EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement"), dated as of February 28, 2007, by and
among Xxxxxxx X. Xxxxxxxx, an individual with an address at 000 Xxxx Xxx Xxxxx,
Xxxxxxxxxxx, XX 00000 ("Executive"), Pentec, Inc., a Connecticut corporation
with its principal office located at 00 Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxx
00000 ("Pentec"), and Pentec Capital Management, Inc., a Connecticut corporation
with its principal office located at 00 Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxx
00000 ("PCM", and collectively with Pentec, the "Company").
RECITALS
A. Pursuant to that certain Stock Purchase Agreement by and among National
Investment Managers Inc. ("NIM"), Pentec, PCM, and Xxxxxxx X. Xxxxxxxx dated
February 28, 2007 (the "Purchase Agreement"), contemporaneously with the
execution of this Agreement, NIM has acquired the Company.
B. Pursuant to the Purchase Agreement, NIM has agreed to cause Pentec and
PCM to retain Executive as an employee during the Term (as defined below).
C. Executive desires to be employed by the Company during the Term, all
upon the terms and conditions set forth herein.
NOW, THEREFORE, the Company and Executive agree as follows:
1 Engagement; Duties. Subject to the terms and conditions set forth herein,
the Company shall employ Executive, and Executive shall serve the Company,
as Vice President of PCM and Vice President of Pentec during the Term (as
defined in Section 2). In such capacity, Executive shall perform duties
and be assigned responsibilities that are substantially similar to those
performed by the Executive immediately prior to the date hereof and as may
be assigned to Executive from time to time. During the Term, the Executive
shall report to the Chief Executive Officer and Chief Operating Officer of
NIM. During the Term, Executive shall use Executive's reasonable efforts
to promote the interests of the Company, shall perform Executive's duties
faithfully and diligently, consistent with sound business practices and
shall devote Executive's "full business time" to the performance of
Executive's duties for the Company in accordance with the terms hereof;
provided, however, that Executive shall be entitled to spend up to 5% of
his time on other business ventures. For purposes of this Section 1, "full
business time" shall mean an average of forty (40) hours per week during
the Term (as defined below).
2 Term. Unless this Agreement is terminated pursuant to Section 5, the term
of this Agreement ("Term") shall be for a period of two (2) years.
3 Compensation. As consideration for the performance by Executive of
Executive's obligations under this Agreement, the Company shall pay
Executive a base salary, commissions and a bonus as follows:
1
(A) During the Term, the Company shall pay Executive a base salary ("Base
Salary") at the annual rate equal to One Hundred Thousand Dollars ($100,000).
(B) The Base Salary shall be payable in accordance with the Company's
normal payroll policy. The Company shall deduct from the Base Salary any
federal, state or local withholding taxes, social security contributions and any
other amounts which may be required to be deducted or withheld by the Company
pursuant to any federal, state or local laws, rules or regulations.
(C) Executive shall be entitled to commissions ("Commissions") from PCM in
connection with sales of securities and insurance-related products, and the
provision of investment advice and consulting services, performed by the Seller
on behalf of PCM. These Commissions shall be equal to 40% of net commissions
generated (i.e., net of fees paid to brokers); provided, however, that in the
case of Commissions relating to the Seller's personal account, these Commissions
shall be equal to 100% of net commissions generated (i.e., net of fees paid to
brokers).
(D) In the event that Executive assists NIM in finding potential
acquisition or strategic investment targets, Executive shall be entitled to a
payment in the amount of $20,000 ("Bonus") upon the completion of any such
transaction; provided, however, Executive shall not be entitled to such Bonus in
connection with acquisitions or strategic investment targets that are already in
negotiation on the date hereof, or were introduced by a third party.
4 Reimbursement of Expenses; Fringe Benefits.
(A) Expenses. During the Term, the Company shall reimburse Executive for
ordinary and necessary business expenses incurred by Executive in the
performance of Executive's duties on behalf of the Company; provided, however,
that any such expenses in excess of $250 are approved in advance in writing by
the Chief Financial Officer of NIM. Notwithstanding the foregoing, the Company
shall reimburse Executive for any professional dues and licensing fees that
Executive shall be required to maintain.
(B) Fringe Benefits. During the Term, Executive shall be entitled to those
fringe benefits and perquisites that are provided to other executives of the
Company generally, including any health or other insurance, pension and/or
retirement, or welfare plan. Notwithstanding the foregoing, the parties
acknowledge and agree that Executive shall not be entitled to fringe benefits
and perquisites identified as non-recurring on Exhibit A annexed hereto.
(C) Vacation. Executive shall be entitled to four (4) weeks paid vacation
days during each calendar year of the Term, pro-rated for any partial calendar
year, at such times as are mutually agreed upon by Executive and NIM.
5 Termination. The Company may terminate this Agreement upon Executive's
death, and may terminate this Agreement at any earlier time at the option
of the Company due to Executive's Disability (as defined below) or for
Cause (as defined below). Executive may terminate this Agreement at any
time for Good Reason (as defined below).
2
(A) As used in this Agreement:
(i) The term "Disability" means the inability of Executive
substantially to perform Executive's duties and obligations under this Agreement
for ninety (90) consecutive days or ninety (90) days in any one hundred eighty
(180)-day period because of any mental or physical incapacity.
(ii) The term "Cause" means (A) any act by Executive that damages,
in any material respect, the reputation, business or business relationships of
the Company, (B) any action by Executive that constitutes a fraud against the
Company, (C) the conviction of Executive of a misdemeanor or felony, (D)
Executive's refusal or failure to perform Executive's duties that continues for
a period of ten (10) business days after notice of such refusal or failure is
given by the Company to Executive, (E) any material breach by Executive of this
Agreement or any other agreement between Executive and the Company, or any
affiliate of the Company, that continues for a period of ten (10) business days
after notice of such breach is given by the Company to Executive, or (F) any
failure by Executive to maintain Executive's securities registrations and other
regulatory licenses and authorizations (other than insurance licenses in states
other than Connecticut), including without limitation, any willful violation of
applicable laws, rules or regulations by Executive that results in the
suspension or revocation of such registrations, licenses or authorizations.
(iii) The term "Good Reason" shall mean (A) the breach by the
Company of this Agreement, the Purchase Agreement or any other agreement entered
into in connection with the transactions contemplated by the Purchase Agreement
(collectively, the "Other Agreements"), including the failure by the Company to
make payments required to be made to Executive under this Agreement or the Other
Agreements, and the failure to cure such breach within thirty (30) days after
receipt of written notice thereof from Executive, (B) the imposition by the
Company of a requirement that the principal office of the Company from which
Executive will perform services under this Agreement be located anywhere other
than in Connecticut, New York City or Boston, unless such relocation of the
principal office of the Company is agreed to in writing by the Executive, (C) a
material and adverse change in Executive's position (D) at any time after a
Change in Control, Pentec or PCM is required to include any proprietary products
in its product offerings to customers, and such proprietary products account for
more than ten percent (10%) of the revenues generated by all product offerings
or (E) the Company terminates Executive for Cause and Executive later obtains a
final non-appealable decision from a court of competent jurisdiction to the
effect that the Company was not entitled to terminate Executive's employment for
"Cause" at the time of such purported termination.
(iv) The term "Termination Date" shall mean the earlier of the
expiration of this Agreement or the effective date of the Company's or
Executive's termination of this Agreement.
(v) A "Change in Control" means any of the following: (i) any
"Person" or "group" (as such terms are defined in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) is or
becomes the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under
the Exchange Act), directly or indirectly, of 50% or more on a fully diluted
3
basis of the then outstanding voting equity interests of NIM (other than a
"Person" or "group" that beneficially owns 50% or more of such outstanding
voting equity interests on the date hereof); (ii) NIM sells, leases, transfers
or otherwise disposes of all or substantially all of its assets; or (iii) NIM
merges or consolidates with or into any other "Person", or any other "Person"
merges or consolidates with or into NIM, in each case unless the holders of a
majority of the outstanding voting equity interests of NIM immediately prior to
such merger or consolidation continue to hold a majority of the outstanding
voting equity interests of the resulting or surviving entity.
(B) Payments to Executive Upon Termination of This Agreement.
(i) In the event this Agreement is terminated prior to the
expiration of the Term by the Company without Cause or by Executive for Good
Reason, the Company shall pay to Executive the amounts set forth in this Section
5(B)(i) within thirty (30) days of the Termination Date: (a) an amount equal to
Executive's accrued but unpaid Base Salary and earned but unpaid Commissions and
Bonus; (b) reimbursement for any reimbursable business expenses incurred in
accordance with this Agreement prior to the Termination Date; (c) Executive's
Base Salary for the remainder of the Term, payable as and when such Base Salary
otherwise would have been payable in accordance with the Company's payroll
practices; and (d) any other amounts or benefits due under this Agreement and
any benefit plan, or program through the remainder of the Term in accordance
with the terms of said plan or program, but without duplication.
(ii) In the event this Agreement is terminated prior to the
expiration of the Term by the Company for Cause or due to Executive's death or
Disability, or by Executive without Good Reason, the Company shall pay to
Executive the amounts set forth in this Section 5(B)(ii): (a) an amount equal to
Executive's accrued but unpaid Base Salary and earned but unpaid Commissions and
Bonus prior to the Termination Date; (b) reimbursement for any reimbursable
business expenses incurred in accordance with this Agreement prior to the
Termination Date; and (c) any other amounts or benefits due through the
Termination Date under this Agreement and any benefit plan, or program in
accordance with the terms of said plan or program, but without duplication.
(iii) Upon expiration of the Term, the Company shall pay to
Executive the amounts set forth in this Section 5(B)(iii): (a) all of
Executive's accrued but unpaid Base Salary and earned but unpaid Commissions and
Bonus; (b) reimbursement for any reimbursable business expenses incurred in
accordance with this Agreement prior to the end of the Term; and (c) any other
amounts or benefits due through the end of the Term under this Agreement and any
benefit plan, or program in accordance with the terms of said plan or program,
but without duplication.
The Company's obligations under Sections 5(B)(i), (ii) and (iii) shall survive
termination of this Agreement.
6 Non-Disclosure; Non-Competition and Non-Solicitation. Reference is made to
the Non-Competition, Non-Solicitation and Non-Disclosure Agreement, of
even date herewith, among NIM, the Company and Executive, which is
incorporated herein by reference and shall survive the expiration or
termination of this Agreement.
4
7 Representation and Warranty of Executive. Executive represents and
warrants to the Company that the execution and delivery of this Agreement
and the performance of Executive's obligations pursuant hereto shall not
conflict with or result in a breach of any provisions of any (a)
agreement, commitment, undertaking, arrangement or understanding to which
Executive is a party or by which Executive is bound; or (b) order,
judgment or decree of any court or arbitrator.
8 General Provisions.
(A) Notices. All notices and other communications under this Agreement
shall be in writing and may be given by personal delivery, registered or
certified mail, postage prepaid, return receipt requested or generally
recognized overnight delivery service. Notices shall be sent to the appropriate
party at that party's address set forth above or at such other address for that
party as shall be specified by notice given under this Section. All such notices
and communications shall be deemed received upon (a) actual receipt by the
addressee or (b) actual delivery to the appropriate address. Copies of notices
hereunder shall be sent as follows: If to Executive - to: Xxxxxxx X. Xxxxxxxx,
000 Xxxx Xxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxx 00000, e-mail: xx0000@xxx.xxx; and
to: Xxxxxxx & Xxxxxxx LLP, Xxx Xxxxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
fax no. 000 000 0000, attention: Xxxxxx X. Xxxxxxxxx, Esq.; and if to the
Company, to: National Investment Managers Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000, attention: Chief Financial Officer, and to: Sichenzia Xxxx Xxxxxxxx
Xxxxxxx LLP, 1065 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
fax no. 000 000 0000, attention: Xxxxxxx Xxxxxxxxx, Esq.
(B) Assignment. This Agreement shall be binding upon, and inure to the
benefit of, the parties' respective successors, permitted assigns, and heirs and
legal representatives. This Agreement may be assigned to, and thereupon shall
inure to the benefit of, any organization which succeeds to substantially all of
the business or assets of the Company, whether by means of merger,
consolidation, acquisition of all or substantially all of the assets of the
Company or otherwise, including, without limitation, by operation of law,
provided, however, that in the event of any such assignment, equitable
adjustments shall be made to any financial criteria or targets required to be
met by Executive. This Agreement is a personal services contract and may not be
assigned by Executive nor may the duties of Executive hereunder be delegated by
Executive to any other person.
(C) Severability. If any provision of this Agreement, or the application
of any provision to any person or circumstance, shall for any reason or to any
extent be invalid or unenforceable, the remainder of this Agreement and the
application of that provision to other persons or circumstances shall not be
affected, but shall be enforced to the full extent permitted by law.
(D) No Waiver. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
5
(E) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in that state, without regard to any of its principles of
conflicts of laws or other laws that would result in the application of the laws
of another jurisdiction. This Agreement shall be construed and interpreted
without regard to any presumption against the party causing this Agreement to be
drafted. Each of the parties hereby unconditionally and irrevocably waives the
right to a trial by jury in any action, suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. Each of the
parties unconditionally and irrevocably consents to the exclusive jurisdiction
of the courts of the State of New York located in the County of New York and the
Federal court in the Southern District of New York with respect to any suit,
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, and each of the parties hereby unconditionally
and irrevocably waives any objection to venue in any such court.
(F) Counterparts. This Agreement may be executed in counterparts, each of
which shall be considered an original, but each of which together shall
constitute the same instrument. In addition, the parties may execute multiple
original copies of this Agreement, each of which shall be considered an
original, but all of which shall be considered the same Agreement.
(G) Entire Agreement; Amendment. This Agreement contains the complete
statement of all the arrangements between the parties with respect to its
subject matter, supersedes all prior agreements between them with respect to
that subject matter, and may not be changed or terminated orally. Any amendment
or modification must be in writing and signed by the party to be charged.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
PENTEC, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: President
PENTEC CAPITAL MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: President
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
[SIGNATURE PAGE - XXXXXXXX EMPLOYMENT AGREEMENT]
7
EXHIBIT A
Non-Recurring Fringe Benefits
Auto reimbursement in excess of IRS mileage rate
Cell phones for wives
Reimbursement of Personal Disability Coverage
Reimbursement of Personal Long Term Care Insurance
Club Dues
Key Man
Insurance
Exotic Travel
8
