EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of October 30, 2005 (this "Agreement"),
between OPTIONABLE, INC., a Delaware corporation ("Employer") and KEVIN P.
CASSIDY ("Employee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Employer is engaged in the business of providing trading and
brokerage services to brokerage firms, financial institutions, energy traders,
and hedge funds, and developing an automated electronic trading system; and
WHEREAS, Employee seeks to be employed by Employer and Employer seeks
to so engage Employee as its Chief Executive Officer and Vice Chairman;
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, agree as follows.
1. Employment. Employer agrees to employ Employee and Employee accepts
employment with Employer, on the terms and conditions set forth in this
Agreement.
2. Term of Employment. Employer hereby employs Employee and Employee
hereby accepts employment for a term commencing on the date first written above
(the "Commencement Date"), and expiring on that date five (5) years after the
Commencement Date, unless sooner terminated as hereinafter provided (the
"Employment Period"). This Agreement shall be renewable for succeeding terms, if
any (each of the Employment Period and each successive term of employment
hereunder, a "Term") only by written agreement by Employer and Employee entered
into within thirty (30) days prior to the expiration of the then current Term.
In the absence of such renewal, this Agreement shall terminate at the end of the
then current Term.
3. Duties During Employment. Employee shall be employed by Employer
during each Term as its Chief Executive Officer. As soon as practicable after
the execution and delivery of this agreement, the Board of Directors shall vote
on the election of Employee as a Director of Employer.
In carrying out his duties under this Agreement, Employee shall have
such powers and duties usually incident to the office of Chief Executive
Officer. Employee shall have authority do such acts and to make such contracts
as are necessary or proper to carry on the business of Employer, including but
not limited to:
(a) managing and overseeing the brokerage operations of the Employer;
(b) managing and overseeing the marketing operations of the Employer;
(c) management and oversight of employees of the Employer;
(d) leading senior level management and participating in Board
meetings at the request of the directors; and
(e) use of his best efforts to carry into effect the policies,
initiatives and directives of the Board.
Employee agrees that he shall devote no less than eighty (80%) percent
of his working time to carrying out his duties and obligations hereunder. It is
expressly acknowledged, however, that, subject to the preceding sentence,
Employee shall be permitted to continue to be active in and pursue other
business activities and opportunities (whether or not now existing) provided,
that while employed hereunder he shall not engage in any other business that
competes directly or indirectly with Employer. Moreover, and subject to the
first sentence of this paragraph and the Employee's duty of loyalty to Employer,
it is understood that Employee may engage in personal activities of a civic,
charitable or educational nature and may manage his personal investments.
4. Place of Performance.
Employee's place of employment shall be Briarcliff Manor, New York
("Place of Performance") and shall not be changed without Employee's prior
written consent.
5. Compensation. As compensation for all of the services to be
rendered hereunder, whether or not anticipated as being within the scope of this
Agreement, Employer shall compensate Employee as follows.
(a) Employee's gross salary during the Employment Period ("Fixed
Compensation") shall be as follows:
(i) upon entering into this agreement, $20,833;
(ii) from October 30, 2005 to December 31, 2005, $46,875;
(iii) from January 1 to December 31, 2006, $275,000;
(iv) from January 1, 2007 to December 31, 2007,,$300,000;
(v) from January 1 to December 31, 2008, $325,000; and
(vi) from January 1, 2009 to December 31, 2009: $350,000;
payable in accordance with the Employer's regular payroll policies and
subject to usual payroll deductions provided by law.
(b) During the Employment Period and beginning with the first month of
the quarter in which the amount payable to Employee, pursuant to the Addendum to
Master Service Agreement dated April 12, 2005, is fully paid, Employer shall pay
Employee (i) cash compensation amounting to five percent (5%) of Gross Revenues
of Employer, and (ii) stock compensation ("Stock Compensation") amounting to two
percent (2%) of the Gross Revenues of Employer (together the "Variable
Compensation"). Gross Revenue is defined as the total gross revenue related to
any all aspects of the brokerage business, including incentive received from
exchanges, based on generally accepted accounting principles. Stock will be
granted at fair value at the date of grant. The Variable Compensation will be
paid (in the case of cash) and issued (in the case of stock) on a quarterly
basis. It is understood that shares of Employer's common stock constituting the
Stock Compensation will be "restricted stock," as such term is defined in Rule
144 of the Securities and Exchange Commission.
(c) Employer shall issue common stock purchase options to Employee to
purchase that number of shares of common stock equal to twenty percent (20%) of
the number of shares of common stock issuable under warrants which become
exercisable pursuant to any Order Flow Agreements. Order Flow Agreements being
those agreements in which the Employer has agreed to issue warrants to an entity
based on the volume of orders that such entity has placed with the Employer.
Such options will be Non-Statutory Stock Options granted under Employer's 2004
Stock Option Plan (the "Plan") at fair value at the date of grant and will be
fully-vested upon grant.
(d) Employer shall issue to Employee 5,000 common stock purchase
options each time a firm registers with and executes its first 10,000 lots on
Employer's OPEX platform. The total number of options issueable under this
Section 5(d) will be limited to 2,500,000. Such options will be Non-Statutory
Options granted under the Plan at fair value at the date of grant and will be
fully-vested upon grant.
(e) Employee shall be entitled to paid annual vacation, personal leave
and holidays in accordance with the policies of Employer. Employee will be
entitled to participate in health, welfare, and pension plans and any other
employee benefit plan of Employer on the same basis as such benefits are
generally available to similarly situated employees of Employer.
(f) Employer will advance to or reimburse Employee for all reasonable
travel and entertainment and other reasonable expenses incurred by the Employee
in connection with his performance under this Agreement upon submission of
written or printed receipts in accordance with Employer's usual and customary
policy. Employer agrees that Employee's travel by first class air travel and by
executive limousine ground transportation are reasonable expenses.
(g) Employer shall advance to or reimburse Employee for the annual or
monthly premium of Employee's life insurance policy of one million dollars
($1,000,000) where the beneficiary is the Employee's estate (immediate family),
provided that Employee submits to Employer a copy of the invoice for such
premium upon request.
6. Early Termination. This Agreement may be terminated by either party
at any time in accordance with the terms and conditions set forth in this
Section 6.
(a) If Employee resigns from his employment under this Agreement
without Good Reason, as defined below, or if Employer terminates Employee's
employment for Cause, as defined below, Employer shall have no financial
obligation to Employee except to pay his Fixed Compensation through the date of
termination and continue his employee benefits through such date. Employer shall
give Employee written notice of a termination for Cause, and Employee shall give
written notice to Employer of resignation for Good Reason. For purposes of this
Agreement, "Cause" shall mean (i) the Employee's willful misconduct in the
performance of his duties hereunder, provided that Employer shall have given
written notice of such willful misconduct to Employee and Employee shall not
have substantially cured such willful misconduct within fifteen (15) days after
his receipt of such notice; (ii) a non-appealable conviction of a felony; or
(iii) issuance of a final consent decree, cease-and-desist or similar order
against Employee prohibiting Employee from engaging in the securities and/or
commodities business. For purposes of this Agreement, "Good Reason" shall mean
the occurrence of any of the following: (A) Employer shall have materially
defaulted in its obligations hereunder; (B) a material diminution in Employee's
authority, or responsibilities, or (C) a change in Employee's Place of
Performance without Employee's prior written consent.
(b) Upon the sale or merger or other business combination of Employer
and another company or companies, Employee will be entitled to a lump sum
payment of 50% of the unpaid Fixed Compensation should he desire not to be
employed with the new or successor entity.
(c) If Employee becomes incapable, by reason of death or Disability,
as defined below, of performing his duties under this Agreement, Employer may
terminate Employee on the following terms. Employer will pay to him, or to a
person duly authorized to act on his or his estate's behalf, a lump sum equal to
the sum of any unpaid Fixed Compensation accrued to the date of termination (the
"Section 6(d) Sum"). In such circumstances, payment of the Section 6(d) Sum
shall satisfy all financial obligations of Employer to Employee under this
Agreement, but Employee's employment hereunder shall continue for the duration
of the condition that occasioned the Disability, after which his employment for
all purposes shall cease. For purposes of this Agreement, "Disability" shall
mean the inability of Employee, by reason of physical or mental illness or
injury, substantially to perform his duties hereunder for a period of time
exceeding 180 days in the aggregate during any period of twelve consecutive
months. Employer shall give Employee or a person duly authorized to act on his
behalf written notice of a termination based on Disability.
(d) Employee shall have no duty to mitigate Employer's damages or
losses, if any, with respect to any payments due him pursuant to this Section 6,
by seeking or accepting other employment. Moreover, should Employee seek and
accept other employment no amounts payable to Employee by a subsequent employer
shall be deemed to offset to any amounts owed by Employer to Employee under this
Agreement.
7. Post Employment Restrictions. Regardless of the reason for the
resignation from or termination of Employee's employment with Employer, Employer
acknowledges that there are no restrictions on Employee's post-employment
activities, except as follows: Employee covenants and agrees that for a period
of nine (9) months after his employment hereunder terminates for reasons other
than the expiration of the then current Term (the "Non-compete Period"),
Employee will not engage in business that competes directly or indirectly with
Employer so long as Employer continues to pay to Employee his Fixed Compensation
during the Non-Compete Period.
8. Termination of Consulting Agreement. Upon execution of this
Agreement, the Consulting Agreement, dated April 1, 2004 between the Employer
and the Employee, which is pursuant to the Master Services Agreement, dated
April 1, 2004, between the Employer and Capital Energy Services LLC, is
terminated retroactively on October 15, 2005.. However, all other terms of the
Master Services Agreement, other than those relating to the Consultant, will
remain unchanged.
9. Governing Law; Jurisdiction; Venue. This Agreement shall be
governed by and is to be construed and enforced in accordance with the internal
laws of the State of New York without regard to principles of conflicts of laws.
Any action to enforce any term hereof shall be brought in the state or federal
courts located in the City of New York, State of New York, to which jurisdiction
and venue all parties hereby submit themselves.
10. Notices. All notices required to be given under this Agreement
shall be in writing and shall be deemed effective when delivered in person, by
facsimile transmission, overnight mail service or by certified U.S. mail,
addressed, in the case of Employee, to him at his residential address as
reflected in the Employer's personnel records or, in the case of Employer, to
555 Pleasantville Road, South Building, Suite 110, Briarcliff Manor, NY 10510,
or to such other address as Employee or Employer may designate in writing to the
other party.
11. Miscellaneous.
(a) This Agreement contains the entire agreement and understanding
between the parties and supersedes all other prior agreements, discussions,
negotiations, commitments, and understandings between them with respect to the
subject matter hereof. There are no representations, agreements, arrangements or
understandings, oral or written, between the parties concerning the subject
matter hereof which are not fully expressed herein.
(b) No waiver by either party of or failure to assert any provision or
condition of this Agreement by him or it to be performed or right to be
exercised shall be deemed a waiver of such or similar or dissimilar provisions
and conditions or rights at the same time or any prior or subsequent time.
(c) This Agreement shall be binding upon, and inure to the benefit of,
the parties hereto and their heirs, successors, assigns and personal
representations. In no event may Employee assign any rights or duties under this
Agreement and in no event may Employer assign any rights or duties under this
Agreement without the prior written authorization of Employee, provided,
however, that Employer may assign its rights under this Agreement in connection
with any merger, consolidation or sale of substantially all of its assets
subject to Section 6(b).
(d) Each in consultation with its respective legal counsel, Employer
and Employee have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any of the provisions of this
Agreement.
(e) Employer shall indemnify and hold Employee harmless with respect
to any liability, loss or expense, including reasonable attorneys' fees ("Loss")
(Employee shall have the right to choose such attorneys, subject to the consent
of Employer, which consent shall not be unreasonably withheld) incurred by him,
as a result of any claim relating to or arising out of the performance of duties
pursuant to this Agreement, provided, however, that if it is determined that the
Loss arose as a result of Employee's willful misconduct or gross negligence,
then Employee shall not be entitled to indemnification for such Loss and
Employee shall be required promptly to return to Employer any amounts paid by
Employer pursuant to this Section 10(e).
[Signatures appear on the following page]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and day first above written.
EMPLOYER
Optionable, Inc.
By /s/ Mark Nordlicht
------------------------------------
Mark Nordlicht, Chairman
EMPLOYEE
Kevin P. Cassidy
/s/ Kevin P. Cassidy
------------------------------------
Kevin P. Cassidy
As to Section 8 only:
CAPITAL ENERGY SERVICES LLC
By: /s/ Kevin P. Cassidy
-----------------------------------
Kevin P. Cassidy, Managing Director