NATIONAL SECURITIES CORPORATION
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made effective this 1st day
of July, 1999, by and between NATIONAL SECURITIES CORPORATION, a Washington
corporation (the "Company") and DAVID M. WILLIAMS, an individual ("Executive").
RECITALS
A. The Company desires to be assured of the association and
services of Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and
the Company is willing to employ Executive, upon the terms, covenants and
conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive as "Corporate Controller and
Chief Operating Officer," subject to the supervision and direction of the
Company's President and Board of Directors. This Agreement
supersedes any earlier Employment Agreement between the parties.
2. TERM. The term of this Agreement shall be for a period of time commencing on
the date hereof and terminating on June 30, 2002, unless terminated earlier
pursuant to Section 6 below.
3. COMPENSATION; REIMBURSEMENT.
3.1 BASE SALARY. For all services rendered by Executive under this Agreement,
the Company shall pay Executive a base salary ("Base Salary") of $90,0000 per
annum through August 31, 1999, increasing to $120,000 per annum on September 1,
1999. The Base Salary is subject to increases from time to time at the
discretion of the Board of Directors of the Company.
3.2 ADDITIONAL BENEFITS. In addition to the Base Salary, Executive shall be
entitled to all other benefits of employment now or hereafter provided to the
other executives of the Company, its operating divisions or subsidiaries,
including but not limited to individual health insurance, life insurance and
on-premises parking. The Company shall reimburse Executive for all reasonable
costs associated with (i) his move to the Seattle area; and (ii) maintaining
licensure as a Certified Public Accountant in the State of Washington,
including, but not limited to, annual dues and the costs of meeting continuing
education requirements. Additionally, the Company will provide air travel to
Chicago four (4) times per year for Executive or one (1) member of Executive's
family.
3.3 BONUSES. It is contemplated that from time to time Executive will be paid
bonuses based upon the Company's and Executive's performance, in the sole
discretion of the Company.
3.4 CONTINUING OBLIGATIONS. All of the Company's compensation obligations under
this Section shall continue through the term of this Agreement.
3.5 REIMBURSEMENT. Executive shall be reimbursed for all reasonable
out-of-pocket business expenses for business travel and business entertainment
incurred in connection with the performance of his duties under this Agreement.
The reimbursement of Executive's business expenses shall be upon weekly
presentation to and approval by the Company of valid receipts and other
appropriate documentation for such expenses.
4. SCOPE OF DUTIES.
4.1 ASSIGNMENT OF DUTIES. Executive shall have such duties as may be assigned to
him from time to time by the Company's Chief Executive Officer, President and
Board of Directors commensurate with his experience and responsibilities in the
position for which he is employed pursuant to Section 1 above. Such duties shall
be exercised subject to the control and supervision of the Board of Directors of
the Company.
4.2 EXECUTIVE'S DEVOTION OF TIME. Executive hereby agrees to devote his full
time, abilities and energy to the faithful performance of the duties assigned to
him and to the promotion and forwarding of the business affairs of the Company,
and not to divert any business opportunities from the Company to himself or to
any other person or business entity. Executive shall be entitled to not less
than three (3) weeks of paid vacation and not less than two (2) weeks of paid
sick leave during each fiscal year of the Company.
4.3 CONFLICTING ACTIVITIES. For the term of this Agreement or until Executive's
employment hereunder terminates, whichever occurs first, Executive hereby agrees
to promote and develop all business opportunities that come to his attention
relating to current or anticipated future business of the Company, in a manner
consistent with the best interest of the Company and with his duties under this
Agreement. If Executive becomes aware of a business opportunity during the
performance of his Company duties, through the use of the Company's property or
information, or under circumstances that would reasonably lead Executive to
believe that the business opportunity was intended by the offeror to be offered
to the Company, he shall first offer such opportunity to the Company. Should the
Chief Executive Officer of the Company, on behalf of the Company, not exercise
its right to pursue this business opportunity within a reasonable period of
time, not to exceed thirty (30) days, Executive may develop the business
opportunity for himself; provided, however, that such development may in no way
conflict or interfere with the duties owed by Executive to the Company under
this Agreement. Further, Executive may develop such business opportunities only
on his own time, and may not use any service, personnel, equipment, supplies,
facility, or trade secrets of the Company in their development. As used herein,
the term "business opportunity" shall not include business opportunities
involving investment in publicly traded stocks, bonds or other securities, or
other investments of a personal nature.
5. CONFIDENTIALITY OF TRADE SECRETS AND OTHER MATERIALS. Other than in the
performance of his duties hereunder, Executive agrees not to disclose, either
during the term of his employment by the Company or at any time thereafter, to
any person, firm or corporation any information concerning the business affairs,
the trade secrets or the customer lists or similar information of the Company.
Any technique, method, process, technology or customer compilation or list used
by the Company shall be considered a "trade secret" for the purposes of this
Agreement. Notwithstanding the foregoing, the names and other information
relating to the retail brokerage customers of Executive who have been assigned
Executive's A/E number shall not be considered as "confidential information" for
purposes of this Section 5 or any other provision of this Agreement.
6. SEVERANCE. So long as this Agreement is in effect, and except as would be
inconsistent with Section 7, upon termination of Executive's employment,
Executive or Executive's designees or heirs shall be entitled to a lump sum
payment equal to one year of Executive's Base Salary as then in effect (the
"Severance Payment").
7. TERMINATION.
7.1 BASES FOR TERMINATION.
(a) Executive's employment hereunder may be terminated at any time by mutual
agreement of the parties.
(b) Executive's employment hereunder shall automatically terminate on the last
day of the month in which Executive dies. If Executive becomes permanently
disabled and is unable to perform the essential duties defined in Section 4
hereof (the "Duties") with or without accommodation, then Executive's employment
hereunder may be terminated. "Permanent disability" as used herein shall mean
mental or physical disability or both, evidenced by:
(i) a consecutive six month period of time during which Executive is unable to
perform the Duties with or without accommodation; and
(ii) medical documentation from Executive's attending physician or a duly
licensed independent physician selected by the Company's Board of Directors,
stating that Executive is physically and/or mentally disabled from performing
the essential Duties with or without accommodation and that the disabling
condition is permanent and will not substantially change or improve.
(c) Executive may terminate his or her employment hereunder by giving the
Company 60 days prior written notice, which termination shall be effective on
the 60th day following such notice.
(d) Executive's employment may not be terminated by the Company against his will
without a finding, by an impartial third person or panel, of fraud, theft or
defalcation.
(e) Executive's employment hereunder may be terminated by the Company or by
Executive at any time within ninety (90) days after the occurrence of a Change
in Control (as defined below). Upon such termination:
(i) the Company shall pay to Executive as a lump-sum payment an amount equal to
two (2) years' Base Salary in effect at the time of termination;
(ii) the Company shall provide Executive with a continuation of health insurance
coverage, existing office space and existing secretarial and telephone services,
in each case for a period of eighteen (18) months after the date of termination;
and
(iii) all stock options issued by the Company to Executive shall immediately
vest and become exercisable for a period of at least two (2) years after the
date of termination, notwithstanding any provision to the contrary in the
Company's stock option plan or in any stock option agreement between the Company
and Executive.
For purposes of this Agreement, a "Change in Control" shall mean the occurrence
of any of the following events:
(x) the acquisition by any individual, entity or group
(within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (collectively, a "person") of Beneficial ownership (as such
term is defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of twenty-five percent (25%) or more of the then outstanding shares
of common stock of the Company or Olympic Cascade Financial Corporation
(collectively, the "Outstanding Common Stock"); provided, however, that the
following shall not constitute a Change of Control: (i) any acquisition by an
Underwriter (as such term is defined in Section 2(11) of the Securities Act of
1933, as amended) for the purpose of making a public offering; or (ii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or Olympic Cascade Financial Corporation or any
corporation controlled by the Company or Olympic Cascade Financial Corporation;
(y) the sale or liquidation of all or substantially all of
the assets of the
Company or Olympic Cascade Financial Corporation; or
(z) any transaction or series of transactions which result
in Steven A. Rothstein
directly or indirectly owning less than ten percent (10%) of the Outstanding
Common Stock.
(f) Notwithstanding anything contained herein, or in any other agreement between
the Company and Executive, or benefit or compensation plan under which the
Executive participates, to the contrary, in the event that any amounts due
Executive under this Section 7.1, or under any other plan or program of the
Company or other agreement between the Company and Executive, constitute
"parachute payments," within the meaning of section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), and the amount of such parachute
payments, when reduced by the federal excise taxes due and owing on such
parachute payments, if any, is less than the amount Executive would receive if
he were paid only three (3) times his "base amount," as that term is defined in
section 280G of the Code, then, in lieu of all payments hereunder which are
parachute payments, Executive shall be paid, in cash, an amount equal to three
(3) times his base amount less one dollar ($1.00). The determinations to be made
with respect to this Section 7.1(f) shall be made by an independent auditor
jointly selected by the parties.
8. NONCOMPETE. Executive covenants and agrees that during the term of his
employment hereunder and for a period of one (1) year thereafter (the
"Noncompetition Period"), Executive shall not, directly or indirectly recruit,
solicit or otherwise induce any customer, officer or employee of the Company, or
independent contractor associated with the Company, to discontinue such
relationship with the Company. During the Noncompetition Period, Executive shall
hold in confidence and shall not disclose to anyone, or use or otherwise exploit
for his own benefit or the benefit of any person or entity, any confidential or
proprietary information of the Company, including, without limitation, customer
and vendor lists, financial statements and information, trade secrets or
marketing arrangements and plans, unless directed to do so by order of any
court; provided, however, that the terms of this Section 8 shall not restrict
Executive with respect to any Company customer who has been assigned Executive's
A/E number.
9. MISCELLANEOUS.
9.1 TRANSFER AND ASSIGNMENT. This Agreement is personal as to Executive and
shall not be assigned or transferred by Executive without the prior written
consent of the Company. This Agreement shall be binding upon and inure to the
benefit of all of the parties hereto and their respective permitted heirs,
personal representatives, successors and assigns.
9.2 SEVERABILITY. Nothing contained herein shall be construed to require the
commission of any act contrary to law. Should there by any conflict between any
provisions hereof and any present or future statute, law, ordinance, regulation,
or other pronouncement having the force of law, the latter shall prevail, but
the provision of this Agreement affected thereby shall be curtailed and limited
only to the extent necessary to bring it within the requirements of the law, and
the remaining provisions of this Agreement shall remain in full force and
effect.
9.3 GOVERNING LAW. This Agreement is made under and shall be construed in
accordance with the laws of the State of Illinois, without regard to conflict of
laws principles. The Company and Executive hereby consent and agree to be
subject to the jurisdiction of the federal and state courts of the State of
Illinois sitting in Chicago, Illinois, in any suit, action or proceeding arising
out of this Agreement or the transactions contemplated hereby.
9.4 COUNTERPARTS. This Agreement may be executed in several counterparts and all
documents so executed shall constitute one agreement, binding on all of the
parties hereto, notwithstanding that all of the parties did not sign the
original or the same counterparts. 9.5 ENTIRE AGREEMENT. This Agreement
constitutes the entire agreement and understanding of the parties with respect
to the subject matter hereof and supersedes all prior oral or written
agreements, arrangements, and understandings with respect thereto. No
representation, promise, inducement, statement or intention has been made by any
party hereto that is not embodied herein, and not party shall be bound by or
liable for any alleged representation, promise, inducement or statement not so
set forth herein.
9.6 MODIFICATION. This Agreement may be modified, amended, superseded, or
canceled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
party or parties to be bound by any such modification, amendment, supersession,
cancellation, or waiver.
9.7 ATTORNEYS' FEES AND COSTS. In the event of any dispute arising out of the
subject matter of this Agreement, the prevailing party shall recover, in
addition to any other damages assessed, its attorneys' fees and court costs
incurred in litigating or otherwise settling or resolving such dispute whether
or not an action is brought or prosecuted to judgment. In construing this
Agreement, none of the parties hereto shall have any term or provision construed
against such party solely by reason of such party having drafted the same.
9.8 WAIVER. The waiver by either of the parties, express or implied, of any
right under this Agreement or any failure to perform under this Agreement by the
other party, shall not constitute or be deemed as a waiver of any other right
under this Agreement, or of any other failure to perform under this Agreement by
the other party, whether of a similar or dissimilar nature.
9.9 CUMULATIVE REMEDIES. Each and all of the several rights and remedies
provided in this Agreement, or by law or in equity, shall be cumulative, and no
one of them shall be exclusive of any other right or remedy, and the exercise of
any one of such rights or remedies shall not be deemed a waiver of, or an
election to exercise, any other such right or remedy.
9.10 HEADINGS. The section and other headings contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
9.11 NOTICES. Any notice under this Agreement must be in writing, may be
telecopied, sent by express 24-hour guaranteed courier, or hand-delivered, or
may be served by depositing the same in the United States mail, addressed to the
party to be notified, postage-prepaid and registered or certified with a return
receipt requested. The addresses of the parties for the receipt of notice shall
be as follows:
If to the Company:
National Securities Corporation
875 North Michigan Avenue
Suite 1560
Chicago, Illinois 60611
Attn: Steven A. Rothstein
If to the Executive: David M. Williams
875 North Michigan Avenue
Suite 1560
Chicago, Illinois 60611
Each notice given by registered or certified mail shall be deemed delivered and
effective on the date of delivery as shown on the return receipt, and each
notice delivered in any other manner shall be deemed to be effective as of the
time of actual delivery thereof. Each party may change its address for notice by
giving notice thereof in the manner provided above.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.
NATIONAL SECURITIES CORPORATION
By: _______________________________
Steven A. Rothstein, Chairman
EXECUTIVE
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David M. Williams