EMPLOYMENT AGREEMENT
This
Employment Agreement ("Agreement") is entered on October 24,
2006
(the "Execution Date") and is effective as of September 29, 2006
("Effective
Date") between National Investment Managers Inc. ("Company") and
Steven J. Ross
("Executive").
RECITALS
Company
wishes to employ Executive as its President and Chief Executive
Officer and Executive wishes to accept such employment under the
terms and
conditions set forth in this Agreement.
IT IS
AGREED as follows:
1.
Employment. Company hereby employs Executive as its President and
Chief
Executive Officer. Executive accepts such employment.
2. Term.
The term of employment under this Agreement shall commence on
the
Effective Date and shall continue, unless otherwise terminated
earlier under
Section 10, until March 31, 2008. The Term shall be automatically
extended for
an additional one (1) year period unless at least thirty (30) days
prior to such
anniversary date, either Company or Executive furnishes the other
with written
notice that the Term not be so extended.
3. Duties.
Executive shall devote his full-time efforts to the proper and
faithful performance of all duties customarily discharged by a
President and
Chief Executive Officer, consistent with Company policies and
budgets and
directives of Company's Board of Directors, together with any
additional duties
assigned to him from time to time by the Board of Directors.
Executive agrees to
use his best efforts and comply with all fiduciary and professional
standards in
the performance of his duties. Executive shall provide services to
any
subsidiary or affiliate of Company without additional compensation
and benefits
beyond those set forth in this Agreement. Executive shall serve on
the Board(s)
of Directors of Company and any affiliate or subsidiary.
4. Base
Salary. Executive shall be paid a base salary of Three Hundred
Fifty Thousand Dollars ($350,000.00) per annum for the Term
payable, less
applicable withholding, in equal monthly payments or more
frequently in
accordance with Company's regular practice. Upon Company reaching a
quarterly
Earnings before Interest Taxes Depreciation Amortization and Stock
based
Compensation ("EBITDA SBC") of $2,250,000, the base salary shall
increase to
Four Hundred Thousand Dollars ($400,000.00) per annum, effective
the first pay
period of the quarter immediately following the attainment of the
aforementioned
target. Upon extension of the Term, Executive's base salary will be
set by the
Compensation Committee of Company; provided, however, that
Executive's base
salary shall not be reduced from the base salary in effect prior to
the
extension of the Term. In addition to his base salary, Executive
shall receive
compensation for service on the Board of Directors in an amount
consistent with
other non-employee Board members, including annual stock option
grants issued to
Board members.
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5. Bonus.
Executive shall be eligible to receive an incentive bonus
during
each fiscal year of the Term. A 2006 bonus of One Hundred Thousand
Dollars
($100,000.00) shall be paid with the signing of the Employment
Contract. The
2007 bonus shall be targeted at fifty percent (50%) of Executive's
base salary
based upon the achievement of 2007 EBITDA SBC of Ten Million
Dollars
($10,000,000.00).
6.
Restricted Stock. Executive shall receive a grant of 800,000 shares
of
restricted stock in the Company, of which 100,000 shares are to be
issued
immediately, 100,000 shares on March 28, 2007, or immediately upon
contract
termination, 100,000 shares upon reaching a cumulative $4,000,000
EBITDA SBC for
Q2 - Q4 2006, and 500,000 shares upon attainment of $10,000,000
EBITDA SBC in
2007. Executive is granted piggyback registration rights on all
shares issued
pursuant to this contract.
7. Stock
Options. Executive retains all previously granted stock
options.
8.
Benefits.
(a)
Executive shall
be entitled to participate in all Company sponsored
retirement
plans, 401(k) plans, life insurance plans, medical
insurance plans, short-term and long-term disability insurance
plans, and such other benefit plans generally available from time
to
time to executive management of the Company for which he
qualifies
under the terms of the plans. Executive's participation in and
benefits under any benefit plan shall be on the terms and subject
to
the conditions specified in such plan. The Company shall
supplement
the insurance coverage and benefits in a separate executive
benefits
plan, including supplementary health insurance coverage, a
minimum
of $1 million life insurance coverage and appropriate long-term
disability coverage, to be fully paid by Company.
(b)
Executive will
receive at least four (4) weeks of paid vacation per
year.
(c)
Executive shall
receive a housing and office allowance of Five
Thousand Dollars ($5,000.00) per month. Such allowance shall be
paid
to Belcourt Associates.
9.
Reimbursement of Expenses. The Company will reimburse Executive for
the
ordinary and necessary expenses incurred by him in the performance
of his duties
under this Agreement in accordance with the Company's policies in
effect from
time to time.
10.
Termination of Employment.
(a)
Executive's
employment under this Agreement may be terminated at any
time by the Board of Directors of Company for Cause.
(b)
Executive's
employment under this Agreement shall terminate upon
expiration of the Term without extension as described in Section
2.
(c)
Executive's
employment under this Agreement shall terminate upon his
retirement, resignation or death.
(d)
Executive's
employment under this Agreement shall terminate upon
written notice by Company to Executive of a termination due to
Disability.
2
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(e)
If Executive's
employment terminates for Cause or for any reason
other than as set forth in Sections 10(f) or (g), Company shall
be
obligated only to continue to pay Executive's base salary
