SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 15, 1999
JWGenesis Financial Corp.
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(Exact name of Registrant as Specified in Charter)
Florida 001-14205 65-0811010
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(State or other Jurisdiction of (Commission File (IRS Employer
Incorporation or Organization) Number) Identification No.)
980 North Federal Highway, Suite 210
Boca Raton, Florida 33432
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (561) 338-2600
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
Formation of Mvp.com, Inc.
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On August 4, 1999, JWGenesis Financial Corp. (the "Company") announced
a joint venture with former NFL star John Elway to form MVP.com, Inc. ("MVP"),
an internet business venture intended to create an on-line lifestyle enhancement
portal. MVP intends that the portal, which will be located at the Web site
mvp.com, will focus on finances, sports, fitness, and lifestyle improvements.
In connection with the organization of MVP, the Company and an
affiliate of Mr. Elway ("JE") entered into a Stockholders Agreement (the
"Stockholders Agreement"), dated as of July 15, 1999, pursuant to which each of
them agreed to certain arrangements for the management of MVP, restrictions on
the transfer of their respective shares in MVP, voting requirements for certain
fundamental corporate actions, and other special matters. The Stockholders
Agreement also contains certain buy-sell, right of first refusal, and
non-competition provisions.
Currently, JE and the Company each own a 50% interest in MVP, for which
each contributed $1,000,000 in start-up capital. The Company intends, however,
to convey (at the same effective price paid by the Company) up to 15% of its
interest (or up to a 7.5% interest in MVP) to certain of its executive personnel
who have been and will be actively involved in the MVP venture, or who are
otherwise key personnel in the Company's own operations but do not have an
employment agreement to remain with the Company. Each such executive, as a
condition to receiving any interest in MVP from the Company, must appoint the
Company as proxy with respect to all voting rights of the executive's interest
in MVP, and the Company will have the right to repurchase the interest from the
executive if the executive's employment with the Company terminates before
December 31, 2001, at a price equal to the lesser of the price initially paid by
the executive or the fair market value of the interest at the date of
termination. The Company will impose transfer restrictions on each executive's
interest for the period through December 31, 2001; in addition, each executive
will become a party to the Stockholders Agreement and subject to its transfer
restrictions.
The Company and Mr. Elway are leading the process of developing MVP's
business plan, and intend to launch the portal for mvp.comsm services in January
2000 in connection with the Super Bowl Championship. MVP requires additional
capital to fund its plan, which it intends to raise in part through a private
equity offering that will dilute ratably the respective ownership percentages of
the Company and the other holders of MVP stock.
In addition to his ownership interest in MVP, Mr. Elway will serve as
its Co-Chairman, along with Marshall T. Leeds, who is Chairman and Chief
Executive Officer of the Company. Mr. Elway has stated his intention to commit
significant time to the business of MVP, and has entered into a five-year
employment agreement with MVP to serve as a corporate spokesman and to grant a
non-exclusive license to MVP to use his name, image, and likeness for certain
promotional purposes.
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Joel E. Marks, the Company's Vice Chairman and Chief Operating Officer,
will serve as Chief Operating Officer of MVP to supervise and direct all
day-to-day development and operational matters for the foreseeable future.
However, it is expected that MVP will hire an outside professional manager with
internet and e-commerce experience to fill the position of Chief Executive
Officer.
Grant of Options to John Elway as Corporate Spokesman
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Also on August 4, 1999, the Company announced that Mr. Elway has
entered into a five-year employment agreement (the "Employment Agreement") to
serve as a corporate spokesman and consultant for the Company's financial
services business. Mr. Elway's compensation for such services consists entirely
of options to purchase 450,000 shares of the Company's common stock, at a price
of $13.40 per share, which was the market price of the common stock when Mr.
Elway indicated his intent to negotiate a binding agreement. The Stock Option
Agreement between the Company and Mr. Elway (the "Stock Option Agreement") also
grants Mr. Elway certain registration rights with respect to any shares acquired
pursuant to the options.
In addition to requiring personal appearances by Mr. Elway at certain
Company functions and promotional events, the Employment Agreement contains
non-competition provisions and grants the Company a non-exclusive license to use
Mr. Elway's name, image, and likeness for promotional purposes. The license
expires on July 15, 2004, or, if Mr. Elway earlier terminates the Employment
Agreement, then six months thereafter.
General and Miscellaneous
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Copies of the Stockholders Agreement, the Employment Agreement, and the
Stock Option Agreement are included herewith pursuant to Item 7 as Exhibits
10(a), 10(b), and 10(c), respectively. Such Exhibits are incorporated by
reference into this Item 5, and the foregoing descriptions thereof are qualified
in their entirety by reference to such Exhibits.
CERTAIN STATEMENTS INCLUDED IN THIS FORM 8-K, INCLUDING WITHOUT
LIMITATION STATEMENTS CONTAINING THE WORDS "BELIEVES," "ANTICIPATES," "INTENDS,"
"EXPECTS" AND WORDS OF SIMILAR IMPORT, CONSTITUTE "FORWARD-LOOKING STATEMENTS"
WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH
FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF
THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH
FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: THE IMPACT OF GENERAL ECONOMIC
CONDITIONS ON THE CAPITAL MARKETS; CHANGES IN OR AMENDMENTS TO REGULATORY
AUTHORITIES' CAPITAL REQUIREMENTS OR OTHER REGULATIONS APPLICABLE TO THE COMPANY
OR ITS SUBSIDIARIES; FLUCTUATIONS IN INTEREST RATES; INCREASED LEVELS OF
COMPETITION; AND OTHER FACTORS REFERRED TO IN THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998, UNDER "ITEM 1. BUSINESS -
CERTAIN MATTERS REGARDING FORWARD LOOKING STATEMENTS," WHICH IS INCORPORATED
HEREIN BY THIS REFERENCE. GIVEN SUCH UNCERTAINTIES, UNDUE RELIANCE SHOULD NOT BE
PLACED ON SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY DISCLAIMS ANY OBLIGATION
TO UPDATE ANY SUCH FACTORS OR TO PUBLICLY ANNOUNCE THE RESULTS OF ANY REVISIONS
TO ANY OF THE FORWARD-LOOKING STATEMENTS INCLUDED HEREIN TO REFLECT FUTURE
EVENTS OR DEVELOPMENTS.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
10(a) Stockholders Agreement among the Company, Woody
Springs LLC and MVP.com, Inc., dated as of July 15,
1999.
10(b) Employment Agreement between the Company and John
Elway, dated as of July 15, 1999.
10(c) Stock Option Agreement between the Company and John
Elway, dated as of July 15, 1999.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
JWGENESIS FINANCIAL CORP.
By: /s/ Joel E. Marks
Joel E. Marks
Vice Chairman and Chief Operating
Officer
Dated: August 12, 1999
4
STOCKHOLDERS AGREEMENT
among
JWGENESIS FINANCIAL CORP.,
WOODY SPRINGS LLC
and
MVP.COM, INC.
Dated as of July 15, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<C> <S> <C>
1. CERTAIN DEFINITIONS......................................................................................1
2. REPRESENTATION AND COVENANTS OF THE STOCKHOLDERS.........................................................3
2.1 Representations and Warranties..................................................................3
2.2 Covenant of Good Faith..........................................................................3
2.3 Business Purposes...............................................................................3
3. MANAGEMENT AND OPERATIONS................................................................................4
3.1 Board of Directors..............................................................................4
3.2 Executive Officers..............................................................................4
3.3 Actions Requiring Special Approval of JWG.......................................................5
3.4 Deadlock Resolution.............................................................................6
3.5 Buy-Sell........................................................................................6
3.6 Operating Budget................................................................................8
3.7 Expense Allowance for JE's Representatives......................................................8
3.8 Future Investment Obligations...................................................................8
3.9 Existing Endorsement Arrangements; Right of First Refusal.......................................9
3.10 Prohibited Activities..........................................................................10
4. TRANSFER RESTRICTIONS; RIGHT OF FIRST REFUSAL...........................................................10
4.1 Pledges........................................................................................10
4.2 Transfers; Right of First Refusal..............................................................10
4.3 Priority of Buy-Sell and First Refusal Provisions..............................................11
4.4 Transfer to Affiliate..........................................................................12
4.5 Ownership and Control of JE....................................................................12
5. PATENTS, TRADEMARKS, COPYRIGHTS, ETC....................................................................12
5.1 Intellectual Property..........................................................................12
5.2 Marks..........................................................................................12
6. TERMINATION AND EXPIRATION..............................................................................13
6.1 Termination of the Agreement...................................................................13
6.2 Tolling in Event of Stockholder Termination....................................................15
6.3 Effect of Termination..........................................................................15
7. GENERAL AND MISCELLANEOUS...............................................................................15
7.1 Non-Competition; Non-Solicitation..............................................................15
7.2 Confidentiality................................................................................16
7.3 Binding on Transferees.........................................................................16
7.4 Legend on Certificates.........................................................................16
7.5 Mediation; Arbitration.........................................................................17
7.6 Notices........................................................................................18
7.7 Governing Law..................................................................................19
7.8 Partial Invalidity.............................................................................19
7.9 Waiver.........................................................................................19
7.10 Further Documents and Actions..................................................................19
7.11 Headings.......................................................................................19
7.12 Entire Agreement...............................................................................20
</TABLE>
EXHIBITS AND SCHEDULES
Exhibit A - Employment Agreement
Exhibit B - Existing Elway Sponsors
Schedule 4.5 Affiliates of John Elway
<PAGE>
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "AGREEMENT") is made as of the 15th
day of July, 1999, by and among JWGenesis Financial Corp., a Florida corporation
with its principal offices at 980 N. Federal Highway, Suite 310, Boca Raton,
Florida 33432 ("JWG"), Woody Springs LLC, a Colorado limited liability
corporation with its principal offices at 10030 East Arapahoe Road, Englewood,
Colorado 80110 ("WS"), and MVP.com, Inc., a Florida corporation with its
principal offices at 117 Perimeter Center West, Suite 500-E, Atlanta, Georgia
30342 ("COMPANY"). JWG and WS are sometimes referred to herein individually as a
"STOCKHOLDER" and collectively as the "STOCKHOLDERS."
WHEREAS, each of the Stockholders owns 50% of the issued and
outstanding shares of common stock of Company (the "COMMON STOCK") (such initial
number of shares together with any other shares of Common Stock hereafter issued
by Company to any Stockholder are collectively referred to as the "SHARES"); and
WHEREAS, the Stockholders believe it is desirable and in their mutual
best interests to set forth their intentions and agreement with respect to
certain aspects of the management of Company, the transferability of their
respective Shares and other matters.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall, unless the
context otherwise requires, have the meanings respectively ascribed to them
below:
"AFFECTED STOCKHOLDER" shall have the meaning ascribed to it in Section
6.1(b) hereof.
"AFFILIATE" shall mean any Person controlling, controlled by or under
direct or indirect control with any Stockholder. For purposes of the foregoing,
one Person shall be deemed to "control" another if it possesses, directly or
indirectly, the exclusive power to direct or cause the direction of the
management or policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise. Notwithstanding the foregoing,
Company shall not be deemed to be an Affiliate of any Stockholder for purposes
of this Agreement.
"APPRAISAL" and "APPRAISER" shall have the respective meanings ascribed
to them in Section 6.1(c) hereof.
"ARTICLES" shall mean the Articles of Incorporation of Company, as
amended from time to time.
<PAGE>
"BOARD" shall mean the Board of Directors of Company as constituted
from time to time.
"BUY-SELL OFFERS" shall have the meaning ascribed to it in Section
3.5(a) hereof.
"CLAIMS" shall have the meaning ascribed to it in Section 7.5(a)
hereof.
"COMPANY'S BUSINESS" shall have the meaning ascribed to it in Section
2.3 hereof.
"CONFIDENTIAL INFORMATION" shall have the meaning ascribed to it in
Section 7.2 hereof.
"DISPUTED MATTER" shall have the meaning ascribed to it in Section 3.4
hereof.
"EMPLOYMENT AGREEMENT" shall have the meaning ascribed to it in Section
3.2 hereof.
"FAIR VALUE" shall have the meaning ascribed to it in Section 6.1(c)
hereof.
"MARKS" shall have the meaning ascribed to it in Section 5.2 hereof.
"MEDIATION RESOLUTION" shall have the meaning ascribed to it in Section
3.4 hereof.
"MEDIATOR" shall have the meaning ascribed to it in Section 7.5(a)
hereof
"NON-DEFAULTING STOCKHOLDER" shall have the meaning ascribed to it in
Section 6.1(b) hereof.
"OFFERED STOCK" shall have the meaning ascribed to it in Section 4.2(a)
hereof.
"OFFEROR AND OFFEREE" shall have the respective meanings ascribed to
them in Section 3.5(a) hereof.
"OPERATING BUDGET" shall have the meaning ascribed to it in Section
3.4(a) hereof.
"OTHER STOCKHOLDER" shall have the meaning ascribed to it in Section
4.2(a) hereof.
"OWNER" shall have the meaning ascribed to it in Section 5.2 hereof.
"PERMANENT DISABILITY" shall mean the inability of John Elway to
perform services requested by Company under the Employment Agreement because of
physical or mental injury or illness during any continuous period of one hundred
twenty (120) days or for shorter periods aggregating more than one hundred
twenty (120) days in any consecutive twelve-month period.
"PERSON" shall mean any individual, partnership, joint venture,
association, corporation, trust, government agency or any other legal entity or
organization.
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"PURCHASING STOCKHOLDER" shall have the meaning ascribed to it in
Section 3.5(b) hereof.
"REFUSAL OFFER", "REFUSAL OPTION" and "REFUSAL PRICE" shall have the
respective meanings ascribed to them in Section 4.2 hereof.
"RULES" shall have the meaning ascribed to it in Section 7.5(b) hereof.
"SELLER" shall have the meaning ascribed to it in Section 4.2(a)
hereof.
"SELLING STOCKHOLDER" shall have the meaning ascribed to it in Section
3.5(b) hereof.
"STOCKHOLDER TERMINATION" shall have the meaning ascribed to it in
Section 6.1(b) hereof.
"TERMINATION OPTION" shall have the meaning ascribed to it in Section
6.1(b) hereof.
"USER" SHALL have the meaning ascribed to it in Section 5.2 hereof.
ARTICLE 2.
REPRESENTATION AND COVENANTS OF THE STOCKHOLDERS
2.1 REPRESENTATIONS AND WARRANTIES. Each Stockholder represents and
warrants to the other Stockholder that: (i) it is a company duly organized,
validly existing and in good corporate standing under the laws of its
jurisdiction of incorporation; (ii) it has full corporate power and authority to
enter into and to perform this Agreement in accordance with its terms; and (iii)
its execution and performance of this Agreement in accordance with its terms
will not violate any provision of applicable law or regulation or its
organizational instruments, and will not result in any material breach of any
material contract or agreement by which it is bound.
2.2 COVENANT OF GOOD FAITH. Each Stockholder hereby agrees to exercise
good faith at all times when dealing with the other Stockholder and with
Company, and to exercise its reasonable best efforts to promote and further the
business and best interests of Company. Each Stockholder will keep the other
fully informed as to all significant matters relating to Company and Company's
Business. The parties shall use their reasonable efforts to give commercial
efficacy to the terms and conditions of this Agreement and to promote the
business of Company, including, without limitation, taking, or causing the
members of the Board designated for election by them to take, all necessary or
prudent actions in a timely fashion in order for Company to engage in Company's
Business as contemplated by this Agreement.
2.3 BUSINESS PURPOSES. The business purposes of Company (the "COMPANY'S
BUSINESS") shall be to serve as a provider of (i) comprehensive information,
communication and shopping and e-commerce services, (ii) on-line investing and
financial services; and (iii) Internet navigation services with extensive
personalization and targeting capabilities, and such other business as may be
expressly authorized from time to time by the Board in an action taken as
contemplated by Section 3.3 hereof.
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ARTICLE 3.
MANAGEMENT AND OPERATIONS
3.1 BOARD OF DIRECTORS. The business of Company shall be managed by and
shall be under the direction and supervision of the Board of Directors of
Company (the "BOARD"), which may exercise all such powers of Company and do all
lawful acts and things that are not by applicable statute, the Articles or this
Agreement specifically directed or required to be exercised or undertaken by the
Stockholders of Company.
The size and composition of the Board shall be as follows:
(a) For so long as the Stockholders hold an equal number of
Shares, and there are no other holders of securities entitling such
holders to elect a member of the Board, the Board shall consist of four
(4) members, two (2) of whom shall be designated for election by each
Stockholder.
(b) If and for so long as any Stockholder holds a greater
number of Shares than the other Stockholder, and there are no other
holders of securities entitling such holders to elect a member of the
Board, the Board shall consist of four (4) members, three of whom shall
be designated for election by the Stockholder with more Shares and one
of whom shall be designated for election by the Stockholder with less
Shares.
(c) JWG and WS shall mutually agree as to which director shall
serve as Chairman of the Board from time to time.
(d) It is understood and agreed that each designee by a
Stockholder shall be reasonably acceptable to the other Stockholder,
and that each Stockholder shall promptly vote its Shares for the
election of each such designee of the other (or, at the behest of the
other Stockholder, for the removal thereof) and, in the event of a
vacancy for any reason on the Board, shall promptly vote its Shares for
the election of a replacement director designated for election by the
Stockholder (in accordance with the foregoing procedures) which had
designated the director whose death, resignation or removal had
resulted in such vacancy. Notwithstanding anything to the contrary in
this Agreement, for the period of thirty (30) days from the effective
date of any such director's death, resignation or removal, the Board
shall not transact any business without the consent of the Stockholder
who designated the former director, except for the filling of such
vacancy.
3.2 EXECUTIVE OFFICERS. JWG shall have the right to designate an
individual to serve as Co-Chief Executive Officer of Company. JWG's designee
(the "JWG CEO") shall, subject to the provisions of Section 3.3 hereof, have the
authority and responsibility for the management, supervision and direction of
the day-to-day operations of Company. John Elway may, at his option, maintain
the title of Co-Chief Executive Officer of Company in connection with his
provision of services under the Agreement between the Company and Mr. Elway
dated July 15, 1999 (the "EMPLOYMENT AGREEMENT"), which is attached hereto as
EXHIBIT A and incorporated herein by reference. JWG and WS shall mutually agree
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on the appointment of any other executive officers of Company, or the
termination or replacement of either of the Co-Chief Executive Officers, and any
actions taken by the Board with respect thereto shall be subject to the
ratification thereof by JWG and WS.
3.3 ACTIONS REQUIRING SPECIAL APPROVAL OF JWG. The Company may not take
any of the following actions unless previously approved by JWG:
(a) Enter into any transaction between Company and any
Stockholder or any Affiliate of a Stockholder; provided, however, that
the Employment Agreement and the Stock Option Agreement between JWG and
John Elway, dated July 15, 1999, are hereby approved for purposes of
this Section 3.3.
(b) Incur any indebtedness in the name of Company; modify,
extend, renew, refinance or restructure such debt; pledge, assign or
otherwise utilize any assets of Company as security for any
indebtedness; or obligate Company as a surety, guarantor or
accommodation party to any obligation of any other Person, in each case
except for indebtedness provided for or contemplated by the then
operative Operating Budget and except for aggregate indebtedness during
any fiscal year in the amount of $1,000,000 or less.
(c) Enter into any agreement for the lease (with annual rental
payments exceeding $240,000 or with total lease payments exceeding
$1,500,000 over the term of the lease), purchase or sale of real
property.
(d) Authorize or issue any additional share capital or other
equity security of Company of any class, kind or series, or any options
to purchase, or other security convertible into, such security, or
effect any public offering of any such security, except as expressly
contemplated by this Agreement.
(e) Consolidate with or merge into or with any other Person.
(f) Acquire any interest in any other Person or, except in the
ordinary course of business, any significant portion of the assets of
any other Person, or agree to enter into any partnership or joint
venture, except as expressly contemplated by this Agreement.
(g) Adopt a plan of reorganization, liquidation or
dissolution.
(h) Engage in any business other than Company's Business,
unless authorized by a unanimous vote of the Board.
(i) Make any redemption of any stock of Company, or make any
distribution or return of capital to any Stockholder.
(j) Increase the capital of Company (except as may be required
by applicable law), or issue any capital call to the Stockholders,
except as expressly contemplated by this Agreement.
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(k) Enter into any agreement for the sale, transfer, exchange,
licensing, assignment, subcontracting or other disposition of any
tangible or intangible asset of Company, except for any of the
foregoing that are incidental to the ordinary and necessary operation
of Company's Business and that are not material to Company's financial
condition.
(l) Enter into any agreement that requires performance for
more than one year or which involves aggregate consideration (whether
by payment or performance) in excess of $1,000,000, except for
agreements that are incidental to the ordinary and necessary operation
of Company's Business and that are not material to Company's financial
condition, but without limiting the approval requirement for all of the
preceding provisions of this Section 3.3.
3.4 DEADLOCK RESOLUTION.
(a) Mediation. If the Board is unable to resolve by majority
vote a matter that requires Board approval, then such matter (the
"DISPUTED MATTER") may be resolved according to the following
procedure. Within 30 days after the close of the meeting of the Board
in which the Disputed Matter was discussed and remained unresolved, the
Board may refer the Disputed Matter to a mutually acceptable third
party not employed or previously employed by JWG, WS, or any of their
respective Affiliates, who shall confer with the Stockholders and
propose a resolution of the Disputed Matter to JWG and WS in writing
(the "MEDIATION RESOLUTION") within 30 days after such reference.
Notwithstanding anything to the contrary herein, the Mediation
Resolution shall not be binding on the parties hereto. If, however, the
Mediation Resolution is mutually agreeable to JWG and WS and is signed
by each of them, then the Mediation Resolution shall be deemed to be
the decision of the Board with respect to the Disputed Matter.
(b) Trigger of Buy-Sell. If (i) a Disputed Matter is submitted
for resolution as provided in Section 3.4(a) above and JWG and WS fail
to agree on the Mediation Resolution within 30 days after the date on
which the Mediation Resolution is delivered to them, or (ii) at any
time the Board fails to refer a Disputed Matter within the respective
time limit for such reference set forth in Section 3.4(a), then either
Stockholder may trigger the buy-sell provisions of Section 3.5 hereof.
3.5 BUY-SELL.
(a) Buy-Sell Offers. At any time and for any reason during the
term of this Agreement, including without limitation upon a deadlock of
the Board as referenced in Section 3.4 hereof, either Stockholder (the
"OFFEROR") may make to the other Stockholder (the "OFFEREE") offers
("BUY-SELL OFFERS") in writing in the alternative (A) to sell all (but
not less than all) of the Shares owned by the Offeror, or (B) to
purchase all (but not less than all) of the Shares owned by the
Offeree, for a price and on terms and conditions specified by the
Offeror (the total price and terms applicable to sale and purchase
being the same); provided, however, that the price in any Buy-Sell
Offer shall be payable in cash only. Such Buy-Sell Offers shall be
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irrevocable for a period of 30 days from the date made. The Offeree
shall, at the expiration of such 30-day period, automatically be deemed
to have accepted the offer of the Offeror to buy the Offeree's Shares
unless the Offeree accepts, by notifying the Offeror before the
expiration of such 30-day period, the offer of the Offeror to sell its
Shares. The making of a Buy-Sell Offer by a Stockholder to the other
Stockholder in accordance with this Section 3.5(a) shall suspend the
other Stockholder's right to make any Buy-Sell Offer under this
Section.
(b) Closing. Within 30 days after the date of acceptance by
the Offeree of one of the Buy-Sell Offers hereunder, the closing shall
be held at the principal offices of Company or at such other place upon
which the parties mutually agree. At the closing, the seller (the
"SELLING STOCKHOLDER") shall deliver to the purchaser (the "PURCHASING
STOCKHOLDER") a written instrument of transfer of the Selling
Stockholder's Shares in form and substance reasonably satisfactory to
the Purchasing Stockholder. The Shares shall be transferred and
assigned to the Purchasing Stockholder free and clear of all claims,
liens, encumbrances, restrictions and security interests (except for
the restrictions created by this Agreement), with full warranties of
title. Upon the delivery of such instrument of transfer, the Purchasing
Stockholder shall pay to the Selling Stockholder the purchase price in
cash in accordance with the terms and conditions of the applicable
Buy-Sell Offer.
(c) Indebtedness to Selling Stockholder; Guaranties. If at the
time of closing of a sale of Shares pursuant to this Section 3.5
Company is indebted to the Selling Stockholder, the Purchasing
Stockholder shall purchase and acquire such indebtedness from the
Selling Stockholder by paying to the Selling Stockholder in immediately
available funds the entire amount of the outstanding principal balance
of such indebtedness as of the date of closing of the sale of the
Selling Stockholder's Shares, and any interest accrued thereon (in
accordance with the terms of such indebtedness) to the date of payment,
on all such indebtedness of Company then remaining unpaid. If any such
loans are outstanding at the time that Buy-Sell Offers are made
pursuant to Section 3.5(a) above, then such Buy-Sell Offers shall
include (whether or not expressly stated therein) the requirements of
this Section 3.5(c) regarding outstanding loans of any Stockholder. If,
at the time of any such sale, the Selling Stockholder, or any Affiliate
of the Selling Stockholder, shall have any outstanding personal
guaranties or security placed with any lending institution or other
Person to secure any indebtedness, liability or obligation of Company,
then the Purchasing Stockholder shall obtain a full and complete
cancellation and release of the Selling Stockholder's guaranties and
security as of the date of closing of the sale of the Shares.
(d) Selling Stockholder Indebtedness. If at the time of the
sale of Shares pursuant to this Section 3.5, the Selling Stockholder is
indebted to Company or to the Purchasing Stockholder, the amount of
such indebtedness shall be credited toward the purchase price to be
paid for the Shares and the Purchasing Stockholder shall have the right
to pay, satisfy and discharge (and offset, where appropriate) all or
any portion of such indebtedness from such purchase price. If any such
indebtedness is outstanding at the time that Buy-Sell Offers are made
pursuant to Section 3.5(a) above, then such Buy-Sell Offers shall
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include (whether or not expressly stated therein) the conditions of
this Section 3.5(d) regarding any such indebtedness.
3.6 OPERATING BUDGET.
(a) At least 60 days prior to the beginning of each fiscal
year, the JWG CEO will prepare and present to the Board for approval an
operating budget for such fiscal year (the operating budget of Company,
so adopted by the Board from time to time and in effect at any time,
being referred to herein as the "OPERATING BUDGET"). Each Operating
Budget shall include, at a minimum, a projected income statement, a
projected balance sheet, and projections of cash flow and capital or
other expenditures, and all material assumptions relied upon in
developing such projections, but excluding all items relating solely to
the initial organization and commencement of Company's operations.
(b) In the event that an Operating Budget for any fiscal year
subsequent to the year ending December 31, 1999 is not approved by the
Board by December 31 of the immediately preceding fiscal year, Company
shall continue to operate on the basis provided in the Operating Budget
for the preceding fiscal year until an Operating Budget for such fiscal
year is approved by the Board.
3.7 INTENTIONALLY OMITTED
3.8 FUTURE INVESTMENT OBLIGATIONS. If and to the extent that the Board
determines by unanimous vote that additional funding is required from the
Stockholders (as opposed to from outside investors or other third party sources)
for Company's operations, each Stockholder shall be obligated to provide a
percentage of such funding to Company pro rata in accordance with its holdings
of Shares.
3.9 EXISTING ENDORSEMENT ARRANGEMENTS; RIGHT OF FIRST REFUSAL.
(a) Attached hereto as EXHIBIT B is a list of companies and the
specific products of such companies for which John Elway is currently
providing (i) consultation and advice with respect to strategies to
promote the business and profile of such company or product(s) of such
company and to motivate the personnel of such company; (ii) on-camera
spokesperson and broadcast personality services in connection with the
production and broadcast of one or more radio and/or television
commercials commissioned by such company; (iii) print media personality
services, including promotional photography sessions, in connection
with the production and dissemination of print-based advertising and/or
marketing campaigns commissioned by such company; (iv) on-line
services, including availability for on-line conferences and other
special promotional events sponsored by such company; (v) personal
appearances at sales conferences, employee meetings and public
functions sponsored by such company; or (vi) other endorsement services
(each an "EXISTING ELWAY SPONSOR").
(b) The Company agrees that prior to entering into a site sponsorship
(naming) agreement or exclusive electronic commerce sales or
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sponsorship agreement (an "ONLINE SPONSORSHIP") with a company (a
"COMPETING SPONSOR") whose products are the same or substantially
similar to the product(s) then being endorsed by John Elway for an
Existing Elway Sponsorship (such Existing Elway Sponsor a "CONFLICTING
ELWAY SPONSOR"), the Company shall first offer, in good faith, to such
Conflicting Elway Sponsor(s), the opportunity to negotiate for the
Online Sponsorship contemplated by the Company to be entered into with
the Competing Sponsor.
(c) Once the Company determines that a Conflicting Elway Sponsor exists
with respect to a contemplated Online Sponsorship, the Company shall
(unless granted a waiver by John Elway with respect to such Conflicting
Elway Sponsor) contact the applicable Conflicting Elway Sponsor(s)
regarding the potential Online Sponsorship and, if the Conflicting
Online Sponsorship responds to the Company's offer to negotiate within
ten (10) days, negotiate in good faith to enter into with the
Conflicting Elway Sponsor the Online Sponsorship contemplated to be
negotiated with the Competing Sponsor; provided, however, the Company
shall only be required to enter into an Online Sponsorship with such
Conflicting Elway Sponsor if such Online Sponsorship is on
substantially the same economic terms as the Company contemplated in
good faith entering into such Online Sponsorship with the Competing
Sponsor. If the applicable Conflicting Elway Sponsor does not indicate
its willingness to negotiate for the Online Sponsorship within ten (10)
days of being contacted by the Company, then the Company shall be free
to negotiate and enter into the Online Sponsorship with the Competing
Sponsor.
(d) In the event that there are more than one Conflicting Elway
Sponsors with respect to an Online Sponsorship, the Company shall
determine, in its sole discretion, which Conflicting Elway Sponsors to
approach first regarding such Online Sponsorship, and, in the event
that the Company is able to negotiate with a Conflicting Elway Sponsor
for such Online Sponsorship, then the Company shall not be required to
contact or offer to negotiate with any of the other Conflicting Elway
Sponsors for such Online Sponsorship.
(e) It shall not be a breach of this section for the Company to reject
the offer of an Online Sponsorship or terminate negotiations for an
Online Sponsorship with a Conflicting Elway Sponsor and proceed to
negotiate with the Competing Sponsor; provided that, if the Company is
unable to agree upon terms for the Online Sponsorship with the
Competing Sponsor more favorable than the terms negotiated with the
Conflicting Elway Sponsor, then the Company shall (i) terminate its
plans for such Online Sponsorship for no less than three (3) months (at
which time the terms of this section shall once again apply to the
negotiations for such Online Sponsorship), or (ii) approach the
Conflicting Elway Sponsor and offer to enter into the Online
Sponsorship on the terms last discussed with such Conflicting Elway
Sponsor (or, if such negotiations were discontinued prior to an offer,
offer to continue to negotiate with such Conflicting Elway Sponsor). If
at such time the Conflicting Elway Sponsor indicates that it does not
wish to enter into such agreement on the same (or substantially similar
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terms), or the Conflicting Elway Sponsor is not willing to resume
negotiations on terms acceptable to the Company, then the Company shall
be free to pursue the transaction with a Competing Sponsor.
(f) If at any time a Conflicting Elway Sponsor indicates that it does
not wish to negotiate or continue to negotiate for an Online
Sponsorship (or at such time as the Company determines in good faith
that negotiations with a Conflicting Elway Sponsor are not leading to
acceptable terms for the Online Sponsorship) then the Company shall be
free to pursue the transaction with a Competing Sponsor.
3.10 PROHIBITED ACTIVITIES. The Company shall not enter into Online
Sponsorships or accept advertising involving gambling, hard liquor (which term
shall specifically not include beer or wine), cigars, or cigarettes without the
prior written consent of WS.
ARTICLE 4.
TRANSFER RESTRICTIONS; RIGHT OF FIRST REFUSAL
4.1 PLEDGES. No Stockholder may pledge, mortgage, hypothecate or
otherwise transfer as security any of its Shares, or transfer, assign, or
endorse any debt owed by Company to the Stockholder, without the prior written
approval of the other Stockholder.
4.2 TRANSFERS; RIGHT OF FIRST REFUSAL. Subject to Section 4.4, the
Stockholders agree that neither Stockholder may sell, transfer, assign or
otherwise dispose of any or all of its Shares without the prior written consent
of the other Stockholder, except in accordance with the following terms and
conditions:
(a) Any Stockholder (the "SELLER") desiring to sell, transfer,
assign or otherwise dispose of any or all of its Shares (the "OFFERED
STOCK") shall first offer (the "REFUSAL OFFER") to sell the Offered
Stock to the other Stockholder (the "OTHER STOCKHOLDER") at a cash
price (due in its entirety at closing) specified by the Seller (the
"REFUSAL PRICE"). The Refusal Offer shall be in writing.
(b) For a period of 30 days after its receipt of the Refusal
Offer, the Other Stockholder shall have the right and option (the
"REFUSAL OPTION"), but not the obligation, to purchase all, but not
less than all, of the Offered Stock at the Refusal Price, exercisable
by delivery of a written notice to that effect to the Seller. If the
Other Stockholder so exercises the Refusal Option, the closing shall be
at the principal office of Company within 30 days after Seller's
receipt of acceptance. At the closing, the Seller shall deliver to the
Other Stockholder (or its designee) such documents as shall be
necessary to transfer all of the Offered Stock, free and clear of all
claims, liens, encumbrances, restrictions and security interests
(except for the restrictions created by this Agreement), with full
warranties of title, and with all transfer taxes and charges paid by
the Seller. Simultaneously with such deliveries by the Seller, the
Other Stockholder shall pay the Seller the Refusal Price.
(c) If the Refusal Option is not exercised by the Other
Stockholder as to all of the Offered Stock, then the Seller shall be
free to sell, transfer or assign all (but not less than all) of the
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Offered Stock to any party at a cash price (due in its entirety at
closing) not lower than the Refusal Price and upon the other terms and
conditions contained in the Refusal Offer; provided, however, that (i)
the sale and transfer of such stock shall not violate the provisions of
any applicable laws, and (ii) the Seller shall cause such party to
acknowledge and agree in writing to be bound by the terms, conditions
and restrictions of this Agreement to the same extent as if such party
had originally been a party to this Agreement.
(d) If the stock of Company so offered to the Other
Stockholder, but not accepted by it, has not been sold, transferred or
assigned to the party referred to in the preceding clause (c) in
accordance with the terms and conditions of the Refusal Offer within 30
days after the expiration of the Refusal Option, then the restrictions
provided in this Section 4.2 shall again become effective with respect
to such stock, and no sale, transfer, assignment or other disposition
of such stock may be made thereafter without the prior written consent
of the Other Stockholder as aforesaid or without again offering such
stock to the Other Stockholder in accordance with the provisions of
this Section 4.2.
4.3 PRIORITY OF BUY-SELL AND FIRST REFUSAL PROVISIONS. Except as
provided in the succeeding sentence, the prior delivery of a Refusal Offer to
the Other Stockholder by the Seller in accordance with Section 4.2(a) above
shall suspend the Stockholders' right to deliver Buy-Sell Offers under Section
3.5(a) above, until after the earliest to occur of (i) the closing of the
purchase of the Offered Stock by the Other Stockholder or the other party
referred to in Section 4.2(c), or (ii) the expiration of the time allowed under
Section 4.2(d) for the sale of the Offered Stock to the other party referred to
in Section 4.2(c). Notwithstanding anything to the contrary herein, the prior
delivery of Buy-Sell Offers by one Stockholder to the other Stockholder in
accordance with Section 3.5(a) above shall suspend the right of the Offeree to
deliver a Refusal Offer to the Offeror in accordance with Section 4.2(a) above.
4.4 TRANSFER TO AFFILIATE. Notwithstanding anything to the contrary
herein, each Stockholder shall have the right at any time to sell, transfer or
assign all, but not less than all, of its Shares to any Affiliate of such
Stockholder; provided that (a) the Affiliate first agrees in writing to become a
party to and be bound by this Agreement, and (b) the transferring Stockholder
shall remain liable for all of its obligations under this Agreement as if such
sale, transfer or assignment had not occurred; and further provided that if at
any time any such transferee ceases to be an Affiliate of the transferor, then
prior thereto the transferor Stockholder shall reacquire all of the Shares that
it transferred to its Affiliate. Upon any such sale, transfer or assignment of
stock to an Affiliate of a Stockholder, such Affiliate shall be deemed to be a
"Stockholder" for all purposes under this Agreement and shall have all of the
rights, obligations (including, without limitation, the obligations set forth in
ARTICLE 3 hereof) and liabilities of the transferring Stockholder.
4.5 OWNERSHIP AND CONTROL OF WS. WS represents and warrants to JWG and
Company that John Elway personally or his Affiliates (as set forth on SCHEDULE
4.5, which is incorporated herein by reference) own all of the issued and
outstanding member interests of WS, and WS covenants that such ownership shall
continue at all times that WS owns Shares, unless any change thereto (other than
a change reflecting only a transfer to a member of the immediate family of John
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Elway or to a trust whose sole beneficiary(ies) is or are such members) is
approved in writing by JWG.
ARTICLE 5.
PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
5.1 INTELLECTUAL PROPERTY. Except as expressly provided herein or as
may be agreed by the Stockholders in writing, neither Stockholder shall acquire
any right, title or interest in any patent, patent right, copyright, trade
secret, know-how, invention, technology, innovation, computer program, software,
idea, design, plan, specification, process or method of any other Stockholder or
Company. If any such right, title or interest is so acquired by either
Stockholder by operation of law or otherwise, such Stockholder shall, upon the
request of the other Stockholder or Company (as the case may be), convey such
right, title or interest back to such other Stockholder or Company (as the case
may be).
5.2 MARKS. Except as expressly provided here or as may be agreed by the
Stockholders in writing, neither any Stockholder nor Company shall directly or
indirectly use as part of its corporate or business name, or in connection with
its business, all or any part of any trademark, service mark, trade name or logo
(collectively the "MARKS") that may now or hereafter be owned or used by any
other Stockholder or Company. If any such Marks are used by a Stockholder or
Company (the "USER") with the express written approval of the other Stockholder
or Company (the "OWNER"), then upon termination of this Agreement for any
reason, or in the event any party hereto ceases to be a Stockholder of Company,
the User shall delete and discontinue all such use, and shall not thereafter use
any name, title or expression in connection with any business in which the Owner
may thereafter be engaged that in the reasonable judgment of the Owner so nearly
resembles any of such Marks, or part thereof, owned or used by the Owner as may
be likely to lead to confusion or uncertainty on the part of the public. Except
as otherwise expressly provided herein, each Stockholder and Company expressly
disclaims any right, title, or interest in the ownership and use of any of the
Marks of the others, and such disclaimer shall survive any termination of this
Agreement.
ARTICLE 6.
TERMINATION AND EXPIRATION
6.1 TERMINATION OF THE AGREEMENT.
(a) This Agreement shall terminate automatically, without
action by any party hereto, upon the earliest occurrence of any of the
following events: (1) mutual written agreement of the Stockholders; (2)
the sale or other disposition of all or substantially all of Company's
assets; (3) the dissolution of Company; or (4) either Stockholder
purchases all of the Shares owned by the other Stockholder.
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(b) Upon the occurrence of any of the following events, the
Stockholder to which such event is not applicable shall have the right
to terminate this Agreement immediately by written notice to the other
Stockholder and Company:
(1) a trustee, receiver or liquidator is appointed
for all or a substantial part of the assets or property of
either Stockholder;
(2) a voluntary winding-up petition is filed with
respect to either Stockholder, or an involuntary petition is
filed and is not dismissed within ninety (90) days after
filing;
(3) the interests of either Stockholder are
assigned for the benefit of creditors;
(4) either Stockholder ceases the active conduct of
its business (provided that the Stockholders agree not to
cease the active conduct of their respective businesses
voluntarily during the two (2) year period immediately
following the date hereof);
(5) either Stockholder dissolves or liquidates
(provided that the Stockholders agree not to dissolve or
liquidate voluntarily during the two (2) year period
immediately following the date hereof);
(6) either Stockholder is in material breach or
default under this Agreement provided that such breaching
Stockholder is given notice of such breach and fails to cure
such breach within 30 days; or
(7) with respect to WS, upon the death or Permanent
Disability of John Elway.
In the event of such termination (a "STOCKHOLDER TERMINATION"), the
Stockholder to which such event is not applicable (the "NON-DEFAULTING
STOCKHOLDER") shall have the right and option (the "TERMINATION
OPTION") but not the obligation, exercisable by written notice to the
other parties hereto, (i) to purchase the Shares of the Stockholder to
which such event is applicable (the "AFFECTED STOCKHOLDER") at a price
equal to a percentage of the Fair Value of Company (determined as
specified in the succeeding clause (c)) equal to the percentage of the
total issued and outstanding share capital of Company held by the
Affected Stockholder as of the date of the Stockholder Termination, or
(ii) to cause the sale of Company, either in a private transaction or
to the public (at the option of the Non-Defaulting Stockholder in its
discretion) to a third party that is not an Affiliate of either
Stockholder for a price equal to the Fair Value, in which case the
Affected Stockholder agrees to sell its Shares to such third party, or,
if applicable, to consent to a sale of all or substantially all of
Company's assets or a merger of Company with such third party. The
Termination Option may be exercised by the Non-Defaulting Stockholder
at any time from the date of the Stockholder Termination until the
later of (x) the date that is sixty (60) days after such Stockholder
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Termination, or (y) the date that is thirty (30) days after its receipt
of the Appraisal (as defined in the succeeding clause (c)).
(c) Determination of Fair Value. In the event of a Stockholder
Termination, the Non-Defaulting Stockholder shall notify Company of
such event, whereupon Company shall promptly engage an investment
banking firm (the "APPRAISER") to determine the Fair Value (as defined
below) of Company, at the expense of the Affected Stockholder. Company
shall provide any existing information in its possession or control
that the Appraiser may request in order to determine the Fair Value.
The Appraiser shall report the Fair Value of Company in writing (the
"APPRAISAL") to each Stockholder and Company within 60 days after its
engagement by Company. For purposes of this Agreement, "FAIR VALUE"
means the price that a willing buyer under no compulsion to buy and in
possession of all information considered relevant by the Appraiser
would pay for the stock of Company, and which a willing seller under no
compulsion to sell would accept, taking into account historical,
present and expected future values, and assuming that Company will
continue to operate Company's Business as a going concern and that the
covenants made in Sections 7.1 and 7.2 hereof shall continue. In
determining the Fair Value upon a Stockholder Termination pursuant to
Section 6.1(b)(7), the Appraiser shall also take into account the
effect upon Company of the death or Permanent Disability of John Elway.
6.2 TOLLING IN EVENT OF STOCKHOLDER TERMINATION. Notwithstanding
anything to the contrary herein, the occurrence of a Stockholder Termination
shall suspend the right of the Affected Stockholder to deliver a Refusal Offer
or sell the Offered Stock under Section 4.2 above, or, if applicable, to deliver
Buy-Sell Offers under Section 3.5 above, until such time (if any) as the period
of time for the exercise of the Termination Option by the Non-Defaulting
Stockholder has expired without such Termination Option being exercised. If such
Termination Option is exercised by the Non-Defaulting Stockholder, then any
Refusal Offer or Buy-Sell Offers then in effect, and all proceedings under
Sections 3.5 or 4.2, shall be deemed to be canceled and shall be of no further
force or effect.
6.3 EFFECT OF TERMINATION. Termination of this Agreement shall not
affect any obligations of either of the Stockholders hereunder which have
accrued by, and are not discharged prior to (in accordance with their terms),
such termination, nor affect the rights of either Stockholder to recover damages
from the other Stockholder by reason of any breach of this Agreement which has
accrued prior to or would by its nature accrue after such termination. As an
example, and without limiting the effect of this Section, the provisions of
Sections 6.1(b), 7.1, 7.2 and 7.5 shall survive the termination of this
Agreement.
ARTICLE 7.
GENERAL AND MISCELLANEOUS
7.1 NON-COMPETITION; NON-SOLICITATION.
(a) As long as it remains a stockholder of Company, neither
any Stockholder nor any of its Affiliates shall, directly or
indirectly, other than through Company, engage in, or have any interest
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in any Person that engages in, a business competitive with Company's
Business within the United States; provided, however, that if at any
time one Stockholder purchases all of the Shares owned by the other
Stockholder, the purchasing Stockholder shall no longer be bound by
this Section 7.1. The applicability of this Section 7.1 to each
Stockholder shall survive the termination or expiration of this
Agreement. Notwithstanding anything to the contrary herein, any
Stockholder may own, either of record or beneficially, solely for
investment purposes, up to one percent (1%) of the shares or stock or
other equity interest of any publicly traded corporation or other
entity which engages in a business competitive with Company's Business
within the United States.
(b) Notwithstanding the provisions of Section 7.1(a) above, WS
acknowledges that JWG and its Affiliates already provide securities
brokerage, corporate finance, asset management, capital formation,
investment banking and financial advisory services through traditional
means and on-line (including via the medium of e-commerce), and JWG and
its Affiliates may continue these activities independently. WS further
agrees that JWG and its Affiliates have no duties or obligations to
Company or WS with respect to such matters.
(c) As long as it remains a stockholder of Company and for a
period of six (6) months after it ceases to be a stockholder of
Company, JWG will not, and will not permit its Affiliates to, either
for themselves or on behalf of another, without the prior written
consent of Company, solicit, induce or cause any employee of Company or
WS, or of any Affiliate thereof, to leave the employment of Company,
WS, or such Affiliate, as the case may be, or become employed by JWG.
(d) As long as it remains a stockholder of Company and for a
period of six (6) months after it ceases to be a stockholder of
Company, WS will not, and will not permit its Affiliates to, either for
themselves or on behalf of another, without the prior written consent
of Company, solicit, induce or cause any employee of Company or JWG, or
of any Affiliate thereof, to leave the employment of Company, JWG or
such Affiliate, as the case may be, or become employed by WS.
7.2 CONFIDENTIALITY. For so long as this Agreement remains in effect
and for a period of five (5) years thereafter, neither any Stockholder nor any
of its Affiliates shall, directly or indirectly, divulge, use, furnish, disclose
or make available to anyone other than Company or its affiliates, or its or
their directors or officers as appropriate, any Confidential Information. For
purposes of this Agreement, "CONFIDENTIAL INFORMATION" means information
relating to Company, its clients, or its business that derives value from not
being generally known to other persons, including, but not limited to, technical
or nontechnical data, formulas (including criteria for weighing stock selection
factors), patterns (including investment patterns), compilations (including
stock selection and buy lists), programs, devices, methods (including stock
selection and portfolio design and monitoring methods), techniques, drawings,
processes, financial data, or lists of actual or potential clients, whether or
not reduced to writing. Confidential Information includes information disclosed
to Company by third parties that Company is obligated to maintain as
confidential. Confidential Information subject to this Agreement may include
information that is not a trade secret under applicable law, but information
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that is not also a trade secret shall constitute Confidential Information only
for two (2) years after this Agreement is no longer in effect.
7.3 BINDING ON TRANSFEREES. Except as otherwise expressly provided
herein, the provisions of this Agreement shall be binding upon and shall inure
to the benefit of the Stockholders, and their permitted successors and assigns,
including, without limitation, all subsequent holders of the shares of Company.
Notwithstanding anything to the contrary herein, no sale, gift, assignment,
encumbrance or other transfer or disposition (by operation of law or otherwise)
of any 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.
7.4 LEGEND ON CERTIFICATES. Each certificate or other evidence
representing the Shares shall bear the following legend:
"Transfer of any of the shares represented by this certificate
and the exercise of the voting rights of such shares are
restricted by and entitled to the benefits of that certain
Stockholders Agreement dated July 15, 1999, as amended, by and
among the holders of issued and outstanding shares of Company,
a copy of which may be inspected at the principal office of
Company."
7.5 MEDIATION; ARBITRATION.
(a) Any controversy or claim arising from, out of or relating
to this Agreement, the breach hereof or the termination hereof which
would give rise to a claim under federal, state or local law (including
but not limited to claims based in tort or contract, claims for
discrimination under state or federal law, and/or claims for violation
of any federal, state or local law, statute or regulation) ("CLAIMS")
shall first be submitted for mediation in a conference with an
impartial mediator ("MEDIATOR") selected jointly by the parties. The
parties will use their best efforts to participate in such mediation
conference within forty five (45) days after either makes a Claim. Both
parties shall attend such mediation conference and attempt to resolve
any and all Claims. Notwithstanding the foregoing, either party shall
have the right to seek injunctive and/or other equitable relief in a
court of competent jurisdiction in the event of a material breach of
the provisions of Sections 7.1 or 7.2 of this Agreement upon
twenty-four (24) hours' prior written notice to the other party.
(b) If the parties are not able to resolve all Claims by
mediation, any unresolved Claims, including any dispute as to whether a
matter constitutes a Claim which must be submitted to arbitration,
shall be determined by final and binding arbitration in West Palm
Beach, Florida or Atlanta, Georgia (as selected by WS), or another
mutually agreed upon location in accordance with the commercial rules
("RULES") of the American Arbitration Association, by an experienced
arbitrator licensed to practice law in the State of Florida or Georgia,
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in accordance with such Rules, except as herein specified. The
arbitrator shall be selected by alternate striking from a list of six
(6) arbitrators, half of which shall be supplied by JWG and half by WS.
If WS does not supply a list of arbitrators, JWG shall select the
arbitrator. If WS does supply a list, JWG shall strike first. The
process shall be repeated twice until an arbitrator is selected. If an
arbitrator is still not selected by the above process, then, the
Mediator shall provide a list of three (3) names which will be
alternately struck, with JWG striking first, until a selection is made.
(c) A demand for arbitration shall be made within a reasonable
time after the Claim has arisen and has not been resolved by mediation.
In no event shall the demand for arbitration be made after the date
when institution of legal and/or equitable proceedings based on such
Claim would be barred by the applicable statute of limitations. Each
party to the arbitration will be entitled to be represented by counsel
and will have the opportunity to take such depositions and undertake
such other discovery as the arbitrator may determine to be appropriate.
The arbitrator shall have the authority to hear and grant a motion to
dismiss and/or for summary judgment, applying the standards governing
such motions under the Federal Rules of Civil Procedure. Each party
shall have the right to subpoena witnesses and documents for the
arbitration hearing. A court reporter shall record all arbitration
proceedings. The decision of the arbitrator may be entered and enforced
in any court of competent jurisdiction by either JWG or WS.
(d) Each party shall pay the fees of its attorneys the
expenses of its witnesses and any other expenses connected with
presenting its case (except as otherwise awarded by the arbitrator).
Other costs, including the fees of the Mediator or the arbitrator, the
cost of any record or transcript of the proceedings, and administrative
fees, shall be borne one-half (1/2) by WS and one-half (1/2) by JWG.
Should either party pursue any dispute or matter covered by this
Section 7.5 by any method other than said arbitration, the defending
party shall be entitled to recover from the moving party all damages,
costs, expenses, and attorneys' fees incurred by the defending party as
a result of such action. The provisions contained in this Section 7.5
shall survive the termination and/or expiration of this Agreement.
(e) Notwithstanding this Section 7.5 or anything else in this
Agreement, the resolution of any Disputed Matter shall be addressed
pursuant to the terms of ARTICLE 3 hereof and not pursuant to this
Section 7.5.
7.6 NOTICES. All notices, consents, requests, and demands to or upon
the respective parties hereto to be effective shall be in writing and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made (i) on the date delivered in person; (ii) on the date indicated on the
return receipt if mailed postage prepaid, by certified or registered U.S. Mail,
with return receipt requested; (iii) on the date transmitted by facsimile, if
sent by 5:00 P.M., Eastern Time, and confirmation of receipt thereof is
reflected or obtained; or (iv) if sent by Federal Express or other national
recognized overnight courier service or overnight express U.S. Mail, with
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service charges or postage prepaid, then on the next business day after delivery
to the courier service or U.S. Mail (in time for and specifying next day
delivery). In each case (except for personal delivery) such notices, requests,
demands, and other communications shall be sent to a party at the following
addresses:
To JWG: 980 N. Federal Highway
Suite 310
Boca Raton, Florida 33432
Attn: Marshall T. Leeds
Facsimile: 561 338-2827
To WS: 10030 East Arapahoe Road
Englewood, Colorado 80110
Attn: John Elway
Facsimile: (303)
To Company: 980 N. Federal Highway
Suite 310
Boca Raton, Florida 33432
Attn: Marshall T. Leeds
Facsimile: 561 338-2827
Any party hereto may change its address for the purpose of this Agreement by
giving notice to the other parties at the addresses and in the manner provided
above.
7.7 GOVERNING LAW. The validity and effect of this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Florida, without regard to its principles of conflicts of laws.
7.8 PARTIAL INVALIDITY. If any term, covenant or provision of this
Agreement, or any part thereof, is found by any court of competent jurisdiction
to be invalid, illegal or unenforceable in any respect, the same shall not
affect the remainder of such term, covenant or provision, or any other terms,
covenants or provisions of this Agreement, all of which shall be given the
maximum effect possible without regard to the invalid, illegal or unenforceable
term, covenant or provision, or portion thereof, unless the result of any such
invalidity, illegality or unenforceability shall be to cause a material failure
of consideration to the party seeking to sustain the validity, legality or
enforceability of the subject provision. In lieu of any such invalid, illegal or
unenforceable provision, and absent any such material failure of consideration,
the parties hereto intend that there shall be substituted therefor as part of
this Agreement a term, covenant or provision as similar in terms to such
invalid, illegal or unenforceable term, covenant or provision, or part thereof,
as may be possible and be valid, legal and enforceable.
7.9 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
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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.
7.10 FURTHER DOCUMENTS AND ACTIONS. The parties shall take such further
actions and execute and deliver such further 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.
7.11 HEADINGS. The headings as to the contents of particular sections
or paragraphs 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.
7.12 ENTIRE AGREEMENT. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter hereof,
and this Agreement, together with any documents that are attached hereto as
Exhibits and Schedules, 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 party or parties to be bound by such modification or amendment.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf on the day and year set forth across its
signature below.
JWGENESIS FINANCIAL CORP.
By: /s/ Marshall T. Leeds
Name: Marshall T. Leeds
Title: President
WOODY SPRINGS LLC
By: /s/ John Elway
Name:__________________________
Title:_________________________
MVP.COM, INC.
By: /s/ Joel E. Marks
Name: Joel E. Marks
Title: Secretary
EMPLOYMENT AGREEMENT
This Employment Agreement (the "AGREEMENT") is entered into as of the
15th day of July, 1999 ("COMMENCEMENT DATE"), by and between JWGenesis Financial
Corp., a Florida corporation with its principal offices at 980 N. Federal
Highway, Suite 300, Boca Raton, Florida 33432 ("COMPANY"), and John Elway, an
individual with his principal address at 10030 East Arapahoe Road, Englewood, CO
80110 ("EXECUTIVE"), with respect to the engagement of Executive to provide to
Company the services set forth below on the following terms and conditions:
1. ENGAGEMENT AND TERM. Company hereby employs Executive, and Executive hereby
accepts such employment, to provide or perform the services described in
Paragraph 3 hereof during the five-year period starting on the Commencement Date
(the "TERM"), in consideration for the compensation to Executive described in
Paragraph 2 hereof. Each of the five consecutive twelve-month periods of the
Term, starting with the Commencement Date, is referred to herein as a "CONTRACT
YEAR."
2. COMPENSATION. In consideration for Executive's services to Company to be
rendered hereunder, Company shall execute and deliver to Executive a Stock
Option Agreement in substantially the form attached hereto as EXHIBIT A,
pursuant to which (i) Executive will be granted a fully vested option (the
"OPTION") to purchase four hundred and fifty thousand (450,000) shares of the
Company's common stock, $.001 par value (the "SHARES"), at a price of $13.40 per
share, which Option shall terminate on the fifth anniversary of its grant and
(ii) Executive will be entitled to certain registration rights with respect to
any Shares acquired by him pursuant to the exercise of his Option.
3. CONSULTING AND PERSONAL SERVICES.
(a) During the Term, Executive shall, faithfully and to the best of his
ability, provide services to Company and its affiliates as required in the
following areas: (i) consultation and advice with respect to strategies to
promote the business and profile of Company and to motivate the personnel of
Company; (ii) on-camera spokesperson and broadcast personality services in
connection with the production and broadcast of one or more radio and/or
television commercials commissioned by Company; (iii) print media personality
services, including availability for promotional photography sessions, in
connection with the production and dissemination of one or more print-based
advertising and/or marketing campaigns commissioned by Company; (iv) on-line
services, including availability for on-line conferences and other special
promotional events sponsored by Company; (v) personal appearances at various
Company-sponsored sales conferences, employee meetings and public functions; and
(vi) such other services as may be mutually agreed upon by the parties. In no
event shall the aggregate number of days on which services are required to be
provided by Executive exceed ten (10) days per Contract Year. Company
acknowledges that Executive has other professional and personal commitments.
Company shall use its best efforts to notify Executive at least thirty (30) days
prior to each proposed scheduled service date and Executive shall use reasonable
efforts to accommodate Company's proposed scheduled service dates. Executive
shall provide on a regular basis to the person designated from time to time by
<PAGE>
Company (the "DESIGNATED LIAISON"), a schedule of professional and personal
commitments of Executive that could affect the availability of Executive to
provide services hereunder.
(b) Executive also agrees, if requested by Company and acceptable to
Executive, to serve as a member of the Board of Directors of Company (but not of
any subsidiary of Company) and committees thereof without any additional
compensation therefor, except for such as Company may pay to other persons who
serve as outside directors.
(c) 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.
(d) Executive agrees to cooperate with the Company's efforts to obtain
a life insurance policy, paid by the Company, that insures Executive's life
during the Term and names the Company as the beneficiary.
4. EXPENSES. Company shall promptly reimburse Executive for documented expenses
reasonably incurred by Executive and his guest in connection with the
performance of his services hereunder. Air travel for Executive and his guest
shall be on a domestic first-class basis, or its equivalent international basis.
Hotel stays for Executive and his guest shall be at Marriott Hotels, or their
equivalent. Executive and his guest's ground transportation and meals while
traveling shall be reimbursed at an agreed upon per diem or shall be provided by
Company.
5. PROTECTION OF CONFIDENTIAL INFORMATION; NON-COMPETITION.
(a) Executive acknowledges that Executive's work for Company will bring
Executive into close contact with many confidential affairs of Company not
readily available to the public, and plans for future developments of Company.
Accordingly, Executive hereby agrees that, as a material inducement for Company
to enter into this Agreement, Executive is subject to the following restrictive
covenants:
(i) Executive will not, during the Term or at any time for a
period of five (5) years thereafter, divulge, use, furnish, disclose or
make available to anyone other than Company or its affiliates, or its
or their directors or officers as appropriate, any Confidential
Information (as defined below), except as may be necessary or
appropriate in the ordinary course of performing the consulting
services set forth herein.
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(ii) For purposes of this Agreement, "CONFIDENTIAL
INFORMATION" means information relating to Company (which includes such
information as previously related to Executive prior to the date
hereof), its clients, or its business that derives value from not being
generally known to other persons, including, but not limited to,
technical or nontechnical data, formulas (including criteria for
weighing stock selection factors), patterns (including investment
patterns), compilations (including stock selection and buy lists),
programs, devices, methods (including stock selection and portfolio
design and monitoring methods), techniques, drawings, processes,
financial data, or lists of actual or potential clients, whether or not
reduced to writing. Confidential Information includes information
disclosed to Company by third parties that Company is obligated to
maintain as confidential. Confidential Information subject to this
Agreement may include information that is not a trade secret under
applicable law, but information that is not also a trade secret shall
constitute Confidential Information only for two years after the last
day Executive is engaged hereunder (whether this Agreement is
terminated voluntarily or involuntarily, with or without cause).
(iii) Executive agrees that Executive shall not make or retain
a copy of, nor make or cause to be made any notes of, nor remove or
cause to be removed from the premises of Company, any document or
recording incorporating any Confidential Information belonging to or
relating to Company (which, Executive acknowledges, is and shall remain
at all times the property of Company) unless such copying or making of
notes or removal of any such document or recording is necessary or
appropriate for the proper and efficient discharge by Executive of the
consulting services set forth herein; PROVIDED, HOWEVER, that if the
Board of Directors or a senior executive officer of Company has
authorized removal or copying of such Confidential Information,
Executive shall return such document, papers, copies or notes to
Company forthwith after the authorized purpose has ceased or has been
completed or on the demand of Company.
(iv) If Company's engagement of Executive is terminated
hereunder, whether by Company or by Executive and for whatever reason,
Executive will immediately deliver to Company, within three (3)
business days of a request by Company: (A) all materials incorporating
Confidential Information and (B) any and all other property or
equipment which is properly the property of Company or any affiliate
thereof.
(b) Executive acknowledges that Executive's services are unique and
extraordinary. Executive also acknowledges that Executive's position may give
Executive access to Confidential Information of substantial importance to the
business of Company. If Company terminates its engagement of Executive pursuant
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to Paragraphs 6(a) or (b), or Executive terminates the engagement for reasons
other than pursuant to Paragraph 6(c), Executive will not, at any time within
two (2) years after such termination (the "NON-COMPETITION PERIOD"), 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, Executive 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 Company within the continental United States on the date hereof
or, to the extent permitted by and enforceable under applicable law, in which
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 stock is listed for trading or quotation on a
national or regional stock exchange registered with the Securities and Exchange
Commission or The Nasdaq Stock Market.
(c) Executive also agrees that, during the Non-Competition Period,
Executive shall not, directly or indirectly, solicit, offer to hire, entice
away, or in any other manner persuade or attempt to persuade any person who is,
at that time, an officer, employee, agent, representative, or spokesperson of
Company to discontinue his or her relationship with Company (each, a "PROHIBITED
SOLICITATION"). Executive shall be deemed to be in breach of Executive's
obligations under this Paragraph 5(c) if any business entity which employs
Executive, or in which he has any direct or indirect interest, engages in a
Prohibited Solicitation, but only if the Prohibited Solicitation results from an
action or effort of Executive undertaken for such purpose.
6. TERMINATION.
(a) Company may terminate this Agreement and its engagement of
Executive upon written notice to Executive "for cause," effective as of the date
of such written notice. For purposes of this Paragraph 6(a) "CAUSE" shall mean:
(i) commission of any act of willful misconduct, fraud or gross negligence by
Executive in providing consulting services hereunder; (ii) willful failure,
refusal or neglect by Executive to comply with Executive's material obligations
hereunder, which failure, refusal or neglect is not cured to the satisfaction of
Company within fourteen (14) business days after Company's written notice to
Executive thereof; (iii) the commission by Executive of any act which
constitutes a felony or involves moral turpitude; or (iv) the knowing
disparagement by Executive of Company, its products or services, or its
personnel.
(b) Company may terminate this Agreement and its engagement of
Executive upon the death or disability of Executive. For purposes of this
Paragraph 6(b), "DISABILITY" shall mean Executive's unavailability to perform
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services requested by Company because of physical or mental injury or illness
during any continuous period of one hundred twenty (120) days or for shorter
periods aggregating more than one hundred twenty (120) days in any consecutive
twelve-month period.
(c) Executive may terminate this Agreement only if Company is in
material breach of its obligations to Executive hereunder, and Company fails to
cure such breach to the reasonable satisfaction of Executive within fourteen
(14) business days following written notice of such breach by Executive to
Company.
(d) If Company terminates its engagement of Executive pursuant to
Paragraph 6(a) or 6(b) above, Executive shall be entitled to receive any unpaid
reimbursable expenses incurred as of the date of such termination (the
"TERMINATION DATE").
7. PUBLICITY RIGHTS. Executive hereby grants to Company and its affiliates
during the Period of Use (as defined below) the non-exclusive worldwide right,
license and authority to use his name, image, likeness, persona, voice,
personality, style, presence, mannerisms, and biographical information in, and
for the purposes of promoting Company, its affiliates, and the services rendered
by Executive pursuant to this Agreement. Notwithstanding the foregoing, the
parties agree that all rights granted to Company hereunder shall be subject to
the prior review and approval by Executive of Company's proposed uses of his
name, image, likeness, persona, voice, personality, style, presence, mannerisms
and biographical information, which approval shall not be unreasonably withheld,
condition or delayed. Prior to the first use of any such material, Company shall
deliver to Executive or his designated representative (initially Jeffrey
Sperbeck) true, correct and complete copies thereof. Executive shall have seven
(7) days following receipt of such material to object in writing to Company's
use of such material. If Company receives written notice of such objection,
Company agrees that it will not utilize the containing the name, image,
likeness, persona, voice, personality, style, presence, mannerisms or
biographical information of Executive unless or until Executive's reasonable
objections have been satisfied and such material has been modified to
Executive's reasonable satisfaction. If Executive does not object to the use of
any such material in writing within such seven (7)-day period, Executive shall
be deemed to have consented to its use. For purposes of this Paragraph 7,
"PERIOD OF USE" shall mean the period of time starting on the Commencement Date
and ending on its fifth anniversary, whether or not this Agreement is terminated
prior to the end of the Term; provided, however, that if this Agreement
terminates pursuant to Paragraph 6(c), the Period of Use shall expire six (6)
months following the Paragraph 6(c) Termination Date.
8. RIGHTS TO WORK PRODUCT. To the greatest extent possible, any work product,
property, data, documentation or information or materials prepared, conceived,
discovered, developed or created by Executive, including Executive's affiliates,
agents and subcontractors, in connection with performing consulting services
during the Term ("WORK PRODUCT"), shall be deemed to be "work made for hire" as
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defined in the Copyright Act, 17 U.S.C.A. Section 101 et. seq., as amended, and
owned exclusively and perpetually by Company. Executive hereby unconditionally
and irrevocably transfers and assigns to Company all intellectual property or
other rights, title and interest Executive may currently have (or in the future
may have) by operation of law or otherwise in or to any Work Product. Executive
agrees to execute and deliver to Company, at Company's expense, any transfers,
assignments, documents or other instruments which Company may deem necessary or
appropriate to vest complete and perpetual title and ownership of any Work
Product and all associated rights exclusively in Company.
9. MEDIATION; ARBITRATION.
(a) Any controversy or claim arising from, out of or relating to this
Agreement, the breach hereof or the engagement or termination hereof which would
give rise to a claim under federal, state or local law (including but not
limited to claims based in tort or contract, claims for discrimination under
state or federal law, and/or claims for violation of any federal, state or local
law, statute or regulation) ("CLAIMS") shall first be submitted for mediation in
a conference with an impartial mediator ("MEDIATOR") selected jointly by the
parties. The parties will use their best efforts to participate in such
mediation conference within forty five (45) days after either makes a Claim.
Both parties shall attend such mediation conference and attempt to resolve any
and all Claims. Notwithstanding the foregoing, either party shall have the right
to seek injunctive and/or other equitable relief in a court of competent
jurisdiction in the event of a material breach of the provisions of Paragraph
5(a), 5(b), 5(c), 7 or 8 of this Agreement upon twenty-four (24) hours' prior
written notice to the other party.
(b) If the parties are not able to resolve all Claims by mediation, any
unresolved Claims, including any dispute as to whether a matter constitutes a
Claim which must be submitted to arbitration, shall be determined by final and
binding arbitration in West Palm Beach, Florida or Atlanta, Georgia (as selected
by Executive), or another mutually agreed upon location in accordance with the
commercial rules ("RULES") of the American Arbitration Association, by an
experienced arbitrator licensed to practice law in the State of Florida or
Georgia, in accordance with such Rules, except as herein specified. The
arbitrator shall be selected by alternate striking from a list of six (6)
arbitrators, half of which shall be supplied by Company and half by Executive.
If Executive does not supply a list of arbitrators, Company shall select the
arbitrator. If Executive does supply a list, Company shall strike first. The
process shall be repeated twice until an arbitrator is selected. If an
arbitrator is still not selected by the above process, then, the Mediator shall
provide a list of three (3) names which will be alternately struck, with Company
striking first, until a selection is made.
(c) A demand for arbitration shall be made within a reasonable time
after the Claim has arisen and has not been resolved by mediation. In no event
shall the demand for arbitration be made after the date when institution of
legal and/or equitable proceedings based on such Claim would be barred by the
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applicable statute of limitations. Each party to the arbitration will be
entitled to be represented by counsel and will have the opportunity to take such
depositions and undertake such other discovery as the arbitrator may determine
to be appropriate. The arbitrator shall have the authority to hear and grant a
motion to dismiss and/or for summary judgment, applying the standards governing
such motions under the Federal Rules of Civil Procedure. Each party shall have
the right to subpoena witnesses and documents for the arbitration hearing. A
court reporter shall record all arbitration proceedings. The decision of the
arbitrator may be entered and enforced in any court of competent jurisdiction by
either Company or Executive.
(d) Each party shall pay the fees of its attorneys the expenses of its
witnesses and any other expenses connected with presenting its case (except as
otherwise awarded by the arbitrator). Other costs, including the fees of the
Mediator or the arbitrator, the cost of any record or transcript of the
proceedings, and administrative fees, shall be borne one-half (1/2) by Executive
and one-half (1/2) by Company. Should either party pursue any dispute or matter
covered by this Paragraph 9 by any method other than said arbitration, the
defending party shall be entitled to recover from the moving party all damages,
costs, expenses, and attorneys' fees incurred by the defending party as a result
of such action. The provisions contained in this Paragraph 9 shall survive the
termination and/or expiration of this Agreement.
10. INDEMNIFICATION.
(a) Each of the parties agrees to indemnify and hold harmless the other
party, its officers, directors and employees, from and against any and all loss,
liability, claims, costs and damages, including but not limited to reasonable
attorneys fees, arising directly or indirectly from a breach of the terms and
conditions of this Agreement by the other party.
(b) Company agrees to indemnify and hold harmless Executive from any
and all third party claims, actions, suits, demands, loses, damages and all
costs and expenses including but not limited to reasonable attorney's fees which
Consultant may hereafter incur in connection with, or arising out of Executive's
good faith performance of his obligations undertaken herein, except for
negligent acts of Executive and acts of intentional misconduct of Executive
provided that Company shall be given prompt notice thereof.
11. GENERAL AND MISCELLANEOUS.
(a) All notices, consents, requests, and demands to or upon the
respective parties hereto to be effective shall be in writing and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made (i) on the date delivered in person, (ii) on the date indicated on the
return receipt if mailed postage prepaid, by certified or registered U.S. Mail,
with return receipt requested, (iii) on the date transmitted by facsimile, if
sent by 5:00 P.M., Eastern Time, and confirmation of receipt thereof is
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<PAGE>
reflected or obtained, or (iv) if sent by Federal Express or other national
recognized overnight courier service or overnight express U.S. Mail, with
service charges or postage prepaid, then on the next business day after delivery
to the courier service or U.S. Mail (in time for and specifying next day
delivery). In each case (except for personal delivery) such notices, requests,
demands, and other communications shall be sent to a party at its address first
set forth above.
(b) Executive shall not have the right to assign this Agreement or any
of Executive's rights or obligations hereunder. Company shall have the right to
assign this Agreement to any direct or indirect subsidiary of Company. Company
shall not have the right to assign this Agreement to a third party in connection
with the transfer of a material portion of Company's business without the
consent of Executive, such consent not to be unreasonably withheld. Any
assignment by Company of this Agreement or any of its rights hereunder shall not
relieve it of its obligations hereunder. Company shall notify Executive if
Company assigns this Agreement.
(c) No course of dealing nor any delay on the part of either party in
exercising any rights hereunder will operate as a waiver of any rights of such
party. No waiver of any default or breach of this Agreement (or of the
application of any term, covenant or provision hereof) shall be deemed a
continuing waiver or a waiver of any other breach or default (or the waiver of
any other application of any term, covenant or provision).
(d) Notwithstanding any other provisions of this Agreement, Paragraphs
5, 7, 8, 9, 10, and, to the extent of expenses incurred by Executive prior to
the effective date of termination, Paragraph 4, shall survive any termination of
this Agreement and shall remain in full force and effect.
(e) This Agreement shall be governed, interpreted and construed in
accordance with the laws of the State of Florida without regard to conflict of
law principles. Any suit, action or proceeding with respect to this Agreement,
to the extent permitted by paragraph 10 hereof, shall be brought exclusively in
the state courts of the State of Florida or in the federal courts of the United
States which are located in West Palm Beach, Florida. The parties hereby agree
to submit to the jurisdiction and venue of such courts for the purposes hereof.
Each party agrees that, to the extent permitted by law, the losing party in a
suit, action or proceeding in connection herewith shall pay the prevailing party
its reasonable attorneys' fees incurred in connection therewith.
(f) This Agreement constitutes the entire agreement between the parties
and supersedes all prior understandings and agreements, whether oral or written,
regarding Executive's engagement by Company to provide the consulting services
set forth herein. This Agreement shall not be altered or modified except in
writing, duly executed by the parties hereto.
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(g) Company and Executive hereby warrant and agree that each is free to
enter into this Agreement.
(h) If any term, covenant or provision of this Agreement, or any part
thereof, is found by any court of competent jurisdiction to be invalid, illegal
or unenforceable in any respect, the same shall not affect the remainder of such
term, covenant or provision, or any other terms, covenants or provisions of this
Agreement, all of which shall be given the maximum effect possible without
regard to the invalid, illegal or unenforceable term, covenant or provision, or
portion thereof, unless the result of any such invalidity, illegality or
unenforceability shall be to cause a material failure of consideration to the
party seeking to sustain the validity, legality or enforceability of the subject
provision. In lieu of any such invalid, illegal or unenforceable provision, and
absent any such material failure of consideration, the parties hereto intend
that there shall be substituted therefor as part of this Agreement a term,
covenant or provision as similar in terms to such invalid, illegal or
unenforceable term, covenant or provision, or part thereof, as may be possible
and be valid, legal and enforceable.
[remainder of page left blank intentionally]
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
"COMPANY"
JWGENESIS FINANCIAL CORP.
By: /s/ Marshall T. Leeds
Marshall T. Leeds,
Chairman and Chief Executive Officer
"EXECUTIVE"
/s/ John Elway
JOHN ELWAY
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
this 15th day of July 1999, by and between JWGenesis Financial Corp., a Florida
corporation (the "Company"), and John Elway (the "Optionee").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Employment Agreement dated as of July
15, 1999, by and between the Company and the Optionee (the "Employment
Agreement") the Company expects (and desires to motivate) Optionee to provide
valuable services to the Company that will enhance the value of the Company for
its Stockholders; and
WHEREAS, in consideration of such services, the Company has approved
the grant of an option to purchase shares of the Company's common stock, $.001
par value ("Common Stock"), to the Optionee, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and undertakings contained herein, and other good
and valuable consideration, the parties hereto hereby agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions of the
Employment Agreement and this Agreement, the Company hereby grants to the
Optionee the right and option (the "Option") to purchase four hundred and fifty
thousand (450,000) shares of Common Stock (the "Shares"), exercisable in
accordance with the provisions of paragraph 2 hereof. The term of this Option is
five (5) years from the date first above written.
2. OPTION PRICE; EXERCISE OF OPTION.
(a) OPTION PRICE. The purchase price of each Share subject to
this Option shall be $13.40, subject to adjustment as provided in
paragraph 4.
(b) VESTING. This Option is fully vested as to all Shares as
of the date of grant.
(c) MANNER OF EXERCISE. This Option may be exercised by
delivering written notice of exercise to the Secretary of the Company,
in person, or by registered mail, postage prepaid, addressed to the
attention of the Secretary of the Company at the location at which the
<PAGE>
Company then maintains its principal office, and if so mailed, the date
of mailing will be considered the date of exercise. Such notice shall
be in substantially the form attached hereto as Appendix A and shall be
accompanied by payment in full of the total purchase price for the
Shares being purchased. The Company, in the event of exercise by an
authorized person other than the Optionee, may require proof of the
right of such person to exercise this Option.
(d) PERSON WHO MAY EXERCISE OPTION. During the lifetime of the
Optionee, this Option shall be exercisable only by the Optionee and his
permitted assigns, or if the Optionee is disabled, by his duly
appointed guardian or legal representative on the Optionee's behalf.
Upon the death of the Optionee, this Option may be exercised by the
Optionee's legal representative or by a person who receives the right
to exercise this Option under the Optionee's will or by the applicable
laws of descent and distribution.
3. TRANSFERABILITY. This Agreement, the Option and all rights
hereunder shall not be transferable or assignable by the Optionee or by
any other person entitled hereunder to exercise any such rights without
the express prior written consent of the Company. The Company may
condition any such consent upon receipt of satisfactory evidence of
compliance with any applicable securities laws and may require any
transferee to enter into a new option agreement substantially in the
form of this Agreement to reflect the outstanding portion of the Option
to be held by such transferee.
4. ADJUSTMENT OF SHARES.
(a) Provision for Conversion in Case of Merger, etc. In the
event of an exchange of the then outstanding Common Stock in connection
with a merger, consolidation, or other reorganization of the Company,
or a sale by the Company of all or a portion of its assets, for cash or
for a different number or class of stock or other securities of the
Company or for shares of the stock or other securities of any other
company, then the number and class of stock or other securities that
shall be subject to this Option and the purchase price that must be
paid thereafter upon exercise of this Option shall be appropriately
adjusted by the Board of Directors of the Company in its good faith
discretion to reflect such event.
(b) Adjustment for Change in Capital Stock. In the event the
Company subdivides its outstanding shares of Common Stock into a
greater number of shares or combines its outstanding shares of Common
Stock into a smaller number of shares, then the number of Shares that
shall be subject to this Option and the purchase price that must be
paid thereafter upon exercise of this Option shall be appropriately
adjusted by the Board of Directors of the Company in its good faith
discretion to reflect such event.
5. INVESTMENT REPRESENTATIONS AND AGREEMENTS. The Optionee hereby
represents, warrants and agrees that, if the Shares or other securities then to
be issued upon any exercise of this Option are not covered by an effective
registration statement (and current prospectus included therein) under the
Securities Act of 1933, as amended (the "Act"), then:
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(a) the Shares or other securities that shall be purchased
under this Option at such time will be purchased for his own account
for investment purposes only and not with a view to resale or
distribution thereof;
(b) the offer of Shares or other securities under this Option
at such time may be made pursuant to a claim of exemption from the
registration provisions of the Act and any applicable state securities
laws; and
(c) the Shares or other securities subject to this Option may
be required to be held indefinitely, unless such securities are
subsequently registered for resale or an exemption from such
registration is then available.
The Optionee understands and agrees that no offering statement, prospectus or
other securities law disclosure document containing information with respect to
the Company or this Option has been or is to be prepared in connection with the
grant of the Option evidenced by this Agreement, and the Optionee has made his
own inquiry and analysis with respect to the Company and this Option. The
Optionee further understands and agrees that, except as set forth below in
Paragraph 6, the Company is under no obligation to register any Shares or other
securities issued upon exercise of this Option, or to comply with any such
exemption or to supply the Optionee with any information necessary to enable him
to make any resale of such Shares or other securities under Rule 144 or any
other rule or regulation of the Securities and Exchange Commission.
In regard to the foregoing, the Optionee understands and
agrees that any certificate(s) or other instruments evidencing any Shares or
other securities that may be purchased pursuant to the exercise of this Option,
which have not been registered under the Act and applicable state securities
law, may bear an appropriate restrictive legend in a form determined in the sole
discretion of the Company.
6. REGISTRATION RIGHTS.
6.1 REGISTRATION. (a) The Company shall within 90 days of the
date first written above, prepare and file with the Commission a registration
statement on an appropriate form of the Commission covering the resale of all of
the Option Shares (as defined below) (the "Registration Statement"), and cause
such Registration Statement relating to Option Shares to become effective as
soon as practicable after such filing, and keep the Registration Statement
effective at all times until such date as is the earlier of (i) the date on
which all of the Option Shares have been sold, (ii) the date on which all of the
Option Shares (in the reasonable opinion of counsel to the Company) may be sold
to the public without registration and without restriction as to the number of
Option Shares to be sold, whether pursuant to Rule 144 or otherwise, and (iii)
until the Options with respect to the Shares have expired (the "Registration
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Period"). The Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein and all documents incorporated by
reference therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein not misleading.
(b) The Company shall prepare and file with the Commission
such amendments (including post-effective amendments) and supplements
to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the
Registration Statement effective at all times during the Registration
Period, and, during such period, comply with the provisions of the
Securities Act applicable to the Company with respect to the
disposition of all Option Shares in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in
the Registration Statement.
(c) The Company shall use reasonable efforts to (i) register
and qualify the Option Shares covered by the Registration Statement
under securities laws of such jurisdictions in the United States as
Optionee who holds (or has the right to hold) the Option Shares being
offered reasonably requests, (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the Registration
Period, (iii) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all actions reasonably necessary or
advisable to qualify the Option Shares for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 6.1(d), or file a general consent to service of
process in any such jurisdiction.
(d) As soon as practicable after becoming aware of such event,
the Company shall notify (by telephone and also by facsimile and
reputable overnight courier) the Optionee of the happening of any
event, of which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Upon such notification, the Optionee
agree to cease all sales of Option Shares pursuant to such Registration
Statement until the Company (using its reasonable best efforts) shall
prepare and file a supplement or amendment to the Registration
Statement to correct such untrue statement or omission.
(e) If, at the time the Company is required to maintain the
effectiveness of a Registration Statement for purposes of satisfying
its obligation under this Section 6, the Company shall be engaged in a
transaction with respect to which disclosure would be required in such
registration statement, but for which financial or other information
necessary for such required disclosure is not then available to the
Company, or with respect to which the Company's Board of Directors
shall have determined that disclosure at such time could have an
adverse effect on the Company or its business or prospects, then the
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Company shall be entitled to delay filing or maintaining the
effectiveness the Registration Statement for up to 90 days.
6.2 "PIGGYBACK RIGHTS". Subject to paragraph 6.3 hereof, if
the Company shall prepare and file one or more registration statements under the
Act with respect to a public offering of equity securities of the Company, or of
any equity securities of the Company held by its security holders, the Company
will include in any such registration statement such information as is required,
and such number of the Shares previously issued and then outstanding, pursuant
to the exercise of this Option (the "Option Shares") held by the Optionee or
other person authorized to act for the Optionee pursuant to paragraph 2(d)
hereof as may be requested, to permit a public offering of the Option Shares so
requested; provided, however, that the subject registration statement shall be
on a form on which Option Shares may be registered for resale by the holder
thereof; and further provided that if, in the written opinion of the Company's
managing underwriter, if any, for such offering, the inclusion of the Option
Shares requested to be registered, when added to the securities being registered
by the Company or the selling security holder(s), would exceed the maximum
amount of the Company's securities that can be marketed without otherwise
materially and adversely affecting the entire offering, then the Company may
exclude from such offering all or any portion of the Option Shares requested to
be so registered, but only if no securities are included in such registration
statement other than securities being sold for the account of the Company or by
persons pursuant to the exercise of "demand" registration rights or of
"piggyback" registration rights granted prior to the date of this Agreement
(which shall be deemed to be senior to those of the Optionee), and then only on
a pro rata basis with respect to all securities not being sold by the Company or
by persons exercising such "demand" or senior "piggyback" registration rights.
The Company shall bear all fees and expenses incurred by it in connection with
the preparation and filing of such registration statement. In the event of such
a proposed registration, the Company shall furnish the Optionee with not less
than twenty (20) days' written notice prior to the proposed or expected
effectiveness date of such registration statement. Such notice shall continue to
be given by the Company to the Optionee with respect to subsequent registration
statements filed by the Company, until such time as all of the Option Shares
have been registered or may be sold by the Optionee without registration under
the Act or applicable state securities laws and regulations, and without
limitation as to volume, pursuant to Rule 144 of the Act or any succeeding
provision. The Optionee shall exercise the rights provided for in this paragraph
6.2 by giving written notice to the Company, within ten (10) days of receipt of
the Company's notice provided for herein.
6.3 CERTAIN PROCEDURES AND REQUIREMENTS OF OPTIONEE.
(a) INFORMATION TO BE FURNISHED BY THE OPTIONEE. In
connection with the registration of the Option Shares, and as
a condition to the Company's obligations under paragraph 6,
the Optionee will furnish to the Company in writing such
information with respect to the Optionee and his proposed
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disposition as shall be reasonably necessary in order to
assure compliance with the Act and with other federal and
applicable state securities laws. Without limiting the
generality of the foregoing, in connection with an
underwritten public offering, the Optionee agrees to enter
into, as required, a written agreement with the managing
underwriter in such form and containing such provisions as is
customary in the securities business for such an arrangement,
and to complete and execute all questionnaires, powers of
attorney, indemnities, and other documents or instruments
reasonably required under such terms of the underwriting
arrangements.
(b) EXPENSES OF THE OPTIONEE. All underwriting
discounts and selling commissions applicable to the sale of
any Option Shares, as well as fees and expenses of any
counsel, accountant, or other advisor to the Optionee, shall
be borne by the Optionee.
(c) CERTAIN RESTRICTIONS. Notwithstanding anything to
the contrary contained in this paragraph 6, if there is a firm
commitment underwritten offering of securities for the Company
pursuant to a registration covering the Option Shares, and if
the Optionee does not elect to sell his Option Shares to the
underwriters of the Company's securities in connection with
such offering, then the Optionee (if requested by the managing
underwriter) shall agree to refrain from selling any of his
Option Shares that are otherwise registered pursuant to this
paragraph 6 during the period in which the underwriting
syndicate, as such, participates in the after-market. The
Optionee shall, however, be entitled to sell such securities,
in any event, commencing on the 120th day after the effective
date of such registration statement, if then lawful to do so
under applicable securities laws and rules of the Securities
and Exchange Commission.
(d) INDEMNIFICATION BY OPTIONEE. In connection with a
registration of the Option Shares under the Act pursuant to
this paragraph 6, the Company and the Optionee shall enter
into customary indemnification agreements with regard to
losses, claims, damages or liabilities arising therefrom. In
addition, if such registration relates to an underwritten
offering, such indemnification agreements shall include the
underwriters thereof as a party thereto.
6.4 SURVIVAL. The rights and obligations set forth in this
paragraph 6 shall survive the exercise of this Option, but shall expire and
terminate as of the date that the Optionee may sell all of his Option Shares
pursuant to Rule 144(k) under the Act or a succeeding provision thereto.
7. OTHER POSSIBLE LEGAL RESTRICTIONS. If, in the opinion of legal
counsel for the Company, the issuance or sale of any Shares or other securities
pursuant to the exercise of this Option would not be lawful for any reason,
including without limitation the inability of the Company to obtain approval or
other clearance from any governmental authority or regulatory body deemed by
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such counsel to be necessary to such issuance or sale, the Company shall not be
obligated to issue or sell any Shares or other securities pursuant to the
exercise of this Option unless and until the Company receives evidence
satisfactory to such counsel that such issuance and sale would no longer be
unlawful.
8. NO RIGHTS AS SHAREHOLDER. Neither the Optionee nor any other person
authorized to purchase Shares upon exercise of this Option shall have any
interest in or rights as a shareholder of the Company with respect to any Shares
which are subject to this Option until such Shares have been issued to the
Optionee or such person pursuant to the exercise of this Option.
9. WITHHOLDING TAXES. As a condition of exercise of this Option, the
Company may, in its good faith discretion, withhold or require the Optionee to
pay or reimburse the Company for any taxes which the Company determines are
required to be withheld in connection with the grant or any exercise of this
Option.
10. HEIRS AND SUCCESSORS. This Agreement and all terms and conditions
hereof shall be binding upon the parties hereto, and their respective
successors, heirs, legatees and legal representatives.
11. ENTIRE AGREEMENT; AMENDMENT; GOVERNING LAW; SEVERABILITY. This
Agreement contains the entire agreement between the parties relating to the
matters provided herein, and no representations, promises or agreements, oral or
otherwise, not expressly contained herein shall be binding on any party with
respect to the subject matter hereof. This Agreement may not be modified or
amended except by an instrument in writing signed by each party hereto or its
respective successor in interest. This Agreement is executed and delivered in,
and shall be enforced, construed and governed in accordance with the laws of,
the State of Florida. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
12. NOTICES. All notices, consents, requests, and demands to or upon
the respective parties hereto to be effective shall be in writing and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made (a) on the date delivered in person, (b) on the date indicated on the
return receipt if mailed postage prepaid, by certified or registered U.S. Mail,
with return receipt requested, (c) on the date transmitted by facsimile, if sent
on a business day by 5:00 P.M., Eastern Time, and confirmation of receipt
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thereof is reflected or obtained, or (d) if sent by Federal Express or other
nationally recognized overnight courier service or overnight express U.S. Mail
in time for and specifying next day or next business day delivery, with service
charges or postage prepaid, then on the next business day after delivery to the
courier service or U.S. Mail. In each case (except for personal delivery) such
notices, requests, demands, and other communications shall be sent to the party
at its address or facsimile number as follows, or as otherwise designated by one
party to the other by notice in accordance herewith:
If to the COMPANY, to:
JWGenesis Financial Corp.
980 North Federal
Suite 300
Boca Raton, Florida 33432
Attention: Joel E. Marks
Telecopier: 561.338.2827
If to the OPTIONEE, to the address on the signature page.
IN WITNESS WHEREOF, the parties have executed or caused this Agreement
to be executed as of the date and year first above written.
COMPANY:
JWGENESIS FINANCIAL CORP.
By: /s/ Joel E. Marks
Joel E. Marks
Vice Chairman and Chief Operating Officer
[SIGNATURES CONTINUE ON NEXT PAGE.]
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OPTIONEE:
____________________________________
John Elway
Address____________________________
____________________________
____________________________
Telecopier:________________________
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APPENDIX A
EXERCISE OF OPTION
The undersigned Optionee under that certain Stock Option
Agreement dated July 15, 1999 (the "Agreement"), hereby exercises the Option
evidenced thereby for the following number of shares of common stock, $.001 par
value, of JWGenesis Financial Corp., and agrees to be subject to and bound by
the terms and conditions of the Agreement:
Number of shares being purchased: _________
Purchase price submitted herewith: $ _____________
_______________________________
(Signature)
_______________________________
(Date)
