<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _________
Commission file number 001-14205
JWGENESIS FINANCIAL CORP.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 65-0811010
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
980 North Federal Highway - Suite 310
Boca Raton, Florida 33432
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (561) 338-2600
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the last 90 days. Yes / / No /x/ *
* The registrant has filed all such reports; however, the
registrant has only been subject to such filing requirements since
June 12, 1998.
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class Outstanding at August 12, 1998
- --------------------------------------- ------------------------------
Common Stock, $.001 par value per share 5,306,622
<PAGE>
JWGENESIS FINANCIAL CORP.
--------------------------
INDEX
-----
Page
----
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Statements of Financial Condition
at June 30, 1998 and December 31, 1997 3
Consolidated Condensed Statements of Income for the Three
Month and Six Month Periods Ended June 30, 1998 and 1997 4
Consolidated Condensed Statements of Cash Flows for the Six
Month Periods Ended June 30, 1998 and 1997 5
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II. Other Information
Item 1. Legal Proceedings 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
2<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
- ----------------------------
<TABLE>
<CAPTION>
JWGENESIS FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
June 30, December 31,
1998 1997(*)
--------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 14,564,000 $ 11,512,000
Receivable from customers, net 132,488,000 107,507,000
Receivable from brokers and dealers 7,407,000 5,248,000
Securities owned, at market value 11,421,000 9,010,000
Cost in excess of the value of net assets acquired 12,911,000
Furniture, equipment and leasehold improvements, net of accumulated
depreciation and amortization of $1,654,000 and $1,433,000 3,150,000 1,742,000
Deferred tax asset 1,648,000 1,621,000
Other, net 5,538,000 4,092,000
--------------------------------
$ 189,127,000 $ 140,732,000
================================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Short-term borrowings from banks $ 47,257,000 $ 29,423,000
Accounts payable, accrued expenses and other liabilities 12,666,000 12,043,000
Payable to customers 19,042,000 35,055,000
Payable to brokers and dealers 61,894,000 32,975,000
Securities sold, not yet purchased, at market value 700,000 567,000
Lines of credit 3,000,000 890,000
Notes payable to affiliates - 5,113,000
Income taxes payable 955,000 -
--------------------------------
145,514,000 116,066,000
--------------------------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value - authorized 5,000,000 shares;
no shares issued or outstanding - -
Common stock, $.001 par value - authorized 9,056,000 shares; issued
and outstanding 5,306,622 and 3,690,743 5,000 4,000
Additional paid-in capital 20,167,000 4,018,000
Retained earnings 23,448,000 20,651,000
Treasury stock, at cost, 900 shares (7,000) (7,000)
--------------------------------
Total stockholders' equity 43,613,000 24,666,000
--------------------------------
$ 189,127,000 $ 140,732,000
=================================
</TABLE>
* - Derived from audited financial statements contained in
JW Charles Financial Services, Inc. Annual Report on Form
10-K/A for the fiscal year ended December 31, 1997. See Note 2.
(The accompanying Notes to Consolidated Condensed Financial Statements
are an integral part of these financial statements.)
3<PAGE>
<TABLE>
<CAPTION>
JWGENESIS FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ------------------------------
1998 1997 1998 1997
---------------------------- ------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Commissions $ 14,052,000 $ 10,528,000 $ 27,181,000 $ 22,066,000
Market making and principal transactions, net 5,618,000 5,399,000 10,486,000 10,045,000
Interest 3,818,000 2,781,000 6,980,000 5,115,000
Clearing fees 2,642,000 2,573,000 4,461,000 4,381,000
Other 738,000 724,000 2,033,000 2,530,000
---------------------------- ------------------------------
26,868,000 22,005,000 51,141,000 44,137,000
---------------------------- ------------------------------
EXPENSES:
Commissions and clearing costs 13,782,000 10,927,000 26,457,000 22,485,000
Employee compensation and benefits 4,437,000 4,114,000 8,885,000 8,269,000
Selling, general and administrative 4,277,000 4,056,000 8,130,000 7,905,000
Interest 1,458,000 1,077,000 2,713,000 2,062,000
---------------------------- ------------------------------
23,954,000 20,174,000 46,185,000 40,721,000
---------------------------- ------------------------------
Income before income taxes 2,914,000 1,831,000 4,956,000 3,416,000
Provision for income taxes 1,138,000 622,000 1,910,000 1,195,000
---------------------------- ------------------------------
Net income $ 1,776,000 $ 1,209,000 $ 3,046,000 $ 2,221,000
============================ ==============================
Earnings per common share:
Basic $ .43 $ .37 $ .78 $ .68
============================ ==============================
Diluted $ .38 $ .32 $ .67 $ .58
============================ ==============================
Weighted average common shares outstanding:
Basic 4,090,801 3,307,780 3,918,753 3,288,978
============================ ==============================
Diluted 4,646,906 3,813,625 4,519,065 3,820,255
============================ ==============================
</TABLE>
(The accompanying Notes to Consolidated Condensed Financial Statements
are an integral part of these financial statements.)
4<PAGE>
JWGENESIS FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
------------------------------
1998 1997
------------------------------
<S> <C> <C>
OPERATING ACTIVITIES $ 3,047,000 $ 2,221,000
Net income
Adjustments to reconcile net income to net cash
used by operating activities:
Depreciation and amortization 241,000 158,000
Change in assets and liabilities, net of effect of acquisition:
Receivable from customers (24,981,000) 10,225,000
Receivable from brokers and dealers 994,000 (3,962,000)
Securities owned (2,382,000) (1,752,000)
Deferred tax asset (27,000) (10,000)
Other assets (1,667,000) (483,000)
Accounts payable, accrued expenses and other liabilities (1,972,000) 626,000
Payable to customers (16,013,000) (22,672,000)
Payable to brokers and dealers 28,527,000 13,282,000
Securities sold, not yet purchased 133,000 2,393,000
Income taxes payable 955,000 183,000
-------------------------------
Net cash (used in) provided by operating activities (13,145,000) 209,000
-------------------------------
INVESTING ACTIVITIES
Purchases of furniture, equipment and leasehold improvements (521,000) (435,000)
-------------------------------
FINANCING ACTIVITIES
Change in short-term borrowings from banks 17,834,000 4,369,000
Change in notes payable to affiliate (5,113,000) (3,012,000)
Change in lines of credit 2,110,000 -
Issuance of common stock 400,000 -
-------------------------------
Net cash provided by financing activities 15,231,000 1,357,000
-------------------------------
Net increase in cash and cash equivalents 1,565,000 1,131,000
Cash and cash equivalents at beginning of period 12,999,000 11,836,000
-------------------------------
Cash and cash equivalents at end of period $ 14,564,000 $ 12,967,000
===============================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for income taxes $ 954,000 $ 964,000
===============================
Cash paid during the period for interest $ 2,713,000 $ 2,062,000
===============================
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
On June 12, 1998, the Company issued 1,500,000 shares of common stock in connection with its acquisition of Genesis
Merchant Group Securities, LLC (Note 5).
</TABLE>
(The accompanying Notes to Consolidated Condensed Financial Statements
are an integral part of these financial statements.)
5
<PAGE>
JWGENESIS FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
As discussed elsewhere in this Report, on June 12, 1998,
JWGenesis Financial Corp. (the "Company") consummated a series
of transactions (the "Combination") in which it (i) acquired
Genesis Merchant Group Securities LLC ("Genesis") through the
issuance of 1,500,000 shares of its authorized but unissued common
stock and (ii) acquired JW Charles Financial Services, Inc. ("JWCFS")
pursuant to an exchange offer of one share of its common stock for
each outstanding share of JWCFS common stock and each of Genesis
and JWCFS became wholly owned subsidiaries of the Company. As a result of
the Combination, the Company has now succeeded to the business and operations
of JWCFS and Genesis. The information in the Financial Section of this
Report relating to periods prior to June 12, 1998 is derived solely from
information and financial statements of JWCFS and, except as otherwise
expressly indicated, relates to matters prior to the Combination.
The interim financial information included herein is unaudited;
however, such information reflects all adjustments, which are, in
the opinion of management, necessary for a fair presentation of
the periods indicated.
The accompanying consolidated condensed financial statements
include the accounts of the Company and its subsidiaries. Certain
information and footnote disclosures normally included in
financial statements prepared in conformity with generally
accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and
Exchange Commission. These consolidated condensed financial
statements should be read in conjunction with the consolidated
condensed financial statements and related notes contained in the
JWCFS 1997 Annual Report on Form 10-K/A.
Because of seasonal and other factors, the results of operations
for the three month and six month periods ended June 30, 1998 are
not necessarily indicative of the results of operations to be
expected for the fiscal year ending December 31, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation
- ----------------------
The accompanying consolidated financial statements include the
accounts of the Company and its subsidiaries which are: JWCFS,
Corporate Securities Group, Inc. ("CSG"), JW Charles Securities,
Inc. ("JWC Securities"), JW Charles Clearing Corp. ("JWC Clearing"),
CMG Capital Corp. ("CMGCC"), First Investors Life Agency, Inc.
("FILA"), DMG Securities, Inc. ("DMG") and Discount Securities
Group, Inc. ("DSG"). In addition, the accompanying consolidated
financial statements include the accounts of Genesis (effective
June 12, 1998) (See Note 5, "Acquisitions") and The Americas Growth
Fund, Inc. ("AGRO") (effective September 22, 1997) (See Note 5,
"Acquisitions"). All significant intercompany transactions have
been eliminated in consolidation.
Reclassifications
- -----------------
Certain amounts in the prior period's consolidated condensed
financial statements have been reclassified to conform to the
6<PAGE>
current period's presentation. These reclassifications are not
material to the consolidated condensed financial statements.
3. CONTINGENCIES
The Company is involved in various claims and possible actions
arising out of the normal course of its business. Although the
ultimate outcome of these claims cannot be ascertained at this
time, it is the opinion of the Company, based on knowledge of
facts and advice of counsel, that the resolution of such actions
will not have a material adverse effect on the Company's
financial condition and results of operations.
4. NET CAPITAL
The broker-dealer subsidiaries of the Company are subject to the
requirements of Rule 15c3-1 under the Securities Exchange Act of
1934. This rule requires that aggregate indebtedness, as
defined, not exceed fifteen times net capital, as defined. Rule
15c3-1 also provides for an "alternative net capital requirement"
which, if elected, requires that net capital be equal to the
greater of $250,000 or two percent of aggregate debit items
computed in applying the formula for determination of reserve
requirements. The New York Stock Exchange, Inc. ("NYSE") may
require a member organization to reduce its business if its net
capital is less than four percent of aggregate debit items and
may prohibit a member firm from expanding its business if its net
capital is less than five percent of aggregate debit items. At
June 30, 1998, the net capital positions of the Company's broker-
dealer subsidiaries were as follows:
JWC Clearing (alternative method elected):
Net capital as a percent of aggregate debit items 8.46
Net capital $11,963,000
Required net capital $2,828,000
CSG:
Ratio of aggregate indebtedness to net capital 1.97
Net capital $1,908,000
Required net capital $250,000
JWC Securities:
Ratio of aggregate indebtedness to net capital 2.32
Net capital $1,496,000
Required net capital $250,000
Genesis:
Ratio of aggregate indebtedness to net capital .68
Net capital $2,514,000
Required net capital $250,000
DMG:
Ratio of aggregate indebtedness to net capital .50
Net capital $413,000
Required net capital $100,000
5. ACQUISITIONS
On June 12, 1998, the Company completed the acquisition of
Genesis a San Francisco-based investment banking firm with
special expertise in institutional sales and trading, research,
brokerage processing and corporate finance. The acquisition
(which was accounted for under the purchase method) was accomplished
7<PAGE>
by the Company though the issuance of 1,500,000 shares of its
authorized but unissued common stock in exchange for a 100%
ownership in Genesis. The purchase price of $16,600,000 exceeded
the fair value of net assets acquired by approximately $12,911,000,
which is being amortized on a straight-line basis over 20 years.
The results of operations of Genesis are included in the accompanying
financial statements from the date of acquisition.
The following unaudited pro forma financial information presents
the Company's results of operations as though Genesis had been
acquired as of the beginning of each of the six month periods
ended June 30, 1998 and 1997:
<TABLE>
<CAPTION>
Six Months Ended
June 30, (Unaudited)
---------------------------
1998 1997
---- ----
<S> <C> <C>
Revenues $ 63,505,000 $ 58,517,000
Net income $ 3,326,000 $ 2,382,000
Earnings per common share:
Basic $ .63 $ .50
Diluted $ .57 $ .45
</TABLE>
The pro forma results of operations are not necessarily
indicative of what actually would have occurred if the
acquisition of Genesis had been completed as of the beginning of
each of the fiscal period presented, nor are they necessarily
indicative of future consolidated results.
On September 22, 1997, JWCFS completed its exchange tender
offer (the "Exchange Offer") for all (but not less than 51%) of
the outstanding shares of common stock of AGRO not already owned
by the Company. Prior to the commencement of the Exchange Offer,
the Company owned 26% of the outstanding shares of common stock
of AGRO. A total of approximately 823,000 shares of AGRO common
stock, representing approximately 65% of the outstanding shares
of AGRO common stock, were tendered pursuant to the Exchange
Offer. All shares of AGRO common stock tendered were accepted
for exchange by the Company according to the terms of the
Exchange Offer on the basis of .431 shares of the Company's
common stock for each share of AGRO, resulting in the issuance by
JWCFS of 354,851 shares of its authorized but unissued common
stock. The tendered shares together with the shares already owned
by JWCFS represent approximately 91% of the outstanding shares of
AGRO common stock, with the remaining 9% of AGRO shares held by
minority shareholders (the "AGRO"). The AGRO acquisition was
accounted for under the purchase method of accounting. The Company
has consolidated the accounts of AGRO in the accompanying financial
statements effective as of September 22, 1997. The AGRO Minority
Shareholders' interests in these accounts is reflected as accounts payable,
accrued expenses and other liabilities in the accompanying financial
statements.
8
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
Forward Looking Statements
- --------------------------
From time to time, information provided by the Company or
statements made by its directors, officers or employees may
constitute "forward-looking statements" under the meaning of the
Private Securities Litigation Reform Act of 1995. Any statements
made in this Form 10-Q, including any statements incorporated
herein by reference, that are not statements of historical fact
are forward-looking statements. Such forward-looking statements
and other forward-looking statements made by the Company or its
representatives are based upon a number of assumptions and
involve a number of risks and uncertainties, and, accordingly,
actual results could differ materially. Factors that may cause
such differences include, but are not limited to, those set forth
under the heading "Risk Factors" contained in the JW Charles
Financial Services, Inc. Annual Report on Form 10-K/A for the
year ended December 31, 1997.
RESULTS OF OPERATIONS -- THREE MONTHS ENDED JUNE 30, 1998 (THE
"1998 PERIOD") VS. 1997 (THE "1997 PERIOD")
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------------------------------------
1998 1997 1996
(000's) % Change (000's) % Change (000's)
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Commissions $14,052 33 $10,528 -20 $13,226
Market making and principal
transactions, net 5,618 4 5399 -23 7,048
Interest 3,818 37 2,781 20 2,322
Clearing fees 2,642 3 2,573 - 4 2,672
Other 738 2 724 -11 810
---------------------------------------------------------
$26,868 22 $22,005 -16 $26,078
=========================================================
Three Months Ended June 30,
---------------------------------------------------------
1998 1997 1996
(000's) % Change (000's) % Change (000's)
---------------------------------------------------------
Expenses:
Commissions and clearing costs $13,782 26 $10,927 -25 $14,666
Employee compensation and benefits 4,437 8 4,114 11 3,697
Selling, general and administrative 4,277 5 4,056 -10 4,487
Interest 1,458 35 1,077 2 1,055
---------------------------------------------------------
$23,954 19 $20,174 -16 $23,905
=========================================================
Three Months Ended June 30,
--------------------------------------------------------
1998 % Change 1997 % Change 1996
--------------------------------------------------------
Clearing Factor 70% 1 69% -4 72%
========================================================
</TABLE>
9<PAGE>
Total revenues of $26,868,000 recorded in the 1998 Period
increased by 22% compared to last year's $22,005,000. In
particular, commissions increased by 33% to $14,052,000 from
$10,528,000. The substantial increase in commissions is
primarily due to the Company's expanded operations and generally
favorable market conditions experienced in the 1998 Period.
Market making and principal transactions, net and clearing fees
both experienced increases, although not as significant as the
increase in commission income. The increase in these revenue
categories was a result of generally favorable market conditions
experienced during the 1998 Period. Interest income and interest
expense increased by 37% and 35%, respectively primarily as a
result of increased customer margin activity and the related cost
of funding customer margin balances.
Commissions and clearing costs, which represent the portion
of fee income payable by the Company to registered representatives
or other broker-dealers as a result of securities transactions (and
the related costs associated with the execution of such trades),
increased, reflecting the increase in second quarter 1998 commissions
and market making and principal transactions, net. Commissions and
clearing costs as a percentage of commissions and market making and
principal transactions, net (the "Clearing Factor") increased slightly
to approximately 70% in the 1998 Period as compared to 69% in the
1997 Period. Employee compensation and benefits increased by 8%
as a result of annual salary adjustments and increase in the
number of personnel to accommodate the Company's continuing
growth.
10<PAGE>
SIX MONTHS ENDED JUNE 30, 1998 (THE "1998 PERIOD") VS. 1997 (THE
"1997 PERIOD")
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------------------------------------
1998 1997 1996
(000's) % Change (000's) % Change (000's)
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Commissions $27,181 23 $22,066 -6 $23,394
Market making and principal
transactions, net 10,486 4 10,045 -20 12,484
Interest 6,980 36 5,115 14 4,482
Clearing fees 4,461 2 4,381 -12 4,985
Other 2,033 -20 2,530 64 1,541
---------------------------------------------------------
$51,141 16 $44,137 -6 $46,886
==========================================================
Six Months Ended June 30,
---------------------------------------------------------
1998 1997 1996
(000's) % Change (000's) % Change (000's)
---------------------------------------------------------
Expenses:
Commissions and clearing costs $26,457 18 $22,485 -13 $25,974
Employee compensation and benefits 8,885 7 8,269 14 7,270
Selling, general and administrative 8,130 3 7,905 -3 8,130
Interest 2,713 32 2,062 7 1,933
---------------------------------------------------------
$46,185 13 $40,721 -6 $43,307
==========================================================
Six Months Ended June 30,
---------------------------------------------------------
1998 % Change 1997 % Change 1996
---------------------------------------------------------
Clearing Factor 70% 0 70% -3 72%
=========================================================
</TABLE>
Total revenues of $51,141,000 recorded in the 1998 Period
increased by 16% compared to last year's $44,137,000. In
particular, commissions increased by approximately 23% while at
the same time market making and principal transactions, net
increased by 4%. The shift in revenues between these categories
can be primarily attributed to the following two reasons. In
1998, new regulations were introduced which have led to a
narrowing of the spread between the bid and ask prices of
securities traded on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"). Secondly, as a
result of the general strength and market leadership of the
"large cap" stocks throughout much of the 1998 Period, a greater
percentage of the Company's securities business was concentrated
in the non-NASDAQ market as compared to the prior year. Other
income decreased as a result of the completion of a co-managed
underwriting in the 1997 Period and none occurring in the 1998
Period.
11<PAGE>
Commissions and clearing costs increased reflecting the
Company's overall business growth. Commissions and clearing
costs as a percentage of commissions and market making and
principal transactions, net, stayed constant at approximately 70%
in the 1998 Period and the 1997 Period, respectively.
Employee compensation and benefits increased primarily the
result of two factors: (i) annual salary adjustments and (ii) an
increase in the number of personnel to accommodate the Company's
continuing growth.
LIQUIDITY AND CAPITAL RESOURCES
The Company maintains a highly liquid balance sheet with the
majority of the Company's assets consisting of cash and cash
equivalents, securities owned, which are marked to market, and
receivable from customers, brokers, dealers and clearing brokers
arising from customer related securities transactions.
Receivable from customers consist primarily of collateralized
customer margin loans, which are typically secured with
marketable corporate debt and equity securities. The nature of
the Company's business as a market maker and securities dealer
requires it to carry significant levels of securities inventories
in order to meet its customer and internal trading needs.
Additionally, the Company's role as a financial intermediary for
customer activities, which it conducts on a principal basis,
results in significant levels of customer related balances.
Accordingly, the Company's total assets and financial leverage
can fluctuate significantly depending largely upon general
economic and market conditions, volume of activity, customer
demand and underwriting commitments. The Company's ability to
support increases in its total assets is a function of its
ability to generate funds internally and obtain short-term
borrowings from banks.
At June 30, 1998, the Company had stockholders' equity of
$43,613,000, representing an increase of $18,947,000 from
December 31, 1997, and the Company had cash and cash equivalents
of $14,564,000. At June 30, 1998, the Company had an aggregate
of $2,000,000 of additional borrowing capacity available under
its committed bank lines of credit described in the JWCFS Annual
Report on Form 10-K/A for the year ended December 31, 1997.
Additionally, the Company presently owns approximately 300,000
shares of common stock of Knight/Trimark Group, Inc.
(NASDAQ: NITE) which are subject to a lock up agreement until
January 3, 1999 and are unregistered. These securities are
recorded at June 30, 1998 at historical cost which is $18,000.
II - OTHER INFORMATION
Item 1. Legal Proceedings
- ---------------------------
There are no material legal proceedings pending or
threatened in which the Company is party or of which the
Company's property is the subject. The Company has been named in
various arbitration and legal proceedings arising in the ordinary
course of its securities brokerage business. Although
arbitration and litigation involves contingencies that cannot be
definitively predicted, including the unpredictability of actions
12<PAGE>
that might be taken by an arbitration panel or jury on matters
that are submitted to them, the Company expects that the ultimate
disposition of arbitration and litigation arising from the
ordinary course of business will not have a material adverse
impact upon its financial position and results of operations.
Item 4. Submission of Matters to Vote of Security Holders
- -----------------------------------------------------------
On June 12, 1998, at the Special Meeting of Shareholders of
JWCFS, shareholders voted to approve and adopt the Amended and
Restated Agreement and Plan of Combination among JWCFS, the Company,
Genesis, and certain holders of equity interests of Genesis (the
"Combination Plan"). Pursuant to the Combination Plan, the Company
acquired (i) all of the outstanding shares of common stock of JWCFS, in
exchange for shares of the common stock of the Company on a one-for-one
basis and, (ii) a 100% of Genesis in exchange for 1,500,000 shares of
Company common stock.
Number of Number of Number of
Votes In Votes Votes
Favor Against Not Voted
-------- --------- ----------
Plan of Combination 2,710,806 94,761 1,135,245
Item 5. Other Information
- ---------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
- ------------------------------------------
(a) Exhibits:
Exhibit 2.1 - Shareholders Agreement, dated June 12, 1998, between
Marshall T. Leeds and The Will K. Weinstein Revocable Trust.
Exhibit 10.1 - Employment Agreement, dated June 12, 1998, between
JWGenesis Financial Corp. and Marshall T. Leeds.
Exhibit 10.2 - Employment Agreement, dated June 12, 1998, between
JWGenesis Financial Corp. and Joel E. Marks.
Exhibit 10.3 - Employment Agreement, dated June 12, 1998, between
JWGenesis Financial Corp. and Philip C. Stapleton.
Exhibit 10.4 - Employment Agreement, dated June 12, 1998, between
JWGenesis Financial Corp. and Will K. Weinstein.
Exhibit 27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K:
Forms 8-K and 8-K/A reporting date - June 12, 1998
Items Reported - Item 1, Changes in Control of
Registrant, Item 2, Acquisition or Disposition of Assets
and Exhibits and Item 7, Financial Statements, Pro Forma
Financial Information and Exhibits
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
JWGENESIS FINANCIAL CORP.
Date: August 18, 1998 /s/ Marshall T. Leeds
(President and Chief Executive Officer)
(Duly Authorized Officer)
Date: August 18, 1998 /s/ Joel E. Marks
(Joel E. Marks, Principal Financial and
Accounting Officer)
SHAREHOLDERS AGREEMENT
THIS AGREEMENT is made and entered into as of this 12th day
of June, 1998, by and between MARSHALL T. LEEDS ("Leeds") and THE
WILL K. WEINSTEIN REVOCABLE TRUST UNDER TRUST AGREEMENT DATED
FEBRUARY 27, 1990 ("Weinstein") (collectively the
"Shareholders").
RECITALS:
WHEREAS, the Leeds owns, beneficially and of record, as of
the date of this Agreement, 618,906 shares (11.8 percent) of the
issued and outstanding $.001 par value common stock ("Common
Stock") of JWGenesis Financial Corp. ("JWGenesis") and Weinstein
owns, beneficially and of record, as of the date of this
Agreement, 407,550 shares (7.8 percent) of the issued and
outstanding Common Stock of JWGenesis (such shares, together with
any other shares hereafter acquired by the Shareholders, are
collectively referred to as the "Shares");
WHEREAS, in accordance with Section 8.7 of that certain
Amended and Restated Agreement and Plan of Combination dated
March 9, 1998 by and among JW Charles Financial Services, Inc.,
JWGenesis, Genesis Merchant Group Securities LLC ("Genesis") and
the Genesis members named therein (the "Plan of Combination"),
the execution of this Agreement, pursuant to which the parties
hereto agree to vote for the election as directors of JWGenesis a
specified number of nominees designated by Leeds, on the one
hand, and by Weinstein, on the other hand, is a condition to the
closing of the Plan of Combination; and
WHEREAS, the Shareholders believe that it is desirable and
in their mutual interests to satisfy such condition and to
execute this Agreement to set forth their agreements with respect
to the election of directors of JWGenesis.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as
follows:
1.
Voting Agreement
----------------
Each Shareholder shall vote, or cause to be voted, the
Shares owned or controlled by him or it in favor of three (3)
nominees for director designated by Weinstein, on the one hand,
and the remaining nominees for director (the greater of five (5)
or a majority of the total number of directors) designated by
Leeds, on the other hand, and shall cause to be taken all such
<PAGE>
other actions within such Shareholder's power and authority as
may be required: (a) to cause to be elected or appointed to the
Board of Directors of JWGenesis the above number of nominees
designated by the other Shareholder; (b) to forthwith remove any
director so designated by the other Shareholder when such removal
is requested, for any reason, with or without cause, by such
Shareholder, and in the case of the death, resignation, or
removal of a director who was so designated, to elect a
replacement for such director as designated by the Shareholder
who designated such director; and (c) to use such Shareholder's
best efforts to prevent any action from being taken by the Board
of Directors of JWGenesis during the pendency of any vacancy due
to such death, resignation, or removal of a director who was
designated by the other Shareholder unless the Shareholder who
designated such director shall have failed for a period of ten
(10) days after receipt from JWGenesis of written notice of such
vacancy to designate a replacement; and (d) to cause the Board
of Directors of JWGenesis to be comprised of no less than eight
(8) directors.
2.
Power of Attorney
-----------------
If any Shareholder fails to execute any document or to do
anything that he or it is obligated to do under this Agreement,
such Shareholder hereby constitutes and appoints the other
Shareholder as his or its agent and attorney-in-fact for the
purpose of executing and delivering: (a) any and all documents
necessary or convenient to vote his or its Shares pursuant to the
provisions of Article 1 of this Agreement, and (b) any and all
other documents, instruments, agreements, and writings necessary
or convenient to effectuate the terms of this Agreement. The
powers of attorney granted herein, being coupled with an
interest, are irrevocable and shall not be revoked by the death,
dissolution, insolvency, or incapacity of any party or for any
other reason. Each Shareholder hereby releases the other
Shareholder who takes any action on his or its behalf as
authorized in this Agreement from any and all claims or
liabilities for or resulting from action so authorized.
3.
Binding on Transferees
----------------------
3. Anything in this Agreement to the contrary
notwithstanding, no sale, gift, assignment, encumbrance, or other
transfer or disposition (by operation of law or otherwise) of any
of the Shares shall have any force, validity, or effect, or vest
in the transferee any rights with respect thereto, unless and
until such transferee shall have agreed in writing to be bound by
the provisions of this Agreement with the same force and effect
as if such transferee had initially been a party to this
Agreement; provided, however, that this Agreement will not apply
to purchasers in bona fide pubic trading market transactions.
3. Except as otherwise expressly provided herein, the
provisions of this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their successors, and
assigns, including, without limitation, all subsequent holders of
the Shares.
3. Each individual Shareholder hereby agrees to provide in
his will that the Shareholder or his personal representative
<PAGE>
shall be bound to observe the terms and conditions of this
Agreement.
4.
Legend
Each certificate representing the Shares or any other voting
stock of JWGenesis now owned or hereafter acquired by any
Shareholder or any transferee, successor, or assign of any
Shareholder, shall bear the following legend:
"The voting of the shares represented by this
certificate are restricted by and entitled to
the benefits of a Shareholders Agreement
among certain of the Corporation's
shareholders, a copy of which may be
inspected at the principal office of the
Corporation."
5.
Termination
-----------
This Agreement shall terminate (a) upon the written
agreement of all parties hereto; (b) upon the dissolution or
liquidation of JWGenesis, the voluntary filing of a petition in
bankruptcy by JWGenesis, or the inability of JWGenesis to pay its
debts as they become due; (c) on December 31, 2001, or (d) at the
election of Leeds or Weinstein on any date on which either
Shareholder beneficially owns less than 60% of the number of
Shares owned by such Shareholder on the date of this Agreement
(adjusted for stock splits and stock dividends).
6.
Miscellaneous
-------------
6. NOTICES. All offers or notices required or permitted
hereunder shall be in writing, and shall be deemed to be
delivered and received (a) if personally delivered or, if
delivered by telegram, facsimile, or courier service, when
actually received by the party to whom notice is sent (or upon
confirmation of receipt received by the sender), or (b) if
delivered by mail (whether actually received or not), at the
close of business on the third business day next following the
day when placed in the mail, postage prepaid, certified or
registered, addressed to the appropriate party or parties, at the
address of such party set forth below (or at such other address
as such party may designate by written notice to all other
parties in accordance herewith):
<PAGE>
(a) If to JWGenesis:
980 North Federal Highway
Suite 210
Boca Raton, Florida 33432
Attention: Marshall T. Leeds, President
With a copy to:
Kilpatrick Stockton LLP
1100 Peachtree Street
Atlanta, Georgia, 30309
Attention: W. Randy Eaddy, Esq.
(b) If to Weinstein:
909 Montgomery, Suite 600
San Francisco, California 94133
Attention: Will K. Weinstein, President
With a copy to:
Feldman, Waldman & Kline
3 Embarcadero Center
28th Floor
San Francisco, California 94111-4066
Attention: Vern Bothwell, Esq.
6.2 GOVERNING LAW. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the
State of Florida without regard to its rules of conflicts of
laws.
6.3 PARTIAL INVALIDITY. All rights and restrictions
contained herein may be exercised and shall be applicable and
binding only to the extent that they do not violate any
applicable laws and are intended to be limited to the extent
necessary so that they will not render this Agreement illegal,
invalid, or unenforceable. If any term of this Agreement shall
be held to be illegal, invalid, or unenforceable, it is the
intention of the parties that the remaining terms hereof shall
constitute their agreement with respect to the subject matter
hereof and all such remaining terms shall remain in full force
and effect. To the extent legally permissible, any illegal,
invalid, or unenforceable provision of this Agreement shall be
replaced by a valid provision that will implement the commercial
purpose of the illegal, invalid, or unenforceable provision.
6.4 WAIVER. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right, power, or remedy
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power, or remedy by any such
party preclude any other or further exercise thereof or the
exercise of any other right, power, or remedy. No express waiver
or assent by any party hereto to any breach of or default in any
term or condition of this Agreement shall constitute a waiver of
or an assent to any succeeding breach of or default in the same
or any other term or condition hereof.
6.5 FURTHER DOCUMENTS AND ACTIONS. The parties shall take
such further actions and execute and deliver such further
<PAGE>
documents as may be necessary or convenient from time to time to
more effectively carry out the intent and purposes of this
Agreement and to establish and protect the rights and remedies
created or intended to be created hereunder.
6.6 HEADINGS; DEFINED TERMS. The headings as to the
contents of particular sections of this Agreement are inserted
only for convenience and shall not be construed as a part of this
Agreement nor as a limitation on the scope of any of the terms or
provisions of this Agreement. All capitalized terms not
otherwise defined herein shall have the meanings set forth in
Plan of Combination.
6.7 GENDER. Where the context requires, the use of the
singular form herein shall include the plural, the use of the
plural shall include the singular, and the use of any gender
shall include any and all genders.
6.8 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the
same instrument.
6.9 ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with respect to
the subject matter hereof, and this Agreement contains the sole
and entire agreement between the parties with respect to the
matters covered hereby. This Agreement shall not be modified or
amended except by an instrument in writing signed by or on behalf
of the parties hereto.
6.10 ADDITIONAL SHAREHOLDERS. Additional shareholders may
become a party to this Agreement and shall be bound by its terms
by signing their name below or by signing a counterpart hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed under seal as of the day and year first above
written.
/s/ Marshall T. Leeds [SEAL]
MARSHALL T. LEEDS
THE WILL K. WEINSTEIN
REVOCABLE TRUST UNDER TRUST
AGREEMENT DATED FEBRUARY 27,
1990
By: /s/ Will K. Weinstein
Will K. Weinstein,
Trustee
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of the 12th day of June, 1998, by and between
MARSHALL T. LEEDS, a resident of the State of Florida
("Executive"), and JWGENESIS FINANCIAL CORP., a Florida
corporation (the "Company").
1. DUTIES AND EXTENT OF SERVICES
1.1 POSITION AND DUTIES. The Company hereby enters into
this Agreement to evidence and provide for the employment of
Executive as Chairman of the Board, Chief Executive Officer, and
President of the Company. Consistent with the policies,
guidelines, and directives established or promulgated by the
Board of Directors of the Company (the "Board"), Executive shall
be in complete charge of all operations of the Company, with
authority and responsibility for formulating and directing the
implementation of policies for the management of such operations.
Executive shall only be required to report directly to the Board.
Executive agrees to serve, without additional compensation, in a
similar executive capacity with subsidiaries of the Company and
in such other executive capacities as may be designated by the
Board consistent with the positions, responsibilities, and
authority of Executive hereunder.
1.2 EXTENT OF SERVICES. Executive agrees to devote his
full working time, energy, and skill to the business of the
Company and to the promotion of the Company's interests and to
discharge his duties in good faith.
2. TERM
The term of this Agreement (the "Term") shall commence on
June 12, 1998 and shall continue to December 31, 2001, and shall
be automatically renewed for successive one-year terms unless
either party notifies the other in writing of its election not to
renew at least six months prior to the scheduled termination of
the Term or any renewal term. This Agreement may be earlier
terminated only in accordance with Section 7 hereof.
3. COMPENSATION
3.1 BASE SALARY. The Company shall pay Executive a base
annual salary (the "Base Salary") of Five Hundred Thousand
Dollars ($500,000.00) for each fiscal year during the Term
(prorated for any partial fiscal year), subject, however, to
increase for each fiscal year beginning January 1, 1999 by (a) an
amount equal to the increase for the previous year in the
Consumer Price Index for Urban Wage Earners and Clerical Workers,
U.S. City Average All Items, 1967=100 (the "Cost of Living
Adjustment") or (b) by such higher amount as may be approved by
the Board or the Compensation Committee thereof upon
consideration of such factors that it believes to be relevant and
appropriate. Each year's executive compensation analysis shall
be considered by the Board within 45 days following the end of
the immediately preceding fiscal year; adjustments to Executive's
Base Salary for the ensuing fiscal year shall be made within 75
days of the commencement of that year, and shall be applied
retroactive to such commencement date. All Base Salary shall be
paid in equal periodic installments in accordance with the
Company's normal payroll schedule.<PAGE>
3.2 INCENTIVE BONUS PLAN PARTICIPATION - In addition to the
base salary, Executive will be entitled to participate in the
Company's Management Incentive Bonus Plan, pursuant to and
subject to the provisions of which Executive will be entitled to
receive 50% of an executive bonus compensation pool (the
"Executive Compensation Pool") consisting of an aggregate of 15%
of the annual pre-tax profits of the Company; provided, however,
that such percentage may be reduced at the discretion of the
committee administering the plan, but not below 35%.
3.3 GENERAL INCENTIVE COMPENSATION PROGRAMS. The Company
hereby agrees that Executive shall be entitled to participate, to
an extent consistent with his title and Base Salary, in such
incentive compensation programs, including stock option or other
stock-based compensation plans or programs, as may be established
by the Board for the Company's officers, other key employees, or
employees as a group.
3.4 RESTRICTED STOCK INCENTIVE PLAN. Pursuant to and
subject to the provisions of the Company's Management Incentive
Bonus Plan and the award agreements issued thereunder, upon the
adoption of a restricted stock incentive plan by the Company (the
"Restricted Stock Plan"), which may be included in and adopted as
part of the Company's Management Incentive Bonus Plan, twenty-
five percent (25%) of Executive's annual incentive compensation
payable thereafter, including pursuant to Section 3.2, at the
option of the Company, will be paid in the form of restricted
Company common stock. The restricted stock will be awarded at
eighty percent (80%) of the average closing price of the common
stock for the last ten consecutive trading days in the calendar
year to which the bonus relates and shall vest 50% on each of the
first and second anniversary of the award. The Executive may
elect to exchange up to one-third of the restricted stock awarded
under the Restricted Stock Plan for a non-qualified stock option
to purchase three shares for each share of restricted stock
awarded, at an exercise price per share equal to the average
closing price of the common stock for the last ten consecutive
trading days in the calendar year to which the bonus relates.
Any such non-qualified stock option shall vest and be exercisable
as to one-third of the total number of shares on each of the
first three anniversaries of the grant date thereof, which shall
be the same date on which the restricted exchange was made and
will have a ten year life, with provisions for accelerated
vesting upon change in control, death, disability, or retirement.
2<PAGE>
4. BENEFITS
During Executive's employment hereunder, Executive shall:
(a) be eligible to participate in employee fringe benefits and
any pension or profit sharing plans that may be provided by the
Company for executive employees in accordance with the provisions
of any such plans, as the same may be in effect from time to
time; (b) be eligible to participate in any medical and health
plans or other employee welfare benefit plans that may be
provided by the Company for its executive employees in accordance
with the provisions of any such plans, as the same may be in
effect from time to time, and the Company shall pay the premiums
on a term life insurance policy, paying benefits of not less than
$1,000,000, obtained and owned by Executive covering his life,
and with such beneficiaries thereunder as Executive may choose to
name from time to time; (c) be entitled to annual paid vacation
in accordance with Company policy that may be applicable to
executive employees from time to time; and (d) be entitled to
sick leave, sick pay, and disability benefits in accordance with
any Company policy that may be applicable to executive employees
from time to time.
Without limiting the provisions of the foregoing paragraph,
the Company also shall: (a) provide to Executive a monthly
automobile allowance of not less than Seven Hundred Fifty Dollars
($750.00) to be used by Executive to purchase, lease, or rent (in
Executive's discretion) an automobile; (b) provide to Executive a
mobile telephone and mobile telephone service; (c) reimburse
Executive for expenses relating to Executive's use of the
automobile for Company business, including, without limitation,
insurance, maintenance, fuel and other such associated expenses,
and for entertainment and other expenses incurred by Executive in
connection with or related to the Company's business (or the
advancement or development thereof); and (d) provide Executive
with an annual allowance of $10,000 to be used by Executive, in
his discretion, to pay the costs of financial, legal, or tax
planning services obtained by Executive from advisors of
Executive's own selection or the costs of other programs, events,
or activities deemed by Executive to be appropriate or desirable
in light of Executive's standing in the community as a senior
officer of an important business. Executive shall submit
appropriate records relating to such expenses to receive
reimbursement from the Company for such expenses, in accordance
with the Company's policy for senior executive officers; the
Company acknowledges that an extensive amount of business related
travel will be required by Executive to perform his duties
hereunder.
3<PAGE>
5. CONFIDENTIAL INFORMATION
Executive agrees that he will hold in a fiduciary capacity,
for the benefit of the Company, all secret or confidential
information, knowledge, or data of the Company ("Confidential
Information") obtained by him during his employment by the
Company, and will not disclose such information to any person
other than in the course of performing his duties hereunder or as
may be required by law or by order of a court or other regulatory
authority of competent jurisdiction, unless the Company shall
consent in writing thereto. Additionally, Executive agrees that,
after termination of his employment under this Agreement, he will
not disclose, at any time, to any person, any Confidential
Information constituting a trade secret under applicable law and,
for a period of one (1) year after termination of employment
under this Agreement for cause, Executive will not disclose
Confidential Information to any person whether or not such
information constitutes a trade secret under applicable law. For
the purposes of this Section 5, information that is or becomes a
part of the public domain (other than as a result of Executive's
breach) shall not be deemed Confidential Information.
6. NO RECRUITMENT; NON-COMPETITION
6.1 NO RECRUITMENT. During Executive's employment
hereunder and for one (1) year after the termination of
Executive's employment hereunder for cause (or for such time as
Executive is receiving severance pay from the Company for
termination other than for cause) plus, at the option of the
Company, an additional six (6) months provided that during such
six-month period Executive is then being employed for a base
compensation of at least Forty Thousand Dollars ($40,000.00) per
month or the Company pays to Executive Forty Thousand Dollars
($40,000.00) per month, Executive will not, directly or
indirectly, (a) induce or conspire with, or attempt to induce or
conspire with, any of the officers or employees or registered
representatives of the Company or any of its subsidiaries or
affiliates to terminate their employment or relationship with or
compete against the Company or any of its subsidiaries or
affiliates, or any of the clients or customers of any such entity
to terminate their relationship with any such entity, or (b)
divert or attempt to divert any or all of such clients' or
customers' business with the Company or any of its subsidiaries
or affiliates from any such entity, unless the Company shall
consent in writing thereto.
6.2 NON-COMPETITION. During Executive's employment
hereunder and for one (1) year after the termination of
Executive's employment hereunder for cause, Executive will not,
directly or indirectly, for any reason, for his own account, or
on behalf of or together with any other person, be engaged as an
officer, director, employee, independent contractor, consultant
or advisor, or sales representative of any kind, or as an owner,
co-owner, or other investor of or in, a business that provides
securities brokerage, corporate finance, asset management,
capital formation, investment banking, financial advisory, or
other services in competition with the business engaged in by the
Company within the continental United States on the date hereof
or, to the extent permitted by and enforceable under applicable
law, in which the Company is so engaged on the date of
Executive's termination.
4<PAGE>
Notwithstanding the foregoing, Executive may own and hold as
a passive investment up to one percent (1%) of the outstanding
capital stock of a competing entity if that class of capital
stock is listed for trading or quotation on a national or
regional stock exchange registered with the SEC or on The Nasdaq
Stock Market.
6.3 DAMAGES. Because of the difficulty in measuring the
economic losses that may be incurred by the Company as a result
of any breach by Executive of the covenants in Section 6.1, and
because of the immediate and irreparable damage that could be
caused to the Company for which it would have no other adequate
remedy, Executive agrees that the Company may enforce the
provisions of Section 6.2 by any equitable or legal means,
including seeking an appropriate injunction or restraining order
against Executive if a breach of any of those provisions occurs.
6.4 REASONABLE RESTRAINT. The parties hereto each agree
that Sections 6.2 and 6.3 impose a reasonable restraint on
Executive in light of the position of Executive with the Company,
the activities and business of the Company on the date hereof,
and the current business plans of the Company (of which Executive
acknowledges that he is aware).
6.5 SEVERABILITY; REFORMATION. The covenants in this
Section 6 are severable and separate, and the unenforceability of
any specific covenant in this Section 6 is not intended by any
party hereto to, and shall not, affect the provisions of any
other covenant in this Section 6. If any court of competent
jurisdiction shall determine that the scope, time, or territorial
restrictions set forth in Section 6.2 are unreasonable as applied
to Executive, the parties hereto acknowledge their mutual
intention and agreement that those restrictions be enforced to
the fullest extent the court deems reasonable, and thereby shall
be reformed to that extent as applied to Executive.
6.6 INDEPENDENT COVENANT. All of the covenants in this
Section 6 are intended by each party hereto to be, and shall be
construed as, an agreement independent of any other provision in
this Agreement, and the existence of any claim or cause of action
of Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of any covenant in this Section 6. It
is specifically agreed that the period specified in Section 6.2
shall be computed by excluding from that computation any time
during which Executive is in violation of any provision of
Section 6.2.
6.7 Materiality. The Company and Executive hereby agree
that this Section 6 is a material and substantial part of this
Agreement.
5<PAGE>
7. TERMINATION OF EMPLOYMENT
7.1 BY COMPANY. Executive's employment under this
Agreement may be terminated by the Company at any time for cause.
For the purposes of this Section 7.1, "cause" shall mean: (a) the
conviction of Executive for an act or acts of dishonesty by
Executive that constitutes a felony under applicable law and that
subjects the Company to substantial loss or detriment, as
determined by a majority of the members of the Board; (b) the
imposition of disciplinary action against Executive, pursuant to
a final non-appealable action, by a regulatory body having
disciplinary authority over members of Executive's profession,
which disciplinary action prevents Executive from performing his
duties hereunder for a period of not less than thirty-one (31)
consecutive days and is determined by a majority of the members
of the Board to have caused substantial loss or detriment to the
Company; or (c) Executive's habitual neglect of, or refusal to
perform, his duties under this Agreement, or deliberate and
intentional disregard of lawful instructions from the Board;
provided, however, that Executive shall have received written
notice of such alleged neglect, refusal, or disregard from the
Board and shall have failed within thirty (30) days after the
receipt of such notice to cure and correct such alleged neglect,
refusal, or disregard (or to begin in good faith to effect such
cure and correction if such cannot practically be completed
within such 30-day period).
If Executive's employment is terminated under this Section
7.1, the Company shall have no further obligation to Executive
hereunder except to pay to him, in cash on the effective date of
such termination, any amount accrued but unpaid hereunder as of
the termination date, except that the rights of Executive (and
the obligations of the Company) under Section 8 shall continue
without regard to such termination. If Executive's employment is
terminated by the Company for cause, as provided above, this
Agreement shall terminate and neither party shall have any
further obligation to the other, except as provided above, and
except for Executive's agreements contained in Sections 5 and 6.
7.2 BY DEATH. If Executive dies, this Agreement shall
terminate on the date of Executive's death. In such event, the
Company shall pay promptly to Executive's designated beneficiary
or, if no designated beneficiary, to Executive's estate, any
compensation or other amount earned or accrued as of the date of
Executive's death but not yet paid and any other payments to
which Executive is entitled pursuant to Section 3.1 and Section 4
hereof (as a result of transactions in process as of the date of
Executive's death), and permit Executive's estate or legal
representative to exercise (during the one-year period
thereafter) any outstanding stock option with respect to the
number of shares for which the option has vested and has not
expired as of such date.
7.3 BY DISABILITY. If Executive becomes unable to perform
his normal duties hereunder as a result of his incapacity due to
physical or mental illness for a period of at least one hundred
twenty (120) consecutive days, the Company shall have the option
to terminate this Agreement upon the expiration of such period
(the "Disability Date"). In such an event, the Company shall pay
to Executive (within thirty (30) days thereof) all amounts
accrued but unpaid as of the Disability Date and, in the manner
and at the times set forth in Section 3.1 above, an amount equal
6<PAGE>
to the difference between (a) the Base Salary payable for the
remainder of the Term and (b) 1.4285714 times the sum of all
payments made to Executive under any disability insurance
coverage provided to him pursuant to Section 4 hereof; and
Executive shall continue to vest in, and remain entitled to
exercise, any outstanding stock option in the manner and at the
times otherwise set forth therein.
7.4 BY DISCHARGE. If Executive's employment under the
terms of this Agreement is terminated by the Company for any
reason other than cause, death, or disability (in any such case a
"Discharge"), then (a) the Company shall pay to Executive, on the
date of Discharge, a lump sum cash amount equal to the greater of
(i) 12 months of Executive's Base Salary at the time of the
Discharge and (ii) Executive's Base Salary, without regard to
Cost of Living Adjustments, payable for the remainder of the
Term; (b) the Company shall pay to Executive the amounts, and on
the schedule, of bonus compensation under Section 3.2 that would
be payable to Executive during the remainder of the Term in the
absence of the Discharge; and (c) Executive shall immediately
become fully vested in, and be entitled to exercise for a period
of 90 days after the date of Discharge, all outstanding stock
options not previously vested or exercised. Such payment shall
be in addition to other payments, if any, to which Executive is
entitled pursuant to Section 4 hereof, and the rights of
Executive (and the obligations of the Company) under Section 8
shall continue without regard to such Discharge. No Discharge
shall be permitted pursuant to this Section 7.4 unless approved
by a majority of the members of the Board.
7.5 BY EXECUTIVE. If (a) the Company significantly reduces
Executive's authority or duties as described in Section 1.1 (or
Executive's standing within the Company as a function of
Executive's relationships with the Board or with other members of
management of the Company) other than at the direction of the New
York Stock Exchange or similar regulatory authority with
jurisdiction over the Company or any of its subsidiaries or (b) a
change of control of the Company occurs that is not approved by
Executive, then, in any such event, Executive may terminate this
Agreement and such termination shall be treated as if it were a
Discharge under Section 7.4; provided that the Board shall have
received written notice from Executive of any reduction described
in clause (a) above upon which Executive proposes to base a
termination and the Company shall have failed within thirty (30)
days thereafter to reverse the situation. For purposes hereof,
"change of control" shall mean (c) the acquisition by a person or
entity other than Executive or a now existing shareholder of the
Company (or any affiliate of Executive or such a shareholder of
the Company), whether in one or several transactions, by
exchange, merger, consolidation, assignment, stock spin-off,
stock split-up, or other transaction, of more than thirty-five
percent (35%) of the voting stock of the Company, or of the right
to vote or to direct the voting of such percentage of voting
stock; or (d) a change in the membership of the Board of
Directors of the Company such that a majority of the members are
persons who are not Continuing Directors. For purposes of this
Agreement, a "Continuing Director" is a person who is a member of
the Board of Directors of the Company on the date hereof or a
person who is elected as a director of the Company upon the
nomination by or approval of a majority of the Continuing
Directors in office.
7<PAGE>
8. LEGAL EXPENSE REIMBURSEMENTS
8.1 INDEMNIFICATION LEGAL EXPENSES. Without limiting the
scope of any indemnification to which Executive is or may be
entitled under applicable law or pursuant to the Company's
Articles of Incorporation, Bylaws, or contract for
indemnification of officers or directors of the Company, the
Company shall indemnify and hold Executive harmless from and
against the costs and expenses (including attorneys' fees and
costs) of Executive's defense with respect to any suit,
investigation, or other action or proceeding instituted or
threatened against Executive by any person, agency, body, or
other entity that is based on, arises out of, or is related to
any position that Executive has or had with the Company or any of
its subsidiaries or other affiliates or otherwise to the
performance by Executive of any duty or responsibility under this
Agreement. To the maximum extent permitted by applicable law,
the Company agrees to advance to Executive the amount of such
costs and expenses as they are incurred by Executive (upon
written request by Executive therefor, accompanied by reasonably
detailed explanation of the basis for such advance(s)), and
Executive agrees, to the extent that such agreement may be
required by applicable law to permit such advances, to account to
the Company for such advance(s), including to refund to the
Company any such amount that it may ultimately be determined
(according to applicable law) that Executive is not entitled to
receive as indemnification or reimbursement for such costs and
expenses as a result of the final disposition of the underlying
suit, investigation, or other action or proceeding in respect of
which such costs or expenses were incurred. The Company agrees
to take such corporate action as may be necessary or advisable,
if requested by Executive, to authorize, approve, or effectuate
and implement the rights conferred upon Executive in this Section
8.1.
8.2 DISPUTES RELATING TO AGREEMENT. If (a) a Dispute (as
hereinafter defined) arises, and (b) either a court, governmental
agency, or similar body of competent jurisdiction issues a final,
nonappealable order, judgment or decree (a "Final Order"), or
Executive and the Company reach a definitive settlement of the
Dispute (a "Settlement"), that sustains the position in the
Dispute taken by Executive prior to the Dispute Date (as
hereinafter defined), then the Company shall reimburse Executive
for his reasonable legal expenses actually incurred from and
after the Dispute Date in connection with obtaining the Final
Order or Settlement, to the extent such expenses exceeded any
award for legal expenses contained in any such Final Order. For
purposes hereof, the "Dispute Date" shall be ten (10) business
days after the date upon which Executive delivers to the Company,
in accordance with Section 9.7, written notice setting forth the
particulars of a matter covered by this Agreement about which
Executive and the Company disagree (the "Dispute") and stating
his intention to seek legal counsel for assistance regarding such
matter. Except as expressly set forth above, the Company
undertakes no obligation to advance, reimburse, or otherwise pay
or assume any expense of Executive incurred in interpreting or
enforcing this Agreement.
8.3 SURVIVAL. The provisions of this Section 8 shall
survive any termination of Executive's employment or of this
Agreement.
8<PAGE>
9. MISCELLANEOUS
9.1 ASSIGNMENT. This Agreement is personal in nature and
may not be assigned by either party without the express written
consent of the other party; provided, however, that the
provisions of this Agreement shall inure to the benefit of and be
binding upon each successor of the Company, whether by merger,
consolidation, transfer of all or substantially all assets, or
otherwise.
9.2 WAIVER. The waiver by any party to this Agreement of a
breach by the other party of any of the provisions of this
Agreement shall not operate as or be construed as a waiver of any
different or subsequent breach.
9.3 ENTIRE AGREEMENT. This Agreement constitutes and
expresses the entire agreement of the parties with respect to the
subject matter hereof.
9.4 GOVERNING LAW. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the
State of Florida (without regard to its rules of conflicts of
laws).
9.5 NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement, whether express or implied, is intended to or shall be
construed to confer upon or give any person not a party hereto
any rights or remedies hereunder, whether as a third-party
beneficiary or otherwise.
9.6 SEVERABILITY. Should any clause or any other portion
of this Agreement be determined to be void or unenforceable for
any reason, such determination shall not affect the validity or
enforceability of any other clause or portion of this Agreement,
all of which shall remain in full force and effect, unless the
result of any such invalidity or unenforceability shall be to
cause a material failure of consideration to the party seeking to
sustain the validity or enforceability of the subject provision.
9.7 NOTICES. All notices and other communications
hereunder shall be deemed to have been duly given on the date of
receipt if delivered personally or three (3) business days after
deposit in the United States Mail, if in writing and sent to the
Company at its address provided following its signature to this
Agreement (Attention: Philip K. Stapleton), or to Executive at
the address provided following his signature to this Agreement,
as the case may be, or to such other address as one party shall
have given to the other in accordance with this provision.
9.8 EFFECT OF CAPTIONS AND HEADINGS. The captions and
headings contained herein are for convenience only, do not
constitute a part of this Agreement, and shall not be used in
construing it.
9<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement, as an instrument under seal, as of the day and year
first written above.
"Company"
JWGENESIS FINANCIAL CORP.
By: /s/ Joel E. Marks
Joel E. Marks
Executive Vice President
Address: 980 North Federal Highway
Suite 210
Boca Raton, Florida 33432
"Executive"
/s/ Marshall T. Leeds (SEAL)
Marshall T. Leeds
Address: 4040 Sanctuary Ln.
Boca Raton, Florida 33431
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of the 12th day of June, 1998, by and between
JOEL E. MARKS, a resident of the State of Georgia ("Executive"),
and JWGENESIS FINANCIAL CORP., a Florida corporation (the
"Company").
1. DUTIES AND EXTENT OF SERVICES
1.1 POSITION AND DUTIES. The Company hereby enters into
this Agreement to evidence and provide for the employment of
Executive as Executive Vice President and Chief Financial Officer
of the Company. Consistent with the policies, guidelines, and
directives established or promulgated by the Board of Directors
of the Company (the "Board"), Executive shall be responsible for
financial affairs, including financial reporting, banking
relationships, financial planning and budgeting, accounting,
financial controls, and related functions of the Company, and,
together with the Chief Executive Officer of the Company, shall
be directly involved in the development and establishment of
policy and strategic initiatives for the Company. Executive
shall only be required to report directly to the Chief Executive
Officer. Executive agrees to serve, without additional
compensation, in a similar executive capacity with subsidiaries
of the Company and in such other executive capacities as may be
designated by the Board consistent with the positions,
responsibilities, and authority of Executive hereunder.
1.2 EXTENT OF SERVICES. Executive agrees to devote his
full working time, energy, and skill to the business of the
Company and to the promotion of the Company's interests and to
discharge his duties in good faith.
2. TERM
The term of this Agreement (the "Term") shall commence on
June 12, 1998 and shall continue to December 31, 2001, and shall
be automatically renewed for successive one-year terms unless
either party notifies the other in writing of its election not to
renew at least six months prior to the scheduled termination of
the Term or any renewal term. This Agreement may be earlier
terminated only in accordance with Section 7 hereof.
3. COMPENSATION
3.1 BASE SALARY. The Company shall pay Executive a base
annual salary (the "Base Salary") of Two Hundred Fifty Thousand
Dollars ($250,000.00) for each fiscal year during the Term
(prorated for any partial fiscal year), subject, however, to
increase for each fiscal year beginning January 1, 1999 by (a) an
amount equal to the increase for the previous year in the
Consumer Price Index for Urban Wage Earners and Clerical Workers,
<PAGE>
U.S. City Average All Items, 1967=100 (the "Cost of Living
Adjustment") or (b) by such higher amount as may be approved by
the Board or the Compensation Committee thereof upon
consideration of such factors that it believes to be relevant and
appropriate. Each year's executive compensation analysis shall
be considered by the Board within 45 days following the end of
the immediately preceding fiscal year; adjustments to Executive's
Base Salary for the ensuing fiscal year shall be made within 75
days of the commencement of that year, and shall be applied
retroactive to such commencement date. All Base Salary shall be
paid in equal periodic installments in accordance with the
Company's normal payroll schedule.
3.2 INCENTIVE BONUS PLAN PARTICIPATION - In addition to the
base salary, Executive will be entitled to participate in the
Company's Management Incentive Bonus Plan, pursuant to and
subject to the provisions of which Executive will be entitled to
receive 21.5% of an executive bonus compensation pool (the
"Executive Compensation Pool") consisting of an aggregate of 15%
of the annual pre-tax profits of the Company; provided, however,
that such percentage may be reduced at the discretion of the
committee administering the plan, but not below 5 %.
3.3 GENERAL INCENTIVE COMPENSATION PROGRAMS. The Company
hereby agrees that Executive shall be entitled to participate, to
an extent consistent with his title and Base Salary, in such
incentive compensation programs, including stock option or other
stock-based compensation plans or programs, as may be established
by the Board for the Company's officers, other key employees, or
employees as a group.
3.4 RESTRICTED STOCK INCENTIVE PLAN. Pursuant to and
subject to the provisions of the Company's Management Incentive
Bonus Plan and the award agreements issued thereunder, upon the
adoption of a restricted stock incentive plan by the Company (the
"Restricted Stock Plan"), which may be included in and adopted as
part of the Company's Management Incentive Bonus Plan, twenty-
five percent (25%) of Executive's annual incentive compensation
payable thereafter, including pursuant to Section 3.2, at the
option of the Company, will be paid in the form of restricted
Company common stock. The restricted stock will be awarded at
eighty percent (80%) of the average closing price of the common
stock for the last ten consecutive trading days in the calendar
year to which the bonus relates and shall vest 50% on each of the
first and second anniversary of the award. The Executive may
elect to exchange up to one-third of the restricted stock awarded
under the Restricted Stock Plan for a non-qualified stock option
to purchase three shares for each share of restricted stock
awarded, at an exercise price per share equal to the average
closing price of the common stock for the last ten consecutive
trading days in the calendar year to which the bonus relates.
Any such non-qualified stock option shall vest and be exercisable
as to one-third of the total number of shares on each of the
first three anniversaries of the grant date thereof, which shall
be the same date on which the restricted exchange was made and
will have a ten year life, with provisions for accelerated
vesting upon change in control, death, disability, or retirement.
2<PAGE>
4. BENEFITS
During Executive's employment hereunder, Executive shall:
(a) be eligible to participate in employee fringe benefits and
any pension or profit sharing plans that may be provided by the
Company for executive employees in accordance with the provisions
of any such plans, as the same may be in effect from time to
time; (b) be eligible to participate in any medical and health
plans or other employee welfare benefit plans that may be
provided by the Company for its executive employees in accordance
with the provisions of any such plans, as the same may be in
effect from time to time; (c) be entitled to annual paid vacation
in accordance with Company policy that may be applicable to
executive employees from time to time; and (d) be entitled to
sick leave, sick pay, and disability benefits in accordance with
any Company policy that may be applicable to executive employees
from time to time.
5. CONFIDENTIAL INFORMATION
Executive agrees that he will hold in a fiduciary capacity,
for the benefit of the Company, all secret or confidential
information, knowledge, or data of the Company ("Confidential
Information") obtained by him during his employment by the
Company, and will not disclose such information to any person
other than in the course of performing his duties hereunder or as
may be required by law or by order of a court or other regulatory
authority of competent jurisdiction, unless the Company shall
consent in writing thereto. Additionally, Executive agrees that,
after termination of his employment under this Agreement, he will
not disclose, at any time, to any person, any Confidential
Information constituting a trade secret under applicable law and,
for a period of one (1) year after termination of employment
under this Agreement for cause, Executive will not disclose
Confidential Information to any person whether or not such
information constitutes a trade secret under applicable law. For
the purposes of this Section 5, information that is or becomes a
part of the public domain (other than as a result of Executive's
breach) shall not be deemed Confidential Information.
6. NO RECRUITMENT; NON-COMPETITION
6.1. NO RECRUITMENT. During Executive's employment
hereunder and for one (1) year after the termination of
Executive's employment hereunder for cause (or for such time as
Executive is receiving severance pay from the Company for
termination other than for cause) plus, at the option of the
Company, an additional six (6) months provided that during such
six-month period Executive is then being employed for a base
compensation of at least Twenty Thousand Dollars ($20,000.00) per
month or the Company pays to Executive Twenty Thousand Dollars
($20,000.00) per month, Executive will not, directly or
indirectly, (a) induce or conspire with, or attempt to induce or
conspire with, any of the officers or employees or registered
representatives of the Company or any of its subsidiaries or
affiliates to terminate their employment or relationship with or
compete against the Company or any of its subsidiaries or
affiliates, or any of the clients or customers of any such entity
to terminate their relationship with any such entity, or (b)
divert or attempt to divert any or all of such clients' or
customers' business with the Company or any of its subsidiaries
3<PAGE>
or affiliates from any such entity, unless the Company shall
consent in writing thereto.
6.2 NON-COMPETITION. During Executive's employment
hereunder and for one (1) year after the termination of
Executive's employment hereunder for cause (or Executive's
voluntary termination of such employment in violation of this
Agreement), Executive will not, directly or indirectly, for any
reason, for his own account, or on behalf of or together with any
other person, be engaged as an officer, director, employee,
independent contractor, consultant or advisor, or sales
representative of any kind, or as an owner, co-owner, or other
investor of or in, a business that provides securities brokerage,
corporate finance, asset management, capital formation,
investment banking, financial advisory, or other services in
competition with the business engaged in by the Company within
the continental United States on the date hereof or, to the
extent permitted by and enforceable under applicable law, in
which the Company is so engaged on the date of Executive's
termination.
Notwithstanding the foregoing, Executive may own and hold as
a passive investment up to one percent (1%) of the outstanding
capital stock of a competing entity if that class of capital
stock is listed for trading or quotation on a national or
regional stock exchange registered with the SEC or on The Nasdaq
Stock Market.
6.3 DAMAGES. Because of the difficulty in measuring the
economic losses that may be incurred by the Company as a result
of any breach by Executive of the covenants in Section 6.1, and
because of the immediate and irreparable damage that could be
caused to the Company for which it would have no other adequate
remedy, Executive agrees that the Company may enforce the
provisions of Section 6.2 by any equitable or legal means,
including seeking an appropriate injunction or restraining order
against Executive if a breach of any of those provisions occurs.
6.4 REASONABLE RESTRAINT. The parties hereto each agree
that Sections 6.2 and 6.3 impose a reasonable restraint on
Executive in light of the position of Executive with the Company,
the activities and business of the Company on the date hereof,
and the current business plans of the Company (of which Executive
acknowledges that he is aware).
6.5 SEVERABILITY; REFORMATION. The covenants in this
Section 6 are severable and separate, and the unenforceability of
any specific covenant in this Section 6 is not intended by any
party hereto to, and shall not, affect the provisions of any
other covenant in this Section 6. If any court of competent
jurisdiction shall determine that the scope, time, or territorial
restrictions set forth in Section 6.2 are unreasonable as applied
to Executive, the parties hereto acknowledge their mutual
intention and agreement that those restrictions be enforced to
the fullest extent the court deems reasonable, and thereby shall
be reformed to that extent as applied to Executive.
6.6 INDEPENDENT COVENANT. All of the covenants in this
Section 6 are intended by each party hereto to be, and shall be
construed as, an agreement independent of any other provision in
this Agreement, and the existence of any claim or cause of action
of Executive against the Company, whether predicated on this
4<PAGE>
Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of any covenant in this Section 6. It
is specifically agreed that the period specified in Section 6.2
shall be computed by excluding from that computation any time
during which Executive is in violation of any provision of
Section 6.2.
6.7 MATERIALITY. The Company and Executive hereby agree
that this Section 6 is a material and substantial part of this
Agreement.
7. TERMINATION OF EMPLOYMENT
7.1 BY COMPANY. Executive's employment under this
Agreement may be terminated by the Company at any time for cause.
For the purposes of this Section 7.1, "cause" shall mean: (a) the
conviction of Executive for an act or acts of dishonesty by
Executive that constitutes a felony under applicable law and that
subjects the Company to substantial loss or detriment, as
determined by a majority of the members of the Board; (b) the
imposition of disciplinary action against Executive, pursuant to
a final non-appealable action, by a regulatory body having
disciplinary authority over members of Executive's profession,
which disciplinary action prevents Executive from performing his
duties hereunder for a period of not less than thirty-one (31)
consecutive days and is determined by a majority of the members
of the Board to have caused substantial loss or detriment to the
Company; or (c) Executive's habitual neglect of, or refusal to
perform, his duties under this Agreement, or deliberate and
intentional disregard of lawful instructions from the Board;
provided, however, that Executive shall have received written
notice of such alleged neglect, refusal, or disregard from the
Board and shall have failed within thirty (30) days after the
receipt of such notice to cure and correct such alleged neglect,
refusal, or disregard (or to begin in good faith to effect such
cure and correction if such cannot practically be completed
within such 30-day period).
If Executive's employment is terminated under this Section
7.1, the Company shall have no further obligation to Executive
hereunder except to pay to him, in cash on the effective date of
such termination, any amount accrued but unpaid hereunder as of
the termination date, except that the rights of Executive (and
the obligations of the Company) under Section 8 shall continue
without regard to such termination. If Executive's employment is
terminated by the Company for cause, as provided above, this
Agreement shall terminate and neither party shall have any
further obligation to the other, except as provided above, and
except for Executive's agreements contained in Sections 5 and 6.
7.2 BY DEATH. If Executive dies, this Agreement shall
terminate on the date of Executive's death. In such event, the
Company shall pay promptly to Executive's designated beneficiary
or, if no designated beneficiary, to Executive's estate, any
compensation or other amount earned or accrued as of the date of
Executive's death but not yet paid and any other payments to
which Executive is entitled pursuant to Section 3.1 and Section 4
hereof (as a result of transactions in process as of the date of
Executive's death), and permit Executive's estate or legal
representative to exercise (during the one-year period
thereafter) any outstanding stock option with respect to the
number of shares for which the option has vested and has not
5<PAGE>
expired as of such date.
7.3 BY DISABILITY. If Executive becomes unable to perform
his normal duties hereunder as a result of his incapacity due to
physical or mental illness for a period of at least one hundred
twenty (120) consecutive days, the Company shall have the option
to terminate this Agreement upon the expiration of such period
(the "Disability Date"). In such an event, the Company shall pay
to Executive (within thirty (30) days thereof) all amounts
accrued but unpaid as of the Disability Date and, in the manner
and at the times set forth in Section 3.1 above, an amount equal
to the difference between (a) the Base Salary payable for the
remainder of the Term and (b) 1.4285714 times the sum of all
payments made to Executive under any disability insurance
coverage provided to him pursuant to Section 4 hereof; and
Executive shall continue to vest in, and remain entitled to
exercise, any outstanding stock option in the manner and at the
times otherwise set forth therein.
7.4 BY DISCHARGE. If Executive's employment under the
terms of this Agreement is terminated by the Company for any
reason other than cause, death, or disability (in any such case a
"Discharge"), then (a) the Company shall pay to Executive, on the
date of Discharge, a lump sum cash amount equal to the greater of
(i) 12 months of Executive's Base Salary at the time of the
Discharge and (ii) Executive's Base Salary, without regard to
Cost of Living Adjustments, payable for the remainder of the
Term; (b) the Company shall pay to Executive the amounts, and on
the schedule, of bonus compensation under Section 3.2 that would
be payable to Executive during the remainder of the Term in the
absence of the Discharge; and (c) Executive shall immediately
become fully vested in, and be entitled to exercise for a period
of 90 days after the date of Discharge, all outstanding stock
options not previously vested or exercised. Such payment shall
be in addition to other payments, if any, to which Executive is
entitled pursuant to Section 4 hereof, and the rights of
Executive (and the obligations of the Company) under Section 8
shall continue without regard to such Discharge. No Discharge
shall be permitted pursuant to this Section 7.4 unless approved
by a majority of the members of the Board.
7.5 BY EXECUTIVE. If (a) the Company significantly reduces
Executive's authority or duties as described in Section 1.1 (or
Executive's standing within the Company as a function of
Executive's relationships with the Board or with other members of
management of the Company) other than at the direction of the New
York Stock Exchange or similar regulatory authority with
jurisdiction over the Company or any of its subsidiaries or (b) a
change of control of the Company occurs that is not approved by
Executive, then, in any such event, Executive may terminate this
Agreement and such termination shall be treated as if it were a
Discharge under Section 7.4; provided that the Board shall have
received written notice from Executive of any reduction described
in clause (a) above upon which Executive proposes to base a
termination and the Company shall have failed within thirty (30)
days thereafter to reverse the situation. For purposes hereof,
"change of control" shall mean (c) the acquisition by a person or
entity other than Executive or a now existing shareholder of the
Company (or any affiliate of Executive or such a shareholder of
the Company), whether in one or several transactions, by
exchange, merger, consolidation, assignment, stock spin-off,
stock split-up, or other transaction, of more than thirty-five
6<PAGE>
percent (35%) of the voting stock of the Company, or of the right
to vote or to direct the voting of such percentage of voting
stock; or (d) a change in the membership of the Board of
Directors of the Company such that a majority of the members are
persons who are not Continuing Directors. For purposes of this
Agreement, a "Continuing Director" is a person who is a member of
the Board of Directors of the Company on the date hereof or a
person who is elected as a director of the Company upon the
nomination by or approval of a majority of the Continuing
Directors in office.
8. LEGAL EXPENSE REIMBURSEMENTS
8.1 INDEMNIFICATION LEGAL EXPENSES. Without limiting the
scope of any indemnification to which Executive is or may be
entitled under applicable law or pursuant to the Company's
Articles of Incorporation, Bylaws, or contract for
indemnification of officers or directors of the Company, the
Company shall indemnify and hold Executive harmless from and
against the costs and expenses (including attorneys' fees and
costs) of Executive's defense with respect to any suit,
investigation, or other action or proceeding instituted or
threatened against Executive by any person, agency, body, or
other entity that is based on, arises out of, or is related to
any position that Executive has or had with the Company or any of
its subsidiaries or other affiliates or otherwise to the
performance by Executive of any duty or responsibility under this
Agreement. To the maximum extent permitted by applicable law,
the Company agrees to advance to Executive the amount of such
costs and expenses as they are incurred by Executive (upon
written request by Executive therefor, accompanied by reasonably
detailed explanation of the basis for such advance(s)), and
Executive agrees, to the extent that such agreement may be
required by applicable law to permit such advances, to account to
the Company for such advance(s), including to refund to the
Company any such amount that it may ultimately be determined
(according to applicable law) that Executive is not entitled to
receive as indemnification or reimbursement for such costs and
expenses as a result of the final disposition of the underlying
suit, investigation, or other action or proceeding in respect of
which such costs or expenses were incurred. The Company agrees
to take such corporate action as may be necessary or advisable,
if requested by Executive, to authorize, approve, or effectuate
and implement the rights conferred upon Executive in this Section
8.1.
8.2 DISPUTES RELATING TO AGREEMENT. If (a) a Dispute (as
hereinafter defined) arises, and (b) either a court, governmental
agency, or similar body of competent jurisdiction issues a final,
nonappealable order, judgment or decree (a "Final Order"), or
Executive and the Company reach a definitive settlement of the
Dispute (a "Settlement"), that sustains the position in the
Dispute taken by Executive prior to the Dispute Date (as
hereinafter defined), then the Company shall reimburse Executive
for his reasonable legal expenses actually incurred from and
after the Dispute Date in connection with obtaining the Final
Order or Settlement, to the extent such expenses exceeded any
award for legal expenses contained in any such Final Order. For
purposes hereof, the "Dispute Date" shall be ten (10) business
days after the date upon which Executive delivers to the Company,
in accordance with Section 9.7, written notice setting forth the
particulars of a matter covered by this Agreement about which
7<PAGE>
Executive and the Company disagree (the "Dispute") and stating
his intention to seek legal counsel for assistance regarding such
matter. Except as expressly set forth above, the Company
undertakes no obligation to advance, reimburse, or otherwise pay
or assume any expense of Executive incurred in interpreting or
enforcing this Agreement.
8.3 SURVIVAL. The provisions of this Section 8 shall
survive any termination of Executive's employment or of this
Agreement.
9. MISCELLANEOUS
9.1 ASSIGNMENT. This Agreement is personal in nature and
may not be assigned by either party without the express written
consent of the other party; provided, however, that the
provisions of this Agreement shall inure to the benefit of and be
binding upon each successor of the Company, whether by merger,
consolidation, transfer of all or substantially all assets, or
otherwise.
9.2 WAIVER. The waiver by any party to this Agreement of a
breach by the other party of any of the provisions of this
Agreement shall not operate as or be construed as a waiver of any
different or subsequent breach.
9.3 ENTIRE AGREEMENT. This Agreement constitutes and
expresses the entire agreement of the parties with respect to the
subject matter hereof.
9.4 GOVERNING LAW. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the
State of Florida (without regard to its rules of conflicts of
laws).
9.5 NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement, whether express or implied, is intended to or shall be
construed to confer upon or give any person not a party hereto
any rights or remedies hereunder, whether as a third-party
beneficiary or otherwise.
9.6 SEVERABILITY. Should any clause or any other portion
of this Agreement be determined to be void or unenforceable for
any reason, such determination shall not affect the validity or
enforceability of any other clause or portion of this Agreement,
all of which shall remain in full force and effect, unless the
result of any such invalidity or unenforceability shall be to
cause a material failure of consideration to the party seeking to
sustain the validity or enforceability of the subject provision.
9.7 NOTICES. All notices and other communications
hereunder shall be deemed to have been duly given on the date of
receipt if delivered personally or three (3) business days after
deposit in the United States Mail, if in writing and sent to the
Company at its address provided following its signature to this
Agreement (Attention: Philip K. Stapleton), or to Executive at
the address provided following his signature to this Agreement,
as the case may be, or to such other address as one party shall
have given to the other in accordance with this provision.
9.8 EFFECT OF CAPTIONS AND HEADINGS. The captions and
headings contained herein are for convenience only, do not
8<PAGE>
constitute a part of this Agreement, and shall not be used in
construing it.
IN WITNESS WHEREOF, the parties have executed this
Agreement, as an instrument under seal, as of the day and year
first written above.
"Company"
JWGENESIS FINANCIAL CORP.
By: /s/ Marshall T. Leeds
Marshall T. Leeds
President
Address: 980 North Federal Highway
Suite 210
Boca Raton, Florida 33432
"Executive"
/s/ Joel E. Marks (SEAL)
Joel E. Marks
Address: 195 Sheridan Pointe Ln.
Atlanta, Georgia 30342
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of the 12th day of June, 1998, by and between
PHILLIP C. STAPLETON a resident of the State of California
("Executive"), and JWGENESIS FINANCIAL CORP., a Florida
corporation (the "Company").
1. DUTIES AND EXTENT OF SERVICES
1.1 POSITION AND DUTIES. The Company hereby enters into
this Agreement to evidence and provide for the employment of
Executive as Chief Operating Officer of the Company and President
of its institutional services subsidiary, Genesis Merchant Group
Securities LLC ("Genesis Securities"). Consistent with the
policies, guidelines, and directives established or promulgated
by the Board of Directors of the Company (the "Board"), Executive
shall be in charge of the operations of Genesis Securities and of
supervising and coordinating such operations with the activities
of the Company's other business divisions and shall be consulted
by the Chief Executive Officer of the Company in connection with
the development, establishment, and implementation of policy and
strategic initiatives for the Company. Executive shall only be
required to report directly to the Chief Executive Officer of the
Company and the Board of Directors of Genesis Securities.
Executive agrees to serve, without additional compensation, in a
similar executive capacity with subsidiaries of the Company and
in such other executive capacities as may be designated by the
Board consistent with the positions, responsibilities, and
authority of Executive hereunder.
1.2 EXTENT OF SERVICES. Executive agrees to devote his
full working time, energy, and skill to the business of the
Company and to the promotion of the Company's interests and to
discharge his duties in good faith.
1.3 RESIDENCE. Nothing contained herein shall require
Executive to change his place of residence from the environs of
San Francisco, California during the Term (defined below).
2. TERM
The term of this Agreement (the "Term") shall commence on
June 12, 1998 and shall continue to December 31, 2001, and shall
be automatically renewed for successive one-year terms unless
either party notifies the other in writing of its election not to
renew at least six months prior to the scheduled termination of
the Term or any renewal term. This Agreement may be earlier
terminated only in accordance with Section 7 hereof.
<PAGE>
3. COMPENSATION
3.1 BASE SALARY. The Company shall pay Executive a base
annual salary (the "Base Salary") of Two Hundred Fifty Thousand
Dollars ($250,000.00) for each fiscal year during the Term
(prorated for any partial fiscal year), subject, however, to
increase for each fiscal year beginning January 1, 1999 by (a) an
amount equal to the increase for the previous year in the
Consumer Price Index for Urban Wage Earners and Clerical Workers,
San Francisco, California Average All Items, 1967=100 (the "Cost
of Living Adjustment"), or (b) by such higher amount as may be
approved by the Board or the Compensation Committee thereof upon
consideration of such factors that it believes to be relevant and
appropriate. Each year's executive compensation analysis shall be
considered by the Board within 45 days following the end of the
immediately preceding fiscal year; adjustments to Executive's
Base Salary for the ensuing fiscal year shall be made within 75
days of the commencement of that year, and shall be applied
retroactive to such commencement date. All Base Salary shall be
paid in equal periodic installments in accordance with the
Company's normal payroll schedule.
3.2 INCENTIVE BONUS PLAN PARTICIPATION - In addition to the
base salary, Executive will be entitled to participate in the
Company's Management Incentive Bonus Plan, pursuant to and
subject to the provisions of which Executive will be entitled to
receive 28.5% of an executive bonus compensation pool (the
"Executive Compensation Pool") consisting of an aggregate of 15%
of the annual pre-tax profits of the Company; provided, however,
that such percentage may be reduced at the discretion of the
committee administering the plan, but not below 20%.
3.3 GENERAL INCENTIVE COMPENSATION PROGRAMS. The Company
hereby agrees that Executive shall be entitled to participate, to
an extent consistent with his title and Base Salary, in such
incentive compensation programs, including stock option or other
stock-based compensation plans or programs, as may be established
by the Board for the Company's officers, other key employees, or
employees as a group.
3.4 RESTRICTED STOCK INCENTIVE PLAN. Pursuant to and
subject to the provisions of the Company's Management Incentive
Bonus Plan and the award agreements issued thereunder, upon the
adoption of a restricted stock incentive plan by the Company (the
"Restricted Stock Plan"), which may be included in and adopted as
part of the Company's Management Incentive Bonus Plan, twenty-
five percent (25%) of Executive's annual incentive compensation
payable thereafter, including pursuant to Section 3.2, at the
option of Executive and the Company, will be paid in the form of
restricted Company common stock. The restricted stock will be
awarded at eighty percent (80%) of the average closing price of
the common stock for the last ten consecutive trading days in the
calendar year to which the bonus relates and shall vest 50% on
each of the first and second anniversary of the award. The
Executive may elect to exchange up to one-third of the restricted
stock awarded under the Restricted Stock Plan for a non-qualified
stock option to purchase three shares for each share of
restricted stock awarded, at an exercise price per share equal to
the average closing price of the common stock for the last ten
consecutive trading days in the calendar year to which the bonus
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relates. Any such non-qualified stock option shall vest and be
exercisable as to one-third of the total number of shares on each
of the first three anniversaries of the grant date thereof, which
shall be the same date on which the restricted exchange was made
and will have a ten year life, with provisions for accelerated
vesting upon change in control, death, disability, or retirement.
4. BENEFITS
During Executive's employment hereunder, Executive shall:
(a) be eligible to participate in employee fringe benefits and
any pension or profit sharing plans that may be provided by the
Company for executive employees in accordance with the provisions
of any such plans, as the same may be in effect from time to
time; (b) be eligible to participate in any medical and health
plans or other employee welfare benefit plans that may be
provided by the Company for its executive employees in accordance
with the provisions of any such plans, as the same may be in
effect from time to time; (c) be entitled to annual paid vacation
in accordance with Company policy that may be applicable to
executive employees from time to time; and (d) be entitled to
sick leave, sick pay, and disability benefits in accordance with
any Company policy that may be applicable to executive employees
from time to time.
5. CONFIDENTIAL INFORMATION
Executive agrees that he will hold in a fiduciary capacity,
for the benefit of the Company, all secret or confidential
information, knowledge, or data of the Company ("Confidential
Information") obtained by him during his employment by the
Company, and will not disclose such information to any person
other than in the course of performing his duties hereunder or as
may be required by law or by order of a court or other regulatory
authority of competent jurisdiction, unless the Company shall
consent in writing thereto. Additionally, Executive agrees that,
after termination of his employment under this Agreement, he will
not disclose, at any time, to any person, any Confidential
Information constituting a trade secret under applicable law and,
for a period of one (1) year after termination of employment
under this Agreement for cause, Executive will not disclose
Confidential Information to any person whether or not such
information constitutes a trade secret under applicable law. For
the purposes of this Section 5, information that is or becomes a
part of the public domain (other than as a result of Executive's
breach) shall not be deemed Confidential Information.
6. NO RECRUITMENT; NON-COMPETITION
6.1 NO RECRUITMENT. During Executive's employment
hereunder and for one (1) year after the termination of
Executive's employment hereunder for cause (or for such time as
Executive is receiving severance pay from the Company for
termination other than for cause) plus, at the option of the
Company, an additional six (6) months provided that during such
six-month period Executive is then being employed for a base
compensation of at least Twenty Thousand Dollars ($20,000.00) per
month or the Company pays to Executive Twenty Thousand Dollars
($20,000.00) per month, Executive will not, directly or
indirectly, (a) induce or conspire with, or attempt to induce or
3
<PAGE>
conspire with, any of the officers or employees or registered
representatives of the Company or any of its subsidiaries or
affiliates to terminate their employment or relationship with or
compete against the Company or any of its subsidiaries or
affiliates, or any of the clients or customers of any such entity
to terminate their relationship with any such entity, or (b)
divert or attempt to divert any or all of such clients' or
customers' business with the Company or any of its subsidiaries
or affiliates from any such entity, unless the Company shall
consent in writing thereto.
6.2 NON-COMPETITION. During Executive's employment
hereunder and for one (1) year after the termination of
Executive's employment hereunder for cause (or Executive's
voluntary termination of such employment in violation of this
Agreement), Executive will not, directly or indirectly, for any
reason, for his own account, or on behalf of or together with any
other person, be engaged as an officer, director, employee,
independent contractor, consultant or advisor, or sales
representative of any kind, or as an owner, co-owner, or other
investor of or in, a business that provides securities brokerage,
corporate finance, asset management, capital formation,
investment banking, financial advisory, or other services in
competition with the business engaged in by the Company within
the continental United States on the date hereof or, to the
extent permitted by and enforceable under applicable law, in
which the Company is so engaged on the date of Executive's
termination.
Notwithstanding the foregoing, Executive may own and hold as
a passive investment up to one percent (1%) of the outstanding
capital stock of a competing entity if that class of capital
stock is listed for trading or quotation on a national or
regional stock exchange registered with the SEC or on The Nasdaq
Stock Market.
6.3 DAMAGES. Because of the difficulty in measuring the
economic losses that may be incurred by the Company as a result
of any breach by Executive of the covenants in Section 6.1, and
because of the immediate and irreparable damage that could be
caused to the Company for which it would have no other adequate
remedy, Executive agrees that the Company may enforce the
provisions of Section 6.2 by any equitable or legal means,
including seeking an appropriate injunction or restraining order
against Executive if a breach of any of those provisions occurs.
6.4 REASONABLE RESTRAINT. The parties hereto each agree
that Sections 6.2 and 6.3 impose a reasonable restraint on
Executive in light of the position of Executive with the Company,
the activities and business of the Company on the date hereof,
and the current business plans of the Company (of which Executive
acknowledges that he is aware).
6.5 SEVERABILITY; REFORMATION. The covenants in this
Section 6 are severable and separate, and the unenforceability of
any specific covenant in this Section 6 is not intended by any
party hereto to, and shall not, affect the provisions of any
other covenant in this Section 6. If any court of competent
jurisdiction shall determine that the scope, time, or territorial
restrictions set forth in Section 6.2 are unreasonable as applied
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<PAGE>
to Executive, the parties hereto acknowledge their mutual
intention and agreement that those restrictions be enforced to
the fullest extent the court deems reasonable, and thereby shall
be reformed to that extent as applied to Executive.
6.6 INDEPENDENT COVENANT. All of the covenants in this
Section 6 are intended by each party hereto to be, and shall be
construed as, an agreement independent of any other provision in
this Agreement, and the existence of any claim or cause of action
of Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of any covenant in this Section 6. It
is specifically agreed that the period specified in Section 6.2
shall be computed by excluding from that computation any time
during which Executive is in violation of any provision of
Section 6.2.
6.7 MATERIALITY. The Company and Executive hereby agree
that this Section 6 is a material and substantial part of this
Agreement.
7. TERMINATION OF EMPLOYMENT
7.1 BY COMPANY. Executive's employment under this
Agreement may be terminated by the Company at any time for cause.
For the purposes of this Section 7.1, "cause" shall mean: (a) the
conviction of Executive for an act or acts of dishonesty by
Executive that constitutes a felony under applicable law and that
subjects the Company to substantial loss or detriment, as
determined by a majority of the members of the Board; (b) the
imposition of disciplinary action against Executive, pursuant to
a final non-appealable action, by a regulatory body having
disciplinary authority over members of Executive's profession,
which disciplinary action prevents Executive from performing his
duties hereunder for a period of not less than thirty-one (31)
consecutive days and is determined by a majority of the members
of the Board to have caused substantial loss or detriment to the
Company; or (c) Executive's habitual neglect of, or refusal to
perform, his duties under this Agreement, or deliberate and
intentional disregard of lawful instructions from the Board;
provided, however, that Executive shall have received written
notice of such alleged neglect, refusal, or disregard from the
Board and shall have failed within thirty (30) days after the
receipt of such notice to cure and correct such alleged neglect,
refusal, or disregard (or to begin in good faith to effect such
cure and correction if such cannot practically be completed
within such 30-day period).
If Executive's employment is terminated under this Section
7.1, the Company shall have no further obligation to Executive
hereunder except to pay to him, in cash on the effective date of
such termination, any amount accrued but unpaid hereunder as of
the termination date, except that the rights of Executive (and
the obligations of the Company) under Section 8 shall continue
without regard to such termination. If Executive's employment is
terminated by the Company for cause, as provided above, this
Agreement shall terminate and neither party shall have any
further obligation to the other, except as provided above, and
except for Executive's agreements contained in Sections 5 and 6.
5
<PAGE>
7.2 BY DEATH. If Executive dies, this Agreement shall
terminate on the date of Executive's death. In such event, the
Company shall pay promptly to Executive's designated beneficiary
or, if no designated beneficiary, to Executive's estate, any
compensation or other amount earned or accrued as of the date of
Executive's death but not yet paid and any other payments to
which Executive is entitled pursuant to Section 3.1 and Section 4
hereof (as a result of transactions in process as of the date of
Executive's death), and permit Executive's estate or legal
representative to exercise (during the one-year period
thereafter) any outstanding stock option with respect to the
number of shares for which the option has vested and has not
expired as of such date.
7.3 BY DISABILITY. If Executive becomes unable to perform
his normal duties hereunder as a result of his incapacity due to
physical or mental illness for a period of at least one hundred
twenty (120) consecutive days, the Company shall have the option
to terminate this Agreement upon the expiration of such period
(the "Disability Date"). In such an event, the Company shall pay
to Executive (within thirty (30) days thereof) all amounts
accrued but unpaid as of the Disability Date and, in the manner
and at the times set forth in Section 3.1 above, an amount equal
to the difference between (a) the Base Salary payable for the
remainder of the Term and (b) 1.4285714 times the sum of all
payments made to Executive under any disability insurance
coverage provided to him pursuant to Section 4 hereof; and
Executive shall continue to vest in, and remain entitled to
exercise, any outstanding stock option in the manner and at the
times otherwise set forth therein.
7.4 BY DISCHARGE. If Executive's employment under the
terms of this Agreement is terminated by the Company for any
reason other than cause, death, or disability (in any such case a
"Discharge"), then (a) the Company shall pay to Executive, on the
date of Discharge, a lump sum cash amount equal to the greater of
(i) 12 months of Executive's Base Salary at the time of the
Discharge and (ii) Executive's Base Salary, without regard to
Cost of Living Adjustments, payable for the remainder of the
Term; (b) the Company shall pay to Executive the amounts, and on
the schedule, of bonus compensation under Section 3.2 that would
be payable to Executive during the remainder of the Term in the
absence of the Discharge; and (c) Executive shall immediately
become fully vested in, and be entitled to exercise for a period
of 90 days after the date of Discharge, all outstanding stock
options not previously vested or exercised. Such payment shall
be in addition to other payments, if any, to which Executive is
entitled pursuant to Section 4 hereof, and the rights of
Executive (and the obligations of the Company) under Section 8
shall continue without regard to such Discharge. No Discharge
shall be permitted pursuant to this Section 7.4 unless approved
by a majority of the members of the Board.
7.5 BY EXECUTIVE. If (a) the Company significantly reduces
Executive's authority or duties as described in Section 1.1 (or
Executive's standing within the Company as a function of
Executive's relationships with the Board or with other members of
management of the Company) other than at the direction of the New
York Stock Exchange or similar regulatory authority with
jurisdiction over the Company or any of its subsidiaries or (b) a
6
<PAGE>
change of control of the Company occurs that is not approved by
Executive, then, in any such event, Executive may terminate this
Agreement and such termination shall be treated as if it were a
Discharge under Section 7.4; provided that the Board shall have
received written notice from Executive of any reduction described
in clause (a) above upon which Executive proposes to base a
termination and the Company shall have failed within thirty (30)
days thereafter to reverse the situation. For purposes hereof,
"change of control" shall mean (c) the acquisition by a person or
entity other than Executive or a now existing shareholder of the
Company (or any affiliate of Executive or such a shareholder of
the Company), whether in one or several transactions, by
exchange, merger, consolidation, assignment, stock spin-off,
stock split-up, or other transaction, of more than thirty-five
percent (35%) of the voting stock of the Company, or of the right
to vote or to direct the voting of such percentage of voting
stock; or (d) a change in the membership of the Board of
Directors of the Company such that a majority of the members are
persons who are not Continuing Directors. For purposes of this
Agreement, a "Continuing Director" is a person who is a member of
the Board of Directors of the Company on the date hereof or a
person who is elected as a director of the Company upon the
nomination by or approval of a majority of the Continuing
Directors in office.
8. LEGAL EXPENSE REIMBURSEMENTS
8.1 INDEMNIFICATION LEGAL EXPENSES. Without limiting the
scope of any indemnification to which Executive is or may be
entitled under applicable law or pursuant to the Company's
Articles of Incorporation, Bylaws, or contract for
indemnification of officers or directors of the Company, the
Company shall indemnify and hold Executive harmless from and
against the costs and expenses (including attorneys' fees and
costs) of Executive's defense with respect to any suit,
investigation, or other action or proceeding instituted or
threatened against Executive by any person, agency, body, or
other entity that is based on, arises out of, or is related to
any position that Executive has or had with the Company or any of
its subsidiaries or other affiliates or otherwise to the
performance by Executive of any duty or responsibility under this
Agreement. To the maximum extent permitted by applicable law,
the Company agrees to advance to Executive the amount of such
costs and expenses as they are incurred by Executive (upon
written request by Executive therefor, accompanied by reasonably
detailed explanation of the basis for such advance(s)), and
Executive agrees, to the extent that such agreement may be
required by applicable law to permit such advances, to account to
the Company for such advance(s), including to refund to the
Company any such amount that it may ultimately be determined
(according to applicable law) that Executive is not entitled to
receive as indemnification or reimbursement for such costs and
expenses as a result of the final disposition of the underlying
suit, investigation, or other action or proceeding in respect of
which such costs or expenses were incurred. The Company agrees
to take such corporate action as may be necessary or advisable,
if requested by Executive, to authorize, approve, or effectuate
and implement the rights conferred upon Executive in this Section
8.1.
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8.2 DISPUTES RELATING TO AGREEMENT. If (a) a Dispute (as
hereinafter defined) arises, and (b) either a court, governmental
agency, or similar body of competent jurisdiction issues a final,
nonappealable order, judgment or decree (a "Final Order"), or
Executive and the Company reach a definitive settlement of the
Dispute (a "Settlement"), that sustains the position in the
Dispute taken by Executive prior to the Dispute Date (as
hereinafter defined), then the Company shall reimburse Executive
for his reasonable legal expenses actually incurred from and
after the Dispute Date in connection with obtaining the Final
Order or Settlement, to the extent such expenses exceeded any
award for legal expenses contained in any such Final Order. For
purposes hereof, the "Dispute Date" shall be ten (10) business
days after the date upon which Executive delivers to the Company,
in accordance with Section 9.7, written notice setting forth the
particulars of a matter covered by this Agreement about which
Executive and the Company disagree (the "Dispute") and stating
his intention to seek legal counsel for assistance regarding such
matter. Except as expressly set forth above, the Company
undertakes no obligation to advance, reimburse, or otherwise pay
or assume any expense of Executive incurred in interpreting or
enforcing this Agreement.
8.3 SURVIVAL. The provisions of this Section 8 shall
survive any termination of Executive's employment or of this
Agreement.
9. MISCELLANEOUS
9.1 ASSIGNMENT. This Agreement is personal in nature and
may not be assigned by either party without the express written
consent of the other party; provided, however, that the
provisions of this Agreement shall inure to the benefit of and be
binding upon each successor of the Company, whether by merger,
consolidation, transfer of all or substantially all assets, or
otherwise.
9.2 WAIVER. The waiver by any party to this Agreement of a
breach by the other party of any of the provisions of this
Agreement shall not operate as or be construed as a waiver of any
different or subsequent breach.
9.3 ENTIRE AGREEMENT. This Agreement constitutes and
expresses the entire agreement of the parties with respect to the
subject matter hereof.
9.4 GOVERNING LAW. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the
State of Florida (without regard to its rules of conflicts of
laws).
9.5 NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement, whether express or implied, is intended to or shall be
construed to confer upon or give any person not a party hereto
any rights or remedies hereunder, whether as a third-party
beneficiary or otherwise.
9.6 SEVERABILITY. Should any clause or any other portion
of this Agreement be determined to be void or unenforceable for
any reason, such determination shall not affect the validity or
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enforceability of any other clause or portion of this Agreement,
all of which shall remain in full force and effect, unless the
result of any such invalidity or unenforceability shall be to
cause a material failure of consideration to the party seeking to
sustain the validity or enforceability of the subject provision.
9.7 NOTICES. All notices and other communications
hereunder shall be deemed to have been duly given on the date of
receipt if delivered personally or three (3) business days after
deposit in the United States Mail, if in writing and sent to the
Company at its address provided following its signature to this
Agreement (Attention: Joel E. Marks), or to Executive at the
address provided following his signature to this Agreement, as
the case may be, or to such other address as one party shall have
given to the other in accordance with this provision.
9.8 EFFECT OF CAPTIONS AND HEADINGS. The captions and
headings contained herein are for convenience only, do not
constitute a part of this Agreement, and shall not be used in
construing it.
9<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement, as an instrument under seal, as of the day and year
first written above.
"Company"
Attest: JWGENESIS FINANCIAL CORP.
________________________________ By: /s/ Joel E. Marks
Secretary or Assistant Secretary Joel E. Marks
Executive Vice President
Address: 980 North Federal Highway
Suite 210
Boca Raton, Florida 33432
"Executive"
/s/ Philip C. Stapleton (SEAL)
Philip C. Stapleton
Address: Genesis Merchant Group
Securities
909 Montgomery, Suite 600
San Francisco, CA 94133
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of the 12th day of June, 1998, by and between
WILL K. WEINSTEIN, a resident of the State of California
("Executive"), and JWGENESIS FINANCIAL CORP., a Florida
corporation (the "Company").
1. DUTIES AND EXTENT OF SERVICES
1.1 POSITION AND DUTIES. The Company hereby enters into
this Agreement to evidence and provide for the employment of
Executive as Vice-Chairman of the Company. Consistent with the
policies, guidelines, and directives established or promulgated
by the Board of Directors of the Company (the "Board"), Executive
shall use his best efforts, in the course of his business and
personal activities, as opportunities are presented to Executive,
(a) to promote the interests of the Company and its subsidiaries
and affiliates, (b) to convey information regarding the Company
and its subsidiaries and affiliates to potential customers and
clients, and (c) to facilitate contacts and communications
between the Company and its subsidiaries and affiliates and
potential clients and customers. In connection with, but without
limiting the foregoing, Executive shall provide to the Company
periodic written or oral reports of his activities with respect
to the forgoing duties. Executive shall only be required to
report directly to the Chief Executive Officer of the Company.
Executive agrees to serve, without additional compensation, in a
similar executive capacity with subsidiaries of the Company.
1.2 EXTENT OF SERVICES. Executive agrees to devote such
reasonable amount of time to the promotion of the Company's
interests as Executive deems is necessary to discharge his duties
in good faith, with the understanding that Executive shall not be
required to work full time or keep regular or specified office
hours or provide his services at a particular location. During
the term of this Agreement, Executive will not engage in
activities competitive with the Company except that it is
understood and agreed that Executive may engage in the operation
of one or more investment partnerships and engage in money
management and investment advisory and similar activities for his
own account or for the account of others and the Company shall
have no interest in the profits or revenues generated by such
activities. If Executive is required to utilize a competing
business to satisfy his fiduciary obligations to clients, such
actions will not be deemed to be in conflict with his obligations
to the Company hereunder.
2. TERM
The term of this Agreement (the "Term") shall commence on
June 12, 1998 and shall continue to December 31, 2001. This
Agreement may be earlier terminated only in accordance with
Section 7 hereof.<PAGE>
3. COMPENSATION
3.1 INCENTIVE COMPENSATION. The Company shall pay
Executive incentive compensation pursuant to the gross income
received by the Company from the activities and in the
percentages set forth on Exhibit A.
3.2 EXPENSE ALLOWANCE. Executive will receive an annual
accountable allowance for expenses incurred in connection with
furtherance of the business of the Company in the amount of
$450,000. Such allowance will be reimbursed to Executive on a
monthly basis upon receipt from Executive of documentation, which
satisfies the substantiation requirements for deductions as
promulgated by the Internal Revenue Service from time to time, of
the incurrence of such expenses; any amount actually incurred
that does not satisfy such deduction requirements will be
reimbursed subject to applicable income tax withholding
requirements.
3.3 RESTRICTED STOCK INCENTIVE PLAN. Upon the adoption of a
Restricted Stock Incentive Plan by the Company (the "Restricted
Stock Plan"), which may be adopted as part of an Incentive Bonus
Plan of the Company, twenty-five percent (25%) of Executive's
annual incentive compensation payable thereafter, at the option
of Executive, will be paid in the form of restricted shares of
Company common stock. The shares of restricted stock will be
awarded at eighty percent (80%) of the average closing price of
the common stock for the last ten consecutive trading days in the
calendar year to which the bonus relates and shall vest (in the
sense that restrictions and the risks of forfeiture with respect
thereto shall lapse) 50% on each of the first and second
anniversary of the award. Executive may elect to exchange up to
one-third of the restricted stock awarded under the Restricted
Stock Plan for a non-qualified stock option to purchase three
shares for each share of restricted stock awarded, at an exercise
price per share equal to the average closing price of the common
stock for the last ten consecutive trading days in the calendar
year to which the bonus relates. Any such non-qualified stock
option shall vest and be exercisable as to one-third of the total
number of shares on each of the first three anniversaries of the
grant date thereof, which shall be the same date on which the
exchange of the shares of restricted stock was made, and will
have a ten-year term, with provisions for accelerated vesting
upon a change of control (as defined in Section 7.5), death,
disability, or retirement. Attached on Exhibit B is a schedule
detailing Executive's and Company's agreements regarding the
assignment to Executive over time of portions of the life
insurance policies insuring Executive's life referenced thereon
and owned by the Company or its subsidiary.
4. BENEFITS
During Executive's employment hereunder, the Company shall
provide disability insurance coverage and other insurance
coverages and other benefits for Executive and his dependents on
such terms as the Company normally provides such benefits for its
executive officers, and amounts received from such benefits will
be in addition to compensation set forth in Section 3 of this
Agreement and the special insurance arrangements referred to in
Section 3.3.<PAGE>
5. CONFIDENTIAL INFORMATION
Executive agrees that he will hold in a fiduciary capacity,
for the benefit of the Company, all secret or confidential
information, knowledge, or data of the Company ("Confidential
Information") obtained by him during his employment by the
Company, and will not disclose such information to any person
other than in the course of performing his duties hereunder or as
may be required by law or by order of a court or other regulatory
authority of competent jurisdiction, unless the Company shall
consent in writing thereto. For the purposes of this Agreement,
Confidential Information does not include information of which
Executive had knowledge prior to the date of this Agreement.
Additionally, Executive agrees that, after termination of his
employment under this Agreement, he will not disclose, at any
time, to any person, any Confidential Information constituting a
trade secret under applicable law and, for a period of one (1)
year after termination of employment under this Agreement for
cause, Executive will not disclose Confidential Information to
any person whether or not such information constitutes a trade
secret under applicable law. For the purposes of this Section 5,
information that is or becomes a part of the public domain (other
than as a result of Executive's breach) shall not be deemed
Confidential Information.
6. NO RECRUITMENT
During Executive's employment hereunder and for one (1) year
after the termination of Executive's employment hereunder for
cause (or for such time as Executive is receiving by agreement
severance pay from the Company for termination other than for
cause), Executive will not, directly or indirectly, (a) induce or
conspire with, or attempt to induce or conspire with, any of the
officers or employees or registered representatives of the
Company or any of its subsidiaries or affiliates to terminate
their employment or relationship with or compete against the
Company or any of its subsidiaries or affiliates, or any of the
clients or customers of any such entity to terminate their
relationship with any such entity, or (b) divert or attempt to
divert any or all of such clients' or customers' business with
the Company or any of its subsidiaries or affiliates from any
such entity, unless the Company shall consent in writing thereto. <PAGE>
7. TERMINATION OF EMPLOYMENT
7.1 BY COMPANY. Executive's employment under this
Agreement may be terminated by the Company at any time for cause.
For the purposes of this Section 7.1, "cause" shall mean: (a) the
conviction of Executive for an act or acts of dishonesty by
Executive that constitutes a felony under applicable law and that
subjects the Company to substantial loss or detriment, as
determined by a majority of the members of the Board; (b) the
imposition of disciplinary action against Executive, pursuant to
a final non-appealable action, by a regulatory body having
disciplinary authority over members of Executive's profession,
which disciplinary action prevents Executive from performing his
duties hereunder for a period of not less than thirty-one (31)
consecutive days and is determined by a majority of the members
of the Board to have caused substantial loss or detriment to the
Company; or (c) Executive's deliberate and intentional disregard
of lawful instructions from the Board that are consistent with
the limited scope of duties and services set forth in Sections
1.1 and 1.2, which disregard has caused (or if continued, will
cause) manifest and material loss or detriment to the Company as
determined by the affirmative vote of 75% of the non-employee
members of the Board; provided, however, that Executive shall
have received written notice of alleged disregard from the Board
and shall have failed within thirty (30) days after the receipt
of such notice to cure and correct such disregard (or to begin in
good faith to effect such cure and correction if such cannot be
practically completed within such 30-day period).
If Executive's employment is terminated under this Section
7.1, the Company shall have no further obligation to Executive
hereunder except to pay or reimburse to him, in cash on the
effective date of such termination or as soon thereafter as
possible, any amount accrued but unpaid hereunder as of the
termination date and, thereafter, any amount that otherwise would
become payable pursuant to Section 3.1 (as a result of
transactions in process as of the date of termination) if there
had been no termination and any amounts reimbursable under
Section 3.2 for expenses incurred prior to termination; and to
permit Executive to exercise (within the 30-day period
thereafter) the stock option described in Section 3.3 with
respect to the number of shares for which the option has vested
as of such termination date, and except that the rights of
Executive (and the obligations of the Company) under Section 8
shall continue without regard to such termination. If
Executive's employment is terminated by the Company for cause, as
provided above, this Agreement shall terminate and neither party
shall have any further obligation to the other, except as
provided above, and except for Executive's agreements contained
in Sections 5 and 6.
7.2 BY DEATH. If Executive dies, this Agreement shall
terminate on the date of Executive's death. In such event, the
Company shall pay promptly to Executive's designated beneficiary
or, if no designated beneficiary, to Executive's estate, any
compensation or other amount earned or accrued as of the date of
Executive's death but not yet paid and any other payments to
which Executive is entitled pursuant to Section 3.1 hereof (as a
result of transactions in process as of the date of Executive's
death) and Section 4 and any amounts reimbursable under Section
3.2 for expenses incurred prior to Executive's death, and permit
Executive's estate or legal representative to exercise (during
the one-year period thereafter) any outstanding stock option with
respect to the number of shares for which the option has vested
and has not expired as of such date.<PAGE>
7.3 BY DISABILITY. If Executive becomes unable to perform
his normal duties hereunder as a result of his incapacity due to
physical or mental illness for a period of at least one hundred
twenty (120) consecutive days, the Company shall have the option
to terminate this Agreement upon the expiration of such period
(the "Disability Date"). In such an event, the Company shall pay
or reimburse to Executive (within thirty (30) days thereof) all
amounts accrued but unpaid as of the Disability Date and,
thereafter, any amount that otherwise would become payable
pursuant to Section 3.1 (as a result of transactions in process
as of the Disability Date) if there had been no termination and
any amounts reimbursable under Section 3.2 for expenses incurred
prior to termination; Executive shall continue to vest in, and
remain entitled to exercise, any outstanding stock option in the
manner and at the times otherwise set forth therein; and the
right of Executive (and the obligations of the Company) with
respect to the agreements set forth on Exhibit B shall continue
without regard to such termination.
7.4 BY DISCHARGE. If Executive's employment under the
terms of this Agreement is terminated by the Company for any
reason other than cause, death, or disability (in any such case a
"Discharge"), then (a) the Company shall pay to Executive, on the
date of Discharge, the amount of any accrued but unpaid Incentive
Compensation and any other amount that otherwise would become
payable pursuant to Section 3.1 (as a result of transactions in
process as of the Disability Date) if there had been no Discharge
and any amounts reimbursable under Section 3.2 for expenses
incurred prior to Discharge; (b) a lump sum amount (less any
applicable withholding taxes) without the requirement for
documentation, accounting, or other justification, equal to the
expense allowance under Section 3.2 that would otherwise be
payable through December 31, 2001, absent the Discharge; and (c)
Executive shall immediately become fully vested in, and be
entitled to exercise for a period of 90 days after the date of
Discharge, all outstanding stock options not previously vested or
exercised. Such payment shall be in addition to other payments,
if any, to which Executive is entitled pursuant to Section 4
hereof, and the rights of Executive (and the obligations of the
Company) under Section 8 and set forth on Exhibit B shall
continue without regard to such Discharge. No Discharge shall be
permitted pursuant to this Section 7.4 unless approved by a
majority of the members of the Board.
7.5 BY EXECUTIVE. (a) If a change of control of the
Company occurs that is not approved by Executive, Executive may
terminate this Agreement and such termination shall be treated as
if it were a Discharge under Section 7.4. For purposes hereof,
"change of control" shall mean (i) the acquisition by a person or
entity other than Executive or a now existing shareholder of the
Company (or any affiliate of Executive or such a shareholder of
the Company), whether in one or several transactions, by
exchange, merger, consolidation, assignment, stock spin-off,
stock split-up, or other transaction, of more than thirty-five
percent (35%) of the voting stock of the Company, or of the right
to vote or to direct the voting of such percentage of voting
stock; or (ii) a change in the membership of the Board of
Directors of the Company such that a majority of the members are
persons who are not Continuing Directors. For purposes of this
Agreement, a "Continuing Director" is a person who is a member of
the Board of Directors of the Company on the date hereof or a
person who is elected as a director of the Company upon the
nomination by or approval of a majority of the Continuing
Directors in office.
<PAGE>
(b) Prior to the termination of this Agreement, Executive
may elect to retire from his position as Vice-Chairman of the
Company and forego the Incentive Compensation in Section 3.1 and
the expense allowance provided for in Section 3.2. If Executive
so elects to retire, (i) Executive will remain subject to the
terms of this Agreement, including his non-recruitment and non-
competition obligations, until the third anniversary of the date
of this Agreement, at which time his non-recruitment and non-
competition obligations hereunder will terminate and (ii)
Executive will be permitted to operate or otherwise be employed
as a registered representative of the Company for the remainder
of the term of this Agreement and be compensated in accordance
with the Company's then existing commission rate as such rate may
be amended from time to time.
8. LEGAL EXPENSE REIMBURSEMENTS
8.1 INDEMNIFICATION LEGAL EXPENSES. Without limiting the
scope of any indemnification to which Executive is or may be
entitled under applicable law or pursuant to the Company's
Articles of Incorporation, Bylaws, or contract for
indemnification of officers or directors of the Company, the
Company shall indemnify and hold Executive harmless from and
against the costs and expenses (including attorneys' fees and
costs) of Executive's defense with respect to any suit,
investigation, or other action or proceeding instituted or
threatened against Executive by any person, agency, body, or
other entity that is based on, arises out of, or is related to
any position that Executive has or had with the Company or any of
its subsidiaries or other affiliates or otherwise to the
performance by Executive of any duty or responsibility under this
Agreement. To the maximum extent permitted by applicable law,
the Company agrees to advance to Executive the amount of such
costs and expenses as they are incurred by Executive (upon
written request by Executive therefor, accompanied by reasonably
detailed explanation of the basis for such advance(s)), and
Executive agrees, to the extent that such agreement may be
required by applicable law to permit such advances, to account to
the Company for such advance(s), including to refund to the
Company any such amount that it may ultimately be determined
(according to applicable law) that Executive is not entitled to
receive as indemnification or reimbursement for such costs and
expenses as a result of the final disposition of the underlying
suit, investigation, or other action or proceeding in respect of
which such costs or expenses were incurred. The Company agrees
to take such corporate action as may be necessary or advisable,
if requested by Executive, to authorize, approve, or effectuate
and implement the rights conferred upon Executive in this Section
8.1.
8.2 DISPUTES RELATING TO AGREEMENT. If (a) Dispute (as
hereinafter defined) arises, and (b) either a court, governmental
agency, or similar body of competent jurisdiction issues a final,
nonappealable order, judgment or decree (a "Final Order"), or
Executive and the Company reach a definitive settlement of the
Dispute (a "Settlement"), that sustains the position in the
Dispute taken by Executive prior to the Dispute Date (as
hereinafter defined), then the Company shall reimburse Executive
for his reasonable legal expenses actually incurred from and
after the Dispute Date in connection with obtaining the Final
Order or Settlement, to the extent such expenses exceeded any
award for legal expenses contained in any such Final Order. For
purposes hereof, the "Dispute Date" shall be ten (10) business
<PAGE>
days after the date upon which Executive delivers to the Company,
in accordance with Section 9.7, written notice setting forth the
particulars of a matter covered by this Agreement about which
Executive and the Company disagree (the "Dispute") and stating
his intention to seek legal counsel for assistance regarding such
matter. Except as expressly set forth above, the Company
undertakes no obligation to advance, reimburse, or otherwise pay
or assume any expense of Executive incurred in interpreting or
enforcing this Agreement.
8.3 SURVIVAL. The provisions of this Section 8 shall
survive any termination of Executive's employment or of this
Agreement.
9. MISCELLANEOUS
9.1 ASSIGNMENT. This Agreement is personal in nature and
may not be assigned by either party without the express written
consent of the other party; provided, however, that the
provisions of this Agreement shall inure to the benefit of and be
binding upon each successor of the Company, whether by merger,
consolidation, transfer of all or substantially all assets, or
otherwise.
9.2 WAIVER. The waiver by any party to this Agreement of a
breach by the other party of any of the provisions of this
Agreement shall not operate as or be construed as a waiver of any
different or subsequent breach.
9.3 ENTIRE AGREEMENT. This Agreement constitutes and
expresses the entire agreement of the parties with respect to the
subject matter hereof.
9.4 GOVERNING LAW. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the
State of Florida (without regard to its rules of conflicts of
laws).
9.5 NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement, whether express or implied, is intended to or shall be
construed to confer upon or give any person not a party hereto
any rights or remedies hereunder, whether as a third-party
beneficiary or otherwise.
9.6 SEVERABILITY. Should any clause or any other portion
of this Agreement be determined to be void or unenforceable for
any reason, such determination shall not affect the validity or
enforceability of any other clause or portion of this Agreement,
all of which shall remain in full force and effect, unless the
result of any such invalidity or unenforceability shall be to
cause a material failure of consideration to the party seeking to
sustain the validity or enforceability of the subject provision.
9.7 NOTICES. All notices and other communications
hereunder shall be deemed to have been duly given on the date of
receipt if delivered personally or three (3) business days after
deposit in the United States Mail, if in writing and sent to the
Company at its address provided following its signature to this
Agreement (Attention: Chief Executive Officer), or to Executive
at the address provided following his signature to this
Agreement, as the case may be, or to such other address as one
party shall have given to the other in accordance with this
provision.
<PAGE>
9.8 EFFECT OF CAPTIONS AND HEADINGS. The captions and
headings contained herein are for convenience only, do not
constitute a part of this Agreement, and shall not be used in
construing it.<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement, as an instrument under seal, as of the day and year
first written above.
[SEAL] "Company"
Attest: JWGENESIS FINANCIAL CORP.
________________________________ By:/s/ Joel E. Marks
Secretary or Assistant Secretary Joel E. Marks
Executive Vice President
Address: 980 North Federal Highway
Suite 210
Boca Raton, Florida 33432
"Executive"
/s/ Will K. Weinstein (SEAL)
WILL K. WEINSTEIN
Address:______________________
______________________
______________________<PAGE>
Exhibit A
The incentive compensation payable to Executive by the Company
under Section 3.1 of the Agreement will be calculated as follows:
I. MONTHLY PAYMENTS. The incentive compensation will be payable to
Executive on a monthly basis, within 15 days of the end of
each month with respect to incentive compensation earned by
Executive prior to termination of the Agreement.
II. RETAIL ACCOUNTS. The Company will pay to Executive 35% of the
commissions received by the Company or any subsidiary or
affiliate on or with respect to any retail accounts covered
by Executive. Such amounts will be paid to Executive
whether the commissions are received prior to or on or after
the end of the term of the Agreement; provided, however,
Executive shall not be entitled to any incentive
compensation with respect to commissions paid on any retail
account which relate to periods of time after the earlier of
(i) Executive has stopped covering such retail account and
(ii) the term of this Agreement.
III. INSTITUTIONAL ACCOUNTS. The Company will pay to Executive 20% of
the commissions received by the Company or any subsidiary or
affiliate on or with respect to any institutional accounts
covered by Executive. Such amounts will be paid to Executive
whether the commissions are received prior to or on or after
the end of the term of the Agreement; provided, however,
Executive shall not be entitled to any incentive
compensation with respect to commissions paid on any
institutional account which relate to periods of time after
the earlier of (i) Executive has stopped covering such
institutional account and (ii) the term of this Agreement.
IV. INVESTMENT BANKING ACTIVITIES. The Company will pay to Executive
a portion of the commission or fees received by the Company
or any subsidiary or affiliate from any investment banking
activities or transactions with respect to which either:
A. Executive has made the introduction which led to the
investment banking activity or transaction being undertaken
by the Company or any subsidiary or affiliate; or
B. Executive is directly or indirectly responsible for the
investment banking activity or transaction being undertaken
by the Company or any subsidiary or affiliate.
The portion of any such commission or fee to be paid by the
Company to Executive shall be not less than 7.5% nor more
than 15% of the aggregate commission or fee. The actual
percentage payable to Executive with respect to any
particular investment banking activity or transaction will
be negotiated and agreed to by Executive and Company in good
faith.
Such amounts will be paid to Executive only on transactions
which are in process prior to the end of the term of the
Agreement. A transaction shall be deemed to be in process
once an introduction by the Executive to the Company has
been made and there have been substantive discussions
regarding the transaction (or a variant of the transaction),
whether or not there is a signed letter of intent. Follow-
on investment banking activities or transactions (which are
not in process prior to the end of the term of the
Agreement) and which commence after the term will not be
subject to any payment to Executive.
Such amounts will be paid to Executive within 15 days after
receipt by the Company whether or not the commissions or
fees are received prior to or on or after the end of the
term of the Agreement.
V. NON-CASH CONSIDERATION. If any commissions or fees which would
give rise to incentive compensation under this Exhibit A are
received by the Company or any subsidiary or affiliate in a
form other than cash or cash equivalents (e.g., in the form
of stock, debentures, notes, etc.), then the incentive
compensation payable to Executive under this Exhibit A with
respect to such non-cash commissions or fees will consist of
an in-kind distribution of the appropriate percentage of the
non-cash consideration received by the Company or any
subsidiary or affiliate.<PAGE>
Exhibit B
The Company or its subsidiary is the owner of the following two
(2) term life insurance policies (the "Policies") upon the life
of Executive in the total face amount ("Total Face Amount") of
$3,500,000:
a) Policy No. 79 660 607 with The Prudential, contract date
November 1, 1990 in the face amount of $1,000,000 for a term of
twenty years and
b)Policy No. 79 660 570 with The Prudential, contract date
November 1, 1990 in the face amount of $2,500,000 for a term of
twenty years.
When and as provided below, the Company shall transfer and assign
to Executive ownership of, and the right to designate the
beneficiary on, part or all (the "Transferred Amount") of the
Total Face Amount of the Policies.
I. PERIODIC TRANSFERS AND ASSIGNMENTS. On each of the annual
anniversaries of the commencement of the Term on which
Executive remains employed by the Company, the Company shall
transfer and assign to Executive the indicated Transferred
Amount of the Total Face Amount of the Policies:
<TABLE>
<CAPTION>
Increments of the Total Face Amount that shall
Date have been transferred to Executive
---- ----------------------------------------------
<S> <C>
First Anniversary (June 12, 1999) 20%
Second Anniversary (June 12, 2000) 20%
Third Anniversary (June 12, 2001) 20%
---------------------------------------------------------------------
Total Transferred Amount 60%
</TABLE>
II. EXPIRATION OF THE AGREEMENT. If Executive is employed by the
Company on December 31, 2001, and this Agreement is then in
effect (notwithstanding any continuing survival of Section 8
or any provisions of this Exhibit B), the Company shall
transfer and assign to Executive the entire remaining
portion of the Total Face Amount (so that 100% of the Total
Face Amount will have been transferred and assigned to
Executive); provided, however, in no event shall the Company
be required to transfer and assign to Executive any
Transferred Back Amount (as such term is defined below in
Section IV).
III. PAYMENT OF PREMIUMS. Executive shall pay, and shall be solely
responsible for the payment of, the pro-rated portion of any
premium allocable to any Transferred Amount of the Policies
and the Company shall pay the remainder of any such premiums
for the Policies.
IV. FAILURE TO PAY.
A. If at any time prior to November 1, 2010, Executive fails,
voluntarily or involuntarily, to pay the portion of any
premium for the Policies which he is to pay under
Section III, above, then the Company shall have the
option of paying such portion of the premium and
maintaining the Policies in good standing. The
provisions of this Section IV(a) shall not come into
effect if Executive's failure to pay any premium is due
to any waiver of premiums by the issuing insurance
company with respect to either or both of the Policies,
whether by reason of disability or otherwise.
B. If, as provided above, the Company elects to pay any
portion of the premium otherwise payable by Executive,
Executive hereby agrees, upon written notice from the
Company, to transfer and assign back to the Company
(and shall be deemed hereby to have done so) the
portion of the Transferred Amount with respect to which
the Company has paid the premium in place of Executive
(the "Transferred Back Amount").
C. Notwithstanding anything to the contrary contained
elsewhere in this Exhibit B, the Company shall not be
required to transfer and assign to Executive, and
Executive shall not be entitled to receive from the
Company, any portion of any Transferred Back Amount.
D. The occurrence of the circumstances described above in
this Section IV shall not excuse the Company from the
duty to transfer and assign to Executive any
Transferred Amounts (other than Transferred Back
Amounts) which subsequently are to be transferred and
assigned to Executive as provided in this Exhibit B and
Executive shall continue to be entitled to the transfer
to him of other portions of the Total Face Amount as
provided above, subject in each case to the above
provisions concerning Executive's possible failure to
pay the premiums that become due on such subsequent
Transferred Amounts
V. EXECUTIVE'S RIGHT TO DECLINE. Executive shall have the right to
decline to receive the assignment and transfer of any
Transferred Amount (or portion thereof) by giving written
notice thereof to the Company at or prior to the date on
which the Company is to transfer and assign such Transferred
Amount to Executive. The exercise by Executive of his right
to decline as provided above shall not excuse the Company
from its duties to make subsequent transfers and assignments
to Executive as provided in this Exhibit B.
VI. SURVIVAL. The provisions of this Exhibit B shall survive any
termination of the Agreement, including the expiration of
the Agreement in accordance with its terms.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001057412
<NAME> JWGENESIS FINANCIAL CORP.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 14,564,000
<SECURITIES> 11,421,000
<RECEIVABLES> 139,895,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,804,000
<DEPRECIATION> 1,654,000
<TOTAL-ASSETS> 189,127,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 5,000
<OTHER-SE> 43,608,000
<TOTAL-LIABILITY-AND-EQUITY> 189,127,000
<SALES> 0
<TOTAL-REVENUES> 51,141,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,713,000
<INCOME-PRETAX> 4,956,000
<INCOME-TAX> 1,910,000
<INCOME-CONTINUING> 3,046,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,046,000
<EPS-PRIMARY> .78
<EPS-DILUTED> .67
</TABLE>
