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EXHIBIT 10.33
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 15th day of
September, 1998 is entered into between Freedom Securities Corporation, a
Delaware corporation with its principal place of business at Xxx Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx (the "Company"), and Xxxx X. Xxxxxxx, (the "Executive").
In consideration of the mutual covenants and promises contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties agree as follows:
1. Term of Employment. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to serve the Company, upon the terms
set forth in this Agreement, for the period commencing on the date of this
Agreement and ending on September 15, 2000 (the "Expiration Date"), unless
sooner terminated in accordance with the provisions of this Agreement.
2. Position and Performance.
2.1 Offices. The Executive shall serve as Chief Executive Officer of
Sutro & Co., Incorporated. The Executive shall be subject to the supervision of
the Chief Executive officer (the "CEO") of the Company and shall also have such
other powers, duties and responsibilities commensurate with such office or
offices as may from time to time reasonably be prescribed by the CEO. In
addition, the Executive agrees to serve during the term of his employment
hereunder, if elected or appointed thereto, in one or more positions as an
officer or director of the Company or any one or more of its present or future
Subsidiaries. Service in such additional offices will be without additional
compensation except for reimbursement of reasonably related business expenses
on the same terms as provided elsewhere in this Agreement. The Company shall
not cause the Executive to relocate his residence in connection with the
fulfillment of his duties and responsibilities hereunder without the
Executive's prior consent.
2.2 Performance. During the term hereof, the Executive shall be
employed by the Company on a full-time basis and shall perform and discharge
(faithfully, diligently and to the best of his ability) his duties and
responsibilities hereunder and shall be accountable to the CEO; provided,
however, that Executive may pursue community and charitable activities and hold
positions in connection therewith and such other activities as may be approved
in advance by the CEO, such approval not to be unreasonably withheld.
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3. Compensation and Benefits.
3.1 Salary. The Company shall pay the Executive such annual base
salary as the Executive and the CEO agree upon from time to time. In addition,
the Executive shall be entitled to receive bonus compensation, if any, in such
amount or pursuant to such formula as the Executive and the CEO agree upon from
time to time. Notwithstanding the foregoing, the Executive shall be entitled to
receive minimum cash compensation under this Agreement, whether as salary,
bonus, or otherwise (not including any gain on the purchase of Company stock)
in any calendar year of at least $700,000 less such amounts or deductions
required to be withheld by applicable law. Base salary shall be payable in
accordance with the payroll practices of the Company.
3.2 Other Fringe Benefits. The Executive shall be entitled to
participate in all benefit programs (including, without limitation, all life
and disability insurance, health and accident plans, retirement plans, stock
incentive plans, and retention plans and other arrangements) that the Company
(or its subsidiaries) makes available to employees or key executives of the
Company (or any such subsidiary), with the Executive's participation to be at a
level consistent with the Executive's position with the Company. The Executive
shall be entitled to 6 weeks paid vacation per calendar year, to be taken at
such times as he deems appropriate. The Executive shall be entitled to carry
forward unused vacation pay and to cash out any unused vacation pay upon the
termination of the Executive's employment. The benefits described in this
Section 3.2 are hereinafter referred to as the "Benefits."
3.3 Reimbursement of Expenses. The Company shall promptly reimburse
the Executive for reasonable travel, entertainment and other expenses incurred
or paid by the Executive in connection with, or related to, the performance of
the Executive's duties, responsibilities or services under this Agreement upon
presentation by the Executive of documentation, expense statements, vouchers
and/or other supporting information as the Company may request, provided,
however, that the amount available for such travel, entertainment and other
expenses may be fixed in advance by the CEO.
4. Employment Termination.
4.1 Date of Termination; Term of Employment. The term "Date of
Termination" shall mean the earlier of (i) the Expiration Date or (ii) if the
Executive's employment is sooner terminated hereunder, the date on which such
termination is to be effective pursuant to the terms hereof. For all purposes
of this Agreement, references to the "term" of the Executive's employment
hereunder shall mean the period commencing on the date hereof and ending on the
Date of Termination.
4.2 Upon Death or Disability. This Agreement shall terminate on the
date of the death or disability of the Executive. As used in this Agreement,
the term "disability" shall mean the inability of the Executive, due to a
physical or mental disability, or a period of 180 consecutive days to perform
the essential functions of the
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Executive's position which are contemplated under this Agreement. A
determination of disability shall be made by a physician satisfactory to both
the Executive and the Company, provided that if the Executive and the Company do
not agree on a physician, the Executive and the Company shall each select a
physician and those two together shall select a third physician, whose
determination as to disability shall be binding on all parties. The reasonable
fees and expenses of any and all such physicians shall be borne by the Company.
4.3 By the Company for Cause. This Agreement may be terminated by the
Company for cause immediately upon written notice by the Company to the
Executive setting forth the basis for such termination with particularity. For
the purposes of this Section 4.3, "cause" for termination shall mean (i) a
material failure of the Executive to perform the Executive's assigned duties
for the Company or gross negligence or willful misconduct of the Executive in
the performance of the Executive's assigned duties for the Company or any
breach of any covenant contained in Section 6 or 7 hereof, in each case after
notice and a reasonable opportunity to cure (if such act or failure shall be
susceptible to cure) of not less than 30 days, and (ii) the conviction of the
Executive of, or the entry of a pleading of guilty or nolo contendere by the
Executive to, any crime involving moral turpitude or any felony.
4.4 By the Executive for Good Reason. This Agreement may be
terminated by the Executive upon 30 days' prior written notice to the Company
for good reason. For purposes of this Section 4.4, "good reason" shall mean (i)
any removal by the Company of the Executive from the position indicated in
Section 2 hereof, except in connection with termination of the Executive's
employment for cause or termination or suspension of employment due to the
Executive's incapacity, (ii) a reduction in the Executive's compensation below
the minimum amount provided for in Section 3.1 hereof or Benefits (except to the
extent that any such reduction is the result of a change to or termination of a
benefit program in which the Executive participates which applies equally to all
other participants therein), or (iii) any breach by the Company of its
obligations under this Agreement or any other willful action by the Company that
is materially inconsistent with the terms of this Agreement after written notice
and a reasonable opportunity to cure of not less than 30 days.
4.5 At the Election of either Party. This Agreement may be terminated
by either the Company or the Executive at any time upon at least 30 days' prior
written notice.
5. Effect of Termination.
5.1 Termination by the Company for Cause or Termination by Executive
Pursuant to Section 4.5. In the event that the Executive's employment is
terminated for cause pursuant to section 4.3 or the Executive shall terminate
this Agreement pursuant to Section 4.5, the Company shall pay to the Executive
salary, bonus
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and other cash compensation at his then current rate of pay (which shall be not
less than the amount of salary, bonus and other cash compensation earned per
day for the fiscal year ended immediately prior to such Date of Termination and
in no event less than the $700,000 per annum rate of pay) and Benefits through
the Date of Termination, provided, however, that in the event of any
termination of the Executive's employment for cause, the foregoing compensation
amount shall be the minimum compensation set forth in Section 3.1 hereof.
5.2 Termination by the Company without Cause or Termination by the
Executive pursuant to Section 4.4. In the event that the Executive's employment
is terminated by the Company pursuant to Section 4.5 or the Executive
terminates his employment pursuant to Section 4.4, the Company shall pay to the
Executive an amount equal to his salary, bonus and other cash compensation at
his then current rate of pay (which shall be not less than the amount of
salary, bonus and other cash compensation earned per day for the fiscal year
ended immediately prior to such Date of Termination and in no event less than
the $700,000 per annum rate of pay) and benefits (or the cash value thereof)
through the end of the twenty-fourth (24th) month following such Date of
Termination (the "Severance Period"). The compensation payable during the
Severance Period shall be paid in a lump sum amount equal to $500,000 within
five business days after the Date of Termination and the remaining compensation
shall be paid to the Executive in equal monthly installments on the first day
of each month during the Severance Period, plus accrued interest on such
installment amounts at a rate equal to LIBOR. In addition, any unvested stock
options, restricted stock or other equity or partnership interests of the
Company or any of its Subsidiaries held by the Executive on the Date of
Termination shall become fully vested, and in the case of stock options
immediately exercisable, to the extent not prohibited by applicable law.
5.3 Termination for Death or Disability. If the Executive's
employment is terminated by death or because of disability pursuant to Section
4.2, the Company shall pay to the estate of the Executive or to the Executive,
as the case may be, salary, bonus and other cash compensation at his then
current rate of pay (which shall be not less than the amount of salary, bonus
and other cash compensation earned per day for the fiscal year ended
immediately prior to such Date of Termination and in no event less than the
$700,000 per annum rate of pay) and Benefits up to the end of the month in
which the termination of the Executive's employment because of death or
disability occurs.
5.4 Liquidated Damages. Any payments paid to the Executive by the
Company under this Section 5 shall be deemed liquidated damages and shall be in
lieu of any other rights to which the Executive may be entitled.
5.5 Survival. The provisions of Sections 5, 6 and 7 shall survive the
termination of this Agreement.
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6. Non-Solicit.
(a) During the Non-solicit Period, the Executive will not:
(i) solicit, divert or take away, or attempt to divert or to
take away, the business or patronage of any of the brokerage or
investment banking clients, customers or accounts of the Company or
its subsidiaries.
(ii) solicit any officer, senior manager or senior broker who
was an employee of the Company at any time during the term of this
Agreement to leave such employment.
(b) For purposes of this Section 6, the term "Non-solicit Period"
shall mean the period commencing on the date hereof and (i) ending two years
after the date the Executive's employment is terminated by the Company pursuant
to Section 4.5 or by the Executive pursuant to Section 4.4, or (ii) ending six
months after the date the Executive terminates his employment pursuant to
Section 4.5.
(c) If any restriction set forth in this Section 6 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
(d) The restrictions contained in this Section 6 are necessary for
the protection of the business and goodwill of the Company and its affiliates
and are considered by the Executive to be reasonable for such purpose. The
Executive agrees that any breach of this Section 6 could cause the Company and
its affiliates substantial and irrevocable damage and therefore, in the event
of any such breach, in addition to such other remedies which may be available,
the Company and its affiliates shall have the right to seek specific
performance and injunctive relief.
7. Unauthorized Disclosure of Confidential Information.
(a) Confidentiality. The Executive acknowledges that the Company,
its subsidiaries and its affiliates continually develop Confidential
Information, that the Executive may develop Confidential Information for the
Company or its affiliates and that the Executive may learn of Confidential
Information during the course of his employment. The Executive will comply with
the written policies and procedures of the Company for protecting Confidential
Information which will be provided to him and, for the term hereof and
thereafter, will not disclose to any person (except as required by any statutory
or regulatory requirement or mandatory court order, subpoena or other legal
process, and except to any person required for the proper performance of his
duties and responsibilities to the Company and its affiliates), or use for his
own benefit or gain or otherwise use in a manner adverse to the interests of
the Company and its affiliates, any
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Confidential Information obtained by the Executive incident to his employment
or other association with the Company or any of its affiliates.
(b) Return of Documents. All documents, records, tapes and other media of
every kind and description relating to the business, present or otherwise, of
the Company, its subsidiaries or its affiliates and any copies, in whole or in
part, thereof (the "Documents"), whether or not prepared by the Executive,
shall be the sole and exclusive property of the Company and its affiliates. The
Executive shall safeguard all Documents and shall surrender to the Company at
the time his employment terminates, or at such earlier time or times as the CEO
or his designee may specify, all Documents then in the Executive's possession or
control.
(c) Assignment of Rights to Intellectual Property. The Executive shall
promptly and fully disclose all Intellectual Property to the Company. The
Executive hereby assigns to the Company (or as otherwise directed by the
Company) the Executive's full right, title and interest in and to all
Intellectual Property as defined herein. The Executive agrees to execute any
and all applications for domestic and foreign patents, copyrights or other
proprietary rights and to do such other acts (including without limitation the
execution and delivery of instruments of further assurance or confirmation)
requested by the Company to assign the Intellectual Property to the Company and
to permit the Company to enforce any patents, copyrights or other proprietary
rights to the Intellectual Property. The Executive will no charge the Company
for time spent in complying with these obligations. All copyrightable works
that the Executive creates shall be considered "work made for hire".
(d) Defined Terms. "Confidential Information" as used herein means any and
all information of the Company and its subsidiaries that is not generally known
by others with whom they compete or do business, or with whom they plan to
compete or do business and any and all information, not publicly know, which, if
disclosed, would assist in competition against the Company and its subsidiaries,
or the disclosure of which would otherwise be adverse to the interest of the
Company or any of its subsidiaries. Confidential Information also includes
comparable information that the Company or any of its subsidiaries have received
belonging to others or which was received by the Company or any of its
subsidiaries with any understanding that it would not be disclosed; provided,
however, that Confidential Information shall not include anything (i) that has
been disclosed to the public (other than in connection with a breach by the
Executive of his obligations hereunder), (ii) that has been obtained by the
Executive from a third party otherwise than in violation of a confidentiality
agreement to which such third party is bound, or (iii) that has otherwise
lawfully entered the public domain. "Intellectual Property" as used herein means
inventions, discoveries, developments, methods, processes, compositions, works,
concepts and ideas (whether or not patentable or copyrightable or constituting
trade secrets) relating to the business of the Company, its Subsidiaries and its
affiliates conceived, made, created, developed or reduced to practice
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by the Executive (whether alone or with others, whether or not during normal
business hours or on or off Company premises) during the Executive's employment.
8. Notices. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States mail, by registered or certified mail, postage
prepaid, or via a reputable nationwide overnight courier service addressed to
the other party at such address or addresses as either party shall designate to
the other in accordance with this Section 8.
9. Indemnity. The Company hereby agrees, to the maximum extent permitted
from time to time under Delaware law, to indemnify the Executive, and upon
request shall advance expenses to the Executive if he shall become a party or
is threatened to be made a party to, any threatened, pending or completed
action, suit, proceeding or claim, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was or has agreed to be a
director or hold any of such offices, against expenses (including attorneys'
fees and expenses), judgments, fines, penalties and amounts paid in settlement
incurred in connection with the investigation, preparation to defend or defense
of such action, suit, proceeding or claim; provided, however, that the
foregoing shall not require the Company to indemnify the Executive against, or
advance expenses to the Executive in connection with, any action, suit,
proceeding or claim resulting from any breach of the Executive's duties
hereunder that would permit the Company to terminate this Agreement for cause.
Such indemnification shall not be exclusive of other indemnification rights
arising under any by-laws, agreement, vote of directors or stockholders or
otherwise.
10. Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.
11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
12. Amendment. This Agreement may be amended or modified only by a
written instrument executed by each of the Company and the Executive.
13. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of California without regard to conflict
of law principles.
14. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may
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succeed to its assets or business, provided, however, that the obligations of
the Executive are personal and shall not be assigned by him.
15. Disputes. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in San
Francisco, California, in accordance with the Rules of the national Association
of Securities Dealers, Inc. or of the New York Stock Exchange, Inc. Judgment
may be entered on an arbitrator's award relating this Agreement in any
court having jurisdiction.
16. Miscellaneous.
16.1 No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any
right on any other occasion.
16.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope
or substance of any section of this Agreement.
16.3 In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
FREEDOM SECURITIES CORPORATION
By: /s/ XXXX XXXXXXXXX
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Xxxx Xxxxxxxxx
Title:
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EXECUTIVE: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
