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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
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