EXHIBIT 10.6
WIT CAPITAL GROUP, INC.
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xx. Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Xxx:
This letter agreement (the "Letter Agreement") is being entered into effective
as of June 8, 1998, by and between Wit Capital Group, Inc., a New York
corporation (the "Company") and you.
On April 9, 1998, the Company and you entered into a letter agreement (the
"Prior Agreement") pursuant to which you were engaged as Chairman of the Board
of Directors of the Company (the "Board") and received, among other things, a
nonqualified stock option to purchase 5,750,000 shares of common stock of the
Company, $.01 par value per share ("Common Stock") with an exercise price of
$1.00 per share and the right, under certain circumstances, to receive cash
compensation in the aggregate amount of $5,000,000. It is both the Company's
and your desire to restate the terms of your employment with the Company in its
entirety, principally in order to cancel the stock option grant in consideration
for your agreement to purchase immediately 5,750,000 shares of Common Stock on
the terms set forth herein, and to expand your title to Chairman and Chief
Executive Officer ("CEO") of the Company.
Accordingly, set forth herein are the terms and conditions of your employment
with the Company. This Letter Agreement shall supersede, in all respects, the
Prior Agreement which shall be void and of no further force and effect.
1. Employment. (a) You hereby agree to be employed as Chairman of the Board
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and CEO of the Company. As Chairman and CEO, your responsibilities will
include, among others: (i) directing the growth and development of the
Company and Wit Capital Corporation, Inc., a New York corporation and
wholly-owned subsidiary of the Company, and developing and assisting in the
execution of a plan to raise capital in connection therewith, (ii) building
a team of capable management and investment personnel, (iii) generating
investment banking engagements and other revenue opportunities, and (iv)
creating and building a proprietary funds business. You will report solely
to the Board and will have authority consistent that normally associated
with the positions of Chairman and CEO.
2. Cash Compensation. (a) Through December 31, 1998, you will not receive a
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base salary. Thereafter, you will receive a base salary in an amount to be
determined by the Board in its sole discretion.
(b) Starting immediately, and during the term of your employment by the
Company as Chairman and CEO, you shall be entitled to participate in such
revenue sharing arrangements or programs as apply generally to the
Company's senior investment banking personnel on a basis which is no less
favorable than is made available to any other senior investment banking
personnel or executives of the Company. In addition, you shall receive such
additional cash compensation as may be determined by the Board in its sole
discretion. The Company's current revenue sharing policy is as follows: (i)
50% of net cash and warrant revenues generated from private placement
transactions shall be shared by the investment bankers and salespeople
responsible therefor, (ii) 50% of the net cash and warrants generated from
public offering transactions shall be shared by the investment bankers and
salepeople responsible therefor, and (iii) 50% of the net cash and warrant
revenues generated from financial advisory transactions shall be shared by
the investment bankers responsible therefor. Allocation of such revenues
among the participants involved in any transaction shall be made initially
by agreement of the senior investment bankers involved in the transactions,
with final discretion exercised by the Board after consultation with you.
(c) In addition to any other compensation you receive hereunder or under
any future employment or consulting agreement, on the 12 month anniversary,
the 24 month anniversary and the 30 month anniversary of an "IPO" (as
defined in Section 6 below), you will be entitled to cash payments of $2
million, $2 million and $1 million, respectively. In addition, upon a
"Sale" (as defined in Section 6 below), you shall be entitled to a payment
of $5 million multiplied by a fraction (which shall not exceed 1), the
numerator of which is the value of the capital stock of the Company as
measured by reference to the proceeds received in connection with such
Sale, and the denominator of which is $25 million: provided that any amount
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payable pursuant to this sentence shall be reduced by any amounts paid or
payable pursuant to the preceding sentence.
(d) Notwithstanding the foregoing, no payment (or installment thereof)
described in Section 2(c) above shall be made on any payment date if (i)
you have materially breached Section 4(a)(i) or (ii) hereof and failed to
cure such breach within 30 days following written notice from the Company
of such breach or (ii) you are not employed by the Company (as Chairman and
CEO or otherwise) or engaged by the Company as a consultant on such
applicable payment date; provided that this Section 2(d) shall be of no
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force and effect and void ab initio if your employment or engagement is
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terminated (x) by the Company for any reason other than for Cause (as
defined in Section 6 below), Disability (as defined in Section 6 below) or
death, or (y) by you for Good Reason.
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3. Investment. (a) The Company has previously sold to you, and you have
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purchased from the Company, 50,00 shares of Common Stock in a private
placement transaction, at a purchase price of $1.00 per share (or $50,000
in the aggregate).
(b) The Company hereby agrees to sell to you, and you hereby agree to
purchase from the Company, an additional 5,750,000 shares of Common Stock
(the "Purchased Shares") in a private placement transaction, at a purchase
price of $1.00 per share or ($5,750,000 in the aggregate) which the Company
and you agree and acknowledge represents the current fair market value per
share of the Common Stock. The purchase price will be paid by you by
promissory note attached as Exhibit A hereto and your repayment obligation
under the promissory note shall be secured by the Purchased Shares as
evidenced by a pledge agreement attached as Exhibit B hereto.
(c) If a Call Event (as defined in Section 6 below) shall occur prior to
April 1, 2000, the Company shall have the right, in its discretion, at any
time within 30 days following the occurrence of such Call Event, to
repurchase from you, at a per share purchase price equal to the lower of
$1.00 and the then fair market value per share of Common Stock, any
Purchased Shares which are then unvested. The Purchased Shares shall be
deemed to vest as follows: (i) 1,916,667 Purchased Shares will be vested
immediately as of the date of your purchase and (ii) an additional
1,916,666 Purchased Shares will vest on each of April 1, 1999 and April 1,
2000. The purchase price of any such repurchase or repurchases shall be
paid in cash and shall be effected promptly by the parties after written
notice from the Company to you shall be effected pursuant to such
procedures as the Company shall reasonably request. For purposes of this
Section 3(c), "fair market value" shall be as determined by the Company's
Board of Directors in good faith; provided that, if you dispute such
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determination you shall have the right to require the Company to obtain an
independent appraisal of the fair market value by a nationally recognized
investment banking or valuation firm. In such event, you shall bear the
cost of such appraisal unless the appraiser's determination of fair market
value shall be 120% or more than the fair market value as determined by the
Board of Directors, in which case the Company shall bear the cost of such
appraisal.
(d) Notwithstanding the foregoing, all of the Purchased Shares shall be
deemed vested and the provisions of Section 3(c) shall be of no force and
effect and void ab initio (x) upon the occurrence of a Sale or (y) if your
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employment as Chairman and CEO is terminated (A) by the Company for any
reason other than for Cause, (B) by you for Good Reason, or (C) due to your
Disability or death.
(e) Registration
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(i) Upon the consummation of an IPO, the Purchased Shares will (x) be
registered pursuant to a Form S-8 if the Company determines, on advice of
counsel, that such Form is available for the Purchased Shares or (y) if
Form S-8 is not available,
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then in connection with the IPO and any other offering of Company
securities by the Company for its own account or for the account of any
stockholder(s) of the Company (other than a registration statement on Form
S-8 or any successor or other forms not available for registering capital
stock for sale to the public) (each an "Offering"), you will be entitled to
register all or any portion of the Purchased Shares on the same terms and
conditions as is made available to the Company or any such shareholders in
connection with such Offering. All expenses incurred in connection with any
registration pursuant to this Section 3(e) shall be borne by the Company.
(ii) Notwithstanding the forgoing, if the underwriter assisting the
Company in connection with such Offering advices the Company in writing
that in its opinion, including any portion of the Purchased Shares
requested by you to be included in the Offering could have an adverse
impact upon the Offering, the Company shall include in such Offering only
the aggregate the number, if any, of Purchased Shares that in the opinion
of such underwriter may be sold without any adverse impact upon such
Offering. In such event, unless you are able to register the remaining
portion of the Purchased Shares in another Offering within 180 days
following the consummation of an IPO, the Company agrees to promptly
thereafter, but in any event, no later than 90 days thereafter, file a
registration statement on Form S-3 (or another appropriate Form) (a "Demand
Offering") covering the remaining Purchased Shares and will use its best
efforts to cause such registration statement to be declared effective as
soon as practicable thereafter.
(iii) To the extent permitted by law, the Company will indemnify and
hold you harmless against any losses, claims, damages or liabilities (joint
or several) to which you may become subject under the Securities Act of
1933, the Securities Exchange Act of 1934 or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon (A) any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement relating to an Offering or Demand Offering, including any
preliminary or final prospectus or any amendments or supplements related
thereof, (B) the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary to make the statements
therein no misleading or (C) any violation or alleged violation by the
Company of the Securities Act of 1933, the Securities Exchange Act of 1934
or any state securities law or any rule or regulation promulgated
thereunder (each a "Violation"); and the Company will pay, as incurred, to
you, any legal or other expenses reasonably incurred by you in connection
with investigating or defending any such loss, damage, liability or action,
as such expenses are incurred; provided that the indemnity contained in
this clause (iii) shall not apply to any losses, claims, damages or
liabilities to the extent they arise out of or are based on a Violation
which occurs in reliance upon and in conformity with information furnished
by you expressly for use in connection with such Offering or Demand
Offering.
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4. Restrictive Covenants. (a) You agree that you will not at any time prior to
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April 1, 2000, nor at any time while you are employed by the Company in any
capacity or otherwise engaged as a consultant to the Company (and, with
respect to (iii) below, at all times thereafter), directly or
indirectly: (i) own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be connected as a
director, officer, employee, or lender with, or be compensated by, any
entity or business (including a sole proprietorship) that (x) is an NASD
registered broker-dealer, or (y) except as permitted pursuant to Section
4(b), that provides financial advisory services, provides investment
banking advice or engages in capital raising; provided that up to a 4.9%
interest in a publicly traded entity shall be permitted, (ii) employ or
otherwise engage, or offer to employ or otherwise engage, or solicit,
entice or induce for himself or any other person, entity or corporation,
the services or employment of any person who is, or during the three months
prior thereto has been, an employee of, or independent contractor,
consultant or agent, in each case, devoting a majority of its business time
to, the Company or any of its affiliates (other than your personal
secretary), and (iii) use or disclose, or authorize any other person or
entity to use or disclose, any information of a confidential nature (i.e.,
strategic plans, specifications for existing or future technology) other
than as necessary to further the business objectives of the Company in
accordance with the terms of your engagement hereunder; provided that the
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restrictions contained in this clause (iii) shall not apply to (x)
information that becomes publicly known (other than as a result of your
breach of this restriction) and (y) information, the disclosure of which is
reasonably necessary to defend yourself, or assert your rights, in
connection with any proceeding to which the Company or its affiliates is
directly or indirectly a party. You understand that your services for the
Company will be of a special and unique nature, and that the breach or
threatened breach of the provisions of this Section 4 would cause the
Company irreparable harm which could not be adequately compensated for in
damages by an action at law. In the event of a breach or threatened breach
by you of this Section 4, in addition to all other remedies available to
the Company at law or in equity, the Company will be entitled to seek a
temporary or permanent injunction or injunctions, or temporary restraining
orders or orders to prevent breaches hereof, in each case, without the need
to post any security or bond.
(b) The Company expressly acknowledges that it shall not be a violation of
subclause (y) of Section 4(a)(i) for you to act as a financial advisor to,
or engage in capital raising activities with respect to, any entity in
which you are or become an investor or director so long as any fee payable
with respect thereto is pursuant to an arrangement for which registration
as a broker-dealer is not required. Notwithstanding the foregoing, such
activities shall not be permitted if a principal purpose of your investment
or engagement as an outside director was to enable you to engage in
financial advisory or capital raising activities.
(c) The Company expressly acknowledges that while you are employed as
Chairman and CEO or otherwise employed or engaged as a consultant, you
shall have the right to own, manage, operate, join, control or participate
in the operation or control of, or be connected as a director, officer,
employee, partner, lender, consultant or otherwise with, any entity or
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business (including a sole proprietorship) that engages in venture capital
activities, provided that such activities do not violate clause (i) of
Section 4(a) above.
(d) The restrictive covenants contained in Section 4(a)(i) and (ii) shall
not be applicable if your employment is terminated (x) by the Company for
any reason other than for Cause or (y) by you for Good Reason.
5. Certain Representations. (a) The Company represents and warrants to you
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that as of the date hereof: (i) 25,000,000 shares of Common Stock are
authorized, of which 10,130,136 shares are issued and outstanding,
20,000,000 shares of preferred stock are authorized, of which 11,312,952
shares are issued and outstanding, (ii) 9,610,412 shares of Common Stock
are subject to the exercise of options, and 797,000 shares of Common Stock
are subject to conversion of warrants, granted to employees and
consultants, (iii) except as set forth in clauses (i) or (ii), there are no
agreements, interests, or securities outstanding that would entitle any
party to an equity interest in the Company, and (iv) except as disclosed in
the Company's audited financial statements, the Company has no subsidiaries
other than Wit Capital Corporation. The Company further represents that it
has full authority to enter into this Agreement with you.
(b) You represent and warrant to the Company your employment hereunder will
not conflict with or result in a violation or breach of, or constitute a
default under any contract, agreement or understanding to which you are or
were a party.
6. Definitions. As used in this letter agreement:
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"Call Event" shall mean (i) your material breach of Section 4(a)(i) and
your failure to cure such breach within 30 days of your receipt of written
notice of such breach from the Company, or (ii) your cessation of
employment as Chairman and CEO.
"Cause" means (i) your persistent or repeated refusal to perform the
material duties of your employment or engagement (other than by reason of a
physical or mental illness or impairment), after written notice thereof
from the board specifying in reasonable detail instances of such conduct
and a 30-day opportunity to cure, (ii) any act of fraud or embezzlement to
the material detriment of the Company after written notice thereof from the
Board specifying in reasonable detail instances of such act, (iii) your
material breach of any provision hereof (including, without limitation,
Section 4(a)) after written notice thereof from the Board specifying in
reasonable detail instances of such breach and a 30-day opportunity to
cure, or (iv) your conviction of the commission of a felony (including
pleading guilty to a felony);
"Disability" shall mean a determination by the Board that you have been
unable to perform the material duties of your employment or engagement with
the Company for any 180 days within a one-year period by reason of a
physical or mental illness or impairment.
6
"Good Reason" means, without your consent, (i) a material reduction in your
authority or responsibilities, a change in your title or your reporting
lines, or (ii) the failure to pay compensation due hereunder, in each case
after written notice thereof from you specifying in reasonable detail
instances of such reduction, change or failure and a 30-day opportunity to
cure;
"IPO" means the closing of the initial public offering of the Company's
capital stock in a firm commitment underwriting registered with the
Securities Exchange Commission in compliance with the provisions of the
Securities Act of 1933, immediately after which the market capitalization
of the capital stock is at least $25 million; and
"Sale" means any transaction whereby, after giving effect to such
transaction, the beneficial owners of the Company's capital stock
immediately prior to such transaction cease to beneficially own, either
singly or in the aggregate, at least 20% of the voting power (as to the
election of directors) of the Company or any successor to substantially all
of the business or assets of the Company.
7. Withholding. The Company shall have the right to withhold from any amount
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payable hereunder any amount necessary in order for the Company to satisfy
any withholding tax obligation it may have under applicable law.
8. Applicable Law. Our agreement outlined in this letter will be governed by,
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and construed and enforced in accordance with, the laws of the State of New
York applicable to agreements made and to be performed wholly therein,
without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the
State of New York.
9. Prior Agreements. This Agreement supersedes all agreements between you and
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the Company entered into prior to the date hereof, whether oral or written,
including the Prior Agreement.
10. Employee Benefits. You shall be entitled to participate in all employee
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benefit plans, programs and arrangements of the Company and its
subsidiaries that are made available to any other executives of the Company
and its subsidiaries on a basis which is no less favorable to you than is
provided to any other executive of the Company and its subsidiaries.
11. Legal Fees. The Company shall reimburse you, up to a maximum of $10,000,
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for legal fees paid by you to Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx in
connection with your entering into this Letter Agreement upon presentation
of proper documentation thereof.
12. Indemnity. The Company agrees to indemnify you to the fullest extent
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permitted by law for any acts or omissions taken, or failed to be taken,
by you in your capacity as an officer or
7
director of the Company or its affiliates (or any other entity with
respect to which the Company requests you to serve as an officer or
director) and the Company agrees to maintain customary and appropriate
directors and officers liability insurance for your benefit during the term
of your employment with or service as a director of, the Company.
13. Set-Off. The Company may set off from any amount payable to you any
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recourse obligation due and payable pursuant to your note to the Company
for the Purchased Shares, provided that the repurchase price payable
pursuant to Section 3(c) may be set off against the entire obligation due
and payable under the note, whether or not recourse.
14. Parachute Limitation.
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(a) In the event that the Company determines, based upon the advice of a
nationally recognized independent accounting firm mutually acceptable to
the Company and you (the "Accountant") that part or all of the
consideration, compensation or benefits to be paid to you hereunder
constitute "parachute payments" under section 280G(b)(2) of the Internal
Revenue Code of 1986 (the "Code"), then, if the aggregate present value of
such parachute payments, singularly or together with the aggregate present
value of any consideration, compensation or benefits to be paid to you
under any other plan, arrangement or agreement which constitute "parachute
payments" (collectively, the "Parachute Amount") exceeds 2.99 times your
"base amount," as defined in section 280G(b)(3) of the Code (the "Base
Amount"), the amounts constituting "parachute payments" that would
otherwise be payable to or for your benefit shall be reduced to the extent
necessary so that the Parachute Amount is equal to 2.99 times the Base
Amount (the "Reduced Amount"); provided that such amount shall not be so
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reduced if you determine, based upon the advice of the Accountant, that
without such reduction you would be entitled to receive and retain, on a
net after tax basis (including, without limitation, any excise taxes
payable under section 4999 of the Code), an amount which is greater than
the amount, on a net after tax basis, that you would be entitled to retain
upon your receipt of the Reduced Amount.
(b) If the determination made pursuant to paragraph (a) above results in a
reduction of the payments that would otherwise be paid to you, you may then
elect, in your sole discretion, which and how much of any particular
entitlement shall be eliminated or reduced and shall advise the Company in
writing of such election within 10 days of the determination of the
reduction in payments.
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If the foregoing is acceptable to you, kindly sign and return to me one copy of
this letter.
Sincerely yours,
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
AGREED TO:
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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WIT CAPITAL GROUP, INC.
000 Xxxxxxxx
Xxx Xxxx, XX 00000
October 30, 1998
Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Dear Xxx:
This letter shall amend the Letter Agreement ("Letter Agreement"), dated as
of June 8, 1998, by and between Wit Capital Group, Inc. (the "Company") and you,
relating to your employment with Wit. Except as specifically set forth herein,
the Letter Agreement shall remain in full force and effect.
1. Section 3(c).
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Section 3(c) shall be amended in its entirety and shall hereafter read as
follows:
"(c) If a Call Event (as defined in Section 6 below) shall occur prior to
April 1, 2001, the Company shall have the right, in its discretion, at any
time within 30 days following the occurrence of such Call Event to
repurchase from you, at a per share purchase price equal to the lower of
$1.00 and the then fair market value per share of Common Stock, any
Purchased Shares which are then unvested. The Purchased Shares shall be
deemed to vest as follows: (i) 1,916,667 Purchased Shares shall have vested
on June 8, 1998; (ii) 319,445 Purchased Shares shall have vested on July 1,
1998; (iii) 319,445 Purchased Shares shall have vested on October 1, 1998;
(iv) 319,445 Purchased Shares will vest on each of (A) January 1, 1999, (B)
April 1, 1999, and (C) July 1, 1999; and (v) 319,444 Purchased Shares will
vest on each of (A) October 1, 1999, (B) January 1, 2000, (C) Xxxxx 0,
0000, (X) July 1, 2000 (E) October 1, 2000 (F) January 1, 2001, and (G)
April 1, 2001. The purchase price of any such repurchase or repurchases
shall be paid in cash and shall be effected promptly by the parties after
written notice from the Company to you and shall be effected pursuant to
such procedures as the Company shall reasonably request. For purposes of
this Section 3(c), "fair market value" shall be as determined by the
Company's Board of Directors in good faith; provided that, if you dispute
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such determination you shall have the right to require the Company to
obtain an independent appraisal of the fair market value by a nationally
recognized investment banking or valuation firm. In such event, you shall
bear the cost of such appraisal unless the appraiser's determination of
fair market value shall be 120% or more than the fair market value as
determined by the Board of Directors, in which case the Company shall bear
the cost of such appraisal."
Section 4(a).
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In the first sentence of Section 4(a), "April 1, 2000" shall be replaced
with "April 1, 2001."
Very truly yours,
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
Agreed and Accepted:
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
WIT CAPITAL GROUP, INC.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Effective as of
January 1, 1999
Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Dear Xxx:
This letter shall amend the Letter Agreement (the "Letter Agreement") dated
as of June 8, 1998, which was amended as of October 30, 1998, (the "Amendment"),
by and between Wit Capital Group, Inc. (the "Company") and you, relating to your
employment with the Company (collectively, the Letter Agreement and the
Amendment are hereinafter referred to as the "Employment Agreement"). Except as
specifically set forth herein, the Employment Agreement shall remain in full
force and effect.
1. Section 1
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Section 1 of the Employment Agreement shall be amended in its entirety and
shall hereafter read as follows:
EMPLOYMENT. (a) The Company agrees to employ you and you agree to be
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employed by the Company, as Co-Chief Executive Officer and as Chairman for
a period beginning January 1, 1999, through December 31, 2000 (the "Initial
Period") and, unless either you or the Company gives notice at least ninety
(90) days before December 31, 2000, for an additional twelve (12) month
period commencing January 1, 2001 (the "Additional Period"). You will
report solely
Xxxxxx X. Xxxxxx
January 1, 1999
Page 2
to the Board of Directors and will have authority consistent with that
normally associated with the position of Co-Chief Executive Officer and
Chairman.
(b) In the event that the Company gives notice not to continue your
employment for the Additional Period, any Purchased Shares not vested as of
December 31, 2000 shall immediately vest and shall not be subject to a Call
Event.
2. Section 2(a) and (b)
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Section 2(a) and (b) shall be amended in their entirety and shall
hereinafter read as follows:
(a) During the Employment Period, the Company shall pay to you a minimum
annual base salary of Two Hundred Fifty Thousand Dollars ($250,000). This
base salary will be payable in equal periodic installments which are not
less frequent than the periodic installments in effect for salaries of
other senior executives of the Company. The base salary be subject to
annual review by the Board (or a committee appointed by the Board) for
upward adjustments based on the policies of the Company and your
contributions to the business of the Company.
(b) During the Employment Period, you shall be entitled to participate at
the senior executive level in both the Annual Bonus Plan for Executives and
the Long-Term Incentive Plan. In no event shall the percentage of the
Annual Bonus Plan allocated to any other Co-Chief Executive Officer exceed
your allocable percentage of the Annual Bonus Plan. Notwithstanding the
foregoing, and in addition to the Annual Bonus Plan and any other salary or
compensation referred to herein, you shall continue to receive 50% of the
net cash and warrant revenues generated for those financial advisory
engagements for which you were responsible and which are entered into prior
to March 15, 1999.
3. Section 3(d)
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In Clause (y) of Section 3(d), the work "CEO" shall be deleted and replaced
with the word "Co-Chief Executive Officer".
Xxxxxx X. Xxxxxx
January 1, 1999
Page 3
4. Section 3(e)
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Section 3(e)(i) and 3(e)(ii) shall be amended in their entirety and shall
hereafter read as follows:
(i) Upon the consummation of and IPO; provided, however, that any "Lock-up"
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Agreement entered into by you and with an underwriter in connection with such
IPO has expired, and, further, subject to (x) limitations contained in Section
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4.4, "Transfers by Key Employees," of the Second Amended and Restated
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Stockholder's Agreement by and between the Company, Capital Z Financial Services
-----------------------
Fund II, L.P., Capital Z Financial Services Private Fund II, L.P., and you; and
(y) subsection (e)(ii) below:
(a) if requested by you, all or a portion of the Purchased Shares will be
registered with the Securities and Exchange Commission pursuant to a Form
S-3 (or pursuant to the then applicable Form); or
(b) if not all of the Purchased shares have been registered pursuant to
subsection (a) above, then at any time the Company proposes to register any
of its securities for sale for its own account or for the account of any
other stockholder(s) (other than a registration relating either to the sale
of securities to employees of the Company pursuant to a stock option, stock
purchase or similar plan or a Rule 145 transaction), you will be entitled
to register all or any portion of the Purchased Shares on the same terms
and conditions as is made available to the Company or any such shareholders
in connection with that offering.
For the purposes hereof, offerings pursuant to subsections (a) and (b)
above are referred to as an Offering. All expenses incurred in connection with
any registration pursuant to this Section 3(e) shall be borne by the Company.
(ii) Notwithstanding the foregoing, if the underwriter assisting the
Company in connection with any such Offering determines that including any
portion of the Purchased Shares requested by you to be included in the Offering
is limited due to market conditions or could have an adverse impact upon the
Offering, the Company shall include in such Offering only the aggregate number,
if any, of Purchased Shares that in the opinion of such underwriter may be sold.
Xxxxxx X. Xxxxxx
January 1, 1999
Page 4
5. Section 6
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In Clause (ii) in the definition of "Call Event" in Section 6, the words
"Chairman and CEO" shall be deleted and replaced with the word "Co-Chief
Executive Officer".
6. Section 10
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Section 10 shall be amended in its entirety and shall hereinafter read as
follows:
EMPLOYEE BENEFITS. In addition to and except for matters governed by this
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Employment Agreement, during the period you are employed by the Company you
shall be entitled to (i) employee benefits perquisites, including but not
limited to pension, deferred compensation plans, stock options, group life
insurance, disability, sickness and accident insurance and health benefits
under such plans and programs as provided to other senior executives of the
Company from time to time, and (ii) paid vacation, holidays, leave of
absence and leave for illness and temporary disability in accordance with
policies of the Company.
Very truly yours,
Xxxxxx X. Xxxxxxxx
Agreed and Accepted Effective
As of January 1, 1999
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
