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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 9th day of
March, 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 Xxxxx X. Xxxxxxxx ("the Executive").
The Executive is currently an employee of Xxxxxx Gull Xxxxxxx & XxXxxxxx
Inc. ("CGRM"). As of the date hereof, the Company will acquire by merger (the
"Merger") all of the outstanding capital stock of CGRM pursuant to a certain
Agreement and Plan of Merger by and among the Company, CGRM Merger Corp. and
CGRM dated as of the date hereof (the "Merger Agreement"), and in connection
with such acquisition, the Company desires to employ the Executive on the terms
provided herein.
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 effective date of the Merger
and ending on the third anniversary of such effective date (the "Expiration
Date"), unless extended or sooner terminated in accordance with the provisions
of this Agreement. In the event that the Merger is abandoned, this Agreement
shall be void and of no force or effect.
2. POSITION AND PERFORMANCE.
2.1 OFFICE. The Executive shall serve as the President and Chief
Executive Officer of CGRM.
2.2 PERFORMANCE. During the term hereof, the Executive shall be
employed by CGRM 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 CGRM's Board of
Directors; PROVIDED, HOWEVER, that Executive may pursue community and charitable
activities and hold positions in connection therewith, serve on Boards of
Directors of for-profit companies provided such service does not materially
interfere with the performance of the Executive's duties hereunder and such
other activities as may be approved in advance by CGRM's Board of Directors,
such approval not to be unreasonably withheld.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. During the term hereof, CGRM shall pay the Executive an
annual base salary of not less than $350,000, or such other amount as the
Executive and CGRM's Board of Directors may agree upon from time to time and the
Executive shall participate in the 1998 Xxxxxx Gull Partners Profit Sharing
Bonus and Deferred Compensation Plan and the 0000 Xxxxxx
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Xxxx Xxxxxxx & XxXxxxxx Inc. Bonus Plan (collectively, the "Xxxxxx Gull Bonus
Plans"). The Executive's base salary shall be payable in accordance with the
payroll practices of the Company. In addition, the Employee shall be entitled to
receive other bonus compensation, if any, in such amount or pursuant to such
formula as the Executive and CGRM's Board of Directors may agree upon from time
to time. Notwithstanding the foregoing, during the term of this Agreement, the
Employee shall be entitled to receive minimum cash compensation under this
Agreement, whether as salary, bonus or otherwise in any calendar year of at
least $700,000, less such amounts or deductions required to be withheld by
applicable law. For purposes of the Xxxxxx Gull Bonus Plans, the Executive's
minimum total guaranteed cash compensation shall be allocated as follows: (a)
$375,000 shall be charged against CGRM's Banking Department and (b) $325,000
shall be charged against Corporate/Administration.
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) (collectively,
"Benefits") that the Company or CGRM (or its subsidiaries) makes available to
employees or key executives at a level consistent with the Executive's position
with CGRM.
3.3 REIMBURSEMENT OF EXPENSES. CGRM 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 and
incurred or paid consistent with past practices, upon presentation by the
Executive of documentation, expense statements, vouchers and/or such other
supporting information as CGRM may request, PROVIDED, HOWEVER, that the amount
available for such travel, entertainment and other expenses may be fixed in
advance by CGRM's Board of Directors.
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, for a period of 180 consecutive days to perform the
essential functions of the 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
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Company do not agree on a physician, the Executive and the Company shall each
select a physician and these 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. For the purposes of this
Section 4.3, "cause" for termination shall mean (i) a material failure of the
Executive to use his best efforts to perform the Executive's assigned duties
(which are consistent with the position set forth in Section 2.1) 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 indictment or 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 any of the positions indicated
in Section 2.1 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 or disability, (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 compensation plan or benefit program in which the
Executive participates which applies equally to all other participants therein),
(iii) the relocation of the Executive's principal place of business to another
city without the Executive's consent to such relocation or (iv) any material
breach by the Company of its obligations under this Agreement or the Merger
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, if such breach is susceptible 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 and other cash compensation at his then current rate of pay and
Benefits through the Date of Termination.
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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 the average of the total cash compensation (as reflected on
the Executive's W-2 Form) for each of the past three years (or, if less, the
number of full calendar years the Executive has been employed by the Company) in
equal monthly installments through the end of the twelve (12) months following
such Date of Termination.
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 and Benefits up to the end of the month in which the
termination of the Executive's employment because of death or disability occurs.
In addition, the Executive shall be entitled to receive any compensation and
benefits payable under any bonus, profit sharing, retirement, welfare plan or
agreement then in effect and in which the Executive participates.
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.
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 with whom the Executive has had contact during the
term of his employment with CGRM or during the Non-solicit Period.
(ii) solicit any officer, senior manager or senior broker who
was an employee of the Company or its subsidiaries 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 ending three years after
the date of this Agreement.
(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
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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 policies and procedures of the Company for protecting Confidential
Information 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
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 that contains Confidential Information (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 Board of
Directors or its 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 now owned or hereafter acquired 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 not
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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
known, which, if disclosed, would assist in competition against the Company and
its subsidiaries, or the disclosure of which would otherwise be adverse to the
interests 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 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 the law of the State of Delaware, 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, officer or agent of the Company or any subsidiary
thereof 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-law,
agreement, vote of directors or stockholders or otherwise.
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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. REMEDIES. Any claim or controversy arising out of or relating to this
Agreement, or the interpretation thereof, or the employment or termination of
employment of the Executive shall be settled by arbitration under the then
prevailing Constitution and Rules of the New York Stock Exchange, Inc. or the
National Association of Securities Dealers, Inc. as the initial complaint may
elect. Judgment based upon the decision of the arbitrators may be entered in any
court having jurisdiction thereof.
14. GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Wisconsin.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefits 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 succeed to its assets or business, provided, however, that the
obligations of the Executive are personal and shall not be assigned by him.
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
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By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
Title:
EXECUTIVE:
/s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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