EXHIBIT 10.20
EMPLOYMENT AGREEMENT/WASTERLAIN
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This Employment Agreement (this "Agreement"), made and entered into as of
the 1st day of June, 1997 (the "Effective Date"), by and between CGA Investment
Management, Inc., a Delaware corporation (referred to herein as the Employer"),
and ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (the "Employee").
RECITALS
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A. The Employer desires to employ the Employee for a specified term; and
B. The Employee is willing to be employed by the Employer upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter contained, it is covenanted and agreed by and between the
parties hereto as follows:
AGREEMENTS
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1. Position and Duties. The Employer hereby employs the Employee as the
Principal of the Employer or in such other capacity as shall be mutually agreed
between the Employee and the Employer. During the period of the Employee's
employment hereunder, the Employee shall devote the Employee's best efforts and
full business time, energy, skills and attention to the business and affairs of
the Employer; provided, however, that the Employee shall perform on behalf of
the Employer and the Employer's parent corporation, CGA Group, Ltd. ("CGA
Group") in the United States of America only such duties that are of a
ministerial nature and the performance of which are in compliance with the
Operating Guidelines (the "Operating Guidelines," as such term is defined in the
Investment Units Subscription Agreement dated as of June 4, 1997 by and among
CGA Group and the other parties named therein (the "Subscription Agreement").
The Employee's duties and authority shall consist of and include all duties and
authority customarily performed and held by persons holding equivalent positions
with business organizations similar in nature and size to the Employer, as such
duties and authority are, subject to the immediately preceding sentence,
reasonably defined, modified and delegated from time to time by the Board of
Directors of the Employer (the "Board") or that person to whom the Board has
delegated such authority. The Employee shall have the powers necessary to
perform the duties assigned to him, and shall be provided such supporting
services, staff, secretarial and other assistance, office space and
accoutrements as shall be reasonably necessary and appropriate in light of such
assigned duties.
2. Compensation. As compensation for the services to be provided by the
Employee hereunder, the Employee shall receive the following compensation and
other benefits:
(a) Base Salary. The Employee shall receive an aggregate annual minimum
base salary ("Base Salary") at the rate of One Hundred Seventy Five Thousand
Dollars ($175,000) payable in installments in accordance with the regular
payroll practices of the Employer.
(b) Bonuses. The Employee shall receive a one-time sign-on bonus, payable
as promptly as practicable after the date of execution hereof, in the amount of
One Hundred Twenty Five Thousand Dollars ($125,000). The Employee shall also
receive a cash bonus, payable within (30) days after the end of the 1997
calendar year, in the amount of not less than Two Hundred Twenty Five Thousand
Dollars ($225,000) ("Base Bonus"). The Employee may receive a discretionary
annual cash bonus ("Annual Bonus"), also payable within thirty (30) days after
the end of each subsequent calendar year during which this Agreement is in
effect, which shall be based upon an annual incentive plan approved by the
compensation committee of the board of directors of the Employer's ultimate
parent.
(c) Reimbursement of Expenses. In accordance with the expense reimbursement
policies of the Employer, as promulgated and in effect from time to time, the
Employee shall be reimbursed, upon submission of appropriate vouchers and
supporting documentation, for all travel, entertainment and other out-of-pocket
expenses reasonably and necessarily incurred by the Employee in the performance
of his duties hereunder.
(d) Other Benefits. The Employee shall be entitled to all benefits
specifically established for him by the Board or a committee thereof and, when
and to the extent he is eligible therefor, to participate in all plans and
benefits generally accorded to employees of the Employer, under and subject to
all of the forms thereof, including, but not limited to, as applicable, pension,
profit-sharing, supplemental retirement, incentive compensation, bonus,
disability income, split-dollar life insurance, group life, medical and
hospitalization insurance, and similar or comparable plans, and also to
perquisites extended to similarly situated senior employees. Additionally, the
Employer shall obtain for the benefit of the Employee's estate a term life
insurance policy with a value of two times the Employee's base salary as
presented in paragraph 2(a).
(e) Vacations. The Employee shall be entitled to an annual vacation in
accordance with the operative vacation policy of the Employer in effect from
time to time, which vacation shall be taken at a time or times mutually
agreeable to the Employee and the Employer.
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(f) Withholding. The Employer shall be entitled to withhold, from amounts
payable to the Employee hereunder, any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold.
3. Term and Termination.
(a) Basic Term. The Employee's employment under this Agreement shall be for
an initial term commencing on the Effective Date and ending on December 31,
1997, which term shall automatically extend for successive one (1) year periods
commencing on January 1, 1998 and on each succeeding January 1 thereafter,
unless terminated by either party effective as of the last day of the then
current Agreement term by written notice to that effect delivered to the other
not less than thirty (30) days prior to the expiration of such Agreement term.
(b) Voluntary Termination by Employee. The Employee may voluntarily
terminate this Agreement, at any time, by written notice to that effect
delivered to the Employer not less than thirty (30) days prior the effective
date of Employee's voluntary termination. Upon Employee's voluntary termination,
Employee shall have no obligations to the Employer other than as provided for in
Sections 4 and 5 hereof, together with an obligation to provide Employee's
reasonable transitional assistance to the Employer for a period of not more than
thirty (30) days in connection with matters for which the Employee was
responsible during the term of this Agreement and which were not concluded prior
to Employee's voluntary termination. Upon Employee's voluntary termination, no
Annual Bonus (or Base Bonus, if applicable) for the year in which such
termination occurs shall be payable to the Employee and no further payments of
any kind shall be due hereunder, except for compensation and benefits accrued as
of the date of such termination.
(c) Premature Termination Without Cause and Constructive Discharge.
(i) In the event of the termination of the Employee's employment under
this Agreement prior to the last day of the then current term, either (A)
by the Employer for any reason other than a termination in accordance with
the provisions of paragraph 3(d), 3(e) or 3(f) or (B) by the Employee by
written notice to the Employer given within thirty (30) days of
Constructive Discharge (as hereinafter defined) effective as of thirty (30)
days after such notice, then the Employer shall: (A) pay the Employee the
greater of (x) the Base Salary the Employee would have received had he
remained employed through the end of the then current term of the Agreement
and (y) six (6) months of salary; (B) pay the Employee, if such termination
occurs in the 1997 calendar year, the Base Bonus and (C) continue to
provide coverage for
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the Employee under the medical benefit program maintained by the Employer
through the remainder of the term of the Agreement (if permitted to do so
under such program).
(ii) Payments to the Employee under this paragraph 3(c) will be made
in accordance with the regular payroll practices of the Employer during the
remaining term of this Agreement or, at the election of the Employer, such
payments may be made in a lump sum. Such payments shall not be reduced in
the event the Employee obtains other employment following the termination
of employment by the Employer.
(iii) For purposes of this Agreement, the Employee shall be deemed
"Constructively Discharged" if the Employer changes the primary employment
location of the Employee to a place that is more than forty (40) miles from
the primary employment location of the Employee as of the Closing Date (as
defined in the Subscription Agreement).
(d) Termination For Cause. Notwithstanding any other provision of this
Agreement, in the event of the termination of the Employee's employment under
this Agreement for cause, no Annual Bonus (or Base Bonus, if applicable) for the
year in which such termination occurs shall be payable to the Employee and no
further payments shall be due hereunder except for compensation or benefits
accrued as of the date of such termination. For purposes of this Agreement,
"cause" shall mean: (i) a material violation by the Employer, in which the
Employee materially and directly participated, of any law or regulation
respecting the business of the Employer or any affiliate, other than a material
violation which is a direct result of the operation of the Employer and/or its
affiliates in accordance with the Operating Guidelines; (ii) the Employee being
found guilty by a court of competent jurisdiction or a plea of guilty or nolo
contendere to a charge of (A) any felony or (B) an act of dishonesty in
connection with the performance of his duties for the Employer; or (iii) the
willful or negligent failure of the Employee to perform his duties hereunder in
any material respect.
(e) Termination Upon Death. If the Employee dies during the term of this
Agreement, payment of any accrued compensation due to the Employee at the time
of death including the bonus payable with respect to the prior calendar year if
death occurs prior to payment of such bonus, shall be made to such beneficiary
as the Employee may designate in writing, or failing such designation, to the
executor, administrator or other representative of his estate (provided,
however, that the Employee's Base Bonus or Annual Bonus payable with respect to
the calendar year in which such termination occurs (with such Annual Bonus
calculated based on the bonus(es) payable to Employee with respect to the
immediately preceding year) shall be payable on a pro rata basis to the date of
the Employee's death). Such payments shall be in addition to any other death
benefits of the
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Employer for the benefit of the Employee and in full settlement and satisfaction
of all payments provided for in this Agreement.
(f) Termination Upon Disability. The Employer may terminate the Employee's
employment after the Employee is determined to be disabled under the then
current Employer program if such a program exists at the time the Employee is
disabled. If no such program exists, the Employee will be considered disabled if
the Employee suffers an illness or injury of a potentially permanent nature
which results in the Employee's inability to substantially perform his duties
hereunder as determined by the board of directors of the Employer's ultimate
parent for a period of either six (6) consecutive months, or one hundred and
twenty (120) business days within a consecutive twelve (12) month period. If the
Employer terminates the Employee after it is determined that the Employee is
disabled, the Employer shall pay the Employee the compensation accrued through
the date of the Employee's termination of employment, including the bonus
payable with respect to the prior calendar year if the termination occurs prior
to payment of such bonus (provided, however, that the Employee's Base Bonus or
Annual Bonus payable with respect to the calendar year in which such termination
occurs (with such Annual Bonus calculated based on the bonus(es) payable to the
Employee with respect to the immediately preceding year) shall be payable on a
pro rata basis to the date of the Employee's termination). In the event of a
dispute regarding the Employee's disability, each party shall choose a physician
who together will choose a third physician to make a final determination. The
Employee shall be entitled to the compensation and benefits provided for under
this Agreement for any period during the term of this Agreement and prior to the
establishment of the Employee's disability. Notwithstanding anything contained
in this Agreement to the contrary, until the date specified in a notice of
termination relating to the Employee's disability, the Employee shall be
entitled to return to his position with the Employer as set forth in this
Agreement, in which event no disability of the Employee will be deemed to have
occurred.
4. Confidentiality and Loyalty. The Employee acknowledges that during the
course of the Employee's employment, the Employee will produce and have access
to material, records, data, trade secret and information not generally available
to the public regarding the Employer and its subsidiaries and affiliates
(collectively, "Confidential Information"). Accordingly, during and subsequent
to termination of this Agreement, the Employee shall hold in confidence and not
directly or indirectly disclose, use, copy or make lists of any such
Confidential Information, except to the extent that such information is or
thereafter becomes lawfully available from public sources, or such disclosure is
authorized in writing by the Employer, required by a law or any competent
administrative agency or judicial authority, or otherwise as reasonably
necessary or appropriate in connection with the Employee's performance of the
Employee's duties
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hereunder. All records, files, documents and other materials or copies thereof
relating to the Employer's business which the Employee shall prepare or use
shall be and remain the sole property of the Employer, shall not be removed from
the Employer's premises without its written consent other than in the ordinary
course of business, and shall be promptly returned to the Employer upon
termination of the Employee's employment hereunder. The Employee agrees to abide
by the Employer's reasonable policies, as in effect from time to time, respects
avoidance of interests conflicting with those of the Employer.
5. Non-Solicitation and Non-Competition Covenants.
(a) Restrictive Covenant. The Employee and the Employer have jointly
reviewed the operations of the Employer and have agreed that the covenants
contained in this Section 5 are an essential ingredient of this Agreement and
are made in consideration for the payment of the amounts described in Sections 2
and 3 hereof. The Employee hereby agrees that, except with the express prior
written consent of the Employer, for a period of one (1) year after the
termination of the Employee's employment with the Employer, with respect to
clause (i) below, for any reason and, with respect to clause (ii) below, for any
reason other than a termination pursuant to Section 3(c) (the "Restrictive
Period"), the Employee (i) will not (a) solicit employees of the Employer or of
any subsidiary or affiliate of the Employer or (b) solicit clients or customers
of the Employer or of any subsidiary or affiliate of the Employer in respect of
any transaction, matter or business that directly or indirectly competes with
any of the businesses then conducted by the Employer or any of its subsidiaries
or affiliates, and (ii) will not directly or indirectly compete with the
business of the Employer, by directly or indirectly being a shareholder or
partner of or serving as an employee, officer or director of or consultant to,
or in any other capacity with, any person, firm, partnership, corporation,
subsidiary, division, joint venture, trust or other entity, or any division,
subsidiary or separate enterprise of any such entity, which (x) was created
during the term of the Employee's employment with the Employer or is expected to
be created within a period of one (1) year after the Employee's termination of
employment with the Employer, and (y) which owns or operates a business which is
either: (A) an insurer or reinsurer of asset backed securities, mortgage backed
securities or commercial mortgage backed securities; or (B) an investment
company that is directly or indirectly owned by, affiliated with, attached to or
otherwise related to an insurer or reinsurer of asset backed securities,
mortgage backed securities or commercial mortgage backed securities; or (C) an
investment advisory firm that is directly or indirectly owned by, affiliated
with, attached to or otherwise related to an insurer or reinsurer of asset
backed securities, mortgage backed securities or commercial mortgage backed
securities (the "Restrictive Covenant"). If the Employee violates the
Restrictive Covenant and the Employer brings legal action for
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injunctive or other relief, the Employer shall not, as a result of the time
involved in obtaining such relief, be deprived of benefit of the full period of
the Restrictive Covenant. Accordingly, the Restrictive Covenant shall be deemed
to have the duration specified in this paragraph 5(a) computed from the date the
relief is granted but reduced by the time between the period when Restrictive
Period began to run and the date of the first violation of the Restrictive
Covenant by the Employee. The Restrictive Covenant shall not prohibit the
Employee from owning directly or indirectly capital stock or similar securities
which are listed on a securities exchange or quoted on the National Association
of Securities Dealers Automated Quotation System which do not represent more
than five percent (5%) of the outstanding capital stock of any business similar
to that of the Employer's.
(b) Remedies for Breach of Restrictive Covenant. The Employee acknowledges
that the restrictions contained in Sections 4 and 5 of this Agreement are
reasonable and necessary for the protection of the legitimate business interests
of the Employer, that any violation of these restrictions would cause
substantial injury to the Employer and such interests, that the Employer would
not have entered into this Agreement with the Employee without receiving the
additional consideration offered by the Employee in binding himself to these
restrictions and that such restrictions were a material inducement to the
Employer to enter into this Agreement. In the event of any violation of these
restrictions, the Employer shall be relieved of all further obligations under
this Agreement and shall be entitled to any rights, remedies or damages
available to the Employer under this Agreement or otherwise at law or in equity.
In addition, in the event of any violation or threatened violation of these
restrictions, the Employer shall be entitled to preliminary and permanent
injunctive relief to prevent or restrain any such violation by the Employee and
any and all periods directly or indirectly acting for the Employee, as the case
may be.
6. Interest in Assets. Neither the Employee nor the Employee's estate shall
acquire hereunder any rights in funds or assets of the Employer, otherwise than
by and through the actual payment of amounts payable hereunder; nor shall the
Employee or the Employee's estate have any power to transfer, assign,
anticipate, hypothecate or otherwise encumber in advance any of said payments;
nor shall any of such payments be subject to seizure for the payment of any
debt, judgment, alimony, separate maintenance or be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise of the Employee.
7. General Provisions.
(a) Neither party hereto may assign his or its rights or delegate his or
its duties under this Agreement without the prior written consent of the other
party; provided, however, that (i) this Agreement shall inure to the benefit of
and be binding
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upon the successors and assigns of the Employer upon any sales of all or
substantially all of the Employer's assets, or upon any merger, consolidation or
reorganization of the Employer with or into any other corporation, all as though
such successors and assigns of the Employer and their respective successors and
assigns were the Employer; and (ii) this Agreement shall inure to the benefit of
and be binding upon the heirs, assigns or designees of the Employee to the
extent of any payments due to them hereunder. As used in this Agreement, the
term "Employer" shall be deemed to refer to any such successor or assign of the
Employer referred to in the preceding sentence.
(b) Entire Agreement; Modifications. This Agreement constitutes the entire
agreement between the parties respecting the subject matter hereof, and
supersedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral. Except as otherwise explicitly
provided herein, this Agreement may not be amended or modified except by written
agreement signed by the Employee and the Employer.
(c) Enforcement and Governing Law. The provisions of this Agreement shall
be regarded as divisible and separate; if any of said provisions should be
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remaining provisions shall not be affected
thereby. This Agreement shall be construed and the legal relations of the
parties hereto shall be determined in accordance with the laws of the State of
New York, without reference to the law regarding conflicts of law.
(d) Arbitration. The provisions of paragraph 5(b) shall supersede the
provisions of this paragraph 7(d) in the event of a simultaneous dispute between
the Employer and the Employee so as to afford the Employer with the remedy of
injunctive relief, without the necessity for arbitration. Any dispute or
controversy arising under or in connection with this Agreement or the Employee's
employment by the Employer shall be settled exclusively by arbitration,
conducted by a single arbitrator sitting in New York City, New York, in
accordance with the rules of the American Arbitration Association (the "AAA")
then in effect. The arbitrator shall be selected by mutual agreement between the
Employer and the Employee. However, in the event that the parties are unable to
agree on an arbitrator within a period of one week, the arbitrator shall be
selected by the parties from a list of eleven (11) arbitrators provided by the
AAA, provided that no arbitrator shall be related to or affiliated with either
of the parties. If the parties mutually agree on an arbitrator from such list,
such arbitrator shall be selected. If the parties cannot agree on the arbitrator
within ten (10) days after the list of the proposed arbitrators is received by
the parties, then no later than twenty (20) days after such list is received by
the parties, the parties, or their respective representatives, shall meet at a
mutually convenient location in New York City, New York, or
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telephonically. At that meeting, the party who sought arbitration shall
eliminate one (1) proposed arbitrator and then the other party shall eliminate
one (1) proposed arbitrator. The parties shall continue to eliminate names from
the list of proposed arbitrators in this manner until each party has eliminated
five (5) proposed arbitrators. The remaining arbitrator shall arbitrate the
dispute. Each party shall submit, in writing, the specific requested action or
decision it wishes to take, or make, with respect to the matter in dispute, and
the arbitrator shall be obligated to choose one (1) party's specific requested
action or decision, without being permitted to effectuate any compromise
position. The party whose requested action or decision is not selected by the
arbitrator shall bear the cost of all counsel, experts or other representatives
who are retained by both parties, together with all costs of the arbitration
proceeding, including, without limitation, the fees, costs and expenses imposed
or incurred by the arbitrator. Judgment may be entered on the arbitrator's award
in any court having jurisdiction; provided, however, that the Employee shall be
entitled to seek specific performance of the Employee's right to be paid through
the date of termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
(e) Waiver. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of this Agreement
to be performed by the other party, shall be deemed a waiver of any similar or
dissimilar provisions or conditions at the same time or any prior or subsequent
time.
[Intentionally Left Blank]
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(f) Notices. Notices pursuant to this Agreement shall be in writing and
shall be deemed given when received; and, if mailed, shall be mailed by United
States registered or certified mail, return receipt requested, postage prepaid;
and if to the Employer, addressed to the principal headquarters of the Employer,
attention: Chairman; or, if to the Employee, to the address set forth below the
Employee's signature on this Agreement, or to such other address as the party to
be notified shall have given to the other.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
CGA Investment Management, Inc. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
By:
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Name: ▇▇▇▇▇▇▇ ▇. Price ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
Title: President, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
CGA Group, Ltd.
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