-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SCwFvtujtWXJdLnvu+rs8S6QkwU4JiEqDw/F57XtibqBU1URMN1nCCYw6bGJKJTC Vn+rmDGSsc9PF5q3WNjYHA== 0000913355-02-000013.txt : 20020415 0000913355-02-000013.hdr.sgml : 20020415 ACCESSION NUMBER: 0000913355-02-000013 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020401 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPTIMARK HOLDINGS INC CENTRAL INDEX KEY: 0001062023 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 223730995 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-30527 FILM NUMBER: 02597111 BUSINESS ADDRESS: STREET 1: 10 EXCHANGE PLACE CENTRE STREET 2: 24TH FLOOR CITY: JERSEY CITY STATE: NJ ZIP: 07302 BUSINESS PHONE: 201-536-7088 MAIL ADDRESS: STREET 1: 10 EXCHANGE PLACA CENTRE STREET 2: 24TH FLOOR CITY: JERSY CITY STATE: NJ ZIP: 07302 FORMER COMPANY: FORMER CONFORMED NAME: OPTIMARK TECHNOLOGIES INC DATE OF NAME CHANGE: 20000329 10-K 1 o10k_12312001.txt ANNUAL REPORT WITH PERIOD ENDING 12-31-2001 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K /x/ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2001 or / / Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ------------ ------------- Commission File Number 000-30527 OPTIMARK HOLDINGS, INC. (Exact name of registrant as specified in its charter) DELAWARE 22-3730995 (State or Other Jurisdiction of (I.R.S.-Employer Incorporation or Organization) Identification No.) 10 Exchange Place Centre, 07302 24th Floor, Jersey City, NJ (Address of Principal Executive Offices) (Zip Code) (201) 536-7000 (Registrant's telephone number, including area code) Securities Registered Pursuant to Section 12(b) of the Act: None Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, Par Value $.01 Per Share Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / / Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / / No sales of the common equity of the Registrant have been consummated within sixty days of this filing and the Registrant's common equity is not publicly traded on an exchange for purposes of establishing bid and ask prices. Therefore, the Registrant is unable to state the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant. As of March 21, 2002, there were 33,369,913 shares of the Registrant's Common Stock outstanding. Documents Incorporated by Reference The information called for by Part III is incorporated by reference to specified portions of the Registrant's definitive Proxy Statement to be issued in conjunction with the Registrant's 2002 Annual Meeting of Stockholders, which will be filed not later than 120 days after the Registrant's fiscal year ended December 31, 2001. Items Omitted The following items were omitted pursuant to regulation 240.12b-25: Part II, Items 6, 7, 7A, and 8. OPTIMARK HOLDINGS, INC. FORM 10-K DECEMBER 31, 2001 TABLE OF CONTENTS Page No. PART I Item 1. Business 3 Item 2. Properties 11 Item 3. Legal Proceedings 12 Item 4. Submission of Matters to a Vote of Security Holders 13 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters 14 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 15 PART III Item 10. Directors and Executive Officers of the Registrant 16 Item 11. Executive Compensation 17 Item 12. Security Ownership of Certain Beneficial Owners and Management 17 Item 13. Certain Relationships and Related Transactions 17 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 18 Signatures 24 FORWARD LOOKING STATEMENTS This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on our beliefs and assumptions, and on information currently available to us. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth in Part II, Item 7 - " Management's Discussion and Analysis of Financial Condition and Results of Operations." Forward-looking statements also include statements in which words such as "expect", "anticipate", "contemplate", "intend", "plan", "believe", "estimate", "consider" or similar expressions are used. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions, including the risks discussed under the heading, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Form 10-K. Such risks, uncertainties and assumptions include, but are not limited to, those factors described in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," under the sub-heading "Factors that may affect future results." The factors described in that section are incorporated herein by reference. Our future results and stockholder values may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control or predict. Investors are cautioned not to put undue reliance on any forward-looking statements. In addition, we disclaim any intention or obligation to update forward-looking statements after the filing of this Annual Report, even if new information, future events or other circumstances have made them incorrect or misleading. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in Section 21E of the Exchange Act. 2 PART I ITEM 1. BUSINESS OptiMark Holdings, Inc. ("Holdings") was established as a holding company on June 12, 2000 as the result of a reorganization of the company formerly known as OptiMark Technologies, Inc. OptiMark Technologies, Inc. was the successor to the company founded in 1996 to begin development of software for use in an electronic system for trading stocks and other financial instruments, goods and services. Holdings has two wholly-owned subsidiaries: (1) OptiMark, Inc. ("OptiMark") and (2) OptiMark US Equities, Inc. ("Equities"). On December 28, 2001, OptiMark formed a majority-owned subsidiary, OptiMark Innovations Inc. (formerly known as OTSH, Inc. and referred to below as "Innovations"). Innovations was capitalized on December 31, 2001, and OptiMark currently holds 67% of the voting interests in Innovations as more fully described below. OptiMark also has an approximately 15% voting interest in Japan OptiMark Systems ("JOS"), a Japanese corporation. In this report, Holdings, OptiMark, Equities, and Innovations are referred to collectively as the "Company," "our," and/or "we." HOLDINGS Holdings' principal business is to hold the securities of OptiMark and, through OptiMark, Innovations. Until September 19, 2000, Holdings operated in two segments, the Exchange Solutions Services Business and the US Equities Business. The Exchange Solutions Services business operated by OptiMark was formerly referred to as the Electronic Markets Business and developed software and provided design, development and maintenance services for building and operating electronic markets and exchanges. On or about January 30, 2002, OptiMark effectively suspended development, sales, and marketing efforts related to its Exchange Solutions Services Business. The second segment, the US Equities Business, was operated by Equities. Prior to September 19, 2000, the US Equities Business owned and operated exchanges or exchange facilities which used the OptiMark software and services. This business was discontinued on September 19, 2000 due to high fixed costs and lack of revenue resulting from the failure of these proprietary exchange facilities to attract users or liquidity. As a result of the suspension of the Exchange Solutions Services Business and the discontinuation of the US Equities Business, the future value of Holdings' common stock will depend principally on the value of the potential investment that Innovations has agreed to make in The Ashton Technology Group, Inc. ("Ashton") and/or on other transactions that the Company can consummate. There are a number of conditions described below, including Innovations receiving a $10 million investment from a third party, that must occur or be waived before Innovations' transaction with Ashton can be consummated. Holdings cannot be sure that the transaction with Ashton will close. A number of the conditions require actions by, or the resolution of issues with, third parties over which Innovations has no control. In addition, Innovations cannot be sure that its continuing due diligence review of Ashton will be satisfactory or that Innovations will be able to obtain sufficient financing or capital contributions. While the Company pursues a transaction with Ashton, OptiMark continues to solicit interest from or opportunities with third parties concerning possible investments and/or strategic alliances. However, no binding or definitive arrangements have been reached with any third parties and there can be no assurances that any such transactions will be consummated. In the event that the transaction with Ashton does not close and/or the Company cannot consummate other transactions, Holdings would not have access to sufficient financial capital to permit continued business operations. Accordingly, Holdings would face the imminent and likely potential for bankruptcy or liquidation. If Holdings is forced to declare bankruptcy or pursue liquidation, the value of 3 Holdings' assets would not be sufficient to pay its creditors in full and, accordingly, Holdings' common and preferred stock would have no value. INNOVATIONS Formation of Innovations Innovations was incorporated in Delaware on December 28, 2001. Innovations has authorized capital stock of 1,000 shares of common stock, par value $.01 per share (the "Innovations Common Stock"), and 2,000 shares of preferred stock, par value $.01 per share (the "Innovations Preferred Stock"). The Innovations Preferred Stock has a cumulative preferred dividend at an annual rate of $500 per share, payable when and if declared by the Board of Directors of Innovations. The liquidation preference of the Innovations Preferred Stock is equal to $10,000 per share plus the aggregate amount of accrued and unpaid dividends or distributions. The Innovations Preferred Stock is also subject to a mandatory redemption, at a price equal to the liquidation preference amount, in four equal quarterly installments on December 31, 2016, March 31, 2017, June 30, 2017 and September 30, 2017. The Innovations Preferred Stock is non-voting. Investment Structure OptiMark received 200 shares of Innovations Common Stock in exchange for a cash payment of $500,000 and 2,000 shares of Innovations Preferred Stock in exchange for the transfer to Innovations of certain intangible assets consisting of software, a patent application and other assets relating to a securities trading technology which is under development (the "Assets"). The stated value of the Innovations Preferred Stock was the result of the evaluation by the board of directors of Innovations of the value of the Assets based, in part, upon preliminary discussions with independent parties regarding a $10,000,000 investment for a one-third interest in Innovations. SOFTBANK Capital Partners LP, SOFTBANK Capital LP and SOFTBANK Capital Advisors Fund LP (collectively, "SOFTBANK") received 100 shares of Innovations Common Stock (the "SOFTBANK Shares") for $250,000 cash. Simultaneously, SOFTBANK's remaining obligation to purchase shares of Series E Cumulative Preferred Stock ("Series E Preferred Stock") from Holdings pursuant to that certain Series E Preferred Stock Purchase Agreement, dated as of June 29, 2001 (as amended on August 16, 2001 and November 16, 2001), by and among Holdings and SOFTBANK was reduced by $250,000. Upon completion of the transaction, Innovations' aggregate assets consisted of the Assets and $750,000 in cash. Put and Call Rights of SOFTBANK and Holdings -------------------------------------------- SOFTBANK and Holdings agreed to certain put and call rights applicable to the SOFTBANK Shares as follows: First Call Right of Holdings on SOFTBANK Shares ----------------------------------------------- The Independent Committee (the "Independent Committee") of Holdings' Board of Directors (the "Board") has the right commencing October 1, 2002 and exercisable until September 30, 2003, to recommend to the Board that Holdings purchase all, but not less than all, of the SOFTBANK Shares for $125,000 in cash and 16,667 shares of Series E Preferred Stock of Holdings. If the Board of Directors accepts such recommendation, SOFTBANK would be obligated to sell the SOFTBANK shares for that consideration. Liquidity Event Discretionary Call of Holdings on SOFTBANK Shares ----------------------------------------------------------------- Upon the occurrence of a Liquidity Event (defined below) on or before September 30, 2003, the SOFTBANK Shares will be purchased by Holdings for $125,000 in cash and 16,667 shares of Series E Preferred Stock of Holdings. A "Liquidity Event" means any of the following: (i) Innovations' sale, conveyance or other disposition of all or substantially all of its assets; (ii) the acquisition of Innovations by another entity by means of merger or consolidation resulting in the exchange of the outstanding shares of 4 Innovations for securities or other consideration issued, or caused to be issued, by the acquiring entity or its subsidiary, unless the stockholders of Innovations immediately prior to the consummation of such transaction hold at least 50% of the voting power of the surviving corporation as a result of such transaction; (iii) the consummation by Innovations of a transaction or series of related transactions, including the issuance or sale of voting securities, if the stockholders of Innovations immediately prior to such transaction (or, in the case of a series of transactions, the first of such transactions) hold less than 50% of the voting power of Innovations immediately after the consummation of such transaction (or, in the case of a series of transactions, the last of such transactions); or (iv) any initial underwritten public offering of Innovations Common Stock. Notwithstanding the foregoing, Holdings will not exercise this call option in the event that the Independent Committee recommends that Holdings not purchase the SOFTBANK Shares. Mandatory Call of Holdings on SOFTBANK Shares --------------------------------------------- In the event that: (i) the call rights of Holdings described above have not been exercised on or before September 30, 2003, (ii) the Independent Committee no longer exists and (iii) no independent directors serve on the Holdings Board of Directors and, after reasonable good faith efforts by the remaining members of the Holdings Board of Directors, no independent persons qualified to serve on the Holdings Board of Directors have been found or, if found, are not willing to serve on the Holdings Board of Directors, then the Holdings Board of Directors will engage an independent investment banking, accounting or third party valuation firm to evaluate whether or not it is in the best interests of Holdings that it purchase the SOFTBANK Shares. If such third party determines it is in the best interests of Holdings to purchase the SOFTBANK Shares, Holdings will be obligated to purchase such shares on or before December 31, 2003 for $125,000 in cash and 16,667 shares of Series E Preferred Stock of Holdings. First Put Right to Holdings of SOFTBANK Shares ---------------------------------------------- SOFTBANK has the right, commencing on October 1, 2002 and continuing until September 30, 2003, to put all, but not less than all, of the SOFTBANK Shares to Holdings in exchange for 16,667 shares of Series E Preferred Stock of Holdings. Second Put Right to Holdings of SOFTBANK Shares ----------------------------------------------- In the event that no put of, or call on, the SOFTBANK Shares has been exercised by October 31, 2003, then commencing on November 1, 2003 and continuing until November 30, 2003, SOFTBANK has the right to require Holdings to purchase all, but not less than all, of the SOFTBANK Shares for 16,667 shares of Series E Preferred Stock of Holdings. Business of Innovations The principal business of Innovations is to (a) consummate a purchase of a controlling interest in Ashton through the purchase of Ashton's common stock and (b) hold Ashton's common stock for the benefit of the shareholders of Holdings and Innovations. Holdings believes that the future value of its stock will depend principally on the value of Ashton's common stock held by Innovations and its ability to consummate financing and strategic transactions with other parties. On February 4, 2002, Innovations entered into a securities purchase agreement with Ashton. Upon closing and subject to the satisfaction or waiver of certain closing conditions, Ashton has agreed to sell and Innovations has agreed to purchase up to 633,443,600 shares of Ashton common stock for the purchase price of approximately $7.3 million in cash and the Assets. The Ashton common stock that would be purchased by Innovations would represent 80% of Ashton's fully-diluted equity. In addition, subject to the closing of the sale of Ashton's common stock to Innovations pursuant to the securities purchase agreement, Innovations has agreed to lend approximately $2.7 million to Ashton to be evidenced by a senior secured convertible note. The five-year senior secured convertible note would be convertible at any time into shares of Ashton common stock at a rate of $0.0492782 per share, subject to 5 adjustment prior to the closing and to customary anti-dilution adjustments after the closing, and would accrue interest at a rate of 7.5% per annum. The principal amount of the senior secured note would be initially convertible into 55,344,360 shares of Ashton's common stock. If and when the purchase of Ashton's common stock closes, Innovations will own 80% of the then fully-diluted outstanding shares of Ashton's common stock. Assuming conversion of the senior secured convertible note that would be issued to Innovations, Innovations would own an additional 7% of the fully-diluted outstanding equity. As the owner of at least 80% of Ashton's then fully-diluted equity, Innovations would be Ashton's majority stockholder, and would be able to control the election of directors, appointment of senior management, and any other matters submitted to the stockholders for a vote. By exercising such control, it is intended that Ashton's wholly-owned broker-dealer subsidiary, ATG Trading, LLC ("ATG") will offer a new service for trading United States equity securities at the volume weighted average price ("VWAP"). This service is referred to below as the "New VWAP Service." The New VWAP Service will be a service for sell-side brokerage firms, enabling them to cost-effectively guarantee VWAP orders for their clients. To provide these guaranteed VWAP orders, ATG will become a principal trading firm using electronic trading algorithms that over the past five years have demonstrated the viability of this approach by achieving returns approximating the VWAP. Based on preliminary discussions with a number of major brokerage firms, it is believed that such firms would pay a mutually acceptable rate per share for a guaranteed VWAP execution in large cap stocks. This would benefit these firms in that the New VWAP Service would tend to minimize the risk and administrative burdens associated with the firms guaranteeing the VWAP directly to their customers. In the event of the closing of the purchase and sale of common stock and other transactions contemplated by the securities purchase agreement, Ashton will continue to operate its primary business, which is providing (a) a business/technology approach for filling, as an agency broker, customer equity orders at the VWAP and (b) a business/technology approach for crossing equity orders within the Philadelphia Stock Exchange (PHLX) VWAP crossing facility, known as the eVWAP(R) System. Upon the closing of the sale of common stock, Ashton will receive a cash infusion of approximately $7.3 million and a loan of approximately $2.7 million to be used as working capital, minus certain expenses of Ashton and Innovations incurred in connection with the transaction. The intellectual property and non-cash assets to be transferred to Ashton by Innovations as partial consideration to purchase Ashton's common stock are: - U.S. provisional patent application (No. 60/323,940 entitled "Volume Weighted Average Price System and Method" filed on September 1, 2001) that relates to VWAP trading. The provisional patent application relates to processing orders for trading equity securities at the VWAP and guaranteeing the price and quantity of trades to users who submit orders. The patent application will not provide any exclusive rights to Ashton until such time as it issues into a patent. There can be no assurance that the patent application will issue into a patent. - Trade secrets and know how relating to VWAP trading. - An assignment to Ashton of a license for technology for use in a system for VWAP trading (the "VWAP License"). - An assignment to Ashton of all rights, duties, and obligations under a bilateral nondisclosure agreement between the licensor of the technology described above and Innovations. 6 - Software developed to implement critical components of the VWAP trading system, including certain tools for testing, de-bugging and building source code. The intellectual property and non-cash assets described above, with the exception of the VWAP License, constitute the Assets transferred from OptiMark to Innovations on December 31, 2001. The intellectual property and non-cash assets to be provided to Ashton under the securities purchase agreement relate to the services that are currently provided or under development by Ashton and, together with the New VWAP Service, have the potential to: - Provide increased VWAP liquidity in a cost-efficient manner to the agency broker VWAP operation of Ashton, which currently depends on non-affiliated VWAP dealers who require Ashton to pay for their VWAP liquidity. - Provide a dealer operation for delivering VWAP liquidity that diversifies the current broker operation and exchange facility operation. In particular, the assets may assist in expanding Ashton's customer base to the broker market segment since the agency VWAP operation focuses on the buy-side market segment and the exchange eVWAP(R)operation focuses on the market segment interested in low cost, anonymous, crossing of equity orders at the VWAP but not necessarily filling those orders. - Provide a technology and system software to perform proprietary dealer trading within a profit center. This would help enable Ashton to expand, with current designs under development, into more diverse VWAP-related products and services driven by customer feedback from the three diverse business operations that Ashton will then be able to prosecute; namely: - filling, as a proprietary dealer, customer equity orders at the VWAP; - filling, as an agency broker, customer equity orders at the VWAP; - crossing equity orders within the PHLX eVWAP(R) facility. While Innovations expects Ashton to benefit from the cash and non-cash assets transferred, Innovations cannot predict the extent to which those benefits will occur. Specifically, there can be no assurance that: - the performance characteristics of the software and technology that is the subject of the VWAP License will scale to the increased level of operations anticipated in the New VWAP Service; - the intellectual property can achieve the desired operational benchmarks; or - integration of the existing Ashton technologies and VWAP-related business models with the acquired technologies and associated business models will be feasible or possible. There are no assurances that the closing of the sale of Ashton's common stock to Innovations will occur. The closing is contingent upon, among other things: - Approval by Ashton's stockholders to increase the number of shares of Ashton's authorized common stock from 100 million to 1 billion shares; - Modification, on terms and conditions acceptable to Innovations, of certain agreements by and between Ashton and its creditors and partners; 7 - The resignation of Ashton's current CEO and certain of its board members and the appointment of a number of directors by Innovations to Ashton's Board of Directors proportionate to its common stock ownership by Innovations at the time of closing; - Execution of employment agreements with certain of Ashton's key employees; - Settlement of the arbitrator's award against Ashton dated as of January 14, 2002 in the amount of $510,750 related to the employment agreement with the former president of Ashton's subsidiary, Electronic Market Center, Inc.; - Resolution on terms acceptable to Innovations of all matters associated with an offer to minority stockholders of Ashton's subsidiary, Universal Trading Technologies Corporation ("UTTC"), to exchange certain shares of UTTC common stock for shares of Ashton's common stock; - Innovations' satisfaction with the results of its due diligence review of Ashton; and - No material adverse effect having occurred to Ashton between the signing of the securities purchase agreement and the closing of the sale of common stock to Innovations. In addition, closing of the sale of common stock to Innovations is contingent upon Innovations: - receiving financing or capital contributions from a third party in the amount of $10 million necessary to (a) pay the approximately $7.3 million cash portion of the purchase price for Ashton's common stock and (b) provide the principal amount of approximately $2.7 million for the senior secured convertible note; and - presenting to Ashton definitive documentation executed in connection with such venture capital investor's investment of $10 million in cash for a one-third interest in Innovations. Innovations currently is negotiating the terms and conditions of a $10 million financing or capital contribution with a potential venture capital investor. Under the non-binding terms and conditions currently contemplated, and subject to the negotiation and entering into definitive agreements and satisfaction or waiver of closing conditions to be included therein, the venture capital investor would contribute $10 million in cash for a one-third interest in Innovations. If we are successful in obtaining the $10 million financing or capital contribution for the Ashton transaction, our ownership percent of Innovations would be reduced to less than 50%. As a result, we would not be able to include Innovations as a consolidated subsidiary, but would rather have to account for our investment using the equity method of accounting. There can be no assurances that the $10 million investment in Innovations will occur on acceptable terms or at all. Ashton Prior to closing of the transaction with Ashton, the business of Ashton is not part of the business of Holdings. However, because the future of Holdings is heavily dependent on this transaction, a brief description of the current business of Ashton is provided. As stated above, there can be no assurances that the transaction with Ashton will occur. 9 The following description of Ashton's business has been adapted from the information contained in Ashton's Definitive Proxy Statement on Form 14A, filed with the SEC on March 19, 2002. Innovations has conducted limited due diligence with respect to Ashton's business. Based solely on that limited review, Innovations has no reason to believe that Ashton's description of its business is incorrect in any material respect. As noted above, the closing of the transactions as contemplated by the securities purchase agreement is contingent upon, among other things, Innovations' satisfaction with the results of its due diligence review of Ashton. The following description is not intended to amend, modify or supplement Ashton's disclosure regarding its business contained in its public filings. Ashton is an e-commerce company that develops and operates electronic trading and intelligent matching systems for the global financial securities industry. Ashton provides equity trading services to exchanges, institutional investors and broker-dealers in the U.S. and internationally. Ashton enables these market participants to trade in an electronic global trading environment that provides large order size, absolute anonymity, no market impact and low transaction fees. The services offered by Ashton compete with services offered by brokerage firms and with providers of electronic trading and trade order management systems. Ashton's eVWAP(R) Trading System, or eVWAP System also competes with various national and regional securities exchanges and execution facilities such as alternative trading systems, or ATSs and electronic communication networks, or ECNs. During August 1999, Ashton launched the eVWAP System for 20 selected New York Stock Exchange ("NYSE")-listed securities. eVWAP is a fully automated system that permits market participants to trade eligible securities before the market opens at the VWAP for the day. Ashton's eVWAP is the average price for a stock, weighted by the volume of shares of that stock traded during the day on all U.S. securities exchanges as reported to the Consolidated Tape. Ashton operates the pre-opening eVWAP System as a facility of the Philadelphia Stock Exchange, Inc. through Ashton's UTTC subsidiary. OPTIMARK On or about January 30, 2002, OptiMark effectively suspended development, sales, and marketing efforts related to its Exchange Solutions Services Business. As of that date, OptiMark became a company whose primary purpose is to hold the securities of Innovations and to consummate financing and strategic transactions with other parties. Prior to and since January 30, 2002, OptiMark has engaged in discussions with number of potential investors and strategic partners concerning possible investments and/or alliances relative to the Exchange Solutions Services Business. To date, none of these discussions has resulted in any such investment or alliance. OptiMark continues to engage in discussions with third parties in an effort to secure funding for the Exchange Solutions Services Business; however, there can be no assurances that any such transactions will be consummated. Clients of OptiMark As of December 31, 2001, OptiMark had definitive agreements with two clients -- Asset International, Inc. and The Nasdaq Stock Market, Inc. ("Nasdaq"). Under an agreement dated November 3, 2000 with Asset International, OptiMark has not received any revenues. For approximately the past twelve months, OptiMark has not performed, nor has Asset International requested that any services be performed under the agreement. The Nasdaq contract, as amended on April 27, 2001, expired on December 31, 2001. OptiMark does not anticipate receiving any additional revenues from either Asset International or Nasdaq. Competition As holding companies, Holdings, OptiMark, and Innovations face no clearly defined competition; however, in the event that the transactions contemplated by the securities purchase agreement with Ashton close, the value of Innovations' investment in Ashton will, in part, be contingent upon Ashton's competing effectively in its industry and marketplace. 9 The following description relating to the competitive aspects of Ashton's business has been adapted from the information contained in Ashton's Annual Report on Form 10-K, filed with the SEC on July 16, 2001. Innovations has conducted limited due diligence with respect to Ashton's business. Based solely on that limited review, Innovations has no reason to believe that Ashton's description of the competitive aspects of its business is incorrect in any material respect. As noted above, the closing of the transactions as contemplated by the securities purchase agreement is contingent upon, among other things, Innovations' satisfaction with the results of its due diligence review of Ashton. The following description is not intended to amend, modify or supplement Ashton's disclosure regarding competition contained in its public filings. The SEC's regulations governing alternative trading systems have lowered the barriers to entering the securities trading markets. Ashton's products and services, including the New VWAP Service, will face competition from traditional securities exchanges, which could establish similar trading systems in an attempt to retain their transaction volumes. Ashton's products and services will also face competition from other alternative trading systems and leading brokerage firms offering similar trade execution services. Many of these competitors have substantially greater financial, research, development, sales, marketing and other resources than Ashton will have, if and when the transaction with Innovations closes, and many of the products of Ashton's competitors have substantial operating histories. While Innovations believes that the Ashton products and services will offer certain competitive advantages, the ability to maintain these advantages will require continued investment in the development of products, and additional marketing and customer support activities. Innovations and/or Ashton may not have sufficient resources to continue to make this investment, while competitors may continue to devote significantly more resources to competing services. Ashton's products and services will compete with other electronic trading systems, including Instinet Corporation's crossing network, Investment Technology Group Inc.'s POSIT system, Bloomberg, L.P.'s Bloomberg Professional and Bloomberg Tradebook, Liquidnet, and other companies that develop proprietary electronic trading systems. Ashton's products and services will also compete with services offered by leading brokerage firms offering various forms of VWAP trade execution. Ashton's products and services will also compete with various national, regional and foreign securities exchanges for trade execution services. Innovations believes that Ashton's products and services will compete favorably on the basis of quality of trade execution, pricing, and reliability of trade processing and settlement operations. While Innovations believes that Ashton's products and services will offer benefits not offered by any other service, there can be no assurance that Ashton's products and services will be accepted by an extended customer base. Nor can Innovations be sure that Ashton's products and services will adequately address all of the competitive criteria in a manner that results in a competitive advantage. Intellectual property and proprietary rights As of December 31, 2001, the Company owned or controlled seven issued United States patents and twelve pending United States patent applications. As of that date, the Company also owned or controlled sixteen issued international patents and forty five pending international patent applications. The Company plans to file one additional patent application domestically and, may file related patent applications internationally. The Company has discontinued prosecution of patent applications and maintenance of patents that were deemed to be strategically unimportant, either because of geography or subject matter. The Company seeks to protect its trade secrets, service marks, trademarks, and copyrights through a combination of laws and contractual restrictions, such as confidentiality and license agreements. The Company attempts to register our trademarks and service marks in the United States and internationally. The Company has registered a corporate logo and the mark "OPTIMARK," among others, in the United States and internationally in several countries. However, effective trademark, service mark, trade secret, and copyright protection may not be available in all countries. The Company also has discontinued 10 prosecution of trademark applications and maintenance of trademarks that were deemed to be strategically unimportant, either because of geography or subject matter. Employees As of December 31, 2001, the Company had eighty full-time and one part time employee, forty one of whom were engaged in technology development, twenty four in quality assurance and support, five in sales and marketing, and eleven in executive, finance, administration and personnel. In connection with OptiMark suspending its development, sales, and marketing efforts related to the building and operation of electronic markets and exchanges, on January 30, 2002 and periodically thereafter, the Company has undertaken to reduce its workforce. As of February 15, 2001, the Company had thirty seven full-time and two part time employees, nineteen of whom were engaged in technology development, eleven in quality assurance and support, three in sales and marketing, and six in executive, finance, administration and personnel. The foregoing numbers of employees do not include four employees on leaves of absence from the Company. The Company has never had a work stoppage and our employees are not represented by any collective bargaining unit. The Company plans to continue to retain personnel to carry out its duties and obligations as a holding company, including its administration and financial reporting obligations. Financial information about industry segments Please refer to the financial statements for financial information about our industry segments. Discontinued operations Until September 19, 2000, Holdings operated in two segments, the Exchange Solutions Services Business and the US Equities Business. The first segment, the Exchange Solutions Services Business, was formerly referred to as the Electronic Markets Business. On or about January 30, 2002, OptiMark effectively suspended development, sales, and marketing efforts related to its Exchange Solutions Services Business, which developed software and provided design, development and maintenance services for building and operating electronic markets and exchanges. The second segment, the US Equities Business, was operated by Equities. Holdings discontinued the operations of the US Equities Business on September 19, 2000. As of that date all criteria for the measurement date per APB 30, "Reporting the Results of Operations -- Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions", had been met. The Company expects the process of disposing of the net liabilities of the discontinued business to be completed by December 31, 2002 as a result of the continuing settlement negotiations with certain companies from which we had previously leased equipment. Disposition includes negotiated payments to be made after December 31, 2002. ITEM 2. PROPERTIES The Company's headquarters are located in Jersey City, New Jersey. We sublease approximately 32,000 square feet under a sublease that expires in February 2014 and approximately 3,300 square feet with a remaining term to September 30, 2008. The foregoing space consists of standard commercial office premises in a metropolitan area. The Company believes that our present facilities exceed our current needs and is attempting to reduce our office space commitments. 12 ITEM 3. LEGAL PROCEEDINGS Holdings and/or its subsidiaries are subject to the following legal proceedings: 1. Finova Capital Corporation (Plaintiff) v. OptiMark Technologies, Inc., OptiMark, Inc. and OptiMark Holdings, Inc. (Defendants), Superior Court of New Jersey - Hudson County. Plaintiff filed this action on June 15, 2001, asserting claims that allegedly arise out of an equipment lease agreement pursuant to which it is alleged that OptiMark Technologies, Inc. (now known as OptiMark US Equities, Inc.) agreed to lease certain equipment. Plaintiff contends that OptiMark Technologies, Inc. breached the equipment lease by, among other things, failing to pay the amounts due under the equipment lease. Based on these allegations, Plaintiff has made claims for breach of contract, tortious interference, fraudulent conveyance of such equipment lease agreement and/or the related equipment and/or other assets from OptiMark Technologies, Inc. to OptiMark, Inc. and/or OptiMark Holdings, Inc. and damages in unspecified amounts exceeding $6,000,000, plus interest, late charges, litigation costs and expenses, and reasonable counsel fees. In the fourth quarter of 2011, most, if not all, of the equipment that was the subject of the equipment lease was returned consensually to Plaintiff. The parties currently are engaged in exchanging responses to written discovery requests. On February 14, 2002, Plaintiff made a motion to add Innovations as a defendant in the case. In the motion, Plaintiff alleges that the transfer of certain assets from OptiMark to Innovations on December 31, 2001 constituted a fraudulent conveyance of such assets. The Defendants and Innovations intend to defend this action and the motion vigorously. The outcome of this litigation cannot be predicted at this time, although it may have a material affect on the Company's financial condition and results of operations. 2. Comdisco, Inc. (Plaintiff) v. OptiMark Technologies, Inc. (now known as OptiMark US Equities, Inc.) (Defendant) and Avnet, Inc. State of Connecticut Superior Court, Judicial District of Fairfield at Bridgeport. Plaintiff filed a Complaint on December 18, 2000. The action seeks possession of leased equipment, proceeds from the sale of leased equipment, a deficiency judgment in an unspecified amount, and fees and costs and interest. Since the complaint was filed, most, if not all, of the equipment was returned consensually to Plaintiff. Based on the complaint filed in a related action in New Jersey (described below) and on other information received from Comdisco, it is believed that amount of damages claimed is approximately $6,500,000. On March 30, 2001, the parties agreed to consolidate a related case captioned Comdisco, Inc. v. OptiMark Technologies, Inc., Superior Court of New Jersey Law Division Hudson County (filed on January 23, 2001) with the Connecticut proceeding. To effect the consolidation, on or about April 2, 2001, the parties filed a stipulation withdrawing Defendant's motion to dismiss Comdisco's Complaint filed in the Superior Court of New Jersey. That motion had sought dismissal principally on grounds that an identical action alleging breach of contract had previously been filed by Comdisco in Connecticut State Court. In exchange for Defendant's agreement to withdraw its motion, Comdisco agreed to withdraw its New Jersey Complaint without prejudice. In June 2001, Comdisco made a motion for summary judgment with respect to a claim against Avnet relating to a guaranty by Avnet of Defendant's obligations under a Master Lease Agreement for computer equipment leased from Comdisco. Avnet responded to Comdisco's motion by denying liability under the guaranty and asserting a variety of special defenses. In addition, Avnet filed a cross claim against Defendant. The cross claim alleges that if Avnet is found liable under the guaranty, then Avnet becomes subrogated to Comdisco's rights under the Master Lease Agreement to the extent of the payments Avnet makes to Comdisco and that OptiMark is liable to Avnet for any such payments. Defendant has responded to the cross-claim by denying its material allegations. The Company intends to defend this action vigorously. On February 12, 2002, Plaintiff filed a motion for default for failure to plead, alleging that OptiMark Technologies, Inc. did not file a pleading responsive to Plaintiff's second amended complaint. This default will be set aside if OptiMark Technologies, Inc. files an answer before a judgment after default has been rendered. OptiMark Technologies, Inc. intends to file such a responsive pleading. The outcome of this 12 litigation cannot be predicted at this time, although it may have a material affect on the Company's financial condition and results of operations. The Company believes that each of the foregoing pending actions or threatened proceedings is derived from the discontinuation of the business of Equities in September 2000 and each seeks monetary damages for an alleged breach of a payment obligation. If the Company is ultimately found to be liable for any loss or impairment resulting from any of these suits, any such loss or impairment will have a material adverse impact on the Company's financial position, results of operations and cash flows. The Company currently is in discussions with the plaintiffs in the Comdisco and Finova litigations concerning a possible settlement of their respective claims in these actions. There can be no assurances that such settlements will be consummated on terms acceptable to the Company or at all. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS A special meeting of the stockholders of the Company was held on November 13, 2001. The stockholders voted on whether to approve the OptiMark Holdings, Inc. 2001 Series F Preferred Stock Plan. The stockholders voted 45,022,603 shares in favor of the proposal and 1,019,723 shares against the proposal. The number of votes that abstained from voting on the proposal was 225,188. 13 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS There is no established public trading market for the shares of common stock and we do not currently intend to seek inclusion of the shares of common stock in any established public trading market. As of December 31, 2001, we had 33,369,913 outstanding shares of common stock, including 740,000 shares of non-voting common stock, owned by approximately 1,100 holders. There are 56,572,645 outstanding shares of common stock on an as converted basis that can be sold currently pursuant to Rule 144. As of December 31, 2001, we have - issued options to purchase an aggregate of 5,759,939 shares of common stock and 5,593,398 shares of Series F Preferred Stock to our directors, officers and current and former employees, - issued warrants to purchase an aggregate of 12,710,900 shares of common stock to investors, consultants and strategic partners, and - granted registration rights to holders of approximately 40,113,000 of common stock, on an as converted basis. Since our inception, we have not declared any dividends or other distributions on our shares of common stock. We do not anticipate paying any other cash dividends in the foreseeable future and anticipate that future earnings would be retained to finance operations. On June 29, 2001, Holdings and certain stockholders entered into a Preferred Stock Purchase Agreement whereby the stockholders agreed to purchase up to an aggregate of 1,000,000 shares of the Series E Preferred at a price of $15.00 per share. The purchase of shares took place at approximately one-month intervals from June 2001 through January 2002. In monthly closings during the three months ended December 31, 2001, investors purchased 269,467 additional shares of the Series E Preferred for an aggregate amount $4,012,005. The Series E Preferred Stock is entitled to certain preferences over existing classes of the Company's stock in the event of liquidation, sale of assets or merger involving the Company equal to twice its purchase price plus 80% of proceeds above that amount up to $200 million, plus 76.56% of proceeds above $200 million up to and including $304.5 million, plus 56% of amounts in excess of $304.5 million. The Series E Preferred Stock will vote together with the Company's common stock and have 32 votes per share. Calculated based on shares outstanding as of December 31, 2001, the Series E Preferred Stock represents 34.6 % of the votes of the outstanding common stock (and shares entitled to vote with the common stock) and, in the aggregate, if fully subscribed to, could represent up to 36.4% of the votes of the outstanding common stock (and shares entitled to vote with the common stock). Holders of the Series E Preferred Stock are entitled to preemptive and registration rights. In connection with the settlement of litigation of the action captioned "Transamerica Business Credit Corporation, Wells Fargo Equipment Finance, Inc., Diamond Lease (U.S.A.), Inc. and Linc Capital, Inc. v. OptiMark US Equities, Inc. f/k/a OptiMark Technologies, Inc., OptiMark, Inc. and OptiMark Holdings, Inc.", Holdings authorized and issued 300,000 shares of a new Series G Preferred Stock of OptiMark Holdings, Inc. to the plaintiffs that ranks junior to the existing Series E Preferred Stock and Series F Preferred Stock but senior to all other classes or series of capital stock with respect to liquidation. In particular, the Series G Preferred Stock is entitled to receive an amount, in the event of a in the event of liquidation, sale of assets or merger involving the Company, equal to 4.30% of the total amount distributed in excess of $200,000,000 up to and including $304,500,000. 14 The issuance of the Series E Preferred Stock and the Series G Preferred Stock was solely to accredited investors and exempt from registration pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. 15 PART III The information called for by this Part III is incorporated by reference to specified portions of the Registrant's definitive Proxy Statement to be issued in conjunction with the Registrant's 2002 Annual Meeting of Stockholders, which is expected to be filed not later than 120 days after the Registrant's fiscal year ended December 31, 2001. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Except for the information concerning executive officers provided below, the information regarding directors and officers required by Item 10 is incorporated by reference from the Company's definitive proxy statement for its annual stockholders' meeting to be held on June 13, 2002. The executive officers serve at the discretion of the Board of Directors. The following table sets forth certain information concerning the executive officers of the Company as of March 1, 2002 (none of whom has a family relationship with another executive officer). Name Age Position - ---- --- -------- Robert J. Warshaw 48 Chief Executive Officer and Director Neil G. Cohen 35 Executive Vice President, General Counsel, and Corporate Secretary James S. Pak 33 Executive Vice President Trevor B. Price 33 Executive Vice President Selected biographical information with respect to executive officers is set forth hereafter. Robert J. Warshaw (48), Chief Executive Officer since March 14, 2001. Mr. Warshaw also serves as Chief Executive Officer of OptiMark, Inc. Mr. Warshaw previously served as Co-Chief Executive Officer, Executive Vice President and Chief Technology Officer of OptiMark, Inc. From November 1999 through June 2000, Mr. Warshaw served as Executive Vice President and Chief Technology Officer of OptiMark Technologies, Inc. From October 1993 to October 1999, Mr. Warshaw was Chief Information Officer at Lazard Freres & Co. LLC, an international investment banking firm. Mr. Warshaw received his bachelor's degree in English from the University of Pennsylvania and a Masters in Management from Northwestern University's Kellogg School of Management. Neil G. Cohen (35), General Counsel and Corporate Secretary since May 18, 2001. Prior to joining OptiMark, Mr. Cohen was associated with the law firms of Cummings & Lockwood from 1997-1999, Rogers & Wells from 1994-1997, and Cushman Darby & Cushman from 1992-1994. While at these law firms Mr. Cohen's practice concentrated on intellectual property litigation, licensing, and procurement. Mr. Cohen received his law degree from Hofstra University and his undergraduate degree in electrical engineering, with a concentration in computer science, from The George Washington University. James S. Pak (32), Executive Vice President of OptiMark, Inc. since December 1, 2001. From September 2001 through November 2001, Mr. Pak was a consultant to OptiMark. Between March 2001 and August 2001, Mr. Pak was an independent consultant. From October 1998 through March 2001, Mr. Pak was an investment banker at Lazard Freres & Co. LLC, an international investment banking firm, focused on mergers and acquisitions. Prior to working at Lazard, Mr. Pak worked from August 1992 through October 1998 for Merrill Lynch & Co. in various groups including investment banking and debt capital markets in New York and London. Mr. Pak has an undergraduate degree from New York University. 16 Trevor B. Price (33), Executive Vice President of OptiMark, Inc. since April 16, 2001. Prior to joining OptiMark, Mr. Price was, from January 2000 through April 2001, Chairman, CEO and founder of SavvyJack, Inc. a business-to-business e-commerce application services provider. During the period from January 2000 through May 2000, while founding SavvyJack, Mr. Price also consulted with Continuous Software Corporation where he led the business transition process for the acquisition of Pagoda Corporation, a company that he founded and built. From June 1998 through January 2000, Mr. Price was co-founder Co-CEO and director of Pagoda Corporation with primary responsibility for product marketing and development. Pagoda successfully developed and deployed an enterprise knowledge management solution to Fortune 500 companies. From March 1992 through June 1998, Mr. Price served in different management positions at Software Services International, Inc, a global services capital firm. Mr. Price has an undergraduate degree from the University of Pennsylvania. ITEM 11. EXECUTIVE COMPENSATION The information required by Item 11 is incorporated by reference from the Company's definitive proxy statement for its annual stockholders' meeting to be held on June 13, 2002. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by Item 12 is incorporated by reference from the Company's definitive proxy statement for its annual stockholders' meeting to be held on June 13, 2002. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by Item 13 is incorporated by reference from the Company's definitive proxy statement for its annual stockholders' meeting to be held on June 13, 2002. 17 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) The following documents are filed as part of this report: 1. FINANCIAL STATEMENTS To be filed by amendment. 2. REPORTS ON FORM 8-K The Company filed a Current Report on Form 8-K on December 26, 2001, reporting the settlement of litigation with Transamerica Business Credit Corporation and others under Item 5. 3. EXHIBITS The exhibits listed on the accompanying index to exhibits immediately following are filed as part of, or incorporated by reference into, this Form 10-K and are numbered in accordance with the Exhibit Table of Item 601 of regulation S-K: EXHIBIT NO. DESCRIPTION - ----------- ----------- 2.1 Agreement and Plan of Merger dated June 12, 2000 (incorporated by reference to Exhibit 2.1 to Registrant's Registration Statement on Form 10/A-1 (No. 000-30527)). 2.2 Subscription Agreement dated December 31, 2001 between SOFTBANK Capital Partners LP, SOFTBANK Capital LP, SOFTBANK Capital Advisors Fund LP and OptiMark Innovations Inc. (f/k/a OTSH, Inc.) (incorporated by reference to Exhibit 2.1 to Registrant's Current Report on Form 8-K dated December 31, 2001 (Commission File No. 000-30527)). 2.3 Subscription Agreement dated December 31, 2001 between OptiMark, Inc. and OptiMark Innovations Inc. (f/k/a OTSH, Inc.) (incorporated by reference to Exhibit 2.2 to Registrant's Current Report on Form 8-K dated December 31, 2001 (Commission File No. 000-30527)). 2.4 Investors' Rights Agreement dated December 31, 2001 by and among OptiMark Innovations Inc. (f/k/a OTSH, Inc.), OptiMark Holdings, Inc., OptiMark, Inc., SOFTBANK Capital Partners LP, SOFTBANK Capital LP and SOFTBANK Capital Advisors Fund LP (incorporated by reference to Exhibit 2.3 to Registrant's Current Report on Form 8-K dated December 31, 2001 (Commission File No. 000-30527)). 2.5 Novation to Series E Preferred Stock Purchase Agreement dated as of June 29, 2001 (as amended on August 16, 2001 and November 16, 2001), dated December 31, 2001, by and among OptiMark Holdings, Inc., SOFTBANK Capital Partners LP, SOFTBANK Capital LP and SOFTBANK Capital Advisors Fund LP (incorporated by reference to Exhibit 2.4 to Registrant's Current Report on Form 8-K dated December 31, 2001 (Commission File No. 000-30527)). 2.6 Securities Purchase Agreement, dated as of February 4, 2002, by and between The Ashton Technology Group, Inc. and OptiMark Innovations Inc. (f/k/a OTSH, Inc.). 18 (incorporated by reference to Exhibit 2.1 to Registrant's Current Report on Form 8-K dated February 4, 2002 (Commission File No. 000-30527)). 2.7 Amendment to Securities Purchase Agreement dated as of February 4, 2002, dated March 6, 2002, by and between The Ashton Technology Group, Inc. and OptiMark Innovations Inc. (f/k/a OTSH, Inc.). 3.1 Certificate of Incorporation of OptiMark Holdings, Inc. as amended to December 14, 2001 (incorporated by reference to Exhibit 3(i) to Registrant's Current Report on Form 8-K dated December 20, 2001 (Commission File No. 000-300527)). 3.2 By-Laws of OptiMark Holdings, Inc. (incorporated by reference to Exhibit 3.2 to Registrant's Registration Statement on Form 10/A-1 (No. 000-30527)). 4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.2 Specimen Preferred Stock Certificate (incorporated by reference to Exhibit 4.2 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.3 Series A Stock Purchase Agreement, dated August 27, 1996, by and among OptiMark and the parties named therein (incorporated by reference to Exhibit 4.3 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.4 Registration Rights Agreement, dated August 27, 1996, by and among OptiMark and the parties names therein (incorporated by reference to Exhibit 4.4 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.5 Amendment to Stock Purchase Agreement and Registration Rights Agreement, dated March 19, 1997, by and among OptiMark and the parties named therein (incorporated by reference to Exhibit 4.5 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.6 Amendment to Stock Purchase Agreement, Stockholders Agreement and Registration Rights Agreement, dated May 29, 1997, by and among OptiMark and the parties named therein (incorporated by reference to Exhibit 4.6 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.7 Amendment to Series A Registration Rights Agreement, dated January 1999, by and among OptiMark and the parties named therein (incorporated by reference to Exhibit 4.7 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.8 Series B Stock Purchase Agreement, dated December 22, 1998, by and among OptiMark and parties named therein (incorporated by reference to Exhibit 4.8 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.9 Registration Rights Agreement, dated April 23, 1998, by and among OptiMark and the parties named therein (incorporated by reference to Exhibit 4.9 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.10 Series C Stock Purchase Agreement, dated June 11, 1999, by and among OptiMark and the parties named therein (incorporated by reference to Exhibit 4.10 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 19 4.11 Registration Rights Agreement, dated July 26, 1999, by and among OptiMark and the parties named therein (incorporated by reference to Exhibit 4.11 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.12 Series D Stock Purchase Agreement, dated July 30, 1999, by and between OptiMark and BancBoston Capital Inc. (incorporated by reference to Exhibit 4.12 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.13 Registration Rights Agreement dated, July 30, 1999, by and between OptiMark and BancBoston Capital Inc. (incorporated by reference to Exhibit 4.13 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.14 Registration Rights Agreement, dated September 19, 1998, by and between OptiMark and The NASDAQ Stock Market, Inc. (incorporated by reference to Exhibit 4.14 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.15 Amended and Restated Stockholders Agreement, dated April 23, 1998, by and among OptiMark and the parties named therein (incorporated by reference to Exhibit 4.15 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 4.16 Series E Stock Purchase Agreement, dated as of June 29, 2001, by and among OptiMark Holdings, Inc. and the entities set forth in the Schedule of Purchasers thereto (incorporated by reference to Exhibit 4.1 to Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 2001 (Commission File No. 000-30527)). 4.17 Registration Rights Agreement, dated as of June 29, 2001, by and among OptiMark Holdings, Inc. and the holders of Series E Cumulative Preferred Stock (incorporated by reference to Exhibit 4.2 to Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 2001 (Commission File No. 000-30527)). 4.18 Amendment to the Series E Stock Purchase Agreement, dated as of August 16, 2001, by and among OptiMark Holdings, Inc. and the entities set forth in the Schedule of Purchasers thereto (incorporated by reference to Exhibit 4.1 to Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2001 (Commission File No. 000-30527)). 4.19 Amendment to the Registration Rights Agreement, dated as of August 16, 2001, by and among OptiMark Holdings, Inc. and the holders of Series E Cumulative Preferred Stock (incorporated by reference to Exhibit 4.2 to Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2001 (Commission File No. 000-30527)). 10.1 OptiMark 1999 Stock Plan (adopted November 29, 1999) (incorporated by reference to Exhibit 10.5(a) to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.2 Amendment No. 1 to OptiMark 1999 Stock Plan (incorporated by reference to Exhibit 10.5(b) to Registrant's Registration Statement on Form 10/A-1 (No. 000-30527)). 10.3 Amendment No. 2 to OptiMark 1999 Stock Plan (incorporated by reference to Exhibit 10.5(c) to Registrant's Amendment No. 2 to Annual Report on Form 10-K for the year ended December 31, 2000 (Commission File No. 000-30527)). 10.4 OptiMark Stock Option Plan (Amended & Restated January 27, 1999) (incorporated by reference to Exhibit 10.6 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 20 10.5 Form of Stock Option Agreement (1999 Stock Plan) (incorporated by reference to Exhibit 10.7 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.6 Form of Stock Option Agreement (Amended and Restated Stock Option Plan) (incorporated by reference to Exhibit 10.8 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.7 Form of Amendment No. 1 to Stock Option Agreements (incorporated by reference to Exhibit 10.8(b) to Registrant's Amendment No. 2 to Annual Report on Form 10-K for the year ended December 31, 2000 (Commission File No. 000-30527)). 10.8 Form of Non-Employee Director Option Agreement(incorporated by reference to Exhibit 10.9 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.9 Employment, Trade Secret and Non-Competition Agreement, dated August 27, 1996, by and between OptiMark and William A. Lupien (incorporated by reference to Exhibit 10.11 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.10 Severance Agreement dated January 5, 2001 by and between John T. Rickard and OptiMark, Inc. (incorporated by reference to Exhibit 10.12(b) to Registrant's Amendment No. 2 to Annual Report on Form 10-K for the year ended December 31, 2000 (Commission File No. 000-30527)). 10.11 Consulting Agreement dated January 15, 2001 by and among Orincon Industries, Inc., John T. Rickard and OptiMark, Inc. (incorporated by reference to Exhibit 10.12(c) to Registrant's Amendment No. 2 to Annual Report on Form 10-K for the year ended December 31, 2000 (Commission File No. 000-30527)). 10.12 Restricted Stock Purchase Agreement, dated December 1, 1998, by and between OptiMark and Phillip J. Riese (incorporated by reference to Exhibit 10.14 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.13 Stock Purchase Agreement, dated December 18, 1998, by and between OptiMark and Phillip J. Riese (incorporated by reference to Exhibit 10.15 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.14+ Services Agreement, dated January 1, 1999, by and between OptiMark and ISM Information Systems Management Corporation (incorporated by reference to Exhibit 10.18 to Registrant's Registration Statement on Form 10/A-1 (No. 000-30527)). 10.15+ OptiMark/IBM Ops Agreement, dated February 2, 1999, by and between OptiMark and the parties named therein (incorporated by reference to Exhibit 10.19 to Registrant's Registration Statement on Form 10/A-1 (No. 000-30527)). 10.16 License Termination Agreement, dated March 19, 1999, by and between OptiMark and High Performance Markets, Ltd. (incorporated by reference to Exhibit 10.21 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.17 Common Stock Purchase Warrant, dated August 27, 1996, in favor of The Pacific Exchange, Inc. (incorporated by reference to Exhibit 10.22 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.18 Common Stock Purchase Warrant, dated December 31, 1996, in favor of The Chicago Board Options Exchange, Inc. (incorporated by reference to Exhibit 10.23 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 21 10.19 Common Stock Purchase Warrant, dated April 23, 1998, in favor of Virginia Surety Company, Inc. (incorporated by reference to Exhibit 10.24 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.20 Common Stock Purchase Warrant, dated June 19, 1998, in favor of Transamerica Business Credit Corporation (incorporated by reference to Exhibit 10.25 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.21 Common Stock Purchase Warrant, dated August 24, 1998, by and between OptiMark and Francis X. Egan (incorporated by reference to Exhibit 10.26 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.22 NASDAQ Warrant Agreement, dated September 1, 1998, by and between OptiMark and The NASDAQ Stock Market, Inc. (incorporated by reference to Exhibit 10.27 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.23 Common Stock Purchase Warrant, dated January 27, 1999, by and between OptiMark and BIOS Group LP (incorporated by reference to Exhibit 10.28 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.24 Warrant Agreement, dated October 27, 1999, by and between OptiMark and Knight/Trimark Group, Inc. (incorporated by reference to Exhibit 10.29 to Registrant's Registration Statement on Form 10 (No. 000-30527)). 10.25+ Development, Subcontract, and Operations Agreement, dated May 17, 1999, by and among OptiMark, Inc. and Japan OptiMark Systems, Inc., as amended (incorporated by reference to Exhibit 10.31) to Registrant's Amendment No. 2 to Annual Report on Form 10-K for the year ended December 31, 2000 (Commission File No. 000-30527)). 10.26 Letters, dated May 23, 2001, amending OptiMark, Inc.'s agreement with Japan OptiMark Systems, Inc. (incorporated by reference to Exhibit 9.1 to Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 2001 (Commission File No. 000-30527)). 10.27 Employment Agreement, dated August 16, 2001, by and between OptiMark Holdings, Inc. and Robert J. Warshaw (incorporated by reference to Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2001 (Commission File No. 000-30527)). 10.28 Amendment No.1 to Employment Agreement, dated August 16, 2001, by and between OptiMark Holdings, Inc. and Robert J. Warshaw (incorporated by reference to Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2001 (Commission File No. 000-30527)). 10.29 Separation Agreement, dated August 15, 2001, by and between OptiMark, Inc. and James G. Rickard (incorporated by reference to Exhibit 10.3 to Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2001 (Commission File No. 000-30527)). 10.30 OptiMark Holdings, Inc. 2001 Series F Preferred Stock Plan (incorporated by reference to Registrant's Registration Statement on Form S-8 (No. 333-73356)). 10.31 Second Amended and Restated Promissory Note, dated October 12, 2002, executed by OptiMark Holdings, Inc. in favor of Robert J. Warshaw. 10.32 Employment Letter, dated June 19, 2001, from OptiMark, Inc. to Neil G. Cohen. 22 10.33 Employee Agreement, dated December 1, 2002, by and between OptiMark, Inc. and James Pak. 10.34 Employment Letter, dated April 9, 2001, from OptiMark, Inc. to Trevor B. Price. 10.35 Employee Agreement, dated May 16, 2001, by and between OptiMark, Inc. and Trevor B. Price. 10.36 Amendment to Employee Agreement, dated June 19, 2001, by and between OptiMark, Inc. and Trevor B. Price. 10.37 Employment Letter, dated April 17, 2001, by and between OptiMark, Inc. and Gary Meshell. 10.38 Employee Agreement, dated May 15, 2001, by and between OptiMark, Inc. and Gary B. Meshell. 10.39 Amendment to Employee Agreement, dated June 19, 2001, by and between OptiMark, Inc. and Gary B. Meshell. 10.40 Separation Agreement, dated February 16, 2002, by and between OptiMark, Inc. and Gary B. Meshell. 10.41 Employment Letter, dated January 16, 2002, from OptiMark, Inc. to James Pak. 21.1 Subsidiaries of OptiMark Holdings, Inc. + Confidential treatment has been requested for certain confidential portions of this exhibit pursuant to Rule 24b-2 under the Exchange Act. In accordance with Rule 24b-2, these confidential portions have been omitted from this exhibit and filed separately with the Commission. 23 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. OPTIMARK HOLDINGS, INC. Dated April 1, 2002 By: /s/ Ronald D. Fisher ------------------------------ Name: Ronald D. Fisher Title: Director By: /s/ William A. Lupien ------------------------------ Name: William A. Lupien Title: Chairman By: /s/ Phillip J. Riese ------------------------------ Name: Phillip J. Riese Title: Director By: /s/ Robert J. Warshaw ------------------------------ Name: Robert J. Warshaw Title: Chief Executive Officer, Director, Principal Financial and Accounting Officer EX-2.7 3 ex2_7.txt AMENDMENT NO. 1 TO THE SECURITIES PURCHASE AGMT Exhibit 2.7 AMENDMENT NO. 1 TO THE SECURITIES PURCHASE AGREEMENT This Amendment No.1 (the "Amendment") to the Securities Purchase Agreement, dated as of February 4, 2002 (the "Agreement"), by and between The Ashton Technology Group, Inc. ("Ashton") and OptiMark Innovations Inc. ("OptiMark") is made as of this 6th day of March, 2002 by and between Ashton and OptiMark. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement. WHEREAS the Agreement provides that any term of the Agreement may be amended with the written consent of Ashton and OptiMark; WHEREAS in accordance with the foregoing, Ashton and OptiMark desire to amend the Agreement; NOW THEREFORE, in consideration of the premises and the covenants hereinafter set forth, Ashton and OptiMark agree as follows: 1. SECTION 6.12 OF THE AGREEMENT. Section 6.12(a)(iii) of the Agreement is hereby amended and restated as follows: (iii) by either the Company or the Investor, so long as such party has not materially breached its obligations hereunder, if the Closing has not occurred on or before April 30, 2002; 2. Except as modified by this Amendment, the Agreement shall remain in full force and effect. 3. Each of Ashton and OptiMark hereby represent and warrant to the other that (i) all corporate action on its part and the part of its directors necessary for the due authorization, execution and delivery of this Amendment has been taken, and (ii) this Amendment will be a valid and binding obligation of it enforceable against it in accordance with its terms. 4. MISCELLANEOUS. a) GOVERNING LAW. This Agreement shall be governed in all respects by the laws of the State of New York without regard to principles of conflict of laws. b) COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. [The Remainder Of This Page Is Intentionally Left Blank] Exhibit 2.7 IN WITNESS WHEREOF, each of the undersigned has caused this Amendment to be executed as of the date first written above. THE ASHTON TECHNOLOGY GROUP, INC. By: /s/ William W. Uchimoto ----------------------- Name: William W. Uchimoto Title: General Counsel OPTIMARK INNOVATIONS INC. By: /s/ Neil G. Cohen ----------------- Name: Neil G. Cohen Title: Secretary EX-10.31 4 ex10_31.txt SECOND AMENDED AND RESTATED PROMISSORY NOTE Exhibit 10.31 SECOND AMENDED AND RESTATED PROMISSORY NOTE ------------------------------------------- $90,000.00 October 12, 2001 Jersey City, New Jersey FOR VALUE RECEIVED, the undersigned, Robert J. Warshaw, hereby unconditionally promises to pay to the order of OptiMark Inc. (the "Payee") at the Payee's office at 10 Exchange Place, Jersey City, New Jersey, on March 31, 2002, the principal amount of ninety thousand dollars ($90,000.00), together with interest on the unpaid principal amount hereof, at a rate per annum equal to six percent (6%). This Note may be prepaid in whole or in part, without premium or penalty, at any time and from time to time upon one business day's irrevocable written notice to Payee, provided that the accrued and unpaid interest on the principal amount prepaid must be paid with any such prepayment. The undersigned represents and warrants that this Note has been executed and delivered by, and constitutes and will continue to constitute the legal, valid, binding and enforceable obligation of, the undersigned. Unless the holder hereof shall notify the undersigned to the contrary, the unpaid principal amount hereof, all accrued interest hereon, and all other amounts payable hereunder shall become immediately due and payable without further notice, protest, presentment, demand or other formalities of any kind, all of which are hereby expressly waived by the undersigned, if ay of the following events shall occur and be continuing: (a) the undersigned shall be unable or admit in writing his inability to pay his debts as they mature, or shall make a general assignment for the benefit of his creditors; or (b) a custodian, trustee, receiver, agent or similar officer shall be appointed for the undersigned or any substantial part of his property; or (c) the undersigned shall be adjudicated a bankrupt or insolvent; or (d) a petition in bankruptcy or a petition seeking reorganization or an arrangement with creditors, or to take advantage of any bankruptcy, insolvency or similar law, shall be filed by or against the undersigned, and if filed without the undersigned's consent or acquiescence, is not dismissed within 60 days; or (e) any representation or warranty made by the undersigned in or in connection with this Note shall be or become untrue; or (f) the undersigned shall cease to be an employee of Payee due to a termination of employment by Payee as a result of (i) the conviction of the undersigned of a felony, (ii) engaging in conduct by the undersigned which constitutes willful gross neglect or willful gross misconduct in carrying out his duties resulting, in either case, in material economic harm to Payee or its affiliates; or (g) the undersigned's voluntary termination of employment by Payee. All payments under this Note shall be made in lawful money of the United States of America, and in immediately available funds, free and clear of and without any set-off, counterclaim, deduction or withholding. The undersigned promises to pay costs of collection and reasonable attorneys' fees in case default is made in payment of this Note. This Note shall be governed by and construed in accordance with the laws of the State of New York. Robert J. Warshaw /s/ Robert J. Warshaw - --------------------- EX-10.32 5 ex10_32.txt EMPLOYEE LETTER AGREEMENT Exhibit 10.32 OPTIMARK OptiMark, Inc. 201.536.7000 phone 24th Floor 201.536.7070 fax 10 Exchange Place Jersey City NJ 07302 www.optimark.com June 19, 2001 PERSONAL AND CONFIDENTIAL VIA HAND DELIVERY - ----------------- Mr. Neil G. Cohen 3 Whittier Way Livingston, NJ 07039 Dear Neil: I am pleased to set forth the terms of your employment as Executive Vice President and General Counsel of Optimark, Inc. (the "Company"). The terms of your employment agreement dated June 9, 1999, as amended, shall remain in full force and effect. The terms set forth in this letter will be deemed effective as of May 18, 2001. You will serve as Executive Vice President and General Counsel of the Company and will report to me. You will be responsible for such duties as are normally associated with such position or as otherwise determined by the Board of Directors, except that the Company agrees that you will not at any time be given a lesser title than the one stated above. As compensation for the services you provide the Company, you will be paid a base salary of two hundred thousand dollars ($200,000.00) per annum, which will be payable in accordance with the Company's regular payroll practices. Also, you will (i) be eligible to participate in all employee benefits provided by the Company to its employees, including the Company's bonus program; (ii) receive three weeks vacation per year, which is earned pro-rata over the year; and (iii) receive 5 paid-time-off days (personal/sick) per year. You will be eligible to participate in the "OptiMark Holdings, Inc. 1999 Stock Plan" (the "Stock Plan"), as amended. Subject to the appropriate approvals, including approval of the Board of Directors, and amendment of the Stock Plan, if necessary, to increase the number of shares allocated to the Stock Plan, you will be granted an Incentive Stock Option to purchase an aggregate number of shares equal to one-half of a percent (0.5%) of the outstanding shares of par value $0.01 common stock of the Company's parent, OptiMark Holdings, Inc., (the "Stock"), calculated on a fully diluted basis as of May 18, 2001. The exercise price to purchase the Stock will be the fair market value of the Stock as of May 18, 2001. In the event that the Company's parent, OptiMark Holdings, Inc., undergoes a change in capitalization and creates a new stock plan for a new class of stock, you will participate in the same manner as other members of the senior management team, except that the initial percentages of common stock to which you and they are entitled will differ. Mr. Neil G. Cohen June 19, 2001 Page 2 In the event that the Company terminates your employment for a reason other than for "cause", as defined in your employee agreement, you will receive severance pay in the amount of four (4) months base salary. In addition, the Company agrees that it will continue making employment level contributions for all employee benefit plans provided to you by the Company during your employment, for a period of four (4) months following the termination of your employment. The relationship between you and the Company will be for an unspecified term and will be considered at will. No employment contract is created by the existence of any policy, rule or procedure in the Company's handbook, any document of the Company, or any verbal statements made to you by representatives of the Company. Consequently, the employment relationship between you and the Company can be terminated at will, either by you or the Company, with or without cause or advance notice. Your employment with the Company is considered exclusive to the Company and, as a condition of your employment, we do not expect, nor will we allow, you to perform services for compensation for any third party. The employment terms in this letter and the employee agreement supersede any other agreements or promises made to you by anyone, whether oral or written, and comprise the final, complete and exclusive agreement between you and the Company. Very truly yours, Optimark, Inc. /s/ Robert Warshaw ------------------ Robert Warshaw Chief Executive Officer ACCEPTED BY: /s/ Neil G. Cohen - ----------------- Neil G. Cohen Date: June 22, 2001 EX-10.33 6 ex10_33.txt EMPLOYEE AGREEMENT (VERSION II) Exhibit 10.33 EMPLOYEE AGREEMENT (Version II) In consideration of my employment or continued employment by OptiMark, Inc.(the "Company"), I agree to the terms and conditions of employment set forth below. 1. CONFLICT OF INTEREST. At the time of signing this Agreement, I have no obligation to any prior employer or other person or organization which would interfere with my performance of my work for the Company or which would result in any conflict of interest for the Company or its customers or clients, except as I have noted in attachment A hereto. Further, I have made no commitment and have no restriction on my service which is a result of any past or present consulting agreement, directorship, ownership interest or other affiliation or connection with any other organization, except as I have noted in attachment A hereto, and will not enter into such commitments or be encumbered by such restrictions without receiving prior written approval from the Company. During the period of my employment by the Company, I will not engage in any other employment or other activity which may be inconsistent with my obligations to the Company and its investors, business partners, customers and clients. 2. CONFIDENTIAL INFORMATION. In the course of my employment by the Company, I may become aware of confidential information including, without limitation, computer system and software designs, plans for new product and service offerings, dealings with regulators, customer lists, market research, strategic plans or other similar information that relates to the business of the Company, its investors, business partners, customers or clients. I will not use or disclose any such confidential information of the Company or its investors, business partners customers or clients except in fulfillment of my obligations to the Company or unless ordered to do so by a court of competent jurisdiction (in which latter case I will promptly inform the Company of such order). I will comply with the Company's policies and procedures for the protection of confidential information. Further, my obligation not to disclose or use such confidential information will continue for a period of two years after the termination of my employment for whatever reason. 3. INTELLECTUAL PROPERTY. I fully and promptly will disclose and describe to the Company, and hereby agree to assign to the Company, all of my full right, title, and interest in all intellectual property, including, without limitation, all inventions, discoveries, concepts, ideas, systems, methods, processes, works, computer programs and computer software (whether or not patentable or copyrightable or constituting trade secrets), which I make, conceive, reduce to practice, or create as an employee of or in connection with my employment by the Company. I also will disclose and assign to the Company all of my interest, if any, in any such intellectual property conceived of or created by other employees or by clients of the Company during the period of my employment by the Company. I understand that I will have no rights to any royalties or other compensation for the use of any intellectual property covered by this Agreement, unless expressly agreed to in writing by the Company. This paragraph 3, however, shall not apply to intellectual property that meets all of the following requirements: (i) it does not relate to the actual business or research and development of the Company, or to business or research and development under consideration by the Company that is known to me, (ii) it is made or conceived of by me during times not working as an employee of the Company (whether or not during normal business hours or on Company premises), and (iii) it is not derived from, and is made without the use of, any intellectual property or confidential information of the Company. I own the discoveries, improvements or inventions identified in attachment A hereto, which discoveries, improvements or inventions are expressly reserved and excepted from the provisions of this Agreement. 4. PATENTS. I will cooperate with the Company in doing whatever is appropriate, including executing assignments, to apply for, obtain and enforce patent rights (U.S. and/or foreign) for the Company or its clients on any invention which is made by me (either alone or jointly with others) during my employment, provided that (a) all expenses required to apply for, obtain and enforce any patent rights will be paid by the Company, and (b) if I am required to spend a substantial amount of time to carry out my obligations under this paragraph 4, I will be entitled to reasonable compensation from the Company for that time. I understand that the Company will have no obligation to me to apply for or obtain any such patent rights. 5. WRITINGS. Any written materials or software that I prepare, in whole or in part, during the course of my employment with the Company, will be the property of the Company. I hereby assign to the Company all of my full right, title and interest in any such written materials or software. I also will do whatever is appropriate to obtain copyright protection of any such written materials or software relating to my work for the Company or its clients, should the Company so request. 6. FINANCIAL OBLIGATIONS. If I am provided with travel advances or other advances of expenses in connection with my employment with the Company, I will make a prompt settlement of all such advances after completion of the travel or other employment-related activities. If I owe any money to the Company at the time of termination of my employment, such amount owed to the Company may be deducted from any money otherwise owed to me by the Company. 7. REASONABLE NOTICE OF TERMINATION I understand that, unless expressly provided otherwise in any other written agreement signed by me and an authorized officer of the Company, my employment with the Company is "at will", and my employment may be terminated by the Company at any time, with or without cause or prior notice. I understand that termination of my employment will be deemed to be with cause only if I am terminated for gross negligence (but not ordinary negligence), intentional misconduct, breach of this or any other written employment agreement with the Company, or repeated failure to comply with reasonable directives of the Company's Chief Executive Officer or Board of Directors, all as determined by a unanimous vote of said Board, or if I am convicted of or plead guilty or novo contender to a felony or crime of moral turpitude. 8. COMPANY PROPERTY. Upon the termination of my employment with the Company, or during my employment if so requested by the Company, I will deliver to an authorized representative of the Company (a) all credit cards, identification cards, badges, keys, and other items which have been provided to me by the Company, (b) all tools, equipment, and software provided to me by the Company, and (c) all written materials, records, tapes, disks and other media which relate to the business of the Company. I will not retain any copies or duplicates of the items described above, except that I may retain copies of my own records relating to my compensation from the Company, a copy of this Agreement, and my personal copies of any papers which have been written by me and have been published without restriction. 2 9. SOLICITING EMPLOYEES AND CLIENTS. I agree that for a period of 12 months following the termination of my employment with the Company for any reason, I will not, and will not assist any one else to, directly or indirectly solicit or induce any of the Company's employees to terminate their employment with the Company or divert, interfere with or take away from the Company any person, company or entity which, within the six month period immediately preceding my termination of employment, was an investor, customer, client, supplier, business partner, prime contractor, subcontractor or independent contractor of the Company. 10. ACKNOWLEDGMENT. I acknowledge that the Company shall not have an adequate remedy at law in the event I breach this Agreement and that the Company will suffer irreparable damage and injury in such event. I agree that the Company, in addition to any other available rights and remedies, shall be entitled to a preliminary and permanent injunction, without having to post a bond, restricting me from committing or continuing any violation of this Agreement. 11. ENFORCEABILITY. If any provision of this Agreement shall, to any extent, be found to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and any such invalid or unenforceable provision shall be reformed so as to be valid and enforceable to the full extent permitted by law. 12. OBLIGATIONS TO THE COMPANY. I understand that I may have obligations to the Company that are not expressly set forth in this Agreement, including obligations to perform the duties of my employment with loyalty, honesty and integrity and in good faith. I understand that I will be required to comply with all rules, regulations and policies of the Company. 13. CONTINUING OBLIGATIONS. My obligations under this Agreement will continue in effect after termination of my employment with the Company. The provisions of this Agreement will be binding upon my executors, administrators, or other legal representatives in the event of my death or disability. 14. GOVERNING LAW. This Agreement (except for paragraph 7) shall continue in effect after my employment with the Company terminates, and shall be governed by and construed in accordance with the laws of the State of New Jersey. 15. NO ORAL AGREEMENTS. I understand that (a) this Agreement and any other written employment agreement include every agreement between the Company and me with respect to my employment, (b) any and all prior oral agreements between me and the Company with respect to my employment are terminated and superseded by this Agreement, (c) no oral agreements between me and the Company with respect to my employment are or will be enforceable against me or the Company, and (d) I will not rely on any oral promises from the Company with respect to my employment, on the understanding that any such promises must be included in a writing, signed by an officer of the Company, in order to be enforceable. 3 16. RECOMMENDATION OF LEGAL ADVICE. I acknowledge the Company's encouragement for me to have obtained independent legal advice with respect to this Agreement. I either have obtained or affirmatively waive such advice. I HAVE READ AND UNDERSTAND ALL OF THE PROVISIONS OF THIS EMPLOYEE AGREEMENT, AND I AGREE TO SUCH PROVISIONS WITHOUT RESERVATION. /s/ James Pak ------------- Signature 12/1/2001 --------- Date James --------- Printed Name 4 EX-10.34 7 ex10_34.txt EMPLOYEE LETTER AGREEMENT Exhibit 10.34 OPTIMARK OptiMark, Inc. 201.536.7000 phone 24th Floor 201.536.7070 fax 10 Exchange Place Jersey City NJ 07302 www.optimark.com April 9, 2001 PERSONAL AND CONFIDENTIAL VIA FEDERAL EXPRESS - ------------------- Mr. Trevor Price 312 East 23rd Street, Apt 5C New York, NY 10010 Dear Mr. Price: Optimark, Inc. (the "Company") is pleased to offer you the position of Senior Vice President Product Strategy. We are very enthusiastic about your joining the team, as we continue to build Optimark, Inc. In your role you will have a major impact on the success of this venture and the future of the corporation. Here are the terms of the offer: POSITION You will serve as Senior Vice President Product Strategy and will work at the Company's New Jersey facility. You will be responsible for such duties as are normally associated with such position or as otherwise determined by the Board of Directors, except that the Company agrees that you will not at any time be given a lesser title than the one stated above. SALARY AND BENEFITS As compensation for the services you provide the Company, you will be paid a base salary of one hundred and seventy five thousand dollars ($175,000.00) per annum, which will be payable in accordance with the Company's regular payroll practices. Also, you will (i) be eligible to participate in all employee benefits provided by the Company to its employees, including the Company's bonus program; (ii) receive three weeks vacation per year, which is earned pro-rata over the year; and (iii) receive 5 paid-time-off days (personal/sick) per year. You will also receive the same paid holidays as are observed by all of the Company's employees. CONSIDERATION FOR EQUITY BONUS At each annual review, the Company shall consider granting Employee a reasonable and competitive number of options to purchase common stock of the Company's parent, OptiMark Holdings, Inc., and/or other equity-based compensation awards, which options and/or awards shall be reasonably calculated to incentivize Employee to help the Company achieve its financial goals; provided, however, that the Company does the same for its other employees. INCENTIVE STOCK OPTION You will be eligible to participate in the "OptiMark Holdings, Inc. 1999 Stock Plan" (the "Stock Plan"), as amended. A copy of the Stock Plan is attached for your reference. Subject to the appropriate Mr. Trevor Price April 9, 2001 Page 2 of 3 approvals, including approval of the Board of Directors, and amendment of the Stock Plan, if necessary, to increase the number of shares allocated to the Stock Plan, you will be granted an Incentive Stock Option to purchase an aggregate number of shares equal to three quarters of a percent (0.75%) of the outstanding shares of par value $0.01 common stock of the Company's parent, OptiMark Holdings, Inc., (the "Stock"), calculated on a fully diluted basis as of the date you commence employment with the Company. The exercise price to purchase the Stock will be the fair market value of the Stock as of the date upon which you commence employment with the Company. The specific terms and conditions of your Incentive Stock Option to purchase shares of the Stock of the Company's parent, OptiMark Holdings, Inc., will be set forth in the "Stock Option Agreement" issued pursuant to the Stock Plan. A copy of the Stock Option Agreement is attached for your reference. The Stock Option Agreement will be executed after you commence your employment with the Company. CHANGE IN CAPITALIZATION In the event that the Company undergoes a change in capitalization and creates a new stock plan for a new class of stock, the Employee will participate in the same manner as other employees of the Company who have an Incentive Stock Option on the common stock of the Company's parent, OptiMark Holdings, Inc. Currently, we anticipate that the employees will be granted non-incentive stock options under a new stock plan such that ratio of (A) the number of options granted to an employee to (B) the total number of options available to all employees will remain constant between the Stock Plan and the new stock plan. We also anticipate that employees' option grants under the existing Stock Plan will remain in tact. Further, the Company foresees that the vesting schedule under the new stock plan will be four (4) years, with one-quarter (1/4) of the new options vesting after the first year and the remaining options vesting quarterly over the remaining thee (3) years. Of course, the foregoing are subject to change at the discretion of the Company and/or its investors. SEPARATION FROM EMPLOYMENT AND SEVERANCE PACKAGE In the event that the Company terminates your employment for a reason other than for "cause", as defined in the Company's Employee Agreement (a copy of which is attached to this letter), you will receive severance pay in the amount of four (4) months base salary. In addition, the Company agrees that it will continue making employment level contributions for all employee benefit plans provided to you by the Company during your employment, for a period of four (4) months following the termination of your employment. AT-WILL EMPLOYMENT The relationship between you and the Company will be for an unspecified term and will be considered at will. No employment contract is created by the existence of any policy, rule or procedure in the Mr. Trevor Price April 9, 2001 Page 3 of 3 Company's handbook, any document of the Company, or any verbal statements made to you by representatives of the Company. Consequently, the employment relationship between you and the Company can be terminated at will, either by you or the Company, with or without cause or advance notice. EXCLUSIVITY Your employment with the Company is considered exclusive to the Company and, as a condition of your employment, we do not expect, nor will we allow, you to perform services for compensation for any third party. Your employment with the Company is also subject to and conditioned upon your execution of the Company's Employee Agreement. The employment terms in this letter and the Employee Agreement supersede any other agreements or promises made to you by anyone, whether oral or written, and comprise the final, complete and exclusive agreement between you and the Company. Please sign and date this letter and the Employee Agreement to indicate your acceptance of employment at the Company under the terms described above and return them to me in the enclosed Federal Express package. If you accept our offer, we would like you to commence your employment with us on April 16, 2001. We are very pleased to make you this offer and look forward to future success for you and for Optimark, Inc. If you have any questions regarding the offer set forth in this letter please contact me. I look forward to hearing from you soon. Very truly yours, Optimark, Inc. By: /s/ Robert Warshaw ------------------ Robert Warshaw Chief Executive Officer ACCEPTED BY: /s/ Trevor Price - ---------------- Trevor Price DATE 5/16/2001 START DATE: April 16, 2001 EX-10.35 8 ex10_35.txt EMPLOYEE AGREEMENT (VERSION II) Exhibit 10.35 EMPLOYEE AGREEMENT (Version II) In consideration of my employment or continued employment by OptiMark, Inc.(the "Company"), I agree to the terms and conditions of employment set forth below. 1. CONFLICT OF INTEREST. At the time of signing this Agreement, I have no obligation to any prior employer or other person or organization which would interfere with my performance of my work for the Company or which would result in any conflict of interest for the Company or its customers or clients, except as I have noted in attachment A hereto. Further, I have made no commitment and have no restriction on my service which is a result of any past or present consulting agreement, directorship, ownership interest or other affiliation or connection with any other organization, except as I have noted in attachment A hereto, and will not enter into such commitments or be encumbered by such restrictions without receiving prior written approval from the Company. During the period of my employment by the Company, I will not engage in any other employment or other activity which may be inconsistent with my obligations to the Company and its investors, business partners, customers and clients. 2. CONFIDENTIAL INFORMATION. In the course of my employment by the Company, I may become aware of confidential information including, without limitation, computer system and software designs, plans for new product and service offerings, dealings with regulators, customer lists, market research, strategic plans or other similar information that relates to the business of the Company, its investors, business partners, customers or clients. I will not use or disclose any such confidential information of the Company or its investors, business partners customers or clients except in fulfillment of my obligations to the Company or unless ordered to do so by a court of competent jurisdiction (in which latter case I will promptly inform the Company of such order). I will comply with the Company's policies and procedures for the protection of confidential information. Further, my obligation not to disclose or use such confidential information will continue for a period of two years after the termination of my employment for whatever reason. 3. INTELLECTUAL PROPERTY. I fully and promptly will disclose and describe to the Company, and hereby agree to assign to the Company, all of my full right, title, and interest in all intellectual property, including, without limitation, all inventions, discoveries, concepts, ideas, systems, methods, processes, works, computer programs and computer software (whether or not patentable or copyrightable or constituting trade secrets), which I make, conceive, reduce to practice, or create as an employee of or in connection with my employment by the Company. I also will disclose and assign to the Company all of my interest, if any, in any such intellectual property conceived of or created by other employees or by clients of the Company during the period of my employment by the Company. I understand that I will have no rights to any royalties or other compensation for the use of any intellectual property covered by this Agreement, unless expressly agreed to in writing by the Company. This paragraph 3, however, shall not apply to intellectual property that meets all of the following requirements: (i) it does not relate to the actual business or research and development of the Company, or to business or research and development under consideration by the Company that is known to me, (ii) it is made or conceived of by me during times not working as an employee of the Company (whether or not during normal business hours or on Company premises), and (iii) it is not 1 derived from, and is made without the use of, any intellectual property or confidential information of the Company. I own the discoveries, improvements or inventions identified in attachment A hereto, which discoveries, improvements or inventions are expressly reserved and excepted from the provisions of this Agreement. 4. PATENTS. I will cooperate with the Company in doing whatever is appropriate, including executing assignments, to apply for, obtain and enforce patent rights (U.S. and/or foreign) for the Company or its clients on any invention which is made by me (either alone or jointly with others) during my employment, provided that (a) all expenses required to apply for, obtain and enforce any patent rights will be paid by the Company, and (b) if I am required to spend a substantial amount of time to carry out my obligations under this paragraph 4, I will be entitled to reasonable compensation from the Company for that time. I understand that the Company will have no obligation to me to apply for or obtain any such patent rights. 5. WRITINGS. Any written materials or software that I prepare, in whole or in part, during the course of my employment with the Company, will be the property of the Company. I hereby assign to the Company all of my full right, title and interest in any such written materials or software. I also will do whatever is appropriate to obtain copyright protection of any such written materials or software relating to my work for the Company or its clients, should the Company so request. 6. FINANCIAL OBLIGATIONS. If I am provided with travel advances or other advances of expenses in connection with my employment with the Company, I will make a prompt settlement of all such advances after completion of the travel or other employment-related activities. If I owe any money to the Company at the time of termination of my employment, such amount owed to the Company may be deducted from any money otherwise owed to me by the Company. 7. REASONABLE NOTICE OF TERMINATION I understand that, unless expressly provided otherwise in any other written agreement signed by me and an authorized officer of the Company, my employment with the Company is "at will", and my employment may be terminated by the Company at any time, with or without cause or prior notice. I understand that termination of my employment will be deemed to be with cause only if I am terminated for gross negligence (but not ordinary negligence), intentional misconduct, breach of this or any other written employment agreement with the Company, or repeated failure to comply with reasonable directives of the Company's Chief Executive Officer or Board of Directors, all as determined by a unanimous vote of said Board, or if I am convicted of or plead guilty or novo contender to a felony or crime of moral turpitude. 8. COMPANY PROPERTY. Upon the termination of my employment with the Company, or during my employment if so requested by the Company, I will deliver to an authorized representative of the Company (a) all credit cards, identification cards, badges, keys, and other items which have been provided to me by the Company, (b) all tools, equipment, and software provided to me by the Company, and (c) all written materials, records, tapes, disks and other media which relate to the business of the Company. I will not retain any copies or duplicates of the items described above, except that I may retain copies of my own records relating to my compensation from the Company, a copy of this Agreement, and my personal copies of any papers which have been written by me and have been published without restriction. 2 9. [INTENTIONALLY OMITTED.] 10. SOLICITING EMPLOYEES AND CLIENTS. I agree that for a period of 12 months following the termination of my employment with the Company for any reason, I will not, and will not assist any one else to, directly or indirectly solicit or induce any of the Company's employees to terminate their employment with the Company or divert, interfere with or take away from the Company any person, company or entity which, within the six month period immediately preceding my termination of employment, was an investor, customer, client, supplier, business partner, prime contractor, subcontractor or independent contractor of the Company. 11. ACKNOWLEDGMENT. I acknowledge that the Company shall not have an adequate remedy at law in the event I breach this Agreement and that the Company will suffer irreparable damage and injury in such event. I agree that the Company, in addition to any other available rights and remedies, shall be entitled to a preliminary and permanent injunction, without having to post a bond, restricting me from committing or continuing any violation of this Agreement. 12. ENFORCEABILITY. If any provision of this Agreement shall, to any extent, be found to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and any such invalid or unenforceable provision shall be reformed so as to be valid and enforceable to the full extent permitted by law. 13. OBLIGATIONS TO THE COMPANY. I understand that I may have obligations to the Company that are not expressly set forth in this Agreement, including obligations to perform the duties of my employment with loyalty, honesty and integrity and in good faith. I understand that I will be required to comply with all rules, regulations and policies of the Company. 14. CONTINUING OBLIGATIONS. My obligations under this Agreement will continue in effect after termination of my employment with the Company. The provisions of this Agreement will be binding upon my executors, administrators, or other legal representatives in the event of my death or disability. 15. GOVERNING LAW. This Agreement (except for paragraph 7) shall continue in effect after my employment with the Company terminates, and shall be governed by and construed in accordance with the laws of the State of New Jersey. 16. NO ORAL AGREEMENTS. I understand that (a) this Agreement and any other written employment agreement include every agreement between the Company and me with respect to my employment, (b) any and all prior oral agreements between me and the Company with respect to my employment are terminated and superseded by this Agreement, (c) no oral agreements between me and the Company with respect to my employment are or will be enforceable against me or the Company, and (d) I will not rely on any oral promises from the Company with respect to my employment, on the understanding that any such promises must be included in a writing, signed by an officer of the Company, in order to be enforceable. 3 17. RECOMMENDATION OF LEGAL ADVICE. I acknowledge the Company's encouragement for me to have obtained independent legal advice with respect to this Agreement. I either have obtained or affirmatively waive such advice. I HAVE READ AND UNDERSTAND ALL OF THE PROVISIONS OF THIS EMPLOYEE AGREEMENT, AND I AGREE TO SUCH PROVISIONS WITHOUT RESERVATION. /s/ Trevor B. Price ------------------- Signature 5/16/2001 --------- Date Trevor B. Price --------------- Printed Name 4 EX-10.36 9 ex10_36.txt AMENDMENT TO EMPLOYEE AGREEMENT Exhibit 10.36 AMENDMENT TO EMPLOYEE AGREEMENT In consideration of the continued employment of Trevor Price ("Employee") by OptiMark, Inc. and the purchase of preferred stock pursuant to the Series E Preferred Stock Purchase Agreement dated as of June 29 2001, by and between OptiMark Holdings, Inc., the parent of OptiMark, Inc., and the entities listed on the Schedule of Purchasers thereto, it is hereby agreed that the terms and conditions of the Employee Agreement executed by Employee on May 16, 2001 shall be amended to include the terms and conditions set forth on the attached "Non-Compete Covenant." In no event shall the Employee be entitled to severance under both the Employee's offer letter and the attached Non-Compete Covenant. Other than as expressly set forth herein, no term or condition set forth in the Employee Agreement is amended, modified or affected by this amendment. This amendment shall be effective as of July 19, 2001. OPTIMARK, INC. EMPLOYEE /s/ Neil G. Cothen - ------------------ By: /s/ Trevor Price ---------------- Name: Neil G. Cohen Trevor Price Title: Executive Vice President NON-COMPETE COVENANT 1. NONCOMPETITION, ETC. -------------------- (a) PRIOR TO EMPLOYEE TERMINATION DATE. Employee agrees that until the date that Employee ceases to be an employee of OptiMark, Inc. (in any capacity whatsoever (such date, the "Employee Termination Date"), Employee shall devote substantially all of his working time to the business and affairs of the Company, its subsidiaries and its parent (together, "OptiMark"). In addition, prior to the Employment Termination Date, neither Employee nor any entity controlled, directly or indirectly, by Employee (each, an "Employee Controlled Entity"), shall engage in any Competitive Activity (as hereinafter defined). (b) POST-EMPLOYEE TERMINATION DATE. Employee agrees that, for a period of 12 months after the Employee Termination Date, neither Employee nor any Employee Controlled Entity, shall engage in any Competitive Activity. (c) COMPETITIVE ACTIVITy. For purposes of this Section 1, "Competitive Activity" shall mean employment by, consulting or contracting for, or soliciting business for, any of the following: (i) any Person who, as of the Employee Termination Date, (a) has executed either a binding agreement or a non-binding term sheet or letter of intent with OPTIMARK, or (b) is engaged in negotiations with OPTIMARK, for OPTIMARK to (x) license its software to such Person, or (y) design, develop, or maintain software for the building and operating of electronic markets or exchanges (a "Client"); (ii) any Person who (1) is not a Client as of the Employee Termination date but (2) has been a Client within six (6) months of the Employee Termination Date (a "Former Client"); (iii) the financial services software applications areas, divisions or groups of OM Technology Inc., ISM Information Systems Management Corporation, eSpeed, Inc., Perfect Commerce, Inc., Commerce One, Inc., Ariba, Inc., VerticalNet, Inc. or i2 Technologies, Inc. (a "Direct Competitor") or the financial services software applications areas, divisions or groups of any Person controlled by, or under common control with, a Direct Competitor, or any successor to or acquirer of all or substantially all of the assets of a Direct Competitor; provided, however, that "Direct Competitor" shall also include any area, division or group of any of the foregoing companies which is responsible for, or performs or provides, any product or service that is substantially similar to any product or service provided by OptiMark from which OptiMark has generated 20% or more of OptiMark's consolidated revenue in any quarter within the twelve months prior to the Employee Termination Date; and (iv) any "Competitive Exchange", defined as any third-Person operating an electronic market or exchange where buyers and sellers may submit orders for substantially the same products or services as an electronic market or exchange (x) developed, designed, created or operated by OPTIMARK, or a Person that is controlled by, or under common control with, OPTIMARK or (y) from which OPTIMARK generates revenue based on transactions consummated in, or subscriptions to, the electronic market or exchange.. A "Person" means any natural person, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, governmental authority, or any other entity. (d) TERMINATION OTHER THAN FOR CAUSE. The noncompetition covenant set forth in Section 1(b) above shall not apply where Employee's employment is terminated by the Company without Cause (as hereinafter defined) or where the Employee has been Constructively Terminated (as hereinafter defined), unless, (i) on or before 10 Business Days following the Employee Termination Date, the board of directors of the Company or OptiMark Holdings, Inc. directs OPTIMARK to pay by wire transfer of immediately available funds to an account specified by Employee an amount equal to (A) twelve times (12x) Employee's gross monthly salary for the last complete calendar month immediately preceding the Employee Termination Date, plus (B) any cash bonus received by Employee during such period, and (ii) the Company agrees in writing to maintain, at the Company's expense for the twelve (12) months following the Employee Termination Date, health and medical insurance coverage to which Employee was entitled as of the Employee Termination Date. A "Business Day" means any day other than (i) a Saturday, Sunday or legal holiday, or (ii) a day on which commercial banks in New York City are authorized or required by law or executive order to close. "Cause" means (i) gross negligence (but not ordinary negligence), intentional misconduct, uncured breach of any written employment agreement with the Company, or failure to comply with any policy, guide or standard of OPTIMARK applicable to Employee or any legally permitted directives of the Company's Chief Executive Officer or Board of Directors of the Company; provided, however, that such policy, guide, or standard of OPTIMARK, or any legally permitted directives are applied consistently to all employees of the Company who are of the substantially similar rank or level of responsibility as Employee, or (ii) a plea of guilty or nolo contendere to, or conviction of, a felony or crime involving moral turpitude. "Constructively Terminated" means: (i) the continued material reduction by OptiMark of the scope of Employee's duties, or (ii) the continued assignment to Employee of any duties materially inconsistent with the level of Employee's position with OptiMark; provided that neither of the foregoing events shall be deemed to result in Employee being Constructively Terminated if Employee consents to such events or if such events are the result of actions of OptiMark or its board of directors that are applicable to all officers of OptiMark. (e) TERRITORY. Unless otherwise specified in this Section 1, Employee acknowledges that the business conducted by the Company is national in nature and, accordingly, agrees that the Competition Restriction shall apply to Employee in the United States for the applicable periods set forth in Sections 1(a) and 1(b). (f) REASONABLE AND NECESSARY RESTRICTIONS. Employee acknowledges that the restrictions, prohibitions and other provisions of this Section 1 are reasonable, fair and equitable in scope, terms and duration, are necessary to protect the legitimate business interests of the Company and are a material inducement to the SOFTBANK Investment. The "SOFTBANK Investment" means the purchase of preferred stock pursuant to the Series E Preferred Stock Purchase Agreement dated as of June 29, 2001, by and between the Company and the entities listed on the Schedule of Purchasers thereto. EX-10.37 10 ex10_37.txt EMPLOYEE LETTER AGREEMENT Exhibit 10.37 OPTIMARK OptiMark, Inc. 201.536.7000 phone 24th Floor 201.536.7070 fax 10 Exchange Place Jersey City NJ 07302 www.optimark.com April 17, 2001 PERSONAL AND CONFIDENTIAL VIA FEDERAL EXPRESS - ------------------- Mr. Gary Meshell 1 Lakeview Court North Brunswick, NJ 08902 Dear Mr. Meshell: Optimark, Inc. (the "Company") is pleased to offer you the position of Executive Vice President Sales, Marketing and Business Development. We are very enthusiastic about your joining the team, as we continue to build Optimark, Inc. In your role you will have a major impact on the success of this venture and the future of the corporation. Here are the terms of the offer: POSITION You will serve as Executive Vice President Sales, Marketing and Business Development and will work at the Company's New Jersey facility. You will be responsible for such duties as are normally associated with such position or as otherwise determined by the Board of Directors, except that the Company agrees that you will not at any time be given a lesser title than the one stated above. SALARY AND BENEFITS As compensation for the services you provide the Company, you will be paid a base salary of two hundred and twenty five thousand dollars ($225,000.00) per annum, which will be payable in accordance with the Company's regular payroll practices. Also, you will (i) be eligible to participate in all employee benefits provided by the Company to its employees, including the Company's bonus program; (ii) receive three weeks vacation per year, which is earned pro-rata over the year; and (iii) receive 5 paid-time-off days (personal/sick) per year. You will also receive the same paid holidays as are observed by all of the Company's employees. GUARANTEED BONUS You will be paid a guaranteed bonus of fifty thousand dollars ($50,000.00), which will be paid out to you in twelve (12) equal monthly payments over the first year of your employment. The bonus payments will be made on the last pay day in a given month, with the first such bonus payment made on May 31, 2001. The Company will discontinue making bonus payments to you effective as of the date you leave the employ of the Company. PROPOSED COMMISSION STRUCTURE A commission structure will be put into place no later than your sixtieth (60th) day of employment. It is to be put together by you and Robert Warshaw and subject to the Board of Directors' approval. Mr. Gary Meshell April 17, 2001 Page 2 CONSIDERATION FOR EQUITY BONUS At each annual review, the Company shall consider granting Employee a reasonable and competitive number of options to purchase common stock of the Company's parent, OptiMark Holdings, Inc., and/or other equity-based compensation awards, which options and/or awards shall be reasonably calculated to incentivize Employee to help the Company achieve its financial goals; provided, however, that the Company does the same for its other employees. INCENTIVE STOCK OPTION You will be eligible to participate in the "OptiMark Holdings, Inc. 1999 Stock Plan" (the "Stock Plan"), as amended. A copy of the Stock Plan is attached for your reference. Subject to the appropriate approvals, including approval of the Board of Directors, and amendment of the Stock Plan, if necessary, to increase the number of shares allocated to the Stock Plan, you will be granted an Incentive Stock Option to purchase an aggregate number of shares equal to one and a half percent (1.5%) of the outstanding shares of par value $0.01 common stock of the Company's parent, OptiMark Holdings, Inc., (the "Stock"), calculated on a fully diluted basis as of the date you commence employment with the Company. The exercise price to purchase the Stock will be the fair market value of the Stock as of the date upon which you commence employment with the Company. The specific terms and conditions of your Incentive Stock Option to purchase shares of the Stock of the Company's parent, OptiMark Holdings, Inc., will be set forth in the "Stock Option Agreement" issued pursuant to the Stock Plan. A copy of the Stock Option Agreement is attached for your reference. The Stock Option Agreement will be executed after you commence your employment with the Company. CHANGE IN CAPITALIZATION In the event that the Company undergoes a change in capitalization and creates a new stock plan for a new class of stock, the Employee will participate in the same manner as other employees of the Company who have an Incentive Stock Option on the common stock of the Company's parent, OptiMark Holdings, Inc. Currently, we anticipate that the employees will be granted non-incentive stock options under a new stock plan such that ratio of (A) the number of options granted to an employee to (B) the total number of options available to all employees will remain constant between the Stock Plan and the new stock plan. We also anticipate that employees' option grants under the existing Stock Plan will remain in tact. Further, the Company foresees that the vesting schedule under the new stock plan will be four (4) years, with one-quarter (1/4) of the new options vesting after the first year and the remaining options vesting quarterly over the remaining thee (3) years. Of course, the foregoing are subject to change at the discretion of the Company and/or its investors. SEPARATION FROM EMPLOYMENT AND SEVERANCE PACKAGE In the event that the Company terminates your employment for a reason other than for "cause", as Mr. Gary Meshell April 17, 2001 Page 3 defined in the Company's Employee Agreement (a copy of which is attached to this letter), you will receive severance pay in the amount of four (4) months base salary. In addition, the Company agrees that it will continue making employment level contributions for all employee benefit plans provided to you by the Company during your employment, for a period of four (4) months following the termination of your employment. AT-WILL EMPLOYMENT The relationship between you and the Company will be for an unspecified term and will be considered at will. No employment contract is created by the existence of any policy, rule or procedure in the Company's handbook, any document of the Company, or any verbal statements made to you by representatives of the Company. Consequently, the employment relationship between you and the Company can be terminated at will, either by you or the Company, with or without cause or advance notice. EXCLUSIVITY Your employment with the Company is considered exclusive to the Company and, as a condition of your employment, we do not expect, nor will we allow, you to perform services for compensation for any third party. Your employment with the Company is also subject to and conditioned upon your execution of the Company's Employee Agreement. The employment terms in this letter and the Employee Agreement supersede any other agreements or promises made to you by anyone, whether oral or written, and comprise the final, complete and exclusive agreement between you and the Company. Please sign and date this letter and the Employee Agreement to indicate your acceptance of employment at the Company under the terms described above and return them to me in the enclosed Federal Express package. If you accept our offer, we would like you to commence your employment with us on April 23, 2001. We are very pleased to make you this offer and look forward to future success for you and for Optimark, Inc. If you have any questions regarding the offer set forth in this letter please contact me. I look forward to hearing from you soon. Very truly yours, Mr. Gary Meshell April 17, 2001 Page 4 Optimark, Inc. By: /s/ Robert Warshaw Robert Warshaw Chief Executive Officer ACCEPTED BY: /s/ Gary Meshell - ---------------- Gary Meshell Date: 4-25-01 START DATE: May 7, 2001 ------- EX-10.38 11 ex10_38.txt EMPLOYEE AGREEMENT (VERSION II) Exhibit 10.38 EMPLOYEE AGREEMENT (Version II) In consideration of my employment or continued employment by OptiMark, Inc.(the "Company"), I agree to the terms and conditions of employment set forth below. 1. CONFLICT OF INTEREST. At the time of signing this Agreement, I have no obligation to any prior employer or other person or organization which would interfere with my performance of my work for the Company or which would result in any conflict of interest for the Company or its customers or clients, except as I have noted in attachment A hereto. Further, I have made no commitment and have no restriction on my service which is a result of any past or present consulting agreement, directorship, ownership interest or other affiliation or connection with any other organization, except as I have noted in attachment A hereto, and will not enter into such commitments or be encumbered by such restrictions without receiving prior written approval from the Company. During the period of my employment by the Company, I will not engage in any other employment or other activity which may be inconsistent with my obligations to the Company and its investors, business partners, customers and clients. 2. CONFIDENTIAL INFORMATION. In the course of my employment by the Company, I may become aware of confidential information including, without limitation, computer system and software designs, plans for new product and service offerings, dealings with regulators, customer lists, market research, strategic plans or other similar information that relates to the business of the Company, its investors, business partners, customers or clients. I will not use or disclose any such confidential information of the Company or its investors, business partners customers or clients except in fulfillment of my obligations to the Company or unless ordered to do so by a court of competent jurisdiction (in which latter case I will promptly inform the Company of such order). I will comply with the Company's policies and procedures for the protection of confidential information. Further, my obligation not to disclose or use such confidential information will continue for a period of two years after the termination of my employment for whatever reason. 3. INTELLECTUAL PROPERTY. I fully and promptly will disclose and describe to the Company, and hereby agree to assign to the Company, all of my full right, title, and interest in all intellectual property, including, without limitation, all inventions, discoveries, concepts, ideas, systems, methods, processes, works, computer programs and computer software (whether or not patentable or copyrightable or constituting trade secrets), which I make, conceive, reduce to practice, or create as an employee of or in connection with my employment by the Company. I also will disclose and assign to the Company all of my interest, if any, in any such intellectual property conceived of or created by other employees or by clients of the Company during the period of my employment by the Company. I understand that I will have no rights to any royalties or other compensation for the use of any intellectual property covered by this Agreement, unless expressly agreed to in writing by the Company. This paragraph 3, however, shall not apply to intellectual property that meets all of the following requirements: (i) it does not relate to the actual business or research and development of the Company, or to business or research and development under consideration by the Company that is known to me, (ii) it is made or conceived of by me during times not working as an employee of the Company (whether or not during normal business hours or on Company premises), and (iii) it is not derived from, and is made without the use of, any intellectual property or confidential information of the Company. I own the discoveries, improvements or inventions identified in attachment A hereto, which discoveries, improvements or inventions are expressly reserved and excepted from the provisions of this Agreement. 4. PATENTS. I will cooperate with the Company in doing whatever is appropriate, including executing assignments, to apply for, obtain and enforce patent rights (U.S. and/or foreign) for the Company or its clients on any invention which is made by me (either alone or jointly with others) during my employment, provided that (a) all expenses required to apply for, obtain and enforce any patent rights will be paid by the Company, and (b) if I am required to spend a substantial amount of time to carry out my obligations under this paragraph 4, I will be entitled to reasonable compensation from the Company for that time. I understand that the Company will have no obligation to me to apply for or obtain any such patent rights. 5. WRITINGS. Any written materials or software that I prepare, in whole or in part, during the course of my employment with the Company, will be the property of the Company. I hereby assign to the Company all of my full right, title and interest in any such written materials or software. I also will do whatever is appropriate to obtain copyright protection of any such written materials or software relating to my work for the Company or its clients, should the Company so request. 6. FINANCIAL OBLIGATIONS. If I am provided with travel advances or other advances of expenses in connection with my employment with the Company, I will make a prompt settlement of all such advances after completion of the travel or other employment-related activities. If I owe any money to the Company at the time of termination of my employment, such amount owed to the Company may be deducted from any money otherwise owed to me by the Company. 7. REASONABLE NOTICE OF TERMINATION I understand that, unless expressly provided otherwise in any other written agreement signed by me and an authorized officer of the Company, my employment with the Company is "at will", and my employment may be terminated by the Company at any time, with or without cause or prior notice. I understand that termination of my employment will be deemed to be with cause only if I am terminated for gross negligence (but not ordinary negligence), intentional misconduct, breach of this or any other written employment agreement with the Company, or repeated failure to comply with reasonable directives of the Company's Chief Executive Officer or Board of Directors, all as determined by a unanimous vote of said Board, or if I am convicted of or plead guilty or novo contender to a felony or crime of moral turpitude. 8. COMPANY PROPERTY. Upon the termination of my employment with the Company, or during my employment if so requested by the Company, I will deliver to an authorized representative of the Company (a) all credit cards, identification cards, badges, keys, and other items which have been provided to me by the Company, (b) all tools, equipment, and software provided to me by the Company, and (c) all written materials, records, tapes, disks and other media which relate to the business of the Company. I will not retain any copies or duplicates of the items described above, except that I may retain copies of my own records relating to my compensation from the Company, a copy of this Agreement, and my personal copies of any papers which have been written by me and have been published without restriction. 9. [INTENTIONALLY OMITTED.] 10. SOLICITING EMPLOYEES AND CLIENTS. I agree that for a period of 12 months following the termination of my employment with the Company for any reason, I will not, and will not assist any one else to, directly or indirectly solicit or induce any of the Company's employees to terminate their employment with the Company or divert, interfere with or take away from the Company any person, company or entity which, within the six month period immediately preceding my termination of employment, was an investor, customer, client, supplier, business partner, prime contractor, subcontractor or independent contractor of the Company. 11. ACKNOWLEDGMENT. I acknowledge that the Company shall not have an adequate remedy at law in the event I breach this Agreement and that the Company will suffer irreparable damage and injury in such event. I agree that the Company, in addition to any other available rights and remedies, shall be entitled to a preliminary and permanent injunction, without having to post a bond, restricting me from committing or continuing any violation of this Agreement. 12. ENFORCEABILITY. If any provision of this Agreement shall, to any extent, be found to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and any such invalid or unenforceable provision shall be reformed so as to be valid and enforceable to the full extent permitted by law. 13. OBLIGATIONS TO THE COMPANY. I understand that I may have obligations to the Company that are not expressly set forth in this Agreement, including obligations to perform the duties of my employment with loyalty, honesty and integrity and in good faith. I understand that I will be required to comply with all rules, regulations and policies of the Company. 14. CONTINUING OBLIGATIONS. My obligations under this Agreement will continue in effect after termination of my employment with the Company. The provisions of this Agreement will be binding upon my executors, administrators, or other legal representatives in the event of my death or disability. 15. GOVERNING LAW. This Agreement (except for paragraph 7) shall continue in effect after my employment with the Company terminates, and shall be governed by and construed in accordance with the laws of the State of New Jersey. 16. NO ORAL AGREEMENTS. I understand that (a) this Agreement and any other written employment agreement include every agreement between the Company and me with respect to my employment, (b) any and all prior oral agreements between me and the Company with respect to my employment are terminated and superseded by this Agreement, (c) no oral agreements between me and the Company with respect to my employment are or will be enforceable against me or the Company, and (d) I will not rely on any oral promises from the Company with respect to my employment, on the understanding that any such promises must be included in a writing, signed by an officer of the Company, in order to be enforceable. 17. RECOMMENDATION OF LEGAL ADVICE. I acknowledge the Company's encouragement for me to have obtained independent legal advice with respect to this Agreement. I either have obtained or affirmatively waive such advice. I HAVE READ AND UNDERSTAND ALL OF THE PROVISIONS OF THIS EMPLOYEE AGREEMENT, AND I AGREE TO SUCH PROVISIONS WITHOUT RESERVATION. /s/ Gary B. Meshell ------------------- Signature 5/15/2001 --------- Date Gary B. Meshell --------------- Printed Name EX-10.39 12 ex10_39.txt AMENDMENT TO EMPLOYEE AGREEMENT Exhibit 10.39 AMENDMENT TO EMPLOYEE AGREEMENT In consideration of the continued employment of Gary Meshell ("Employee") by OptiMark, Inc. and the purchase of preferred stock pursuant to the Series E Preferred Stock Purchase Agreement dated as of June 29 2001, by and between OptiMark Holdings, Inc., the parent of OptiMark, Inc., and the entities listed on the Schedule of Purchasers thereto, it is hereby agreed that the terms and conditions of the Employee Agreement executed by Employee on May 15, 2001 shall be amended to include the terms and conditions set forth on the attached "Non-Compete Covenant." In no event shall the Employee be entitled to severance under both the Employee's offer letter and the attached Non-Compete Covenant. Other than as expressly set forth herein, no term or condition set forth in the Employee Agreement is amended, modified or affected by this amendment. This amendment shall be effective as of July 19, 2001. OPTIMARK, INC. EMPLOYEE /s/ Neil G. Cohen - ----------------- By: /s/ Gary Meshell ---------------- Name: Neil G. Cohen Gary Meshell Title: Executive Vice President NON-COMPETE COVENANT 1. NONCOMPETITION, ETC. -------------------- (a) PRIOR TO EMPLOYEE TERMINATION DATE. Employee agrees that until the date that Employee ceases to be an employee of OptiMark, Inc. (the "Company") in any capacity whatsoever (such date, the "Employee Termination Date"), Employee shall devote substantially all of his working time to the business and affairs of the Company, its subsidiaries and its parent (together, "OptiMark"). In addition, prior to the Employment Termination Date, neither Employee nor any entity controlled, directly or indirectly, by Employee (each, an "Employee Controlled Entity"), shall engage in any Competitive Activity (as hereinafter defined). (b) POST-EMPLOYEE TERMINATION DATE. Employee agrees that, for a period of 12 months after the Employee Termination Date, neither Employee nor any Employee Controlled Entity, shall engage in any Competitive Activity. (c) COMPETITIVE ACTIVITY. For purposes of this Section 1, "Competitive Activity" shall mean employment by, consulting or contracting for, or soliciting business for, any of the following: (i) any Person who, as of the Employee Termination Date, (a) has executed either a binding agreement or a non-binding term sheet or letter of intent with OPTIMARK, or (b) is engaged in negotiations with OPTIMARK, for OPTIMARK to (x) license its software to such Person, or (y) design, develop, or maintain software for the building and operating of electronic markets or exchanges (a "Client"); (ii) any Person who (1) is not a Client as of the Employee Termination date but (2) has been a Client within six (6) months of the Employee Termination Date (a "Former Client"); (iii) the financial services software applications areas, divisions or groups of OM Technology Inc., ISM Information Systems Management Corporation, eSpeed, Inc., Perfect Commerce, Inc., Commerce One, Inc., Ariba, Inc., VerticalNet, Inc. or i2 Technologies, Inc. (a "Direct Competitor") or the financial services software applications areas, divisions or groups of any Person controlled by, or under common control with, a Direct Competitor, or any successor to or acquirer of all or substantially all of the assets of a Direct Competitor; provided, however, that "Direct Competitor" shall also include any area, division or group of any of the foregoing companies which is responsible for, or performs or provides, any product or service that is substantially similar to any product or service provided by OptiMark from which OptiMark has generated 20% or more of OptiMark's consolidated revenue in any quarter within the twelve months prior to the Employee Termination Date; and (iv) any "Competitive Exchange", defined as any third-Person operating an electronic market or exchange where buyers and sellers may submit orders for substantially the same products or services as an electronic market or exchange (x) developed, designed, created or operated by OPTIMARK, or a Person that is controlled by, or under common control with, OPTIMARK or (y) from which OPTIMARK generates revenue based on transactions consummated in, or subscriptions to, the electronic market or exchange.. A "Person" means any natural person, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, governmental authority, or any other entity. (d) TERMINATION OTHER THAN FOR CAUSE. The noncompetition covenant set forth in Section 1(b) above shall not apply where Employee's employment is terminated by the Company without Cause (as hereinafter defined) or where the Employee has been Constructively Terminated (as hereinafter defined), unless, (i) on or before 10 Business Days following the Employee Termination Date, the board of directors of the Company or OptiMark Holdings, Inc. directs OPTIMARK to pay by wire transfer of immediately available funds to an account specified by Employee an amount equal to (A) twelve times (12x) Employee's gross monthly salary for the last complete calendar month immediately preceding the Employee Termination Date, plus (B) any cash bonus received by Employee during such period, and (ii) the Company agrees in writing to maintain, at the Company's expense for the twelve (12) months following the Employee Termination Date, health and medical insurance coverage to which Employee was entitled as of the Employee Termination Date. A "Business Day" means any day other than (i) a Saturday, Sunday or legal holiday, or (ii) a day on which commercial banks in New York City are authorized or required by law or executive order to close. "Cause" means (i) gross negligence (but not ordinary negligence), intentional misconduct, uncured breach of any written employment agreement with the Company, or failure to comply with any policy, guide or standard of OPTIMARK applicable to Employee or any legally permitted directives of the Company's Chief Executive Officer or Board of Directors of the Company; provided, however, that such policy, guide, or standard of OPTIMARK, or any legally permitted directives are applied consistently to all employees of the Company who are of the substantially similar rank or level of responsibility as Employee, or (ii) a plea of guilty or nolo contendere to, or conviction of, a felony or crime involving moral turpitude. "Constructively Terminated" means: (i) the continued material reduction by OptiMark of the scope of Employee's duties, or (ii) the continued assignment to Employee of any duties materially inconsistent with the level of Employee's position with OptiMark; provided that neither of the foregoing events shall be deemed to result in Employee being Constructively Terminated if Employee consents to such events or if such events are the result of actions of OptiMark or its board of directors that are applicable to all officers of OptiMark. (e) TERRITORY. Unless otherwise specified in this Section 1, Employee acknowledges that the business conducted by the Company is national in nature and, accordingly, agrees that the Competition Restriction shall apply to Employee in the United States for the applicable periods set forth in Sections 1(a) and 1(b). (f) REASONABLE AND NECESSARY RESTRICTIONS. Employee acknowledges that the restrictions, prohibitions and other provisions of this Section 1 are reasonable, fair and equitable in scope, terms and duration, are necessary to protect the legitimate business interests of the Company and are a material inducement to the SOFTBANK Investment. The "SOFTBANK Investment" means the purchase of preferred stock pursuant to the Series E Preferred Stock Purchase Agreement dated as of June 29, 2001, by and between the Company and the entities listed on the Schedule of Purchasers thereto. EX-10.40 13 ex10_40.txt SEPARATION AGREEMENT Exhibit 10.40 SEPARATION AGREEMENT -------------------- The following sets forth an Agreement between Optimark, Inc. (the "Company") and Gary B. Meshell ("Employee") regarding his separation from employment with the Company. WHEREAS, Employee has indicated a willingness to resign from his employment with the Company as of January 30, 2002; WHEREAS, the Company has indicated a willingness to accept Employee's resignation; and WHEREAS, the parties mutually agree to resolve any issues that may exist between them regarding the circumstances of Employee's termination of employment; THEREFORE, the parties agree as follows: 1. PAYMENTS AND BENEFITS SUPPORTING AGREEMENT. In consideration for signing this Agreement and compliance with the terms and promises made herein, and upon receipt of (a) Employee's written resignation in substantially the form set forth in Exhibit A hereto and (b) Employee's return to OptiMark, Inc. of the laptop computer and other equipment belonging to OptiMark, Inc., OptiMark, Inc. agrees (x) to pay to Employee the amount of $22,249.32 (less appropriate withholdings) on the first business day after the Payment Date (as defined below) and (y) to the extent permitted pursuant to the Company's existing employee benefit plan, to continue Employee's existing medical benefits through March 31, 2002, including making payments on behalf of Employee of $154.68 and $96.00 for long term disability and life insurance, respectively. The payment pursuant to subsection (x) above will be made by wire transfer to an account designated in writing by Employee. 2. NO CONSIDERATION ABSENT EXECUTION OF THIS AGREEMENT. Employee understands and agrees that he would not have received the consideration specified in paragraph "1" above except for his execution of this Agreement and fulfillment of the promises contained herein. 3. GENERAL RELEASE OF CLAIMS. Employee recognizes that the consideration referred to in paragraph "1" is above and beyond any amounts otherwise due him for services rendered or to be rendered or under the Company's general policies or programs or under the Employee's employment agreement with the Company. In consideration of and as a condition to this consideration, Employee hereby, to the extent allowed by law, releases and forever discharges the Company and all of its respective affiliates, subsidiaries, parent, present or former partners, members, stockholders, officers, directors, employees, agents, successors or assigns (collectively, the "Releasees") from any claim for future employment, and of and from all claims or causes of action or other demands whatsoever, which he ever had, now has, or hereafter can, shall or may have against the Releasees, arising out of or related to his employment relationship with the Company or the termination of that relationship. This general release or giving up of claims is binding on the Employee, his heirs, his assigns, and/or his representatives. Listed below are examples of the statutes and legal theories from which the Employee has released and discharged the Releasees and under which the Employee will not bring any claim. In the event that the law prohibits a release or waiver of claims under any such statute or theory, the Employee hereby waives the right to seek or accept damages in a proceeding under the statute or theory and/or hereby acknowledges that he has no valid claim under such statute or theory. The claims released or acknowledged not to exist include, but are not limited to, any alleged violation of: The Age Discrimination and Employment Act of 1967, as amended, and including the Older Workers Benefit Protection Act of 1990, 29 U.S.C. ss. 621 et seq.; Americans With Disabilities Act; Title VII of the Civil Rights Act of 1964; Employee Retirement Income Security Act; New Jersey Law Against Discrimination; any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance prohibiting, among other things, sexual harassment or discrimination on the basis of sex, race, color, creed, religion, age, disability, national origin, sexual orientation or marital status; and any public policy, contract, tort, or other common law claim or cause of action, including but not limited to breach of implied or express contract, intentional or negligent infliction of emotional distress, negligent misrepresentation, defamation, wrongful discharge. 4. UNKNOWN CLAIMS RELEASED. Employee understands that he is releasing Claims that he may not know about. This is Employee's knowing and voluntary intent, even though Employee recognizes that someday he might learn that some or all of the facts he currently believes to be true are untrue and even though he might then regret having signed this Agreement. Nevertheless, Employee assumes that risk and agrees that this Agreement shall remain effective in all respects in any such case. Employee expressly waives all rights he might have under any law that is intended to protect Employee from waiving unknown claims, and he understands the significance of doing so. 5. CLAIMS NOT RELEASED. Employee understands that he is not releasing any claim that relates to his right to enforce this Agreement, any rights or claims that arise after the signing of this Agreement, or his right, if any, to government provided unemployment benefits. The Company agrees that it will not contest Employee seeking or otherwise obtaining unemployment compensation benefits 6. NO PARTICIPATION IN CLAIMS. Employee understands that if this Agreement were not signed, he would have the right to voluntarily assist other individuals or entities in bringing claims against the Company. Employee hereby waives that right and he will not provide any such assistance, other than assistance in an investigation or proceeding conducted by an agency of the United States government. To the extent that the law prohibits Employee from waiving his right to bring and/or participate in the investigation of a claim, he nevertheless waives his right to seek or accept any damages or relief in any proceeding. 7. PROHIBITED STATEMENTS. Employee agrees to refrain from taking action or making statements, written or oral, (a) which disparage or defame the goodwill or reputation of the Releasees, actual or potential clients and investors of the Releasees, The Ashton Technology Group, Inc. and its affiliates, or (b) which could adversely affect the morale of other employees of any of the foregoing. The Company's executive officers and directors agree that they will not make any false or disparaging statements, written or oral, to any person or entity concerning Employee. 8. CONFIDENTIALITY. Except for informing his spouse and communicating with legal or financial advisers, and except as otherwise may be required by applicable law, Employee will keep confidential the terms and conditions of this Agreement. 9. NONADMISSION OF LIABILITY. Employee recognizes and agrees that this Agreement is not intended to imply any wrongdoing on the Company's part with respect to his employment or its termination, or any other reason, and shall not constitute evidence of the same. Employee acknowledges that he resigned from the employment with the Company as of January 30, 2002 and that such resignation was voluntary on his part. 10. RETURN OF COMPANY PROPERTY. Employee represents that he has returned all Company property, documents and copies of documents, including but not limited to "Confidential Information." "Confidential Information" means inventions, trade secrets, designs, discoveries and improvements, patentable and unpatentable, concerning products and solutions related to the actual and anticipated business of the Company, price and customer lists, customer contact information, materials, research or test reports, sales organization or methods, sales presentations, weekly reports, operating organization or methods, supplier relationships, and inventories of the Company." Employee further agrees not to disclose or use any Confidential Information. 11. DUTY OF COOPERATION. Employee covenants and agrees to cooperate with the Company with respect to any reasonable request to provide information or assist in any matter relating to the business of the Company of which he may have knowledge or information including, but not limited to, the defense of any pending or threatened litigation or government audit. 12. VOLUNTARY AGREEMENT. Employee's decision to enter into this Agreement is based solely on the mutual considerations described above and is wholly his free act and deed. Before signing this Agreement, Employee has had the opportunity for up to twenty-one (21) days to carefully consider the terms and ramifications of the Agreement and the opportunity to consult with his advisors, legal or otherwise, which the Company has encouraged Employee to do. 13. GOVERNING LAW AND INTERPRETATION. This Agreement shall be governed and conformed in accordance with the laws of the State of New Jersey without regard to its conflict of laws provision. 14. LIMITATIONS ON CHANGING AGREEMENT. This Agreement may not be modified, altered or changed except upon express written consent of both parties wherein specific reference is made to this Agreement. 15. ENTIRE AGREEMENT. Employee acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in connection with his decision to sign this Agreement, except for those set forth in this Agreement. 16. REVOCATION. Employee may revoke this Agreement for a period of seven (7) days following the day he executes this Agreement. Any revocation within this period must be submitted, in writing, to Neil Cohen, Esq. and state, "I hereby revoke my acceptance of our Agreement and General Release." This Agreement shall not become effective or enforceable until the revocation period has expired. The day after the revocation period expires shall be the "Payment Date" as referred to in paragraph 1 of this Agreement. If the last day of the revocation period is a Saturday, Sunday, or legal holiday, then the revocation period shall not expire until the next following day which is not a Saturday, Sunday, or legal holiday. 17. SEVERABILITY. If any provision of this Agreement shall be deemed invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed and enforced as if it had never contained such invalid or unenforceable provision. In addition, in place of such invalid or unenforceable provision, there shall automatically be added hereto a provision as similar to such invalid or unenforceable provision as may be possible and still be valid and enforceable. EMPLOYEE HAS HAD TWENTY ONE (21) DAYS TO CONSIDER THIS AGREEMENT AND GENERAL RELEASE AND CONFIRMS THAT THE COMPANY ADVISED HIM TO CONSULT WITH HIS ATTORNEY BEFORE EXECUTING THE AGREEMENT. EMPLOYEE AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND GENERAL RELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY ONE DAY CONSIDERATION PERIOD. HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE THE CONSIDERATION SET FORTH IN PARAGRAPH "1" ABOVE, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS HE HAS OR MIGHT HAVE AGAINST THE RELEASED ENTITIES. IN WITNESS WHEREOF, the parties knowingly and voluntarily executed this agreement as of the date set forth below: 2-14-02 /s/ Gary B. Meshell - -------------------------- ------------------- Date Gary B. Meshell, Employee Optimark, Inc. 2/20/02 By: /s/ Neil Cohen - -------------------------- ------------------------------ Its Executive Vice President EXHIBIT A --------- FORM OF RESIGNATION --------------------- GARY B. MESHELL January 30, 2002 By Facsimile - ------------ Robert J. Warshaw, CEO OptiMark, Inc. 10 Exchange Place, 24th Floor Jersey City, NJ 07302 Re: Resignation ----------- Dear Bob: Effective at the close of business on January 30, 2002, I hereby resign from my position as an officer of OptiMark, Inc., and any other positions that I may have with OptiMark, Inc., OptiMark Holdings, Inc. or any of their respective affiliates. Sincerely, /s/ Gary B. Meshell - ------------------- Gary B. Meshell EX-10.41 14 ex10_41.txt EMPLOYEE LETTER AGREEMENT Exhibit 10.41 OPTIMARK OptiMark, Inc. 201.536.7000 phone 24th Floor 201.536.7070 fax 10 Exchange Place Jersey City NJ 07302 www.optimark.com January 16, 2002 PERSONAL AND CONFIDENTIAL VIA FEDERAL EXPRESS - ------------------- Mr. James Pak 45 West 67th Street #9C New York, NY 10023 Dear Jim: Optimark, Inc. (the "Company") is pleased to offer you the position of Executive Vice President of Strategic Development. We are very enthusiastic about your joining the team, as we continue to build Optimark, Inc. In your role you will have a major impact on the success of this venture and the future of the corporation. Here are the terms of the offer: POSITION You will serve as Executive Vice of President Strategic Development and will work at the Company's New Jersey facility. You will be responsible for such duties as are normally associated with such position or as otherwise determined by the Board of Directors. SALARY AND BENEFITS As compensation for the services you provide the Company, you will be paid a base salary of one hundred and seventy five thousand dollars ($175,000.00) per annum, which will be payable in accordance with the Company's regular payroll practices. Also, you will (i) be eligible to participate in all employee benefits provided by the Company to its employees; (ii) receive three weeks vacation per year, which is earned pro-rata over the year; and (iii) receive 5 paid-time-off days (personal/sick) per year. You will also receive the same paid holidays as are observed by all of the Company's employees. INCENTIVE STOCK OPTION You will be eligible to participate in the "OptiMark Holdings, Inc. 2001 Series F Preferred Stock Plan" (the "Stock Plan"). Subject to the appropriate approvals, including approval of the Board of Directors, you will be granted an Incentive Stock Option to purchase 277,398 shares of Series F Preferred Stock of the Company's parent, OptiMark Holdings, Inc., (the "Stock"). The exercise price to purchase the Stock will be the fair market value of the Stock as of the date upon which you commence employment with the Company. The specific terms and conditions of your Incentive Stock Option to purchase shares of the Stock of the Company's parent, OptiMark Holdings, Inc., will be set forth in the "Stock Option Agreement" issued pursuant to the Stock Plan. The Stock Option Agreement will be executed after you commence your employment with the Company. AT-WILL EMPLOYMENT The relationship between you and the Company will be for an unspecified term and will be considered at will. No employment contract is created by the existence of any policy, rule or procedure in the Company's handbook, any document of the Company, or any verbal statements made to you by representatives of the Company. Consequently, the employment relationship between you and the Company can be terminated at will, either by you or the Company, with or without cause or advance notice. As we have discussed in the past, your employment with OptiMark may be for a relatively short period of time as it is OptiMark's and your intention for you to become employed by an entity that OptiMark controls, either directly or indirectly, in the very near future. However, the foregoing should not be construed as a guarantee of future or continued employment by OptiMark or any other entity. Mr. James Pak January 16, 2002 Page 2 EXCLUSIVITY Your employment with the Company is considered exclusive to the Company and, as a condition of your employment, we do not expect, nor will we allow, you to perform services for compensation for any third party. Your employment with the Company is also subject to and conditioned upon your execution of the Company's Employee Agreement. The employment terms in this letter and the Employee Agreement supersede any other agreements or promises made to you by anyone, whether oral or written, and comprise the final, complete and exclusive agreement between you and the Company. Please sign and date this letter and the Employee Agreement to indicate your acceptance of employment at the Company under the terms described above and return them to me in the enclosed Federal Express package. If you accept our offer, your employment with OptiMark, Inc. will be deemed to have commenced on December 1, 2001. We are very pleased to make you this offer and look forward to future success for you and for Optimark, Inc. If you have any questions regarding the offer set forth in this letter please contact me. I look forward to hearing from you soon. Very truly yours, Optimark, Inc. By: /s/ Robert Warshaw ------------------ Robert Warshaw Chief Executive Officer ACCEPTED BY: /s/ James Pak - -------------------------- James Pak Date: January 16, 2002 EX-21.1 15 ex21_1.txt LIST OF SUBSIDIARIES Exhibit 21.1 Subsidiaries ------------ 1. OptiMark, Inc., a Delaware corporation 2. OptiMark Innovations Inc., a Delaware corporation 3. OptiMark US Equities, Inc. (f/k/a OptiMark Technologies, Inc.), a Delaware corporation 4. OptiMark Services, Inc., a Colorado corporation 5. OptiMark OTC Services, Inc., a Delaware corporation 6. OptiMark Trading Systems Canada, Inc., a Canadian corporation 7. Japan OptiMark Systems, Inc., a Japanese corporation -----END PRIVACY-ENHANCED MESSAGE-----