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EXHIBIT 10.1
EXECUTION COPY
SEVERANCE AGREEMENT, WAIVER, AND RELEASE
This
Severance Agreement, Waiver and Release (the "Agreement"), dated
as
of March 4, 2005, is entered into by
Charles I. Johnston ("Johnston") and
Ladenburg Thalmann Financial Services Inc.
("LTFS").
WHEREAS,
Johnston has been employed by LTFS as its Chairman and Chief
Executive Officer pursuant to the parties'
Employment Agreement, dated as of
March 9, 2004 (the "Employment
Agreement");
WHEREAS,
Johnston now desires to retire from his positions with LTFS and
each of LTFS' subsidiaries and affiliates
(collectively, the "Company");
WHEREAS,
the parties mutually desire to resolve any and all disputes
between them, including all issues
pertaining to the amount and calculation of
compensation and benefits due under the
Employment Agreement;
NOW,
THEREFORE, in consideration of the acts, payments, covenants,
and
mutual agreements herein described and
agreed to be performed, Johnston and the
Company agree as follows (capitalized terms
not defined herein shall have the
meanings ascribed to them in the Employment
Agreement):
1.
Effective
as of the close of business on March 31, 2005, Johnston
shall be deemed to have resigned from all positions with the
Company.
2.
In
connection with Johnston's resignation, the Company shall pay
Johnston, as severance, a lump sum of $150,000 by the close of
business on March 31, 2005.
3.
The
Company shall continue to pay or provide, consistent with the
Company's prior practices applicable to Johnston immediately
prior
to the date hereof as if Johnston is an active employee of the
Company, health benefits for Johnston (and his dependents) and
all
other benefits described in Section 5(A) of the Employment
Agreement, until the earlier of (i) the second anniversary of
the
date hereof and (ii) the date Johnston becomes eligible to be
covered under another substantially equivalent program by reason
of
employment or consultancy elsewhere.
4.
Effective
March 31, 2005, the Employment Agreement shall be deemed
terminated, except for the provisions of Sections 5(C),
Sections
6(A), (C) and (D) and Section 8 thereof which shall survive
termination of the Employment Agreement. For the avoidance of
doubt,
the restrictive covenants provided in Section 6(B) of the
Employment
Agreement shall terminate on March 31, 2005.
5.
The terms
and provisions of the Indemnification Agreement between
Johnston and LTFS, dated as of March 9, 2004 ("Indemnification
Agreement"), shall remain in full force and effect and shall
survive
termination of the Employment Agreement.
6. Johnston shall be
entitled to exercise options to purchase 100,000
shares of common stock represented by the two Stock Option
Agreements, each dated as of March 9, 2004, between LTFS and
Johnston. Such 100,000 options shall remain exercisable for a
period
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of twelve (12) months from the date of hereof. The option to
purchase the remaining 2,400,000 shares of common stock shall
terminate.
COMPLETE RELEASE
In
consideration of the Company's obligations stated above,
Johnston
hereby forever releases the Company, its
past and present employees, officers,
directors, parent companies, subsidiaries,
divisions, successors and assigns
from all claims Johnston may now have based
on his employment with the Company
or the separation of that employment
through the date of execution of this
Agreement to the maximum extent permitted
by law. This includes a release, to
the maximum extent permitted by law, of any
rights or claims Johnston may have
under: (1) the Age Discrimination
Employment Act, which generally prohibits age
discrimination in employment; Title VII of
the Civil Rights Act of 1964, which
generally prohibits discrimination in
employment based on race, color, national
origin, religion or sex; the Equal Pay Act,
which generally prohibits paying men
and women unequal pay for equal work; the
Americans with Disabilities Act, which
generally prohibits discrimination on the
basis of disability; the Employee
Retirement Income Security Act of 1974,
which governs the provision of pension
and welfare benefits; and all other
federal, state or local laws prohibiting
employment discrimination, or (2) Section
806 of 18 U.S.C. 1514A, which
generally provides certain protection for
employees of publicly traded companies
and all other federal, state or local laws
providing similar protection. This
also includes a release by Johnston of any
claims for wrongful discharge, any
compensation claims (other than as provided
in this Agreement) or any other
claims under any statute, rule, regulation,
or under the common law. This
release covers both claims known and
unknown to Johnston based on his employment
with the Company or the separation of that
employment through the date of
execution of this Agreement.
Johnston
further promises never to file or voluntarily participate or
voluntarily assist in any lawsuit,
arbitration or other legal action asserting
any claims that are released under this
Agreement, provided, however, that
nothing herein shall restrict Johnston'
ability to respond to any inquiry from
applicable regulatory authorities or to
provide information pursuant to legal
process or to participate in any lawsuit,
arbitration or other legal action
pursuant to legal process. If Johnston
breaches this Section and files a lawsuit
or arbitration based on legal claims that
he has released and the court or
arbitrator decides in favor of the Company,
Johnston will pay for all costs
incurred by the Company, including
reasonable attorneys' fees, in defending
against such claim.
In
consideration of Johnston providing the Company with the release
as
referenced above, the Company for itself,
and on behalf of its past, present
and/or future parent companies, and any and
all of its or their subsidiaries,
divisions, employee benefit and/or pension
plans or funds, successors and
assigns, and all of its or their past
and/or present employees, directors,
attorneys and assigns, hereby forever
releases Johnston, his heirs, successors
and assigns, from any and all claims
(whether known or unknown) it may now have
based upon his employment with the Company,
the separation or termination of
that employment, his holding any office
or
