EXHIBIT 10.11
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 4, 1998, between ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, residing at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Executive"),
and GKN SECURITIES CORP., a New York corporation having its principal office at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Company").
WHEREAS, the Company is engaged primarily in the business of
investment banking and securities brokerage; and
WHEREAS, concurrently herewith the Company's sole shareholder,
Research Partners International, Inc. ("RPII) is entering into an Agreement and
Plan of Merger with ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Inc. ("GBI"), RPII Acquisition Corp.
("Newco"), a wholly-owned subsidiary of RPII, 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's employment continue 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 an
Executive Vice President. 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 Executive Vice President.
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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.
2. Compensation and Benefits.
2.1 Base Salary. The Company shall pay to Executive a salary
at the minimum annual rate of $240,000 during the term hereof (i.e., $20,000 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 60% of the gross
brokerage commissions on customers' stock brokerage accounts with the Company or
any other subsidiary of RPII (each an "RPI Broker Dealer") which are serviced by
Executive or jointly serviced by Executive and other registered representatives
of the Company ("Joint Reps").
2.3 Bonus. Executive shall participate in the "Pool," as
defined in RPII 1996 Incentive Compensation Plan ("Plan"), for the year ending
January 31, 2000 in the following manner. Executive, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇ (collectively, "GKN Executives"), as a group, shall
be paid an aggregate amount from the Pool for such fiscal year ("2000 Pool")
equal to the "Overrides" payable for such year to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (collectively,
"GBI Executives") under the terms of their Employment Agreements with RPII (all
of which are being executed simultaneously herewith), less 162/3% of all
commissions payable to GKN Executives during such year. The amount to be paid to
each of the GKN Executives shall be determined by RPII's Compensation Committee.
The balance of the 2000 Pool shall be paid 50% to the GKN Executives, as a
group, and 50% to the GBI Executives, as a group, with the amount to be paid to
each such person being determined by the Compensation Committee. The foregoing
bonuses shall be payable as soon as practicable after January 31, 2000, as
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determined under the terms of the Plan. It is understood and agreed that the
amount of the 2000 Pool will be calculated after deducting 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.
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. From and
after the Commencement Date, Executive's current employment agreement with the
Company will be null and void and of no further force or effect. 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.
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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 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 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 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 Executive Vice President, 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,
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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
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 RPII (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 RPII 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.
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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
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.
3.9 Continuation of GKN Securities Corp. The Company agrees
that, until the five-year anniversary of the Commencement Date, it shall not
take any steps to dissolve or liquidate or otherwise voluntarily withdraw its
membership with the National Association of Securities Dealers, Inc. or
qualification to act as a broker dealer in any state without Executive's prior
written consent; provided, however, that such steps may be taken without
Executive's consent if and only if Executive is afforded the opportunity to
become associated as a registered representative with another RPI Broker Dealer
without losing his ability to do business in New York, Florida and substantially
all of the other states in which Executive is then currently authorized to do
business.
4. Indemnification.
(i) RPII agrees to indemnify Executive and hold Executive
harmless against all costs, expenses (including, without limitation, reasonable
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attorneys' fees) and liabilities (other than settlements to which RPII 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 other subsidiary of RPII; provided,
however, that RPII 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 RPII's best interests).
Executive shall promptly notify RPII of any claim, action, proceeding or
investigation under this Section and RPII 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 RPII; provided that
Executive shall have the right to employ counsel to represent him (at RPII's
expense) if RPII counsel would have a "conflict of interest" in representing
both RPII and Executive. RPII 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 RPII fully
indemnifies Executive in connection therewith. RPII 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, RPII agrees to maintain directors and officers liability
insurance coverage at a level at least as favorable to the Executive as such
insurance which RPII currently maintains.
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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,
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
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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
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
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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
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
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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:
GKN Securities Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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.
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.
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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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
GKN SECURITIES CORP.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
By:____________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Operating Officer
With respect to Paragraph 4 hereof,
RESEARCH PARTNERS INTERNATIONAL, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
By:____________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Operating Officer
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