FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment is made as of July 1, 1999, by and between Olympic
Cascade Financial Corporation, a Delaware corporation (the "Company") and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, an individual ("Executive").
A. The Company and Executive are parties to an Employment Agreement
dated as of January 1, 1997 (the "Agreement"), pursuant to which the Company
employs Executive as its Senior Vice President and Chief Financial Officer,
based in the Company's executive offices in Chicago, Illinois; and
B. The Company and Executive desire to amend certain provisions of the
Agreement, as set forth in this Amendment.
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions set forth below, the parties agree as follows:
1. TERM OF AGREEMENT. Section 2 of the Agreement is hereby deleted in its
entirety and replaced with the ----------------- following:
"The term of this Agreement shall be for a period of three (3) years
commencing on July 1, 1999, unless terminated earlier pursuant to
Section 7 below."
2. BASE SALARY. Section 3.1 of the Agreement is hereby deleted in its entirety
and replaced with the following:
"For all services rendered by Executive under this Agreement, and
commencing July 1, 1999, the Company shall pay to Executive a base
salary ("Base Salary") of $240,000 per annum. The Base Salary is
subject to increases from time to time at the discretion of the Board
of Directors of the Company."
3. CONFLICTING ACTIVITIES. Section 4.3 of the Agreement is hereby deleted in
its entirety and replaced with the following:
"4.3 CONFLICTING ACTIVITIES. For the term of this Agreement or until
Executive's employment hereunder terminates, whichever occurs first,
Executive hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or
anticipated future business of the Company, in a manner consistent with
the best interest of the Company and with his duties under this
Agreement. If Executive becomes aware of a business opportunity during
the performance of his Company duties, through the use of the Company's
property or information, or under circumstances that would reasonably
lead Executive to believe that the business opportunity was intended by
the offeror to be offered to the Company, he shall first offer such
opportunity to the Company. Should the Chief Executive Officer of the
Company, on behalf of the Company, not exercise its right to pursue
this business opportunity within a reasonable period of time, not to
exceed thirty (30) days, Executive may develop the business opportunity
for himself; provided, however, that such development may in no way
conflict or interfere with the duties owed by Executive to the Company
under this Agreement. Further, Executive may develop such business
opportunities only on his own time, and may not use any service,
personnel, equipment, supplies, facility, or trade secrets of the
Company in their development. As used herein, the term "business
opportunity" shall not include business opportunities involving
investment in publicly traded stocks, bonds or other securities, or
other investments of a personal nature.
4. SEVERANCE. Section 6 of the Agreement is hereby deleted in its entirety and
replaced with the following: ---------
"So long as this Agreement is in effect, and except as would be
inconsistent with Section 7, upon termination of Executive's
employment, Executive or Executive's designees or heirs shall be
entitled to a lump sum payment equal to one year of Executive's Base
Salary as then in effect (the "Severance Payment").
5. CHANGE OF CONTROL. Section 7.1 of the Agreement shall be amended by adding a
new subsection (e) and a new subsection (f) immediately following Section
7.1(d), as follows:
"(e) Executive's employment hereunder may be terminated by the Company
or by Executive at any time within ninety (90) days after the
occurrence of a Change in Control (as defined below). Upon such
termination:
(i) the Company shall pay to Executive as a lump-sum payment an amount equal to
two (2) years' Base Salary in effect at the time of termination;
(ii) the Company shall provide Executive with a continuation of health insurance
coverage, existing office space and existing secretarial and telephone
services, in each case for a period of eighteen (18) months after the date
of termination; and
(iii)all stock options issued by the Company to Executive shall immediately
vest and become exercisable for a period of at least two (2) years after
the date of termination, notwithstanding any provision to the contrary in
the Company's stock option plan or in any stock option agreement between
the Company and Executive.
For purposes of this Agreement, a "Change in Control" shall mean the
occurrence of any of the following events:
(x) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (collectively, a "person") of Beneficial ownership (as
such term is defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of twenty-five percent
(25%) or more of the then outstanding shares of common stock
of the Company or National Securities Corporation
(collectively, the "Outstanding Common Stock"); provided,
however, that the following shall not constitute a Change of
Control: (i) any acquisition by an Underwriter (as such term
is defined in Section 2(11) of the Securities Act of 1933, as
amended) for the purpose of making a public offering; or (ii)
any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or National
Securities Corporation or any corporation controlled by the
Company or National Securities Corporation;
(y) the sale or liquidation of all or substantially all of
the assets of the
Company or National Securities Corporation; or
(z) any transaction or series of transactions which result
in ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ directly or indirectly owning
less than ten percent (10%) of the Outstanding Common
Stock.
(f) Notwithstanding anything contained herein, or in any other
agreement between the Company and Executive, or benefit or
compensation plan under which the Executive participates, to the
contrary, in the event that any amounts due Executive under this
Section 7.1, or under any other plan or program of the Company or
other agreement between the Company and Executive, constitute
"parachute payments," within the meaning of section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and the
amount of such parachute payments, when reduced by the federal
excise taxes due and owing on such parachute payments, if any, is
less than the amount Executive would receive if he were paid only
three (3) times his "base amount," as that term is defined in
section 280G of the Code, then, in lieu of all payments hereunder
which are parachute payments, Executive shall be paid, in cash,
an amount equal to three (3) times his base amount less one
dollar ($1.00). The determinations to be made with respect to
this Section 7.1(f) shall be made by an independent auditor
jointly selected by the parties."
6. NONCOMPETE. Section 8 of the Agreement is hereby amended by deleting the
first sentence of such Section and replacing it with the following:
"Executive covenants and agrees that during the terms of his employment
hereunder and for a period of one (1) year thereafter (the
"Noncompetition Period"), Executive shall not, directly or indirectly
recruit, solicit or otherwise induce any customer, officer or employee
of the Company or its affiliates, or any independent contractor
associated with the Company or its affiliates, to discontinue such
relationship with the Company or its affiliates."
7. GOVERNING LAW. Section 9.3 of the Agreement is hereby deleted in its entirety
and replaced with the following:
"This Agreement is made under and shall be construed in accordance with
the laws of the State of Illinois, without regard to conflict of laws
principles. The Company and Executive hereby consent and agree to be subject to
the jurisdiction of the federal and state courts of the State of Illinois
sitting in Chicago, Illinois, in any suit, action or proceeding arising out of
this Agreement or the transactions contemplated hereby."
8. AFFECT ON AGREEMENT. Except as set forth in this Amendment, the Agreement and
each of the parties' respective obligations thereunder shall remain in full
force and effect, and shall not be waived, modified, superseded or otherwise
affected by this Amendment. This Amendment is not to be construed as a release,
waiver or modification of any of the terms, conditions, covenants, rights or
remedies set forth in the Agreement, except as specifically set forth herein.
9. COUNTERPARTS. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
10. GOVERNING LAW. This Amendment is made under and shall be construed in
accordance with the laws of the State of Illinois, without regard to conflict of
laws principles.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
OLYMPIC CASCADE FINANCIAL CORPORATION
By:________________________________
Its:________________________________
EXECUTIVE
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