EXHIBIT 10.23
EMPLOYMENT AGREEMENT
between
PIMCO ADVISERS L.P.
and
John O. Leasure
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is entered into as of
________ __, 1994, and by between PIMCO ADVISERS L.P. (formerly Thomson Advisory
Group L.P., a Delaware limited partnership ("Employer"), and John O. Leasure
("Employee").
R E C I T A L S
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WHEREAS, Thomson Advisory Group L.P., a Delaware limited partnership
("TAG LP"), Thomson Advisory Group Inc,. a Delaware corporation ("TAG Inc."),
stockholders of TAG Inc., PIMCO Partners, G.P., a California general partnership
("PIMCO GP"), Pacific Financial Asset Management Company, a California
corporation ("PFAMCO"), certain subsidiaries of PFAMCO and certain individuals
associated with the respective businesses of TAG LP, Pacific Investment
Management Company, a California corporation ("PIMCO Inc.") and PFAMCO are
parties to that certain Agreement and Plan of Consolidation for PIMCO Advisors
L.P. effective as of October 31, 1994 (the "Consolidation Agreement"), providing
for the consolidation of the investment management and advisory business of TAG
LP with the investment management and advisory business of PFAMCO and PIMCO Inc.
in the manner described therein (the "Consolidation").
WHEREAS, Employer has acquired its business in connection with and
pursuant to the Consolidation.
WHEREAS,Employer has proposed to appoint Employee its Senior Vice
President.
WHEREAS, Employer and Employee desire to assure that Employee will
perform services for Employer for a period of time from and after the
Consolidation, subject to the consummation thereof, with such employment to be
governed by the terms and provisions of this Agreement commencing as of the
effective date of this Agreement as specified in Section 9 hereof (the
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"Effective Date").
A G R E E M E N T
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NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Definitions.
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The following definitions shall be applicable to the terms set forth
below as used in this Agreement:
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"Affiliate" - means, with respect to any person or entity (herein the
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the "first party"), any other person or entity that directly or indirectly
controls, or is controlled by, or is under common control with, such first
party. The term "control" as used herein (including the terms "controlled by"
and "under common control with") means the possession, directly or indirectly,
of the power to (a) vote 50% or more of the outstanding voting securities of
such person or entity, or (b) otherwise direct the management policies of such
person or entity, by contract or otherwise.
"Constructive Termination" - shall have the meaning provided for it in
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Employer's Amended Unit Option Plan as effective on the date of the
Consolidation.
"Employer Managed Funds" - means as of any date of reference, those
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funds or investments with respect to which the Employer or any Affiliate is
performing any investment management services.
"Equity Board" - means the Equity Board of PIMCO Advisors L.P. as it may
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from time to time be constituted under the PIMCO Advisors Partnership Agreement.
"For Cause" - shall mean for (i) acts of fraud or dishonesty against the
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Employer or any of its Affiliates or affecting adversely any of their properties
or businesses; (ii) commission of any act which, in the reasonable opinion of
the Employer's outside legal counsel, will lead to the suspension or barring of
the Employee, by any regulatory body having jurisdiction over an area of
activity which constitutes a significant portion of the Employee's activities,
from the performance of his duties to the Employer or any of its Affiliates;
(iii) permanent suspension of the Employee, by any regulatory body having
jurisdiction over an area of activity which constitutes a significant portion of
the Employee's activities, from the performance of his duties to the Employer or
any of its Affiliates as a result of acts taken by Employee; and (iv) the
Employee's having been convicted of, or having engaged in any criminal activity
which, in the reasonable opinion of the Employer, adversely affects the
reputation of the Employer or any of its Affiliates or the Employee's ability to
perform the services required under this Agreement.
"Involuntary Termination" - means any termination of Employee's
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employment which is not a Voluntary Termination or a termination of Employee's
employment by Employer For Cause, and includes any Constructive Termination
prior to January 1, 1999 and any termination as a result of a Notice of
Non-Extension given by the Employer pursuant to Section 8(c), but does not
include any Constructive Termination after December 31, 1998 or any termination
by death or incapacity pursuant to Section 5(a).
"Operating Board" - means the Operating Board of PIMCO Advisors L.P as
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it may from time to time be constituted under the PIMCO Advisors Partnership
Agreement.
"Prohibited Competition Activity" - means any of the following
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activities:
(a) Directly or indirectly, for or on behalf of any person,
firm, corporation or other entity other than the Employer or any Employer
Affiliate, (i) diverting or taking
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away any Employer Managed Funds, or (ii) soliciting any person or entity for the
purpose of diverting or taking away any such Employer Managed Funds.
(b) Directly or indirectly, for or on behalf of any person,
firm, corporation or other entity other than the Employer or any Employer
Affiliate, performing any Prohibited Distribution Services.
For purposes of this definition of Prohibited
Competition Activity, the Employee shall be deemed to be indirectly engaged in
any activity described in clause (a) or (b) above if such activity is carried
out or effected by or through another party that is acting at the direction of,
or in conjunction with, the Employee.
"Prohibited Distribution Services" - means any services on behalf of or
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in support of the principal underwriter of shares of one or more entities
registered under the Investment Company Act of 1940 (or any successor
statute); provided, however, that this shall not include services
performed for or in support of a registered broker/dealer distributing
shares of such an entity where there is (i) no investment adviser, (ii)
the adviser is unaffiliated with the broker/dealer, or (iii) the
broker/dealer is distributing such shares directly to its own brokerage
customers, and the broker/dealer is engaged in the distribution of
securities generally.
"Voluntary Termination" - means a termination of employment by reason of
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Employee's voluntary resignation or any voluntary termination of employment by
Employee and includes any termination as a result of a Notice of Non-Extension
given by the Employee pursuant to Section 8(c), but does not include any action
by Employee as a result of a Constructive Termination prior to January 1, 1999.
2. Employment of Employee.
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Subject to the terms and provisions of this Agreement, Employer agrees
to employ Employee as Senior Vice President of PIMCO ADVISORS L.P. and as
President of PADCO (PIMCO Advisors Distribution Company) and Employee agrees to
be employed as a Senior Vice President of PIMCO ADVISORS L.P. and as President
of PADCO, with such employment to commence effective as of the Effective Date.
Employee agrees to serve Employer faithfully and to the best of his ability
in such capacity, or in such other capacity as Employee and Employer shall agree
upon from time to time. Employee shall devote such time and attention to the
business of Employer during the term of this Agreement as Employer in its
discretion shall deem appropriate and commensurate with Employee's duties and
responsibilities with Employer and which is reasonable and proper under general
rules of business conduct. Employee shall not, during the term of this
Agreement, directly or indirectly render any services of a business,
commercial or professional nature to any other person or organization, whether
for compensation or otherwise, to an extent that such services interfere with or
detract from the quality of Employee's performance of his duties and obligations
on behalf of Employer.
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3. Compensation.
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(a) As compensation for Employee's performance of his services
under this Agreement, Employer shall pay Employee an annual base salary of not
less than Two Hundred Seventy-Five Thousand Dollars ($275,000) ("Base Salary").
Such compensation shall be prorated for a partial year based on the period
worked for Employer during such year, and shall be payable in accordance with
Employer's customary employee payroll practices, including but not limited to
all customary withholding practices.
(b) As additional compensation ("Bonus Compensation") for
Employee's performance of services under this Agreement, Employee shall be
entitled an annual bonus which shall not be less than 50% of Employee's Base
Salary ("Minimum Bonus Compensation") and is expected to be within a range of
50% to 150% subject to increase above such amount in the event of extraordinary
performance.
4. Benefit Arrangements.
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(a) Employee shall be entitled to participate in all health,
welfare, insurance, pension and other similar employee benefit plans and
programs of Employer which are open to participation by employees holding
employment positions comparable to Employee's position; provided, however, that
such participation by Employee shall in all cases be subject to the terms and
provisions of such employee plan or program and also to applicable federal,
state or other governmental laws and regulations.
(b) Employer shall promptly reimburse Employee for all
reasonable business expenses incurred by Employee (in connection with the
business of Employer and its affiliates) during the term of this Agreement in
accordance with practices as in effect from time to time.
(c) During the term of this Agreement, Employee shall receive
paid vacations in accordance with Employer's practices as in effect from time to
time.
(d) Except as provided in Section 4(a), compliance with the
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foregoing subsections shall in no way create or be deemed to create any
obligation, express or implied, on the part of Employer or any affiliate of
Employer with respect to the continuation of any benefit or other plan or
arrangement maintained at or prior to the date hereof or the creation and
maintenance of any particular benefit or other plan or arrangement at any time
after the date hereof.
5. Termination of Employment Prior to Stated Termination Date.
The parties hereby expressly agree that Employee's employment by
Employer may terminate or be terminated by either party at any time prior to the
Scheduled Termination Date (as such term is defined in Section 8(c)) as provided
below. Except as otherwise expressly set forth herein, Employee shall not be
entitled to any severance pay, relocation
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benefits or other severance benefits upon termination of his employment with
Employer. Upon any termination prior to the Scheduled Termination Date the
rights of the parties shall be as follows:
(a) Death and Permanent Incapacity. Upon the death of Employee
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or the permanent incapacity of Employee continuing for a period of more than 180
days, Employee's employment by Employer hereunder shall terminate. Upon any such
termination, all rights and obligations of the parties hereunder shall
terminate, other than: (i) any obligation of Employer with respect to earned but
unpaid Base Salary pursuant to Section 3(a) hereof, (ii) any Bonus Compensation
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owed to Employee pursuant to Section 3(b) hereof, and (iii) any reimbursement
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amounts owed to Employee and any other amounts owed to Employee under any
benefit plan (including amounts under any disability plan). Employer shall pay
Employee his Base Salary and Minimum Bonus Compensation pursuant to Section 3
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hereof and shall provide Employee with all his benefits as set forth in
Section 4 hereof for a period of one year from the date of termination of
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Employee's employment pursuant to this Section 5(a). As used herein, the term
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permanent incapacity means the inability of Employee, by reason of injury,
illness or other similar cause to perform a major part of his or her duties and
responsibilities in connection with the conduct of the business and affairs of
Employer and its Affiliates.
(b) Voluntary Termination and Termination "For Cause." In the
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event of (i) a termination of Employee's employment by reason of a Voluntary
Termination or (ii) in the event of Employee's termination by Employer For
Cause, then (A) all obligations of Employer under any Section of this Agreement
shall terminate as of the date of such termination, and (B) all obligations of
Employee under Sections 6 and 7 hereof shall continue unaffected by the
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termination of Employee's employment in accordance with the terms thereof.
(c) Involuntary Termination and Default by Employer. In the
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event of the Involuntary Termination of Employee's employment by Employer, then
(i) Employer shall continue to pay Employee his Base Salary and Minimum Bonus
Compensation for the longer of one year from such termination date or through
the then Scheduled Termination Date and during such period shall continue in
effect Employee's participation in such benefit plans as were in effect at the
time of such termination unless and until the same are replaced on substantially
equivalent or superior terms, (ii) all obligations of Employee under this
Agreement other than Section 6(a) and Section 7 shall terminate; provided,
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however, that in the event that Employee engages in any Prohibited Distribution
Services or engages in any of the activities prohibited by Section 6(c) hereof,
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then Employer's obligations under clause (i) above shall terminate, and (iii)
all of the Employee's Class I and II options to purchase Class A Units and no
less than sixty percent (60%) of the Employee's options to purchase Class B
Units under the Employee's Unit Option Plan granted prior to the effective date
of this Agreement shall be fully vested. After any material default by Employer
in the performance of any of its obligations hereunder (including any action
which would constitute a Constructive Termination), Employee shall have the
right to terminate his or her employment hereunder for a period of
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two months thereafter, and such a termination shall be deemed an Involuntary
Termination by Employer. Notwithstanding the foregoing, Employer shall not be
deemed to have committed a material default hereunder unless and until
(x) Employee gives written notice to Employer of Employee's belief that Employer
has committed such a default, and (y) Employer fails, within 30 days after the
effective date of such notice (determined as provided in Section 9 hereof), to
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cure such default. Payment of the amount specified in this Section 5(c) is
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agreed by the parties hereto to be in full satisfaction and compromise of any
claims arising out of any termination of Employee's employment pursuant to this
Section 5(c).
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6. Confidential Information: Prohibited Competition.
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(a) Employee agrees and acknowledges that any and all presently
existing mutual fund distribution business of Employer and its Affiliates and
all business developed by Employer and its Affiliates or any other employee of
Employer and its Affiliates, or carried on by Employee for Employer and all
trade names, service marks and logos under which Employer and its affiliates do
business, are and shall be the exclusive property of Employer or such Affiliate,
as applicable, for its or their sole use. Employee acknowledges that, in the
course of performing services hereunder and otherwise, including for Employer's
predecessor, Employee has had and will from time to time have access to
confidential records, data, client and contract lists, trade secrets, formulae,
computer programs and software, manuals and documentation, algorithms, and
similar and other confidential information owned or used in the course of
business by Employer or its Affiliates. Employee agrees always to keep secret
and not ever (during the terms of this Agreement or thereafter) publish,
divulge, furnish, use or make accessible to anyone (otherwise than in the
regular business of Employer or any Affiliate thereof or otherwise at the
Employer's request and with the consent of the Operating Board) any knowledge or
information of a confidential or proprietary nature with respect to any trade
secrets, proprietary plans, clients, client requirements, service providers,
business operations or techniques of Employer or any Affiliate thereof. Upon
termination of Employee's services to Employer for any reason, all data,
memoranda, client lists, notes, programs and other papers, items and tangible
media, and reproductions thereof relating to the foregoing matters in Employee's
possession or control, shall be returned to 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).
(b) By execution of this Agreement, Employee hereby covenants
that during the term of his employment with Employer, and for one year
thereafter, he will not engage directly or indirectly in any Prohibited
Competition Activity.
(c) Upon any termination of Employee's employment, until the
later of (i) the then Scheduled Termination Date or (ii) one year after the
effective date of such termination, Employee will not, without the consent of
the Operating Board, directly or indirectly, whether as owner, part-owner,
shareholder, partner, director, officer, trustee, employee, agent or consultant,
or in any other capacity, on behalf of himself or any firm, corporation or other
business organization other than Employer:
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(A) provide Prohibited Distribution Services;
(B) directly or indirectly, for or on behalf of any
person, firm, corporation or other entity (i) divert or take away any Employer
Managed Funds or (ii) solicit any person or entity for the purpose of diverting
or taking away any such Employer Managed Funds; or
(C) solicit or induce any professional employee or
former professional employee of Employer to terminate his or her employment or
work in any enterprise involving Prohibited Distribution Services with any
professional employee or former professional employee of Employer who was
employed by Employer at any time during the six months immediately preceding the
termination of Employee's employment.
Notwithstanding the provisions of this Section 6(c), Employee may make passive
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investments in a competitive enterprise the shares of which are publicly traded
provided his holding therein, together with any holdings of his Affiliates, do
not exceed 1% of the outstanding shares or comparable interests in such entity.
(d) As of the date of this Agreement, Employee is not performing
any consulting or other duties for, and is not a party to any similar agreement
with, any business or venture competing with the Employer or any of its
affiliates.
(e) If Employer gives a Notice of Non-Extension pursuant to
Section 8(c) hereof, Employer will continue to pay Employee his or her Base
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Salary and Minimum Bonus Compensation and will continue his or her benefits
pursuant to Section 4 hereof, until the earlier of one year from the then
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Scheduled Termination Date (as such term is defined in Section 8 hereof) or the
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date on which Employee engages in any activity prohibited by subsections (b) or
(c) above.
7. Notices.
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All notices, requests or other communications (hereinafter collectively
referred to as "Notices") required or permitted to be given hereunder or which
are given with respect to this Agreement shall be in writing (including
telecopy) and, unless otherwise expressly provided herein, shall be delivered
(a) by hand during normal business hours, (b) by Federal Express, United Parcel
Service or other reputable overnight commercial delivery service (collectively
"overnight courier"),(c) by registered or certified mail (return receipt
requested)or (d) by telecopy, addressed as follows:
To Employer at: PIMCO Advisers Group, L.P.
2187 Atlantic Street
Stamford, Connecticut 06902
To Employee at: John O.Leasure
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[address]
Any such notice shall be effective for purposes of determining
compliance with the time requirements herein (unless otherwise specifically
provided herein) (a) at the time of personal delivery, if delivered by hand, (b)
at the time accepted for overnight delivery by the overnight courier, if
delivered by overnight courier, (c) at the time of deposit in the United States
mail, postage fully prepaid, if delivered by registered or certified mail, or
(d) at the time of confirmation of receipt, if delivered by telecopy. Either
party may change its address for purposes of Notices hereunder pursuant to a
Notice, given as provided herein, advising the other party of such change.
8. Effective Date/Term of Agreement.
(a) Employee and Employer agree that the employment relationship
between Employee and Employer shall be governed in all respects by the terms and
provisions of this Agreement effective as of the date of the Closing of the
transactions contemplated by the Consolidation Agreement. If for any reason such
Closing shall not occur and Employer does not acquire the assets related to the
PIMCO Investment Management Business as contemplated in the Consolidation
Agreement, this Agreement and all of its terms and conditions shall be null and
void and of no effect whatsoever.
(b) The term of this Agreement shall end on the earlier of the
following dates (the "Contract Termination Date"):
(i) The Scheduled Termination Date as defined in
Section 8(c) hereof; or
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(ii) The effective date of Employee's termination of
employment with Employer as provided in Section 5 hereof, if earlier.
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(c) As used in this Agreement, the initial "Scheduled
Termination Date" shall be December 31, 1996; provided, however, that the
Scheduled Termination Date automatically shall be changed on the Initial
Scheduled Terminate Date (thus extending the term of this Agreement) to a date
which is exactly two years after the Scheduled Termination Date then in effect
(and after such a change, such date thereafter be the then "Scheduled
Termination Date") unless at least one of the parties gives notice (the
"Notice of Non-Extension") to the other party that the Scheduled Termination
Date shall not be so postponed; and provided further, that the Scheduled
Termination Date automatically shall be postponed pursuant to the preceding
clause for successive two year periods until a Notice of Non-Extension is given
by at least one of the parties. Any Notice of Non-Extension must be given in
writing at least six months prior to the Scheduled Termination Date to which the
Notice of Non-Extension applies. Upon any such non-renewal, the parties shall be
subject to Section 6 to the extent provided therein.
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(d) Notwithstanding that this Agreement shall terminate on the
Contract Termination Date, such termination shall not have the effect of
terminating those obligations of any Party which, pursuant to the terms of this
Agreement, are contemplated as remaining in-effect to a date, or throughout a
period which ends, after the Contract Termination Date.
9. Governing Law.
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This Agreement shall be governed by, interpreted under, and construed
and enforced in accordance with the laws of the State of Connecticut applicable
to Agreements made and to be performed only within the State of Connecticut
without regard to its conflict of laws.
10. Entire Agreement.
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The terms of this Agreement are intended by the parties as a final
expression of their agreement with respect to such terms as are included in this
Agreement and may not be contradicted by evidence of any prior or
contemporaneous agreement. The parties further intend that this Agreement
constitutes the complete and exclusive statement of its terms and that no
extrinsic evidence whatsoever may be introduced into any judicial proceeding, if
any, involving this Agreement, except for written modification's as provided
under Section 11 of this Agreement. Except as set forth herein, the parties
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agree that there are no collateral agreements of any kind concerning Employee's
employment with Employer. This Agreement supersedes all prior understandings
and agreements between the parties relating to the subject matter hereof.
11. Modifications and Amendments.
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This Agreement may not be modified, amended, changed or supplemented,
nor may any obligations hereunder be waived, except by written instrument signed
by both parties.
12. Successors and Assigns.
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This Agreement and the provisions hereof shall be binding upon each of
the parties, their successors, and assigns.
13. Assignment.
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This Agreement and the rights, duties and obligations hereunder may not
be assigned (which term shall mean only the actual assignment of this Agreement
by either party without the prior written consent of the other party.
14. Third Party Rights.
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The parties do not intend to confer any benefit hereunder on any person,
firm or corporation other than the parties hereto.
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15. Non-Waiver of Rights
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The failure or delay of either party in the exercise of any right given
to such party hereunder shall not constitute a waiver of rights unless the time
specified herein for exercise of such rights has expired,nor shall any single or
partial exercise of any right preclude other or further exercise thereof or of
any other right.
16. Specified Performance; Severability.
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It is specifically understood and agreed that any breach of the
provisions of this Agreement will result in irreparable injury, that the remedy
at law alone will be an inadequate remedy for such breach and that, in addition
to any other remedy they may have, the parties hereto shall be entitled to
enforce the specific performance of this Agreement by and to seek both temporary
and permanent injunctive relief without the necessity of proving actual damages.
In case any of the provisions contained in this Agreement shall for any reason
be held or be invalid, illegal or unenforceable in any respect, any such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had been limited or modified (consistent with
its general intent) to the extent necessary to make it valid, legal and
enforceable, or if it shall not be possible to so limit or modify such invalid,
illegal or unenforceable provision or part of a provision, this Agreement shall
be construed as if such invalid, illegal or unenforceable provision or part of a
provision had never been contained in this Agreement.
17. Pronouns and Plurals.
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Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.
18. Counterparts.
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This Agreement may be executed in two counterparts, each of which shall
be deemed an original, but both of which together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as provided hereinabove.
"EMPLOYER"
/s/ William Cvengros
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Chief Executive Officer
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"EMPLOYEE"
/s/ John O. Leasure
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