Document:

EX-10.3

EXHIBIT 10.3

	 	 	 	 	 

DATED September 5, 2007

TITANIUM ASSET MANAGEMENT CORPORATION

and

NIGEL WIGHTMAN

SERVICE AGREEMENT

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1
	 	DEFINITIONS AND INTERPRETATION	 	1
	 
	 	 	 	 
	2
	 	TERM OF EMPLOYMENT	 	1
	 
	 	 	 	 
	3
	 	DUTIES	 	2
	 
	 	 	 	 
	4
	 	HOURS OF WORK	 	2
	 
	 	 	 	 
	5
	 	GRATUITIES AND CODES OF CONDUCT	 	2
	 
	 	 	 	 
	6
	 	REMUNERATION	 	3
	 
	 	 	 	 
	7
	 	PENSION SCHEME	 	3
	 
	 	 	 	 
	8
	 	OTHER BENEFITS	 	3
	 
	 	 	 	 
	9
	 	EXPENSES	 	4
	 
	 	 	 	 
	10
	 	HOLIDAYS	 	4
	 
	 	 	 	 
	11
	 	ILLNESS	 	5
	 
	 	 	 	 
	12
	 	RESTRICTIONS DURING EMPLOYMENT	 	5
	 
	 	 	 	 
	13
	 	INTELLECTUAL PROPERTY	 	6
	 
	 	 	 	 
	14
	 	CONFIDENTIALITY	 	8
	 
	 	 	 	 
	15
	 	DATA PROTECTION	 	9
	 
	 	 	 	 
	16
	 	MONITORING	 	9
	 
	 	 	 	 
	17
	 	TERMINATION OF EMPLOYMENT	 	9
	 
	 	 	 	 
	18
	 	SUSPENSION	 	10
	 
	 	 	 	 
	19
	 	GARDEN LEAVE	 	10
	 
	 	 	 	 
	20
	 	RESIGNATION AND RETURN OF COMPANY PROPERTY	 	10
	 
	 	 	 	 
	21
	 	RECONSTRUCTION OR AMALGAMATION	 	11
	 
	 	 	 	 
	22
	 	RESTRICTIONS	 	11
	 
	 	 	 	 
	23
	 	SEVERABILITY	 	13
	 
	 	 	 	 
	24
	 	THIRD PARTIES	 	13
	 
	 	 	 	 
	25
	 	NOTICES	 	13
	 
	 	 	 	 
	26
	 	STATUTORY INFORMATION	 	13
	 
	 	 	 	 
	27
	 	MISCELLANEOUS	 	14
	 
	 	 	 	 
	THE SCHEDULE — Statement Of Particulars Pursuant To The Employment Rights Act 1996	 	15

(i)

 

THIS AGREEMENT is made on September 5, 2007

BETWEEN:

	(1)	 	Titanium Asset Management Corporation whose registered office is at       (the
“Company”); and
	 
	(2)	 	Nigel Wightman of HOME ADDRESS APPEARS IN ORIGINAL (the “Executive”).

RECITAL

The Company shall employ the Executive and the Executive shall serve the Company as Managing
Director of the Company on the following terms and subject to the following conditions (the
“Agreement”):

IT IS AGREED AS FOLLOWS:

	1	 	DEFINITIONS AND INTERPRETATION

	1.1	 	In this Agreement unless the context otherwise requires the following expressions shall
have the following meanings:

	 	 	“Associated Company”

	 	(a)	 	a company which is not a Subsidiary of the Company but whose issued equity
share capital (as defined in s744 of the Companies Act 1985) is owned as to at
least twenty per cent (20%) by the Company or one of its Subsidiaries; or
	 
	 	(b)	 	a Subsidiary (as defined below)

	 	 	“Board”
	 
	 	 	the board of directors for the time being of the Company;
	 
	 	 	“Group”
	 
	 	 	the Company and its subsidiaries and Associated Companies for the time being and “Group
Company” means any one of them;
	 
	 	 	“Regulations”
	 
	 	 	the Working Time Regulations 1998
	 
	 	 	“Subsidiary”
	 
	 	 	a Subsidiary within the meaning of s736 of the Companies Act 1985.
	 
	1.2	 	Any reference to a statutory provision shall be deemed to include a reference to any
statutory modification or re-enactment of it.
	 
	1.3	 	The headings in this Agreement are for convenience only and shall not affect its
construction or interpretation.
	 
	1.4	 	References in this Agreement to a person include a body corporate and an incorporated
association of persons and references to a company include any body corporate.
	 
	1.5	 	Where appropriate, references to the Executive include his personal representatives.
	 
	2	 	TERM OF EMPLOYMENT
	 
	2.1	 	The employment of the Executive shall be deemed to have commenced on 1 October 2007.
The employment of the Executive (subject to termination as provided below) shall

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	 	 	be for an initial fixed term of 2 years from 1 October 2007 and shall continue until
terminated by either party giving to the other not less than 12 months notice in writing to
expire on or any time after 30 September 2007.
	 
	2.2	 	Notwithstanding clause 2.1 above the employment of the Executive shall automatically
terminate on the day when the Executive reaches age 65.
	 
	2.3	 	The Executive represents and warrants that he is not bound by or subject to any contract,
court order, agreement, arrangement or undertaking which in any way restricts or
prohibits him from entering into this Agreement or performing his duties under it.
	 
	3	 	DUTIES
	 
	3.1	 	The Executive shall during his employment under this Agreement:

	 	3.1.1	 	perform the duties and exercise the powers which the Board may from time to
time properly assign to him in his capacity as Managing Director or in
connection with the conduct and management of the business of the Company
or the business of any Group Company (including serving on the board of such
Group Company or on any other executive body or any committee of such a
company); and
	 
	 	3.1.2	 	do all in his power to promote, develop and protect the business of the
Company and at all times and in all respects conform to and comply with the
proper and reasonable directions and regulations of the Board.

	3.2	 	The Executive shall give to the Board such information regarding the affairs of the
Company as it shall require, and in any event, report regularly and keep the Board
informed.
	 
	3.3	 	The Executive shall carry out his duties and exercise his powers jointly with any other
executives appointed by the Board to act jointly with him and the Board may at any time
require the Executive to cease performing or exercising the said or any duties or powers.
	 
	3.4	 	The Executive shall work in any place within the United Kingdom which the Board may
require and he may be required to travel abroad when required by the Company for the
proper performance of his duties.
	 
	4	 	HOURS OF WORK
	 
	 	 	The Executive shall have no normal hours of work but is required to devote such time to
his work as is necessary for the proper performance of his duties. Normal office hours are
9.00am to 6.00pm Monday to Friday.
	 
	5	 	GRATUITIES AND CODES OF CONDUCT
	 
	5.1	 	The Executive shall not directly or indirectly accept any commission, rebate, discount or
gratuity in cash or in kind from any person who has or is having a business relationship
with the Company or any Group Company.
	 
	5.2	 	The Executive shall comply (and procure that his spouse and minor children shall comply)
with all applicable rules and regulations of the London Stock Exchange including all AIM
rules and regulations, and as applicable the Listing Rules of the United Kingdom Listing
Authority, and any codes of conduct of the Company for the time being in force and any
other relevant regulatory authority.

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	6	 	REMUNERATION
	 
	6.1	 	The Company shall pay to the Executive a salary at the rate of two hundred and fifty
thousand dollars ($250,000) gross per year inclusive of any directors’ fees payable to
him.
	 
	6.2	 	The Executive’s salary shall accrue from day to day and be payable by equal monthly
instalments in arrears on the last day of each month in US dollars.
	 
	6.3	 	The Executive’s salary shall be reviewed once in every year; the first review to be on or
about 31 December 2008. The undertaking of a salary review does not confer a
contractual right (whether express or implied) to any increase in salary and the Executive
acknowledges that any salary increase is at the discretion of the Company.
	 
	6.4	 	The Executive shall be eligible to receive an annual performance bonus on such terms as
may be determined by the Remuneration Committee from time to time. Notwithstanding
the foregoing, the Executive shall receive a bonus for 2007 equivalent to the pro-rated (on
a monthly basis) value of an annual bonus of $100,000 subject to satisfactory personal
and company performance, as determined by the Remuneration Committee.
Furthermore, the Executive’s bonus entitlement for 2008 shall be $100,000, subject to
satisfactory personal and Company performance as determined by the Remuneration
Committee in its absolute discretion. In the event of the termination of the Executive’s
employment during 2007 or 2008, the Executive shall be eligible to receive a bonus
payment in respect of that part of the bonus year during which the Executive was
employed (and not suspended under clause 19) pro-rated on a time basis. All bonus
payments shall be payable within 30 days of the end of the Company’s fiscal year.
	 
	7	 	PENSION SCHEME
	 
	7.1	 	The Company shall in each complete year of the Executive’s employment pay, to such
personal pension scheme as is registered with HM Revenue & Customs that the
Executive may from time to time nominate an amount equal to twenty per cent of the
Executive’s salary (or if lower, such percentage of what the earnings cap would have
been, had it continued to be determined after A-Day on the same basis as it was
determined prior thereto) in that year to be calculated and paid as pounds sterling, based
on the dollar to pound exchange rate as at 1 January of the calendar year concerned.
This amount shall be payable in addition to the Executive’s salary, in equal monthly
instalments at the same time as the instalment of salary to which it relates, and shall be
subject always to such limits on (and other provisions relating to) contributions (and/or the
tax relief available thereon) as apply from time to time in accordance with the prevailing
practice of HM Revenue & Customs or the provisions of the Finance Act 2004.
	 
	7.2	 	There is no contracting-out certificate in force in respect of the Executive’s employment
with the Company.
	 
	8	 	OTHER BENEFITS
	 
	8.1	 	The Executive is entitled to membership of the following
schemes (each referred to below as an “insurance scheme”):

	 	8.1.1	 	a medical expenses insurance scheme providing such cover for the Executive
and his spouse/partner and children under the age of eighteen (18) as the
Company may from time to time notify to him; and
	 
	 	8.1.2	 	a life insurance scheme under which a lump sum benefit shall be payable on
the Executive’s death while the Agreement continues; the benefit of which shall
be paid to such dependants of the Executive or other beneficiary as the
trustees of the scheme select at their discretion, after considering any
beneficiaries identified by the Executive in any expression of his wishes

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	 	 	 	delivered to the trustees before his death. The benefit is equal to 4 times the
Executive’s basic annual salary at his death (but basic annual salary for this
purpose shall not exceed such limit as applies, as the case may be, under the
scheme’s own rules or the prevailing practice of HM Revenue & Customs or the
provisions of the Finance Act 2004).
	 
	 	8.1.3	 	a salary continuance on long-term disability insurance scheme
providing coverage of no less than 60% of the Executive’s base salary.

	8.2	 	Benefits under any insurance scheme shall be subject to the rules of the scheme(s) and
the terms of any applicable insurance policy and are conditional upon the Executive
complying with and satisfying any applicable requirements of the insurers. Copies of
these rules and policies and particulars of the requirements shall be provided to the
Executive on request. The Company shall not have any liability to pay any benefit to the
Executive under any insurance scheme unless it receives payment of the benefit from the
insurer under the scheme.
	 
	8.3	 	Any insurance scheme which is provided for the Executive is also subject to the
Company’s right to alter the cover provided or any term of the scheme.
	 
	8.4	 	The provision of any insurance scheme does not in any way prevent the Company from
lawfully terminating this Agreement in accordance with the provisions of this Agreement
even if to do so would deprive the Executive of membership of or cover under any such
scheme.
	 
	9	 	EXPENSES
	 
	9.1	 	The Company shall reimburse or procure that the Executive is reimbursed all reasonable
travelling, hotel and other expenses wholly and necessarily incurred by him in the
performance of his duties under this Agreement on production of appropriate receipts, if
required, by the Company. The Executive shall also be entitled to repayment of reasonable
charges in connection with obtaining and maintaining a Blackberry for use in the proper
performance of his duties.
	 
	10	 	HOLIDAYS
	 
	10.1	 	The Executive is entitled to 25 days’ holiday with pay every calendar year in addition to
bank and other public holidays. The Company’s holiday year runs from January to
December.
	 
	10.2	 	The Executive’s holiday entitlement is inclusive of his statutory entitlement which is twenty
(20) days per annum. When calculating the Executive’s statutory entitlement bank and
public holidays are taken into account. The statutory entitlement cannot be carried over
from one holiday year to the next and no pay in lieu can be made to the Executive.
	 
	10.3	 	During the first year of the Executive’s employment the Executive’s statutory holiday
entitlement will accrue pro rata monthly in advance. Where this calculation results in
fractions of days the amount of leave which can be taken is rounded up to the next half
day. Any rounded up element is deducted from the leave remaining.
	 
	10.4	 	Save as provided for in clause 10.3 above, the Executive’s entitlement to holiday accrues
pro rata throughout each holiday year (disregarding fractions of days). The Executive will
be deemed to have taken statutory holiday first.
	 
	10.5	 	Any entitlement to holiday over and above any statutory entitlement remaining at the end
of any holiday year shall lapse and no payment in lieu will be made for accrued untaken holiday.

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10.6

	 	10.6.1	 	If the Executive has taken holiday in excess of his entitlement on termination of
employment he will be required to give account for it and the Company will
make a deduction from his final salary payment accordingly. If the Executive
has accrued holiday owing to him, the Company may at its discretion, require
him to take the outstanding holiday during any notice period or make a
payment in lieu of it.
	 
	 	10.6.2	 	For the purposes of clause 10.6.1 above, a day’s pay will be calculated as
1/260th of basic salary:

	10.7	 	If the Executive’s employment is terminated without notice, he will not be entitled to
holiday pay for holiday which would have accrued during the notice period, had he
continued to be employed throughout that time.
	 
	10.8	 	If the Executive is put on garden leave in accordance with clause 19 any accrued but
unused holiday entitlement shall be deemed to be taken during any period of garden
leave.
	 
	10.9	 	There are no formal notice requirements for taking holiday but the Executive is expected
to take his holiday at a time or times convenient to the Company.
	 
	11	 	ILLNESS
	 
	11.1	 	The Executive shall continue to be paid during sickness absence (such payment to be
inclusive of any statutory sick pay or social security benefits to which he may be entitled)
for a total of up to 12 weeks in 12 consecutive months and therefore shall continue to be
paid salary at the discretion of the Company.
	 
	11.2	 	The Executive will cease to accrue holiday, subject to any entitlement under the Working
Time Regulations if he has been absent due to sickness, for four (4) consecutive weeks
or more.
	 
	11.3	 	If the Executive is incapable of performing his duties by reason of injury sustained wholly
or partly as a result of negligence, nuisance or breach of any statutory duty on the part of
a third party and the Executive recovers an amount by way of compensation for loss of
earnings from that third party, he shall immediately pay that amount to the Company.
	 
	11.4	 	The Company shall be entitled to require the Executive to undergo examinations by a
medical adviser appointed or approved by the Company and the Executive authorises the
medical adviser and/or will provide such consents as are necessary to disclose to the
Company the results of such examinations.
	 
	12	 	RESTRICTIONS DURING EMPLOYMENT
	 
	12.1	 	During the continuance of his employment under this Agreement the Executive shall unless prevented by incapacity
devote his whole time and attention to the business of the Company and shall not without the prior written consent of the
Board:

	 	12.1.1	 	engage in any other business; or
	 
	 	12.1.2	 	be concerned or interested in any other business which is or shall be of a
similar nature to or competitive with that carried on by the Company or any
Group Company or which is a supplier or customer of the Company or Group
Company in relation to its services; or
	 
	 	12.1.3	 	solicit the custom of, canvass, approach or deal with, in competition with the
Company or any Group Company, any person (including any company, firm,
organisation or other entity) to whom the Company or any Group Company

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	 	 	 	supplies services or with whom the Company or any Group Company is in
negotiations or discussions regarding the possible supply of services; or

	 	12.1.4	 	discourage any such person referred to in clause 12.1.3 above from conducting
or continuing to conduct business with the Company or any Group Company
on the best terms available to the Company or any Group Company; or
	 
	 	12.1.5	 	induce or attempt to induce any director or senior employee of the Company or
any Group Company and with whom the Executive has material dealings in the
course of his employment, to leave the employment of the Company or any
Group Company; or
	 
	 	12.1.6	 	take any steps which impair or might reasonably be thought by the Company,
to impair the Executive’s ability to act at all times in the best interests of
the
Company

	 	 	provided that nothing in this clause shall preclude the Executive from holding or being
otherwise interested in any shares or other securities of any company which is quoted on
any recognised investment exchange (as defined by section 285 Financial Services and
Markets Act 2000) so long as the interest of the Executive in such shares or other
securities does not extend to more than one per cent 1%) of the total amount of such shares or securities.

	13	 	INTELLECTUAL PROPERTY
	 
	13.1	 	“Intellectual Property” shall mean all inventions, patents, utility models, designs (both
registered or unregistered and including rights relating to semi-conductor topographies),
database right, copyright, and trade marks (both registered and unregistered) together
with all rights to the grant of and applications for the same and including all similar or
analogous rights and all other rights in the nature of intellectual and industrial property
throughout the world and all future rights of such nature.
	 
	13.2	 	For the purpose of interpreting this clause, reference(s) to any form of Intellectual
Property shall include all similar and analogous rights in other jurisdictions and all other
rights in the nature of intellectual and industrial property that protect the same or similar
subject matter.
	 
	13.3	 	If the Executive makes, or if the Executive participates in making, any invention, any
design (whether registrable or not), or any work in which copyright and/or database rights
subsist and which relates to or is useful in connection with the business of the Company
the Executive shall disclose it to the Company immediately, whether or not it is the
property of the Company and:

	 	13.3.1	 	in the case of an invention give the Company full particulars of the invention
together with everything embodying, recording (in any media) or relating to the
invention, irrespective of the nature of the invention or when it was made; and
	 
	 	13.3.2	 	in the case of designs or works in which copyright and/or database right
subsists, give the Company a copy of all records of such designs and works;
	 
	 	13.3.3	 	and, in addition, the Company may call for the same to be delivered forthwith to
an authorised representative at any time.

	13.4	 	If an invention made by the Executive is the property of the Company under Section 39
Patents Act 1977 the Executive assigns to the Company with full title guarantee all rights
the Executive may have to the invention, to the grant of protection and all applications for
protection in respect of that invention.
	 
	13.5	 	The Company shall not be under any obligation to apply for or maintain protection in
respect of any invention made by the Executive.

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	13.6	 	If any invention is the Executive’s property under Section 39 Patents Act 1977 and relates
to or is useful in connection with the business or any product or service of the Company
the Executive shall not grant or agree to grant a licence or other rights or execute or
agree to execute an assignment in respect of any rights in or relating to that invention to
any other person without first offering to grant a licence (or such other rights) or execute
an assignment for the benefit of the Company on terms no less favourable than those
offered to the third party, and the Company shall have fifteen working days in which to
accept or reject the offer.
	 
	13.7	 	If during the course of the Executive’s employment by the Company (whether in the
course of normal duties or not and whether or not during normal working hours) the
Executive makes, or participates in the making of any design (whether registrable or not)
or any work in which copyright and/or database right subsists the Executive assigns to the
Company with full title guarantee and, where appropriate, by way of future assignment, all
such rights for the full term thereof throughout the world. The assignment shall not extend
to those designs or works which are created by him wholly outside his normal working
hours and wholly unconcerned with his service under this Agreement. Any agreement to
the contrary is expressly excluded. If by operation of law it is not possible for the
Executive to assign such rights in a territory outside the United Kingdom the Executive
shall hold such rights on trust for the Company and shall grant to the Company such
rights as most closely resemble an assignment in the territory concerned.
	 
	13.8	 	The Executive shall execute all documents and do all things which are necessary or
desirable for perfecting the assignment of all rights assigned to the Company pursuant to
this clause 13 and for obtaining the best possible protection in respect of such rights in
the territories specified by the Company. The Executive shall assign to the Company all
such rights as are not already held by the Company in all subsequent registrations and
applications for registration.
	 
	13.9	 	All embodiments of rights assigned under this clause 13 and all records relating to such
rights irrespective of the form or media shall be the property of the Company, the
Executive shall surrender them to the Company on the termination of this Agreement or at
the request of the Company at any time during the Executive’s employment, and shall not
keep any copies.
	 
	13.10	 	The Executive irrevocably appoints the Company to be his attorney in his name and on
his behalf to sign or execute any document or do anything generally to use his name for
the purpose of giving to the Company the full benefit of the provisions of this clause 13
and in favour of any third party a certificate in writing signed by any director or the
secretary of the Company that any document or act falls within the authority conferred by
this clause shall be conclusive evidence that that is the case.
	 
	13.11	 	The Executive waives all moral rights and all similar and analogous rights in other
territories (whether arising under Chapter IV of the Copyright Designs and Patents Act
1988 or otherwise) to the extent permissible under the relevant legislation in each
jurisdiction in works to which clause 13 applies.
	 
	13.12	 	The Executive warrants that he is not bound by any legally enforceable obligations owed
to persons other than the Company which would prevent him from complying with the
terms of this Agreement. The Executive shall not without proper licence use any
inventions or information in breach of rights owed to or held by persons other than the
Company or copy or adapt copyright works or designs or unlawfully extract or re-utilise all
or a substantial part of a database owned (in each case) by persons other than the
Company or otherwise infringe any rights in Intellectual Property owned by people other
than the Company.
	 
	13.13	 	The Executive shall not exploit or attempt to exploit any Intellectual Property which is the
property of the Company without the prior written consent of the Company nor shall the
Executive do anything that would imperil or prejudice any rights in any of the same, and

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	 	 	the Executive shall immediately inform the Company if the Executive becomes aware of any
infringement of any of the same.

	13.14	 	If and when required to do so by the Company, the Executive shall provide reasonable
assistance to defend any proceedings in respect of revocation, invalidity and/or
infringement of any and all rights that are assigned or licensed to the Company under this
clause 13.
	 
	13.15	 	All the provisions of this clause 13 shall survive termination of the Executive’s
employment insofar as they relate to rights that were created before the date of
termination of this Agreement.
	 
	14	 	CONFIDENTIALITY
	 
	14.1	 	The Executive shall not (except in the proper performance of his duties) during or after his
employment has ended divulge to any person or otherwise make use of (and shall use his
best endeavours to prevent the publication or disclosure of) any trade secret or any
confidential information concerning the business or finances of the Company or any
Group Company or any of its/their dealings transactions or affairs or any such confidential
information concerning any of their suppliers, agents, distributors or clients.
	 
	14.2	 	Confidential information includes, but is not limited to:

	 	14.2.1	 	corporate and marketing strategy, business development and plans, sales
reports and research results;
	 
	 	14.2.2	 	business methods and processes, manuals and operating procedures,
technical information and know-how relating to the Group’s business and which
is not in the public domain, including inventions, designs, programs,
techniques, database systems, formulae and ideas;
	 
	 	14.2.3	 	business contacts, lists of commercial customers, advertisers and suppliers
and details of contracts with them and their current or future requirements;
	 
	 	14.2.4	 	information on employees and their terms of employment;
	 
	 	14.2.5	 	sales, expenditure levels, pricing and discounting policies;
	 
	 	14.2.6	 	budgets, management accounts, trading statements and other financial
reports;
	 
	 	14.2.7	 	unpublished price sensitive information relating to shares or securities listed or
dealt in on any recognised stock exchange; and
	 
	 	14.2.8	 	any document marked “confidential” or any information not in the public
domain.

	14.3	 	The restrictions in clauses 14.1 and 14.2 shall not apply to information which:

	 	14.3.1	 	comes into the public domain otherwise than by a breach by the Executive of
his obligations under this Agreement; or
	 
	 	14.3.2	 	is disclosed to the Executive by a third party who has not received it directly or
indirectly from the Company or any Group Company; or
	 
	 	14.3.3	 	must be disclosed by any applicable law, to the extent of such required
disclosure.

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	15	 	DATA PROTECTION
	 
	15.1	 	The Executive acknowledges that the Company will hold personal data relating to the
Executive such data will include the Executive’s employment application, address,
references, bank details, performance appraisals, work, holiday and sickness records,
next of kin, salary reviews, remuneration details and other records (which may, where
necessary, include sensitive personal data relating to the Executive’s health, and data
held for equal opportunities purposes). The Company will hold such personal data for
personnel administration and management purposes and to comply with the obligations
regarding the retention of Executive/worker records. The Executive’s right of access to
such data is as prescribed by law.
	 
	15.2	 	The Executive hereby undertakes and agrees that the Company may process personal
data relating to personnel administration and management purposes, and may, when
necessary for those purposes, make such data available to its advisers, to third parties
providing products and/or services to the Company (such as IT systems suppliers,
pensions, benefits and payroll administrators) and as required by law. Further, the
Executive hereby agrees that the Company may transfer such data to and from any
Group Company. By signing this Agreement, the Executive expressly consents to the
collection, transfer and use of such data in accordance with this clause 15.
	 
	16	 	MONITORING
	 
	16.1	 	The Executive acknowledges that the Company may monitor messages sent and received via
email, the Internet and voicemail systems to ensure that the Executive is complying with the
Company’s policy for use by its employees of these systems.
	 
	17	 	TERMINATION OF EMPLOYMENT
	 
	17.1	 	The Company may at any time and in its absolute discretion (whether or not any notice of
termination has been given by the Company or the Executive under clause 2 above)
terminate the Agreement with immediate effect and make a payment in lieu of notice.
This payment shall comprise solely the Executive’s basic salary (at the rate payable when
this option is exercised) and the Executive’s pension entitlement for the notice period but
shall not include any bonus or other benefits and shall be subject to deductions for
income tax and national insurance contributions as appropriate (the “Payment in Lieu”).
The Executive will not, under any circumstances, have any right to payment in lieu unless
the Company has exercised its option to pay in lieu of notice.
	 
	17.2	 	The employment of the Executive may be terminated by the Company without notice or
payment in lieu of notice if the Executive:

	 	17.2.1	 	is guilty of any serious misconduct or any other conduct which affects or is
likely to affect prejudicially the interests of the Company [or any Group
Company to which he is required to render services under this Agreement]; or
	 
	 	17.2.2	 	fails or neglects efficiently and diligently to discharge his duties or commits any
serious or repeated breach or non-observance by the Executive of any of the
provisions contained in this Agreement; or
	 
	 	17.2.3	 	has an interim receiving order made against him, becomes bankrupt or makes
any composition or enters into any deed of arrangement with his creditors; or
	 
	 	17.2.4	 	is charged with any arrestable criminal offence (other than an offence under
road traffic legislation in the United Kingdom or elsewhere for which a fine or
non-custodial penalty is imposed); or
	 
	 	17.2.5	 	is disqualified from holding office in another company by reason of an order of
a court of competent jurisdiction; or

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	 	17.2.6	 	shall become of unsound mind or become a patient under the Mental Health
Act 1983; or
	 
	 	17.2.7	 	is convicted of an offence under the Criminal Justice Act 1993 in relation to
insider dealings or under any other present or future statutory enactment or
regulations relating to insider dealings; or
	 
	 	17.2.8	 	is in breach of the Model Code on directors’ dealings in listed securities,
including securities dealt on the OFEX trading facility and securities dealt on
the Alternative Investment Market published by the London Stock Exchange
Limited.

	17.3	 	Any delay by the Company in exercising the right to terminate without notice is not a
waiver thereof.
	 
	18	 	SUSPENSION
	 
	18.1	 	The Company may suspend the Executive on full pay to allow the Company to investigate
any complaint made against the Executive in relation to his employment with the Company.
	 
	19	 	GARDEN LEAVE
	 
	19.1	 	Provided the Executive continues to enjoy his full contractual benefits and receive his
pay in accordance with this Agreement, the Company may in its absolute discretion do all or
any of the following during the notice period or any part of the notice period, after the
Executive or the Company has given notice of termination to the other, without breaching this
Agreement or incurring any liability or giving rise to any claim against it:

	 	19.1.1	 	exclude the Executive from the premises of the Company and/or the Group;
	 
	 	19.1.2	 	require the Executive to carry out only specified duties (consistent with his
status, role and experience) or to carry out no duties;
	 
	 	19.1.3	 	announce to any or all of its employees, suppliers, customers and business
partners that the Executive has been given notice of termination or has
resigned (as the case may be);
	 
	 	19.1.4	 	prohibit the Executive from communicating in any way with any or all of the
suppliers, customers, business partners, employees, agents or representatives
of the Company or the Group until his employment has terminated except to
the extent he is authorised to do so by the Board in writing;
	 
	 	19.1.5	 	require the Executive to resign his directorship of any Group Company;
	 
	 	19.1.6	 	require the Executive to comply with any other reasonable conditions imposed
by the Company.

The Executive will continue to be bound by all obligations (whether express or implied)
owed to the Company under the terms of the Agreement or as an employee of the Company.

	20	 	RESIGNATION AND RETURN OF COMPANY PROPERTY
	 
	20.1	 	Upon the termination by whatever means of this Agreement the Executive shall:

	 	20.1.1	 	immediately resign from his office as a director of the Company and from such
offices held by him in any Group Company without claim for compensation; and
	 
	 	20.1.2	 	immediately deliver to the Company all credit cards, motor-cars, keys,
computer media and other property, in whatever form, of or relating to the

10

 

	 	 	 	business of the Company or of any Group Company which may be in his possession
or under his power or control.

	20.2	 	If the Executive fails to comply with clause 19.1.5 and 20.1.1 the Company is hereby
irrevocably authorised to appoint some person in his name and on his behalf to sign and
complete any documents or do any thing necessary to give effect to this clause.
	 
	20.3	 	The Executive shall not without the consent of the Company at any time after the
termination of this Agreement represent himself still to be connected with the Company or
any Group Company.
	 
	21	 	RECONSTRUCTION OR AMALGAMATION
	 
	 	 	If the employment of the Executive under this Agreement is terminated by reason of the
liquidation of the Company for the purpose of reconstruction or amalgamation and the
Executive is offered employment with any concern or undertaking resulting from the
reconstruction or amalgamation on terms and conditions not less favourable than the terms
of this Agreement then the Executive shall have no claim against the Company [or any Group
Company] in respect of the termination of his employment under this Agreement.
	 
	22	 	RESTRICTIONS
	 
	22.1	 	Definitions
	 
	 	 	In this clause the following words shall have the following meanings:
	 
	 	 	“Termination Date”
	 
	 	 	the date on which the employment terminates;
	 
	 	 	“Person”
	 
	 	 	includes any company, firm, organisation or other entity;
	 
	 	 	“Area”
	 
	 	 	any country where on the Termination Date the Company was supplying services
	 
	 	 	“Client”
	 
	 	 	any Person to whom the Company or a Group Company supplied services during the 12 months
preceding the Termination Date and with whom at any time during such period the Executive
was actively involved in the course of his employment;
	 
	 	 	“Prospective Client”
	 
	 	 	any Person with whom the Company or a Group Company had negotiations or discussions
regarding the possible supply of services during the 12 months immediately preceding the
Termination Date and with whom at any time during such period the Executive was actively
involved in the course of his employment.
	 
	22.2	 	In order to protect the goodwill, confidential information, trade secrets and business
connections of the Company or a Group Company the Executive covenants with the
Company (and as trustee for each Group Company) that:

	 	22.2.1	 	Non-competition
	 
	 	 	 	the Executive shall not for a period of 12 months from the Termination Date
directly or indirectly be interested or concerned in any business which is
carried on in the Area and which:

11

 

	 	(a)	 	concerns the business of fund management and with which the
Executive was actively involved at any time during 12 months ending
on the Termination Date; or
	 
	 	(b)	 	is competitive or likely to be competitive with the business of the
Company or a Group Company being carried on at the Termination Date and with
which the Executive was actively involved at any time during the 12 months
ending on the Termination Date.

For this purpose, the Executive is concerned in a business if:

	 	(c)	 	he carries it on as principal or agent; or
	 
	 	(d)	 	he is a partner, director, employee, secondee, consultant or
agent in, of or to any Person who carries on the business; or
	 
	 	(e)	 	subject to clause 12 above, he has any direct or indirect financial
interest (as shareholder or otherwise) in any Person who carries on the
business.

	 	22.2.2	 	Non-solicitation
	 
	 	 	 	the Executive shall not for a period of 12 months from the Termination Date in the Area
directly or indirectly;

	 	(a)	 	canvass or solicit business or approach any Clients or Prospective
Clients in respect of services similar to those being provided by the
Company or a Group Company as at the Termination Date;
	 
	 	(b)	 	seek to do business or deal with any Clients or Prospective Clients in
respect of services similar to those being provided by the Company or
a Group Company as at the Termination Date; or
	 
	 	(c)	 	canvass or solicit business from or make an approach to any supplier
of the Company or a Group Company with whom the Executive was
actively involved at any time during the 12 months ending on the
Termination Date to cease to supply, or to restrict or vary the terms of
supply to the Company or a Group Company or otherwise interfere with
the relationship between such a supplier and the Company or a Group
Company.

	 	22.2.3	 	Non-poaching
	 
	 	 	 	the Executive shall not for a period of 12 months after the Termination Date directly or
indirectly:

	 	(a)	 	induce or attempt to induce any senior employee of the Company or a
Group Company who is engaged in any business activity carried on by
the Company or a Group Company at the Termination Date and with
whom the Executive at any time during the 12 months ending on the
Termination Date had material dealings in the course of his
employment, to leave the employment of the Company or a Group
Company (whether or not this would be a breach of contract by that
employee) for the purposes of being involved in or engaged in the
types of business referred to in sub-clauses 22.2.1 (a) and 22.2.1(b)
above; or
	 
	 	(b)	 	engage, attempt to engage, employ, attempt to employ or offer
employment or work (and in each case whether directly or indirectly,
including through an employment agency or other intermediary) to any

12

 

	 	 	 	senior employee of the Company or a Group Company who is engaged in any
business activity carried on by the Company or a Group Company at the
Termination Date and with whom the Executive at any time during the 12
months ending on the Termination Date had material dealings in the
course of his employment, for the purposes of being involved in or
engaged in the types of business referred to in sub-clauses 22.2.1(a)
and 22.2.1(b) above.

	22.3	 	The restrictions in this clause are considered by the parties to be reasonable and the
validity of each sub-clause shall not be affected if any of the others is invalid. If any of the
restrictions is void but would be valid if some part of the restriction were deleted, the
restriction in question shall apply with such modification as may be necessary to make it
valid.

	22.4	 	The Executive acknowledges that the provisions of this clause are no more extensive
than is reasonable to protect the Company [or the Group].
	 
	22.5	 	If the Executive is suspended from work under the provisions of clause 19.1, the
Company may, at its sole discretion, agree that the period of time during which the
non-competition restriction contained in clause 22 is enforceable, starts to run from the date of
the suspension and not from the Termination Date.
	 
	23	 	SEVERABILITY
	 
	 	 	If any of the provisions of this Agreement become invalid or unenforceable for any reason
by virtue of applicable law the remaining provisions shall continue in full force and
effect and the Company and the Executive hereby undertake to use all reasonable endeavours
to replace any legally invalid or unenforceable provision with a provision which will
promise to the parties (as far as practicable) the same commercial results as were
intended or contemplated by the original provision.
	 
	24	 	THIRD PARTIES
	 
	 	 	Unless the right of enforcement is expressly granted, it is not intended that a third
party should have the right to enforce the provisions of this Agreement pursuant to the
Contracts (Rights of Third Parties) Act 1999.
	 
	25	 	NOTICES
	 
	25.1	 	Any notice required or permitted to be given under this Agreement shall be given in
writing delivered personally or sent by first class post pre-paid recorded delivery (air mail
if overseas) or by facsimile to the party due to receive such notice at, in the case of the
Company, its registered office from time to time and, in the case of the Executive, his
address as set out in this Agreement (or such address as he may have notified to the
Company in accordance with this clause).
	 
	25.2	 	Any notice delivered personally shall be deemed to be received when delivered to the
address provided in this Agreement and any notice sent by pre-paid recorded delivery
post shall be deemed (in the absence of evidence of earlier receipt) to be received 2 days
after posting and in proving the time of despatch it shall be sufficient to show that the
envelope containing such notice was properly addressed, stamped and posted. A notice
sent by facsimile shall be deemed to have been received on receipt by the sender of
confirmation in the transmission report that the facsimile had been sent.
	 
	26	 	STATUTORY INFORMATION
	 
	 	 	The Schedule to this Agreement sets out information required to be given to the Executive
by the Employment Rights Act 1996.

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	27	 	MISCELLANEOUS
	 
	27.1	 	This Agreement is governed by and shall be construed in accordance with the laws of
England.
	 
	27.2	 	The parties to this Agreement submit to the exclusive jurisdiction of the English courts.
	 
	27.3	 	This Agreement contains the entire understanding between the parties and supersedes all
previous agreements and arrangements (if any) relating to the employment of the
Executive by the Company (which shall be deemed to have been terminated by mutual
consent).
	 
	27.4	 	The Executive authorises the Company to deduct from any remuneration payable to the
Executive under this Agreement any sums due from him to the Company or any Group
Company including the cost of repairing any damage to Company or any Group Company
property caused by the Executive.

14

 

THE SCHEDULE

Statement Of Particulars Pursuant To The Employment Rights Act 1996

	1	 	The Executive’s period of continued employment commenced
on 1 October 2007. A period of
employment with a previous employer does not count as part of the Executive’s continuous
employment with the Company.
	 
	2	 	The Company’s disciplinary and grievance procedures will be supplied to you separately.
For the avoidance of doubt any disciplinary or grievance procedure do not form part of the
Service Agreement.
	 
	3	 	The Executive may be required to work overseas for periods exceeding one (1) month but
there are currently no particulars to be entered.
	 
	4	 	The Company is not a party to any collective agreement which affects the Executive’s
employment.

	 	 	 	 	 
	Signed as a Deed by            acting by:

 	 	 
	Director 	/s/ Mark Adam Parkin 	 	 	 
	Director  	 	 	 
	
 Signed as a Deed by            in the presence of:
	/s/ Nigel David Wightman 	 
	 

	 	 	 	 	 
	 	 	 
	Witness signature: 	/s/ JEMMA SHORTEN
 	 	 
	Name:  	Jemma  Shorten 	 	 
	Address: 	9 Ironmonger Lane
  London  EC2V 8EY
 	 
	Occupation: 	Solicitor. 	 
	 

15EX-10.4

EXHIBIT 10.4

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”), made this ___day of ___2007, between Jeffrey
Hines (“Executive”) and Sovereign Holdings, LLC (the “Company”), a North Carolina limited liability
corporation.

     1. Term of Employment. The Company hereby agrees to employ Executive, and Executive
hereby accepts employment with the Company, upon the terms set forth in this Agreement, for the
period commencing on the date hereof (the “Commencement Date”) and ending on the fourth anniversary
of the Commencement Date, unless sooner terminated in accordance with the provisions of Section 5
or extended as hereinafter provided (such period, as it may be extended or terminated, is the
“Agreement Term”). Beginning on the fourth anniversary of the Commencement Date, and on each
anniversary of the Commencement Date thereafter, the Agreement Term shall extend for an additional
one year period from the then current expiration date of the Agreement Term unless at least 60 days
prior to the anniversary date either Executive or the Company provides written notice to the other
party electing not to extend the Agreement Term.

     2. Title; Capacity. The Company will employ Executive, and Executive agrees to work
for the Company, as its Chief Executive Officer to perform the duties and responsibilities inherent
in such position and such other duties and responsibilities as the Company shall from time to time
assign to Executive. Executive shall report to the Board of Directors of the company and shall be
subject to the supervision of, and shall have such authority as is delegated by such board, which
authority shall be sufficient to perform Executive’s duties hereunder. Executive shall devote
Executive’s full business time and reasonable best efforts in the performance of the foregoing
services, provided that Executive may accept other board memberships or other charitable
organizations that are not in conflict with Executive’s primary responsibilities and obligations to
the Company.

     3. Compensation and Benefits.

          3.1 Salary. As of the Commencement Date, the Company shall pay Executive a base
salary of $240,000 per year, payable in accordance with the Company’s customary payroll practices
(the “Base Salary”). The Base Salary thereafter shall be subject to annual review and adjustment
as determined by the Company in its discretion on the anniversary of the Commencement Date each
year of the Agreement Term.

          3.2 Annual Incentive. Executive will be eligible to receive an annual cash bonus in
an amount equal to 3% of the Company’s Net Annual Advisor Revenue, for each year of the Agreement
Term. For purposes of this Agreement, the term “Net Annual Advisory Revenue” means the gross
investment advisory fee revenue (including performance fees) earned by the Company during a
calendar year, less advisory fee waivers during such year to the extent such fees are included in
investment advisory fee revenue and are not repaid to the

 

 

Company (it being understood that
any such amounts that are repaid in a subsequent year shall be deemed to be investment advisory
fee revenue in such year). The bonus, if payable, shall be paid within 30 days of the
determination of Company’s Net Annual Advisor revenue in conjunction with the preparation of the
Company’s annual financial statements.

          3.3 Fringe Benefits. Executive shall be entitled to participate in all bonus and
benefit programs that the Company establishes and makes available to its executive employees, if
any, to the extent that Executive’s position, tenure, salary, age, health and other
qualifications make Executive eligible to participate, including, but not limited to, health care
plans, life insurance plans, disability insurance, retirement plans, and all other benefit plans
from time to time in effect.

          3.4 Reimbursement of Certain Expenses. Executive shall be reimbursed for such
reasonable business expenses as Executive documents in writing to the Company on a regular basis
and in accordance with Company policy.

     4. Termination of Employment Period. The Employment Period shall terminate upon the
occurrence of any of the following:

          4.1 Termination of the Agreement Term. At the expiration of the Agreement Term, but
only if appropriate notice is given in accordance with Section 1.

          4.2 Termination for Cause. At the election of the Company, for cause upon written
notice by the Company to Executive. For the purposes of this Section, “Cause” for termination
shall be deemed to exist upon the occurrence of any of the following:

               (a) a good faith finding by the Company that Executive has engaged in dishonesty, gross
negligence or gross misconduct that is materially injurious to the Company which, if curable, has
not been cured by Executive within 30 days after he shall have received written notice from the
Company stating with reasonable specificity the nature of such conduct;

               (b) Executive’s conviction or entry of nolo contendere to any felony or crime involving moral
turpitude, fraud or embezzlement of Company property; or

               (c) Executive’s material breach of his duties under this Agreement, which, if curable, has not
been cured by Executive within 30 days after he shall have received written notice from the Company
stating with reasonable specificity the nature of such breach.

          4.3 Voluntary Termination by the Company or for Good Reason. At the election of the
Company, without Cause, at any time upon 30 days prior written notice by the Company to Executive
or by Executive for Good Reason (as defined below).

          4.4 Death or Disability. Thirty days after the death or determination of disability
of Executive. As used in this Agreement, the determination of “disability” shall occur when
Executive, due to a physical or mental disability, for a period of 90 consecutive days, or 180
days in the aggregate whether or not consecutive, during any 360-day period, is

2

 

unable to perform
the services contemplated under this Agreement. A determination of disability shall be made by a
physician satisfactory to both Executive and the Company, provided that if
Executive and the Company do not agree on a physician, Executive and the Company shall each
select a physician and these two together shall select a third physician, whose determination as
to disability shall be binding on all parties.

          4.5 Voluntary Termination by Executive. At the election of Executive upon not less
than 30 days prior written notice by him to the Company.

     5. Effect of Termination.

          5.1 Termination for Cause, at the Election of Executive, at Death, or Upon Expiration of
the Agreement Term. In the event that Executive’s employment is terminated for Cause, upon
Executive’s death, at the election of Executive, or upon the expiration of the Agreement, the
Company shall have no further obligations under this Agreement other than to pay to Executive
salary and accrued vacation through the last day of Executive’s actual employment by the Company.

          5.2 Voluntary Termination by the Company or for Good Reason. In the event that
Executive’s employment is terminated without Cause, or due to Executive’s disability, or
Executive’s resignation for Good Reason, beginning immediately after the date of such
termination, the Company shall continue to pay to Executive the greater of (a) the annual Base
Salary then in effect for twelve (12) months on a regular payroll basis, or (b) the annual Base
Salary then in effect on a regular payroll basis for the remainder of the Agreement Term. In
addition to the foregoing amounts, the Company shall pay Executive in a single lump sum,
immediately upon the effective date of the release described herein, payment for a pro rata
portion of any bonus for the year in which termination occurs. In addition, the Company shall
continue its contributions toward Executive’s health care, dental, disability and life insurance
benefits on the same basis as immediately prior to the date of termination, except as provided
below, for the greater of (a) twelve months from the last day of Executive’s employment; or (b)
the remainder of the Agreement Term. Notwithstanding the foregoing, the Company shall not be
required to provide any health care, dental, disability or life insurance benefit otherwise
receivable by Executive if Executive is actually covered or becomes covered by an equivalent
benefit (at the same cost to Executive, if any) from another source. Any such benefit made
available to Executive shall be reported to the Company. No benefits shall be payable under
this provision until after the effective date of a release that Executive executes in favor of
the Company substantially in the form annexed hereto as Exhibit A.

          5.3 Notwithstanding any other provision with respect to the timing of payments under Section
5.2, if, at the time of the Executive’s termination, the Executive is deemed to be a “specified
employee” (within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended, and the provisions of United States
Treasury Notice 2005-1, and any successor statute, regulation and guidance thereto, collectively
hereafter, the “Code”) of the Company, then only to the extent necessary to comply with the
requirements of Section 409A of the Code, any payments to which the Executive may become entitled
under Section 5.2 which are subject to Section 409A of the Code (and not otherwise exempt from
its

3

 

application) will be withheld until the first business day of the seventh month following the
date of termination, at which time the Executive shall be paid an aggregate amount equal to six
months of payments otherwise due to the Executive under the terms of Section 5.2, as applicable.
After the first business day of the seventh month following the date of termination and
continuing each month thereafter, the Executive shall be paid the regular payments otherwise due
to the Executive in accordance with the terms of Section 5.2, as thereafter applicable.

          5.4 As used in this Agreement, “Good Reason” means, without Executive’s written
consent, (a) the assignment to Executive of duties inconsistent in any material respect with the
duties of an officer of the Company; or (b) a material reduction in Base Salary or other
benefits. Notwithstanding the occurrence of any of events enumerated in this paragraph, an event
shall not be deemed to constitute Good Reason if, within 30 days after the giving by Executive of
notice of the occurrence or existence of an event that Executive believes constitutes Good
Reason, the Company has fully corrected such event.

          5.5 Limitation on Benefits. In the event that the benefits provided for in this
Agreement or otherwise payable to Executive (i) constitute “Parachute payments” within the
meaning of Section 280G of the Internal Revenue Code of 1986 and (ii) but for this Section 5.5,
would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
then Executive’s benefits shall be either:

               (a) delivered in full, or

               (b) delivered as to such lesser extent which would result in no portion of such severance
benefits being subject to excise tax under Section 4999 of the Internal Revenue Code of 1986,

whichever of the foregoing amounts, taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, results in the receipt by the Executive on
an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some
portion of such severance benefits may be taxable under Section 4999 of the Internal Revenue Code
of 1986.

     6. Nondisclosure and Noncompetition.

          6.1 Proprietary Information.

               (a) Executive agrees that all information and know-how, whether or not in writing, of a
private, secret or confidential nature concerning the Company’s business or financial affairs
(collectively, “Proprietary Information”) is and
shall be the exclusive property of the Company. By way of illustration, but not limitation,
Proprietary Information may include inventions, products, processes, methods, techniques, formulas,
designs, drawings, slogans, tests, logos, ideas, practices, projects, developments, plans, research
data, financial data, personnel data, computer programs and codes, and customer and supplier lists.
Executive will not disclose any Proprietary Information to others outside the Company except in
the performance of his

4

 

duties or use the same for any unauthorized purposes without written
approval by an officer of the Company, either during or after his employment, unless and until such
Proprietary Information has become public knowledge or generally known within the industry without
fault by Executive, or unless otherwise required by law.

5

 

               (b) Executive agrees that all files, letters, memoranda, reports, records, data, sketches,
drawings, laboratory notebooks, program listings, or other written, photographic, electronic or
other material containing Proprietary Information, whether created by Executive or others, which
shall come into his custody or possession, shall be and are the exclusive property of the Company
to be used by Executive only in the performance of his duties for the Company.

               (c) Executive agrees that his obligation not to disclose or use information, know-how and
records of the types set forth in paragraphs (a) and (b) above, also extends to such types of
information, know-how, records and tangible property of subsidiaries and joint ventures of the
Company, customers of the Company or suppliers to the Company or other third parties who may have
disclosed or entrusted the same to the Company or to Executive in the course of the Company’s
business.

          6.2 Inventions

          (a) Disclosure. Executive shall disclose promptly to an officer or to attorneys of
the Company in writing any idea, invention, work of authorship, whether patentable or
unpatentable, copyrightable or uncopyrightable, including, but not limited to, any computer
program, software, command structure, code, documentation, compound, genetic or biological
material, formula, manual, device, improvement, method, process, discovery, concept, algorithm,
development, secret process, machine or contribution (any of the foregoing items hereinafter
referred to as an “Invention”) Executive may conceive, make, develop or work on, in whole or in
part, solely or jointly with others. The disclosure required by this Section applies (a) during
the period of Executive’s employment with the Company and for one year thereafter; (b) with
respect to all Inventions whether or not they are conceived, made, developed or worked on by me
during Executive’s regular hours of employment with the Company; (c) whether or not the Invention
was made at the suggestion of the Company; (d) whether or not the Invention was reduced to
drawings, written description, documentation, models or other tangible form; and (e) whether or
not the Invention is related to the general line of business engaged in by the Company.

          (b) Assignment of Inventions to Company; Exemption of Certain Inventions. Executive
hereby assigns to the Company without royalty or any other further consideration Executive’s
entire right, title and interest in and to all Inventions which Executive conceives, makes,
develops or works on during employment and for one year thereafter, except those Inventions that
Executive develops entirely on
Executive’s own time after the date of this Agreement without using the Company’s equipment,
supplies, facilities or trade secret information unless those Inventions either (a) relate at the
time of conception or reduction to practice of the Invention to the Company’s business, or actual
or demonstrably anticipated research or development of the Company; or (b) result from any work
performed by Executive for the Company.

          (c) Records. Executive will make and maintain adequate and current written records
of all Inventions. These records shall be and remain the property of the Company.

          (d) Patents. Subject to Section 6.4, Executive will assist the Company in

6

 

obtaining, maintaining and enforcing patents and other proprietary rights in connection with any
Invention covered by Section 6.1. Executive further agrees that his obligations under this
Section shall continue beyond the termination of his employment with the Company, but if he is
called upon to render such assistance after the termination of such employment, he shall be
entitled to a fair and reasonable rate of compensation for such assistance. Executive shall, in
addition, be entitled to reimbursement of any expenses incurred at the request of the Company
relating to such assistance.

          6.3 Prior Contracts and Inventions; Information Belonging to Third Parties.
Executive represents that there are no contracts to assign Inventions between any other person or
entity and Executive. Executive further represents that (a) Executive is not obligated under any
consulting, employment or other agreement which would affect the Company’s rights or Executive’s
duties under this Agreement, (b) there is no action, investigation, or proceeding pending or
threatened, or any basis therefor known to Executive involving Executive’s prior employment or
any consultancy or the use of any information or techniques alleged to be proprietary to any
former employer, and (c) the performance of Executive’s duties as an employee of the Company will
not breach, or constitute a default under any agreement to which Executive is bound, including,
without limitation, any agreement limiting the use or disclosure of proprietary information
acquired in confidence prior to engagement by the Company. Executive will not, in connection with
Executive’s employment by the Company, use or disclose to the Company any confidential, trade
secret or other proprietary information of any previous employer or other person to which
Executive is not lawfully entitled.

          6.4 Noncompetition and Nonsolicitation.

               (a) During the Employment Period and for a period of twelve (12) months after the termination
of Executive’s employment with the Company for any reason, Executive will not directly or
indirectly, absent the Company’s prior written approval, render services of a business,
professional or commercial nature to any other person or entity that competes with the Company in
the same geographical area where the Company does business at the time this covenant is in effect
(or where the Company has made, as of the effective date of termination, active plans to do
business), whether such services are for compensation or otherwise, whether alone or in conjunction
with others, as an employee, as a partner, or as a shareholder (other than as the holder of not
more than 1% of the combined voting power of the outstanding stock of a public company),
officer or director of any corporation or other business entity, or as a trustee, fiduciary or in
any other similar representative capacity.

               (b) During the Employment Period and for a period of twelve (12) months after the termination
of Executive’s employment for any reason, Executive will not, directly or indirectly, recruit,
solicit or induce, or attempt to recruit, solicit or induce any employee or employees of the
Company to terminate their employment with, or otherwise cease their relationship with, the
Company.

               (c) During the Employment Period and for a period of twelve (12) months after termination of
Executive’s employment for any reason, Executive will not, directly or indirectly, solicit, divert
or take away, or attempt to solicit, divert or take away, the business or

7

 

patronage of any of the
clients, customers or accounts, or prospective clients, customers or accounts, of the Company.

          6.5 If any restriction set forth in this Section is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of time or over too great
a range of activities or in too broad a geographic area, it shall be interpreted to extend only
over the maximum period of time, range of activities or geographic area as to which it may be
enforceable.

          6.6 The restrictions contained in this Section are necessary for the protection of the
business and goodwill of the Company and are considered by Executive to be reasonable for such
purpose. Executive agrees that any breach of this Section will cause the Company substantial and
irrevocable damage and therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right to seek specific performance and
injunctive relief. The Company shall be entitled to recover its reasonable attorneys’ fees in the
event it prevails in such an action.

     7. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written or oral relating to
the subject matter of this Agreement.

     8. Jury Waiver. Executive and the Company agree to waive trial by jury with respect
to any claims arising out of or relating to this Agreement or Executive’s employment by the
Company.

     9. Amendment. This Agreement may be amended or modified only by a written instrument
executed by both the Company and Executive.

     10. Governing Law. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of Florida without regard to principles of conflicts of laws
thereunder.

     11. Notices. Any notice or other communication required or permitted by this
Agreement to be given to a party shall be in writing and shall be deemed given if
delivered personally or by commercial messenger or courier service, or mailed by U.S.
registered or certified mail (return receipt requested), or sent via facsimile (with receipt of
confirmation of complete transmission) to the party at the party’s last known address or facsimile
number or at such other address or facsimile number as the party may have previously specified by
like notice. If by mail, delivery shall be deemed effective 3 business days after mailing in
accordance with this Section.

     12. Successors and Assigns.

          12.1 Assumption by Successors. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of the Company to assume in writing prior to such

8

 

succession and to agree to
perform its obligations under this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place. Successions by
virtue of the sale of stock shall be governed by operation of law.

          12.2 Successor Benefits. This Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns, including any corporation into
which the Company may be merged or which may succeed to its assets or business, provided,
however, that the obligations of Executive are personal and shall not be assigned by him.

     13. Miscellaneous.

          13.1 No Waiver. No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by
the Company on any one occasion shall be effective only in that instance and shall not be construed
as a bar or waiver of any right on any other occasion.

          13.2 Severability. In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions
shall in no way be affected or impaired thereby.

          13.3 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.

9

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set
forth above.

	 	 	 	 	 
	 	 	 
	 	
/s/ Jeffrey Hines
 	 
	 	Jeffrey Hines 	 
	 	 	 
	 
	 	SOVEREIGN HOLDINGS, LLC

 	 
	 	By:  	/s/ Jeffrey Hines
 	 
	 	 	Its: 	 
	 	 	 	 
	 

[Signature
Page to Sovereign Holdings Employment Agreement]

10

 

Exhibit A

     1. Your Release of Claims. You hereby agree and acknowledge that by signing this
Agreement, and for other good and valuable consideration, you are waiving your right to assert
any and all forms of legal claims against the Company1/ of any kind whatsoever, whether
known or unknown, arising from the beginning of time through the date you execute this Agreement
(the “Execution Date”). Except as set forth below, your waiver and release herein is intended to
bar any form of legal claim, complaint or any other form of action (jointly referred to as
“Claims”) against the Company seeking any form of relief including, without limitation, equitable
relief (whether declaratory, injunctive or otherwise), the recovery of any damages, or any other
form of monetary recovery whatsoever (including, without limitation, back pay, front pay,
compensatory damages, emotional distress damages, punitive damages, attorneys fees and any other
costs) against the Company, for any alleged action, inaction or circumstance existing or arising
through the Execution Date.

     Without limiting the foregoing general waiver and release, you specifically waive and release
the Company from any Claim arising from or related to your prior employment relationship with the
Company or the termination thereof, including, without limitation:

	 	**	 	Claims under any state or federal discrimination, fair employment practices or
other employment related statute, regulation or executive order (as they may have been
amended through the Execution Date) prohibiting discrimination or harassment based
upon any protected status including, without limitation, race, national origin, age,
gender, marital status, disability, veteran status or sexual orientation. Without
limitation, specifically included in this paragraph are any Claims arising under the
Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Equal Pay Act, the Americans With Disabilities Act and
any similar Federal and state statute.
	 
	 	**	 	Claims under any other state or federal employment related statute, regulation
or executive order (as they may have been amended through the Execution Date) relating
to wages, hours or any other terms and conditions of employment.
	 
	 	**	 	Claims under any state or federal common law theory including, without
limitation, wrongful discharge, breach of express or implied contract, promissory
estoppel, unjust enrichment, breach of a covenant of good faith and fair dealing,
violation of public policy, defamation, interference with contractual relations,
intentional or negligent infliction of emotional distress, invasion of privacy,
misrepresentation, deceit, fraud or negligence.
	 
	 	**	 	Any other Claim arising under state or federal law.

 

			
	1/	 	For purposes of this Agreement, the Company includes the Company and any of its divisions,
affiliates (which means all persons and entities directly or indirectly controlling, controlled by
or under common control with the Company), subsidiaries and all other related entities, and its and
their directors, officers, employees, trustees, agents, successors and assigns.

 

 

     You acknowledge and agree that, but for providing this waiver and release, you would not be
receiving the economic benefits being provided to you under the terms of this Agreement.

     It is the Company’s desire and intent to make certain that you fully understand the
provisions and effects of this Agreement. To that end, you have been encouraged and given the
opportunity to consult with legal counsel for the purpose of reviewing the terms of this
Agreement. Also, because you are over the age of 40, the Age Discrimination in Employment Act
(“ADEA”), which prohibits discrimination on the basis of age, allows you at least twenty-one (21)
days to consider the terms of this Agreement. ADEA also allows you to rescind your assent to this
Agreement if, within seven (7) days after you sign this Agreement, you deliver by hand or send by
mail (certified, return receipt and postmarked within such 7 day period) a notice of rescission to
me at the Company. The eighth day following your signing of this Agreement is the Effective Date.

     Also, consistent with the provisions of the Federal Discrimination Laws, nothing in this
release shall be deemed to prohibit you from challenging the validity of this release under the
discrimination laws (the “Federal Discrimination Laws”) or from filing a charge or complaint of
employment-related discrimination with the Equal Employment Opportunity Commission (“EEOC”), or
from participating in any investigation or proceeding conducted by the EEOC. Further, nothing in
this release or Agreement shall be deemed to limit the Company’s right to seek immediate dismissal,
of such charge or complaint on the basis that your signing of this Agreement constitutes a full
release of any individual rights under the Federal Discrimination Laws, or to seek restitution to
the extent permitted by law of the economic benefits provided to you under this Agreement in the
event that you successfully challenge the validity of this release and prevail in any claim under
the Federal Discrimination Laws.

     2. Confidentiality and Other Agreements.

     You expressly acknowledge and agree to the following:

(a) that you promptly will return to the Company upon the separation date all Company
documents (and any copies thereof) and property. Further, you agree that you will abide by
any agreements regarding confidentiality or other post-employment obligations.

 

 

(b) that you will not make any statements that are professionally or personally disparaging
about, or adverse to, the interests of the Company (including its officers, directors,
employees and consultants) including, but not limited to, any statements that

disparage any person, product, service, finances, financial condition, capability or any
other aspect of the business of the Company, and that you will not engage in any conduct
which could reasonably be expected to harm professionally or personally the reputation of
the Company (including its officers, directors, employees and consultants); likewise, the
senior management of the Company shall not make any such disparaging remarks about you.

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Employee 	 
	 	 	Date signed:

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