Exhibit 10.1

 

CONFIDENTIAL: FOR SETTLEMENT PURPOSES ONLY

 

August 1, 2005

 

Mr. Derek Stein

[Address]

[Address]

 

Re: Separation from Employment

 

Dear Mr. Stein:

 

This letter agreement (the “Agreement and Release”) between you and Knight
Equity Markets, L.P., a Delaware limited liability company, having its principal
place of business at 545 Washington Boulevard, Jersey City, New Jersey 07310
(hereinafter referred to as “Knight” or the “Company”), confirms our
understanding and agreement with respect to your termination of employment with
the Company as follows:

 

1. Termination. You have been permitted to resign effective August 1, 2005
(hereinafter, the “Separation Date”).

 

2. Compensation. Regardless of whether you sign this Agreement and Release, your
total and final compensation, payments and benefits from the Company shall be as
follows (subject to applicable deductions and withholdings):

 

a. You have received your salary at the current rate of your base compensation
through August 1, 2005, payable in accordance with the Company’s payroll
practices.

 

b. Your group medical and dental insurance benefits will remain in effect
through August 31, 2005. Thereafter, you will be eligible to participate in
COBRA for medical and dental insurance for a period of up to 18 months. You will
be provided with all documentation necessary in order to apply for such
continued COBRA coverage. You will be responsible for all COBRA premium
payments, except as provided in paragraph 3(b) herein.

 

c. As of the Separation Date, you will cease to actively participate in all
other benefit plans and programs, including, but not limited to, the Company’s
401k plan and any entitlements thereunder including but not limited to payment
of any voluntary deferred compensation under the Company’s plan with Deephaven
Capital Management LLC will be governed by the terms of such plans and programs.
You agree that any amounts payable under this Paragraph 2 will not be taken into
account in determining any such entitlements;

 

d. You have been paid your accrued and unused vacation time in a lump sum.

 

e. You will be reimbursed for approved and authorized out-of-pocket travel and
business expenses incurred through your Separation Date, as soon as practicable
thereafter.

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Mr. Derek Stein

August 1, 2005

Page 2

 

3. Consideration. You will be entitled to the following payments and benefits
(subject to applicable deductions and withholdings), contingent upon your
execution and delivery of this Agreement and Release in accordance with the
provisions of Paragraph 21 below:

 

a. If this Agreement and Release becomes effective, then the Company will pay
you severance in the amount of $1,310,705.

 

b. You will be reimbursed by the Company for your premium payment for the first
12 months of your family’s coverage under COBRA, and, thereafter, continued
coverage will be at your expense. No reimbursements will be made for any period
of coverage after you and your family are eligible to participate in a medical
plan with a new employer. You are required under this Agreement and Release to
notify the Company, if and when you become eligible for coverage with a new
employer. Reimbursement by the Company of up to the first 12 months of your
family’s coverage under COBRA is contingent upon your initial and continuing
eligibility for such coverage (and associated costs) as determined by, and
subject to your present eligibility for such coverage.

 

c. You will be eligible for standard executive outplacement services to be
provided by Harris McCully Associates. These services must be utilized within
six months from the Termination Date.

 

d. If this Agreement and Release becomes effective, the Company will reimburse
you for attorneys fees incurred up to a maximum of $15,000.

 

4. Other Compensation. You understand and agree that the compensation, payments
and benefits provided for in paragraph 3 of this Agreement and Release are in
excess of those to which you may be entitled from the Company or the Releasees,
as defined in Paragraph 5 (d) below, and you expressly acknowledge and agree
that you are not entitled to any additional compensation, payment or benefit
from the Company or the Releasees, including, but not limited to, any
compensation, payment or benefit under any Company severance plan or policy.

 

5. Waiver and Release By You. In exchange for the compensation, payments,
benefits and other consideration provided to you pursuant to this Agreement and
Release, you agree as follows:

 

a. To the fullest extent permitted by law you hereby IRREVOCABLY AND
UNCONDITIONALLY RELEASE, WAIVE AND FOREVER DISCHARGE the Company and the
Releasees from any and all legally waiveable agreements, promises, liabilities,
claims, demands, rights and entitlements of any kind whatsoever, in law or
equity, whether known or unknown, asserted or unasserted, fixed or contingent,
apparent or concealed, which you, your heirs, executors, administrators,
successors or assigns ever had, now have or hereafter can, shall or may have
for, upon, or by reason of any matter, cause or thing whatsoever existing,
arising or occurring at any time on or prior to the date you execute this
Agreement and Release, including, without limitation, any and all claims arising
out of or relating to your employment,

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Mr. Derek Stein

August 1, 2005

Page 3

 

compensation and benefits with the Company and/or the termination thereof, and
any and all contract claims, benefit claims, tort claims, fraud claims, claims
under any employment agreement (and any predecessor agreement), commissions,
defamation, disparagement, or other personal injury claims, claims related to
any bonus compensation, claims for accrued vacation pay, claims under any
federal, state or municipal wage payment, discrimination or fair employment
practices law, statute or regulation, and claims for costs, expenses and
attorneys’ fees with respect thereto, except that the Company’s obligations
under this Agreement and Release shall continue in full force and effect in
accordance with its terms. THIS RELEASE AND WAIVER INCLUDES, WITHOUT LIMITATION,
ANY AND ALL RIGHTS AND CLAIMS UNDER TITLE VII OF THE CIVIL RIGHTS ACT OF 1964,
THE AGE DISCRIMIATION IN EMPLOYMENT ACT, AS AMENDED, THE CIVIL RIGHTS ACT OF
1991, THE CIVIL RIGHTS ACT OF 1866 (42 U.S.C. 1981), THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT, AS AMENDED, THE AMERICANS WITH DISABILITIES ACT, THE NEW
JERSEY LAW AGAINST DISCRIMINATION, THE NEW JERSEY WAGE PAYMENT ACT, THE NEW
JERSEY FAMILY LEAVE ACT, THE NEW JERSEY CONSCIENTIOUS EMPLOYEE PROTECTION ACT;
and all other federal, state or local fair employment practices statutes,
ordinances, regulations or constitutional provisions; provided, however, that
this waiver and release shall not prohibit you from enforcing your rights under
this Agreement and Release.

 

b. To the fullest extent permitted by law, you represent and affirm that: (i)
you have not filed or caused to be filed on your behalf any claim for relief
against the Company before any arbitral, administrative, regulatory,
self-regulatory, judicial, legislative, or other body or agency, and, to the
best of your knowledge and belief, no outstanding claims for relief have been
filed or asserted against the Company on your behalf, whether in your name or on
your behalf as part of a class, collective or representative action; and (ii)
you have no knowledge of any purported improper, unethical or illegal conduct or
activities.

 

c. For the purpose of implementing a full and complete release and discharge of
claims, you expressly acknowledge that this Agreement and Release is intended to
include in its effect, without limitation, all the claims described in the
preceding Paragraph 5(a), whether known or unknown, apparent or concealed, and
that this Agreement and Release contemplates the extinction of all such claims,
including claims for attorney’s fees. You expressly waive any right to assert
after the execution of this Agreement and Release that any such claim, demand,
obligation or cause of action has, through ignorance or oversight, been omitted
from the scope of this Agreement and Release; and

 

d. For purposes of this Agreement and Release, the terms “the Company and the
Releasees” and “the Company or the Releasees”, include Knight Equity Markets,
L.P., and any past, present and future direct and indirect parents,
subsidiaries, affiliates, divisions, predecessors, successors, and assigns, and
their and Knight’s past, present and future officers, directors, shareholders,
representatives, employees, agents and attorneys, in their official and
individual capacities, and all other related individuals and entities, jointly
and individually, and this Agreement and Release shall inure to the benefit of
and be enforceable by all such entities and individuals and their successors and
assigns.

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Mr. Derek Stein

August 1, 2005

Page 4

 

6. No Admissions. Nothing contained in this Agreement and Release shall be
deemed to constitute an admission or evidence of any wrongdoing or liability on
the part of the Company or Releasees or by you.

 

7. Return of Documents and Property. You represent that you have returned to the
Company all known equipment, data, material, books, records, documents (whether
stored electronically or on computer hard drives or disks), computer disks,
credit cards, Company keys, I.D. cards and other property, including, without
limitation, fax machine, printers, and other electronic devices in your
possession, custody, or control which are or were owned and/or leased by the
Company in connection with the conduct of the business of the Company
(collectively referred to as “Company Property”). Knight has agreed that you may
keep your company laptop so long as all company information has been removed
from that laptop. You will also be entitled to keep your company cell phone,
which Knight will move into your own name for billing and ownership purposes.
You further warrant that you have not retained, or delivered to any person or
entity, copies of Company Property or permitted any copies of Company Property
to be made by any other person or entity.

 

8. Non-Disparagement. You shall not issue or authorize any disparaging comments
or statements, to present or former employees of Knight (or of its subsidiaries
or affiliates), or to any individual or entity with whom or which Knight or any
of its subsidiaries or affiliates has a business relationship, or to others,
which could affect adversely the conduct of Knight’s business or its reputation
or the conduct of business or the business or reputation of any of Knight’s
current or former parents, subsidiaries, affiliates, officers, directors or
employees.

 

9. Confidentiality. You agree to maintain the confidentiality of, and refrain
from disclosing, making public, or discussing in any way whatsoever the terms
and conditions of this Agreement and Release. Notwithstanding the foregoing, it
is understood that as the sole exceptions to this confidentiality provision: (i)
you may discuss this Agreement and Release with your spouse; (ii) you may
discuss this Agreement and Release with your attorneys; (iii) you may permit
appropriate public accountants to review this Agreement and Release in
connection with the conduct of an audit, and may permit attorney(s),
accountant(s) and tax advisor(s) of your choice to review this Agreement and
Release in connection with the receipt of advice on the taxability of the
compensation, payments and benefits set forth in Paragraphs 2 and 3 of this
Agreement and Release, your rights hereunder, or to answer inquiries with
respect thereto; (iv) you may disclose the terms of this Agreement and Release
to the Internal Revenue Service and any similar state taxing authorities, if
requested by such authorities or as necessary to comply with all applicable
income tax laws; and (v) you may disclose the terms of this Agreement and
Release as provided for in Paragraph 11 below. To the extent that you divulge
the terms of this Agreement and Release to any of the individuals described in
(i), (ii) and (iii) above, you shall advise each such individual of this
confidentiality provision and instruct each such individual of the confidential
nature of this Agreement and Release and that each such individual must comply
with the confidentiality terms of this Agreement and Release and not divulge any
of the terms and conditions thereof. The Company agrees to maintain appropriate
confidentiality with regard to the terms and conditions of this Agreement and
Release. You recognize and agree, however, that the Company may be required to
disclose, and is permitted to disclose, the terms and conditions of this
Agreement and Release by law or in connection with its normal business
operations.

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Mr. Derek Stein

August 1, 2005

Page 5

 

10.  Confidentiality; Non-Disclosure. Except as otherwise provided in this
document:

 

a. You agree that you will keep confidential, and not disclose, nor use for your
benefit or the benefit of any other person or entity, any written material,
records, documents or information made by you or coming into your possession
during the course of your employment with Knight, that contain information which
is confidential or proprietary to Knight or which constitutes trade secrets of
Knight and which: (i) has not been disclosed publicly by Knight, or (ii) is
otherwise not a matter of public knowledge, or (iii) is a matter of public
knowledge but which you have reason to know became a matter of public knowledge
through an unauthorized disclosure. Proprietary or confidential information is
defined as information that has been developed by Knight and is unique to
Knight, the unauthorized disclosure or use of which could reduce the value of
such information to Knight including, without limitation, Knight’s client lists,
its trade secrets, any confidential information about (or provided by) any
current or former officer, director, employee, client or prospective client of
Knight, and any written material referring or relating to legal, litigation or
regulatory matters. Nothing herein shall prevent you from retaining and
utilizing your professional business experience and personal records, including
copies of benefit plans and programs in which you retain an interest, contract
lists, desk calendars or other personal office effects.

 

b. You agree you shall not issue, authorize, or condone comments or statements
to the press concerning Knight or any of its parents, affiliates, officers, or
directors other than to say “I cannot comment.” You shall notify Knight’s
General Counsel if you have been contacted by the press or broadcast media.

 

11.  Permitted Disclosure.

 

a. Nothing in this Agreement shall prohibit or restrict you from: (i) making any
disclosure of information required by law or legal process; or (ii) providing
information to, or testifying or otherwise participating in or assisting in any
investigation or proceeding brought by, any federal or state regulatory or law
enforcement agency or legislative body, any self-regulatory organization, or
Knight’s Legal or Compliance Departments.

 

b. To the extent permitted by law, you agree to give Knight timely and prompt
written notice (in the manner provided for herein) of the receipt of any
subpoena, court order or other legal process compelling the disclosure of any
information and/or documents relating to Knight so as to allow Knight reasonable
opportunity to take such action as may be necessary in order to protect such
information and/or documents from disclosure.

 

12.  Cooperation. You agree to cooperate with Knight and its counsel in
connection with any investigation, administrative proceeding or litigation
relating to any matter in which you were involved or of which you have knowledge
as a result of your employment by Knight.

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Mr. Derek Stein

August 1, 2005

Page 6

 

13. Non Solicit. Until August 1, 2006, you will not, without the prior written
consent of Knight, directly or indirectly solicit, encourage, or induce any
employee of Knight or its affiliated entities to terminate his or her employment
with Knight.

 

14. Modifications. This Agreement and Release may not be changed orally, and no
modification, amendment or waiver of any of the provisions contained in this
Agreement and Release, nor any future representation, promise or condition in
connection with the subject matter of this Agreement and Release, shall be
binding upon any party hereto unless made in writing and signed by such party.

 

15. Governing Law. This Agreement and Release shall be subject to and governed
by and interpreted in accordance with the laws of the State of New Jersey
without regard to conflicts of law principles. You hereby: (i) irrevocably
submit to the jurisdiction of any arbitration panel or any state or federal
court sitting in the State of New Jersey, for the purposes of any suit, action
or other proceeding arising out of or relating to this Agreement and Release;
and (ii) waive and agree not to assert in any such proceeding a claim that you
are not personally subject to the jurisdiction of the court referred to above,
or that the suit or action was brought in an inconvenient forum.

 

16. Assignment. This Agreement and Release shall be binding upon you and your
executors, administrators and heirs. The Company may, at its sole discretion,
sell or otherwise assign any rights, obligations or benefits it has under this
Agreement and Release. You may not sell or otherwise assign any rights,
obligations or benefits under this Agreement and Release, and any attempt to do
so shall be void.

 

17. Entire Agreement. This Agreement and Release contains the entire agreement
between the parties and supersedes and terminates any and all previous
agreements between them, whether written or oral.

 

18. Specific Enforcement. The parties agree that this Agreement and Release may
be specifically enforced in court or arbitration and may be used as evidence in
a subsequent proceeding in which any of the parties allege a breach of this
Agreement and Release. In the event any action, suit or other proceeding is
brought to interpret, enforce or obtain relief from a breach of this Agreement
and Release, the prevailing party shall recover all such party’s reasonable
costs, expenses and attorneys’ fees incurred in each and every such arbitration,
action, suit or other proceeding, including any and all appeals or petitions
therefrom.

 

19. Notices. All notices in connection with or provided for under this Agreement
and Release shall be validly given or made only if made in writing and delivered
personally, by facsimile or mailed by registered or certified mail, return
receipt requested, postage prepaid, to the party entitled or required to receive
the same, as follows:

 

If to Derek Stein, addressed to:

 

[Address]

[Address]

[Phone]

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Mr. Derek Stein

August 1, 2005

Page 7

 

If to the Company, addressed to:

 

Joan Fader

Knight Equity Markets L.P.

545 Washington Boulevard, 3rd Floor

Jersey City, New Jersey 07310

Phone: 201-557-6952

Fax    : 201-222-7869

 

or at such other address as either party may designate to the other by notice
similarly given. Notice shall be deemed to have been given upon receipt in the
case of personal delivery or facsimile and upon the date of receipt indicated on
the return receipt in the case of mail.

 

20. Severability. If, at any time after the Effective Date of this Agreement,
any provision of this Agreement shall be held by any court or other forum of
competent jurisdiction to be illegal, void, or unenforceable, such provision
shall be of no force and effect. The illegality or unenforceability of such
provision, however, shall have no effect upon, and shall not impair the
enforceability of, any other provision of this Agreement; provided, however,
that upon a finding by a court of competent jurisdiction that the release set
forth in Paragraph 5 is illegal and/or unenforceable, Knight shall be released
from any obligations hereunder.

 

21. Acknowledgment. By signing this Agreement and Release, you certify that you
have read the terms of this Agreement and Release, and that your execution of
this Agreement and Release shall indicate that this Agreement and Release
conforms to your understanding and is acceptable to you as a final agreement.
You further acknowledge and agree that you have been advised of the opportunity
to consult with counsel of your choice and that you have been given a reasonable
and sufficient period of time of not less than twenty-one (21) days in which to
consider and return this Agreement and Release. You further acknowledge and
agree that upon your execution and return of this Agreement and Release, you
will be permitted to revoke the Agreement and Release at any time during a
period of seven (7) calendar days following your execution hereof. To be
effective, the revocation must be in writing and must be hand-delivered or
telecopied to the Company within the seven (7) day period. This Agreement and
Release will not be effective until the seven (7) day period has expired without
revocation (hereinafter, the “Effective Date”). If the Agreement and Release is
not executed and returned on or before August 29, 2005, or if this Agreement and
Release is executed and then revoked within the aforementioned seven (7) day
period, this Agreement and Release will be of no further force or effect, and
neither you nor the Company will have any rights or obligations hereunder.

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Mr. Derek Stein

August 1, 2005

Page 8

 

We appreciate your service to Knight, and we wish you the best in all your
future endeavors.

 

Sincerely yours,

 

By:  

/s/ Bronwen Bastone

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    Bronwen Bastone     Director     Knight Equity Markets, L.P.

 

    Date: 08-31-2005

/s/ Derek Stein

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    Derek Stein     Subscribed and Sworn to before me     This 31st day of
August 2005    

 

/s/ Notary Public

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    NOTARY PUBLIC