EXHIBIT 10.16
FORM OF ESSEX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereafter the "Employment Agreement") made as of
____________________, 1998 (the "Closing Date"), by and among Essex Investment
Management Company, Inc., a Massachusetts corporation (the "Company"), Essex
Investment Management Company, LLC, a Delaware limited liability company (the
"Employer"), and _________________________, a resident of
_________________________ (the "Employee").
W I T N E S S E T H
WHEREAS, pursuant to an Agreement and Plan of Reorganization dated as of
January 15, 1998 (the "Purchase Agreement") by and among Affiliated Managers
Group, Inc., a Delaware corporation ("AMG"), the Employer, the Employee and
certain other parties as set forth therein, at the Closing (as defined in the
Purchase Agreement), a newly organized subsidiary of AMG will be merged (the
"Merger") with and into the Company, which will become a wholly-owned subsidiary
of AMG and will continue as the Managing Member of the Employer.
WHEREAS, the Company transferred its assets and liabilities to the
Employer, which will continue the investment advisory businesses of the Company
(including acting as an investment adviser to the clients which were clients of
the Company).
WHEREAS, the Employee is a stockholder of the Company and will receive
substantial economic and other benefits if the transactions contemplated by the
Purchase Agreement are consummated.
WHEREAS, on the Closing Date, and in consideration for the Employee
entering into this Employment Agreement, the Employee is being admitted as a
member of the Employer. Reference is hereby made to that certain Amended and
Restated Limited Liability Company Agreement dated as of the Closing Date, as
the same may be amended and/or restated from time to time (the "LLC Agreement").
WHEREAS, it is a condition precedent to the obligation of AMG to consummate
the transactions contemplated by the Purchase Agreement that the Employee enter
into and on the Closing Date (as defined in the Purchase Agreement) be bound by
an employment agreement with the Employer in the form hereof, supplanting any
previous employment agreement or arrangement that Employee may have had with the
Employer or the Company. It is further a condition precedent to the obligation
of AMG to consummate the transactions contemplated by the Purchase Agreement
that the Company be an intended third-party beneficiary of this Employment
Agreement and be entitled to enforce all the provisions hereof as against each
of the Employer and the Employee.
WHEREAS, it is a condition precedent to the Employee being admitted to the
Employer as a member, that the Employee enter into and on the Closing Date be
bound by an employment agreement with the Employer in the form hereof.
WHEREAS, the Company and the Employer recognize the importance of the
Employee to the Employer and to the Employer's ability to retain the client
relationships transferred to the Employer under the Purchase Agreement and the
Asset Transfer Agreement (as such term is defined in the Purchase Agreement),
and desire that the Employer employ the Employee for the period of employment
and upon and subject to the terms herein provided.
WHEREAS, the Company and the Employer wish to be assured that the Employee
will not compete with the Employer and its Controlled Affiliates during the
period of employment, and will not for a period thereafter compete with the
Employer or its Controlled Affiliates, or solicit any Past, Present, or
Potential Clients (as hereinafter defined) of the Company or the Employer and
will not, by such competition or solicitation, damage the Employer's goodwill
among its clients and the general public.
WHEREAS, the Employee desires to be employed by the Employer and to refrain
from competing with the Employer or soliciting its clients and the clients of
the Company for the periods and upon and subject to the terms herein provided.
WHEREAS, the Employee has been employed by the Company for approximately
years, has while so employed contributed to
the acquisition and retention of the Company's clients, and will continue to
seek to acquire and retain clients and to generate goodwill in the future as an
officer, employee and agent of the Employer.
Capitalized terms used herein and not otherwise defined shall have the
meaning set forth in the LLC Agreement when used in this Employment Agreement.
AGREEMENTS
In consideration of the premises, the mutual covenants and the agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto covenant and
agree as follows:
Section 1. Term of Employment; Compensation. The Employer agrees to
employ the Employee for a period of ten (10) years beginning on the Closing Date
(the "Term") as an officer of the Employer except as provided herein; and the
Employee hereby accepts such employment. As consideration for the Employee's
performance hereunder, the Employer will pay the Employee for his services
during the Term hereof such amounts (which may be zero (0)) as shall be
determined by the Management Committee consistent with the provision of Article
III of the LLC Agreement (including, by way of example and not of limitation,
the provisions of Section
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3.5(a) of the LLC Agreement with regard to the use of Operating Cash Flow),
subject to such payroll and withholding deductions as are required by law.
Consistent with the provisions of Section 3.5(a) of the LLC Agreement, the
Employee's compensation (including salary and bonus) will be periodically
reviewed and adjusted (with respect to both increases and/or decreases).
Section 2. Office and Duties.
(a) During the Term of this Employment Agreement, the Employee
shall hold such positions and perform such duties relating to the Employer's
businesses and operations as may from time to time be assigned to him in
accordance with the provisions of Article III of the LLC Agreement. During
the Term of this Employment Agreement and while employed by the Employer, the
Employee shall devote substantially all of his working time to his duties
hereunder and shall, to the best of his ability, perform such duties in a
manner which will further the business and interests of the Employer. If the
Company (as a third party beneficiary of this Agreement) reasonably believes
that the Employee has breached the foregoing obligation, it shall provide
written notice of such breach to the Employer and within three (3) business
days of such notice, the Management Committee (excluding the Person whose
termination is being considered) of the Employer shall determine whether it
concurs in the determination that the Employee has breached such provision.
If the Management Committee disagrees with the Company, then the Management
Committee shall provide written notice of such disagreement to the Company
within three (3) business days of its determination and, if the Company so
notifies the Employer within three (3) business days after notice of such
agreement, then such issue shall be finally determined by binding arbitration
in accordance with the provisions of Section 11 of this Agreement, provided,
that such arbitration shall take place no later than fourteen (14) days
following the receipt by the Management Committee of written notice from the
Company that the Company desires to submit such issue to arbitration, and a
final decision with respect to such issue shall be issued within five (5)
business days after such arbitration. During the longer of the Term of this
Employment Agreement or while Employee is employed by or acting as a
consultant (or in any similar capacity) to the Employer or any of its
Affiliates, the Employee shall not engage (i) in any Prohibited Competition
Activity; (ii) interfere with the relations of the Employer or any of its
Controlled Affiliates with any person or entity who at any time during such
period was a Client (which means Past, Present, and Potential Clients, as
defined below); or (iii) solicit or induce or attempt to solicit or induce,
directly or indirectly, any employee or agent of or consultant (or person
acting in any similar capacity) to the Employer to terminate its, his or her
relationship therewith. The Employee agrees that he will travel to whatever
extent is reasonably necessary in the conduct of the Employer's business.
(b) At any time after the
anniversary of the date hereof, the Employee may elect, with the
written consent of the Management Committee in its sole discretion, to reduce
(but not to zero) the amount of time devoted to his duties hereunder, including
without limitation reduction of travel time.
(c) Except as provided in the LLC Agreement, during the Term of this
Agreement and while employed by the Employer, the Employee shall not, directly
or indirectly,
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solicit the business of any Past, Present, or Potential Clients except on behalf
and for the benefit of the Employer, or pursue any other business activity,
including, without limitation, serving as an officer, director, employee, agent
or adviser to any business entity other than the Employer, without the
Employer's prior written consent.
(d) Notwithstanding the provisions of this Section 2, the Employee
may engage in investing for his personal account if each such investment is made
in accordance with the Code of Ethics of the LLC.
(e) The terms "Client" or "Client List" when used herein shall
include all Past, Present, and Potential Clients, subject to the following
general rules: (i) with respect to each such Client, the term shall also
include any persons or entities which are known to the Employee to be Affiliates
of such Client or persons who are members of the Immediate Family of such Client
or any of its Affiliates; and (ii) with respect to so-called "wrap programs,"
both the sponsor of the program and the underlying participants in the program
(or clients who have selected the Company or a Controlled Affiliate under their
contract with the sponsor) shall be included as Clients. Past, Present and
Potential Clients shall be defined as follows:
"Past Client" shall mean at any particular time, any Person who at any
point prior to such time had been an advisee or investment advisory customer of,
or recipient of Investment Management Services from, the Employer (including,
without limitation, its predecessors, including the Corporation) but at such
time is not an advisee, investment advisory customer of, or recipient of
Investment Management Services from, the Employer.
"Present Client" shall mean, at any particular time, any Person who is at
such time an advisee or investment advisory customer of, or recipient of
Investment Management Services from, the Employer or any of its Controlled
Affiliates.
"Potential Client" shall mean, at any particular time, any Person to whom
the Employer (including, without limitation, its predecessors, including the
Company) or any of its Controlled Affiliates, through any of their officers,
employees, agents or consultants (or persons acting in any similar capacity),
has, within five years prior to such time, offered (by means of a personal
meeting or a written proposal specifically directed to the particular Person) to
serve as investment adviser or otherwise provide Investment Management Services
but who is not at such time an advisee or investment advisory customer of, or
recipient of Investment Management Services from, the Employer or any of its
Controlled Affiliates. The preceding sentence is meant to exclude form letters,
blanket mailings, cold calls and initial marketing efforts that do not result in
a request by the recipient for further information or a presentation.
Section 3. Benefits. The Employee shall participate, to the extent he
is eligible and in a manner and to an extent that is fair and appropriate in
light of his position and duties with the Employer at such time, in all bonus,
pension, profit-sharing, group insurance, or other fringe benefit plans which
the Employer may hereafter in its sole and absolute discretion make available
generally to its officers pursuant to the provisions of Article III of the LLC
Agreement, but the
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Employer will not be required to establish any such program or plan. The
Employee shall be entitled to such vacations and to such reimbursement of
expenses as the Employer's policies allow, from time to time, to officers having
comparable responsibilities and duties.
Section 4. Termination of Employment. Notwithstanding any other
provision of this Employment Agreement, Employee's employment with the Employer
shall be terminated only in the following circumstances:
(i) At any time by the Company, or by the Employer with the
prior written consent of the Company, For Cause;
(ii) At any time by the Company, or by the Employer with the
prior written consent of the Company upon the Permanent Incapacity of the
Employee; or
(iii) Upon the death of the Employee;
[(iv) At any time by the Employer in accordance with the
provisions of the LLC Agreement.]
Section 5. All Business to be the Property of the Employer; Assignment
of Intellectual Property; Confidentiality.
(a) The Employee agrees that any and all presently existing
investment advisory businesses of the Employer and its Controlled Affiliates
(including its predecessor, the Company), and all businesses developed by the
Employer and its Controlled Affiliates, including by such Employee or any other
employee or agent of the Employer (including, without limitation, employees and
agents of its predecessor, the Company), including, without limitation, all
investment methodologies, all investment advisory contracts, fees and fee
schedules, commissions, records, data, client lists, agreements, trade secrets,
and any other incident of any business developed by the Employer (or its
predecessor, the Company) or its Controlled Affiliates or earned or carried on
by the Employee Stockholder for the Employer or its predecessor, the Company or
their respective Controlled Affiliates, and all trade names, service marks and
logos under which the Employer or its Controlled Affiliates do business, and any
combinations or variations thereof and all related logos, are and shall be the
exclusive property of the Employer or such Controlled Affiliate, as applicable,
for its or their sole use, and (where applicable) shall be payable directly to
the Employer or such Controlled Affiliate. In addition, the Employee
acknowledges and agrees that the investment performance of the accounts managed
by the Employer (and its predecessor, the Company) was attributable to the
efforts of the team of professionals at the Employer (or its predecessor, the
Company, as applicable) and not to the efforts of any single individual, and
that therefore, the performance records of the accounts managed by the Employer
(and its predecessor, the Company) are and shall be the exclusive property of
the Employer.
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(b) The Employee acknowledges that, in the course of performing
services hereunder and otherwise (including, without limitation, for the
Employer's predecessor, the Company), the Employee Stockholder has had, and will
from time to time have, access to information of a confidential or proprietary
nature, including without limitation, all confidential or proprietary investment
methodologies, trade secrets, proprietary or confidential plans, client
identities and information, client lists, service providers, business operations
or techniques, records and data ("Intellectual Property") owned or used in the
course of business by the Employer or its Controlled Affiliates. The Employee
agrees always to keep secret and not ever publish, divulge, furnish, use or make
accessible to anyone (otherwise than in the regular business of the Employer)
any Intellectual Property of the Employer or any Controlled Affiliate thereof
unless such information can be shown to be (i) previously known on a
nonconfidential basis by such Employee, (ii) in the public domain through no
fault of such Employee or (iii) lawfully acquired by such Employee from other
sources. At the termination of the Employee's services to the Employer, all
data, memoranda, client lists, notes, programs and other papers, items and
tangible media, and reproductions thereof relating to the foregoing matters in
the Employee's possession or control shall be returned to the Employer and
remain in its possession (except where the return of such items shall be
unreasonable or impractical in relation to the importance or confidentiality of
such items).
(c) The Employee acknowledges that, in the course of entering into
this Employment Agreement, the Employee has had and, in the course of the
operation of the Employer, the Employee will from time to time have, access to
Intellectual Property owned by or used in the course of business by AMG or the
Company. The Employee agrees, for the benefit of AMG and the Company, always to
keep secret and not ever publish, divulge, furnish, use or make accessible to
anyone (other than at AMG's or the Company's request) any knowledge or
information regarding Intellectual Property (including, by way of example and
not of limitation, the transaction structures utilized by AMG or the Company) of
AMG or the Company unless such information can be shown to be (i) previously
known on a nonconfidential basis by such Employee, (ii) in the public domain
through no fault of such Employee or (iii) lawfully acquired by such Employee
from other sources. At the termination of the Employee Stockholder's service to
the Employer, all data, memoranda, documents, notes and other papers, items and
tangible media, and reproductions thereof relating to the foregoing matters in
the Employee's possession or control shall be returned to the Company and remain
in its possession.
(d) The provisions of this Section 5 shall not be deemed to limit any
of the rights of the Employer or the Company under the LLC Agreement or under
applicable law, but shall be in addition to the rights set forth in the LLC
Agreement and those which arise under applicable law.
Section 6. Non-Competition Covenant.
(a) Until the later of (i) three (3) years following the termination
of the Employee's employment with the Employer or any of its Affiliates, or (ii)
(A) in the event the Employee's employment is terminated by the LLC other than
For Cause or a Unanimous
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Termination Decision, five (5) years from the date hereof, or (B) in the event
the Employee's employment terminates for any other reason, ten (10) years from
the date hereof, the Employee shall not, directly or indirectly, engage in any
Prohibited Competition Activity.
(b) In addition to, and not in limitation of, the provisions of
Section 6(a), the Employee agrees, for the benefit of the Employer and the
Company, that from and after the termination of his employment with the Employer
and until the later of (i) three (3) years following the termination of the
Employee's employment with the Employer or any of its Affiliates, or (ii) A) in
the event the Employee's employment is terminated by the LLC other than For
Cause or a Unanimous Termination Decision, five (5) years from the date hereof,
or (B) in the event the Employee's employment terminates for any other reason,
ten (10) years from the date hereof, the Employee shall not, directly or
indirectly, whether as owner, part-owner, shareholder, partner, member,
director, officer, trustee, employee, agent or consultant, or in any other
capacity, on behalf of himself or any Person other than the Employer:
(i) provide Investment Management Services to any Person that is
a Past, Present or Potential Client of the Employer; provided, however, that
this clause (i) shall not be applicable to clients of the Employer (including
Potential Clients) who are also members of the Immediate Family of the Employee;
(ii) solicit or induce, whether directly or indirectly, any
Person for the purpose (which need not be the sole or primary purpose) of (A)
causing any funds with respect to which the Employer provides Investment
Management Services to be withdrawn from such management, or (B) causing any
Client of the Employer (including any Potential Client) not to engage the
Employer or any of its Affiliates to provide Investment Management Services for
any or additional funds;
(iii) contact or communicate with, in either case in
connection with Investment Management Services, whether directly or indirectly,
any Past, Present or Potential Clients of the Employer; provided, however, that
this clause (iii) shall not be applicable to clients of the Employer (including
Potential Clients) who are also members of the Immediate Family of the Employee;
or
(iv) solicit or induce, or attempt to solicit or induce, directly
or indirectly, any employee or agent of, or consultant to, the Employer or any
of its Controlled
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Affiliates to terminate its, his or her relationship therewith, hire any such
employee, agent or consultant, or former employee, agent or consultant, or work
in any enterprise involving investment advisory services with any employee,
agent or consultant or former employee, agent or consultant, of the Employer or
its Controlled Affiliates who was employed by or acted as an agent or consultant
to the Employer (or its predecessor, the Company) or its Controlled Affiliates
at any time during the two (2) year period preceding the termination of the
Employee Stockholder's employment (excluding for all purposes of this sentence,
secretaries and persons holding other similar positions).
Notwithstanding the provisions of Sections 6(a) and 6(b), the Employee may make
passive investments in a competitive enterprise the shares or other equity
interests of which are publicly traded, provided his holding therein together
with any holdings of his Affiliates and members of his Immediate Family, less
than five percent (5%) of the outstanding shares of comparable interests in such
entity at the time such investments are made.
(c) The Employee, the Employer and the Company agree that the periods
of time and the unlimited geographic area applicable to the covenants of this
Section 6 and of Section 2 are reasonable, in view of the Employee's status as
significant stockholder of the Company and his receipt of his share of the
Merger Consideration in the Purchase Agreement, and which will contribute its
investment advisory business to the Employer, the Employee's receipt of a member
interest in the Employer, the Employee's receipt of the payments specified in
Section 1 above, the geographic scope and nature of the business in which the
Employer is engaged, the Employee's knowledge of the Employer's (and its
predecessor, the Company's) businesses and the Employee's relationships with the
Employer's and the Company's investment advisory clients. However, if such
period or such area should be adjudged unreasonable in any judicial proceeding,
then the period of time shall be reduced by such number of months or such area
shall be reduced by elimination of such portion of such area, or both, as are
deemed unreasonable, so that this covenant may be enforced in such maximum area
and during such maximum period of time as are adjudged to be reasonable.
Section 7. Notices. All notices hereunder shall be in writing and
shall be delivered, sent by recognized overnight courier or mailed by registered
or certified mail, postage and fees prepaid, to the party to be notified at the
party's address shown below. Notices which are hand delivered or delivered by
recognized overnight courier shall be effective on delivery. Notices which are
mailed shall be effective on the third day after mailing.
(i) If to the Employer:
Essex Investment Management Company, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Affiliated Managers Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Employee:
with a copy to:
Dechert Price & ▇▇▇▇▇▇
4000 ▇▇▇▇ Atlantic Tower,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to the Company:
c/o Affiliated Managers Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Fries
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
unless and until notice of another or different address shall be given as
provided herein.
Section 8. Third Party Beneficiary; Assignability. Each of AMG and the
Company is an intended third party beneficiary of the provisions of this
Employment Agreement. This Employment Agreement shall be binding upon and inure
to the benefit of the Employer, AMG and the Company, and to any person or firm
who may succeed to substantially all of the assets of the Employer, AMG or the
Company. This Employment Agreement shall not be assignable by the Employee.
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Section 9. Entire Agreement. Except as set forth in the following
below, this Employment Agreement contains the entire agreement between the
Employer and the Employee with respect to the subject matter hereof, and
supersedes all prior oral and written agreements between the Employer and the
Employee with respect to the subject matter hereof, including without limitation
any oral agreements relating to compensation. In the event of any conflict
between the provisions hereof and of the LLC Agreement, the provisions hereof
shall control.
Section 10. Remedies Upon Breach.
(a) In the event that the Employee breaches any of the provisions of
this Agreement (including, without limitation, following the termination of
his/her employment with the Employer), then AMG (or its assignees) shall have no
further obligations under any promissory note theretofore issued to the Employee
pursuant to Section 3.11(f) of the LLC Agreement.
(b) The Employee recognizes and agrees that the Employer or the
Company's remedy at law for any breach of the provisions of Sections 2, 4, 5, or
6 hereof would be inadequate and that for any breach of such provisions by the
Employee, the Employer or the Company shall, in addition to such other remedies
as may be available to it at law or in equity or as provided in this Employment
Agreement, be entitled to injunctive relief and to enforce their respective
rights by an action for specific performance to the extent permitted by law, and
to the right of set-off against any amounts due to the Employee by the Employer
or the Company. Should the Employee engage in any activities prohibited by this
Employment Agreement, he agrees to pay over to the Employer all compensation
received in connection with such activities. Such payment shall not impair any
other rights or remedies of the Employer or the Company or affect the
obligations or liabilities of the Employee under this Employment Agreement or
applicable law.
Section 11. Arbitration of Disputes. The parties agree that any and all
disputes, claims, or controversies arising out of or relating to this Agreement
or the breach hereof or otherwise arising out of the Employee's employment or
the termination of that employment (including, without limitation, any claims of
unlawful employment discrimination whether based on age or otherwise) shall, to
the fullest extent permitted by law, be settled by arbitration in any forum and
form agreed upon by the parties or, in the absence of such an agreement, under
the auspices of the American Arbitration Association ("AAA") in Boston,
Massachusetts in accordance with the Employment Dispute Resolution Rules of the
AAA, including, but not limited to, the rules and procedures applicable to the
arbitrators, except that the selection of arbitrator shall apply the law as
established by decisions of the U.S. Supreme Court, the Court of Appeals for the
First Circuit and the U.S. District Court for the District of Massachusetts in
deciding the merits of claims and defenses under federal law or any state or
federal anti-discrimination law, and any awards to the Employee for violation of
any anti-discrimination law shall not exceed the maximum award to which the
Employee would be entitled under the applicable (or most analogous) federal
anti-discrimination civil rights laws. In the event that any person or entity
other than the Employee, the Employer of the Surviving Corporation may be a
party with regard to any such controversy
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or claim, such controversy or claim shall be submitted to arbitration subject to
such other person or entity's agreement. Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
parties covenant that they will participate in the arbitration in good faith and
that they will share equally its costs except as otherwise provided herein. The
provisions of this Section 11 shall be enforceable in any court of competent
jurisdiction, and the parties shall bear their own costs in the event of any
proceeding to enforce this Agreement except as otherwise provided herein. The
arbitrator may in his or her discretion assess costs and expenses (including the
reasonable legal fees and expenses of the prevailing party) against any party to
a proceeding. Any party unsuccessfully refusing to comply with an order of the
arbitrators shall be liable for costs and expenses, including attorney's fees,
incurred by the other party in enforcing the award.
Section 12. Accelerated Put Rights.
(a) Notwithstanding any provisions contained in the LLC Agreement to
the contrary (including Article III and Article VII thereof) upon any exercise
by the Company of any of its rights under Section 3.2(b)(v) (a "Put Acceleration
Event"), then AMG or its successors or assigns shall, upon the request of the
Employee, purchase all of the LLC Points then held by the Employee in the LLC
pursuant to the terms and conditions of this Section 12 (an "Accelerated Put").
(b) If Employee desires to exercise its rights under Section (a)
above, it shall give the Company and AMG irrevocable written notice (a "Put
Notice") within ninety (90) days after the Put Acceleration Event, stating that
it is electing to sell all (but not less than all) of its LLC Points then owned
by the Non-Manager Member.
(c) The purchase price for an Accelerated Put ("Accelerated Put
Price") shall be an amount equal to (i) sixteen (16) times the positive
difference, if any, of (x) the sum of (I) fifty percent (50%) of the LLC's
Maintenance Fees for the twenty-four (24) months ending on the last day of
the calendar quarter in which the Put Acceleration Event occurred and (II)
thirty-three and thirty-three one-hundredths percent (33.33%) of the LLC's
Earned Performance Fees for the thirty-six (36) calendar months ending on the
last day of the calendar year prior to the calendar year in which the
Accelerated Put Event occurred, minus (y) the amount by which the actual
expenses of the LLC exceeded the Operating Cash Flow (including previously
reserved Operating Cash Flow) during the twelve (12) months ending on the
last day of the calendar quarter prior to the date of closing of such
Accelerated Put (in each case determined by reference to the most recent
financial statements with respect to the applicable period supplied to the
Company pursuant to Section 9.3 of the LLC Agreement) multiplied by (ii) a
fraction, the numerator of which is the number of Vested LLC Points to be
purchased from such Employee on the Purchase Date and the denominator of
which is the number of LLC Points outstanding on the Purchase Date before
giving effect to any puts, calls or any issuances or redemptions of LLC
Points on such date or in connection with an Accelerated Put.
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(d) In the case of any Accelerated Put, the Put Price shall be paid
by AMG (or its successors and assigns) on a date determined by AMG (but no later
than sixty (60) days following delivery of the Put Notice) by wire transfer or
certified check issued to the Employee.
Section 13. Consent to Jurisdiction. To the extent that any court
action is permitted consistent with or to enforce Section 10 of this Employment
Agreement, the parties hereby consent to the jurisdiction of the Superior Court
of the Commonwealth of Massachusetts and the United States District Court for
the District of Massachusetts. Accordingly, with respect to any such court
action, the Employee (a) submits to the personal jurisdiction of such courts;
(b) consents to service of process at the address determined pursuant to the
provisions of Section 7 hereof; and (c) waives any other requirement (whether
imposed by statute, rule of court, or otherwise) with respect to personal
jurisdiction or service of process.
Section 14. Third-Party Agreements and Rights. The Employee hereby
confirms that the Employee is not bound by the terms of any agreement with any
previous employer or other party which restricts in any way the Employee's use
or disclosure of information or the Employee's engagement in any business. The
Employee represents to the Employer that the Employee's execution of this
Employment Agreement, the Employee's employment with the Employer and the
performance of the Employee's proposed duties for the Employer will not violate
any obligations the Employee may have to any such previous employer or other
party. In the Employee's work for the Employer, the Employee will not disclose
or make use of any information in violation of any agreements with or rights of
any such previous employer or other party, and the Employee will not bring to
the premises of the Employer any copies or other tangible embodiments of
non-public information belonging to or obtained from any such previous
employment or other party.
Section 15. Litigation and Regulatory Cooperation. During and after the
Employee's employment, the Employee shall cooperate fully with the Employer in
the defense or prosecution of any claims or actions now in existence or which
may be brought in the future against or on behalf of the Employer or the Company
or their Affiliates which relate to events or occurrences that transpired while
the Employee was employed by the Employer (including, without limitation, its
predecessor, the Company). The Employee's full cooperation in connection with
such claims or actions shall include, but not be limited to, being available to
meet with counsel to prepare for discovery or trial and to act as a witness on
behalf of the Employer or the Company or their Affiliates at mutually convenient
times. During and after the Employee's employment, the Employee also shall
cooperate fully with the Employer, the Company and their Affiliates in
connection with any investigation or review of any federal, state or local
regulatory authority (including, without limitation, the Securities and Exchange
Commission) as any such investigation or review relates to events or occurrences
that transpired while the Employee was employed by the Employer (including,
without limitation, its predecessor, the Company). The Employer shall reimburse
the Employee for any reasonable out-of-pocket expenses incurred in connection
with the Employee's performance of obligations pursuant to this Section 14.
12
Section 16. Waivers and Further Agreements. Neither this Employment
Agreement nor any term or condition hereof, including without limitation the
terms and conditions of this Section 15, may be waived or modified in whole or
in part as against the Company, the Employer or the Employee, except by written
instrument executed by or on behalf of each of the parties hereto other than the
party seeking such waiver or modification, expressly stating that it is intended
to operate as a waiver or modification of this Employment Agreement or the
applicable term or condition hereof, it being understood that any action under
this Section 15 on behalf of the Employer may be taken only with the approval of
the Company as Manager Member. Each of the parties hereto agrees to execute all
such further instruments and documents and to take all such further action as
the other party may reasonably require in order to effectuate the terms and
purposes of this Employment Agreement.
Section 17. Amendments; Employer's Consents. This Employment Agreement
may not be amended, nor shall any change, modification, consent, or discharge be
effected except by written instrument executed by or on behalf of the party
against whom enforcement of any change, modification, consent or discharge is
sought, it being understood that any action under this Section 16 on behalf of
the Employer may be taken only with the prior written approval of the Company as
the Manager Member of the Employer.
Whenever under this Agreement the consent of the Employer is required, that
consent shall only be effective if given with the prior written consent of the
Company as the Manager Member of the Employer.
Section 18. Severability. If any provision of this Employment Agreement
shall be held or deemed to be invalid, inoperative or unenforceable in any
jurisdiction or jurisdictions, because of conflicts with any constitution,
statute, rule or public policy or for any other reason, such circumstance shall
not have the effect of rendering the provision in question unenforceable in any
other jurisdiction or in any other case or circumstance or of rendering any
other provisions herein contained unenforceable to the extent that such other
provisions are not themselves actually in conflict with such constitution,
statute or rule of public policy, but this Employment Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative, or unenforceable provision had never been contained herein and such
provision reformed so that it would be enforceable to the maximum extent
permitted in such jurisdiction or in such case.
Section 19. Governing Law. This Employment Agreement shall be governed
by and construed and enforced in accordance with the laws of The Commonwealth of
Massachusetts which apply to contracts executed and performed solely in The
Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
a sealed instrument as of the date first above written.
EMPLOYEE: ESSEX INVESTMENT MANAGEMENT
COMPANY, LLC
By: Essex Investment Management Company,
Inc., its Manager Member
_______________________ By: ___________________________
Name: Name:
Title:
AMG ACKNOWLEDGES AND AGREES TO BE BOUND BY THE TERMS AND CONDITIONS OF SECTION
12 HEREOF:
AFFILIATED MANAGERS GROUP, INC.
By___________________________________
Name:
Title: