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SEPARATION AND CONSULTING AGREEMENT
This Separation and Consulting Agreement ("Agreement"),
effective as of
May 16, 2007 (the "Effective Date"), is entered into by and
between National
Investment Managers, Inc. (the "Company") and Leonard Neuhaus
("Executive")
(collectively, the "Parties" and, each, a "Party").
Whereas, the Company has employed Executive pursuant to various
employment
agreements and in various positions, most recently as a Chief
Operating Officer
pursuant to the terms of an Employment Agreement entered into as
of December 11,
2006 (the "Employment Agreement");
Whereas, Executive and the Company mutually have agreed that,
pursuant to
the terms hereof, Executive has resigned (i) from his position
as Chief
Operating Officer of the Company and (ii) as an officer and/or
member of the
Board of Directors of those affiliates of the Company in which
he holds such
positions (collectively, the "Affiliates"); and
Whereas, the Company and Executive wish for Executive to
continue with the
Company as a consultant pursuant to the terms hereof.
Now Therefore, in consideration of the mutual promises and
agreements
contained in this Agreement, and other valuable consideration,
the receipt and
sufficiency of which is hereby acknowledged, the Parties agree
as follows:
1. Resignation of Employment and Related Positions. The
Parties
acknowledge and agree that, as of the Effective Date, Executive
has resigned (i)
his employment as Chief Operating Officer of the Company and
(ii) his positions
as officer and/or member of the Board of Directors of the
Affiliates, thereby
effecting Executive's termination as an Executive of the Company
and as an
officer and/or member of the Board of Directors of the
Affiliates. The Company
will pay Executive on or before the first regularly scheduled
pay date on or
after the Effective Date (i) any and all outstanding wages due
through the
Effective Date and (ii) business expenses incurred per existing
Company policies
through the Effective Date. Beginning on the Effective Date, the
Company and
Executive hereby agree to terminate the Employment Agreement and
the Employment
Agreement shall be of no further force and effect as of such
date.
2. Additional Payments and Benefits. The Company will provide
Executive
with the payments and benefits set forth in this paragraph 2
(collectively,
"Severance Benefits"). The Severance Benefits are separate and
apart from the
payments and benefits to be provided to Executive under his
consulting
relationship with the Company as provided for in paragraph 18
below.
a. Salary Continuation. Beginning on the Effective Date, the
Company
shall provide Executive with salary continuation in an amount
equal to the
Executive's base salary on the Effective Date, less deductions
and withholdings
required by law, on regularly scheduled paydays commencing on
the day after the
Effective Date and continuing through the end of the term of the
Employment
Agreement (i.e., March 31, 2008). The salary continuation
payments shall be made
by direct deposit into Executive's bank account previously used
by the Company.
Separation and Consulting Agreement,
effective as of May 16, 2007, between
National Investment Managers, Inc. and Company:_____
Leonard Neuhaus Executive:_____
<PAGE>
Notwithstanding the foregoing, in the event of a Change in
Control (as
hereinafter defined) or upon the Company raising at least an
aggregate of ten
million dollars, the Company's obligations under this paragraph
2a. shall be
accelerated and the Company shall immediately pay to Executive
in a lump sum by
check any and all remaining amounts due pursuant to this
paragraph 2a. that
would have been payable through March 31, 2008. For the purposes
of this
Agreement, the term "Change of Control" shall mean (1) an
Ownership Change Event
or a series of related Ownership Change Events (collectively,
the "Transaction")
wherein the stockholders of the Company immediately before the
Transaction do
not retain immediately after the Transaction, in substantially
the same
proportions as their ownership of shares of the Company's voting
stock
immediately before the Transaction, direct or indirect
beneficial ownership of
more than fifty percent (50%) of the total combined voting power
of the
outstanding voting stock of the Company or the corporation or
corporations to
which the assets of the Company were transferred (the
"Transferee
Corporation(s)"), as the case may be, provided, however, that an
equity or
convertible securities financing by the Company shall be deemed
an Ownership
Change Event or Transfer of Control for the purposes of this
paragraph. For
purposes of the preceding sentence, indirect beneficial
ownership shall include,
without limitation, an interest resulting from ownership of the
voting stock of
one or more corporations which, as a result of the Transaction,
own the Company
or the Transferee Corporation(s), as the case may be, either
directly or through
one or more subsidiary corporations. The Board shall have the
right to determine
whether multiple sales or exchanges of the voting stock of the
Company or
multiple Ownership Change Events are related, and its
determination shall be
final, binding and conclusive. An "Ownership Change Event" shall
be deemed to
have occurred if any of the following occurs with respect to the
Company:
(i) the direct or indirect sale or exchange in a single or
series
of related transactions by the stockholders of the Company
of
more than fifty percent (50%) of the voting stock of the
Company; (ii)
(ii) a merger or consolidation in which the Company is a
party;
(iii) the sale, exchange, or transfer of all or substantially
all of
the assets of the Company; or
(iv) a liquidation or dissolution of the Company.
b. Restricted Stock. 100,000 shares of the Company's Common
Stock
shall be issued to Executive upon Executive's execution and
delivery to the
Company of this Agreement, of which 50,000 shares are for
consulting services.
Such 100,000 shares of Common Stock do not include the 50,000
shares of Common
Stock previously issued to Executive under the Employment
Agreement, which
50,000 shares, together with the 100,000 shares being issued
pursuant to this
paragraph shall collectively be referred to herein as the
"Restricted Stock."
Separation and Consulting Agreement,
effective as of May 16, 2007, between
National Investment Managers, Inc. and Company:_____
Leonard Neuhaus Executive:_____
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<PAGE>
c. Stock Warrant. The Company hereby confirms and acknowledges
that
Executive is currently in possession of a fully vested Common
Stock Purchase
Warrant (the "Warrant") to purchase 317,200 shares of Common
Stock (as defined
therein) at an exercise price per share equal to $0.1667. The
Parties
acknowledge and agree that, upon Executive's election to
purchase Common Stock
under the Warrant, the exercise price therefor may, at the
Executive's option,
be payable by Executive by cashless exercise, and, to effectuate
such cashless
exercise, the number of shares issuable upon exercise of the
Warrant shall be
reduced by that number of shares equal to the quotient of the
aggregate exercise
price divided by the fair market value per share of the
Company's Common Stock
on the date of exercise. To the extent that the terms of this
paragraph conflict
with those of the Warrant, the terms of this paragraph shall
govern; otherwise,
the terms of the Warrant shall continue to govern the purchase
of Common Stock
thereunder.
d. 2005 Stock Options. The Company hereby confirms and
acknowledges
that all 400,000 stock options (collectively, the "2005 Stock
Options") granted
to Executive pursuant to the Stock Option Contract - Grant of
Incentive Stock
Option dated as of March 1, 2006 between the Company and
Executive (the "Option
Agreement") and subject to the Company's 2005 Stock Option
Incentive Plan (the
"Option Plan") are fully vested at an exercise price per share
equal to $1.00.
The Parties acknowledge and agree that, upon Executive's
election to exercise
any of the 2005 Stock Options, the exercise price therefor may,
at the
Executive's option, be payable by Executive by cashless
exercise, and, to
effectuate such cashless exercise, the number of shares issuable
upon exercise
of any of the 2005 Stock Options shall be reduced by that number
of shares equal
to the quotient of the aggregate exercise price divided by the
fair market value
per share of the Company's Common Stock on the date of exercise.
The 2005 Stock
Options shall be exercisable in accordance with the terms set
forth in the
Option Agreement and the Option Plan. To the extent that the
terms of this
paragraph conflict with those of the Option Agreement or the
Option Plan, the
terms of this paragraph shall govern; otherwise, the 2005 Stock
Options shall
continue to be governed by, and subject to, the terms of the
Option Agreement
and the Option Plan.
e. Continuation of Existing Health and Insurance Benefits.
If
Executive elects to continue Executive's existing health
insurance coverage
under COBRA (see paragraph 6 below), the Company will pay
directly to the
insurance carrier the full monthly premium cost for such
coverage for himself
and his eligible dependents and family members for a period of
12 months
commencing on the Effective Date. Additionally, for a period of
12 months
commencing on the Effective Date (the "Benefit Period"), the
Company shall
provide, at the Company's full expense, continuation of the
other health and
insurance related benefits received by Executive and/or his
dependents and
family members immediately preceding Executive's resignation of
his employment
with the Company, including, without limitation, life insurance,
short-term and
long-term disability insurance and the executive benefit plan.
The Company
agrees to pay such insurance-related costs directly to the
applicable insurance
carrier. The Company also agrees to reimburse Executive for
amounts due him
under the executive benefit plan, by check payable and mailed to
Executive,
within 5 days of Executive's submission of the necessary
paperwork therefor.
Separation and Consulting Agreement,
effective as of May 16, 2007, between
National Investment Managers, Inc. and Company:_____
Leonard Neuhaus Executive:_____
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<PAGE>
f. Computer. The Company hereby transfers to Executive all
rights,
title and interest in the Sony Vaio notebook computer it
provided to Executive
in connection with Executive's employment, provided, however,
that all Company
information contained therein is first transferred
electronically to the Company
and subsequently deleted.
3. Indemnification; Directors and Officers Insurance. The
Company shall
defend, indemnify and hold harmless Executive (and his heirs and
personal
representatives) from and against any losses, claims, damages or
liabilities
related to, arising out of or in connection with Executive being
or having been
a former officer of the Company, a former officer and/or, member
of the Board of
Directors of any Affiliate and a consultant to the Company, to
the fullest
extent permitted by applicable law, and will reimburse Executive
against any
costs, attorney's fees and expenses, as incurred (including but
not limited to
investigating, preparing pursuing or defending any Claim (as
hereinafter
defined)), by Executive in connection with any investigation,
claim, action,
suit or proceeding, pending or threatened (hereinafter, a
"Claim"), to which
Executive may be made a party, or subject to, by reason of his
being or having
been an officer of the Company, a former officer and/or member
of the Board of
Directors of any Affiliate and/or a consultant to the Company,
or because of
actions taken by Executive which were believed by Executive to
be in the best
interests of the Company and/or Affiliates and not in violation
of applicable
law, and Executive shall be entitled to be covered by any
directors' and
officers' liability insurance policies which the Company
maintains for the
benefit of its directors and officers, subject to the
limitations of any such
policies. The Company shall have the right to assume, with legal
counsel of its
choice, who shall be reasonably acceptable to Executive, the
defense of
Executive in any such action, suit or proceeding for which the
Company is
providing indemnification to Executive. Should Executive
determine to employ
separate legal counsel in any such action, suit or proceeding,
any costs and
expenses of such separate legal counsel shall be the sole
responsibility of
Executive unless the Executive shall have reasonably concluded,
based upon the
written of legal counsel to the Executive, a copy of which shall
be furnished to
the Company, that there may be conflicts in the defenses
available to the
Executive which are different from or additional to those
available to the
Company (if the Company is also a party or potential party to
the claim), or any
other named party, in which case the reasonable costs and
expenses of such
separate legal counsel shall be borne by the Company. If the
Company does not
assume the defense of any such action, suit or proceeding, the
Company shall,
upon the request of the Executive, promptly advance or pay any
amount for costs
or expenses, including the reasonable fees of counsel retained
by Executive,
incurred by Executive in connection with such action, suit or
proceeding;
provided that Executive agrees in writing to repay any such
amounts advanced if
it is ultimately determined by a court of competent jurisdiction
that Executive
is not entitled to such indemnification. Executive shall be
entitled to
indemnification under this clause regardless of any subsequent
amendments of the
Certificate Of Incorporation or By-Laws of the Company.
4. Registration Rights.
a. Piggyback Registration Rights. If the Company at any time
proposes to register any of its shares of Common Stock for sale
to the public
under the Securities Act of 1933, as amended, and applicable
state blue sky
laws, whether or not for sale for its own account, the Company
will each such
time include in the registration statement all of the underlying
shares of
Common Stock held by Executive (whether or not he is then
serving as a Executive
or in any other capacity with the Company), whether held by the
Executive as a
result of purchase, grant, exercise of the Warrant, 2005 Stock
Options,
Restricted Stock or otherwise, or any combination of the
foregoing (with the
securities which the Company at the time proposes to register),
so as to permit
the sale or other disposition by Executive of such Common Stock.
The rights of
the Executive hereunder shall be automatic, and Executive shall
not be required
to consent at the time of registration. Any such registration of
Common Stock
held by the Executive shall be at Company expense, except for
expenses of
separate counsel to the Executive. The Company shall have the
right to
discontinue any such registration at an
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