FIRST AMENDMENT
TO THE
EMPLOYMENT AGREEMENT
WHEREAS, GBI CAPITAL PARTNERS, INC. (formerly known as XXXXXX, XXXXXXX
INC.) (the "Company"), a New York corporation, has entered into an employment
agreement (the "Agreement") with XXXXX XXXXXXXX (the "Administrator"), dated
August 24, 1999;
WHEREAS, the Company is a wholly-owned subsidiary of GBI Capital
Management Corp. (the "Parent"), a Florida corporation;
WHEREAS, NEW VALLEY CORPORATION ("New Valley"), a Delaware corporation,
and Parent have entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement") dated as of February 8, 2001 by which New Valley will acquire
beneficial ownership of in excess of 50% of the stock of the Parent (such
corporate transaction, the "Acquisition");
WHEREAS, the Company and the Administrator desire to amend the
Agreement in order to facilitate the Acquisition;
WHEREAS, Section 13 of the Agreement provides that no modification of
or addition to the Agreement or waiver or cancellation of any provision therein
shall be valid except by a signed writing;
NOW THEREFORE, in consideration of the promises and mutual
representations, covenants and agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree to amend the Agreement as follows:
1. The term of the Agreement, as set forth in Section 1 of the
Agreement, is hereby amended to terminate on the second
anniversary of the closing of the Stock Purchase Agreement
(the "Second Anniversary Date), subject to earlier termination
as provided in the Agreement.
2. The Administrator's annual salary, as set forth in Section
3(A) of the Agreement, is hereby amended to Two Hundred
Thousand Dollars ($200,000).
3. The Administrator shall not participate in the Annual
Incentive Bonus Plan and the Special Performance Incentive
Plan effective with the end of the commission month in which
the closing of the Stock Purchase Agreement occurs. The
Administrator hereby agrees that the termination of
participation under the plans is permitted under the
Agreement, and the termination of such participation shall not
provide Reason (as defined in the Agreement) under the
Agreement.
4. For the period commencing October 1, 2000 through the end of
the commission month in which the closing of the Stock
Purchase Agreement occurs, the Administrator shall participate
in the Bonus Plan and the Incentive Plan on the same basis as
he currently participates in such plans on the date hereof.
5. During the term of the Agreement, (i) the Administrator's
services shall be rendered primarily from the Company's
Bethpage, New York location unless he consents in writing to
another location; (ii) the Administrator agrees to devote such
of his business time as may be necessary to perform his duties
hereunder consistent with past practice (it being acknowledged
by the Company that the Administrator's employment hereunder
shall not be "full time"); (iii) the Administrator shall
report to Xxxxxx Xxxxx and Xxxxxxx Xxxxxxxxxx; (iv) the
Administrator shall be reimbursed consistent with past
practices for all out-of-pocket medical expenses; and (v) the
Administrator's annual vacation period, as set forth in
Section 5(B) of the Agreement, is hereby amended so that the
Administrator shall have five weeks of paid vacation annually.
6. Section 6(B) is hereby amended to read as follows: "The
Administrator agrees that if the Company has made and is
continuing to make all required payments to him upon and after
termination of his employment, then for a period commencing on
the date of termination of the Administrator's employment
pursuant to this Agreement and ending on the earlier of twelve
(12) months thereafter or the Second Anniversary Date, the
Administrator shall neither directly and/or indirectly (a)
solicit, hire and/or contact any prior (within six (6) months
of termination) or then current employee of the Company,
Ladenburg Xxxxxxxx & Co. Inc. and/or the Parent nor any of
their respective direct and/or indirect subsidiaries
(collectively, the "Applicable Entities"), nor (b) solicit or
transact any business with any prior (within six (6) months of
termination) or then current customer and/or client of the
Applicable Entities. In addition, the Administrator shall not
attempt (directly and/or indirectly), to do anything either by
himself or through others that he is prohibited from doing
pursuant to this Section 6."
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7. Given that the Administrator is a significant shareholder in
the Parent and the Parent and New Valley have entered into the
Stock Purchase Agreement by which New Valley will acquire
beneficial ownership of in excess of 50% of the stock of the
Parent, and the Stock Purchase Agreement is providing
significant benefits to the Administrator, the Administrator
hereby agrees that, from the date of the closing of the Stock
Purchase Agreement until the earlier of 12 months following
the Administrator's termination of employment hereunder or the
Second Anniversary Date, without the prior written consent of
the Parent, he will not, directly or indirectly, either as
principal, manager, agent, consultant, officer, director,
stockholder, partner, investor, lender or employee or in any
other capacity, carry on, be engaged in or have any financial
interest in, any business which is in competition with any
business of the Applicable Entities. For purposes of this
section, a business shall be deemed to be in competition with
any business of the Applicable Entities if it is materially
involved in the purchase, sale or other dealing in any
property or the rendering of any service purchased, sold,
dealt in or rendered by any member of the Applicable Entities
as a material part of the business of such member of the
Applicable Entities within the same geographic area in which
such member of the Applicable Entities effects such purchases,
sales or dealings or renders such services; provided, however,
that for the period commencing with the termination of
Administrator's employment, (i) a business shall be deemed to
be in competition with any business of the Applicable Entities
only if it is materially involved in the retail brokerage
business and (ii) the provisions of this Section 5 shall apply
to the Administrator only if the Company has made and is
continuing to make all required payments to him upon and after
termination of his employment. Notwithstanding the foregoing,
Administrator shall be allowed to make passive investments in
publicly held competitive businesses as long as his ownership
is less than 5% of such business.
8. Section 7(A) is hereby amended to add the following sentence:
"In addition, Administrator's beneficiary and/or dependents
shall be entitled, through August 24, 2006, to continuation,
at the Company's expense, of such medical insurance and
reimbursement benefits as are being provided to them,
consistent with past practices, prior to termination of
Administrator's employment."
9. Section 7(B) is hereby amended to add the following sentence:
"In addition, Administrator and his dependents, as the case
may be, shall be entitled, through August 24, 2006, to
continuation, at the Company's expense, of such medical
insurance and reimbursement benefits as are being provided to
them, consistent with past practices, prior to termination of
Administrator's employment."
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10. Clauses (iii) and (iv) of Section 7(C)(i) are hereby amended
to read as follows: "or (iii) the continued and willful
failure by Administrator to substantially and materially
perform his material duties hereunder after a reasonable
notice and an opportunity to cure same."
11. Section 7(E) is hereby amended to read as follows: "In the
event Administrator's employment hereunder shall be terminated
by the Administrator for Reason or by the Company for other
than Cause, Death or Disability: (1) the Administrator shall
receive as severance pay in a lump sum no later than sixty
(60) days following such termination, an amount equal to the
salary the Administrator would have received for the remaining
term of this Agreement had there been no termination, and (2)
the Administrator's (and his dependents') participation in any
and all life, disability, medical and dental insurance plans
shall be continued, or equivalent benefits provided to him or
them by the Company, at no cost to him or them, through August
24, 2004, with medical insurance and reimbursement benefits,
consistent with past practices, through April 24, 2006.
12. Section 7(H) is hereby amended to read as follows: "For
purposes hereof, a Change of Control shall be deemed to have
occurred if a "Change of Control" as defined in the Senior
Convertible Promissory Note attached as Exhibit B to the Stock
Purchase Agreement has occurred." The Administrator hereby
agrees that the Acquisition and the other transactions
contemplated by the Stock Purchase Agreement shall not
constitute a Change of Control under the Agreement.
13. In the event the Administrator's employment is terminated due
to Disability, by the Administrator without Reason or by the
Company for Cause, in addition to, and without duplication of,
any other payments or other benefits currently provided in the
Agreement, the Administrator shall be entitled to all salary
earned through the date of termination of his employment. In
addition, Administrator's beneficiary and/or dependents shall
be entitled, through August 24, 2006, to continuation, at the
Company's expense, of such medical insurance and reimbursement
benefits as are being provided to them, consistent with past
practices, prior to termination of Administrator's employment.
14. Any references in the Agreement to benefits to be provided to
the Company's "executive officers" or "administrative
officers" shall also include benefits provided to the
Company's and Ladenburg's executive officers.
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15. To the extent Section 8 of the Agreement is inconsistent with
the Indemnification Agreement dated February 7, 2001 between
Administrator and the Company, the Indemnification Agreement
shall prevail.
16. Section 2 is hereby amended to add the following: "(C)
Charitable and Other Activities: The Administrator shall be
allowed, to the extent such activities do not substantially
interfere with the performance of his duties and
responsibilities hereunder, (i) to manage his personal,
financial and legal affairs, (ii) to be engaged in civic,
charitable, religious and educational activities, and (iii) to
serve on corporate boards with the prior written approval of
the Company's board."
17. This First Amendment to the Agreement shall become effective
only upon the closing of the Stock Purchase Agreement. This
First Amendment to the Agreement shall become null and void on
the termination of the Stock Purchase Agreement prior to the
consummation of the transactions contemplated thereby.
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IN WITNESS WHEREOF, the parties have duly executed this First Amendment
to the Agreement as of February 8, 2001.
GBI CAPITAL PARTNERS, INC.
/s/ Xxxxxxx X. Xxxxxxxxxx /s/ Xxxxx Xxxxxxxx
----------------------------- ------------------------
Name: Xxxxxxx X. Xxxxxxxxxx XXXXX XXXXXXXX,
Title: ADMINISTRATOR