Exhibit 10.05
 
EXECUTION VERSION

 
EMPLOYMENT AGREEMENT
 
This EMPLOYMENT AGREEMENT (as amended, supplemented or extended from time to
time, this “Agreement”) is entered into as of May 10, 2005, between the The
Edelman Financial Center, LLC, a Delaware limited liability company (the
“Employer”), and Fredric M. Edelman (the “Employee”).
 
WITNESSETH
 
WHEREAS, pursuant to a Reorganization and Purchase Agreement dated as of May 10,
2005 (the “Purchase Agreement”), among the Employer, the Employee, Sanders
Morris Harris Group Inc. (“SMH”), and The Edelman Financial Center, Inc.
(“EFC”), SMH will purchase in three related transactions an initial 51% direct
membership interest, and later, an additional 25% direct membership interest and
an additional 24% indirect membership interest, in the Employer;
 
WHEREAS, it is a condition precedent to the obligation of SMH to consummate the
transactions contemplated by the Purchase Agreement that the Employee enter into
an employment agreement with the Employer in the form hereof;
 
WHEREAS, SMH and the Employer recognize the importance of the Employee to the
Employer and to the Employer’s ability to obtain and maintain relationships with
the clients of the Employer after giving effect to the transactions contemplated
in the Purchase Agreement (the “Reorganization”);
 
WHEREAS, SMH and the Employer wish to be assured that the Employee will not
compete with the Employer and its Affiliates during his period of employment and
for five years thereafter or solicit any clients or customers of the Employer
during such period and will not, by such competition or solicitation, damage the
Employer’s goodwill among its clients and the general public;
 
WHEREAS, after giving effect to the Reorganization, Employee will have an
indirect ownership interest in the Employer through his ownership of all of the
used and outstanding capital stock of EFC (the “Equity Participation”);
 
WHEREAS, it is in the best interest of Employee, that SMH consummate the
Reorganization; and
 
WHEREAS, Employee desires to accept employment on the terms of this Agreement
and to induce SMH to consummate the Reorganization.
 
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other valuable consideration, including, without limitation, Employee’s Equity
Participation, the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereby agree as follows:
 
1.           Employment and Employment Period. (a) Position and Duties. (i)
Subject to the terms and conditions of this Agreement, the Employer agrees to
employ Employee, and Employee agrees to remain in the employ of the Employer,
during the Employment Period referred to in Section 1(b);
 

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(ii)           During the Employment Period, Employee will serve as the
Employer’s Chief Executive Officer with respect to the business of the Employer
in substantially the same capacity (including authority and duties) as Employee
served with respect to the business of EFC immediately prior to the Initial
Closing Date (as defined in the Purchase Agreement); provided, that (A) the
authority of the Employee shall be subject to the authority of the Board of
Managers as and to the extent set forth in the Limited Liability Company
Agreement of the Employer, and (B) Employee shall have such other powers and
perform such additional duties as may be assigned or delegated to Employee from
time to time by the Board of Managers of the Employer (the “Board”), so long as
such duties and authority are substantially consistent with the position of
Chief Executive Officer of a company of similar size and nature;
 
(iii)          At all times during the Employment Period, Employee agrees to (A)
perform all services related to Employee’s employment hereunder faithfully and
diligently and to discharge the responsibilities thereof to the best of
Employee’s ability, (B) devote full business time and attention and energies to
the duties of Employee’s employment under this Agreement, and (C) use Employee’s
best efforts to promote the business of the Employer. Notwithstanding the
foregoing, Employee may continue to serve on any board of directors or trustees
of any business corporation or any charitable organization which he currently
serves, each set forth on Exhibit A attached hereto, and subject to the prior
approval of the Board, which shall not be unreasonably withheld, Employee may
accept appointment to serve on any board of directors or trustees of any
business organization or any charitable organization, so long as, in each case,
(x) such activities do not, individually or in the aggregate, conflict or
materially interfere with the performance of Employee’s duties or obligations
hereunder and (y) such business organization is not engaged in activities that
compete with the business of the Employer or any of its Affiliates. In addition,
Employee’s activities with respect to his and his family’s investments, the
not-for-profit promotion of financial literacy and consumer education and public
policy and political activities shall be permitted under the terms of this
Agreement so long as, in each case, such activities do not, individually or in
the aggregate, conflict or materially interfere with the performance of
Employee’s duties or obligations hereunder and arc not competitive with the
business of the Employer or any of its Affiliates.
 
(b)           Employment Period. The “Employment Period” shall begin on the
Initial Closing Date and end on the fourth anniversary thereof, unless earlier
terminated by the parties as provided in Section 4 hereof; provided, however,
that commencing on the fourth anniversary of the Initial Closing Date and on
each anniversary thereafter (each an “Extension Date”), the Employment Period
shall be automatically extended for an additional one-year period, unless the
Employer or Employee provides the other party hereto at least 60 days prior
written notice before the next Extension Date that the Employment Period shall
not be so extended.
 
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(c)           Place of Employment. The Employer may require Employee to travel
on business of the Employer to an extent substantially consistent with
historical business travel obligations of Employee on behalf of the business of
EFC prior to the Initial Closing Date. Except when engaged in travel on behalf
of Employer or its Affiliates, Employee’s place of employment shall be within a
ten (10) mile radius of Fair Oaks Mall in Fairfax, Virginia (except as otherwise
mutually agreed).
 
(d)           Key Man Insurance. The Employer shall have the right from time to
time to purchase, increase, modify or terminate insurance policies on the life
of Employee for the direct benefit of the Employer, in such amounts as the
Employer shall determine in its sole discretion. In connection therewith,
Employee shall, at such time or times and at such place or places as the
Employer may reasonably direct, submit to such physical examinations and execute
and deliver such documents as the Employer may reasonably deem necessary or
desirable to obtain such insurance; provided, that the Employer shall reimburse
the Employee for any out-of-pocket expenses reasonably incurred by the Employee
in connection therewith.
 
(e)           Effectiveness of Agreement. This Agreement shall constitute a
binding agreement between the parties as of the date hereof; provided, however,
that in the event the Purchase Agreement is terminated for any reason without
the Initial Closing therein described having occurred, this Agreement shall be
terminated without further obligation or liability on the part of any party
hereto (other than with respect to any breaches of the terms of this Agreement
occurring prior to the date of such termination of the Purchase Agreement, for
which the party breaching this Agreement shall remain liable notwithstanding
such termination of the Purchase Agreement and this Agreement).
 
2.           Compensation. (a) Salary. During the Employment Period, in
consideration for the services to be rendered hereunder, and subject to the
terms and conditions of this Agreement, the Employer hereby agrees to pay
Employee, in accordance with its normal practices, a base salary at the rate of
$600,000 per annum (the “Annual Base Salary”). All compensation shall be subject
to all applicable tax withholding and similar requirements under applicable law.
 
(b)           Incentive Compensation. During the Employment Period, Employee
will be eligible to participate in the bonus plan (the “Bonus Plan”) to be
established on the Initial Closing Date in accordance with the Employer’s
Limited Liability Agreement (the “Incentive Compensation”).
 
3.           Benefits. (a) Generally. During the Employment Period, Employee
shall be eligible to participate in any medical, dental and life insurance plans
or policies and any pension and retirement plans and any disability plans which
the Employer may hereafter, in its sole and absolute discretion, make available
to employees, but, subject to the penultimate sentence of this Section 3(a),
Employer will not be required to establish any such program or plan. The
Employee shall be entitled to such annual vacation and to such reimbursement of
expenses, each in accordance with the Employer’s policies in effect from time to
time with respect to employees. Such programs, plans and policies shall be in
the aggregate at least substantially equivalent to the employee benefit
programs, plans and policies maintained by EFC immediately prior to the Initial
Closing Date and disclosed as such in EFC’s Disclosure Schedules delivered under
the Purchase Agreement. Employee shall be entitled to receive perquisites that
are consistent with those that are received by senior executives of SMH.
 
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(b)           Payments to Representatives. In the event of Employee’s death or
other inability to receive payments under this Agreement, payments which have
accrued as of the date of death or other inability to receive payments shall be
made to Employee’s estate, heirs or other representative as may be legally
appropriate.
 
4.            Termination of Employment. (a) Termination for Cause. After the
Initial Closing Date, this Agreement (and the Employment Period) may be
terminated by the Employer for Cause (as defined below), provided, the Employer
delivers written notice to the Employee specifying in reasonable detail the
reasons therefor. The term “Cause” shall include any of the following:
 
(i)           conviction of, or plea of nolo contendere to, a felony under the
laws of the United States or any state thereof;
 
(ii)          conviction of an act involving embezzlement or fraud, or the
intentional violation of securities law; or
 
(iii)         an intentional breach by Employee of any material provision of
this Agreement; provided, that, for the first instance of any such breach of a
provision of this Agreement other than any contained in Section 5 or 6 hereof,
(A) Employee will be given written notice by the Employer and a period of 15
Business Days to cure and (B) if (1) Employee cures the action to the reasonable
satisfaction of the Employer within such 15 Business Day time period, or (2) in
the case of a breach which cannot be cured within the 15 Business Day cure
period, Employee undertakes to cure the action in a manner and within a time
period reasonably acceptable to the Employer and Employee so cures the action to
the reasonable satisfaction of the Employer within such agreed time period, then
the action contained in the notice shall not constitute “Cause” hereunder (it
being understood and agreed that nothing contained in this Agreement shall
require the Employer to give more than one notice and opportunity to cure under
this Section 4(a)(iii) and in no event shall this notice and opportunity to cure
apply to any breach of Section 5 or 6 of this Agreement); provided, further,
that no act or failure to act on Employee’s part shall be deemed to be
intentional if (x) taken (or failed to be taken) by Employee with the good faith
belief that such action or inaction was in the best interest of the Employer, or
(y) taken (or failed to be taken) at the direction of the Board or any employee
to whom Employee reports. “Business Day” means any day other than a Saturday,
Sunday or other day on which commercial banks in Fairfax, Virginia are
authorized or required by law to close.
 
(b)          Death or Permanent Disability of Employee. Employee’s employment
hereunder shall terminate upon Employee’s death. In addition, after the Initial
Closing Date the Employer shall have the right to terminate Employee’s
employment hereunder upon 15 days’ written notice if and when Employee, by
reason of injury, illness or similar cause (as determined by a licensed
physician selected by Employee and approved by the Employer) is unable to, and
fails to, perform his duties for a period of 180 consecutive days.
 
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(c)           Termination Without Cause or Voluntary Resignation. Following the
fourth anniversary of the Initial Closing Date, the Employer, by written notice
to Employee, shall have the right to terminate Employee’s employment without
Cause for any reason or for no reason, subject to Section 4(e) hereof. Employee,
by 15 days’ written notice to the Employer delivered after the Initial Closing
Date, shall have the right to terminate Employee’s employment for any reason or
for no reason.
 
(d)          Termination for Good Reason. For purposes of this Agreement, “Good
Reason” shall mean (i) the failure of the Employer to pay or cause to be paid
Employee’s Annual Base Salary or any amount earned under the Bonus Plan or
Profit Sharing Plan, (ii) any diminution in the Employee’s title or substantial
diminution in Employee’s authority or responsibilities from those described in
Section 1(a) hereof, (iii) a material breach by the Employer of any other
material obligations pursuant to this Agreement or of any material obligations
pursuant to the Purchase Agreement; or (iv) the occurrence of a
Change-in-Control (defined below); provided, that any of the events described in
clauses (1) or (2) of this Section 4(d) shall constitute Good Reason only if the
Employer fails to cure such event within 15 Business Days following the
Employer’s receipt of written notice from Employee describing the event
constituting Good Reason. As used in this Agreement, a “Change-in-Control” shall
be considered to occur if and when:
 
(1)          the sale by SMH of more than 50% of the membership interests of the
Employer, to any person (as such term is used in Section 13(d) of the Exchange
Act) other than SMH or an employee benefit plan of SMH; or
 
(2)          the execution of definitive documents pertaining to the foregoing.

 
(e)          Compensation Upon Voluntary Resignation or Termination for Cause.
If (i) Employee voluntarily resigns from employment with the Employer as
described in the second sentence of Section 4(c), or (ii) the Employer
terminates Employee’s employment for Cause, as described in Section 4(a), then
the Employer will pay to Employee within 30 days following such termination of
employment, (x) the unpaid salary and vacation earned by Employee before the
date of such event as provided for in this Agreement (computed pro rata up to
and including such date of such event), (y) any Incentive Compensation earned
but unpaid as of the date of termination for any previously completed fiscal
year, and (z) reimbursement for any unreimbursed business expenses incurred by
the Employee prior to the date of termination (the “Accrued Obligations”). Such
payment will be in lieu of any and all other compensation, benefits and claims
of any kind, excepting only such additional amounts as may be provided for under
the express terms of any applicable benefit plans or be required by law to be
paid (which amounts will be paid in accordance with such terms or requirements,
as the case may be).
 
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(f)          Compensation for Termination without Cause or Termination for Good
Reason. If the Employee’s employment with the Employer is terminated (i) without
Cause as described in the first sentence of Section 4(c), or (ii) for Good
Reason as described in Section 4(d), then (A) the Employer will pay to Employee
a lump sum payment in cash within 30 days following such termination equal to
(1) the Accrued Obligations, plus (2) an amount equal to (x) Employee’s Annual
Base Salary in effect at the date of termination plus the average of the amount
of Employee’s bonus earned during the last three fiscal years immediately
preceeding such termination; multiplied by (z) the number of years (including
partial years prorated on a daily basis) then remaining in the Employment
Period; and (B) so long as Employee has not breached Employee’s covenants and
obligations under Sections 5 and 6, the Employer will continue to provide
Employee with the welfare benefits described in Section 3 for a period through
the expiration of the Employment Period; provided, any such welfare benefit
shall cease prior to the expiration of the Employment Period if the Employee
commences receiving coverage from a subsequent employer under a comparable
welfare benefit plan. The payment and continuation of benefits described above
will be in lieu of any and all other compensation, benefits and claims of any
kind, excepting only such additional amounts as may be provided for under the
express terms of any applicable benefit plans or agreement, or be required by
law to be paid (which amounts will be paid in accordance with such terms or
requirements, as the case may be).
 
(g)          Compensation for Termination upon Death or Disability. If the
Employee’s employment is terminated as a result of the Employee’s death or
Disability as described in Section 4(b), then the Employer will pay the Employee
(or Employee’s estate or representatives, as the case may be) within 30 days
following such termination of employment, the Accrued Obligations and an amount
equal to the bonus paid to him for the fiscal year immediately prior to the
fiscal year in which such termination occurs prorated for the current fiscal
year based on the number of full months elapsed.
 
5.            Confidential Information. (a) During the Employment Period,
Employee will have access to, and become acquainted with, confidential
proprietary information of the Employer (or its predecessors), including,
without limitation, confidential or proprietary investment methodologies, trade
secrets, proprietary or confidential plans, Client identities and relationships,
compilations of information, Client lists, service providers, business
operations or techniques, records, specifications, and data owned or used in the
course of business by the Employer (or its predecessors) (collectively,
“Confidential Information”). Employee shall not disclose any of the Confidential
Information, directly or indirectly, or use them in any way, either during the
term of this Agreement or at any time thereafter, except as required in the
course of Employee’s employment by the Employer. All files, records, documents,
drawings, specifications, equipment and similar items relating to the business
of the Employer (or its predecessors), whether prepared by Employee or otherwise
coming into Employee’s possession, will remain the exclusive property of the
Employer, and if removed from the premises of the Employer will be immediately
returned to the Employer upon any termination of Employee’s employment.
 
(b)          Employee agrees that any and all presently existing investment
advisory businesses of the Employer (including, without limitation, its
predecessors) and all businesses developed by the Employer, including by
Employee or any other employee or agent of the Employer (including, without
limitation, employees and agents of any of EFC as its predecessor), including,
without limitation, all investment methodologies, all investment contracts, fees
and fee schedules, commissions, records, data, Client lists, agreements, trade
secrets, and any other incident of any business developed by the Employer
(including, without limitation, its predecessors) or earned or carried on by the
Employee for the Employer (or any predecessor), and all trade names, service
marks and logos or any under which the Employer does business, and any
combinations or variations thereof and all related logos, are and shall be, the
exclusive property of the Employer for its sole use, and (where applicable)
shall be, payable directly to the Employer. In addition, Employee acknowledges
and agrees that the investment performance of the accounts managed by the
Employer (and EFC as its predecessor) was attributable to the efforts of the
team of professionals at the Employer (or EFC as predecessor thereto) and not to
the efforts of any single individual, and that therefore, the performance
records of the accounts managed by the Employer (and EFC as its predecessor) are
and shall be the exclusive property of the Employer. Accordingly, at any time
after the date hereof, subject to the other terms and conditions of this Section
5 and the terns and conditions of Section 6, Employee shall use the performance
information of the Employer (or EFC as its predecessor), including, without
limitation, the investment performance of any accounts or group of accounts for
which Employee was a portfolio manager, only if Employee refrains from taking
any credit, explicitly or implicitly, for the achievement of such performance or
results (it being understood and agreed that nothing in this sentence shall be
construed as relieving Employee from any of Employee’s covenants and obligations
under this Section 5 and Section 6).

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(c)          As used in this Section 5, (A) the term “Confidential Information”
does not include information that (1) becomes or has been generally available to
the public other than as a result of Employee’s disclosure in violation hereof;
(ii) was available to Employee on a nonconfidential basis prior to its
disclosure by the Employer (or its predecessors); (iii) is independently
developed or becomes available to Employee on a nonconfidential basis from a
source other than the Employer (or its predecessors); or (iv) is required by law
to be disclosed or is reasonably necessary for Employee to defend himself or
assert rights in a proceeding involving the Employer or its Affiliates; and (B)
the term “Employer” includes any person directly or indirectly controlling or
controlled by the Employer or under common control with the Employer.
 
6.            Agreement Not to Solicit or Compete Under Certain Circumstances.
Employee agrees that until the ninth anniversary of the Initial Closing Date, he
will not, anywhere in the United States, directly or indirectly, for his own
account or the account of others (other than on behalf of the Employer and its
Subsidiaries and controlled Affiliates):
 
(i)           engage in the securities brokerage, asset management or investment
advisory businesses in competition with the Employer or any of its Subsidiaries
or controlled Affiliates (the “Restricted Businesses”), unless expressly
approved by SMH; for the avoidance of doubt, Employee’s activities with respect
to his and his family’s investments, the promotion of financial literacy and
consumer education and public policy and political activities shall be deemed
not to be Restricted Businesses;
 
(ii)           solicit or accept assets for management or securities brokerage
services from any client or customer of the Employer or its Subsidiaries or
controlled Affiliates (or any person that was such a client or other customer
during the one year period preceding such solicitation or acceptance, or who was
offered such services in an individually targeted manner during the one year
period preceding such solicitation or acceptance), or otherwise request or
advise any client or customer of the Employer or any of its Subsidiaries or
controlled Affiliates to reduce or cancel any of its business with such persons;

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(iii)           induce or attempt to influence any employee of the Employer or
any of its Subsidiaries or controlled Affiliates to terminate his or her
employment with any such person; or
 
(iv)           employ any individuals employed by the Employer or any of its
Subsidiaries or controlled Affiliates during the one year period preceding such
commencement of employment.
 
7.             Miscellaneous.
 
(a)          Waivers. Any waiver of any terms or conditions or of the breach of
any covenant, representation or warranty of this Agreement in any one instance
shall not operate as or be deemed to be or construed as a further or continuing
waiver of any other breach of such terns, condition, covenant, representation or
warranty or any other term, condition, covenant, representation or warranty nor
shall any failure or delay at any time or times to enforce or require
performance of any provision hereof operate as a waiver of or affect in any
manner such party’s right at a later time to enforce or require performance of
such provision or of any other provision hereof, provided, however, that no such
waiver, unless it, by its own terms, explicitly provides to the contrary, shall
be construed to effect a continuing waiver of the provision being waived and no
such waiver in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom such waiver
is claimed in all other instances or for all other purposes to require full
compliance.
 
(b)          Modification. Except as otherwise provided in this Agreement,
neither this Agreement nor any term hereof may be changed, amended, modified,
waived, discharged or terminated except to the extent that the same is effected
and evidenced by the written consent of the party against whom enforcement of
such change or modification is sought and by written consent of SMH, which the
parties acknowledge is an intended third party beneficiary of this Agreement.
 
(c)          Injunctive Relief. Employee acknowledges and agrees that it is fair
and reasonable that he make the covenants and undertakings set forth in Sections
5 and 6 and has done so with the benefit of the advice of counsel. Furthermore,
Employee agrees that any breach or attempted breach by him of the provisions of
Section 5 or 6 of this Agreement will cause irreparable harm to the Employer for
which monetary damages will not be an adequate remedy. Accordingly, the Employer
and SMH shall be entitled to apply for and obtain injunctive relief (temporary,
preliminary and permanent) in order to restrain the breach or threatened breach
of, or otherwise to specifically enforce, any of the provisions of Section 5 or
6, without the requirement to post a bond or provide other security. Nothing
herein shall be construed as a limitation or waiver of any other rights or
remedies that may be available to the Employer for such breach or threatened
breach. Employee further agrees that the subject matter and duration of the
restrictions covered in Sections 5 and 6 are reasonable in light of the facts as
they exist today.
 
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(d)          Governing Law. This Agreement shall be governed by, and interpreted
in accordance with, the laws of the Commonwealth of Virginia without regard to
conflicts of law principles. No suit, action or proceeding with respect to this
Agreement may be brought in any court or before any similar authority other than
a federal or state court located in the Commonwealth of Virginia. Each of the
Parties submits to the exclusive jurisdiction of such courts in any such suit,
action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the suit, action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any suit, action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto.
 
(e)          Notices. (i) All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and sent as follows:
 
 If to Employee
Fredric M. Edelman
 
12450 Fair Lakes Circle
Fairfax, Virginia 22033
   
With a copy to:
Simpson Thacher & Bartlett LLP
 
425 Lexington Avenue
New York, NY 10017
Attention: Robert D. Goldbaum
                   Patrick J. Naughton
   
If to the Employer
The Edelman Financial Center, LLC
 
12450 Fair Lakes Circle
Fairfax, Virginia 22033
   
With a copy to:
Sanders Morris Harris Group Inc.
 
600 Travis, Suite 3100
Houston, Texas 77002
Attention: Robert E. Garrison II

 
(ii)          All notices and other communications required or permitted under
this Agreement which are addressed as provided in Section 8(e)(i), (A) if
delivered personally against proper receipt shall be effective upon delivery and
(B) if sent (1) by certified or registered mail with postage prepaid or (2) by
Federal Express or similar courier service with courier fees paid by the sender,
shall be effective upon receipt. The parties hereto may from time to time change
their respective addresses for the purpose of notices to that party by a similar
notice specifying a new address, but no such change shall be deemed to have been
given unless it is sent and received in accordance with this Section 8(e).
 
(f)          Entire Understanding; No Third Party Beneficiaries. This Agreement,
represents the entire understanding of the Employer and Employee with respect to
Employee’s employment with the Employer and Employee’s compensation therefor.
Nothing in this Agreement, express or implied, is intended to confer on any
person, other than the parties hereto and SMH (which is a third party
beneficiary of this Agreement) and their respective heirs, permitted
representatives, successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement. On and after
the Initial Closing Date, this Agreement will supersede any and all other
agreements, written or oral. Specifically, Employee acknowledges that no
commitment has been made by the Employer to Employee with respect to any
employment beyond the term of this Agreement (whether ending by lapse of time or
earlier termination pursuant to its terms) or with respect to any benefit not
expressly set forth in this Agreement or incorporated herein by reference.
 
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(g)          Severability. If any of the provisions of Section 6 or any other
provision of this Agreement are found by any court of competent jurisdiction (or
legally empowered agency) to be in violation of applicable law or unenforceable
for any reason whatsoever, then it is the intention of the parties that such
provision or provisions be deemed to be automatically amended to the extent
necessary to comply with applicable law and permit enforcement. If any of the
provisions of Section 6 or any other provision of this Agreement shall be deemed
by any court of competent jurisdiction (or legally empowered agency) to be
wholly or partially invalid, such determination shall not affect the binding
effect of the other provisions of Section 6 or of any of the other provisions of
this Agreement.
 
(h)          Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
 
(i)           Plurals; Gender. Whenever used herein, any singular term in this
Agreement will be deemed to include the plural, and any plural term the
singular. All pronouns and variations thereof will be deemed to refer to the
feminine, masculine or neuter, singular or plural, as the identity of the person
referred to may require.
 
(j)           Headings; Interpretation. The various headings contained herein
are for reference purposes only and do not limit or otherwise affect any of the
provisions of this Agreement. It is the intent of the parties that this
Agreement not be construed more strictly with regard to one party than with
regard to any other party.
 
(k)          Assignment. Neither this Agreement, nor any rights or obligations
hereunder, may be assigned by one party without the written consent of the
other, except that this Agreement shall be binding upon and inure to the benefit
of any successor or successors of the Employer, whether by merger,
consolidation, sale of assets or otherwise, and reference herein to the Employer
shall be deemed to include any such successor or successors.
 
(1)          Definitions. Capitalized terms used herein and not otherwise
defined shall have the meaning set forth in the Purchase Agreement when used in
this Agreement. In addition, for purposes of this Agreement,
 
(i)           an interest or position is “publicly traded” if the security
underlying it is listed on a national securities exchange or registered under
Section 12(g) of the Securities Exchange Act of 1934;
 
(ii)          a business that is “competitive with the business of the Employer”
shall include, without limitation, a business that involves providing Investment
Services with respect to investment products that are the same or similar to the
investment products offered or reasonably contemplated to be offered by the
Employer; and
 
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(iii)          “Investment Services” shall mean any services which involve (A)
the management of an investment account or fund (or portions thereof or a group
of investment accounts or funds), or (B) the giving of advice with respect to
the investment and/or reinvestment of assets or funds (or any group of assets or
funds).
 
(m)          Indemnification. During the Employment Period and thereafter,
Employer shall indemnify Employee to the fullest extent permitted by law against
any judgments, fines, amounts paid in settlement and reasonable expenses
(including attorneys’ fees) in connection with any claim, action or proceeding
(whether civil or criminal) against Employee as a result of Employee serving as
an employee, officer or director of the Employer or in any capacity at the
request of the Employer, in or with regard to any other entity, employee benefit
plan or enterprise. This indemnification shall be in addition to, and not in
lieu of, any other indemnification Employee shall be entitled to pursuant to any
other agreement.
 
(n)          Legal Fees. The Company shall pay all legal fees and related
expenses (including the cost of experts, evidence and counsel) incurred by
Employee in connection with any and all disputes arising under this Agreement
unless a court of competent jurisdiction has finally determined that the Company
has prevailed in such dispute, in which case the Employee shall reimburse the
Company for the payment of such fees.
 
(o)          Voiding of Agreement. If the Purchase Agreement is terminated in
accordance with its terms, this Agreement and all the rights and obligations
created hereunder shall be rendered void ab initio.
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 
THE EDELMAN FINANCIAL CENTER, LLC
 
By:
[sig1.jpg]    
Name:
   
Title:
      [sig2.jpg]   
Fredric M. Edelman

[Signature Page for Employment Agreement of Fredric M. Edelman]
 
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