EXHIBIT 10.4
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 4, 1998, between ▇▇▇▇▇▇
▇▇▇▇▇▇▇, residing at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
("Executive"), and RESEARCH PARTNERS INTERNATIONAL, INC., a Delaware corporation
having its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
("Company").
WHEREAS, the Company is engaged through its subsidiary
corporations (each an "RPI Broker Dealer") primarily in the business of
investment banking and securities brokerage; and
WHEREAS, concurrently herewith the Company is entering into an
Agreement and Plan of Merger with ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Inc. ("GBI"), RPII Acquisition
Corp. ("Newco"), a wholly-owned subsidiary of the Company, and those persons
named on the signature page thereof ("Merger Agreement"), pursuant to which
Newco will merge with and into GBI and GBI will become a wholly-owned subsidiary
of the Company ("Merger"); and
WHEREAS, the Company and the Executive desire that the
Executive commence employment with the Company after the Merger pursuant to the
terms and conditions hereinafter set forth;
IT IS AGREED:
1. Employment, Duties and Acceptance.
1.1 Employment. The Company hereby employs Executive as
Co-Chairman of the Company's Board of Directors. All of Executive's powers and
authority in any capacity shall at all times be subject to the direction and
control of the Company's Board of Directors. Executive accepts such employment
and agrees to devote substantially all of his business time, energies and
attention to the performance of his duties hereunder. Nothing herein shall be
construed as preventing Executive from making and supervising personal
investments, provided they will not interfere with the performance of
Executive's duties hereunder or violate the provisions of Section 5.4 hereof.
1.2 Duties. The Board may assign to Executive such general
management and executive duties for the Company or any subsidiary of the Company
as are consistent with Executive's status as Co- Chairman of the Board of
Directors. The Company and Executive acknowledge that Executive's primary
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functions and duties as Co-Chairman of the Board of Directors shall be, together
with the Company's other Co-Chairman, Vice Chairman and President, to establish
policies and strategies for the Company's overall business and operations,
including plans for growth and strategic partnerships.
1.3 Location. Executive shall be based in the New York
Metropolitan area, and shall undertake such occasional travel, within or without
the United States, as is reasonably necessary in the interests of the Company.
1.4 Attendance at Board Meetings. If, during the term hereof,
Executive is nominated to serve as a director of the Company but fails to be
elected, he shall nonetheless be invited to attend each meeting of the Board of
Directors of the Company through the remainder of the term hereof.
2. Compensation and Benefits.
2.1 Base Salary. The Company shall pay to Executive a salary
at the minimum annual rate of $200,000 during the term hereof (i.e., $16,667 per
month). Executive's compensation shall be paid in equal, periodic installments
in accordance with the Company's normal payroll procedures.
2.2 Commissions. Executive shall be entitled to receive,
together with the Joint Reps referred to below, an aggregate of 50% of the gross
brokerage commissions on customers' stock brokerage accounts with the Company or
any RPI Broker Dealer which are serviced by Executive or jointly serviced by
Executive and other registered representatives of the Company ("Joint Reps").
Additionally, the Company will pay to Executive 0.65% ("Override") of all
commissions and sales credits generated from customers of any person who is
employed as a retail broker by any RPI Broker Dealer other than Shochet
Securities, Inc. (including, but not limited to, sales credits and commissions
generated for initial public offerings and private placements) during the term
of Executive's employment hereunder. Notwithstanding the foregoing, (i) no
Override will be payable on commissions or sales credits generated by any of the
GBI Executives or GKN Executives (as each term is defined below); (ii) with
respect to any registered representative who commences employment with an RPI
Broker Dealer after the date hereof and prior to the Commencement Date with a
"payout" greater than 55%, the Override payable to Executive on commissions
generated by such registered representative shall be reduced by 10% for each
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full percentage point that such registered representative's payout is greater
than 55%; and (iii) with respect to any registered representative who commences
employment with an RPI Broker Dealer after the Commencement Date with a payout
greater than 50%, the Override payable to Executive on commissions generated by
such registered representative shall be reduced 10% for each full percentage
point that such registered representative's payout exceeds 50%. All Overrides
will be paid at least monthly, on or before the 15th day of each month.
2.3 Bonus. Executive shall participate in the "Pool," as
defined in the Company's 1996 Incentive Compensation Plan ("Plan"), for the year
ending January 31, 2000 ("2000 Pool") in the following manner. After the initial
payments to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
(collectively, "GKN Executives") under the terms of their Employment Agreements
with the Company (all of which are being executed simultaneously herewith), the
balance of the Pool for such fiscal year shall be paid 50% to the GKN
Executives, as a group, and 50% to Executive and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (collectively, "GBI Executives"),
as a group. The amount to be paid to each such person shall be determined by the
Company's Compensation Committee. The foregoing bonuses shall be payable as soon
as practicable after January 31, 2000, as determined under the terms of the
Plan. It is understood and agreed that the amount of the 2000 Pool will be
calculated after deducting all Overrides and bonuses for Company personnel.
2.4 Benefits. Executive shall be entitled to such medical,
life, disability and other benefits as are generally afforded to other senior
executives of the Company, subject to applicable waiting periods and other
conditions.
2.5 Vacation. Executive shall be entitled to four weeks of
vacation in each calendar year and to a reasonable number of other days off for
religious and personal reasons.
2.6 Automobile Reimbursement. Executive shall maintain a
suitable automobile for business use. The Company shall reimburse Executive for
the costs of leasing such automobile and for all other costs associated with the
use of the vehicle, including insurance costs, repairs and maintenance, up to
the maximum deductible amount allowable by law.
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2.7 Business Expenses. The Company will pay or reimburse
Executive for all transportation, hotel and other expenses reasonably incurred
by Executive on business trips and for all other ordinary and reasonable
out-of-pocket expenses actually incurred by him in the conduct of the business
of the Company against itemized vouchers submitted with respect to any such
expenses and approved in accordance with customary procedures.
3. Term and Termination.
3.1 Initial Term. The term of Executive's employment under
this Agreement shall commence ("Commencement Date") on the Effective Time (as
such term is defined in the Merger Agreement) and shall continue until the one
year anniversary thereof, unless sooner terminated as herein provided. If the
Merger is not consummated in accordance with the terms of the Merger Agreement,
this Agreement shall be null and void and of no further force or effect.
3.2 Termination Due to Death. If Executive dies during the
term of this Agreement, Executive's employment under this Agreement shall
thereupon terminate, except that the Company shall pay to the legal
representative of Executive's estate (i) the base salary, Overrides and
commissions due Executive pursuant to Sections 2.1 and 2.2 hereof through the
date of Executive's death, (ii) a pro rata allocation of bonus payments under
Section 2.3 during the year of death through the date of Executive's death,
(iii) all valid expense reimbursements through the date of the termination of
this Agreement, (iv) all accrued but unused vacation pay, and (v) all costs
associated with terminating the lease for Executive's automobile.
3.3 Termination Due to Disability. The Company, by notice to
Executive, may terminate Executive's employment under this Agreement if
Executive shall fail because of illness or incapacity to render, for six
consecutive months, services of the character contemplated by this Agreement.
Notwithstanding such termination, the Company shall pay to Executive (i) the
base salary, Overrides and commissions due Executive pursuant to Sections 2.1
and 2.2 hereof through the date of such notice, less any amount Executive
receives for such period from any Company-sponsored or Company-paid source of
insurance, disability compensation or government program, (ii) a pro rata
allocation of bonus payments under Section 2.3 during the year in which the
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disability commenced through the date of such notice, (iii) all valid expense
reimbursements through the date of the termination of this Agreement, (iv) all
accrued but unused vacation pay, and (v) all costs associated with terminating
the lease for Executive's automobile.
3.4 Termination by Company For Cause. The Company, by notice
to Executive, may terminate Executive's employment under this Agreement for
"Cause". As used herein, "Cause" shall mean: (i) the refusal or failure by
Executive to carry out specific directions of the Board which are of a material
nature and consistent with his status as Co-Chairman of the Board of Directors,
or the refusal or failure by Executive to perform a material part of Executive's
duties hereunder; (ii) the commission by Executive of a material breach of any
of the provisions of this Agreement; (iii) fraud or dishonest action by
Executive in his relations with the Company or any of its subsidiaries or
affiliates ("dishonest" for these purposes shall mean Executive's knowingly or
recklessly making of a material misstatement or omission for his personal
benefit); or (iv) the conviction of Executive of any crime involving an act of
moral turpitude, or the imposition against Executive of a permanent bar from
association with a securities firm by any Federal, state or regulatory agency or
self-regulatory body after the exhaustion of all judicial and administrative
appeals therefrom. Notwithstanding the foregoing, no "Cause" for termination
shall be deemed to exist with respect to Executive's acts described in clauses
(i) or (ii) above, unless the Company shall have given written notice to
Executive specifying the "Cause" with reasonable particularity and, within
thirty calendar days after such notice, Executive shall not have cured or
eliminated the problem or thing giving rise to such "Cause;" provided, however,
that a repeated breach after notice and cure of any provision of clauses (i) or
(ii) above involving the same or substantially similar actions or conduct, shall
be grounds for termination for "Cause" without any additional notice from the
Company.
3.5 Termination and Resignation as Director. If Executive's
employment hereunder is terminated for any reason, then Executive shall, at the
Company's request, resign as a director of the Company and all of its
subsidiaries, effective upon the occurrence of such termination.
3.6 Termination by Executive For "Good Reason". The Executive,
by notice to the Company, may terminate Executive's employment under this
Agreement if a "Good Reason" exists. For purposes of this Agreement, "Good
Reason" shall mean the occurrence of any of the following circumstances without
the Executive's prior express written consent: (i) a substantial and material
adverse change in the nature of Executive's title, duties or responsibilities
with the Company that represents a demotion from his title, duties or
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responsibilities as in effect immediately prior to such change; (ii) Executive
is not nominated to serve as a director by the Company or is removed from
service as a director of the Company; (iii) a substantial and material breach of
this Agreement by the Company; (iv) a failure by the Company to make any payment
to Executive when due, unless the payment is not material and is being contested
by the Company, in good faith; (v)(a) any person or entity other than the
Company and/or any officers or directors of the Company as of the date of this
Agreement acquires securities of the Company (in one or more transactions)
having 25% or more of the total voting power of all the Company's securities
then outstanding and (b) the Board of Directors of the Company does not
authorize or otherwise approve such acquisition; or (vi) a liquidation,
bankruptcy or receivership of the Company. Notwithstanding the foregoing, no
Good Reason shall be deemed to exist with respect to the Company's acts
described in clauses (i), (ii), (iii) or (iv) above, unless Executive shall have
given written notice to the Company specifying the Good Reason with reasonable
particularity and, within thirty calendar days after such notice, the Company
shall not have cured or eliminated the problem or thing giving rise to such Good
Reason; provided, however, that a repeated breach after notice and cure of any
provision of clauses (i), (ii), (iii) or (iv) above involving the same or
substantially similar actions or conduct, shall be grounds for termination for
Good Reason without any additional notice from Executive.
3.7 Compensation Upon Termination With Good Reason or Without
Cause. In the event that Executive terminates employment under this Agreement
for Good Reason, pursuant to the provisions of Section 3.6, or the Company
terminates employment under this Agreement without "Cause," as defined in
Section 3.4, the Company shall continue to pay to Executive (or in the case of
his death, the legal representative of Executive's estate or such other person
or persons as Executive shall have designated by written notice to the Company),
all payments, compensation and benefits required under Section 2 hereof through
the one-year anniversary of the Commencement Date; provided, however, that
Executive's insurance coverage shall terminate upon the Executive becoming
covered under a similar program by reason of employment elsewhere.
3.8 Employment as Registered Representative. If, at any time,
prior to the five-year anniversary of the Commencement Date, Executive's
employment as an executive officer of the Company is terminated (other than as a
result of termination under Sections 3.2, 3.3 or 3.4), then, notwithstanding
such termination, at Executive's request, the Company will cause an RPI Broker
Dealer to employ Executive as a registered representative and pay Executive
commissions in accordance with its commission "grid" then in effect.
Additionally, during such period of time as Executive is employed as a
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registered representative, the Company will make available to him the use of a
sales assistant and such amenities as is customary for registered
representatives with a similar level of commission business.
4. Indemnification.
(i) The Company agrees to indemnify Executive and hold
Executive harmless against all costs, expenses (including, without limitation,
reasonable attorneys' fees) and liabilities (other than settlements to which the
Company does not consent, which consent shall not be unreasonably withheld)
(collectively, "Losses") reasonably incurred by Executive in connection with any
claim, action, proceeding or investigation brought against or involving
Executive with respect to, arising out of or in any way relating to Executive's
employment with, or service as a director of, the Company or any subsidiary of
the Company; provided, however, that the Company shall not be required to
indemnify Executive for Losses incurred as a result of Executive's intentional
misconduct or gross negligence (other than matters where Executive acted in good
faith and in a manner he reasonably believed to be in and not opposed to the
Company's best interests). Executive shall promptly notify the Company of any
claim, action, proceeding or investigation under this Section and the Company
shall be entitled to participate in the defense of any such claim, action,
proceeding or investigation and, if it so chooses, to assume the defense with
counsel selected by the Company; provided that Executive shall have the right to
employ counsel to represent him (at the Company's expense) if Company counsel
would have a "conflict of interest" in representing both the Company and
Executive. The Company shall not settle or compromise any claim, action,
proceeding or investigation without Executive's consent, which consent shall not
be unreasonably withheld; provided, however, that such consent shall not be
required if the settlement entails only the payment of money and the Company
fully indemnifies Executive in connection therewith. The Company further agrees
to advance any and all expenses (including, without limitation, the fees and
expenses of counsel) reasonably incurred by the Executive in connection with any
such claim, action, proceeding or investigation, provided Executive first enters
into an appropriate agreement for repayment of such advances if indemnification
is found not to have been available. The provisions of this Section 4 shall
survive the termination of this Agreement for any reason, except in the event
Executive's employment is terminated under Section 3.4(iii) or (iv) hereof, in
which event, this Section 4 shall be null and void and of no further force or
effect.
(ii) As a material inducement to Executive entering into
this Agreement, the Company agrees that during the term of Executive's
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employment hereunder, it shall maintain directors and officers liability
insurance coverage at a level at least as favorable to the Executive as such
insurance which the Company currently maintains.
5. Protection of Confidential Information; Non-Competition.
5.1 Acknowledgments. Executive acknowledges that:
(i) As a result of his current and prior involvement with
the Company, Executive has obtained and will obtain secret and confidential
information concerning the business of the Company and its subsidiaries and
affiliates (referred to collectively in this Section 5 as the "Company"),
including, without limitation, financial information, proprietary rights, trade
secrets and "know-how," customers and sources ("Confidential Information");
(ii) The Company will suffer substantial damage which will
be difficult to compute if, during the period of his employment with the Company
or thereafter, Executive should enter a business competitive with the Company or
divulge Confidential Information; and
(iii) The provisions of this Agreement are reasonable and
necessary for the protection of the business of the Company.
5.2 Nondisclosure. Executive agrees that he will not at any
time, either during the term of this Agreement or thereafter, divulge to any
person or entity any Confidential Information obtained or learned by him as a
result of his employment with the Company, except (i) in the course of
performing his duties hereunder, (ii) with the Company's express written
consent; (iii) to the extent that any such information is in the public domain
other than as a result of Executive's breach of any of his obligations
hereunder; or (iv) where required to be disclosed by court order, subpoena or
other government process. If Executive shall be required to make disclosure
pursuant to the provisions of clause (iv) of the preceding sentence, Executive
promptly, but in no event more than 72 hours after learning of such subpoena,
court order, or other government process, shall notify, by personal delivery or
by electronic means, confirmed by mail, the Company and, at the Company's
expense, Executive shall: (a) take all reasonably necessary and lawful steps
required by the Company to defend against the enforcement of such subpoena,
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court order or other government process, and (b) permit the Company to intervene
and participate with counsel of its choice in any proceeding relating to the
enforcement thereof.
5.3 Return of Confidential Materials. Upon termination of his
employment with the Company, Executive will promptly deliver to the Company all
memoranda, notes, records, reports, manuals, drawings, blueprints and other
documents (and all copies thereof) relating to the business of the Company and
all property associated therewith, which he may then possess or have under his
control; provided, however, that Executive shall be entitled to retain copies of
such documents reasonably necessary to document his financial relationship with
the Company.
5.4 Non-Competition.
(i) During the period commencing on the Commencement Date
and ending on the date Executive's employment hereunder is terminated (and, if
Executive's employment is terminated by the Company for "Cause" or by Executive
without "Good Reason," until the one-year anniversary of the Commencement Date),
Executive, without the prior written permission of the Company, shall not,
anywhere in the world, (i) be employed by, or render any services to, any
person, firm or corporation engaged in any business which is competitive with
the business being conducted by the Company or any of its subsidiaries at the
time Executive's employment is terminated ("Competitive Business"); (ii) engage
in any Competitive Business for his or its own account; (iii) be associated with
or interested in any Competitive Business as an individual, partner,
shareholder, creditor, director, officer, principal, agent, employee, trustee,
consultant, advisor or in any other relationship or capacity; or (iv) solicit,
interfere with, or endeavor to entice away from the Company, for the benefit of
a Competitive Business, any of its customers or other persons with whom the
Company has a contractual relationship. Notwithstanding the foregoing, nothing
in this Agreement shall preclude Executive from investing his personal assets in
any manner he chooses, provided, however, that Executive may not, during the
period referred to in this Section 5.4, own more than 4.9% of the equity
securities of any Competitive Business.
(ii) During the period commencing on the Commencement Date
and ending on the one-year anniversary of the date Executive's employment
hereunder is terminated, Executive, without the prior written permission of the
Company, shall not, directly or indirectly, employ or retain, or have, assist or
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cause any other person or entity to employ or retain, any person who was
employed or retained by the Company during the 60-day period prior to the date
Executive's employment is terminated.
5.5 Remedies. If Executive commits a breach, or threatens to
commit a breach, of any of the provisions of Sections 5.2 or 5.4, the Company
shall have the right and remedy:
(i) to have the provisions of this Agreement specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed by Executive that the services being rendered hereunder to the Company
are of a special, unique and extraordinary character and that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the Company; and
(ii) to require Executive to account for and pay over to the
Company all monetary damages suffered by the Company as the result of any
transactions constituting a breach of any of the provisions of Sections 5.2 or
5.4, and Executive hereby agrees to account for and pay over such damages to the
Company.
Each of the rights and remedies enumerated in this Section 5.5
shall be independent of the other, and shall be severally enforceable, and such
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company under law or equity.
In connection with any legal action or proceeding arising out
of or relating to this Agreement, the prevailing party in such action or
proceeding shall be entitled to be reimbursed by the other party for the
reasonable attorneys' fees and costs incurred by the prevailing party.
5.6 Unenforceability. If any provision of Sections 5.2 or 5.4
is held to be unenforceable because of the scope, duration or area of its
applicability, the tribunal making such determination shall have the power to
modify such scope, duration, or area, or all of them, and such provision or
provisions shall then be applicable in such modified form.
5.7 Survival. The provisions of this Section 5 shall survive
the termination of this Agreement for any reason, except in the event
Executive's employment is terminated by the Company without "Cause" in breach of
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this Agreement, or by Executive with "Good Reason," in either of which events,
this Section 5 shall be null and void and of no further force or effect.
6. Miscellaneous Provisions.
6.1 Notices. All notices provided for in this Agreement shall
be in writing, and shall be deemed to have been duly given when (i) delivered
personally to the party to receive the same, or (ii) when mailed first class
postage prepaid, by certified mail, return receipt requested, addressed to the
party to receive the same at his or its address set forth below, or such other
address as the party to receive the same shall have specified by written notice
given in the manner provided for in this Section 6.1. All notices shall be
deemed to have been given as of the date of personal delivery or mailing
thereof.
If to Executive:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
If to the Company:
Research Partners International, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Chief Operating Officer
6.2 Entire Agreement. This Agreement sets forth the entire
agreement of the parties relating to the employment of Executive from and after
the Effective Time and is intended to supersede all prior negotiations,
understandings and agreements. No provisions of this Agreement, may be waived or
changed except by a writing by the party against whom such waiver or change is
sought to be enforced. The failure of any party to require performance of any
provision hereof or thereof shall in no manner affect the right at a later time
to enforce such provision.
6.3 Governing Law. All questions with respect to the
construction of this Agreement, and the rights and obligations of the parties
hereunder, shall be determined in accordance with the law of the State of New
York applicable to agreements made and to be performed entirely in New York.
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6.4 Successors; Assignability. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of the Company.
This Agreement shall not be assignable by Executive, but shall inure to the
benefit of and be binding upon Executive's heirs and legal representatives.
6.5 Severability. Should any provision of this Agreement
become legally unenforceable, no other provision of this Agreement shall be
affected, and this Agreement shall continue as if the Agreement had been
executed absent the unenforceable provision.
6.6 Arbitration. Any claim or controversy arising out of or
related to this Agreement or its interpretation will be settled by arbitration
before the National Association of Securities Dealers, Inc. Judgment based upon
the decision of the arbitrators may be entered in any court having jurisdiction.
The governing law of this Agreement shall be the substantive and procedural law
of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
_____________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
RESEARCH PARTNERS INTERNATIONAL, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
By:__________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Operating Officer
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