Exhibit 10.7
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
by and between
MAXCOR FINANCIAL GROUP INC.
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
TABLE OF CONTENTS
SECTION PAGE
------- ----
1. Employment....................................................1
2. Term..........................................................2
3. Position and Duties; Place of
Performance...................................................2
4. Compensation and Related Matters..............................2
(a) Base Salary..............................................2
(b) Bonuses..................................................3
(c) Expenses.................................................3
(d) Other Benefits...........................................3
(e) Vacation.................................................3
(f) Services Furnished.......................................4
5. Offices.......................................................4
6. Termination...................................................4
(a) Death....................................................4
(b) Disability...............................................4
(c) Cause....................................................4
(d) Good Reason..............................................5
(e) Change in Control........................................7
7. Termination Procedure.........................................9
(a) Notice of Termination....................................9
(b) Date of Termination.....................................10
(c) Compensation During Dispute.............................10
8. Compensation upon Termination or
During Disability............................................11
(a) Disability; Death.......................................11
(b) By Company without Cause or by
the Executive for Good Reason...........................11
(c) By Company for Cause or by the
Executive Other than for
Good Reason.............................................12
(d) Compensation Plans......................................13
(e) Gross-Up Payment........................................13
i
9. Mitigation...................................................15
10. Confidential Information;
Noncompetition Requirement...................................15
(a) Confidential Information................................15
(b) Noncompetition Requirement..............................16
(c) Salary Continuation.....................................16
(d) Injunctive Relief.......................................17
11. Indemnification; Legal Fees..................................17
12. Successors; Binding Agreement................................17
(a) Company's Successors....................................17
(b) Executive's Successors..................................18
13. Notice.......................................................18
14. Miscellaneous................................................19
15. Validity.....................................................19
16. Counterparts.................................................20
17. Entire Agreement.............................................20
ii
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED AGREEMENT, dated as of August 14, 1998,
by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Executive"), and Maxcor Financial Group Inc.
(formerly Financial Services Acquisition Corporation), a Delaware corporation
(the "Company"), restating the employment agreement between the parties hereto,
dated as of March 8, 1996, as amended (the "1996 Agreement").
WHEREAS, the Board of Directors of the Company (the "Board")
currently employs the Executive and the Executive currently furnishes services
to the Company on the terms and conditions set forth in the 1996 Agreement; and
WHEREAS, the Board recognizes that, as is the case with many
publicly held corporations, the possibility of a Change in Control exists and
that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including the Executive, to
their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control; and
WHEREAS, the parties desire to amend and restate the 1996
Agreement in order to add certain Change in Control and other provisions;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to continue to employ
the Executive, and the Executive hereby accepts such continued employment, on
the terms and conditions hereinafter set forth.
2. Term. The period of employment of the Executive by the
Company hereunder (the "Employment Period") shall commence on August 16, 1996
(the "Commencement Date"), and end on the fifth anniversary of the Commencement
Date, unless further extended as provided in this Section 2 or sooner terminated
as provided in Section 6. On the fourth anniversary of the Commencement Date and
on each successive anniversary thereafter, the contract term of the Executive's
employment shall be automatically extended for one (1) additional year unless,
on or prior to such anniversary, the Company shall have delivered to the
Executive or the Executive shall have delivered to the Company written notice
that the term of the Executive's employment hereunder will not be extended (the
initial five-year contract term, as it may be so extended, the "Contract Term");
provided, however, that, if a Change in Control shall have occurred during the
original or extended term of this Agreement, the Contract Term shall continue in
effect for at least twenty-four (24) months subsequent to the month in which
such Change in Control occurs.
3. Position and Duties; Place of Performance. During the
Employment Period, the Executive shall serve as Chairman of the Board and
President and Chief Executive Officer of the Company. The Executive shall report
directly to the Board. The Executive's responsibilities and authority shall
include such responsibilities and authority as may from time to time be assigned
to the Executive by the Board, provided that such responsibilities and authority
are consistent with the Executive's position with the Company. In connection
with the Executive's employment by the Company, the Executive shall be based in
Manhattan, New York, except for reasonably required travel on the Company's
business.
4. Compensation and Related Matters.
(a) Base Salary. As compensation for the performance by the
Executive of his obligations hereunder, during the Employment Period, the
Company shall pay the Executive a base salary at the rate of $450,000 per annum
("Base Salary"). Base Salary shall be paid in approximately equal installments
in accordance with the Company's customary payroll practices. Base Salary may be
increased from time to time in accordance with the normal business practices of
the Company and, if so
2
increased, shall not thereafter during the Employment Period be decreased.
(b) Bonuses. During the Employment Period, the Executive
shall be eligible to receive such semi-annual bonuses (the "Bonus") as may be
awarded to him as the Board or the Compensation Committee of the Board shall
determine, or if an annual incentive plan is adopted by the Company or a
subsidiary thereof, in accordance with the terms of such plan.
(c) Expenses. The Company shall promptly reimburse the
Executive for all reasonable business expenses incurred during the Employment
Period by the Executive in performing services hereunder, including all expenses
of travel and living expenses while traveling on business or at the request of
and in the service of the Company, provided that such expenses are incurred and
accounted for in accordance with the policies and procedures established by the
Company.
(d) Other Benefits. The Executive shall be entitled to
participate in all of the employee benefit plans and arrangements currently
maintained by the Company or a subsidiary thereof, in accordance with the terms
of such plans and arrangements, and shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement made available
by the Company or a subsidiary thereof in the future to its executives and key
management employees (including without limitation each incentive plan, pension
and retirement plan and arrangement, supplemental pension and retirement plan
and arrangement, stock option plan, life insurance and health-and-accident plan
and arrangement, medical insurance plan, disability plan, survivor income plan,
relocation plan and vacation plan), subject to and on a basis consistent with
the terms, conditions and overall administration of such plans and arrangements.
Nothing paid to the Executive under any plan or arrangement presently in effect
or made available in the future shall be deemed to be in lieu of the salary
payable to the Executive pursuant to subsection (a) of this Section 4.
(e) Vacation. The Executive shall be entitled to the number
of vacation days in each calendar year, and to compensation in respect of earned
but unused vacation days, determined in accordance with the Com-
3
pany's vacation plan or policy as from time to time in effect. The Executive
shall also be entitled to all paid holidays given by the Company to its
executives.
(f) Services Furnished. During the Employment Period, the
Company shall furnish the Executive with office space, stenographic assistance
and such other facilities and services as shall be suitable to the Executive's
position and adequate for the performance of his duties as set forth in Section
3 hereof.
5. Offices. Subject to Section 3 hereof, the Executive agrees
to serve without additional compensation, if elected or appointed thereto, as a
director of the Company or any subsidiaries of the Company and as a member of
any committees of the board of directors of any such corporations, and in one or
more executive positions of any of the Company's subsidiaries, provided that the
Executive is indemnified for serving in any and all such capacities on a basis
no less favorable than is currently provided to any other director of the
Company or any of its subsidiaries, or any such executive position, as the case
may be.
6. Termination. The Executive's employment hereunder (and the
Employment Period) may be terminated without any breach of this Agreement only
under the circumstances set forth in the following subsections (a), (b), (c) and
(d).
(a) Death. The Executive's employment hereunder (and the
Employment Period) shall terminate upon his death.
(b) Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of his duties hereunder for the entire
period of six consecutive months, and within thirty (30) days after written
Notice of Termination (as defined in Section 7 hereof) is given shall not have
returned to the performance of his duties hereunder on a full-time basis, the
Company may terminate the Executive's employment hereunder (and the Employment
Period) for "Disability."
(c) Cause. The Company may terminate the Executive's
employment hereunder (and the Employment
4
Period) for Cause. For purposes of this Agreement, the Company shall have
"Cause" to terminate the Executive's employment hereunder upon the occurrence of
any of the following events:
(i) the conviction of the Executive for the
commission of a felony; or
(ii) the willful and continuing failure by the
Executive to substantially perform his duties hereunder (other than
such failure resulting from the Executive's incapacity due to physical
or mental illness or subsequent to the issuance of a Notice of
Termination by the Executive for Good Reason) after demand for
substantial performance is delivered by the Company in writing that
specifically identifies the manner in which the Company believes the
Executive has not substantially performed his duties; or
(iii) the willful misconduct by the Executive
(including, but not limited to, breach by the Executive of the
provisions of Section 10 hereof) that is demonstrably and materially
injurious to the Company or its subsidiaries, whether monetarily or
otherwise.
Cause shall not exist unless and until the Company has delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than two-thirds (2/3) of the entire membership of the Board of Directors of
the Company at a meeting of such board called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with his counsel, to be heard before such board), finding that in the
good faith opinion of such board, the Executive was guilty of the conduct set
forth in this Section 6(c) and specifying the particulars thereof in detail. For
purposes of this Section 6(c), no act or failure to act on the Executive's part
shall be considered "willful" unless done or failed to be done by the Executive
in bad faith and without reasonable belief that the Executive's action or
omission was in the best interest of the Company.
(d) Good Reason. The Executive may terminate his employment
hereunder (and the Employment
5
Period) during the Contract Term hereunder for "Good Reason" after the
occurrence, without the written consent of the Executive, of an event
constituting a material breach of this Agreement by the Company that has not
been fully cured within ten (10) days after written notice thereof has been
given by the Executive to the Company, provided that, without limiting the
generality of the foregoing, on and after a Change in Control, any one of the
following events shall be deemed a material breach of this Agreement:
(i) the assignment to the Executive of any
duties inconsistent with the Executive's status as Chief Executive
Officer of the Company or a substantial adverse alteration in the
nature of the Executive's responsibilities from those in effect
immediately prior to the Change in Control, or being required to report
to anyone other than the Board;
(ii) a reduction by the Company in the
Executive's Base Salary as in effect immediately prior to the Change in
Control;
(iii) the relocation of the Executive's
principal place of employment to a location outside of Manhattan, New
York;
(iv) the failure by the Company to pay to
the Executive any portion of the Executive's current compensation or to
pay to the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the Company
within fifteen (15) days of the date such compensation is due;
(v) the failure by the Company to provide
the Executive with compensation plans which, in the aggregate, provide
the Executive with substantially comparable compensation opportunities
to those compensation opportunities for which the Executive was
eligible immediately prior to the Change in Control;
(vi) the failure by the Company to continue
to provide the Executive with benefits substantially similar to those
enjoyed by the Exec-
6
utive under any of the Company's pension, life insurance, medical,
health and accident, or disability plans in which the Executive was
participating at the time of the Change in Control, the taking of any
action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any material
perquisite or other fringe benefit, or secretarial service and office
space at the level, enjoyed by the Executive at the time of the Change
in Control, or the failure by the Company to provide the Executive with
the number of paid vacation days to which the Executive is entitled on
the basis of years of service with the Company in accordance with the
Company's normal vacation policy in effect at the time of the Change in
Control;
(vii) any purported termination of the
Executive's employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 7(a) or that does
not comply with Section 6(c), if applicable (and for purposes of this
Agreement, no such purported termination shall be effective); or
(viii) the failure of a successor to the
Company to expressly assume and agree to perform this Agreement
pursuant to Section 12(a) hereof.
The Executive's right to terminate his employment hereunder for Good Reason
shall not be affected by his incapacity due to physical or mental illness. The
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any act or failure to act constituting Good Reason
hereunder.
(e) Change in Control. A "Change in Control" shall be
deemed to have occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(i) any Person (as defined hereinbelow)
becomes the Beneficial Owner, directly or indirectly, of securities of
the Company (as defined hereinbelow) representing 25% or more of the
combined voting power of the Company's then outstanding securities,
excluding (x) any Person who
7
becomes such a Beneficial Owner in connection with a transaction
described in clause (A) of paragraph (iii) below and (y) any Person who
currently is such a Beneficial Owner unless such Person becomes the
Beneficial Owner of additional securities of the Company representing
5% or more of the combined voting power of the Company's then
outstanding securities; or
(ii) the following individuals cease for any
reason to constitute a majority of the number of directors then
serving: individuals who, on the date of this amended and restated
Agreement, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for
election by the Company's stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or
recommended; or
(iii) there is consummated a merger or
consolidation of the Company or any direct or indirect subsidiary of
the Company with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent
thereof) at least 60% of the combined voting power of the securities of
the Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's
then outstanding securities, excluding any
8
Person who currently is such a Beneficial Owner unless such Person
becomes the Beneficial Owner of additional securities of the Company
representing 5% or more of the combined voting power of the Company's
then outstanding securities; or
(iv) the stockholders of the Company approve
a plan of complete liquidation or dissolution of the Company or there
is consummated an agreement for the sale or disposition by the Company
of all or substantially all of the Company's assets, other than a sale
or disposition by the Company of all or substantially all of the
Company's assets to an entity, at least 60% of the combined voting
power of the voting securities of which are owned by stockholders of
the Company in substantially the same proportions as their ownership of
the Company immediately prior to such sale.
For purposes of this Section 6(e) and Section 8(e) hereof,
"Person" shall have the meaning given in Section 3(a)(9) of the Securities
Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
For purposes of this Section 6(e), "Beneficial Owner" shall
have the meaning set forth in Rule 13d-3 under the Exchange Act.
7 Termination Procedure.
(a) Notice of Termination. Any termination of the
Executive's employment by the Company or by the Executive (other than
termination pursuant to Section 6(a) hereof) shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 13.
For purposes of this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this Agreement relied
9
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
(b) Date of Termination. "Date of Termination" shall
mean (i) if the Executive's employment is terminated by his death, the date of
his death, (ii) if the Executive's employment is terminated for Disability
pursuant to Section 6(b), thirty (30) days after Notice of Termination (provided
that the Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty (30) day period), (iii) if the Executive's
employment is terminated for Cause pursuant to Section 6(c), the date specified
in the Notice of Termination, which shall not be earlier than the date of the
Notice of Termination and (iv) if the Executive's employment is terminated for
any other reason, the date on which a Notice of Termination is given or any
later date (within 30 days) set forth in such Notice of Termination; provided,
however, that if either party notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date on which
the dispute is finally determined, either by mutual written agreement of the
parties, by a binding and final arbitration award or by a final judgment, order
or decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected); provided further, however,
that the Date of Termination shall be extended by a notice of dispute given by
the Executive only if such notice is given in good faith and the Executive
pursues the resolution of such dispute with reasonable diligence.
(c) Compensation During Dispute. If a purported
termination occurs on or after a Change in Control and during the Contract Term,
and such termination is disputed in accordance with subsection (b) of this
Section 7, the Company shall continue to pay the Executive the full compensation
in effect when the notice giving rise to the dispute was given (including, but
not limited to, salary) and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the Executive was
participating when the notice giving rise to the dispute was given, until the
Date of Termination, determined in accordance with subsection (b) of this
Section 7. Amounts paid under this
10
Section 7(c) are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement.
8 Compensation upon Termination or During Disability.
(a) Disability; Death. During any period that the
Executive fails to perform his duties hereunder as a result of incapacity due to
physical or mental illness ("Disability Period"), the Executive shall continue
to receive his full Base Salary at the rate in effect at the beginning of such
period and continue as a participant in all compensation and employee benefit
plans in which the Executive was participating pursuant to Section 4(d) until
his employment is terminated pursuant to Section 6(b) and shall continue to
receive such Base Salary for a period of six months thereafter. Subsequent to
the six-month period following termination of the Executive's employment
pursuant to Section 6(b), or in the event the Executive's employment is
terminated by reason of his death, the Company shall have no further obligations
to the Executive under this Agreement and the Executive's benefits shall be
determined under the Company's retirement, insurance and other compensation
programs then in effect in accordance with the terms of such programs.
(b) By Company without Cause or by the Executive for
Good Reason. If during the Contract Term the Executive's employment is
terminated by the Company other than for Cause or Disability or by the Executive
for Good Reason, then --
(i) in addition to any amounts due the
Executive pursuant to Sections 4(a) or 4(b) hereof, the Company shall
continue to pay to the Executive (or his legal representatives or
estate) his Base Salary (at the rate in effect immediately prior to the
occurrence of the circumstance giving rise to the Notice of
Termination) for the remainder of the Contract Term or, if greater, for
one year; provided, however, that if such termination occurs on or
after a Change in Control, then the Company shall, within five (5) days
following the Date of Termination, pay to the Executive, in an
undiscounted cash lump sum, an amount equal to (i)
11
three (3) times the sum of Base Salary (at the rate in effect
immediately prior to the occurrence of the circumstance giving rise to
the Notice of Termination) and the Bonus (annualized if paid for less
than a full year) awarded in respect of the last completed bonus period
prior to the fiscal year in which occurs the Change in Control or the
Date of Termination, whichever resulting Bonus is greater, provided
that, solely for purposes of this Section 8(b)(i), such annualized
Bonus shall not be less than $200,000; and
(ii) the Company or a subsidiary thereof
shall maintain in full force and effect, for the continued benefit of
the Executive and his dependents for the remainder of the Contract Term
or, if greater, for one year, all medical, dental and life insurance
benefit plans and programs in which the Executive was entitled to
participate immediately prior to the Date of Termination, provided that
the Executive's continued participation is possible under the general
terms and provisions of such plans and programs. In the event that the
Executive's participation in any such plan or program is barred, the
Company shall arrange to provide the Executive and his dependents with
benefits substantially similar to those which the Executive and his
dependents would otherwise have been entitled to receive under such
plans and programs from which their continued participation is barred;
and
(iii) the Executive shall be deemed to
continue as an employee of the Company during the remainder of the
Contract Term for purposes of the exercise and/or vesting of
outstanding stock and stock option awards and cash incentive awards.
(c) By Company for Cause or by the Executive Other
than for Good Reason. If the Executive's employment shall be terminated by the
Company for Cause or by the Executive other than for Good Reason, then the
Company shall pay the Executive his Base Salary (at the rate in effect at the
time Notice of Termination is given) through the Date of Termination, and the
Company shall have no additional obligations to the Executive under this
Agreement except as set forth in subsection (d) of this Section 8.
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(d) Compensation Plans. Following any termination of
the Executive's employment, the Company shall pay the Executive all unpaid
amounts, if any, to which the Executive is entitled as of the Date of
Termination under any compensation plan or program of the Company, at the time
such payments are due.
(e) Gross-Up Payment.
(i) Notwithstanding any other provi-sions of
this Agreement, in the event that any payment or benefit received or to
be received by the Executive in connection with a Change in Control or
the termination of the Executive's employment (whether pursuant to the
terms of this Agreement (the "Severance Payments") or any other plan,
arrangement or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with the Company
or such Person) (all such payments and benefits, including the
Severance Payments, being hereinafter called "Total Payments") would be
subject (in whole or part) to the excise tax ("Excise Tax") imposed
under section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), then the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of any Excise Tax on the Total Payments
and any federal, state and local income tax and Excise Tax upon the
payment provided for by this Section 8(e), shall be equal to the Total
Payments.
(ii) For purposes of determining whether any
of the Total Payments will be subject to the Excise Tax and the amount
of such Excise Tax, (A) all of the Total Payments shall be treated as
"parachute payments" within the meaning of section 280G(b)(2) of the
Code, unless in the opinion of tax counsel selected by the Company's
independent auditors and reasonably acceptable to the Executive ("Tax
Counsel"), such other payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section
280G(b)(4)(A) of the Code, (B) all "excess parachute payments" within
the meaning of section 280G(b)(l) of the Code
13
shall be treated as subject to the Excise Tax, unless in the opinion of
Tax Counsel such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered,
within the meaning of section 280G(b)(4)(B) of the Code, in excess of
the Base Amount allocable to such reasonable compensation, or are
otherwise not subject to the Excise Tax, and (C) the value of any
noncash benefits or any deferred payment or benefit shall be determined
by the Company's independent auditors in accordance with the principles
of sections 280G(d)(3) and (4) of the Code. For purposes of determining
the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which occurs the Date of Termination
(or such earlier date on which any payment or benefit becomes subject
to the Excise Tax) and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the Executive's
residence on the Date of Termination (or such earlier date on which any
payment or benefit becomes subject to the Excise Tax), net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
(iii) In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account
hereunder at the time of termination of the Executive's employment, the
Executive shall repay to the Company, at the time that the amount of
such reduction in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of
the Gross-Up Payment attributable to the Excise Tax and federal, state
and local income tax imposed on the Gross-Up Payment being repaid by
the Executive to the extent that such repayment results in a reduction
in the Excise Tax and/or a federal, state or local income tax
deduction) plus interest on the amount of such repayment at the rate
provided in section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of the Executive's employment
(including by reason of any payment the existence or
14
amount of which cannot be determined at the time of the Gross-Up
Payment) the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions
payable by the Executive with respect to such excess) at the time that
the amount of such excess is finally determined.
9 Mitigation. The Executive shall not be required to mitigate
the amount of any payment provided for the Executive by seeking other employment
or otherwise, nor shall the amount of any payment or benefit provided for the
Executive hereunder be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by the Executive to the Company or
otherwise except as is hereinafter specifically provided in this Section 9. To
the extent that the Executive, during the relevant period described in Section
8(b)(ii) hereof, shall receive from a subsequent employer benefits similar to
those to be provided under Section 8(b)(ii), the benefits to be provided under
the provisions of said Section shall be correspondingly reduced.
10 Confidential Information; Noncompetition Requirement.
(a) Confidential Information. The Executive shall
hold in a fiduciary capacity for the benefit of the Company all trade secrets
and confidential information relating to the Company and its businesses, which
shall have been obtained by the Executive during the Executive's employment by
the Company and which shall not have been or now or hereafter have become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). The Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such trade secrets or information to
anyone other than the Company and those designated by the Company. Any
termination of the Executive's employment or of this Agreement shall have no
effect on the continuing operation of this Section 10(a).
15
(b) Noncompetition Requirement. During (1) any period
that the Executive is performing services hereunder, (2) a period of one (1)
year following a termination of the Executive's employment by the Company for
Cause or by the Executive other than for Good Reason (if the Company so
requests, notifies and pays the Executive as provided in paragraph (c) of this
Section 10), (3) on or after a Change in Control, a period of six (6) months
following a termination of the Executive's employment by the Executive for Good
Reason, and (4) with respect to clauses (i) and (ii) of this Section 10(b), any
period with respect to which the Executive is entitled to payment pursuant to
Section 8(b)(i) or, if shorter, a period of one year, the Executive agrees that,
without the prior written consent of the Company, he shall not, directly or
indirectly, with or without pay, either as an employee, employer, consultant,
agent, principal, partner, stockholder, corporate officer, director, manager,
investor, lender, advisor, owner, associate or in any other individual or
representative capacity, (i) solicit, entice, encourage or otherwise attempt to
procure or service by telephone or otherwise accounts from any customers
(determined as of the Date of Termination) of the Company or a subsidiary
thereof for a business that is competitive in any manner whatsoever (a
"Competitive Business") with the interdealer brokerage business in which the
Company is then engaged (the "Business"), (ii) solicit, entice or encourage any
employee (determined as of the Date of Termination) of the Company or a
subsidiary thereof to terminate such employee's employment in order to work in a
Competitive Business, or (iii) upon the written request of the Company, engage
or participate in any Competitive Business unless such Competitive Business is
located more than seventy-five (75) miles from the site, as of the Date of
Termination, of the Company's executive offices in New York; provided, however,
that trading by the Executive for his own benefit or in proprietary accounts
shall not constitute a Competitive Business.
(c) Salary Continuation. As additional consideration
for the Executive's performance of the covenant provided in subsection (b) (iii)
of this Section 10 relating to the twelve-month period following a termination
of his employment by the Company for Cause or by the Executive other than for
Good Reason, but only for so long as the Executive shall continue to perform
such
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covenants, the Company shall pay the Executive for each month during such
twelve-month period an amount equal to one twelfth (1/12th) of the Executive's
Base Salary. It is agreed and understood that such payment constitutes full and
fair consideration to the Executive for observance of such covenants and his
possible abstinence from the Business for such period.
(d) Injunctive Relief. In the event of a breach or
threatened breach of subsections (a), (b) or (c) of this Section 10, the
Executive agrees that the Company shall be entitled to injunctive relief in a
court of appropriate jurisdiction to remedy any such breach or threatened
breach, the Executive acknowledging that damages would be inadequate and
insufficient.
11 Indemnification; Legal Fees. The Company shall indemnify
the Executive to the full extent permitted by law and the by-laws of the Company
for all expenses, costs, liabilities and legal fees which the Executive may
incur in the discharge of his duties hereunder. The Company shall also reimburse
the Executive for any reasonable legal fees and expenses incurred by the
Executive in contesting or disputing any termination of the Executive's
employment hereunder or in seeking to obtain or enforce any right or benefit
provided by this Agreement, but only if the Executive shall substantially
prevail with respect to the preponderance of the matters at issue. Such payments
shall be made within five (5) days after the Executive's request for payment
accompanied with such evidence of his having prevailed (as described in the
preceding sentence) and such evidence of the fees and expenses incurred, as the
Company may reasonably require. Any termination of the Executive's employment or
of this Agreement shall have no effect on the continuing operation of this
Section 11.
12 Successors; Binding Agreement.
(a) Company's Successors. The Company will require
any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this
17
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as he would be entitled to hereunder if
the Company had terminated his employment other than for Cause, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used in this
Agreement, "Company" shall mean the Company as herein before defined and any
successor to its business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Section 12 or which otherwise becomes bound
by all the terms and provisions of this Agreement by operation of law.
(b) Executive's Successors. This Agreement and all
rights of the Executive hereunder shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts would still be payable to him hereunder
if he had continued to live, all such amounts unless otherwise provided herein
shall be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such designee, to the
Executive's estate.
13 Notice. For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇-▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
With a copy to the offices of the Company
If to the Company:
Maxcor Financial Services Group
Two World Trade ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Attn: Chairman
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14 Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and such officer of the Company as
may be specifically designated by its Board of Directors or its compensation
committee. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. This Agreement shall
be binding on all successors to the Company. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of New York without regard to its conflicts of law principles. All
references to sections of the Exchange Act or the Code shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law. The obligations of the Company and the Executive
under this Section 14 and Sections 7, 8, 9, 10, 11 and 12 hereof shall survive
the expiration of the term of this Agreement. The compensation and benefits
payable to the Executive under this Agreement shall be in lieu of any other
severance benefits to which the Executive may otherwise be entitled upon his
termination of employment under any severance plan, program, policy or
arrangement of the Company.
15 Validity. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
16 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall
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be deemed to be an original but all of which together will constitute one and
the same instrument.
17 Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and cancelled.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
MAXCOR FINANCIAL GROUP INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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