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 XXXXXX XXXXXXX (the "Executive"), 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 Executive 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,
subject to earlier termination as provided in the Agreement.
2. The Executive's title, as set forth in Section 2 of the
Agreement, is hereby amended to be Executive Vice President.
The Executive will serve as Executive Vice President of the
Parent, but will not serve as a director of the Parent nor as
an officer or director of any affiliate thereof without the
Executive's prior written consent. The Executive agrees to
devote substantially his full business time to the performance
of his duties hereunder. The Executive shall report to Xxxxxx
Xxxxx and Xxxxxxx Xxxxxxxxxx.
3. The Executive's annual salary, as set forth in Section 3(A) of
the Agreement, is hereby amended to One Hundred and Eighty
Thousand Dollars ($180,000).
4. The Executive 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 Executive
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.
5. 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 Executive 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.
6. During the term of the Agreement, (i) the Executive's services
shall be rendered primarily from the Company's Manhattan or
Bethpage, New York locations unless he consents in writing to
another location and the Company will continue to provide
office space for the Executive at the Company's offices in
Manhattan and Bethpage; (ii) the Company shall continue to pay
the Executive's NASD and other regulatory filing fees; (iii)
the Company shall continue to provide desk top order execution
machinery and related phone-line services to the Executive's
South Hampton and Manhattan homes and to update same, from
time to time, at the Company's expense, consistent with past
practices; (iv) the Executive shall be required to pay charges
for trades effected for his personal benefit and those of his
family only on the same basis as other senior executives of
the Company are charged; (v) if the Company makes any
modification (including repricing or accelerated vesting) to
the options currently held by Xxxxxxx Xxxxxxxxxx similar
modifications shall be made to the stock options currently
held by the Executive; (vi) any registration or similar rights
granted to Xxxxxxx Xxxxxxxxxx, from time to time, under the
Investor Rights Agreement or otherwise shall likewise be
granted to the Executive; (vii) the Executive shall be
reimbursed consistent with past practices for all
out-of-pocket medical expenses; and (viii) the Executive's
annual vacation period, as set forth in Section 5(B) of the
Agreement, is hereby amended so that the Executive shall have
five weeks of paid vacation annually.
7. Nothing contained in Section 6(A) shall preclude the Executive
from the use of confidential information which relates to
customers or clients the Executive is permitted by Section
6(B) to transact business with following the termination of
his employment.
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8. Section 6(B) is hereby amended to read as follows: "The
Executive 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 Executive's employment pursuant
to this Agreement and ending twelve (12) months thereafter,
the Executive shall neither directly and/or indirectly (a)
solicit or hire 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 other than any prior or then current
customer or client of the Executive. In addition, the
Executive 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."
9. Section 7(A) is hereby amended to add the following sentence:
"In addition, Executive'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 Executive's employment."
10. Section 7(B) is hereby amended to add the following sentence:
"In addition, Executive 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
Executive's employment."
11. Clauses (iii) and (iv) of Section 7(C)(i) are hereby amended
to read as follows: "or (iii) the continued and willful
failure by Executive to substantially and materially perform
his material duties hereunder after a reasonable notice and an
opportunity to cure same."
12. Section 7(E) is hereby amended to read as follows: "In the
event Executive's employment hereunder shall be terminated by
the Executive for Reason or by the Company for other than
Cause, Death or Disability: (1) the Executive 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
Executive would have received for the remaining term of this
Agreement had there been no termination, and (2) the
Executive's (and his dependents') participation in any and all
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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.
13. 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 Executive 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.
14. In the event the Executive's employment is terminated due to
Disability, by the Executive 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 Executive shall be entitled to all salary
earned through the date of termination of his employment. In
addition, Executive'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 Executive's employment.
15. Any references in the Agreement to benefits to be provided to
the Company's executive officers shall also include benefits
provided to Ladenburg's executive officers.
16. To the extent Section 8 of the Agreement is inconsistent with
the Indemnification Agreement dated February 7, 2001 between
the Executive and the Company, the Indemnification Agreement
shall prevail.
17. Section 2 is hereby amended to add the following: "(C)
Charitable and Other Activities: The Executive 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."
18. 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/ Xxxxxx Xxxxxxx
----------------------------- ------------------------
Name: Xxxxxxx X. Xxxxxxxxxx XXXXXX XXXXXXX,
Title: EXECUTIVE