Contract

Exhibit 10.29 SEPARATION AGREEMENT Separation Agreement (this "Agreement") dated as of February 8, 2005 between FIRST MONTAUK FINANCIAL CORP, its subsidiaries, affiliates, divisions, successors and assigns, their respective past and present officers, directors, employees, agents, attorneys, whether as individuals or in their official capacity, and each of their respective successors and assigns (hereinafter collectively referred to as "FMFC" or the "Company") and by his own free will, WILIIAM KURINSKY ("Kurinsky" or "Employee"). WHEREAS, Kurinsky has been a senior executive officer and member of the Board of Directors of FMFC; and WHEREAS, Kurinsky has been employed by FMFC as chief executive officer of FMFC pursuant to a written employment agreement dated as of January 1, 2004 between FMFC and Kurinsky (the "Employment Agreement"); and WHEREAS, Kurinsky and FMFC each desire an amicable cessation of the employment relationship and a termination of the rights and obligations of the parties under the Employment Agreement except as otherwise provided herein. NOW, THEREFORE, in consideration of the covenants and promises contained herein and for other good and valuable consideration, receipt of which is hereby acknowledged, Kurinsky and FMFC ( who hereinafter collectively may be referred to as the "Parties") hereby mutually agree as follows: 1. Employee acknowledges and agrees that effective at 5:00 pm Eastern Standard time on February 8, 2005, Employee's employment is terminated (the "Termination Date".) Notwithstanding the foregoing, Employee shall continue to serve as a member of the Board of Directors of FMFC in accordance with the Certificate of Incorporation and Bylaws of FMFC. 2. In consideration for the Parties' execution of this Agreement, the Company and the Employee agree as follows: a. Solely for the purpose of determining the benefits under Article IX of the Employment Agreement, Employee's termination shall be deemed a termination without cause and a termination by the Company under Section 9.1(c) of the Employment Agreement. b. FMFC shall issue to Employee a total of 197,824 shares of newly created Series B Convertible Preferred Stock, in accordance with the terms and conditions of the Certificate of Designation of Series B Convertible Preferred Stock annexed hereto as Exhibit A, which Series B Preferred Stock shall be deemed to have a value or issue price of $1,000,00.00. FMFC shall cause the Certificate of Designation of Series B Convertible Preferred Stock to be filed with the Secretary of State of New Jersey within five (5) business days of the date hereof. FMFC shall grant Employee "piggyback" registration rights with respect to the shares of common stock underlying the Series B Convertible Preferred Stock, which registration rights shall become effective if the proposed merger with Olympic Cascade Financial Corp. is not effected within 180 days of the Termination Date. c. The Company shall issue to Employee a promissory note (the "Note") in the principal amount of $200,000, payable with interest at the rate of 8% per annum, with a maturity date of February 8, 2006 and otherwise substantially in the form of Exhibit C annexed hereto. d. The Company shall pay Employee a lump sum payment of $136,000. e. The Company shall pay to Employee out of the management incentive pool (including all underwriting warrants earned through the Termination Date by the Company for inclusion therein regardless of whether such warrants have actually been issued) Employee's earned share thereof through the Termination Date. f. The Company shall issue to Employee, in connection with his retention as a consultant, an aggregate of 200,000 common stock options under the Company's 2002 Incentive Stock Option Plan with an exercise price of $0.83, with an exercise term of three (3) years. The options shall vest in two increments, with the first increment vesting on the date hereof and the second one year from the date hereof. Employee's existing outstanding options for an aggregate of 325,000 shares shall terminate upon execution of this Agreement. g. All unvested restricted stock grants held by Employee for 250,000 shares shall be deemed vested in full. 3. Consulting Agreement. Simultaneously with the execution of this Agreement, the Company will enter into a consulting agreement (the "Consulting Agreement") with the Employee, substantially in the form of Exhibit D to this Agreement. The Consulting Agreement shall be for a term of 24 months commencing on the Termination Date and the Company shall pay the Employee $12,645 per month as compensation for services to be rendered under the Consulting Agreement. 4. Benefits: a. FMFC shall continue to provide to Employee for a period of twenty-four (24) months the Continuation Benefits set forth in Section 1.7 of the Employment Agreement, and except as otherwise expressly provided in this Agreement, Employee will not be entitled to receive any other benefits after the Termination Date. b. Employee shall be paid for unused vacation time for 2005 in accordance with the Company's current policy. 5. Expense Reimbursement. To the extent Employee has unreimbursed business expenses, incurred through the Termination Date, Employee must submit the expenses with all appropriate documentation within 60 days of the date hereof; those expenses which meet the Company's guidelines will be reimbursed. Any expense account that Employee has with the Company terminates effective on the Termination Date, and any expenses already incurred will be reviewed and processed in accordance with the policies and procedures of the Company. No new expenses may be incurred after the Termination Date. Employee agrees to promptly pay any outstanding balance on these accounts that represent non-reimbursable expenses. 6. Employee understands that this Agreement does not constitute an admission by the Company of any liability, error or omission, including without limitation, any: (a) violation of any statute, law, or regulation; (b) breach of contract, actual or implied; or (c) commission of any tort. 7. Employee acknowledges that the consideration provided in this Agreement is less than that to which Employee would otherwise be entitled under the Employment Agreement. The Company acknowledges that Employee is accepting less consideration under this Agreement than he would otherwise be entitled to under the Employment Agreement. The parties further acknowledge that the execution, delivery and performance of this Agreement is conditioned upon the execution and delivery of mutual releases between the Parties. 8. The Parties agree that, except as provided for herein, in the Consulting Agreement and in the Note, there shall be no other payments or benefits payable to Employee, including but not limited to, salary, bonuses, commissions, gross up payments, finder's fees and/or other payments. 9. Arbitration: a. Any dispute arising out of the interpretation, application, and/or performance of this Agreement shall be settled through final and binding arbitration before a panel of arbitrators in accordance with the rules of the National Association of Securities Dealers (the "NASD"). Any judgment upon any arbitration award may be entered in any court, federal or state, having competent jurisdiction of the parties before a single arbitrator in the State of New Jersey in accordance with the Rules of the American Arbitration Association. The arbitrators shall be selected by the NASD. Any judgment upon any arbitration award may be entered in any court, federal or state, having competent jurisdiction of the parties. b. The Parties' agreement to arbitrate disputes includes, but is not limited to, any claims of unlawful discrimination and/or unlawful harassment under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act 1967, as amended, the Americans with Disabilities Act, the New Jersey and New York Civil Rights Laws, the New Jersey Law Against Discrimination, the New York Executive Law, the New York City Human Rights Law, the New Jersey Conscientious Employee Protection Act, the New Jersey Family Leave Act, or any other federal, state or local law relating to discrimination in employment and any claims relating to wage and hour claims and any other statutory or common law claims. 10. Employee and FMFC agree that the terms and existence of this Agreement are and shall remain confidential and agree not to disclose any terms or provisions of this Agreement, or to talk or write about the negotiation, execution or implementation of this Agreement, without the prior written consent of the other, except (a) as required by law; (b) as required by regulatory authorities; (c) as required within FMFC to process this Agreement; or (d) in connection with any arbitration or litigation arising out of this Agreement. Anything herein to the contrary notwithstanding, Employee may disclose the terms of this Agreement to Employee's immediate family, accountant or attorney, provided they are made aware of and agree to the confidentiality provisions. 11. Employee understands and agrees that the Company shall be required to file a copy of this Agreement and Exhibits with the Securities and Exchange Commission ("SEC") and make other disclosures in accordance with the rules and regulations of the SEC. The Company shall provide Employee with the opportunity to comment upon such disclosures prior to any filing or public notice thereof. In addition, the Company shall be required to continue Employee's registration with the NASD for a period of 24 months at the costs and expense of the Company. 12. Employee further acknowledges and agrees that any non-public and/or proprietary information of the Company and/or its customers disclosed to or prepared by Employee during Employee's employment remains confidential and may not be used and/or disclosed by Employee hereafter without the prior written consent of FMFC. Employee further agrees that the provisions of Article VI of the Employment Agreement (Non-Disclosure) shall remain in full force and effect. 13. Solely for the purpose of determining the applicability of the Restrictive Covenant in Article VII of the Employment Agreement, Employee shall be deemed to have voluntarily terminated his employment as of the termination date of the Employment Agreement, and Employee hereby agrees that all of the provisions of Article VII, as modified by this paragraph, shall remain in full force and effect. Further, in addition to the provisions of Article VII, Employee also agrees that in consideration for the payments and other consideration provided in this Agreement and the Consulting Agreement, Employee will not for a period of six months after the termination of the Consulting Agreement, either directly or indirectly, (a) solicit any person who is employed by FMFC (or who was employed by FMFC within 90 days of the termination of the Consulting Agreement) to: (i) terminate his employment with FMFC; (ii) accept employment with anyone other than FMFC, or (b) in any manner interfere with the business of FMFC. 14. Litigation a. Employee shall cooperate fully with the Company in the prosecution or defense, as the case may be, of any and all actions, governmental inquiries or other legal or regulatory proceedings in which Employee's assistance may be reasonably requested by the Company. Reasonable expenses arising from the cooperation will be reimbursed by the Company. Consistent with the Certificate of Incorporation of the Company's and its By-Laws as in effect on the date hereof, FMFC will hold harmless and indemnify Employee from and against any expenses (including attorneys' fees), judgments, fines and amounts paid in settlement arising from any claim, suit or other action against Employee by any third party, on account of any action or inaction by Employee taken or omitted to be taken by Employee on behalf of FMFC during the course of his employment, up to his date of termination, provided that such action or inaction by Employee was within the scope of Employee's employment. In accordance with Article XIV of the Employment Agreement, the Company further agrees to maintain such insurance as is necessary and reasonable to protect the Employee from any and all claims arising from or in connection with his employment by the Company for a period of six (6) years after the Termination Date. b. Employee acknowledges that he has advised the Company completely and candidly of all facts of which he is aware that may give rise to legal matters. 15. Employee agrees to cause all requests for references to be forwarded in writing to the Company, attention: Office of the President. The Company will state in response to such inquiries your dates of employment and positions held. The Company shall not be responsible for responses to reference requests sought or obtained other than under the procedures set forth in this paragraph. 16. Employee realizes there are many laws and regulations prohibiting employment discrimination, or otherwise regulating employment or claims related to employment pursuant to which Employee may have rights or claims. These include but are not limited to Title VII of the Civil Rights Act of 1964, as amended; the Americans with Disabilities Act of 1990; the Pregnancy Discrimination Act; the National Labor Relations Act, as amended; 42 U.S.C 1981; the Employee Retirement Income Security Act of 1974, as amended; the Age Discrimination in Employment Act of 1967, as amended; the Civil Rights Act of 1991; the Worker Adjustment and Retraining Notification Act; the New York State and City Human Rights Laws; the New Jersey Law Against Discrimination; the New Jersey Conscientious Employee Protection Act, the New Jersey Family Leave Act, and other Federal, State and local human rights, fair employment and other laws. Employee also understands there are other statutes and contract and tort laws which relate to Employee's employment and/or the termination of Employee's employment. Employee hereby knowingly and voluntarily agrees to waive and release any rights or claims Employee may have under these and other laws, but does not intend to, nor is Employee waiving any rights or claims that may arise after the date that this Agreement is signed by Employee. Notwithstanding the foregoing sentence, Employee's waiver and release shall not extend to (i) any rights, remedies, or claims Employee may have in enforcing the terms of the Agreement; and (ii) any rights Employee may have to receive vested amounts under FMFC's stock option plans or pension plans. 17. This Agreement shall be deemed to have been made within the County of Monmouth, State of New Jersey, and shall be interpreted and construed and enforced in accordance with the laws of the State of New Jersey without regard to its conflicts of law provision. 18. Employee is hereby advised of Employee's rights to review this Agreement with counsel of Employee's choice. Employee has had the opportunity to consult with an attorney and/or other advisor of Employee's choosing before signing the Agreement, and was given a period of twenty-one (21) days to consider the Agreement. Employee is permitted, at his discretion, to return the Agreement prior to the expiration of this 21-day period. Employee acknowledges that in signing this Agreement, Employee has relied only on the promises written in this Agreement, and not on any other promise made by the Company or any other entity or person. 19. Employee represents that Employee has not filed any complaints, charges or claims against FMFC with any local, State, or Federal agency or court, or with any other forum. 20. Employee agrees to immediately return any FMFC property no matter where located including, but not limited to, FMFC I.D. card, corporate credit card, keys, computer disks, and written/electronic material prepared in the course of employment at FMFC. Notwithstanding the foregoing, Employee shall be entitled to retain his desktop and laptop computers and all personal belongings as well as office furnishings. 21. If any provision of this Agreement, or any part thereof, is held to be invalid or unenforceable because of the scope or duration of or the area covered by such provision, Employee and FMFC agree that the court or other appropriate decision-making authority making such determination shall reduce the scope, duration and/or area of such provision (and shall substitute appropriate provisions for any such invalid or unenforceable provisions) in order to make such provision enforceable to the fullest extent permitted by law and/or shall delete specific words and phrases, and such modified provision shall then be enforceable and shall be enforced. In the event that any court or other appropriate decision-making authority determines that the time period or the area, or both, are unreasonable and that any of the covenants is to that extent invalid or unenforceable, the parties hereto agree that such covenants will remain in full force and effect, first, for the greatest time period, and second, in the greatest geographical area that would not render them unenforceable. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement shall nonetheless survive and be enforced to the fullest extent permitted by law. 22. Except as otherwise expressly provided herein, this Agreement, the Consulting Agreement, the Note and the Mutual Release constitute the entire agreement between the Parties and supersede any and all prior agreements, whether written or oral. This Agreement may not be modified or changed, except in a written agreement signed by both Parties. [signature page is next] 23. The Agreement may be executed in multiple counterparts, each of which shall be considered an original but all of which shall constitute one agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates set forth below. I have read this Agreement, and I understand all of its terms. I enter into and sign this Agreement knowingly and voluntarily with full knowledge of what it means. I understand that I have twenty-one (21) days to consider this Agreement and return it to FMFC. I also understand that I have seven (7) days to revoke this Agreement in writing after I sign it. I understand that a revocation will become effective only if I furnish FMFC with written notice, within such seven (7) day period. This Agreement will not become effective or enforceable until FMFC's receipt back of Employee's executed Agreement and the expiration of the seven day revocation period. /s/ William Kurinsky 2/8/05 ------------------------------------ -------------------- William Kurinsky Date FIRST MONTAUK FINANCIAL CORP. By /s/ Victor Kurylak 2/8/05 ---------------------------------- -------------------- Victor Kurylak Date President MUTUAL RELEASE Each of the Parties understands and, of his or its own free will, enters into this Mutual Release. (a) In consideration of the payments, benefits, agreements, and other consideration to be provided by FMFC as described in the SEPARATION AGREEMENT AND RELEASE dated as of February 8, 2005 of which this General Release is a part (such agreement, this General Release, together, the "Agreement"), WILLIAM KURINSKY, for himself or herself and for his heirs, executors, administrators, and their respective successors and assigns (collectively, "Employee"), HEREBY RELEASES AND FOREVER DISCHARGES, to the maximum extent permitted by law, FIRST MONTAUK FINANCIAL CORP, its stockholders, subsidiaries, affiliates, divisions, successors and assigns, their respective current and former officers, directors, employees, agents, attorneys, whether as individuals or in their official capacity, and each of their respective successors and assigns (hereinafter collectively referred to as "FMFC") of and from all or any manner of actions, causes and causes of action, suits, debts, obligations, damages, complaints, liabilities, losses, covenants, contracts, controversies, agreements, promises, variances, trespasses, judgments and expenses (including attorneys' fees and costs), extents, executions, claims and demands whatsoever at law or in equity ("claims"), specifically including by way of example but not limitation, Title VII of the Civil Rights Acts of 1964 and 1991, as amended; the Civil Rights Act of 1866; the Employee Retirement Income Security Act of 1974, as amended; the National Labor Relations Act, as amended; the Americans with Disabilities Act of 1990; the Age Discrimination in Employment Act of 1967, as amended; the Worker Adjustment and Retraining Notification Act; the Pregnancy Discrimination Act; and all Federal, State and local statutes, regulations, decisional law and ordinances and all human rights, fair employment, contract and tort laws relating to Employee's employment with FMFC and/or the termination thereof including, again by way of example but without limitation, the New Jersey Civil Rights Laws, the New Jersey Law Against Discrimination, the New Jersey Conscientious Employee Protection Act, the New Jersey Family Leave Act, any civil rights or human rights law, as well as all claims for wrongful discharge, breach of contract, personal injury, defamation, mental anguish, injury to health and reputation, and sexual harassment, which Employee ever had, now has, or which Employee hereafter can, shall or may have for, upon or by reason of any matter, cause or thing whatsoever arising out of Employee's employment by FMFC or the termination thereof, provided that this General Release shall not extend to (i) any rights, remedies, or claims Employee may have in enforcing the terms of this Agreement; (ii) any rights Employee may have to receive vested amounts under FMFC's stock option plan, 401-K or pension plans; (iii) Employee's rights to medical benefit continuation coverage, on a self-pay basis, pursuant to federal law (COBRA); and (iv) claims for indemnification (whether under state law, the Company's by-laws or otherwise) for acts performed as an officer or director of the Company or any of its affiliates. Employee takes this action fully aware of Employee's rights arising under the laws of the United States (and any State or local governmental entity thereof) and voluntarily waives and releases all such rights or claims under these or other laws, but does not intend to, nor is Employee waiving any rights or claims that may arise after the date that this Agreement is signed by Employee. The provisions of any laws providing in substance that releases shall not extend to claims which are at the time unknown to or unsuspected by the person executing such release, are hereby waived. (b) In consideration of the payments, benefits, agreements, and other consideration to be provided by Employee as described in the SEPARATION AGREEMENT AND RELEASE dated as of February 8, 2005 of which this General Release is a part (such agreement, this General Release, together, the "Agreement"), FIRST MONTAUK FINANCIAL CORPORATION, for itself stockholders, subsidiaries, affiliates, divisions, successors and assigns, their respective current and former officers, directors, employees, agents, attorneys, whether as individuals or in their official capacity, and each of their respective successors and assigns, HEREBY RELEASES AND FOREVER DISCHARGES, to the maximum extent permitted by law, EMPLOYEE, of and from all or any manner of actions, causes and causes of action, suits, debts, obligations, damages, complaints, liabilities, losses, covenants, contracts, controversies, agreements, promises, variances, trespasses, judgments and expenses (including attorneys' fees and costs), extents, executions, claims and demands whatsoever at law or in equity ("claims"), specifically including by way of example but not limitation, Title VII of the Civil Rights Acts of 1964 and 1991, as amended; the Civil Rights Act of 1866; the Employee Retirement Income Security Act of 1974, as amended; the National Labor Relations Act, as amended; the Americans with Disabilities Act of 1990; the Age Discrimination in Employment Act of 1967, as amended; the Worker Adjustment and Retraining Notification Act; the Pregnancy Discrimination Act; and all Federal, State and local statutes, regulations, decisional law and ordinances and all human rights, fair employment, contract and tort laws relating to Employee's employment with FMFC and/or the termination thereof including, again by way of example but without limitation, the New Jersey Civil Rights Laws, the New Jersey Law Against Discrimination, the New Jersey Conscientious Employee Protection Act, the New Jersey Family Leave Act, any civil rights or human rights law, as well as all claims for wrongful discharge, breach of contract, personal injury, defamation, mental anguish, injury to health and reputation, and sexual harassment, which Employee ever had, now has, or which Employee hereafter can, shall or may have for, upon or by reason of any matter, cause or thing whatsoever arising out of Employee's employment by FMFC or the termination thereof, provided that this General Release shall not extend to (i) any rights, remedies, or claims FMFC may have in enforcing the terms of this Agreement; and (ii) for indemnification (whether under state law, the Company's by-laws or otherwise) for acts performed by Employee as an officer or director of the Company or any of its affiliates. FMFC takes this action fully aware of its rights arising under the laws of the United States (and any State or local governmental entity thereof) and voluntarily waives and releases all such rights or claims under these or other laws, but does not intend to, nor is FMFC waiving any rights or claims that may arise after the date that this Agreement is signed by FMFC. The provisions of any laws providing in substance that releases shall not extend to claims which are at the time unknown to or unsuspected by the person executing such release, are hereby waived. Employee represents that Employee has been advised to and has had an opportunity to consult with an attorney and/or any other advisors of Employee's choosing before signing this Agreement, and was given a period of twenty-one (21) days to consider this Agreement. Employee is permitted, at his discretion, to return the Agreement prior to the expiration of this 21-day period. Employee has relied only on the promises written in the Agreement, and not on any other promise made by FMFC or any other entity or person. Employee has seven (7) days to revoke the Agreement after Employee signs it. The Agreement will not become effective or enforceable until FMFC's receipt back of Employee's executed Agreement and the expiration of the seven day revocation period. Employee has read and understood the Agreement and enters into it knowingly and voluntarily. IN WITNESS WHEREOF, each of the parties has executed this Mutual Release this day of February 8, 2005 having had the opportunity to review this with counsel of his or its choice. /s/ William Kurinsky 2/8/05 --------------------------------- --------------------- William Kurinsky Date First Montauk Financial Corp. By: /s/ Victor Kurylak 2/8/05 ------------------------------ ---------------------- Victor Kurylak Date President