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CIO Employment Agreement - FARSHID TAFAZZOLI

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Sectors: Financial Services, Internet
Governing Law: Florida, View Florida State Laws
Effective Date: February 01, 1999
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EMPLOYMENT AGREEMENT



This Employment Agreement is made on the 1st day of February 1999, between onlinetradinginc.com corp. ("Employer"), whose principal place of business at 2700 N. Military Trail, Suite 200, Boca Raton, Florida 33431, and FARSHID TAFAZZOLI ("Employee").



WHEREAS, Employer is actively engaged in the business of a securities broker dealer; and,



WHEREAS, Employer wishes to employ Employee and Employee wishes to be employed pursuant to the terms of this Employment Agreement.



NOW THEREFORE, in consideration of the mutual covenants and agreements contained in this Employment Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows:



Article 1

Employment of Employee



Employer agrees to employ Employee, and Employee accepts employment with Employer, on and subject to the terms and conditions set forth in this Employment Agreement.



Article 2

Position of Employee



Employer agrees to employ Employee to act as Employer's Chief Information Officer.



Article 3

Place of Employment



Section 3.1. PLACE OF EMPLOYMENT. Employee shall be based at Employer's principal office at 2700 N. Military Trail, Suite 200, Boca Raton, Florida 33431 and shall not be required to travel away from that office on business more than fourteen (14) days during a calendar year. Employer agrees that during the term of this Employment Agreement it shall not assign Employee to work at any location which is more than ten (10) miles from said principal office without Employee's consent.



Section 3.2. MOVING EXPENSES. If Employer relocates its principal office more than ten (10) miles from its current principal office, or requests that Employee relocates to one of its offices which is more than ten (10) miles from its current principal office, and Employee consents to relocate to that new location, Employer shall promptly pay or reimburse Employee for all reasonable moving expenses incurred by Employee in connection with the relocation plus an amount to reimburse Employee for any federal and state income taxes that it has to pay on amounts reimbursed. Employer also shall indemnify Employee against any loss incurred in connection with the sale of Employee's principal residence. The amount of any loss shall be











determined by taking the difference between the average of two appraisal prices set by two independent appraisers agreed to by Employer and Employee and the actual sales price of Employee's principal residence.



Article 4

Compensation of Employee



Section 4.1. BASE SALARY. For all services rendered by Employee under this Employment Agreement, Employer agrees to pay Employee an annual base salary of $200,000, which shall be payable to Employee in such installments, but not less frequently than monthly, as are consistent with Employee's practice for its other Employees. Employee's base salary shall be reviewed at least once a year by Employer and shall be increased at a minimum by the percentage increase in the Consumer Price Index for the previous year.



Section 4.2. INCENTIVE COMPENSATION. In addition to the base salary, Employee shall be entitled to receive incentive compensation, as determined by Employer in accordance with Employer's Incentive Compensation Plan. Notwithstanding the foregoing, Employee agrees the Employer will not pay and the Employee will not receive any bonuses until the earlier of (i) 24 months from the date of this Agreement and (ii) such time as Employer earns $3,300,000 in pre-tax earnings in any fiscal year. Thereafter, Employee acknowledges and agrees that, for the fiscal years ended January 31, 2000, January 31, 2001, and January 31, 2002, the total amount of bonuses payable to all of Employee, Andrew Allen, Steve zum Tobel, Derek Hernquist and Benedict Gambino shall not exceed in the aggregate 5% of pre-tax earnings in each of such fiscal years.



Section 4.3. REIMBURSEMENT FOR BUSINESS EXPENSES. Employer shall promptly pay or reimburse Employee for all reasonable business expenses incurred by Employee in performing Employee's duties and obligations under this Employment Agreement, but only if Employee properly accounts for expenses in accordance with Employer's policies.



Article 5

Vacations and Other Paid Absences



Section 5.1. VACATION DAYS. Employee shall be entitled to forty-five (45) paid vacation days each calendar year during the term of this Employment Agreement. During the first calendar year of this Employment Agreement, Employee shall be entitled to forty-five (45) paid vacation days.



Section 5.2. HOLIDAYS. Employee shall be entitled to the same paid holidays as authorized by Employer for its other Employees.



Section 5.3. SICK DAYS AND PERSONAL ABSENCE DAYS. Employee shall be entitled to the same number of paid sick days and personal absence days authorized by Employer for its other Employees.











Article 6

Life Insurance



Employer may, in its sole discretion, maintain in effect during the term of Employee's employment a life insurance policy on the life of Employee in such amount as Employer shall in its sole discretion decide to maintain during the term of this Employment Agreement. Any proceeds payable under the policy shall be paid to the beneficiary or beneficiaries designated in writing from time to time by Employee.



Article 7

Fringe Benefits



Section 7.1. EMPLOYER'S EMPLOYEE BENEFIT PLANS. Employee shall be entitled to participate in and receive benefits from all of Employer's Employee benefit plans that currently are maintained by Employer for its Employees. Employee shall be entitled to participate in and receive benefits under any retirement plan, profit-sharing plan, or other Employee benefit plan that Employer establishes for the benefit of its Employees after the date of this Employment Agreement. No amounts paid to Employee from an Employee benefit plan shall count as compensation due Employee as base salary or incentive compensation. Nothing in this Employment Agreement shall prohibit Employer from modifying or terminating any of its Employee benefit plans in a manner that does not discriminate between Employee and other Employees of Employer.



Section 7.2. MOTOR VEHICLE. Employer may, in its sole discretion, provide Employee with the use of a motor vehicle to be selected in the reasonable discretion of Employer considering Employee's position. If Employer does provide Employee with the use of a motor vehicle, Employer shall procure, maintain, and pay for appropriate insurance on the motor vehicle, including liability insurance of at least $100,000.00 per person and $300,000.00 per occurrence for personal injury and $50,000.00 for property damage.



Article 8



Section 8.1. COMPENSATION DURING PERIODS OF DISABILITY.



(a) Employee shall receive, or continue to receive, Employee's base salary and incentive compensation while Employee is unable to work full or part time unless Employee is actually receiving of disability insurance provided pursuant to this Employment Agreement. While Employee is receiving the benefits of disability insurance provided pursuant to this Employment Agreement, and for so long as such benefits are received, Employer shall pay Employee an amount sufficient to equal any difference between said disability insurance benefits and Employee's base salary and incentive compensation, including any increases in base salary and/or incentive compensation that would have occurred pursuant to this Employment Agreement.





























(b) While Employee is unable to work full time because of illness or injury and through the full term of this Employment Agreement, including extensions, Employer shall maintain for Employee's benefit all Employee benefit plans in which Employee was participating at the time Employee was replaced. If Employee is barred from participating in any Employee benefit plan because of Employee's disability, Employer shall pay Employee an amount equal to what Employer would have contributed on Employee's behalf to the Employee benefit plan if Employee's participation had not been barred.



(c) If Employee gives notice that Employee is terminating employment because Employee's health has become so impaired that continued performance of Employee's duties under this Employment Agreement would be hazardous to Employee's physical or mental health, in addition all other compensation and benefits provided hereunder and any disability insurance benefits provided pursuant to Section 8.3 below, Employer shall pay Employee an amount equal to the sum of Employee's then current annual base salary plus the annualized amount of incentive compensation paid to Employee most recently before the date Employee's employment was terminated, multiplied by the number of full and partial years remaining in the term of this Employment Agreement, including any extensions.



(d) Employee is not required to seek other employment to mitigate any amounts payable under this Employment Agreement. Nor will amounts due Employee under this Employment Agreement be reduced by any amounts received by Employee for other employment.



Section 8.3. DISABILITY INSURANCE. Employer may, in its sole discretion, purchase and use its best efforts to maintain disability insurance in force for the benefit of Employee throughout the term of this Employment Agreement, including extensions. The policy shall provide that if Employer fails to make a premium payment, Employee shall have the right in Employee's sole discretion to advance such funds as may be required to maintain the policy in force and shall thereafter be entitled to recover amounts paid from Employer.



Article 9

Termination of Employment



Section 9.1. TERM OF EMPLOYMENT. Employee's employment shall commence on the execution of this Employment Agreement and shall continue for five (5) years ("end-of-employment date"), unless extended or terminated sooner, as provided by this article of the Employment Agreement. However, no compensation or benefits described hereunder shall be due or payable unless and until the settlement of Employer's initial public offering of stock. Should Employer's initial public offering of stock fail to settle on or before September 30, 1999, this Employment Agreement shall automatically terminate and become null and void retroactive to its commencement and Employer shall not be obligated to pay Employee any compensation or benefits stated herein or continue the same thereafter.



Section 9.2. EXTENSION OF EMPLOYMENT. On the end-of-employment date and every five (5) years thereafter, Employee's employment with Employer automatically shall be extended for an additional five (5) years unless, at least ninety (90) days prior to the end-of-employment date, or

















successive five (5) year anniversary thereof, Employer or Employee delivers to the other a written notice that Employee's employment with Employer is not to be extended.



Section 9.3. TERMINATION AT EMPLOYEE'S DEATH. Employee's employment with Employer shall terminate at Employee's death.



Section 9.4. TERMINATION BY EMPLOYEE. Employee may, but is not obligated to, terminate this Employment Agreement at any time under the following circumstances:



(a) Employee's health becomes so impaired that continued performance of Employee's duties under this Employment Agreement would be hazardous to Employee's physical or mental health.



(b) There is a change in control of Employer. There is a change in control of Employer if someone other than a current owner of Employer becomes the beneficial owner of 20 percent or more of the voting power of Employer.



(c) Employee is assigned duties that are significantly different than those described in this Employment Agreement, or duties assigned Employee by this Employment Agreement are eliminated or transferred to someone else.



(d) Employee is removed from any of the positions described in Section 2.1 of this Employment Agreement (other than by Employer for cause).



(e) Employee's fringe benefits or other compensation are materially reduced.



(f) Employer requires Employee to travel more frequently than contemplated by this Employment Agreement.



(g) Employer fails to have a successor assume this Employment Agreement.



(h) Employer becomes insolvent or files a bankruptcy petition.



Section 9.5. TERMINATION BY EMPLOYER.



(a) TERMINATION FOR CAUSE. Employer may terminate Employee's employment for cause.



(b) "CAUSE" DEFINED. Employer shall have cause to terminate Employee's employment if Employee willfully fails to substantially perform any duties required by this Employment Agreement (unless Employee's failure is due to a physical or mental incapacity), Employee is consistently, flagrantly, and grossly negligent in the performance of required duties, Employee engages in conduct that demonstrably and substantially damages Employer, Employee is convicted of a felonious act of moral turpitude that demonstrably and substantially damages Employer, or Employee willfully discloses material confidential information in violation of Article 10 of this Employment Agreement. No act or failure to act by Employee may be















considered "willful" unless Employee acted or failed to act without any reasonable belief that the act or omission was in Employer's best interests and without good faith.



Section 9.6. NOTICE OF TERMINATION. Any termination of Employee's employment by Employer or Employee must be communicated to the other party by a written notice of termination. The notice must specify the provision of this Employment Agreement authorizing the termination and must set forth in reasonable detail the facts and circumstances providing the basis for termination of Employee's employment.



Section 9.7. DATE TERMINATION IS EFFECTIVE. If Employee's employment terminates because this Employment Agreement expires, then Employee's employment will be considered to have terminated on that expiration date. If Employee's employment terminates because of Employee's death, then Employee's employment will be considered to have terminated on the date of Employee's death. If Employee's employment is terminated by Employee, then Employee's employment will be considered to have terminated on the date that notice of termination is given. If Employee's employment is terminated by Employer for cause, then Employee's employment will be considered to have terminated on the date specified by the notice of termination. If, within thirty (30) days after a notice of termination is given, the party receiving the notice notifies the other party that there is a dispute concerning the termination, then Employee's employment will not be considered to have terminated, and Employer shall continue to compensate Employee pursuant to this Employment Agreement, until the dispute is ended by a written agreement between the parties or a final judgment, order, or decree of a court of competent jurisdiction. A judgment, order, or decree of a court of competent jurisdiction will be considered final if the time for appealing the decision has expired and no notice of appeal has been filed.



Section 9.8. COMPENSATION FOLLOWING TERMINATION.



(a) If Employee's employment terminates because of Employee's death, Employer shall pay a lump sum death benefit to the person or persons designated in a written notice filed with Employer by Employee or, if no person has been designated, to Employee's estate. The amount of the lump sum death benefit will equal the amount of Employee's then current annual base salary plus the annualized amount of incentive compensation paid Employee most recently prior to Employee's death, multiplied by the number of full and partial years multiplied by the number of full and partial years remaining in the term of this Employment Agreement, including extensions. This lump sum death benefit shall be in addition to any life insurance payable pursuant to Article 6 and/or any other amounts that Employee's beneficiaries and estate may be entitled to receive under any Employee benefit plan maintained by Employer.



(b) If Employee's employment is terminated by Employer for cause, Employer shall pay Employee/Employee's then current base salary through the date employment is terminated, and Employer shall have no further obligations to Employee under this Employment Agreement.



(c) If Employer terminates Employee's employment other than for cause, Employer shall pay Employee Employee's then current base salary through the date employment is terminated and any legal fees and expenses incurred by Employee to enforce Employee's rights











under this Employment Agreement. In addition, Employer shall pay Employee as liquidated damages an amount equal to the sum of Employee
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