EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 1st day of
September, 1999, between First Colonial Securities Holding Corp., a Delaware
corporation ("Employer" or "The Company"), and Xxxxxxx X. Xxxxxx, an individual
("Employee" or "You").
Employer is a corporation which, through its subsidiaries 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 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 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 Chairman and
CEO of Employer and Employee does hereby accept and agree to such employment and
engagement.
2. Term. Except as otherwise provided herein, the term of this Agreement shall
be for a period of five (5) years (the "Initial Term"), and thereafter eligible
for renewal in the sole discretion of Employer for an additional term of one (1)
year 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 $360,000 per year (the "Base Salary"), payable in accordance with
the regular payroll of Employer during the term of this Agreement.
3.2 Bonus. In addition to such Base Salary, Employee shall be entitled to
participate in a bonus program established for senior executives of the
firm. Such bonus shall be accrued throughout the Initial Term and each
renewal term and shall be calculated and payable not less than 90 days after
the end of Employer's fiscal year. A bonus pool will be based on attaining
certain annual gross revenues levels starting for the year ending
12/31/2000, pursuant to the following schedule:
Revenues Bonus as a
-------- % of Revenue*
(Millions) --------------
Year 2000 20-22 1
22-25 1 3/4
25- 2 1/4
Year 2001 25-32.5 1 1/2
32.5-40 2 1/2
40+ 3
Year 2002 40-50 1 1/2
50-60 2 1/2
60+ 3 1/4
*Not Retroactive
Employee shall be entitled to 60% of such bonus pool
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3.3 Stock Options. Employee will be eligible for future option grants from
any option program created for the benefit of its employees, in such amount
as is determined by the Board of Directors or such committee appointed
thereby.
4. Vacation. Employee shall be entitled to an annual vacation, without loss of
compensation, in accordance with Employer's existing vacation schedule. Vacation
scheduling shall be coordinated with Employer and in accordance with established
Office procedures so as not to disrupt the continuity of the business. Accrued
vacation not taken at the end of the year in which days have been accrued
automatically will be forfeited.
5. Health Benefits and Retirement Plans. Employee shall be entitled to
participate in such health benefits and retirement plans as are made available
by Employer to its employees on a usual and customary basis. See attachment.
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.
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. 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.
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 any injunction without the necessity of
posting bond therefor in order to restrain any further violation of such
provision. 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. The terms and conditions
of this Section shall survive termination of this Agreement.
8. Non-Competition Agreement. Employee agrees that during the term of this
Agreement and for a period of one (1) year thereafter, Employee shall not
directly or indirectly compete with the 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
business of Employer.
9. Covenant Not To Solicit. Employee agrees that, during the term of this
Agreement and for a period of one (1) year thereafter, Employee shall not (i)
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solicit, encourage or advise clients serviced during the term of this Agreement
at the Office (any other office location at which Employer operates during the
term of this Agreement) to obtain or seek service 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, Employers shall be entitled to an injunction
without the necessity of posting bond thereof in order to restrain any further
violations of such provision. 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 services at the
office, or any other office location at which Employer operates during the term
of this Agreement. The terms and conditions of this Section and Section 8 shall
survive termination of this Agreement.
10. Representations and Warranties. Employee represents and warrants that he (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
Employee and any other person or entity.
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. Employee hereby agrees to indemnify, defend and hold Employer
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 breach by Employee of any of the terms or conditions of this
Agreement; any negligent or intentional wrongful act of Employee; any act or
omission of Employee which constitutes negligence; or any other act of Employee
not authorized under the terms of this Agreement. If Employer or 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 The terms and conditions of this Section shall
survive termination of this Agreement.
12. Termination by Employer. Employer, by a vote of not less than 75% of its
Board of Directors, shall have the right to terminate Employee's employment only
for cause, and except as provided below without notice, as follows: Cause shall
be defined as (i) the death of Employee, (ii) the material failure of Employee
to discharge his employment obligations as reasonably directed by Employer
(which direction shall be in writing and for which Employee shall have fourteen
(14) days to cure such material failure), (iii) conviction of Employee of a
non-traffic related felony or conduct which involves moral turpitude, or (iv)
fraud, embezzlement or theft by Employee of funds belonging to Employer or any
of its subsidiaries or their respective clients. In addition, Employer may
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terminate Employee's employment hereunder forthwith upon, or at any time after,
an event of material nonperformance of his duties as an employee because of a
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 full-time regular 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.
With respect to subsections (ii), (iii) and (iv), above, prior to the effective
date of any termination, Employee shall have the opportunity to present a
defense thereto before a full meeting of Employer's Board of Directors, with
counsel of his own choosing.
12.1 Severance. In the event the Term is not renewed, Employee shall be paid
a severance payment amount equal to 200% of his then current Base Salary and
his accrued but unpaid bonus over the one year period following such
termination.
12.2 Termination Following a Change in Control. If a Change in Control
occurs and employee's employment is terminated by the Company without Cause
other than for Disability or you voluntarily terminate employee's employment
with the Company, during the period from the date of the Change in Control
to two (2) years after date of such Change in Control, the employee shall be
entitled to the amounts and benefits provided below upon such termination.
12.2.1 Compensation on Termination In the event of a Change in Control,
the Company shall pay and provide to you:
(a) (i) two (2) times your highest annual base salary in effect within
one hundred and eighty (180) days prior to the Change in Control,
(ii) two (2) times the highest annual bonus paid or payable to you
for any of the last two (2) completed years by the Company or its
predecessors, (iii) any un-reimbursed business expenses for the
period prior to termination payable in accordance with Company's
policies, and (iv) any base salary, bonus, vacation pay or other
deferred compensation accrued or earned under law or in accordance
with the Company's policies applicable to you but not yet paid;
(b) any other amounts or benefits due under the then applicable
employee benefit, incentive or equity plans of the Company
applicable to you as shall be determined and paid in accordance
with such plans;
(c) two (2) years of additional service and compensation credit (at
your highest compensation level in the one hundred and eighty
(180) day period prior to the Change in Control) for pension
purposes under any defined benefit type qualified or non-qualified
pension plan or arrangement of the Company and its affiliates
applicable to you, measured from the date of termination of
employment and not credited to the extent that you are otherwise
entitled to such credit during such two (2) year period, which
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payments shall be made through and in accordance with the terms of
the non-qualified defined benefit pension plan or arrangement if
any then exists, or, if not, in an actuarially equivalent lump sum
(using the actuarial factors then applying in the Company's or its
affiliates' defined benefit plan covering you);
(d) an amount equal to two (2) years of the maximum Company
contribution (assuming you deferred the maximum amount and
continued to earn your then current salary) measured from the date
of termination of your employment under any type of qualified or
non-qualified 401(K) plan (payable at the end of each such year
and not payable to the extent otherwise contributed to such plan);
and
(e) payment by the Company of the premiums for you (except in the case
of death) and your dependents' health coverage for two (2) years
from the date of termination of your employment under the
Company's health plans which cover the senior executives of the
Company or materially similar benefits (to the extent not
otherwise provided). Any amendment or termination of benefits,
equity or incentive plans within one hundred and eighty (180) days
prior to, or after, a Change in Control that is detrimental to you
shall be ignored with respect to subsections (c), (d) and (e)
above.
Payments under (e) above may, at the discretion of the Company, be made
by paying the applicable COBRA premium for you and your dependents, or
by covering you and your dependents under substitute arrangements,
provided that, to the extent you incur tax that you would not have
incurred as an active employee as a result of the aforementioned
coverage or the benefits provided thereunder, you shall receive from
the Company an additional payment in the amount necessary so that you
will have no additional cost for receiving such items or any
additional payment.
12.2.2 Change in Control For purposes of this Agreement, the term
"Change in Control" shall mean the sale or transfer, directly or
indirectly, of substantially all of the Company's business and assets
to an entity not affiliated with the Company, or the purchase, directly
or indirectly, by an entity not affiliated with the Company, of more
than 50% of the outstanding shares of the common stock of the Company.
For the purpose of this definition, an affiliate of the Company refers
to any person or business entity, directly or indirectly, controlling,
controlled by, or under the common control with the Company, with the
term "control" referring to any person or business entity owning,
directly or indirectly, more than a 50% equity interest in the
controlled entity or possessing the power to direct or cause the
direction of the management or policies of the controlled entity. Only
one (1) Change in Control may take place under this Agreement.
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12.2.3 No Payment of Benefits Resulting in Golden Parachute Taxes under
Section 280g of the Code. No payment shall be made to you pursuant to
this Agreement to the extent that such payment when aggregated with all
other payments considered for purposes of calculating a parachute
payment results in an excess parachute payment as defined under Section
280g of the Code. Furthermore to the extent that the Internal Revenue
Service or other applicable governmental taxing authority determines
that there has been an "excess parachute payment" and a notice of
deficiency or similar notice has been issued, then the Company or its
successor agrees to pay all expenses associated with professional fees
(legal and tax accounting) in connection with the protest, challenge,
and defense of any such notice and the appeal of any decision on such
matter.
The Company or its successor agrees not to settle the matter short of
the appellate level without your written consent. In the event that the
Internal Revenue Service or other applicable governmental taxing
authority ultimately determines that, in fact, there has been an
"excess parachute payment" by the Company, then the amount necessary to
reduce the total payments such that there would be no "excess parachute
payment" would be immediately and retroactively characterized as a loan
from the Company or its successor to you with interest at a rate equal
to the ten year Treasury Bond (or if the Company's successor is a bank
subject to Regulation O then the loan shall be at substantially the
same terms as credit underwriting procedures that are not less
stringent than, those prevailing at the time the loan would have been
made for comparable transactions of the Company or its successor and
shall be subject to the other conditions of Regulation O). The loan
shall be subject to repayment at the demand of the Company or its
successor.
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.
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16. Assignment. Employee may not assign or delegate any rights, duties or
obligations established herein without the prior written consent of Employer,
which consent may be withheld in Employer's sole and absolute discretion.
Employer may assign this Agreement, in whole or in part, in its sole and
absolute discretion without the consent of Employee.
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 of 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. The provision set forth in Sections 6, 7, 8, 9, 10, and 11 of this
Agreement shall survive expiration or termination of this instrument.
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"
First Colonial Securities Holding Corp.
By: /s/ Xxx Xxxxxxxxxxx
--------------------------
Name Xxx Xxxxxxxxxxx
--------------------------
Title: Vice Chairman
--------------------------
Address: 0000 X. Xxxxxxxx
--------------------------
Xxxx Xxxxx, XX
--------------------------
"EMPLOYEE"
Name: Xxxxxxx Xxxxxx
--------------------------
Signature: /s/ Xxxxxxx Xxxxxx
--------------------------
Address: 0000 X. Xxxxxxxx Xxxx Xx
--------------------------
Xxxx Xxxxx, XX
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SS#: ###-##-####
--------------------------
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