EMPLOYMENT AGREEMENT
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
Exhibit
10.1
This
Employment Agreement (the “Agreement”), dated as of January 10, 2008 (“Agreement
Date”), by and between Xxxxxx Securities, Inc., a Delaware corporation
(“Company”), having an address of 000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxx
Xxxx, Xxx Xxxxxx 00000, and Xxxxx Xxxxxxxxx (the “Employee”), residing at
000-X Xxxxxx Xxxx, Xxxxxx Xxx, Xxx Xxxx 00000.
WITNESSESTH:
WHEREAS,
the Company is a registered broker-dealer and member of the Financial Industry
Regulatory Authority (“FINRA”) engaged in the business of market making,
trading, institutional agency trading, investment banking and research; and
WHEREAS,
the Company wishes to employ the Employee and the Employee is willing to be
so
employed and to render services to the Company, all upon the terms and subject
to the conditions contained herein;
NOW
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is acknowledged, the parties agree as follows:
1. Employment. Subject
to and upon the terms and conditions contained in this Agreement, the Company
hereby agrees to employ Employee and Employee agrees to enter the employ of
the
Company, for the period set forth in Paragraph 2 hereof, to render the services
to the Company, its affiliates and/or subsidiaries described in Paragraph 3
hereof.
2. Term. Employee’s
employment by the Company is at the will of either party. Employee’s term of
employment (the “Agreement Term”) under this Agreement shall commence on a date
no later than January 22, 2008 (such date, the “Commencement Date”) and shall
continue until terminated by either party for any reason but subject to the
terms and conditions set forth herein, but in no event will Employee render
any
services under this Agreement to the Company in any form whatsoever prior to
the
Commencement Date.
3. Duties
and Responsibilities of Parties.
(a) Employee
shall be employed as the Company’s Senior Vice President (“SVP”) of
Institutional Sales, as co-Head of the Institutional Sales Group with Xxxxxxx
Xxxxxx and Xxxx Xxxxxxxx. It is agreed that Employee shall perform his services
in the Company’s Jersey City, New Jersey offices, as well as in the offices of
the Company’s affiliates and/or subsidiaries in New Jersey and New York and he
will be responsible for
institutional account coverage and,
at
the request of the Company, for managing institutional sales and sales trading,
which duties, responsibilities and work location may only be changed by mutual
written agreement of the parties. All existing and future institutional sales
traders or other members of the Institutional Sales Group (each, a
“Subordinate”, and collectively, the “Subordinates”) employed by the Company
will report to the co-Heads of the Institutional Sales Group, unless existing
employees previously specified by written commitments of the firm are prohibited
from doing so.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
(b) Employee
shall report to the Chief Executive Officer of the Company or any other more
senior executive officers appointed by the Board of Directors of the Company
and
agrees to abide by all bylaws and applicable policies of the Company promulgated
from time to time by the Board of Directors of the Company.
(c) The
Company represents that it will continue to update its technological resources
to maintain its current level of technology.
(d) The
Company represents that it has, and will maintain, the ability to trade in
the
overseas markets currently available to the firm.
(e) The
Company agrees to implement the employment of a CSA agreement and soft dollar
person with knowledge and expertise of regulatory and legal requirements
applicable to the Institutional Sales Group business as necessitated by the
business needs of the Institutional Sales Group as determined by the Company.
(f) The
Company agrees to use its best efforts to assist the Employee to begin the
process of opening a New York branch office capable of supporting Employee’s
business needs within six-months of the Commencement Date and will permit
Employee the option to work from the New York branch office. If the Company
has
not substantially committed to opening a New York branch office within
six-months of the Commencement Date, the Employee can notify the Company (in
accordance with Notice procedures set forth in paragraph 15) of the resignation
of his Employment for Good Reason under this Agreement, and if the work location
situation is not cured by the Company within 30 days of Company’s receipt of his
notice of resignation, Employee’s resignation will be deemed for “Good Reason”
(as defined under paragraph 5.2 (b)(v)) and the Company will also accelerate
all
Loan distributions (to the extent any Loan distributions have not already been
distributed) and forgive the repayment of the Loan (as discussed in paragraph
5.2 below).
4. Exclusive
Services And Best Efforts. Employee
shall devote all of his working time, attention, best efforts and ability during
regular business hours exclusively to the service of the Company, its affiliates
and subsidiaries during the term of this Agreement. Nothing shall preclude
Employee from (i) engaging in charitable activities and community affairs or
(ii) managing his personal investments and affairs; provided, however, that
such
activities do not materially interfere with the proper performance of his duties
and responsibilities as an employee of the Company.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
5.1. Compensation
and Expenses.
(a) Subject
to the limitations set forth in this Agreement, Company shall pay out to the
Employee a commission that is *** of the “Net Commissions” generated by Employee
(the “Employee’s Commission”).
(b) For
purposes of this Agreement, the term “Net Commissions” shall mean gross
commissions that are actually received by the Company and derived directly
from
the Employee’s total purchase and sale of securities from transactions on
accounts that are covered by the Employee for the firm, less any and all
expenses related to the fees incurred in connection with the purchase or sale
transactions effectuated by Employee, and any associated trading system or
other
costs including,
(i) all
actual, third-party transaction costs including execution, brokerage fees,
give-up, clearing and/or flip charges, and processing ticket
charges;
(ii) all
applicable, direct internal transaction costs including execution, brokerage
fees, give-up, clearing and/or flip charges, and processing ticket
charges;
(iii) all
commission rebates relating to equity business payable to introducing brokers
or
account executives not employed by the Company, if any, which are approved
by
the Company;
(iv) all
bad
debts of any Employee customer, including uncollectible
commissions;
(v)
all
errors relating to Employee’s customers’ business;
(vi) reasonable
travel, entertainment and meal expenses consistent with the policy determined
by
Company for such matters, so long as approved by Company management prior to
reimbursement;
(vii) expenses
incurred directly by Employee related to recruitment, promotion or marketing
by
or of Employee, in each case as approved by Company management;
Solely
for the purposes of this Section 5.1(b), the term “Employee” includes any person
working for Employee or in the Institutional Sales Group.
(c) Notwithstanding
anything to the contrary contained herein, and for purposes of clarity, in
no
event shall Company be required to pay Employee’s Commission for those sales
whose fees are not actually received by Company.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
(d) Upon
his
entering into this Agreement, the Company shall grant to Employee *** of
“restricted stock”. For so long as Employee shall remain in the employ of
Company, the “restricted stock” shall vest equally on an annual basis over a
four (4) year period (the “Vesting Period”) from the Commencement Date, and the
initial *** shall begin to vest on the first anniversary of the Commencement
Date. All vested stock is not forfeited by the Employee in the event his
employment with the Company ends for any reason. In the event of a Change of
Control, all previously unvested restricted stock granted by this Section 5.1(d)
shall automatically vest with Employee, regardless of the date. For the purposes
herein, “Change of Control” shall mean any of the following: (i) direct or
indirect acquisition by any person (as the term “person” is used in Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of
more
than fifty percent (51%) of the voting capital stock of the Company, in a single
or series of related transactions; (ii) the occurrence of a sale of all or
substantially all of the assets of the Company to an entity which is not a
direct or indirect subsidiary of the Company; (iii) the occurrence of a
reorganization, merger, consolidation or similar transaction involving the
Company, unless (A) the shareholders of the Company immediately prior to the
consummation of any such transaction will initially own securities representing
a majority of the voting power of the surviving or resulting corporation, and
(B) the directors of the Company immediately prior to the consummation of such
transaction will initially represent a majority of the directors of the
surviving or resulting corporation; or (iv) any other event which is at any
time
irrevocably designated as "Change in Control" for purposes of this Agreement
by
resolution adopted by a majority of the directors of the Employer.
(e)
The
Company will grant options for the purchase of common stock of the Company
at an
exercise price of *** to the Employee in the following amounts in the event
Revenue earned by the Institutional Sales Group reaches in the aggregate certain
milestones by December 31, 2008 (the “Milestone Date”). The options shall be in
the same form and under the same terms as described under the Company’s Stock
Option Plan. For the purpose of this Agreement, “Revenue” is defined as the
total commissions earned by the Company on the purchase and sale of securities
from transactions on accounts that are covered by the Institutional Sales Group
for the firm. In addition, all stock grants under this section vest immediately
upon the Milestone Date, and are not forfeited by the Employee in the event
his
employment with the Company ends for any reason after the Milestone Date.
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Revenue
Milestone
|
Option
Grants
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|
***
|
*** | |
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***
|
***
|
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***
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*** |
(f) Employee
agrees that the Company may, at any time, demand and receive payment from the
Employee for or deduct from any Employee’s Commission payable to Employee under
this Agreement, any taxes, withholding payments, license fees, registration
fees, ticket charges, bonding fees, or such other expenses, fees or costs
payable or chargeable to the Employee which have been paid, accrued or otherwise
incurred by the Company on behalf of the Employee in connection with the
Employee’s duties under this Agreement.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
(g). With
respect to Subordinates, Subordinates shall be compensated by the Institutional
Sales Group in an amount ***.
|
5.2
|
Forgivable
Loan.
|
The
Employee hereby acknowledges the future receipt of *** (the “Loan”) to be loaned
to Employee by the Company after the execution of this Agreement. The Loan
will
be distributed to the Employee in five (5) equal installments of *** on the
following dates in 2008: May 1, June 1, July 1, August 1 and September 1. The
Loan shall accrue interest at the annual rate of *** from the date proceeds
are
received by Employee, up to and including the *** anniversary of the
Commencement Date (the “Due Date”), and if payment of the Loan is accelerated
during such period, the total amount due under the Loan plus interest shall
be
payable on a demand basis. The Loan will be distributed to the Employee on
the above distribution dates and the Company cannot use as an excuse for its
failure to distribute any installment the fact that it is the subject of any
litigation or other event that may impact the business existence of the Company.
In the event the Company fails to timely distribute a loan installment, the
Employee can notify the Company (in accordance with Notice procedures set forth
in paragraph 15) of the missed installment, and if Company does not cure by
distributing the installment payment within 30 days of Company’s receipt of this
notice, Employee can resign for “Good Reason” (as defined under paragraph
5.2(b)(v)) and the Employee will be entitled to accelerate the outstanding
loan
installments and make a demand on the Company for the balance of the
installments of the Loan, which Employee will be entitled to receive and be
excused from paying back. In the event that the Employee is forced to expend
legal or other fees in its effort to the collect the accelerated Loan amount
due, the Company agrees that such costs shall be borne and payable exclusively
by the Company in the event Employee prevails in such action, and that such
costs shall begin to accrue interest at the rate of *** from the date Employee
ceases to be in the employ of Company.
(a)
The Loan
shall be evidenced by a Promissory Note executed and delivered on or after
the
date hereof, the form of which is annexed hereto as Exhibit “A”, and the terms
of which incorporated herein by reference.
Employee
agrees and acknowledges that the Company shall take out life insurance and
disability policies upon the Employee, with the Company as sole beneficiary,
in
the amount of the Loan and shall keep such policies in force until the Loan
is
repaid in full.
(b) The
Loan
will be forgiven as follows:
i. In
the
event the Employee is employed as of the *** anniversary of the Commencement
Date (the “*** Anniversary”), the Company will forgive *** of the Loan and the
accrued interest on the forgiven debt. Once forgiven, the Company cannot seek
repayment of the forgiven debt that is the subject of this paragraph.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
xx.Xx
the
event the Employee is employed as of the *** anniversary of the Commencement
Date (the “*** Anniversary”), the Company will forgive the full balance of the
Loan, including all accrued interest and will issue to the Employee a written
release confirming the cancellation and forgiveness of the debt and the related
documents attached as Exhibit A.
iv. In
the
event that the Company terminates the Employee’s employment without “Good Cause”
(as defined herein) prior to the Due Date, the Company agrees to cancel and
forgive the Loan and any accrued interest and as such the Employee is not
obligated to repay the Loan and any accrued interest, and will issue to the
Employee a written release confirming the cancellation and forgiveness of the
debt and the related documents attached as Exhibit A. The termination of
Employee’s employment will be deemed to have been for “Good Cause” as defined
below in paragraph 13.
v. In
the
event that the Employee terminates the Agreement with “Good Reason” (as defined
herein) prior to the Due Date, the Company agrees to cancel and forgive the
Loan
and any accrued interest and as such the Employee is not obligated to repay
the
Loan and any accrued interest, and will issue to the Employee a written release
confirming the cancellation and forgiveness of the debt and the related
documents attached as Exhibit A. “Good Reason” is defined as any of the
following events which are not cured by Company within thirty (30) days after
receipt of written notice of termination from Employee based on: (1) a
significant change in the nature or scope of Employees authorities, powers,
functions or duties, or a reduction in compensation; (2) a determination by
a
court that there has occurred a material breach by the Company of any provision
of this Agreement which is not remedied within 30 days after receipt by the
Company of written notice from Employee; (3) a Change in Control as defined
in
Section 5.1(d); (4) Employee providing notice of resignation under paragraph
3(f); or (5) Employee providing notice of resignation under paragraph 5.2 for
failure to make a Loan installment payment.
vi. Upon
Employee’s termination of this Agreement other than for Good Reason prior to the
*** Anniversary Date of the Commencement Date, the Loan, plus interest, shall
become immediately due and payable. Upon Employee’s termination of this
Agreement other than for Good Reason after the *** Anniversary but prior to
the
*** Anniversary (the Due Date), the remaining balance of the Loan in the amount
not forgiven of *** plus interest shall become immediately due and payable,
without further action from the Company on the date employment ceases. In the
event that the Company is forced to expend legal or other fees in its effort
to
the collect the amount due and payable under the Loan and this paragraph 5.2(b),
Employee agrees that such costs shall be borne and payable exclusively by
Employee, and that such costs shall begin to accrue interest at the rate of
***
from the date Employee ceases to be in the employ of Company.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
6. Business
Expenses. Subject
to 5.1(b), the Employee shall be reimbursed by the Company for those business
expenses incurred by him, which are reasonable and necessary for the Employee
to
perform his duties under this Agreement, upon submission of such accounts and
records as may reasonably be required by the policies established from time
to
time by the Company.
7. Confidentiality.
Employee shall keep confidential, except as the Company may otherwise consent
in
writing, and not disclose or make any use of except for the benefit of the
Company and in no way harmful to the Company, at any time either during the
term
of this Agreement or thereafter, any trade secrets, knowledge, data,
intellectual property or other information of the Company relating to the
Company and its businesses, including,
without limitation, information regarding cost of new accounts, customer lists,
customer activity rates and other customer information, technology (hardware
and
software), discoveries, processes, algorithms, mask works, strategies,
products,
processes, know how, technical data, designs, formulas, test data, business
plans, marketing plans and advertising
results
or other
subject matter pertaining to any business of the Company or any of its clients,
customers, consultants, licensees or affiliates which Employee may produce,
obtain or otherwise learn of during the course of Employee’s performance of
services (collectively “Confidential
Information”).
Employee shall not deliver, reproduce, or in any way allow any such Confidential
Information to be delivered to or used by any third parties without the specific
direction or consent of a duly authorized representative of the Company, except
in connection with the discharge of his duties thereunder. The terms of this
paragraph shall survive termination of this Agreement. Notwithstanding anything
to the contrary herein, Employee
shall not have any obligation to keep confidential any information that: (a)
is
required by law or regulation to be disclosed by Employee,
or (b)
is required to be disclosed by Employee
to
any
government agency or person to whom disclosure is required by judicial or
administrative process or (c) any client information of clients that Employee
has had contact while in the Employ of the Company, or (d) any client
information or clients that Employee had contact with prior to becoming an
Employee of the Company.
7.1 Restriction
During Employment.
Employee agrees that at no time during his employment with the Company will
Employee (i) in any way induce or attempt to induce any employee or registered
representative of the Company (or of any affiliate of the Company) or any
person, firm or corporation having any contract with the Company (or any
affiliate of the Company), either to leave such employment or association with
the Company or to breach or terminate its contract with the Company (or with
any
affiliate of the Company); (ii) in any way induce or attempt to induce any
employee or registered representative of the Company (or any affiliate of the
Company) or any person, firm or corporation having a contract with the Company
(or any affiliate of the Company) to become employed by, associated with or
enter into a contract or agreement with another stock brokerage firm or other
entity; and (iii) in any way induce or attempt to induce any account, customer
and client of the Company from terminating their relationship with the Company
or becoming an account, customer and client of another stock brokerage or
trading firm or similar entity.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
7.2 Restrictions
After Employment.
(a) Employee
agrees that for a period of one (1) year after the termination of its employment
with the Company, the Employee will not induce or attempt to induce any employee
or registered representative of the Company or any other person, firm or
corporation having any contract or association with the Company either from
leaving such employment or association with the Company or to breach or
terminate his or its contract with the Company or in any way induce or attempt
to induce any employee or registered representative of the Company (or any
affiliate of the Company) or any person, firm or corporation having a contract
with the Company (or any affiliate of the Company) to become employed by,
associated with or enter into a contract or agreement with another stock
brokerage or trading firm or other similar entity.
(b) Employee
agrees that for a period of thirty (30) days after the termination of his
employment with the Company for whatever reason, the Employee will not engage,
as an owner, partner, shareholder, officer, director, employee, consultant,
advisor, agent or representative, in any business which competes with the
Company or any of its affiliates in trading or executing in equity markets,
including but not limited to equity-related products.
8. Return
of Confidential Material.
Upon
the completion or other termination of Employee’s services for the Company,
Employee shall promptly surrender and deliver to the Company all records,
materials, equipment, drawings, documents, notes and books and data of any
nature pertaining to any invention, trade secret or Confidential Information
of
the Company or to Employee’s services, and Employee will not take with him any
description containing or pertaining to any Confidential Information, knowledge
or data of the Company which Employee may produce or obtain during the course
of
his services. The terms of this paragraph shall survive termination of this
Agreement.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
9. Other
Obligations; Certain Representations.
(a) Employee
acknowledges that the Company from time to time may have agreements with other
persons which impose obligations or restrictions on the Company made during
the
course of work there under or regarding the confidential nature of such work.
Employee will be bound by all such obligations and restrictions and will take
all action necessary to discharge the obligations of the Company there
under.
(b) All
of
Employee’s obligations under this Agreement shall be subject to any applicable
agreements with, and policies issued by the Company to which Employee is
subject, that are generally applicable to the five highest paid executives
of
the Company.
(c) Employee
represents that he has the legal capacity to enter into this Agreement, and
has
of the Commencement Date he is under no
employment contract, non-competition agreement, or any other obligation that
would violate or be in conflict with the terms and conditions of this Agreement
or encumber his performance of duties assigned to him by the Company other
than
potential conflicts arising from Employee’s previous relationship with eTrade
Financial, Inc., or any successor, assignee, or purchaser of any rights of
eTrade Financial, Inc. (the “Former Employer”). Employee
further
represents and warrants that he has not signed or committed to any
employment or consultant duties or other obligations that would divert his
full
attention or conflict with from the duties assigned to him by the
Company.
(d) Employee
holds all licenses required by FINRA, all applicable self regulatory
organizations, and all federal and state securities and other laws necessary
to
perform services to the Company as contemplated by this Agreement. All such
licenses are in full force and effect, and Employee covenants to take such
action as is necessary to maintain all such licenses in full force and effect
during the term of this Agreement.
(e) If
during
the first three-years of this Agreement while the Loan is still outstanding
the
Employee is enjoined from working for the Company by a court of law, the
Employee agrees to: (i) return to work to the Company whenever the restraints
lapse or are removed or (ii) at the Company’s sole discretion, continue to
remain in the employ of the Company performing services not prevented from
being
provided by the Employee under the restraints.
(f) If
the
Employee is enjoined from working for the Company by a court of law and the
Employee decides, in his sole discretion, not to return to work for the Company
after the restraints lapse or are removed, in such event the Company may demand
the Loan to be repaid by the Employee and the Employee agrees to repay the
Loan,
interest free, as follows: the Employee will be entitled to keep a prorated
portion of the Loan for the period of time the Employee worked during the
two-year period accrued through the latest month-end prior to the Employee’s
last day of work and pay back the balance. For example, if the Employee last
worked 45 days into the two-year period, the Employee would be entitled to
keep
two-months/24-months multiplied by *** of the Loan, or ***, and repay the
balance of ***. For the avoidance of doubt, any time during which the Employee
was restrained from working for the Company in the role of either SVP of
Institutional Sales, Co-Head of the Institutional Sales Group, or in any role
generally associated with such positions, and the Company elects not to have
the
Employee perform any other services for the Company, such time shall not be
considered time worked for the previous equation herein. If the Employee refuses
to tender said Loan repayment within 60 days of the demand from Company,
Employee agrees to reimburse Company for any reasonable costs of collection
of
such debt, including reasonable attorneys’ fees and to pay interest on the debt
at an annual rate of *** calculated from the date demand is made by the Company.
Notwithstanding the foregoing, if the Employee reports to work after the
restraints lapse and the Company refuses to continue Employee’s employment or
re-employment, the Company cannot demand repayment of the Loan and the Employee
is not obligated in any manner to pay back the Loan, and the Employee will
also
immediately vest in all “restricted stock” under Section 5.1(d).
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
(g) Adjustment
for Injunction or Other Restraint.
Each
of
the Company and Employee acknowledge that in the event the Employee may be
enjoined or otherwise restrained from performing his duties as SVP of
Institutional Sales and/or Co-Head of Institutional Sales for a certain time
period (“Time of Restraint”). In such event, the Company may elect during such
Time of Restraint, in its sole option, to either (i) request that Employee
perform other duties for the Company, or (ii) perform no duties for the Company
until such restraints lapse. Only in the event that the Company elects to have
Employee perform no duties for the Company during the Time of Restraint, each
of
the *** Anniversary, *** Anniversary, Due Date and Milestone Date (collectively,
the “Defined Dates”) as defined in this Agreement, as well as any other dates
based upon any of the Defined Dates, shall be extended by an amount of time
equal to the Time of Restraint.
10. Trade
Secrets of Others.
Employee will not enter into any agreement, either written or oral, which is
in
conflict with this Agreement.
11. Employee
Benefits. During
the Agreement Term, the Company agrees to include Employee in its group medical
and hospital plan. Employee understands and acknowledges that Employee will
be
responsible for monthly payments for such insurance at the rate commensurate
with other employees of Company. Employee hereby authorizes the Company to
deduct the fees accrued for the insurance provided to Employee under this
paragraph on a monthly basis from the Employee’s share of net commissions prior
to Company’s distribution of the same. Company reserves the right to (i) cancel
Employee’s insurance in the event Employee’s share of net commissions is
insufficient to cover the monthly insurance expense hereunder, or (ii) require
Employee to make such monthly payments in lieu of Company’s deduction of the
same from Employee’s share of net commissions. The Company may withhold from any
benefits payable to the Employee all federal, state, local and other taxes
and
amounts as shall be permitted or required pursuant to law, rule or
regulation.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
12. Death
and Disability.
(a) The
Agreement Term shall terminate on the date of Employee’s death, in which event
the Employee’s Commission and reimbursable expenses and benefits, if any, owing
to Employee through the date of Employee’s death shall be paid to his estate.
Employee’s estate will not be entitled to any other compensation upon
termination of this Agreement pursuant to this Paragraph 12(a). For purposes
of
clarity, and notwithstanding anything contrary herein, should the Employee’s
death occur prior to the expiring of the Vesting Period set forth in paragraph
5.1 (d) herein the Company shall have no obligation to continue to issue
Employee’s estate stock, subsequent to the date of Employee’s death.
Furthermore, should Employee’s death occur prior to the Due Date as set forth in
paragraph 5.2 herein, the Company shall forgive and cancel the Loan and any
accrued interest, and may not seek to recover the same as a collection from
Employee’s estate.
(b) If,
during the Agreement Term, in the opinion of a duly licensed physician
acceptable to the Employee and the Company, the Employee because of physical
or
mental illness or incapacity shall become substantially unable to perform the
duties and services required of him under this Agreement for a period of thirty
(30) or more consecutive days or an aggregate of thirty (30) days in any
twelve-month period (the “Disability”), the Company may, upon at least thirty
(30) days’ prior written notice (given at any time after the expiration of such
period) to the Employee of its intentions to do so, terminate this Agreement
as
of such date as may be set forth in the notice. In case of such termination,
the
Employee shall be entitled to receive any remaining Employee’s Commission and
reimbursable expenses and benefits, if any, owing to the Employee through the
date of termination. Furthermore, should Employee’s disability occur prior to
the Due Date as set forth in paragraph 5.2 herein, the Company shall forgive
and
cancel the Loan and any accrued interest, and may not seek to recover the same
as a collection from Employee or his estate. Employee will not be entitled
to
any other compensation upon termination of this Agreement pursuant to this
Paragraph 12(b) and the vesting of the restricted stock granted under 5.1(d)
shall cease upon termination of this Agreement for Disability.
13. Good
Cause.
(a) As
used
herein, the term “Good Cause” shall mean:
(i) a
material breach by Employee of the terms of this Agreement or the Company’s
written policies delivered to him, including those with respect to xxxxxxx
xxxxxxx and other trading activities, which material breach remains uncured
after twenty (20) days following Employee’s receipt from Company of written
notice specifying such breach or default;
(ii) gross
negligence or willful misconduct by Employee or the material breach of a
fiduciary duty of Employee to the Company in the performance of his duties
hereunder;
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
(iii) the
commission by Employee of an act of fraud, embezzlement or any other crime
by
Employee in the performance of his duties as an employee hereunder as determined
by a court that has jurisdiction over such matters;
(iv) conviction
of Employee of a felony or any other crime that could materially interfere
with
the performance of Employee’s duties hereunder or material damages the
reputation of the Company;
(v) failure
to hold and maintain in full force and effect during the term of this Agreement,
all licenses required by FINRA, all applicable self regulatory organizations
(“SRO”), and all federal and state securities and other laws necessary to
perform services to the Company as contemplated by this Agreement.
(vi) except
as
may have been disclosed in writing to the Company, Employee’s failure to
disclose to Company prior or existing customer complaints, arbitrations, legal
proceedings, or regulatory, administrative, civil or criminal matters threatened
or pending, or any other matter which may adversely affect the employment of
the
Employee by the Company, such as a violation of any rules promulgated by the
NASD or another SRO, or any other reportable event that should be disclosed
by
Employee on Form U-4..
(vii) failure
to promptly notify the Company if (i) Employee becomes a party to any inquiry,
investigation, litigation, legal proceeding or arbitration, (ii) any award
or
judgment is entered against Employee; (iii) Employee’s registration or license
to sell securities is refused, suspended, threatened or revoked by the SEC,
FINRA or any SRO; (iv) Employee becomes subject to a proceeding to effectuate
the foregoing; (v) Employee is enjoined, temporarily or otherwise, from selling
or dealing in securities; or (vi) Employee is arrested, summoned, arraigned,
or
indicted in connection with a criminal offense.
(b) As
used
herein, the term “Good Cause” shall not
mean any
action or threatened action against either the Company or the Employee, or
both,
by the Former Employer of Employee to restrain or enjoin Employee’s employment
with the Company or the Company’s business, in whole or in part.
(c) Upon
Employee’s termination for Good Cause prior to the *** Anniversary Date of this
Agreement, the Loan, shall become immediate due and payable pursuant to the
terms described in paragraph 5.2 hereunder. Upon Employee’s termination for Good
Cause after the *** Anniversary but prior to the *** Anniversary, the remaining
balance of the Loan in the amount not forgiven of *** plus interest shall become
immediately due and payable, pursuant to the terms described in paragraph 5.2
hereunder. In the event that the Company is forced to expend legal or other
fees
in its effort to the collect the amount due and payable under the Loan, Employee
agrees that such costs shall be borne and payable exclusively by Employee,
and
that such costs shall begin to accrue interest at the rate of *** from the
date
Employee ceases to be in the employ of Company.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
14. Remedy. It
is
mutually understood and agreed that Employee’s services are special, unique,
unusual, extraordinary and of an intellectual character giving them a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages or in an action at law. Accordingly, in the event of any breach of
this
Agreement by Employee, the Company shall be entitled to equitable relief by
way
of injunction or otherwise in addition to damages the Company may be entitled
to
recover. In addition, the Company shall be entitled to reimbursement from
Employee, upon request, of any and all reasonable attorneys’ fees and expenses
incurred by it in enforcing any term or provision of this
Agreement.
15. Notices. All
notices given hereunder shall be in writing and shall be deemed effectively
given when mailed, if sent by registered or certified mail, return receipt
requested, or overnight mail with proof of mailing, to Employee at his address
set forth on the first page of this Agreement and to the Company at its address
set forth on the first page of this Agreement, Attention: Xxxxx
Xxxxxxxxxx,
with a
copy to Bonnist & Cutro, LLP, 0000 Xxxxx 00, Xxxxx 000, Xxxxxxxxxxxx, Xxx
Xxxxxx 00000, Attention: Xxxxx X. Xxxxx, Esq., or at such address as such party
shall have designated by a notice given in accordance with this Paragraph
15.
16. Entire
Agreement. This
Agreement constitutes the entire understanding of the parties with respect
to
its subject matter and no change, alteration or modification hereof may be
made
except in writing signed by the parties hereto. Any prior or other agreements,
promises, negotiations, understandings or representations not expressly set
forth in this Agreement are of no force or effect.
17. Severability. If
any
provision of this Agreement shall be unenforceable under any applicable law,
then notwithstanding such unenforceability, the remainder of this Agreement
shall continue in full force and effect.
18. Amendments,
Modifications, Waivers. No
amendment, modification or waiver of any provisions of this Agreement shall
be
effective unless the same shall be in writing and signed by each of the parties
hereto, and then such waiver or consent shall be effective only in specific
instances and for the specific purpose for which given.
19. Assignment. Neither
this Agreement, nor any of Employee’s rights, powers, duties or obligations
hereunder, may be assigned by Employee. This Agreement shall be binding upon
and
inure to the benefit of Employee and his heirs and legal representatives and
the
Company and its successors and assigns. Successors of the Company shall include,
without limitation, any corporation or corporations acquiring, directly or
indirectly, all or substantially all of the assets of the Company, whether
by
merger, acquisition, consolidation, purchase or otherwise, and such successor
shall thereafter be deemed “the Company” for purposes hereof.
20. Applicable
Law. This
Agreement shall be deemed to have been made, drafted, negotiated and the
transactions contemplated hereby consummated and fully performed in the State
of
New York and shall be governed by and construed in accordance with the laws
of
the State of New York, without regard to the conflicts of law rules thereof.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
21. Arbitration.
(a) The
parties agree that any and all claims or disputes arising under this Agreement,
as to which they may be adverse parties, will be resolved by arbitration before
FINRA and that with respect to this Agreement, a party may seek injunctive
relief and ancillary damages before FINRA. Each party irrevocably consents
to
subject matter and personal jurisdiction before FINRA. The parties shall
restrict themselves to claims for compensatory damages and no claims shall
be
made by any party for punitive or similar damages. The parties agree that any
award or decision by FINRA shall be final and binding upon the parties and
a
judgment may be entered in a court of competent jurisdiction upon such award
or
decision. The parties agree that the situs of any arbitration or legal
proceedings hereunder shall be the City of New York, State of New
York.
(b) The
parties agree that in the event that there is a threatened breach or breach
of
any of the covenants, agreements and representations contained in this
Agreement, the Company will suffer immediate and irreparable harm and money
damages and as a result thereof, the Company shall have the right to seek
injunctive relief before FINRA or through the judicial process in addition
to
any and all rights and remedies at law or equity it may have. In any such action
or proceeding, the Company shall be entitled to reimbursement for all legal
fees
it may incur. The parties further agree that the Company shall not be required
to post any bond with regards to it seeking any equitable or legal relief
hereunder.
22. Full
Understanding. Employee
represents and agrees that he fully understands his right to discuss all aspects
of this Agreement with his private attorney, that to the extent, if any that
he
desired, he availed himself of this right, that he has carefully read and fully
understands all provisions of this Agreement, that he is competent to execute
this Agreement, that his agreement to execute this Agreement has not been
obtained by any duress and that he freely and voluntarily enters into it, and
that he has read this document in its entirety and fully understands the
meaning, intent and consequences of this document, which is that it constitutes
and agreement of employment.
23. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original and all of which taken together shall constitute one and
the
same agreement.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
|
XXXXXX
SECURITIES, INC.
|
||
| By: | /s/ Xxxxxx Xxxxxxxxxx | |
|
Name: Xxxxxx Xxxxxxxxxx |
||
| Title: CEO | ||
|
EMPLOYEE
|
||
| /s/ Xxxxx Xxxxxxxxx | ||
|
Name: Xxxxx Xxxxxxxxx |
||
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
PROMISSORY
NOTE
Xxxxx
Xxxxxxxxx.,
an
individual residing 000-X Xxxxxx Xxxx, Xxxxxx Xxx, Xxx Xxxx 00000 (“Debtor”),
promises to pay to Xxxxxx
Securities, Inc.,
a
Delaware corporation, having an address of 000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx,
Xxxxxx Xxxx, Xxx Xxxxxx 00000, hereinafter referred to as “Creditor”, the sum of
***,
which
represents a forgivable loan owed by the Debtor to the Creditor under the
Employment Agreement between the Debtor and Creditor for the period January
22,
2008, through January 21, ***, and interest at the annual rate of *** (the
“Loan”) in the event the Loan becomes due under the terms of the Employment
Agreement, which is fully adopted and incorporated herein.
Payment
shall be made to the order of Creditor at the address of Creditor set forth
above, or at such other place as Creditor or any subsequent holder of this
Note
may designate in the event under the terms of the Employment Agreement the
Loan
becomes due, as follows:
1) It
is the
desire and intent of the parties that the terms, provisions, covenants and
remedies contained in this Note shall be enforceable to the fullest extent
permitted by law. If any term, provision, covenant or remedy of this Note shall,
to any extent, be construed to be invalid or unenforceable in whole or in part,
then such term, provision, covenant or remedy shall be construed in a manner
so
as to permit its enforceability under the applicable law to the fullest extent
permitted by law. In any case, the remaining provisions of this Note or the
application thereof, other than those to which they have been held invalid
or
unenforceable, shall remain in full force and effect.
2) Should
any provision of this Note require interpretation or construction, it is agreed
by the parties that the entity interpreting or construing this Note shall not
apply a presumption that the provisions hereof shall be more strictly construed
against one party by reason of the rule of construction that a document is
to be
construed more strictly against the party who prepared the Note, it being agreed
that both parties (by their respective attorneys) have participated in the
preparation of all the provisions of this Note.
3) The
laws
of the State of New York govern this Note and the validity and performance
thereof.
4) This
Note
and the Employment Agreement embodies the entire understanding between the
parties hereto with respect to the subject matter hereof and may not be used
as
evidence of wrongdoing or as an admission of guilt by either party in any
subsequent legal action.
5) This
Note
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against whom enforcement of any change, waiver,
discharge or termination is to be sought. No waiver of any term or provision
of
this Note will be deemed a waiver of any subsequent breach of such term or
provision, or the breach of any other term or provision of this Note. Failure
of
any party to claim default of all or any part of this Note by the other party,
or failure to enforce all or any of its rights hereunder, will not be construed
as a waiver of any subsequent claims or rights or as novation or modification
in
any way of this Note.
CONFIDENTIAL
TREATMENT REQUESTED
WITH
RESPECT TO CERTAIN PORTIONS HEREOF
DENOTED
WITH “***”
6) This
Note
and any rights herein granted are personal to Creditor, and any assignment
(including a merger, sale of majority stock interest or transfer of control
of
Debtor) by Debtor, or other encumbrance, is void (or shall be deemed to be
ineffective in transferring any rights pursuant to this Note) without Creditor’s
prior written consent.
7) Creditor
has the right to assign the Note.
8) Debtor
and any other person who has obligations under this Note waives the rights
of
presentment and notice of dishonor. “Presentiment” means the right to require
the Creditor to demand payment of amount due. “Notice of Dishonor” means the
right to require the Creditor to give notice to other persons that amounts
have
not been paid.
9) This
Note
is a uniform instrument with limited variations in some jurisdictions.
10) The
parties hereto all represent that they are duly authorized to enter into this
Note.
| /s/ Xxxxx Xxxxxxxxx | ||
|
By: Xxxxx Xxxxxxxxx |
||
|
Dated:
January 14,
2008
|
Notary
/s/
Xxxxxxx X.
Xxxxxxxx
|
|
|
|
