AMENDED AND RESTATED EMPLOYMENT AGREEMENT between HARRIS & HARRIS GROUP, INC. and CHARLES E. HARRIS As Amended and Restated for Code Section 409A Effective January 1, 2005, but actually on August 2, 2007
AMENDED
AND RESTATED
between
▇▇▇▇▇▇
& ▇▇▇▇▇▇ GROUP, INC.
and
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
As
Amended and Restated for Code Section 409A Effective January 1,
2005,
but
actually on August 2, 2007
AMENDED
AND RESTATED
This
is
an AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), between ▇▇▇▇▇▇
& ▇▇▇▇▇▇ GROUP, INC. (the “Company”), a New York corporation, and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ (the “Executive”) , which is generally effective August 2, 2007, except
where a January 1, 2005 effective date is otherwise specified.
W
I T N E S
S E T H
T
H A T:
WHEREAS,
the Executive is currently serving as Chairman and Chief Executive Officer
of
the Company, pursuant to an Amended and Restated Employment Agreement, dated
as
of October 14, 2004 (the “Prior Agreement”); and
WHEREAS,
the Company and the Executive wish to amend the Prior Agreement to bring it
into
clear compliance with Internal Revenue Code (the "Code") Section 409A effective
January 1, 2005 to avoid a 20% additional income tax assessment against employee
due to certain compensation items provided for hereunder.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. Employment.
The
Company shall employ the Executive, and the Executive shall be employed by
the
Company, for the Period of Employment provided in paragraph 3(a) below and
upon
the other terms and conditions set forth in this Agreement.
2. Position
and Responsibilities:
During
the Period of Employment, the Executive shall:
(a) Serve
as
the Chairman and Chief Executive Officer of the Company;
(b) Be
responsible for the general management of the affairs of the Company and all
its
subsidiaries, reporting directly to the Board of Directors of the Company (the
“Board”);
(c) Serve
as
a member of the Board for the period for which he is and shall from time to
time
be elected or reelected; and
(d) Serve,
if
elected, as President of the Company and as an officer and director of any
subsidiary or affiliate of the Company.
3. Terms
and Duties
(a) Commencement
of Period
of Employment.
The
Executive's employment hereunder shall continue, subject to earlier termination
in accordance with the terms of this Agreement, until Executive's Mandatory
Retirement Date under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Group, Inc. Executive Mandatory
Retirement Plan and Program ("EMRP"), including all extensions.
(b) End
of
Period of Employment.
Effective January 1, 2005, the following rule shall apply to determine when
the
Period of Employment ends: The Period of Employment shall end upon the first
of
the following to occur: Executive's death, in accordance with notice from the
Company during disability in as provided in Section 6, on the date specified
in
notice from the Company to the Executive that his employment is being terminated
as a Without Cause Termination or as a Termination for Cause (as defined in
Section 8(d)), on the date specified in notice from the Executive to the Company
as a Constructive Discharge or as a voluntary termination of employment other
than Constructive Discharge. Further, the Period of Employment under this
Agreement shall not extend beyond the time period specified in 3(a) above.
Notwithstanding the forgoing, the Period of Employment shall be considered
to
end for purposes of Sections 8 and 10 on the last day on which the Employee
performs services for the Company (or any other entity considered a single
employer with the Company under Section 414(b) or (c) of the Code) substantially
on his regular, full-time schedule, if on that date both the Company and the
Employee reasonably anticipate that (i) no further services will be performed
thereafter, or (ii) the level of bona fide services performed after that date
(as an employee or independent contractor, but not including service as a member
of the Board of Directors of the Company) will permanently decrease to no more
than 20% of the average level of bona fide services performed over the previous
36 months, or on such later date on which the parties first reasonably
anticipate service has reduced in such manner. The Executive's Period of
Employment will not be considered to be terminated while the Executive is on
military leave, sick leave or other bona fide leave of absence if the leave
does
not exceed six months. If a bona fide leave of absence extends beyond six
months, a termination of the Period of Employment will be deemed to occur on
the
first day after the end of such six month period. The Compensation Committee
of
the Board of Directors will determine whether a Termination of Employment has
occurred based on all relevant facts and circumstances, in accordance with
Treasury Regulation §1.409A-1(h).
(b) Duties.
While
employed by the Company, (except for illness or incapacity and vacation periods)
the Executive shall perform and discharge well and faithfully the duties which
the Board may assign to him from time to time. The Executive shall not, without
the prior consent of the Board, engage in any business activity for which he
is
compensated unrelated to the Company’s business; provided, however, the
foregoing shall not be deemed to prohibit the Executive from devoting time
to
his personal investments or from continuing the activities he had been engaged
in at the time this Agreement is entered into with respect to his then personal
investments. The Executive shall be permitted to perform and discharge his
duties from any location.
4. Compensation.
For all
services rendered by the Executive in any capacity during the Period of
Employment, including, without limitation, services as an executive, officer,
director or member of any committee of the Company or of any subsidiary,
affiliate or division of the Company, the Company shall compensate the Executive
as described in paragraphs (a) through (g) below. For purposes of this Section
4, the term “Board” shall mean either the Board of Directors of the Company or a
committee of the Board of Directors (i.e., the Compensation Committee of the
Board of Directors).
(a) Base
Salary.
During
the Period of Employment, the Company shall pay the Executive a fixed salary
(the “Base Salary”) at an annual rate of not less than $202,980 effective
October 19, 1999. On January 1, 2001, and on each January 1 thereafter during
the Period of Employment, the Base Salary shall be increased so that the new
Base Salary equals the product of the Base Salary in effect on the immediately
preceding December 31 times the quotient obtained by dividing A by B,
where:
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“A
is the
Consumer Price Index, All Urban Consumers (CPI-U), U.S. City of Average for
All
Items (standard reference base period 1982-84 = 100) (the “CPI”), as published
during the September immediately preceding the January 1 with respect to which
the increased Base Salary is being computed; and
B
is the
CPI as published during the September twelve months prior to the September
referred to in “A” above. If during the Period of Employment, the United States
Bureau of Labor Statistics (the “Bureau”) ceases publication of the CPI, the
calculations required hereby shall thereafter be made using the consumer price
index published by the Bureau (or any successor agency of the federal
government) that is most nearly equivalent to the CPI.”
(b) Discretionary
Base Salary Increases.
At any
time or from time to time during the Period of Employment, the Board may
increase the Base Salary to an amount exceeding the Base Salary determined
pursuant to paragraph 3(a) above. Following any such discretionary increase
in
the Base Salary, the Board may or may not maintain the Base Salary at that
increased level (or further increase the Base Salary beyond that level). But
in
no event shall the Base Salary in effect for any portion of the Period of
Employment be an annual amount less than the amount determinable in accordance
with paragraph 3(a) above as if no discretionary increases had been
made.
(c) Incentive
Compensation.
Executive acknowledges that in 2006, the Board terminated the Company's
incentive compensation Employee Profit Sharing Plan (the “Profit Sharing Plan”),
and replaced it, effective for performance in 2006 and later years, with the
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Group, Inc 2006 Equity Incentive Plan.
(d) Additional
Benefits.
In
addition, the Executive shall be entitled to participate in all compensation
or
employee benefit plans or programs, and to receive all benefits, perquisites,
and emoluments for which any salaried employees are eligible under any plan
or
program, now or hereafter established and maintained by the Company for salaried
employees (which shall be comparable to those provided to senior officers of
other comparable companies), to the extent permissible under the general terms
and provisions of such plans or programs and in accordance with the provisions
thereof, including group hospitalization, health, dental care, life or other
insurance, tax-qualified pension, savings, thrift and profit-sharing plans,
termination pay programs, sick-leave plans, travel or accident insurance,
disability insurance, auto allowance or auto lease plans, and executive
contingent compensation plans, including, without limitation, capital
accumulation programs and stock purchase, restricted stock or stock option
plans. Specifically, but without limitation, the Company shall furnish the
Executive, with (1) cash reimbursement for the cost of term life insurance
for
the benefit of the Executive’s designated beneficiary in the amount of at least
$2,000,000, (2) supplemental uninsured medical reimbursement plan coverage
of
$10,000 for expenses incurred by the Executive or his covered dependents which
are not covered by the Company’s group hospitalization, health and dental care
insurance plans, provided that this $10,000 limit shall be increased so that
on
a cumulative basis, such limit equals the product of $10,000 multiplied times
the quotient (the “CPI Factor”) obtained by dividing the CPI published during
the most recent September by the CPI published for September, 1999, (3)
disability insurance (through an insurance carrier and/or self-insured by the
Company) for the benefit of the Executive providing for continuation of 100%
of
his Base Salary for the period specified in the insured long term disability
coverage in force in August, 2007, and (4) long-term care insurance (through
an
insurance carrier) for the benefit of the Executive and his spouse in an amount
reasonable expected to cover daily expenses of $250 (subject to cost of living
adjustments) the Executive and his spouse may each incur with respect to
long-term care. After an event of a Change of Control (as defined in the Amended
and Restated Severance Compensation Agreement effective as of August 2, 2007,
by
and between the Company and the Executive), the disability insurance referred
to
in clause (3) above shall be provided through an insurance carrier. If such
disability insurance is provided to the Executive at any time though an
insurance carrier, then at the Executive’s election, the Company shall increase
the Executive’s Base Salary in an amount equal to the premium payments due with
respect to such insurance and the Executive shall thereafter be responsible for
making the premium payments for such coverage.
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(e) Perquisites.
The
Company shall also furnish the Executive, without cost to him, with (1) a
Company-owned or leased automobile which will be replaced with a new automobile
every four years, provided that the Executive may select the automobile and,
if
the value of the automobile selected by the Executive is greater than $40,000
times the CPI Factor (for purposes of this clause (1) only, the CPI Factor
shall
be based on the CPI published for September, 1991 rather than for September,
1999), the Executive shall pay to the Company, each month during which he shall
have use of the automobile, the difference between the monthly market rental
of
the vehicle being furnished to the Executive and the monthly market rental
of an
automobile with a value of $40,000 times the CPI Factor; and (2) membership
in
one health club (including the cost of a personal trainer), one luncheon club,
and one social or country club of the Executive’s choosing. The Company shall
also reimburse the Executive annually for the cost of (1) an annual physical
examination of the Executive by a physician selected by the Executive, and
(2)
personal financial, investment or tax advice, not to exceed $5,000 times the
CPI
Factor per annum. Any reimbursable amount for the cost of personal financial,
investment or tax advice not utilized in a year shall be available to reimburse
the Executive for such costs incurred in a prior or subsequent year. The
Executive shall properly document such costs for federal income taxation
purposes to preserve any deduction for such reimbursements to which the Company
may be entitled.
(f) Deferred
Compensation.
This
Section 4(f) shall be applicable January 1, 2005. The Company maintains a
supplemental executive retirement plan (the “SERP”), as amended and restated
(also previously documented by the Company as the "Deferred Compensation
Agreement"), for the benefit of the Executive. Under the SERP, the Company
shall
cause an amount equal to one-twelfth of the Executive’s current Base Salary to
be credited each month (a “Monthly Credit”) to a special account maintained for
this purpose on the books of the Company for the benefit of the Executive (the
“SERP Account”). The SERP Account shall be credited and debited to reflect the
deemed investment returns, losses and expenses attributed to such deemed
investments and reinvestments in accordance with the terms of the SERP in effect
from time to time. The Executive’s benefit under the SERP shall equal the
balance in the SERP Account and such benefit shall always be 100% vested
(i.e.,
not
forfeitable). One or more payments equal to the balance of the SERP Account
shall be made to the Executive in accordance with the provisions of the separate
Amended and Restated SERP dated August 2, 2007. The Company shall establish
a
rabbi trust for the purpose of accumulating funds to satisfy the obligations
incurred by the Company pursuant to this paragraph 4(f). Each time the Company
credits a Monthly Credit to the SERP Account, the Company shall make a
corresponding dollar contribution to the trust. The Executive’s rights to
benefits pursuant to this paragraph 4(f) shall be no greater than those of
a
general creditor of the Company. The Executive’s benefits pursuant to this
paragraph 4(f) may not be anticipated, alienated, pledged, encumbered or subject
to attachment, garnishment, levy, execution, or other legal or equitable
process. If the Board determines that the investment of the rabbi trust assets
in mutual funds will cause the Company to fail to comply with certain statutory
asset holding requirements, such assets shall be invested in U.S. Government
securities to the extent necessary to meet the statutory
requirements.
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(g) Office
Equipment.
During
the Period of Employment, the Company shall provide the Executive with state
of
the art communication and office equipment for use at a residence of the
Executive’s choice.
(h) Vacation.
In each
calendar year during the Period of Employment, the Executive shall be entitled
to not less than 1½ days of an annual vacation for each full year of employment
with the Company (e.g.,
for
2007, the Executive shall be entitled to not less than 36 vacation
days).
5. Business
Expenses.
The
Company shall pay or reimburse the Executive for all reasonable travel or other
expenses incurred by the Executive in connection with the performance of his
duties and obligations under this Agreement, including, without limitation,
routine and necessary costs of maintaining the automobile (including garage
space) provided to the Executive by the Company pursuant to paragraph 4(e)
above, subject to the Executive’s presentation of appropriate vouchers in
accordance with such procedures as the Company may from time to time establish
for senior officers and to preserve any deductions for federal income taxation
purposes to which the Company may be entitled.
6. Disability.
This
Section 6 is applicable effective January 1, 2005.
(a) In
the
event of the disability of the Executive during the Period of Employment, the
Company shall, subject to the provisions of the next following sentence,
continue to pay to the Executive the compensation provided in paragraph 4 above
during the period of his disability. But if the Executive’s disability continues
until the Executive becomes entitled to receive the proceeds of the disability
insurance described in paragraph 4(d) above, or after 180 days of the disability
benefit if the benefit is fully self-funded, the Company may, at its election,
terminate the Period of Employment, in which event the Company’s obligation to
make payments under paragraph 4 shall cease, except for (1) unpaid continuation
of Base Salary disability benefits, (2) Monthly Credits to the SERP Account
through the effective date of termination, and (3) retirement benefits as
described in paragraph 10 below. However, the benefits described in paragraph
4(d) and the perquisites described in paragraph 4(e) shall continue to be
provided for a period of ten years, except that the Company shall only continue
to provide the automobile described in paragraph 4(d) for six months following
termination of the Period of Employment and then allow the Executive to assume
(without any continuing obligations under the lease, if any, on the part of
the
Company) the Company’s rights and obligations to lease or purchase such
automobile (to the extent any lease is so assumable) or to purchase such
automobile at its then book value.
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(b) During
the period the Executive is receiving payments, either under paragraph 6 or
under the disability insurance described in paragraph 4(d) above, to the extent
that he is physically and mentally able to do so, he shall furnish information
and assistance to the Company and, upon a reasonable request in writing by
the
Board from time to time, he shall make himself available to the Company to
undertake reasonable assignments consistent with the dignity, importance, and
scope of his prior position with the Company and his physical and mental health.
During the first six months of disability, the Executive shall report directly
to the Board. If the Company fails to make a payment or provide a benefit
required under paragraph 6(a), the Executive’s obligation to furnish information
and assistance and undertake assignments shall terminate.
(c) If
the
Executive’s disability continues until the Executive becomes entitled to receive
the proceeds of the disability insurance described in paragraph 4(d) above,
or
after 180 days of the disability benefit if fully self-funded, then beginning
January 1, 2010, the Company shall also pay to the Executive or his wife, if
he
predeceases her, for a period of three years, the Base Salary amount that
existed at the time disability began. Such Base Salary amount shall be paid
by
the Company in 36 monthly installments.
(d) If
the
Executive dies prior to the date he becomes entitled to receive the proceeds
of
the disability insurance described in paragraph 4(d) above, or after 180 days
of
the disability if the disability benefit is fully self-funded, then the Company
shall pay his wife, if she survives him, for a period of two years beginning
in
the month following the date of the Executive's death, the Base Salary amount
that existed at the onset of the disability in the form of a death benefit.
Such
Base Salary amount shall be paid by the Company in 24 monthly installments
commencing in the month following the Executive’s death.
(e) As
used
in this Agreement, the term “disability” shall mean the Executive is
unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result
in
death or can be expected to last for a continuous period of not less than 12
months, or the Executive is, by reason of any medically determinable physical
or
mental impairment which can be expected to result in death or can be expected
to
last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under an accident
and health plan covering employees of the participant's employer.
7. Death.
If the
Executive dies during the Period of Employment, the Executive’s designated
beneficiary shall be entitled to receive the proceeds of any life or other
insurance or other death benefit program provided pursuant to paragraph 4(d)
above in accordance with the provisions thereof, and the Period of Employment
and the Company’s obligation to make payments under paragraph 4 (except for
payment of SERP benefits already accrued as provided in paragraph 4(f)) shall
cease as of the date of death, except (1) for earned (through the date of death)
but unpaid Base Salary or disability benefits, (2) Monthly Credits to the SERP
Account through the date of death, and (3) retirement benefits as described
in
paragraph 10 below. The Company shall pay the Executive’s wife, if she survives
him, for a period of two years the Base Salary amount that existed at the time
of death in the form of a death benefit, provided that this benefit will not
be
paid if the Executive is already entitled to salary continuation under paragraph
6(d) above. Such Base Salary amount shall be paid by the Company in 24 monthly
installments commencing in the month following the Executive’s
death.
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8. Effect
of Termination of Employment.
This
Section 8 shall be applicable effective January 1, 2005.
(a) If
the
Period of Employment hereunder terminates because of either a Without Cause
Termination or Constructive Discharge, the Executive shall be entitled to (1)
earned (through the effective date of the termination) but unpaid Base Salary,
(2) Monthly Credits to the SERP Account through the effective date of the
termination and (3) retirement benefits as described in paragraph 10 below.
In
addition, if the Period of Employment is terminated because of either a Without
Cause Termination or Constructive Discharge, the Company shall, as liquidated
damages or severance pay, or both, pay to the Executive (or to his estate if
he
dies before all payments are made) two times his Base Salary in effect at the
time of such termination of the Period of Employment, which payments shall
be
made as follows: ½ year of base salary shall be paid six months and one day
after the termination of the Period of Employment, and the remaining 1½ years of
Base Salary shall be paid in 18 monthly installments commencing in the month
following the date the first payment is made. In addition, benefits described
in
paragraph 4(d), the perquisites described in paragraph 4(e) and the
communication and office equipment described in paragraph 4(g) shall continue
to
be provided for twenty-four months, except that the Company shall only continue
to provide the automobile allowance described in paragraph 4(e) for six months
following such termination and then the Executive may assume (without any
continuing obligations under the lease, if any, on the part of the Company)
the
Company’s rights and obligations to lease or purchase such automobile (to the
extent any lease is so assumable) or to purchase such automobile at its then
book value and except that the Company shall continue to provide communication
and office equipment to the Executive for only 18 months. To the extent any
benefit under 4(d), (e) or (g) is determined to be deferred compensation under
Code Section 409A, such benefit shall not be paid or provided until the day
six
months and one day after termination of the Period of Employment, and then
all
payments that would have been made during such six month period had this payment
delay rule not been in effect shall be made on that payment date.
(ii) To
the
extent that the Executive is entitled to receive cash compensation that is
(or
would be, if any elective deferral were disregarded) subject to federal income
taxation in respect of any other employment or a consulting position with
another company before all compensation provided for in this Section 8(a) is
paid, the payments to be made pursuant to this paragraph 8(a) shall be
correspondingly reduced by such cash compensation and, to the extent that
benefits of the kind required by this paragraph 8(a) to be continued are payable
in respect of such other employment or consulting position, such benefits
provided by the other Company shall be deemed the primary coverage for purposes
of coordination of benefits and avoiding duplication of benefits. However,
at no
time shall such benefits of a kind described herein, be less than those required
by this paragraph 8(a) or paragraphs 4(d) and 4(e).
(b) If
the
Period of Employment hereunder terminates because of a Termination for Cause,
the Executive shall receive: (1) earned (through the effective date of
termination) but unpaid Base Salary, and (2) monthly credits to the SERP Account
through the effective date of the termination of the Period of Employment,
but
no other payments (except the SERP benefit as provided in paragraph 4(f)) shall
be made, or benefits provided, by the Company.
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(c) Notwithstanding
anything to the contrary in this Agreement, if the Period of Employment
hereunder terminates because the Executive has reached his Mandatory Retirement
Date under the EMRP including any extensions, the Executive shall receive:
(1)
earned (through the effective date of termination) but unpaid Base Salary,
(2)
Retirement Benefits under Section 10, (3) the monthly credit to the SERP Account
through the effective date of the termination, and (4) any benefits to which
the
Executive may be entitled pursuant to the Employee Mandatory Retirement Benefits
Plan, subject to the terms of that Plan, shall be payable to the Executive,
but
no other payments (except payment under the SERP deferred compensation as
provided in paragraph 4(f)) shall be made, or benefits provided, by the
Company.
(d) If
the
Period of Employment hereunder terminates due to the Executive's voluntary
termination of the Period of Employment other than on account of Constructive
Discharge, death, disability, or termination under the EMRP, the Executive
shall
receive: (1) earned (through the effective date of termination) but unpaid
Base
Salary, (2) the Monthly Credit to the SERP Account through the effective date
of
the termination of the Period of Employment, and (3) the Retirement Benefits
under Section 10, but no other payments (except the SERP benefit as provided
in
paragraph 4(f)) shall be made, or benefits provided, by the
Company.
(e) As
used
in this Agreement:
(1) “Termination
for Cause” means a termination of the Period of Employment by the Company, by
written notice to the Executive, specifying the event relied upon for such
termination, because of the Executive’s serious, willful misconduct in respect
of his duties under this Agreement, including, without limitation, conviction
of
a felony or for perpetration of a common law fraud which has resulted in
material economic damage to the Company or any of its subsidiaries or
affiliates. If the Executive’s misconduct can be cured, a Termination for Cause
shall not occur until the Executive fails to so cure within 30 days from
delivery to the Executive of a written demand by the Company that he do so,
which demand shall specify the misconduct being relied upon for termination
pursuant to this paragraph 8(c)(1).
(2) “Constructive
Discharge” means a termination of the Period of Employment by the Executive
because of (A) a failure of the Company to fulfill its obligations under this
Agreement in any material respect, including any failure to elect or reelect
or
to appoint or reappoint the Executive to the offices of Chairman of the Company
and its Chief Executive Officer or as a member of the Board or other material
change by the Company in the functions, duties, or responsibilities of the
Executive’s position with the Company which would reduce the ranking or level,
dignity, responsibility, importance, or scope of such position, or (B) any
assignment or reassignment by the Company of the Executive to a place of
employment other than the Company’s headquarters, (which shall be located in New
York, New York, or other location of the Executive’s choosing). A Constructive
Discharge shall apply to any case in which the Company shall have failed to
remedy within 30 days from delivery to the Company of a written demand by the
Executive that it do so, which demand shall specify the circumstances being
relied upon for termination pursuant to this paragraph 8(c)(2).
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(3) “Without
Cause Termination” means a termination of the Period of Employment by the
Company other than because of disability or expiration of the Period of
Employment and other than a Termination for Cause. The exercise by the Company
or the Executive, as the case may be of a right to terminate the Period of
Employment under this paragraph 8(c) shall not abrogate the rights and remedies
of the terminating party in respect of the circumstances giving rise to such
termination.
9. Other
Duties of Executive During and After Period of Employment.
(a) The
Executive shall, upon reasonable notice, during or after the Period of
Employment, furnish such information as may be in his possession to, and
cooperate with the Company, as the Company may reasonably request in connection
with the analysis, negotiation, and settlement of any pending claims and any
litigation in which the Company or any of its subsidiaries or affiliates, is,
or
may become, a party.
(b) The
Executive recognizes and acknowledges that all information pertaining to the
affairs, business, or clients of the Company or any of its subsidiaries or
affiliates, as such information may exist from time to time, is confidential
information and is a unique and valuable asset of the Company, access to and
knowledge of which are essential to the performance of the Executive’s duties
under this Agreement. The Executive shall not, during the Period of Employment
or thereafter, except to the extent reasonably necessary in the performance
of
his duties under this Agreement, divulge to any person, firm, association,
corporation or governmental agency, any information concerning the affairs,
business, clients, or customers of the Company or any of its subsidiaries or
affiliates (except such information as it is required by law to be divulged
to a
government agency), or make use of any such information for his own purposes
or
for the benefit of any person, firm, association or corporation (except the
Company or its subsidiaries or affiliates) and shall use his best efforts to
prevent the disclosure of any such information by others. All records,
memoranda, letters, books, papers, reports, accountings, experience or other
data, and other records and documents relating to the business of the Company
or
any of its subsidiaries or affiliates, whether made by the Executive or
otherwise coming into his possession, are confidential information and are,
and
shall be, and shall remain the property of the Company.
(c) During
the Period of Employment and for a one year period thereafter in the event
of
(1) a Termination for Cause, (2) a termination of the Period of Employment
by
the Executive that is not a Constructive Discharge, or (3) the disability of
the
Executive, the Executive shall not:
Make
any
statement or perform any act intended to advance an interest of any existing
or
prospective competitor of the Company or any of its subsidiaries or affiliates
in any way that will injure an interest of the Company or any of its
subsidiaries or affiliates in its relationship and dealings with existing or
potential clients, customers or brokers or to do any act that is disloyal to
the
Company or inconsistent with the Company’s interests or in violation of any
provision of this Agreement.
(d) The
Company’s obligation to make payments under paragraph 4, other than the SERP
benefits described in paragraph 4(f), shall cease upon any violation of the
provisions of paragraph 9 which is not inadvertent and which has resulted in
material economic damage to the Company or any of its subsidiaries.
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10. Retirement
Benefits.
At the
termination of Executive’s Period of Employment with the Company, the Executive,
his spouse and dependents shall be entitled to medical and health insurance
coverage under the ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Group, Inc. Retiree Medical Benefit Plan
as amended on May 3, 2007 and as further amended from time to time, provided
that no amendment shall reduce the level of benefit to be provided thereunder.
Any dispute as to whether the Company has complied with its obligations under
this paragraph 10 may be referred to final and binding arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
and the Company agrees to reimburse the Executive or the Executive’s spouse, as
the case maybe, for reasonable attorney fees and expenses incurred by the
Executive or the Executive’ spouse in connection with such
arbitration.
11. Indemnification,
Litigation.
(a) Throughout
the Period of Employment and thereafter, the Executive shall continue to be
entitled to indemnification from the Company pursuant to the Indemnification
Agreement, dated as of December 15, 1992 between the Company and the Executive
(the “Indemnification Agreement”), a copy of which is attached hereto as Exhibit
B.
(b) In
the
event of any litigation or other proceeding between the Company and the
Executive with respect to the subject matter of this Agreement and the
enforcement of rights hereunder, the Company shall reimburse the Executive
for
all costs and expenses relating to such litigation or other proceeding,
including reasonable attorneys’ fees and expenses, provided that such litigation
or proceeding results in any:
(1) Settlement
requiring the Company to make a payment to the Executive; or
(2) Judgment,
order, or award in favor of the Executive, regardless of whether such judgment,
order, or award is subsequently reversed on appeal or in a collateral
proceeding.
(c) In
no
event shall the Executive be required to reimburse the Company for any of the
costs and expenses relating to such litigation or other proceeding referred
to
in paragraph 11(b).
12. Withholding
Taxes.
The
Company may directly or indirectly withhold from any payments made under this
Agreement all federal, state, city, or other taxes as shall be required pursuant
to any law or governmental regulation or ruling.
13. Consolidation,
Merger, or Sale of Assets: Change of Control.
(a) Nothing
in this Agreement shall preclude the Company from consolidating or merging
into
or with, or transferring all or substantially all of its assets to, another
corporation which assumes this Agreement and all obligations and undertakings
of
the Company hereunder. Upon such a consolidation, merger, or transfer of assets
and assumption, the term “Company” as used herein shall mean such other
corporation and this Agreement shall continue in full force and
effect.
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(b) The
provisions of the Severance Compensation Agreement, made effective as of August
15, 1990, and amended as of August 2, 2007, by and between the Company and
the
Executive, (the “Severance Compensation Agreement”), shall apply and coordinate
with this Agreement as provided therein.
14. Effect
of Prior Agreements.
This
Agreement between the Company and the Executive, contains the entire
understanding between the Company and the Executive with respect to the subject
matter hereof and supersedes any prior employment agreement (including the
“Prior Agreement”) between the Company or any predecessor of the Company and the
Executive, except that this Agreement shall not affect or operate to reduce
any
benefit or compensation inuring to the Executive of a kind elsewhere provided
and not expressly provided in this Agreement, and this Agreement shall also
not
be superseded by, but shall operate in tandem with, the Indemnification
Agreement, the Severance Compensation Agreement, the SERP, and the ▇▇▇▇▇▇ &
▇▇▇▇▇▇ Group, Inc. 2006 Equity Incentive Plan and awards issued
thereunder.
15. Notices.
All,
notice, requests, demands, and other communications required or permitted
hereunder shall be given in writing and shall be deemed to have been duly given
if hand delivered or mailed, postage prepaid by same day or overnight mail
as
follows:
|
(1)
|
To
the Company:
|
▇▇▇▇▇▇
& ▇▇▇▇▇▇ Group, Inc.
|
|
▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
||
|
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||
|
Attn.:
Secretary
|
||
|
(2)
|
To
the Executive:
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|
▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
|
||
|
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
or
to
such other address as either party shall have previously specified in writing
to
the other.
16. No
Attachment.
Except
as required by law, no right to receive payments under this Agreement shall
be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, or hypothecation or to execution, attachment, levy, or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void, and of no effect.
But nothing in this paragraph 16 shall preclude the executors, administrators,
or other legal representatives of the Executive from assigning any rights
hereunder to the person or persons entitled thereto.
17. Binding
Agreement.
This
Agreement shall benefit and bind (a) the Executive, his heirs, beneficiaries,
and personal representatives, and (b) the Company and its successors and
assigns.
18. Severability.
If any
provision of this Agreement shall be held or deemed to be invalid, inoperative
or unenforceable in any jurisdiction or jurisdictions, because of conflicts
with
any constitution, statute, rule or public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision in question
unenforceable in any other jurisdiction or in any other case of circumstance
or
of rendering any other provisions herein contained unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule or public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative, or unenforceable provision had never been contained herein and
such
provision reformed so that it would be enforceable to the maximum extent
permitted in such jurisdiction or in such case.
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19. Modification
and Waiver.
This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto. No terms or condition of the Agreement shall
be
deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement except by written instrument
signed by the party charged with such waiver or estoppel. No such written waiver
shall be deemed a continuing waiver unless specifically stated therein, and
each
such waiver shall operate only as to the specific term or condition waived
and
shall not constitute a waiver of such term or condition for the future as to
any
act other than that specifically waived.
20. Headings
of No Effect.
The
paragraph headings contained in this Agreement are included solely for
convenience of reference and shall not in any way affect the meaning or
interpretation of any of the provisions of this Agreement.
21. Governing
Law.
The
laws of New York shall govern the validity, construction, and interpretation
of
this Agreement.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed and its
seal to be affixed hereunto by its duly authorized officers, and the Executive
has signed and delivered this Agreement, on the date set forth
above.
| ▇▇▇▇▇▇ & ▇▇▇▇▇▇ GROUP, INC. | ||
| |
|
|
| BY: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President |
||
| |
|
|
| BY: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
||
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