MANAGEMENT
CONTINUITY AGREEMENT
This MANAGEMENT CONTINUITY AGREEMENT
(this “Agreement”) is made as of December 9, 2005
by and between TradeStation Group, Inc., a Florida corporation,
with its principal office at 8050 S.W. 10 th Street,
Plantation, Florida 33324 (the “Company”), and
(“Executive”).
WITNESSETH:
WHEREAS, the Company believes it to
be in the best interest of the Company and its shareholders to
assure that the Company will have the continued dedication of
Executive, should there be a Change in Control;
WHEREAS, the Company believes it is
imperative to diminish the distraction of Executive by virtue of
the personal uncertainties should there be a Change in Control;
and
WHEREAS, it is customary for a
company to enter into a management continuity agreement such as
this Agreement with its key executives.
NOW, THEREFORE, in consideration of
the premises and mutual covenants contained herein and for other
good and valuable consideration, the parties agree as follows:
DEFINITIONS
1. DEFINITIONS
a.
“Accrued Obligations” means any base salary
earned but unpaid, any accrued but unused vacation or sick pay
payable pursuant to the Company’s policies at the time of
termination of employment, any earned or declared annual bonus for
any complete fiscal year which has not then been paid, and any
unreimbursed business expenses payable pursuant to the
Company’s policies.
b.
“Act” means the Securities Exchange Act of 1934,
as amended from time to time.
c.
“Affiliate” means with respect to a Person, a
corporation, limited liability company, partnership, or similar
entity where at least 50% of the voting securities or ownership
interests of said entity are directly or indirectly owned by such
Person.
d.
“Cause” means, if such circumstances have a
material adverse impact on the Company, or the Company and its
Affiliates as a whole, whether economic, or reputation wise or
otherwise, the occurrence of any of the following circumstances:
(i) Executive’s refusal to perform Executive’s
duties tantamount to abandonment of duties;
(ii) Executive’s willful misconduct or gross negligence
with regard to the Company or its Affiliates or their respective
businesses, assets or employees (in the nature of fraud,
embezzlement or other act of dishonesty with regard to the Company
or its Affiliates); (iii) Executive’s conviction of, or
pleading nolo contendere to, a felony involving fraud, dishonesty
or moral turpitude; or (iv) Executive’s intentional
breach of a fiduciary duty owed to the Company or its
Affiliates.
e.
“Change in Control” means the occurrence of any
of the following:
(i) any
Person (other than the Company, the Controlling Shareholder Group,
any Employee Purchaser, any subsidiary of the Company, any trustee
or other fiduciary holding securities under any employee benefit
plan of the Company, or any company owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of Common Stock of the Company), is
or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing more than fifty (50%) of the
combined voting power of the Company’s then outstanding
securities;
(ii) a merger
or consolidation of the Company with any other corporation or other
entity, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity)
more than fifty percent (50%) of the combined voting power of the
voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to
implement a reorganization or recapitalization of the Company (or
similar transaction) in which no Person acquires more than fifty
(50%) of the combined voting power of the Company’s then
outstanding securities shall not constitute a Change in Control of
the Company; or
(iii) the
consummation of the sale or disposition by the Company directly or
indirectly, of all or substantially all of the Company’s
assets or accounts other than (x) the sale or disposition of
all or substantially all of the assets of the Company to a
subsidiary of the Company or to a Person or persons who
beneficially own, directly or indirectly, at least fifty percent
(50%) or more of the combined voting power of the outstanding
voting securities of the Company at the time of the sale or
(y) pursuant to a spin-off type transaction, directly or
indirectly, of such assets to the stockholders of the Company.
Notwithstanding
the foregoing, in no event shall a Change in Control be deemed to
have occurred, with respect to Executive, if Executive is part of a
purchasing group which consummates a transaction causing a Change
in Control. Executive shall be deemed “ part of a purchasing
group” for purposes of the preceding sentence if Executive is
a direct or indirect equity participant in the purchasing company
or group; provided however, that Executive shall not be considered
part of a purchasing group if the Executive owns, directly or
indirectly, 1% or less of the outstanding securities of the
purchasing company or group.
f.
“COBRA” means Consolidated Omnibus Budget
Reconciliations Act of 1985, as amended.
g.
“Code” means the Internal Revenue Code of 1986,
as amended.
h.
“Common Stock” means the common stock, par value
$.01 per share, of the Company.
i.
“Controlling Shareholder Group” means
(i) William R. Cruz, (ii) Ralph L. Cruz, (iii) the
spouses and lineal descendants of the persons described in clauses
(i) and (ii), (iv) any trust whose only beneficiaries are
persons described in the foregoing clauses (i), (ii) and (iii), and
(v) any Affiliate of the persons described in the foregoing
clauses (i), (ii) (iii) and (iv).
j. “Date
of Termination” means (i) in the case of a
Termination for Good Reason, the date that is 15 days after
the receipt by the Company of the Notice of Termination or any
later date specified therein, as the case may be, (ii) in the
case of a termination by the Company for any reason other than
Cause, the date on which the Company notified Executive of such
termination (or a later date specified therein), (iii) in the
case of a termination by Executive without Good Reason, the date on
which Executive notified the Company of such termination (or a
later date specified therein), (iv) in the case of a
termination by the Company for Cause, the date the Company provides
Executive with a Notice of Termination (or a later date specified
therein); or (v) in the case of a termination pursuant to
Section 2(a), the 90 th day following a Change in
Control.
k.
“Employee Purchaser” means (i) any employee
of the Company or group of employees of the Company, (ii) the
spouse and lineal descendants of the persons described in clause
(i), (iii) any trust whose only beneficiaries are persons
described in the foregoing clauses (i) and (ii), and (iv) any
Affiliate of the persons described in the foregoing clauses (i),
(ii) and (iii).
l. “Good
Reason” means the occurrence of any of the following
circumstances: (i) a failure by the Company to pay
Executive’s base salary in accordance with the
Company’s payroll practices in effect immediately prior to
the Change in Control, or if more favorable the Company’s
payroll practices in effect after the Change in Control;
(ii) a relocation of Executive’s principal place of
employment with the Company to a location outside of Miami-Dade
County, Florida, Broward County, Florida and Palm Beach County,
Florida; or (iii) any reduction in Executive’s base salary;
provided that Executive provides the Company with 15 days to
cure any acts or omissions that give Executive basis to terminate
employment with the Company for Good Reason.
m.
“Highest Base Salary” means the greater of
(i) Executive’s annual base salary as in effect at the
time of termination, or (ii) Executive’s annual base
salary in effect on the date immediately preceding the date on
which the Change in Control occurs.
n.
“Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive’s employment
under the provision so indicated and (iii) if the Date of
Termination is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than
thirty (30) days after the giving of such notice).
o.
“Person” means any “person” as such
term is defined in Section 13(d) of the Act.
p.
“Prior Year Bonus” means Executive’s bonus
earned in the fiscal year immediately preceding the year in which
the Change in Control occurs.
q.
“Termination for Good
