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Exhibit 3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of November 19, 1998 between Xxxxxx X.
Xxxx, an individual with an address at 00 Xxxxxxxxxx Xxxxx, Xxx Xxxxx, Xxx Xxxx
00000 (the "Employee"), and North Shore Capital Management Corp., a New York
corporation ("North Shore"), and North Ridge Securities Corp., a New York
corporation ("North Ridge") (collectively, North Shore and North Ridge will be
referred to herein as the "Company"), having an office at 0000 Xxxx Xxxxxxx
Xxxx, Xxxxxxxx, Xxx Xxxx 00000.
W I T N E S S E T H :
WHEREAS, Xxxxxx & Ciocia, Inc. ("G&C"), Xxxxxx Xxxxxxx and the Employee
have entered into a Stock Purchase Agreement dated as of November 19, 1998 (the
"Stock Purchase Agreement") pursuant to which G&C is purchasing the capital
stock of the Company for cash, as described in the Stock Purchase Agreement; and
WHEREAS, the Company wishes to employ the Employee as the president of
North Shore and North Ridge and the Employee wishes to accept such employment,
all on the terms hereinafter set forth,
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree hereby as follows:
1. EMPLOYMENT. The Company hereby employs the Employee as the president
of North Shore and North Ridge, and the Employee hereby accepts such employment,
subject to the terms and conditions hereinafter set forth, under the immediate
direction of the executive officers of G&C.
2. TERM, RENEWAL. The term of the Employee's employment hereunder shall
be deemed to have commenced on November 1, 1998 and shall continue thereafter
for a period of five (5) years, unless terminated earlier in accordance with the
terms hereof.
3. DUTIES.
(a) The duties of the Employee shall be managing the brokerage
business and the general affairs of the Company. The Employee shall serve the
Company loyally, faithfully and to the best of his abilities and shall devote
his full working time and efforts to the performance of his duties hereunder.
The Employee
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shall be available for travel as the needs of the business of the Company
require.
(b) The Employee agrees that he will not, during the term of
this Agreement, engage in any business activity that interferes with the
performance of his obligations under this Agreement.
4. COMPENSATION, BENEFITS, ETC..
(a) In consideration of the services to be rendered by the
Employee hereunder, the Company shall pay to the Employee, and he shall accept,
compensation at an annual rate of (omitted), payable biweekly or monthly, at the
Company's option. If the Company shall have satisfied the annual projections for
a year as set forth in Schedule A annexed hereto, Employee shall receive an
increase in annual compensation in the amount of (omitted) for the next year of
the term hereof. Any other provision of this Agreement to the contrary
notwithstanding, any commission payments due to the Employee by any party shall
be paid directly to G&C, or its appropriate subsidiary, and no other
compensation, except compensation described herein, shall be due to the
Employee.
(b) The Employee shall receive health insurance and paid
holidays, as are made available to other employees of the Company. The Employee
shall receive 4 weeks of paid vacation/personal/sick days each year, which may
be taken at any time up to 6 months after the year of accrual but not
thereafter, subject to the Company's prior approval, which shall not be
unreasonably withheld or delayed.
(c) The Employee shall receive reimbursement or inclusion on
the Company expense account for up to $1,000 per month of discretionary business
expenses, provided that receipts for such expenses are provided to the Company,
and $1,500 per month for car expenses.
(d) The Employee shall receive (omitted) options to purchase
common stock in G&C, par value $.01 (the "Stock"), at an exercise price of
$8.75. The options shall be in the form of the Company's standard employee stock
option and shall have a term of five (5) years from vesting. G&C shall register
the issuance of the shares underlying such options with the Securities and
Exchange Commission on Form S-8 and use its best efforts to maintain the
effectiveness of such registration during the exercisability of said Options.
(e) Except as hereinafter provided in Section 6, the Company
shall pay the Employee, for any period during which he is unable fully to
perform his duties because of physical or mental
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disability or incapacity, an amount equal to the fixed compensation due him for
such period, less the aggregate amount of all income disability benefits that he
receives under or by reason of (i) any group health insurance plan; (ii) any
applicable compulsory state disability law; (iii) the Federal Social Security
Act; (iv) any applicable worker's compensation law or similar law; and (v) any
plan towards which the Company or any parent, subsidiary or affiliate of the
Company has contributed, such as group accident or health policies.
(f) North Ridge shall continue to insure itself and employees,
including Levy, under North Ridge's errors and omissions policy in effect as of
June 30, 1998 or under a reasonably comparable occurrence-based policy.
5. COVENANTS.
(a) The Employee agrees that all work produced by him under
this Agreement or otherwise for the Company or NRS shall be deemed to be a "work
made for hire" as defined in the federal Copyright Act, Title 17 of the United
States Code. Without further consideration, the Employee hereby irrevocably
assigns, transfers and sets over to the Company, its successors and assigns, all
of the Employee's right, title and interest in and to any and all developments,
processes, discoveries, technologies and creations and all copyrightable and
patentable works, materials and ideas (collectively "Inventions") and any
improvement to any Invention, whether or not patentable, copyrightable or
legally protectable or recognized as forms of property, and whether or not
completed or used in practice, together with all information and data relating
thereto (hereinafter "Proprietary Information") (including all designs,
drawings, prints, patterns, sketches, ideas, inventions, improvements, writings
and other works of authorship, theses, books, computer programs, lectures,
illustrations, photographs, scientific and mathematical models, prints and any
other subject matter that is or may become legally protectible or recognized as
a form of property) that have been conceived, made or suggested, or may
hereafter be conceived, made or suggested, either by the Employee or by others
with the assistance or other participation of the Employee, and (i) on the
Company's premises or during the Employee's usual working hours, or (ii)
otherwise related to the business of the Company or any affiliate of the
Company.
(b) The Employee shall disclose promptly to the Company any
and all Inventions and Proprietary Information when conceived or made by the
Employee, and report promptly to the Company all information of which the
Employee may become aware during the term of employment with the Company that
may be of benefit to the Company. During the period of his employment hereunder,
the Employee shall also disclose promptly to the Board of Directors of the
Company all material Inventions relating to the business, products, or projects
of the Company and/or
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involving the use of the Company's time or, materials and/or facilities.
(c) Upon request by the Company, the Employee shall, without
compensation other than the Employee's usual and customary salary, bonus and
benefits hereunder, execute all such assignments and other documents and perform
all such acts necessary to enable the Company to obtain or uphold for its
benefit patents or copyrights for, and other rights to, such Inventions and
Proprietary Information relating thereto, which shall be owned by the Company,
whether or not the Employee is the inventor thereof.
(d) The Employee shall have the right to manage the Company in
the role of its chief operating officer, and shall have full authority in making
decisions with regards to the following:
(i) setting salaries of employees' of the Company
subject to G&C's overall salary policies;
(ii) maintaining the Company's holiday parties and
broker retreats as consistent with prior Company practice;
(iii) maintaining the Company's location through
the current term of its lease unless expansion of the Company's business
requires moving its offices, and, in general, maintaining the Company's office
in the same geographic vicinity;
(iv) writing checks on behalf of the Company
solely for advances on commissions and commissions for North Ridge's registered
representatives (provided that Employee shall provide the Company with
supporting documentation for each such check); and
(v) hiring and firing of employees, brokers and
consultants subject to the review of the Company's Board of Directors provided
that Employee may veto the hiring or retention of any broker on the basis of a
poor securities law compliance record.
(e) G&C shall cause the Employee to be elected as a member of
the Board of Directors of the Company during the term of employment.
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6. DISABILITY AND DEATH.
(a) If the Employee, due to physical or mental disability or
incapacity, shall have been unable fully to perform his duties hereunder for any
60 days during any twelve (12) consecutive months, as determined in good faith
by the Board of Directors, then the Company may terminate this Agreement and the
Employee's employment hereunder by written notice to the Employee or his legal
guardian, effective immediately upon delivery of such notice.
(b) If the Employee shall die during the term of this
Agreement, this Agreement and the Employee's employment hereunder shall
terminate immediately upon the Employee's death.
7. TERMINATION OF EMPLOYMENT.
(a) The Company may at any time terminate this Agreement and
the Employee's employment hereunder by written notice to the Employee effective
immediately upon delivery of such notice if:
(i) the Employee shall commit any act whether or
not involving the Employee that constitutes a felony in the
jurisdiction involved; or
(ii) the Employee engages in repeated substance
abuse; or
(iii) the Board, after due inquiry and providing the
Employee with a reasonable opportunity to be heard, shall have
determined in good faith that the Employee committed wilful malfeasance
or gross misconduct in his performance hereunder, or any material act
of fraud or dishonesty against the Company.
(b) The Employee may at any time terminate this Agreement and
his employment hereunder by written notice to the Company effective immediately
upon delivery of such notice if:
(i) the Company shall have committed a material
breach of this Agreement that the Company shall not have cured for 30
days after notice of the particulars of the breach provided that if
such material breach cannot reasonably be cured in such 30-day period,
then only if the Company has not promptly begun or diligently pursued a
cure; or
(ii) the Company, G&C or their principal officers
undergo adverse publicity that renders the Company and G&C unable to
conduct their businesses for more than 60 days.
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(c) All disputes, conflicts and claims related to this Article
7 shall be resolved by arbitration in New York City before the American
Arbitration Association ("AAA") in accordance with the rules of the AAA.
Judgement on any award may be entered in any court having jurisdiction thereof.
8. NON-DISCLOSURE OF CONFIDENTIAL
INFORMATION AND NON-COMPETITION.
(a) The Employee acknowledges that he has been informed that
it is the policy of the Company to maintain as secret and confidential all
information (i) relating to the products, processes, technologies, inventions,
designs and/or systems used by the Company and (ii) relating to the suppliers,
customers and employees of the Company (all such information hereafter referred
to as "Confidential Information"), and the Employee further acknowledges that
such Confidential Information is of great value to the Company. The parties
hereto recognize that the services to be performed by the Employee are special
and unique, and that by reason of his employment by the Company, he has and will
acquire Confidential Information as aforesaid. The parties hereto confirm that
it is reasonably necessary to protect the Company's goodwill that the Employee
agree, and accordingly the Employee does agree, that he will not directly or
indirectly (except where authorized by the Board of Directors of the Company for
the benefit of the Company), for or on behalf of himself or any Person
(hereinafter defined):
(i) at any time during his employment by the Company
or for 5 years after he ceases to be employed by the Company
for any reason, divulge to any Person other than the Company
(hereinafter referred to collectively as a "third party"), or
use or cause to authorize any third parties to use, any such
Confidential Information (except information regarding clients
of Employee listed on Schedule B as attached, and if both
Employee and Xxxxxx Xxxxxxx cease to be employed or retained
by the Company then information regarding clients of both
Employee and Xxxxxx Xxxxxxx as listed on Schedules B and A
respectively (hereinafter referred to as "Exempt Clients"), or
any other information regarded as confidential and valuable by
the Company that he knows or should know is regarded as
confidential and valuable by the Company (whether or not any
of the foregoing information is actually novel or unique or is
actually known to others and whether or not the Confidential
Information is labeled as confidential); or
(ii) at any time during his employment by the
Company, act as or be an officer, director, stockholder,
consultant or advisor, partner or employee of, or render any
service for, or have any profit-
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sharing or other interest in, or lend money or make any other
financial accommodation for or on behalf of, or undertake any
business transaction with, any Person that engages in or is
planning or preparing to engage in either direct competition
with the Company or any corporate affiliate of the Company, or
the business of providing, within a ten-mile radius around the
site of any office of the Company or any affiliate of the
Company, the same services as those provided by the Company or
any corporate affiliate, except that he may hold securities
that are part of a publicly traded class of securities (not in
excess of 5% of the outstanding total of any class of such
securities) in competitive concerns so long as he discloses
such holding to the Company; or
(iii) at any time during his employment by the
Company engage in or plan or prepare to engage in (A)
competition with the Company or any corporate affiliate or (B)
the business of providing, within a ten-mile radius around the
site of any office of the Company or any affiliate of the
Company, the same services as those provided by the Company or
any corporate affiliate; or
(iv) at any time during his employment by the Company
and for a period of two years after he ceases to be employed
by the Company for any reason, attempt in any manner to
solicit, or instruct, assist or provide any services in
connection with the solicitation of, business from any Person
that is, or shall have been after the date hereof, a client of
the Company or any affiliate of the Company except Exempt
Clients (a "Client") (except on behalf of the Company), or
persuade, or attempt in any manner to persuade, or communicate
with, any Client to cease doing business or to reduce the
amount of business that any such Client except Exempt Clients
has customarily done or contemplates doing with the Company or
any affiliate of the Company, whether or not the relationship
between the Company and such Client was originally established
in whole or in part through the efforts of the Employee; or
(v) at any time during his employment by the Company
and for a period of two years after he ceases to be employed
by the Company for any reason, employ or otherwise obtain
services from, or solicit or otherwise attempt to employ or
otherwise obtain services from, or assist any Person in
employing or otherwise obtaining services from, or attempting
to employ or otherwise obtain services from, any person who is
then, or at any time during the preceding twelve months shall
have
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been, in the employ of or retained by the Company and/or its
affiliates; or
(vi) at any time during his employment by the Company
and the applicable period thereafter specified in each of the
clauses above, negotiate for or enter into an agreement,
understanding or arrangement, or otherwise cause or authorize
any Person, to take any of the actions prohibited by such
clause.
As used herein, the term "Person" means any person, corporation, partnership or
other entity, and the term "Client" shall mean (i) anyone who is then a client
of the Company or any of its affiliates, (ii) anyone who was a client of the
Company at any time during the two-year period immediately preceding the alleged
prohibited conduct, and (iii) any prospective client that shall have met with a
registered representative of the Company. This Section 8 shall be assignable by
the Company in a sale of all or substantially all of the assets of the Company
and shall apply to the continuing business conducted with such transferred
assets and replacements thereof.
(b) The Employee shall, upon the expiration of his employment
by the Company for any reason, forthwith deliver up to the Company any and all
drawings, notebooks, keys and other documents and materials, or copies thereof,
in his possession or under his control that relate to any Confidential
Information, including any of same that relate to any Invention relating to the
business of the Company or any affiliate of the Company described in Section
5(a), or that are otherwise the property of the Company. This Section 8 and
Section 5(c) shall survive any expiration or other termination of this
Agreement.
(c) The Employee agrees that any breach or threatened breach
by him of any provision of this Section 8 will, because of the unique nature of
the Employee's services and the Confidential Information entrusted to him as
aforesaid, cause irreparable harm to the Company and shall entitle the Company,
in addition to any other legal remedies available to it, to apply to any court
of competent jurisdiction to enjoin such breach or threatened breach, without
the need to show irreparable injury or to post any bond, which are hereby waived
by the Employee. The parties hereto understand and intend that each restriction
agreed to by the Employee hereinabove shall be construed as separable and
divisible from every other restriction, and the unenforceability, in whole or in
part, of any such restriction, in any jurisdiction, shall not affect the
enforceability of such restriction in any other jurisdiction or of the remaining
restrictions in any jurisdiction, and that one or more or all of such
restrictions may be enforced in whole or in part as the circumstances warrant.
The Employee further acknowledges that the Company is relying upon such
covenants as an inducement to provide the Employee with employment and in
connection therewith
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to permit the Employee to have continued access to Confidential Information.
9. INDEMNIFICATION.
(a) In addition to the Company's obligation to maintain its
error and omissions insurance policy, the Company agrees to indemnify Employee
for any settlements, judgments, damages, costs, fees and expenses arising from
any suit, action or proceeding (collectively a "Claim") against the Employee
(including the litigation entitled Essex National Securities, Inc., Annuity
Agency of New York, Inc., and The Bank of New York, v. Xxxxxx Xxxxxxx d/b/a
Village Investments, North Shore Capital Management Corp., and North Ridge
Securities Corp. except to the extent of indemnification under the Stock
Purchase Agreement): if based on or relating to (i) the Employee's own direct
action with a client of the Company, so long as such claim does not arise out of
Employee's personal negligence or fraudulent conduct in dealing with such
client, and (ii) transactions in which the Employee acted in a supervisory
capacity so long as Employee's conduct was not fraudulent in connection with
such transaction.
(b) The Employee shall immediately notify the Company in
writing, with sufficient time to respond to any Claim or threatened Claim or
answer or otherwise plead in any such action; provided that failure or delay to
supply such notice shall not relieve the Company of its indemnification
hereunder except to the extent that the Company is actually prejudiced by such
failure or delay.
(c) In case any Claim is asserted against the Employee, and it
notifies the Company of the commencement thereof, then the Company shall be
entitled to participate therein, and to the extent that it may wish, to assume
the defense, conduct or settlement thereof. After notice from the Company to the
Employee of its election so to assume the defense, conduct or settlement
thereof, the Company shall not be liable to the Employee for any legal or other
expenses subsequently incurred by the Employee in connection with the defense,
conduct or settlement thereof; provided, however, that if the Employee has
material separate defenses that counsel to the Company would be prohibited from
raising because of a conflict of interest, then the Employee shall have the
right to be represented by its own counsel at the Company's expense. The
Employee will cooperate with the Company in connection with any such Claim and
make personnel, books and records relevant to the Claim available to the
Company.
(d) Prior to finally settling any such Claim, the Company
shall give to the Employee prompt notice of its intention to settle same and the
terms of such proposed settlement. No
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settlement of any Claim shall be made without the consent of the Company.
10. ENTIRE AGREEMENT. This Agreement, contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes any
prior agreement between the parties. No change, termination or attempted waiver
of any of the provisions hereof shall be binding unless in writing and signed by
the party against whom the same is sought to be enforced; PROVIDED, HOWEVER,
that the Employee's compensation may be increased at any time by the Company
without in any way affecting any of the other terms and conditions of this
Agreement, which in all other respects shall remain in full force and effect. No
action by either party shall be deemed a waiver of any right hereunder, and no
waiver of any right at any time shall operate as a waiver of any other right or
as a waiver of such right at any other time.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the respective heirs, legal representatives,
successors and assigns of the parties hereto, except that this agreement may not
be assigned by the Employee, or by the Company except to an affiliate of the
Company, in which case the Company shall remain liable for all of its
obligations hereunder.
12. GOVERNING LAW. All matters concerning the validity and
interpretation of and performance under this Agreement shall be governed by the
laws of the State of New York, except with respect to its conflict of laws
provisions.
13. NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient when delivered personally
or telecopied by confirmed facsimile, or three (3) business days after mailing
by registered or certified mail, return receipt requested, or the next business
day if sent by nationally recognized overnight courier providing for a return
receipt, in each case postage prepaid, addressed as follows:
If to Employer:
Xxxxxx & Ciocia, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxx, XX 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Akabas & Xxxxx
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
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If to Employee:
Xxxxxx Xxxx
00 Xxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxx Xxxx 00000
With a copy to:
Xxxxxx Xxxxxxxxx, Esq.
Steinberg, Fineo, Xxxxxx & Burlant, P.C.
0000 Xxxxxxxx Xxx. Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed, effective ten (10) days
after such notice.
14. SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement in any jurisdiction shall not affect the other
provisions hereof or such provision in other jurisdictions, and this Agreement
shall be construed in such jurisdiction in all respects as if such invalid or
unenforceable provisions were omitted. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision in such jurisdiction there shall be added
automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid and enforceable.
15. CONSTRUCTION. Throughout this Agreement, each pronoun shall be
deemed to include the masculine, the feminine and the neuter, the singular and
plural, and vice versa, where such meanings would be appropriate. The headings
herein are inserted only as a matter of convenience and reference, and they in
no way define, limit or describe the scope of this Agreement or the intent of
any provisions thereof.
16. FURTHER ASSURANCES. Each party shall execute such other documents
and instruments as shall be requested by the other party in order fully to
accomplish the purposes of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Employee has executed this Agreement and the
Company has caused this Agreement to be executed by its duly authorized officer
as of the date first above written.
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NORTH SHORE CAPITAL MANAGEMENT
CORP.
\s\ Xxxxxx X. Xxxx By:\s\ Xxxxx Xxxxxx
XXXXXX X. XXXX Name: Xxxxx Xxxxxx
Title: Vice President
NORTH RIDGE SECURITIES CORP.
By:\s\ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Vice President
Agreed as to
Section 4(d) and
Section 5(e)and
payments under
Sections 4(a)
and 4(c), and
maintenance of
insurance policy
under Section 4(f)
XXXXXX & XXXXXX,
INC.
By:\s\ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: President
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