FORM OF EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the
8th day of November, 1999, between Colonial Direct Financial Group, Inc., a
Delaware corporation ("Employer"), and Xxxxxxx X. Xxxx, an individual
("Employee").
Employer is a corporation which is engaged in the securities and
related businesses throughout the United States from its principal office
location at 0000 X. Xxxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000
(the "Office"). Employer wishes to employ Employee to provide certain services
related to employee benefits consulting and administration to Employer and
Employee is willing to be employed by Employer to render such services, all in
accordance with the terms and conditions specified below and in accordance with
the all applicable federal and state statutes, rules and regulations then in
effect.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Engagement. Employer does hereby employ and engage Employee as Chief,
Executivc Officer of Colonial Direct Financial Group, Inc., a wholly-owned
subsidiary of Employer, at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxx,
Xxxxxxx ("Office") and as a member of Employer's Board of Directors, and
Employee does hereby accept and agree to such employment and engagement. In
connection herewith, Employee shall dedicate such time and resources as are
commensurate, with his responsibilities, it being acknowledged that the
Employee's primary commitment is to the practice of law and his engagement
hereunder will be part-time. Employer acknowledges that since the Employee is
engaged in the practice of law in performing legal services certain of those
services may include services offered by the Employer or its affiliates. Nothing
herein, including Sections 6 through 9, shall be construed to limit Employee's
right to perform legal and related incidental services, including employee
benefit services, or require him to take any action or fail to take any action
which he deems would or may be in violation of any professional or other rules
applicable to Employee as an attorney.
2. Term. Except as otherwise provided herein, the term of this Agreement shall
be for a period of two (2) years from the date of this Agreement (the "Initial
Term"), and thereafter automatically shall renew for three successive one-year
terms, at the option of Employee, unless earlier terminated as provided for
herein.
3. Compensation:
3.1 Base Salary. Employer shall pay Employee, and Employee agrees to
accept from Employer as payment in full for Employee's services hereunder, a
base salary of $150,000 per year (the "Base Salary"), payable in accordance with
the payroll of Employer during the term of this Agreement. The Base Salary shall
be subject to an adjustment twelve months from the date of this Agreement, in
Employer's sole discretion, based on, among other things, Employee's
contribution to the net profitability of Employer and its subsidiaries.
3.2 Additional Compensation. In addition to such Base Salary, Employee
shall be entitled to Additional Compensation which shall be based upon
Employee's success in introducing new business to Employer, its divisions or
subsidiaries with (i) existing clients of Employer or such divisions or
subsidiaries; or (ii) third parties introduced thereto by Employee. Such
Additional Compensation shall be based on a equal division of net profitability
of such new business between Employer, Employee and such division or subsidiary,
as appropriate. The Additional Compensation shall be calculated and payable not
less than 90 days after the end of Employer's fiscal year or at more frequent
intervals if calculated and payable to any other executive of the Employer on a
more frequent basis.
3.3 Stock Options. Employee will be eligible for and be entitled to
participate in any stock option program created for the benefit of any of its
employees at a comparable executive level as Employee, in such amount as is
reasonably determined by Employer's Board of Directors or such committee
appointed thereby as is reasonably commensurate with his position and
compensation.
4. Vacation. Employee shall be entitled to an annual vacation of six (6) weeks,
without loss of compensation. Vacation scheduling shall be made by Employee so
as not to materially disrupt the continuity of the business of Employer. Accrued
vacation not taken at the end of the year in which days have been accrued
automatically will be forfeited.
5. Health and Fringe Benefits. Employee shall be entitled to participate in such
health benefits and plans, and other fringe benefits as are made available by
Employer (or its affiliates) to its employees at Employee's level on a usual and
customary basis.
6. Confidential Information. Employee acknowledges and agrees that he will have
access to certain confidential information of the Employer and that such
information constitutes valuable, special and unique property of Employer.
Subject to Employee's use of information reasonably required in the practice of
law and Employee's right to divulge such information to partners, associates and
other persons in connection with that practice, Employee further acknowledges
and agrees that Employee will not, at any time during or after the term hereof,
in any fashion, form, or manner, either directly or indirectly, divulge,
disclose or communicate to any person, firm, or corporation, in any manner
whatsoever, the terms and conditions of this Agreement or any information of any
kind, nature or description concerning any matters affecting or relating to the
business of the Employer ("Confidential Information").
7. Client Information. Except as to such information related to Employee's
practice of law to which Employee, his partners and associates shall also be
entitled to retain for that purpose, Employee agrees that (i) all client names,
addresses, telephone numbers, files, and records (collectively, "Client
Records") are and shall remain in the custody and control of Employer, and,
except as necessary and permitted for purposes directly related to the operation
of the Office or proper client service, or as authorized and required by law or
client consent, Employee shall not remove, copy, transfer, or transmit to any
person, natural or corporate, any Client Records at any time; and (ii) an actual
or attempted violation of any provision of this Section by Employee, either
directly or indirectly, shall be grounds for immediate termination of this
Agreement.
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Employee recognizes and agrees that a violation of any of the
provisions contained in this Section may cause irreparable damage to Employer,
the exact amount of which may be impossible to ascertain, and that, for such
reason, among others, Employer shall be entitled to an injunction without the
necessity of posting bond therefor in order to restrain any further violation of
such provisions. Such right to an injunction shall be in addition to, and not in
limitation of, any other rights and remedies Employer may have against Employee,
including, but not limited to, the recovery of damages. Except as provided
herein, the terms and conditions of this Section shall survive termination of
this Agreement.
8. Non-Competition Agreement. Subject to Section 1 as it relates to the practice
of law, Employee agrees that during the term of this Agreement and for a period
of three (3) years thereafter, Employee shall not directly or indirectly compete
with the benefit consulting and administration business of Employer, or own,
directly or indirectly, any part of or become the employee of, or otherwise
render services to, any enterprise which directly or indirectly competes with
the benefits consulting and administration business of Employer. Employer
acknowledges that certain of the services provided by Employee in the practice
of law or incidental to that practice, may overlap with the employee benefits
consulting and administration business of Employer. Sections 8 and 9 will not
apply to the extent of such overlap.
9. Covenant Not To Solicit. Subject to Section 1 as to the Employee's right to
practice law and subject to the rules he believes are applicable to him,
Employee agrees that, during the term of this Agreement and for a period of
three (3) years thereafter, Employee shall not (i) solicit, encourage or advise
clients serviced during the term of this Agreement, at the Office (or any other
office location at which Employer operates during the term of this Agreement) to
obtain or seek employee benefit consulting and administration services from any
entity other than Employer, or (ii) solicit, encourage or advise any employees
of Employer to terminate employment with Employer for any reason whatsoever.
Employee recognizes and agrees that the limitations set forth in this Section
and Section 8 are reasonable and necessary for the protection of the goodwill of
the business of Employer. Employee further recognizes and agrees that a
violation of any of the provisions contained in either section will cause
irreparable damage to Employer, the exact amount of which may be impossible to
ascertain, and that, for such reason, among others, Employer shall be entitled
to an injunction without the necessity of posting bond therefor in order to
restrain any further violation of such provisions. Such right to any injunction
shall be in addition to, and not in limitation of, any other rights and remedies
Employer may have against Employee, including, but not limited to, the recovery
of damages. As used herein, the term "client" shall include any and all clients
serviced at the Office, or any other office location at which Employer operates
during the term of this Agreement. Except as provided herein, the terms and
conditions of this Section and Section 8 shall survive termination of this
Agreement.
10. Representations and Warranties. Each party represents and warrants that he
or it (i) is not subject to any restriction that would prohibit entering into
this Agreement, is fully able to perform each of the terms, conditions and
covenants hereof, and is not restricted or prohibited from entering into or
performing any of the terms or conditions hereof; and (ii) is able to execute
and perform under this Agreement without violating or breaching any agreement
between said party and any other person or entity.
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Employee acknowledges and agrees that the truth and accuracy of the
representations and warranties contained herein constitute a condition precedent
to Employer's obligation to provide compensation pursuant to the terms and
conditions of this Agreement.
11. Indemnity. Each party hereby agrees to indemnify, defend and hold the other
harmless from and against any and all costs, losses, claims, demands and
liabilities, including reasonable attorneys' fees and costs, which arise out of
or relate to any material breach by such party of any of the terms or conditions
of this Agreement and as provided in the remainder of this Section. Employee
shall indemnify Employer (only to the extent not covered by insurance) for his
acts or omissions which constitute gross negligence or an intentional wrongful
act of Employee which was not authorized by the Employer. If Employer, any of
its shareholders or affiliates is made a party to any litigation or obligation
or otherwise incurs any loss or expense as a result of Employee's activities
unconnected with Employer's business at the Office, Employee shall forthwith
upon demand reimburse Employer or such individuals for any and all expenses
incurred as a result thereof Employer shall indemnify, defend and hold Employee
harmless with respect to or any actions taken by the course of his employment
except for gross negligence or an international wrongful act not authorized by
the Employer. Employer shall provide directors/officers/employees errors and
ommissions or similar insurance on substantially the same basis provided any
other executive, officer or director of the Employer. The terms and conditions
of this Section shall survive termination of this Agreement.
12. Termination By Employer. Subject to the terms hereof, Employer shall have
the right to terminate Employee's employment at any time, for any reason, with
or without cause, on thirty (30) days prior written notice. Cause shall be
strictly defined as (i) the death of Employee, (ii) a material failure of
Employee to discharge his employment obligations as reasonably directed by
Employer, (iii) conduct by Employee which is violative of law which constitutes
a felony or which involves moral turpitude and conviction of the same, (iv)
fraud, embezzlement or theft by Employee of funds belonging to Employer or its
subsidiaries, or (v) Employee's disability for which Employer can make no
reasonable accommodation. The term "disability" shall mean, for purposes of this
Agreement, the inability of Employee to perform part-time duties as contemplated
hereunder on account of a physical or mental condition for a period of 90
consecutive days, but shall exclude infrequent and temporary incapacity due to
ordinary illness. All other terminations by Employer shall be without cause and
which shall include the resignation by the Employee (unless otherwise waived by
Employer or cured within a reasonable period of time by Employee) based on: (i)
a material breach by Employer of its agreements or obligations hereunder or
under the Stock Exchange Agreement dated 11/8/99; (ii) any non-consensual
reduction (including after the Initial Term) in annual compensation payable to
Employee which reduction is in excess of $15,000; (iii) any non-consensual
material reduction in Employee's scope of authority; (iv) non-consensual change
in the business location of Employee's services to a location outside of Broward
or Palm Beach counties; or (v) any action or inaction by Employer which
materially interferes or frustrates Employee's ability to perform his
obligations hereunder.
12.1 Severance. In the event the Term is not renewed, or Employee is
terminated for any reason other than cause as defined herein, Employee shall be
paid a severance payment equal to 100% of his then current annual Base Salary
over the one year period following such termination
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and all accrued but unpaid Additional Compensation due him. If, however,
Employee voluntary terminates this Agreement in accordance with Section 13
(unless such resignation constitutes a termination without cause in Section 12
which shall then be governed by the prior sentence), or is otherwise terminated
for cause, he shall receive no severance benefits but shall be paid his accrued
but unpaid Additional Compensation. A termination without cause or an unwinding
under Section 8 of the Stock Exchange Agreement, shall automatically extinguish
the non-compete and non-solicitation provisions of Sections 8 and 9, above.
13. Termination By Employee. Employee may not terminate this Agreement prior to
the end of the Initial Term. Thereafter, Employee may terminate this Agreement
on thirty (30) days' prior written notice.
14. Entire Agreement, Amendment. Except as otherwise stated herein, this
Agreement sets forth the entire agreement of the parties hereto with respect to
the subject matter hereof, and supersedes all prior and contemporaneous
agreements, arrangements and understandings. This Agreement may only be amended
by the mutual written consent of Employer and Employee.
15. Waiver. No waiver or modification of this Agreement or any covenant,
condition, or limitation herein shall be valid unless in writing and duly
executed by the parties hereto, and no evidence of any waiver or modification
shall affect this Agreement, or the rights or obligations of any party
hereunder, unless such waiver or modification is in writing and duly executed by
the parties hereto. The parties hereto further agree that the provisions of this
Section may not be waived except as herein set forth.
16. Assignment. Neither party may assign his or its rights or obligations
hereunder provided, however, Employee is specifically authorized to delegate
certain of his duties to Xxxxxxx Xxxxxx. Xxxxxxx Xxxxxx shall be entitled to all
information regarding the Employer that is within Employee's knowledge.
17. Notices. All notices or other communications required or permitted hereunder
shall be sent in writing to the address as set forth herein.
18. Jurisdiction/Governing Law. The parties hereto submit to the jurisdiction of
the courts of the State of Florida for the purpose of resolution of any and all
disputes which arise out of, or are related to, this Agreement or an alleged
breach thereof. This Agreement and performance hereunder shall be construed and
enforced, and all actions or proceedings arising out of or related hereto shall
be conducted in accordance with the laws of the State in which such services are
rendered.
19. Survival. Subject to Section 12, the provisions set forth in Sections 6, 7,
8, 9, 10, and 11 of this Agreement shall survive expiration or termination of
this instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this instrument,
or caused its execution by a duly authorized officer, all as of the day and year
first above written.
"EMPLOYER"
COLONIAL DIRECT FINANCIAL GROUP, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
Address: 0000 X. Xxxxxxxx Xxxx Xx.
Xxxxx 000
Xxxx Xxxxx, XX 00000
"EMPLOYEE"
/s/ Xxxxxxx X. Xxxx
---------------------------------
[Signature]
XXXXXX X. XXXX
Address: 0000 Xxxx Xxxx #000
Xxxx Xxxxx, XX 00000
SS#: ###-##-####
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