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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(AMENDMENT NO. ) (1)
LABRANCHE & CO INC.
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
505447 10 2
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(CUSIP Number)
Jeffrey M. Marks, Esq.
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
(212) 318-3000
------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
AUGUST 24, 1999
---------------
(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. / /
NOTE. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. SEE Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 9 Pages)
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(1) The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, SEE the
NOTES).
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CUSIP NO. 505447 10 2 13D PAGE 2 OF 9 PAGES
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
George M.L. LaBranche, IV
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP *
(a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS *
OO & PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 100
SHARES -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 34,686,343
EACH -------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 3,501,094
WITH -------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,501,094
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/X/
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.6%
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14 TYPE OF REPORTING PERSON *
IN
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 505447 10 2 13D PAGE 3 OF 9 PAGES
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
James G. Gallagher
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP *
(a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS *
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 34,686,343
EACH -------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 2,287,100
WITH -------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,287,100
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES *
/X/
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.0%
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14 TYPE OF REPORTING PERSON *
IN
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 505447 10 2 13D PAGE 4 OF 9 PAGES
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Alfred O. Hayward, Jr.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP *
(a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS *
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 34,686,343
EACH -------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 1,908,068
WITH -------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,908,068
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES *
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.2%
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14 TYPE OF REPORTING PERSON *
IN
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 505447 10 2 13D PAGE 5 OF 9 PAGES
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ITEM 1. SECURITY AND ISSUER.
The title of the class of equity securities to which this
statement relates is Common Stock, $.01 par value per share (the
"Common Stock"), of LaBranche & Co Inc., a Delaware corporation
(the "Company"), whose principal executive offices are located at
One Exchange Plaza, Twenty-Fifth Floor, New York, New York 10006.
ITEM 2. IDENTITY AND BACKGROUND.
(A) The names of the persons filing this statement are: George
M.L. LaBranche, IV ("LaBranche"), James G. Gallagher ("Gallagher")
and Alfred O. Hayward, Jr. ("Hayward"). Each of LaBranche,
Gallagher and Hayward may hereinafter also be referred to as a
"Reporting Person" and, collectively, as the "Reporting Persons."
(B) The business address of each Reporting Person is LaBranche &
Co Inc., One Exchange Plaza, Twenty-Fifth Floor, New York, New
York 10006.
(C) The principal occupation or employment of LaBranche is
Chairman, Chief Executive Officer and President of the Company and
a specialist for LaBranche & Co., a specialist firm and
broker-dealer and a subsidiary of the Company, located at the same
address as the Company. The principal occupation or employment of
each of Gallagher and Hayward is a specialist for LaBranche & Co.
(D) During the last five years, none of the Reporting Persons has
been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(E) During the last five years, none of the Reporting Persons has
been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or finding any
violation with respect to such laws.
(F) Each of the Reporting Persons is a citizen of the United
States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Each of the Reporting Persons acquired his shares of Common Stock
(other than 100 shares acquired by LaBranche using $1,400 of his
personal funds) in exchange for his membership interests in LaB
Investing Co. L.L.C. pursuant to that certain Exchange Agreement,
dated as of June 17 (the "Exchange Agreement"), by and among the
Company, LaB Investing Co. L.L.C. and the former members named
therein. A copy of the Exchange Agreement is attached hereto as
Exhibit 1. Such membership interests were the only consideration
used by the Reporting Persons to acquire their shares of Common
Stock.
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CUSIP NO. 505447 10 2 13D PAGE 6 OF 9 PAGES
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The descriptions of the Exchange Agreement contained in this
Item 3 and Item 4 below are qualified in their entirety by
reference to Exhibit 1 to this statement.
ITEM 4. PURPOSE OF TRANSACTION.
On August 24, 1999, the Company consummated the initial public
offering of its Common Stock and its reorganization from
partnership to corporate form. In connection with these
transactions, each of the Reporting Persons acquired his shares
of Common Stock in exchange for his membership interests in LaB
Investing Co. L.L.C. pursuant to the Exchange Agreement. LaB
Investing Co. L.L.C. is a subsidiary of the Company and the
general partner of LaBranche & Co.
Other than as described in this Item 4 and Item 6 below and
except for acquisitions of the Company's securities pursuant to
employee incentive or similar plans of the Company, none of the
Reporting Persons has any present plans or proposals which relate
to or would result in any of the actions set forth in
subparagraphs (a) through (j) of Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(A) LaBranche beneficially owns 3,501,094 shares of Common Stock,
constituting approximately 7.6% of the outstanding shares of
Common Stock.
Gallagher beneficially owns 2,287,100 shares of Common Stock,
constituting approximately 5.0% of the outstanding shares of
Common Stock.
Hayward beneficially owns 1,908,068 shares of Common Stock,
constituting approximately 4.2% of the outstanding shares of
Common Stock.
The Reporting Persons beneficially own an aggregate of 7,696,262
shares of Common Stock, constituting approximately 16.8% of the
outstanding shares of Common Stock. As a result of the
stockholders' agreement described in Item 6 below, each of the
Reporting Persons may be deemed to beneficially own an
aggregate of 34,686,343 shares of Common Stock, constituting
approximately 75.6% of the outstanding shares of Common Stock.
Each of the Reporting Persons disclaims beneficial ownership of
any and all shares of Common Stock held by any person or entity
other than such Reporting Person.
None of the shares of Common Stock reported in this Item 5 are
shares as to which there is a right to acquire exercisable within
60 days. All percentage calculations are based upon 45,875,000
shares of Common Stock issued and outstanding as of August 24,
1999, as reported by the Company in its most recently available
filing with the Securities and Exchange Commission.
(B) LaBranche has the sole power to vote or direct the vote of
100 shares of Common Stock, the shared power to vote or direct
the vote of an aggregate of 34,686,343 shares of Common Stock
and the sole power to dispose or direct the disposition of an
aggregate of 3,501,094 shares of Common Stock.
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CUSIP NO. 505447 10 2 13D PAGE 7 OF 9 PAGES
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Gallagher has the shared power to vote or direct the vote of an
aggregate of 34,686,343 shares of Common Stock and the sole power
to dispose or direct the disposition of an aggregate of 2,287,100
shares of Common Stock.
Hayward has the shared power to vote or direct the vote of an
aggregate of 34,686,343 shares of Common Stock and the sole power
to dispose or direct the disposition of an aggregate of 1,908,068
shares of Common Stock.
As described in Item 6 below, each of the Reporting Persons
shares with the other Reporting Persons the power to vote or
direct the vote of such 34,686,343 shares of Common Stock.
Information regarding each of the Reporting Persons for the
purposes of this subparagraph (b) of this Item 5 is set forth in
Item 2 above and expressly incorporated by reference herein.
(C) On August 19, 1999, LaBranche acquired 100 shares of
Common Stock at a purchase price of $14.00 per share, which
transaction was effected on the New York Stock Exchange. On
August 24, 1999, the Reporting Persons acquired beneficial
ownership of an aggregate of 7,696,162 shares of Common Stock
in exchange for their membership interests in LaB Investing Co.
L.L.C. No other transactions were effected by any of the
Reporting Persons during the past sixty (60) days.
(D) Inapplicable.
(E) Inapplicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Each of the Reporting Persons is a party to that certain
Stockholders' Agreement, dated as of August 24, 1999 (the
"Stockholders' Agreement"), by and among the Company and the
stockholders named therein. A copy of the Stockholders' Agreement
is attached hereto as Exhibit 2. Pursuant to the Stockholders'
Agreement, each party thereto has agreed to vote or act by
written consent with respect to such party's Covered Securities
(as defined therein) as determined by a majority of the Reporting
Persons.
In addition, pursuant to the Stockholders' Agreement, each
Exchanging Member (as defined therein), including the Reporting
Persons, has agreed that, subject to applicable securities laws,
such Exchanging Member may only Transfer (as defined therein):
(i) up to 33 1/3% of such Exchanging Member's Covered Securities
after the third anniversary of the consummation of the Company's
initial public offering; (ii) up to an additional 33 1/3% of such
Covered Securities after the fourth anniversary of the
consummation of the Company's initial public offering; and (iii)
all of such Covered Securities after the fifth anniversary of the
consummation of the Company's initial public offering. Each
Exchanging Member has further agreed to hold a specified minimum
number of Covered Securities for so long as such Exchanging Member
remains in the employ of the Company or its subsidiaries and to
comply with transfer restrictions imposed by the underwriters of
the Company's initial public offering. The Stockholders'
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CUSIP NO. 505447 10 2 13D PAGE 8 OF 9 PAGES
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Agreement also prohibits the parties thereto from engaging in
certain activities relating to any securities of the Company with
Restricted Persons (as defined therein).
Each Reporting Person has pledged to the Company shares of Common
Stock with an initial value equal to 100% of the liquidated
damages obligations under such Reporting Person's noncompetition
agreement with the Company. The forms of noncompetition agreement
and pledge agreement are Exhibits 3 and 4 to this statement.
The foregoing descriptions of the Stockholders' Agreement,
noncompetition agreements and pledge agreements are qualified in
their entirety by reference to Exhibits 2, 3 and 4 to this
statement, respectively.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT 1 Exchange Agreement, dated as of June 17, 1999.
EXHIBIT 2 Stockholders' Agreement, dated as of August 24, 1999
(including joint filing agreement).
EXHIBIT 3 Form of Agreement Relating to Noncompetition and
Other Covenants (incorporated by reference to
Exhibit 10.6 to the Company's Registration Statement
of Form S-1, as amended (Registration No. 333-81079)).
EXHIBIT 4 Form of Pledge Agreement (incorporated by reference
to Exhibit 10.7 to the Company's Registration
Statement of Form S-1, as amended (Registration
No. 333-81079)).
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CUSIP NO. 505447 10 2 13D PAGE 9 OF 9 PAGES
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
/s/ George M.L. LaBranche, IV
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George M.L. LaBranche, IV
/s/ James G. Gallagher
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James G. Gallagher
/s/ Alfred O. Hayward, Jr.
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Alfred O. Hayward, Jr.
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EXCHANGE AGREEMENT
This EXCHANGE AGREEMENT (this "AGREEMENT") is dated as of June 17,
1999, by and among (i) LaBranche & Co Inc., a Delaware corporation (the
"COMPANY"), (ii) LaB Investing Co. L.L.C., a New York limited liability company
("INVESTING"), and (iii) the members of Investing listed on SCHEDULE A hereto
(collectively, the "EXCHANGING MEMBERS" and, each, an "EXCHANGING MEMBER").
W I T N E S S E T H :
WHEREAS, the Company is contemplating an initial public offering (the
"IPO") of its common stock, $.01 par value per share ("COMMON STOCK");
WHEREAS, in contemplation of the IPO, the Company, Investing, LaBranche
& Co., a New York limited partnership ("LABRANCHE LP"), and the limited partners
of LaBranche LP (collectively, the "PARTICIPATING LIMITED PARTNERS") have
simultaneously herewith approved, adopted and entered into a Plan of
Incorporation, (the "PLAN"), dated as of June 17, 1999, pursuant to which, among
other things, the Participating Limited Partners have agreed to exchange their
partnership interests in LaBranche LP for cash and/or securities of the Company
and/or LaBranche LP; and
WHEREAS, in contemplation of the IPO, the Exchanging Members desire to
transfer their respective membership interests in Investing (collectively,
"MEMBERSHIP INTERESTS") to the Company in exchange for shares of Common Stock
or, in the case of certain Exchanging Members, a combination of cash and/or
securities of the Company (the "LLC EXCHANGE");
NOW THEREFORE, in consideration of the premises and of the mutual
agreements, covenants and provisions herein contained and for good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
LLC EXCHANGE
Section 1.1. LLC EXCHANGE.
(a) As of the Effective Time (as defined below), each
Exchanging Member hereby assigns and transfers to the Company all right, title
and interest in, to and with respect to his or her entire Membership Interest.
(b) As of the Effective Time, the Company hereby accepts the
assignment and transfer by each Exchanging Member of his or her Membership
Interest and hereby assumes and
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agrees to perform and be bound by any and all of the conditions, covenants and
obligations of such Exchanging Member pursuant to the LaB Investing Co. L.L.C.
Amended and Restated Operating Agreement, dated as of January 1, 1998, as
amended to date (the "LLC AGREEMENT").
(c) Immediately after the Effective Time, each Exchanging
Member shall receive, in consideration for the exchange of his or her Membership
Interest, the number of shares of Common Stock (or, in the case of Steven C.
Berger, Paul Redmond and Robert W. Keelips, III , a combination of shares of
Common Stock and cash) with a value, based upon the per share price of the
Common Stock in the IPO, equal to such Exchanging Member's interest in that
portion of the public market valuation of the Company available to the members
of Investing.(1)
(d) The Company will issue to an Exchanging Member, as
applicable, only whole shares of Common Stock. As a result, such an Exchanging
Member will receive cash in lieu of any fractional share interest in Common
Stock.
Section 1.2. TERMINATION OF RIGHTS. From and after the Effective Time,
the entire capital account and share of profits and losses of each Exchanging
Member shall be deemed to be the capital account and share of profits and losses
of the Company, and such Exchanging Member shall have no further interest or
rights of any kind in or with respect to his or her Membership Interest or under
the LLC Agreement. From and after the Effective Time, the Company shall be the
sole member of Investing, and each Exchanging Member shall be released from all
further obligations under the LLC Agreement.
Section 1.3. CONSENT OF MANAGING COMMITTEE. By its execution hereof,
Investing acknowledges that the Managing Committee of Investing (the "MANAGING
COMMITTEE") (i) has approved the form of this Agreement, (ii) acknowledges
receipt of a duly executed copy of this Agreement and (iii) in accordance with
the provisions of the LLC Agreement, consents to the assignment and transfer of
the Exchanging Members' Membership Interests to the Company and to the admission
of the Company as a new member of Investing.
Section 1.4. EFFECTIVE TIME. Subject to the consummation of the IPO,
the LLC Exchange shall be deemed to occur immediately prior to the IPO. The date
and time when the LLC Exchange shall be deemed to occur is referred to in this
Agreement as the "EFFECTIVE TIME."
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(1) An estimated value of each Exchanging Member's interest is set forth on
SCHEDULE A hereto opposite such Exchanging Member's name under the column
entitled "Total Assumed Value." These estimated values are based on a current
estimate of $425 million, which is subject to change, as the portion of the
public market valuation of the Company available to the members of Investing.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
As of the date hereof and as of the Effective Time, each Exchanging
Member severally represents and warrants to the Company as follows:
Section 2.1. ENFORCEABILITY. Such Exchanging Member is of sound mind
and has full legal capacity to enter into, execute and deliver this Agreement
and the other documents contemplated hereby and perform his or her obligations
hereunder and thereunder, and each of this Agreement and the other documents
contemplated hereby has been duly executed and delivered by such Exchanging
Member and constitutes a legal, valid and binding obligation of such Exchanging
Member, enforceable against such Exchanging Member in accordance with its terms,
except as such enforceability may be limited by any applicable bankruptcy,
insolvency, moratorium or other laws relating to or affecting creditors' rights
generally and the exercise of judicial discretion in accordance with general
equitable principles.
Section 2.2. TITLE. Such Exchanging Member owns, beneficially and of
record, his or her Membership Interest, free and clear of any claim, lien,
pledge, deed of trust, option, charge, security interest, hypothecation,
encumbrance, right of first offer, voting trust, proxy, right of third parties
or other restriction or limitation of any nature whatsoever (collectively,
"LIENS" and each, a "LIEN"). At the Effective Time, the Company will acquire
good and valid title to such Membership Interest, free and clear of any Liens
other than any Lien created by the Company.
Section 2.3. NO CONFLICTS. Subject to compliance with the rules and
regulations of the New York Stock Exchange (the "NYSE") and federal and state
securities laws, the execution, delivery and performance of this Agreement and
the other documents contemplated hereby, and the consummation of the
transactions contemplated hereby and thereby, will not conflict with,
contravene, result in a violation or breach of or default under (with or without
the giving of notice or the lapse of time or both), permit any party to
terminate, amend or accelerate the provisions of, or result in the imposition of
any Lien (or any obligation to create any Lien) upon any of the property or
assets of such Exchanging Member under any contract, agreement, indenture,
letter of credit, mortgage, security agreement, pledge agreement, deed of trust,
bond, note, guarantee, surety obligation, warranty, license, franchise, permit,
power of attorney, lease, instrument or other agreement to which such Exchanging
Member is a party or by which any of his or her property or assets may be bound.
Section 2.4. ACCREDITED INVESTOR. Such Exchanging Member is an
"accredited investor," as defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended (the "SECURITIES ACT").
Section 2.5. INVESTMENT PURPOSE. Such Exchanging Member is acquiring
shares of Common Stock under this Agreement for his or her own account for
investment purposes, and not
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with a view to, or for resale in connection with, any distribution thereof other
than in compliance with the Securities Act and other applicable securities laws.
Such Exchanging Member acknowledges that he or she must bear the economic risk
of an investment in the Common Stock for an indefinite period of time because,
among other reasons, the shares of Common Stock received by such Exchanging
Member have not been registered under the Securities Act and, therefore, such
securities cannot be sold unless subsequently registered under the Securities
Act or an exemption from such registration is available. Such Exchanging Member
also acknowledges that transfers of the shares of Common Stock received are
further restricted by applicable United States federal and state and foreign
securities laws.
Section 2.6. ACCESS TO INFORMATION. Such Exchanging Member understands
the risks of, and other considerations relating to his or her acquisition and
ownership of the shares of Common Stock received. Such Exchanging Member has
been provided an opportunity to ask questions of, and has received answers
satisfactory to him or her from, the Company, LaBranche LP, Investing and their
representatives regarding the shares of Common Stock received, and has obtained
any and all additional information from the Company and its representatives that
such Exchanging Member deems necessary regarding the shares of Common Stock
received.
Section 2.7. EVALUATION OF AND ABILITY TO BEAR RISKS. Such Exchanging
Member has such knowledge and experience in financial affairs that he or she is
capable of evaluating the merits and risks of, and other considerations relating
to, the ownership of the shares of Common Stock received, and has not relied in
connection with his or her acquisition of the shares of Common Stock received
upon any representations, warranties or agreements other than those set forth in
this Agreement. Such Exchanging Member's financial situation is such that he or
she can afford to bear the economic risk of holding the shares of Common Stock
for an indefinite period of time, and such Exchanging Member can afford to
suffer the complete loss of his or her investment in such securities.
Section 2.8. NO DISPOSITIONS. Such Exchanging Member does not currently
have, and at the Effective Time will not have, any plan, agreement, commitment,
intention or arrangement, whether written or oral, to dispose of any of the
shares of Common Stock to be received by such Exchanging Member. For purposes of
this representation, a "disposition" shall include any direct or indirect offer,
offer to sell, sale, contract of sale or grant of any option to purchase, gift,
transfer, pledge or other disposition, including any disposition of the economic
or other risks of ownership through hedging transactions or derivatives and any
other transaction that would constitute a "constructive sale" within the meaning
of Section 1259 of the United States Internal Revenue Code of 1986, as amended
(the "CODE"), including, without limitation, a short-sale, forward sale, equity
swap or other derivative contract with respect to the Common Stock or
substantially identical property, or other transaction having substantially the
same effect as the foregoing.
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ARTICLE III
ADDITIONAL INFORMATION AND AGREEMENTS
Section 3.1. COMPANY. Each Exchanging Member understands and
acknowledges that the Company is a Delaware corporation organized to be the
direct or indirect owner of all or substantially all of the equity interest in
LaBranche LP and Investing. Each Exchanging Member further understands and
acknowledges that the Company has not conducted any business operations prior to
the date of this Agreement.
Section 3.2. AMENDMENT TO LLC AGREEMENT. Each Exchanging Member
acknowledges and agrees that, at the Effective Time, this Agreement shall
constitute an amendment of those provisions of the LLC Agreement which are
inconsistent with the provisions of this Agreement. Each Exchanging Member
consents to and approves such amendment, subject to its effectiveness. The
provisions of the LLC Agreement as in effect on the date hereof will continue to
apply to all Exchanging Members until the Effective Time.
Section 3.3. IPO REGISTRATION STATEMENT. A current draft of the
Company's Registration Statement on Form S-1 for the IPO (the "REGISTRATION
STATEMENT") to be filed with the Securities and Exchange Commission is attached
hereto as EXHIBIT A. A description of the Common Stock is included therein.
Section 3.4. PLAN OF INCORPORATION. A copy of the Plan is attached
hereto as EXHIBIT B. Each Exchanging Member consents to and approves the terms
and conditions of the Plan.
Section 3.5. EMPLOYMENT AGREEMENTS. In connection herewith, the each of
the Exchanging Members (other than Steven C. Berger, Paul Redmond and Robert W.
Keelips, III) (each, an "EMPLOYEE MEMBER") shall execute and deliver an
Employment Agreement, in a form reasonably satisfactory to such Exchanging
Member and the Company.
Section 3.6. BENEFIT PLANS. By executing this Agreement, each
Exchanging Member hereby consents to and approves the terms and conditions of
each of the Company's Equity Incentive Plan and Annual Incentive Plan (as each
is defined and described in the Plan).
Section 3.7. ADDITIONAL AGREEMENTS. In connection herewith, each
Exchanging Member shall execute and deliver each of the following:
(a) Stockholders' Agreement, in a form reasonably satisfactory
to such Exchanging Member and the Company, pursuant to which such Exchanging
Member will be subject to, among other things, certain transfer and voting
restrictions;
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(b) Power of Attorney, in substantially the form attached as
EXHIBIT C hereto, appointing George M.L. LaBranche, IV and James G. Gallagher as
agents and attorneys-in-fact for such Exchanging Member;
(c) Agreement Regarding Noncompetition and Other Covenants, in
a form reasonably satisfactory to such Exchanging Member and the Company (the
"NONCOMPETITION AGREEMENT"), pursuant to which such Exchanging Member will be
subject to certain restrictive covenants, including those relating to
noncompetition and nonsolicitation; and
(d) Pledge Agreement, in a form reasonably satisfactory to
such Exchanging Member and the Company, pursuant to which such Exchanging Member
will pledge shares of Common Stock to secure certain of his or her obligations
under his or her Noncompetition Agreement.
Section 3.8. TRANSFER RESTRICTIONS.
(a) Each Exchanging Member hereby agrees to be bound by and
subject to any and all transfer restrictions set forth in the Stockholders'
Agreement referred to in Section 3.7(a) above.
(b) Each Exchanging Member hereby agrees to execute and
deliver a "lock-up" agreement if and when required by the underwriters of the
IPO.
(c) Each Employee Member hereby agrees to comply in all
respects with any trading restrictions generally applicable to employees of the
Company or LaBranche LP.
Section 3.9. CUSTODY ARRANGEMENTS. All shares of Common Stock issued to
an Exchanging Member must be held in a brokerage, custody or similar account
maintained at a firm approved by the Board. The Company will be entitled to
monitor all activity in each Exchanging Member's account and to enforce
applicable transfer and hedging restrictions applicable to such Exchanging
Member as in effect from time to time. Any Common Stock held in such an account
may be held of record by a custodian or nominee. The Company may require each
Exchanging Member to execute a customary account agreement with the custodian or
other firm, in such reasonable form as the Company and such Exchanging Member
shall mutually determine (which may include customary provisions relating to
indemnification of the custodian or other firm and an undertaking to arbitrate
custody-related disputes).
Section 3.10. INDEMNIFICATION AGREEMENTS. In connection with the IPO,
the Company will enter into an indemnification agreement with each director and
each officer of the Company who signs the Registration Statement and any other
registration statements to be filed by the Company, to indemnify them for
actions taken in consummating the transactions contemplated by the IPO.
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<PAGE>
Section 3.11. RELEASE. Each Exchanging Member (the "RELEASOR")
hereby irrevocably releases the Company, LaBranche LP and Investing, each and
every affiliate, stockholder, subsidiary, partner, officer, member, director
and employee of the Company and Investing in their capacities as such, and
each other Exchanging Member (each, a "RELEASEE") from any claims,
liabilities, costs, expenses, actions, suits or demands however arising,
whether at law or in equity, contingent, known or unknown, which such
Releaseor may have or assert, in respect of any interest in Investing or
arising out of any membership or employment relationship with LaBranche LP or
Investing that such Releasor or such Releasor's heirs, successors or assigns
had with any such Releasee on or prior to the Effective Time; PROVIDED that
this release shall not extend to (i) indebtedness owing to such Releasor by
any Releasee, (ii) representations or warranties made, or agreements entered
into by, a Releasee in connection with this Agreement, and (iii) any conduct
that resulted from a Releasee's bad faith, fraud or criminal act or omission.
ARTICLE IV
TAX CONSEQUENCES
Section 4.1. TAX MATTERS. The parties hereto intend the LLC Exchange to
qualify under Section 351 of the Code and will use all reasonable efforts to
cause the LLC Exchange to so qualify. Each party hereto will not take, and will
cause such party's affiliates and representatives not to take, any actions or
positions which may be expected to cause the LLC Exchange not to so qualify.
Section 4.2. ADDITIONAL INFORMATION. For additional information
regarding the tax consequences to the Exchanging Members of the transactions
contemplated hereby, see Section 8 of the Plan, entitled "Tax Consequences."
ARTICLE V
MISCELLANEOUS
Section 5.1. AMENDMENTS.
(a) The Managing Committee, in its sole discretion, may amend
this Agreement in any respect prior to the Effective Time, including making any
amendments to the Exhibits hereto; provided that an amendment shall not be
binding upon an Exchanging Member if it would (a) disproportionately reduce the
value of the shares of Common Stock and/or cash, as the case may be, to be
received by such Exchanging Member in the LLC Exchange relative to the other
Exchanging Members (other than Steven C. Berger, Paul Redmond and Robert W.
Keelips, III), or (b) amend the LLC Agreement in a manner that would require the
further consent of such Exchanging Member without obtaining the consent of such
Exchanging Member.
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<PAGE>
(b) The Managing Committee has the authority under this
Agreement not to offer securities of the Company to or exchange securities of
the Company with any member of Investing if the Managing Committee determines,
in its sole discretion, that the making of such offer or the consummation of
such exchange could violate any applicable laws or regulations, including
securities laws. In the event the Managing Committee does not so offer or
exchange, the Managing Committee may, pursuant to Section 10(b) of the Amended
and Restated Operating Agreement of Investing, dated as of January 1, 1998, as
amended (the "INVESTING OPERATING AGREEMENT"), require such member of Investing
to withdraw from Investing, and such member will receive his, her or its Final
Payment (as defined and determined in accordance with the Investing Operating
Agreement).
(c) Following consummation of the LLC Exchange, the Managing
Committee may waive or amend any aspect of this Agreement that has not yet been
completed or reflected in a separate agreement.
Section 5.2. EXPENSES. Each party hereto shall be responsible for all
expenses of such party incurred in connection with the transactions contemplated
by this Agreement. In addition, each Exchanging Member shall be responsible for
any and all expenses incurred by the Company in enforcing the provisions of this
Agreement against such Exchanging Member.
Section 5.3. NOTICES.
(a) All notices, requests, demands, waivers and other
communications to be given by any party hereunder shall be in writing and shall
be (i) mailed by first-class, registered or certified mail, postage prepaid,
(ii) sent by hand delivery or reputable overnight delivery service or (iii)
transmitted by telecopy (provided that a copy is also sent by reputable
overnight delivery service) addressed, in the case of any Exchanging Member, to
such Exchanging Member at the address set forth on the current records of
Investing or, in the case of the Company or Investing, to One Exchange Plaza,
New York, NY 10006, Attention: Chief Executive Officer, or, in each case, to
such other address as may be specified in writing to the other parties hereto.
(b) All such notices, requests, demands, waivers and other
communications shall be deemed to have been given and received (i) if by
personal delivery or telecopy, on the day of such delivery, (ii) if by
first-class, registered or certified mail, on the fifth business day after the
mailing thereof or (iii) if by reputable overnight delivery service, on the day
delivered.
Section 5.4. TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time by the Managing Committee. If the IPO has not been
consummated by December 31, 1999, unless re-executed, this Agreement will be
automatically terminated and will be of no further force and effect.
Section 5.5. REPRESENTATIVES, SUCCESSORS AND ASSIGNS. This Agreement
shall be binding upon and inure to the benefit of the respective parties hereto
and their respective legatees, legal representatives, successors and assigns;
provided that an Exchanging Member may not assign,
-8-
<PAGE>
delegate or otherwise transfer any of his or her rights or obligations under
this Agreement except with the prior written consent of the Company, and any
assignment without such consent by the Company shall be void.
Section 5.6. BENEFIT. Nothing in this Agreement, express or implied, is
intended or shall be construed to confer upon or give to any person or other
entity (other than Investing or the Company and, to the extent expressly
provided herein, an Exchanging Member) any remedy or claim under or by reason of
this Agreement or any term, covenant or condition hereof, all of which shall be
for the sole and exclusive benefit of the parties mentioned above in this
Section, except that the provision set forth above in Section 3.10, entitled
"Release," shall be enforceable by the Releasees mentioned therein.
Section 5.7. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS. THE MANAGING COMMITTEE IS EXPRESSLY
AUTHORIZED TO MAKE ANY CHANGES TO THIS GOVERNING LAW PROVISION AND THE GOVERNING
LAW PROVISIONS OF ANY EXHIBIT AS IT SHALL DEEM NECESSARY OR DESIRABLE PRIOR TO
THE EFFECTIVE TIME.
Section 5.8. ARBITRATION. Without diminishing the finality and
conclusive effect of any determination by the Managing Committee of any matter
under this Agreement, which is provided herein to be determined by the Managing
Committee, any dispute, controversy or claim arising out of or relating to or
concerning the provisions of this Agreement or any of the Exhibits hereto shall
be finally settled by arbitration in New York City before, and in accordance
with the rules then obtaining of, the NYSE or, if the NYSE declines to arbitrate
the matter, the American Arbitration Association ("AAA") in accordance with the
commercial arbitration rules of the AAA; PROVIDED HOWEVER, that, in addition to
the right to compel arbitration of any dispute or controversy, the Company or
Investing may bring an action or special proceeding in a state or federal court
of competent jurisdiction sitting in New York City, whether or not an
arbitration proceeding has theretofore been or is ever initiated, for the
purpose of temporarily, preliminarily, or permanently enforcing the provisions
of this Agreement or to enforce an arbitration award and, for the purposes of
this provision, each Exchanging Member expressly consents to the jurisdiction of
any such court in respect of any such action and waives to the fullest extent
permitted by applicable law any objection to personal jurisdiction or to the
laying of venue of any such suit, action or proceeding in such court, agrees
that proof shall not be required that monetary damages for breach of the
provisions of this Agreement would be difficult to calculate and that remedies
at law would be inadequate and irrevocably appoints George M.L. LaBranche, IV as
such Exchanging Member's agent for service of process in connection with any
such action or proceeding, who shall promptly advise such participant of any
such service of process.
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<PAGE>
Section 5.9. FURTHER ASSURANCES. Each Exchanging Member agrees to
execute such additional documents and take such further action as may be
requested by the Company to effect the provisions of this Agreement.
Section 5.10. HEADINGS. The headings of the Sections of this Agreement
are inserted as a matter of convenience and for reference purposes only, are of
no binding effect, and in no respect define, limit or describe the scope of this
Agreement or the intent of any Section.
Section 5.11. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 5.12. ENTIRE AGREEMENT. This Agreement, including the Exhibits
hereto, supersedes all prior negotiations, agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
Each Exchanging Member expressly agrees that neither LaBranche LP, Investing,
nor the Company has made representations, warranties, promises or inducements in
connection with this Agreement other than as provided herein.
* * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
LABRANCHE & CO INC.
By: /s/ George M.L. LaBranche, IV
-----------------------------------------
Name: George M.L. LaBranche, IV
Title: Chairman and Chief Executive Officer
LAB INVESTING CO. L.L.C.
By: /s/ George M.L. LaBranche
-----------------------------------------
Name: George M.L. LaBranche
Title: Managing Committee member
/s/ George M.L. LaBranche, IV
--------------------------------------------
George M.L. LaBranche, IV
/s/ Vincent J. Flaherty
--------------------------------------------
Vincent J. Flaherty
/s/ James G. Gallagher
--------------------------------------------
James G. Gallagher
/s/ Alfred O. Hayward, Jr.
--------------------------------------------
Alfred O. Hayward, Jr.
/s/ Michael J. Naughton
--------------------------------------------
Michael J. Naughton
/s/ John McGraner
--------------------------------------------
John McGraner
/s/ Vincent Papandrea
--------------------------------------------
Vincent Papandrea
-11-
<PAGE>
/s/ Anthony M. Corso
--------------------------------------------
Anthony M. Corso
/s/ Eugene C. McCarthy
--------------------------------------------
Eugene C. McCarthy
/s/ John O. Pickett, III
--------------------------------------------
John O. Pickett, III
/s/ Michael C. Ziebarth
--------------------------------------------
Michael C. Ziebarth
/s/ Anthony Giardina
--------------------------------------------
Anthony Giardina
/s/ Sean M. McCooey
--------------------------------------------
Sean M. McCooey
/s/ Mark Soltz
--------------------------------------------
Mark Soltz
/s/ Christopher M. Smith
--------------------------------------------
Christopher M. Smith
/s/ Joseph Corso, Jr.
--------------------------------------------
Joseph Corso, Jr.
/s/ Robert A. Conte
--------------------------------------------
Robert A. Conte
/s/ Paul A. Redmond
--------------------------------------------
Paul A. Redmond
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<PAGE>
/s/ Thomas G. McLaughlin
--------------------------------------------
Thomas G. McLaughlin
/s/ Nicholas Caputo
--------------------------------------------
Nicholas Caputo
/s/ Joseph R. Dewhurst, II
--------------------------------------------
Joseph R. Dewhurst, II
/s/ Steven C. Berger
--------------------------------------------
Steven C. Berger
/s/ John L. McWilliams
--------------------------------------------
John L. McWilliams
/s/ Thomas J. Shanley
--------------------------------------------
Thomas J. Shanley
/s/ Kevin R. McMahon
--------------------------------------------
Kevin R. McMahon
/s/ Fred DeBoer
--------------------------------------------
Fred DeBoer
/s/ Robert W. Keelips, III
--------------------------------------------
Robert W. Keelips, III
/s/ Karin Gill
--------------------------------------------
Karin Gill
/s/ John M. Dempsey, III
--------------------------------------------
John M. Dempsey, III
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<PAGE>
/s/ John N. Durante
--------------------------------------------
John N. Durante
/s/ Gerard A. Competello
--------------------------------------------
Gerard A. Competello
/s/ William J. Burke, III
--------------------------------------------
William J. Burke, III
/s/ Christopher Connors
--------------------------------------------
Christopher Connors
/s/ Christopher Keelips
--------------------------------------------
Christopher Keelips
/s/ Vincent G. Quigley
--------------------------------------------
Vincent G. Quigley
/s/ Anthony Picerni
--------------------------------------------
Anthony Picerni
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<PAGE>
LABRANCHE & CO INC.
STOCKHOLDERS' AGREEMENT
DATED AS OF AUGUST 24, 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C> <C>
ARTICLE I LIMITATIONS ON TRANSFER OF SECURITIES...........................................................1
Section 1.1. General Transfer Restrictions..........................................................1
Section 1.2. Compliance with Certain Restrictions...................................................2
Section 1.3. Transfers Following Death or Disability................................................3
Section 1.4. Transfers with the Consent of Board of Directors.......................................3
Section 1.5. Transfers to Permitted Transferees.....................................................3
Section 1.6. Compliance with Law and Regulations....................................................3
Section 1.7. Legend on Certificates; Entry of Stop Transfer Orders..................................3
Section 1.8. Certificates to be Held by Company.....................................................4
Section 1.9. Transfers in Violation of Agreement Void...............................................5
ARTICLE II VOTING AGREEMENT................................................................................5
Section 2.1. Voting by Stockholders.................................................................5
Section 2.2. Designation of Successors..............................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................................................5
Section 3.1. Representations and Warranties of the Stockholders.....................................5
ARTICLE IV DEFINITIONS.....................................................................................6
ARTICLE V MISCELLANEOUS...................................................................................9
Section 5.1. Standstill Provisions..................................................................9
Section 5.2. Expenses...............................................................................9
Section 5.3. Filing of Schedule 13D or 13G.........................................................10
Section 5.4. Notices...............................................................................10
Section 5.5. Term of the Agreement.................................................................11
Section 5.6. Amendments; Waivers...................................................................11
Section 5.7. Adjustment upon Changes in Capitalization; Adjustments upon
Changes of Control; Representatives, Successors and Assigns...........................12
Section 5.8. Disinterested Board Members to Make Determinations....................................12
Section 5.9. Severability..........................................................................12
Section 5.10. Representatives, Successors and Assigns...............................................13
Section 5.11. Governing Law.........................................................................13
Section 5.12. Specific Performance..................................................................13
Section 5.13. Arbitration...........................................................................13
Section 5.14. Submission to Jurisdiction; Waiver of Immunity........................................13
Section 5.15. Further Assurances....................................................................14
Section 5.16. Execution in Counterparts.............................................................14
Section 5.17. Entire Agreement......................................................................14
</TABLE>
<PAGE>
STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS' AGREEMENT (this "AGREEMENT"), dated as of
August 24, 1999, is by and among (i) LaBranche & Co Inc., a Delaware
corporation (the "COMPANY"), (ii) the Exchanging Members (as defined below)
listed on Schedule I hereto and (iii) Steven C. Berger, Robert W. Keelips, III
and Paul A. Redmond (collectively, the "RETIRING MEMBERS"). The Exchanging
Members and the Retiring Members are collectively referred to herein as the
"STOCKHOLDERS." Except as otherwise provided herein, capitalized terms used
herein have the respective meanings ascribed thereto in Article IV of this
Agreement.
W I T N E S S E T H :
WHEREAS, the Company, LaB Investing Co. L.L.C., a New York limited
liability company ("INVESTING"), and the Stockholders have entered into an
Exchange Agreement, dated as of June 15, 1999 (the "EXCHANGE AGREEMENT"),
pursuant to which (i) the Exchanging Members have agreed to contribute their
respective membership interests in Investing to the Company in exchange for
common stock, par value $.01 per share ("COMMON STOCK"), of the Company and
(ii) the Retiring Members have agreed to contribute their respective membership
interests in Investing to the Company in exchange for a combination of shares
of Common Stock and cash (the "LLC EXCHANGE") in connection with the Company's
proposed initial public offering of shares of Common Stock (the "IPO");
WHEREAS, the Company and the Stockholders desire to enter into certain
agreements with respect to the Transfer (as defined below) and voting of their
Common Stock and various other matters in order to continue harmonious
relationships among themselves with respect to the conduct of the business and
affairs of the Company and LaBranche & Co., a New York limited partnership of
which Investing is the sole general partner ("LABRANCHE LP");
WHEREAS, it is a condition under the Exchange Agreement that the
parties hereto enter into this Agreement.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements, covenants and provisions herein contained and for good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
LIMITATIONS ON TRANSFER OF SECURITIES
Section 1.1. GENERAL TRANSFER RESTRICTIONS.
(a) Each Stockholder agrees that he or she shall not Transfer
any Covered Securities beneficially owned by him or her, except in accordance
with all of the following: (i) the
<PAGE>
terms of this Agreement, (ii) the restrictions on the transfer of the Company's
securities contemplated by the Plan of Incorporation of LaBranche LP, dated as
of June 17, 1999, (iii) any trading restrictions generally applicable to
employees of the Company Group, for so long as such Stockholder remains in the
employ of the Company Group, (iv) the terms of any "lock-up" agreement required
by the underwriters of the IPO and (v) the terms of any other contract or
agreement with the Company or other undertaking by which such Stockholder is
bound and to which such Covered Securities are subject.
(b) Each Exchanging Member agrees that he or she may Transfer
Covered Securities only as follows, subject to applicable securities laws:
(i) up to 33 1/3% of such Covered Securities at any
time after the third anniversary of the date of the consummation of the
IPO;
(ii) up to an additional 33 1/3% of such Covered
Securities at any time after the fourth anniversary of the date of the
consummation of the IPO; and
(iii) all of such Covered Securities at any time
after the fifth anniversary of the date of the consummation of the IPO.
(c) Notwithstanding the provisions set forth in Section 1.1(b)
above, each Exchanging Member agrees that for so long as such Exchanging Member
remains in the employ of any member of the Company Group, such Exchanging Member
shall at all times be the sole beneficial Owner of that number of Covered
Securities equal to 25% or more of the aggregate number of Covered Securities
(i) beneficially owned by such Exchanging Member immediately after the
consummation of the IPO and (ii) beneficial ownership of which is acquired by
such Exchanging Member thereafter, with no reduction in such aggregate number
for Covered Securities disposed of by such Exchanging Member.
(d) Each Retiring Member agrees that he may Transfer Covered
Securities only as follows, subject to applicable securities laws:
(i) up to 50% of such Covered Securities at any
time after the first anniversary of the IPO
Date; and
(ii) all of such Covered Securities at any time
after the second anniversary of the IPO
Date.
Section 1.2. COMPLIANCE WITH CERTAIN RESTRICTIONS.
(a) Each Stockholder agrees that, with respect to all Covered
Securities beneficially owned by such Stockholder, he or she shall comply with
the restrictions on Transfer imposed by the underwriters of the IPO.
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<PAGE>
(b) Each Stockholder agrees that he or she shall, at the
request of the Company, comply with any future restrictions on Transfer imposed
by or with the consent of the Company from time to time in connection with any
future offerings of securities of the Company, whether by the Company or by any
securityholder of the Company and whether or not such restrictions on Transfer
refer to such Stockholder by name.
(c) Each Stockholder agrees that, with respect to all Covered
Securities beneficially owned by such Stockholder, he or she will comply with
any restrictions imposed by the Company from time to time to enable the Company
or any party to an agreement with the Company to account for a business
combination by the pooling of interests method.
Section 1.3. TRANSFERS FOLLOWING DEATH OR DISABILITY. Notwithstanding
any other provisions of this Agreement, upon the death or Disability of any
Stockholder, such Stockholder (or his or her estate) may Transfer his or her
Covered Securities free of any provisions of this Agreement, subject to the
provisions of any other agreement relating to this subject matter.
Section 1.4. TRANSFERS WITH THE CONSENT OF BOARD OF DIRECTORS.
Notwithstanding any other provisions of this Agreement, a Stockholder may
Transfer any number of Covered Securities at any time with the prior written
consent of the Board of Directors, which consent may be withheld or delayed, or
granted on such terms and conditions as the Board of Directors may determine, in
its sole discretion.
Section 1.5. TRANSFERS TO PERMITTED TRANSFEREES. Notwithstanding any
other provision of this Agreement, a Stockholder may Transfer any number of
Covered Securities to a Permitted Transferee at any time, provided that it shall
be a condition to any such Transfer that such Permitted Transferee agree in
writing to be bound by all the provisions of this Agreement as if such Permitted
Transferee were a Stockholder from and after the date of such Transfer for all
purposes of this Agreement.
Section 1.6. COMPLIANCE WITH LAW AND REGULATIONS. Each Stockholder
agrees that any Transfer of Covered Securities by such Stockholder shall be in
compliance with any applicable constitution, rule or regulation of, or any
applicable policy of, any of the exchanges or associations or other institutions
with which any member of the Company Group has membership or other privileges
(including, without limitation, the NYSE), federal and securities laws, and any
applicable law, rule or regulation of the Commission or any other governmental
agency having jurisdiction.
Section 1.7. LEGEND ON CERTIFICATES; ENTRY OF STOP TRANSFER ORDERS. (a)
Each Stockholder agrees that each outstanding certificate representing any
Covered Securities that are subject to this Agreement shall bear an endorsement
noted conspicuously on each such certificate reading substantially as follows:
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), or under any
state securities law and
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<PAGE>
may not be sold, offered for sale, pledged, hypothecated or otherwise
transferred in the absence of an effective registration statement with
respect thereto under the Act and any applicable state securities law,
or the receipt by the Company of an opinion of counsel, reasonably
satisfactory to the Company, that such registration is not required.
The securities represented by this certificate are subject to the
provisions of a Stockholders' Agreement dated as of August 24, 1999
among the Company and certain persons listed on Schedule I to such
agreement, a copy of which is on file at the principal executive office
of the Company, and such securities may be sold, assigned, pledged or
otherwise transferred only in accordance with such agreement."
(b) Each Stockholder agrees to the entry of stop transfer
orders against the Transfer of legended certificates representing securities of
the Company not in compliance with this Agreement.
Section 1.8. CERTIFICATES TO BE HELD BY COMPANY. (a) Each Exchanging
Member agrees that the certificates representing his or her Covered Securities
shall be issued in the name of a nominee holder to be designated by the Company
and shall be held in custody by the Company at its principal office. The Company
shall, upon the request of any such Exchanging Member or the estate of any
Exchanging Member, as the case may be, in writing addressed to the Secretary of
the Company or any officer designated by the Secretary (which request shall
include a representation by such Exchanging Member or his or her estate that he
or she is then permitted to Transfer a specified number of Covered Securities
under the provisions of this Agreement), promptly release from custody the
certificates representing such specified number of such Exchanging Member's
Covered Securities which are then intended and permitted to be Transferred under
the provisions of this Agreement.
(b) Subject to the Exchanging Members having provided
appropriate written direction to the Company, whenever the nominee holder shall
receive any cash dividend or other cash distribution upon any Covered Securities
deposited pursuant to Section 1.8(a), the Company shall cause the nominee holder
to distribute promptly such cash dividend or other distribution (by any other
manner that it may determine, net of its charges and expenses in effecting such
conversion), by checks drawn on a bank in the United States, to the Exchanging
Members in proportion to the number of Covered Securities Owned by each of them
respectively; provided that the Company shall cause the nominee holder to make
appropriate adjustments in the amounts so distributed in respect of any amounts
required to be withheld by the nominee holder from any distribution on account
of taxes. The nominee holder shall distribute only such amount as can be
distributed without distributing to any Exchanging Member a fraction of one
cent, and any balance not so distributable shall be held by the nominee holder
(without liability for interest thereon) and shall be added to and become part
of the next sum received by the nominee holder for distribution to the
Exchanging Members.
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<PAGE>
Section 1.9. TRANSFERS IN VIOLATION OF AGREEMENT VOID. Any attempted
Transfer of Covered Securities not made in accordance with the provisions of
this Agreement shall be void, and the Company shall not register, or cause or
permit the registration, of Common Stock Transferred in violation of this
Agreement.
ARTICLE II
VOTING AGREEMENT
Section 2.1. VOTING BY STOCKHOLDERS. At any meeting of the stockholders
of the Company called to vote with respect to any corporate action or where
action by stockholders of the Company is taken by written consent, each
Stockholder agrees to vote or act by written consent with respect to all Covered
Securities then Owned by such Stockholder on all such matters in which action is
proposed to be taken as determined by a majority of George M.L. LaBranche, IV,
James G. Gallagher and Alfred O. Hayward, Jr. (or the successors designated in
accordance with Section 2.2 herein to replace them in the event of their death,
disability or resignation) (collectively, the "VOTING EXECUTIVES").
Notwithstanding any other provisions of this Agreement, the power to direct the
vote of each Stockholder with respect to the Covered Securities Owned by such
Stockholder shall remain in full effect until such Stockholder no longer Owns
such Covered Securities.
Section 2.2. DESIGNATION OF SUCCESSORS. In the event of the death,
disability or resignation of any of the Voting Executives, successors shall be
designated as follows:
(a) in the event of such death, disability or resignation of
any one Voting Executive, such Voting Executive's successor shall be designated
by mutual consent of the remaining Voting Executives;
(b) in the event of the simultaneous death, disability or
resignation of any two Voting Executives, such Voting Executives' successors
shall be designated by the sole remaining Voting Executive; or
(c) in the event of the simultaneous death, disability or
resignation of all three Voting Executives, such Voting Executives' successors
shall be designated by a majority in interest of the Stockholders who then Own
Covered Securities.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
Stockholder severally represents and warrants to the Company and to each other
Stockholder that:
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<PAGE>
(a) he or she has (and with respect to Covered Securities to
be acquired, will have) good, valid and marketable title to the Covered
Securities, free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind, other than pursuant to this Agreement,
the Plan of Incorporation of LaBranche LP, the Exchange Agreement or another
agreement with the Company by which such Stockholder is bound and to which the
Covered Securities are subject; and
(b) (i) he or she is of sound mind and has full legal capacity
to enter into, execute and deliver this Agreement and perform his or her
obligations hereunder; (ii) this Agreement constitutes his or her legal, valid
and binding obligation, enforceable against him or her in accordance with its
terms (subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles); (iii) neither his or her
execution and delivery of this Agreement nor the consummation of the
transactions contemplated herein conflicts with or results in a breach of any of
the terms, conditions or provisions of any agreement or instrument to which he
or she is a party or by which his or her assets are bound, or constitutes a
default under any of the foregoing, or violates any law or regulation; (iv) he
or she has obtained all authorizations, consents, approvals and clearances of
all courts, governmental agencies and authorities, and any other person, if any
(including his or her spouse with respect to the interest of such spouse in his
or her Covered Securities if the consent of such spouse is required), required
to permit him or her to enter into this Agreement and to consummate the
transactions contemplated herein; (v) there are no actions, suits or proceedings
pending, or, to his or her knowledge, threatened against or affecting him or her
or his or her assets in any court or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality which, if adversely determined, would impair his or her ability
to perform this Agreement; (vi) the performance of this Agreement will not
violate any order, writ, injunction, decree or demand of any court or federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality to which he or she is subject; and (vii) no statement,
representation or warranty made by him or her in this Agreement, nor any
information provided by him or her for inclusion in a report filed pursuant to
Section 5.3 hereof or in a registration statement filed by the Company contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements, representations
or warranties contained herein or information provided therein not misleading.
ARTICLE IV
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
"AGREEMENT" has the meaning set forth in the preamble to this
Agreement.
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"BOARD OF DIRECTORS" means the Board of Directors of the Company or, to
the extent expressly authorized by the Board of Directors to exercise the powers
of the Board of Directors under this Agreement, (i) any committee of such Board
of Directors or (ii) any board of directors or committee of any Subsidiary of
the Company.
"BUSINESS DAY" means a day on which the NYSE is open for the
transaction of business.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" has the meaning set forth in the recitals to this
Agreement.
"COMPANY" has the meaning set forth in the preamble to this Agreement
and any successors thereof, whether by operation of law or otherwise.
"COMPANY GROUP" means the group comprised of the Company and its
Subsidiaries, including Investing and LaBranche LP.
"COVERED SECURITIES" means, with respect to any Stockholder at the time
in question, subject to Section 5.7, the shares of Common Stock then owned by
such Stockholder which were received by such Stockholder as a result of the LLC
Exchange. Prior to or after the IPO, shares of the Common Stock may be excluded
from the definition of Covered Securities by action of the Board of Directors,
in its sole discretion.
"DISABILITY" means disability as that term is defined under the
Company's long-term disability plan in effect at the date of such determination,
or any other plan or definition designated by the Board of Directors for the
purpose of this provision.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE AGREEMENT" has the meaning set forth in the recitals to this
Agreement.
"EXCHANGING MEMBERS" mean the holders of membership interests in
Investing listed on Schedule I hereto.
"IPO" has the meaning set forth in the recitals to this Agreement.
"INVESTING" has the meaning set forth in the recitals to this
Agreement.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended.
"LLC EXCHANGE" has the meaning set forth in the recitals to this
Agreement.
"LABRANCHE LP" has the meaning set forth in the recitals to this
Agreement.
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"NASD" means the National Association of Securities Dealers, Inc.
"NYSE" means the New York Stock Exchange, Inc.
"OWN" means to own of record or beneficially, whether directly, through
a nominee designated by the Company pursuant to Section 1.8 or through any other
Person.
"PERMITTED TRANSFEREE" means any Person receiving Covered Securities
from a Stockholder that is: (i) a trust for the benefit of any spouse or lineal
descendant (or spouse of such lineal descendant) of such Stockholder, provided
that the controlling trustee of such trust is such Stockholder; (ii) any
organization to which contributions by such Stockholder of Covered Securities
are deductible for federal income, estate or gift tax purposes or any
split-interest trust described in Section 4947 of the Internal Revenue Code of
1986, as amended, provided that, in each case, such Stockholder is a trustee or
a member of the board of directors or other governing body or group having the
ultimate authority, INTER ALIA, to vote, dispose or direct the voting or
disposition of such Covered Securities; or (iii) a corporation of which a
majority of the outstanding shares of capital stock entitled to vote generally
for the election of directors is beneficially owned by, or a partnership or
limited liability company of which a majority of the partnership or limited
liability company interests entitled to vote and participate in the management
of such partnership or limited liability company are beneficially owned by, such
Stockholder.
"PERSON" means any natural person or any firm, partnership, limited
liability partnership, association, corporation, limited liability company,
trust, business trust, governmental authority or other entity.
"RESTRICTED PERSON" means any person that is not (i) a Stockholder or
(ii) a director, officer or employee of any member of the Company Group acting
in such person's capacity as a director, officer or employee.
"RETIRING MEMBERS" means Steven C. Berger, Robert W. Keelips, III and
Paul A. Redmond.
"STOCKHOLDERS" has the meaning set forth in the preamble to this
Agreement.
"SUBSIDIARY" means a corporation, limited liability company, limited
partnership or other entity of which the Company, directly or indirectly, has
the power, whether through the ownership of voting securities, equity interests,
contract or otherwise, (i) to elect at least a majority of the members of such
entity's board of directors or other governing body or (ii) in the absence of a
governing body, to control the business affairs of such entity.
"TRANSFER" means, with respect to any Covered Securities, directly or
indirectly, (i) to sell, assign, transfer, pledge, convey, distribute, mortgage,
encumber, hypothecate or otherwise dispose, whether by gift, for consideration
or for no consideration, or (ii) to grant any right to vote, whether by voting
agreement, voting trust or otherwise. For purposes of this Agreement, Transfer
shall
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include any disposition and any other transaction that would constitute a
"constructive sale" within the meaning of Section 1259 of the Internal Revenue
Code of 1986, as amended, including, without limitation, a short-sale, forward
sale, equity swap or other derivative contract with respect to Common Stock or
substantially identical property, or other transaction having substantially the
same effect as the foregoing.
"VOTING EXECUTIVES" has the meaning set forth in Section 2.1.
ARTICLE V
MISCELLANEOUS
Section 5.1. STANDSTILL PROVISIONS. Each Stockholder agrees that he or
she shall not, directly or indirectly, alone or in concert with any other
person, (a) make, or in any way participate in, any "solicitation" of "proxies"
(as such terms are defined in Exchange Act Rule 14A-1) relating to any
securities of the Company to or with any Restricted Person; (b) except as
contemplated by this Agreement, deposit any Covered Securities in a voting trust
or subject any Covered Securities to any voting agreement or arrangement that
includes as a party any Restricted Person; (c) form, join or in any way
participate in a group (as contemplated by Exchange Act Rule 13d-5(b)) with
respect to any securities of the Company (or any securities the ownership of
which would make the owner thereof a beneficial owner of securities of the
Company (for this purpose as determined by Exchange Act Rule 13d-3 and Exchange
Act Rule 13d-5)) that includes as a party any Restricted Person; (d) make any
announcement subject to Exchange Act Rule 14a-1(1)(2)(iv) to any Restricted
Person; (e) initiate or propose any "shareholder proposal" subject to Exchange
Act Rule 14a-8; (f) together with any Restricted Person, make any offer or
proposal to acquire any securities or assets of any member of the Company Group
or solicit or propose to effect or negotiate any form of business combination,
restructuring, recapitalization or any extraordinary transaction involving, or
any change in control of, any member of the Company Group, any Subsidiaries or
any of its respective securities or assets; (g) together with any Restricted
Person, seek the removal of any directors or a change in the composition or size
of the Board of Directors; (h) together with any Restricted Person, in any way
participate in a call for any special meeting of the stockholders of the
Company; or (i) assist, advise or encourage any Person with respect to, or seek
to do, any of the foregoing.
Section 5.2. EXPENSES.
(a) The Company shall be responsible for all expenses incurred
in the operation and administration of this Agreement, including expenses
incurred in preparing appropriate filings and correspondence with the Commission
or NYSE, lawyers', accountants', agents', consultants', experts', investment
banking and other professionals' fees, expenses incurred in enforcing the
provisions of this Agreement, expenses incurred in maintaining any necessary or
appropriate books and records relating to this Agreement and expenses incurred
in the preparation of amendments to and waivers of provisions of this Agreement.
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<PAGE>
(b) Each Stockholder shall be responsible for all of his or
her expenses incurred in connection with his or her compliance with his or her
obligations under this Agreement, including expenses incurred by the Company in
enforcing the provisions of this Agreement relating to such obligations.
Section 5.3. FILING OF SCHEDULE 13D OR 13G.
(a) In the event that a Stockholder is required to file a
report of beneficial ownership on Schedule 13D or 13G (or any successor forms
thereto) with respect to the Covered Securities beneficially owned by such
Stockholder (for this purpose as determined by Exchange Act Rule 13d-3 and
Exchange Act Rule 13d-5), he or she agrees that, unless otherwise directed by
the Company, he or she will not separately file such a report, but will file a
report together with the other Stockholders, containing the information required
by the Exchange Act, and such Stockholder understands and agrees that such
report shall be filed on his or her behalf by the Company. Such Stockholder
shall cooperate fully with the other Stockholders and the Company to achieve the
timely filing of any such report and any amendments thereto as may be required,
and such Stockholder agrees that any information concerning such Stockholder
which such Stockholder furnishes in connection with the preparation and filing
of such report will be complete and accurate.
(b) Each Stockholder hereby irrevocably makes, constitutes and
appoints each of George M.L. LaBranche, IV, James G. Gallagher, Alfred O.
Hayward, Jr. and any other officer(s) of the Company designated in writing by
George M.L. LaBranche, IV, each with full power of substitution, his or her true
attorney-in-fact and agent, for and in his or her name, place and stead, to
execute a report of beneficial ownership on Schedule 13D or 13G (or any
successor forms thereto) and any and all amendments thereto and to file such
reports with all exhibits thereto and other documents in connection therewith
with the Commission, granting to such attorneys, and each of them, full power
and authority to do and perform each and every act and thing whatsoever that
such attorney or attorneys may deem necessary, advisable or appropriate to carry
out fully the intent of this Section 5.3 as such Stockholder might or could do
personally, hereby ratifying and confirming all acts and things that such
attorney or attorneys may do or cause to be done by virtue of this power of
attorney. Each Stockholder hereby further designates such attorneys as such
Stockholder's agents authorized to receive notices and communications with
respect to such reports and any amendments thereto. It is understood and agreed
by each such Stockholder that this appointment, empowerment and authorization
may be exercised by the aforementioned Persons for the period beginning on the
date hereof and ending on the date such Stockholder is no longer subject to the
provisions of this Agreement (and shall extend thereafter for such time as is
required to reflect that such Stockholder is no longer a party to this
Agreement).
Section 5.4. NOTICES.
(a) All notices, requests, demands, waivers and other
communications to be given by any party hereunder shall be in writing and shall
be (i) mailed by first-class, registered or certified mail, postage prepaid,
(ii) sent by hand delivery or reputable overnight delivery service or (iii)
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transmitted by telecopy (provided that a copy is also sent by reputable
overnight delivery service) addressed, in the case of any Stockholder, to him or
her at his or her last address appearing in the Company Group's employment
records or, in the case of the Company, to One Exchange Plaza, New York, NY
10006, Attention: Secretary, or, in each case, to such other address as may be
specified in writing to the other parties hereto.
(b) All such notices, requests, demands, waivers and other
communications shall be deemed to have been given and received (i) if by
personal delivery or telecopy, on the day of such delivery, (ii) if by
first-class, registered or certified mail, on the fifth Business Day after the
mailing thereof or (iii) if by reputable overnight delivery service, on the day
delivered.
Section 5.5. TERM OF THE AGREEMENT.
(a) This Agreement shall become effective upon the occurrence
of the consummation of the IPO and shall terminate on the earlier to occur of
(i) the first date on which there are no Stockholders who remain bound by its
terms and (ii) the date on which the Company and the Stockholders who Own a
majority of the Covered Securities subject to this Agreement as of such date
agree to terminate this Agreement.
(b) Unless this Agreement is theretofore terminated pursuant
to Section 5.5(a) hereof, a Stockholder shall be bound by its terms until all
Covered Securities owned by such Stockholder are free of the provisions of
Articles I and II hereof.
Section 5.6. AMENDMENTS; WAIVERS.
(a) This Agreement may be amended or modified, and any
provision in this Agreement may be waived, if such amendment, modification or
waiver is approved by the Board of Directors, provided that any amendment that
would materially adversely affect any Stockholder (other than an amendment that,
in the good faith judgment of the Board of Directors, is intended to cure any
ambiguity or correct or supplement any provisions of this Agreement that may be
incomplete or inconsistent with any other provision contained herein) must be
approved by the Stockholders that Own a majority of the Covered Securities
subject to this Agreement as of the date of such amendment or modification,
provided, further, that, without the consent of any Person, the Board of
Directors may permit any Person who executes and delivers a counterpart of this
Agreement to become a party to this Agreement by amending Schedule I or II
hereto, as the case may be.
(b) The failure of any party at any time or times to require
performance of any provision of this Agreement shall in no manner affect the
rights at a later time to enforce the same. No waiver by any party of the breach
of any term contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such breach or the breach of any other term of this
Agreement.
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Section 5.7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION; ADJUSTMENTS
UPON CHANGES OF CONTROL; REPRESENTATIVES, SUCCESSORS AND ASSIGNS.
(a) In the event of any change in the outstanding Common Stock
by reason of stock dividends, stock splits, reverse stock splits, spin-offs,
split-ups, recapitalizations, combinations, exchanges of shares and the like,
the term "Covered Securities" shall refer to and include the securities received
or resulting therefrom, but only to the extent such securities are received in
exchange for or in respect of Covered Securities. Upon the occurrence of any
event described in the immediately preceding sentence, the Board of Directors
shall make such adjustments to or interpretations of the restrictions of Section
1.1 (and, if it so determines, any other provisions hereof) as it shall deem
necessary or desirable to carry out the intent of such provision(s). If the
Board of Directors deems it desirable, any such adjustments may take effect from
the record date, the "when issued trading date," the "ex dividend date" or
another appropriate date.
(b) In the event of any business combination, restructuring,
recapitalization or other extraordinary transaction involving any member of the
Company Group or any of its respective securities or assets as a result of which
the Stockholders shall hold voting securities of a Person other than the
Company, the Stockholders agree that this Agreement shall also continue in full
force and effect with respect to such voting securities of such other Person
formerly representing or distributed in respect of Covered Securities, and the
terms "Covered Securities," "Common Stock," "Voting Interests," and "Company,"
shall refer to such voting securities formerly representing or distributed in
respect of Covered Securities and such Person, respectively. Upon the occurrence
of any event described in the immediately preceding sentence, the Board of
Directors shall make such adjustments to or interpretations of the restrictions
of Section 1.1 (and, if it so determines, any other provisions hereof) as it
shall deem necessary or desirable to carry out the intent of such provisions(s).
If the Board of Directors deems it desirable, any such adjustments may take
effect from the record date or another appropriate date.
Section 5.8. DISINTERESTED BOARD MEMBERS TO MAKE DETERMINATIONS. In the
event that any Stockholder breaches its obligations under this Agreement, then
the Board of Directors shall have the exclusive right to make (on behalf of the
Company) any and all determinations that may be necessary or appropriate under
this Agreement, including without limitation, determinations relating to the
exercise and enforcement of remedies hereunder. If a Stockholder who is also a
member of the Board of Directors breaches his or her obligations under this
Agreement, such Stockholder must refrain from exercising his or her vote at
meetings of the Board of Directors and general meetings of the Company to give
effect to this Section 5.8.
Section 5.9. SEVERABILITY. If the final determination of a court of
competent jurisdiction declares, after the expiration of the time within which
judicial review (if permitted) of such determination may be perfected, that any
term or provision hereof is invalid or unenforceable, (a) the remaining terms
and provisions hereof shall be unimpaired and (b) the invalid or unenforceable
term or provision shall be deemed replaced by a term or provision that is valid
and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision.
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Section 5.10. REPRESENTATIVES, SUCCESSORS AND ASSIGNS. This Agreement
shall be binding upon and inure to the benefit of the respective parties hereto
and their respective legatees, legal representatives, successors and assigns;
provided that Stockholders may not assign, delegate or otherwise Transfer any of
their rights or obligations under this Agreement except with the prior written
consent of the Board of Directors, and any assignment without such consent by
the Board of Directors shall be void.
Section 5.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE CONFLICT OF LAWS PRINCIPLES OR RULES THEREOF).
Section 5.12. SPECIFIC PERFORMANCE. Each of the parties hereto
acknowledges that it will be impossible to measure in money the damage to the
Company or the Stockholders if any party hereto fails to comply with the
provisions of Article I or II and each party hereto agrees that in the event of
any such failure, neither the Company nor any Stockholder will have an adequate
remedy at law. Therefore, the Company and each Stockholder, in addition to all
of the other remedies which may be available, shall have the right to equitable
relief, including, without limitation, the right to enforce specifically the
provisions of Article I and II by obtaining injunctive relief against any
violation thereof, or otherwise. All claims for specific performance of one or
more provisions of this Agreement shall be resolved exclusively by litigation
before a court of competent jurisdiction located in the State of New York.
Section 5.13. ARBITRATION. Except for claims for specific performance
brought in accordance with Section 5.12, all disputes, differences, and
controversies arising out of or in any way related to this Agreement shall be
submitted:
(a) to the NYSE to be heard and decided under the terms of
this Agreement and the then applicable rules of the NYSE or, if those rules as
interpreted by the NYSE do not permit the disputes, differences and
controversies to be submitted to the NYSE for arbitration; then
(b) to the American Arbitration Association in New York, New
York;
to be heard and decided under the terms of this Agreement and in accordance with
the then applicable rules of the hearing body by a panel of three arbitrators
(unless the rules of the hearing body shall require a different number of
arbitrators) chosen in accordance with the then applicable rules of the hearing
body. The decision of the arbitrators shall be final and binding upon the
parties, and an order may be entered upon the award of the arbitrators in any
court of competent jurisdiction.
Section 5.14. SUBMISSION TO JURISDICTION; WAIVER OF IMMUNITY. Each
Stockholder, for himself or herself and his or her successors and assigns,
hereby irrevocably waives (a) any objection, and agrees not to assert, as a
defense in any arbitration or legal or equitable action, suit or proceeding
against such Stockholder arising out of or relating to this Agreement or any
transaction contemplated
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<PAGE>
hereby or the subject matter of any of the foregoing, that (i) he or she is not
subject thereto or that such action, suit or proceeding may not be brought or is
not maintainable before such arbitral body or in said courts, (ii) the venue
thereof may not be appropriate and (iii) the internal laws of the State of
Delaware do not govern the validity, interpretation or effect of this Agreement,
(b) any immunity from jurisdiction to which he or she might otherwise be
entitled in any such arbitration, action, suit or proceeding which may be
instituted before any state or federal court in the State of New York in
accordance with Section 5.12 or before any arbitral body in accordance with
Section 5.13 and (c) any immunity from the maintaining of an action against him
or her to enforce any judgment for money obtained in any such arbitration,
action, suit or proceeding and, to the extent permitted by applicable law, any
immunity from execution.
Section 5.15. FURTHER ASSURANCES. Each Stockholder agrees to execute
such additional documents and take such further action as may be requested by
the Company to effect the provisions of this Agreement.
Section 5.16. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, but
all such counterparts shall together constitute but one and the same instrument.
Section 5.17. ENTIRE AGREEMENT. This Agreement, including the Schedules
hereto, contains the entire understanding of the parties with respect to the
subject matter hereof.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
LaBRANCHE & CO INC.
By: /s/ George M.L. LaBranche, IV
------------------------------------------
Name: George M.L. LaBranche, IV
Title: Chairman and Chief Executive Officer
/s/ George M.L. LaBranche, IV /s/ Vincent J. Flaherty
- -------------------------------- -----------------------------------
George M.L. LaBranche, IV Vincent J. Flaherty
/s/ James G. Gallagher /s/ Alfred O. Hayward, Jr.
- -------------------------------- -----------------------------------
James G. Gallagher Alfred O. Hayward, Jr.
/s/ Michael J. Naughton /s/ John McGraner
- -------------------------------- -----------------------------------
Michael J. Naughton John McGraner
/s/ Vincent Papandrea /s/ Anthony M. Corso
- -------------------------------- -----------------------------------
Vincent Papandrea Anthony M. Corso
/s/ Eugene C. McCarthy /s/ John O. Pickett, III
- -------------------------------- -----------------------------------
Eugene C. McCarthy John O. Pickett, III
/s/ Michael C. Ziebarth /s/ Anthony Giardina
- -------------------------------- -----------------------------------
Michael C. Ziebarth Anthony Giardina
/s/ Sean M. McCooey /s/ Mark Soltz
- -------------------------------- -----------------------------------
Sean M. McCooey Mark Soltz
<PAGE>
/s/ Christopher M. Smith /s/ Joseph Corso, Jr.
- -------------------------------- -----------------------------------
Christopher M. Smith Joseph Corso, Jr.
/s/ Robert A. Conte /s/ Paul A. Redmond
- -------------------------------- -----------------------------------
Robert A. Conte Paul A. Redmond
/s/ Thomas G. McLaughlin /s/ Nicholas Caputo
- -------------------------------- -----------------------------------
Thomas G. McLaughlin Nicholas Caputo
/s/ Joseph R. Dewhurst, II /s/ Steven C. Berger
- -------------------------------- -----------------------------------
Joseph R. Dewhurst, II Steven C. Berger
/s/ John L. McWilliams /s/ Thomas J. Shanley
- -------------------------------- -----------------------------------
John L. McWilliams Thomas J. Shanley
/s/ Kevin R. McMahon /s/ Fred DeBoer
- -------------------------------- -----------------------------------
Kevin R. McMahon Fred DeBoer
/s/ Kevin R. McMahon /s/ Fred DeBoer
- -------------------------------- -----------------------------------
Kevin R. McMahon Fred DeBoer
/s/ John M. Dempsey, III /s/ John N. Durante
- -------------------------------- -----------------------------------
John M. Dempsey, III John N. Durante
/s/ Gerard A. Competello /s/ William J. Burke, III
- -------------------------------- -----------------------------------
Gerard A. Competello William J. Burke, III
<PAGE>
/s/ Christopher Connors /s/ Christopher Keelips
- -------------------------------- -----------------------------------
Christopher Connors Christopher Keelips
/s/ Vincent G. Quigley /s/ Anthony Picerni
- -------------------------------- -----------------------------------
Vincent G. Quigley Anthony Picerni
<PAGE>
SCHEDULE I
EXCHANGING MEMBERS
George M.L. LaBranche, IV Thomas G. McLaughlin
Vincent J. Flaherty Nicholas Caputo
James G. Gallagher Joseph R. Dewhurst, II
Alfred O. Hayward, Jr. John L. McWilliams
Michael J. Naughton Thomas J. Shanley
John McGraner Kevin R. McMahon
Vincent Papandrea Fred DeBoer
Anthony M. Corso Karin Gill
Eugene C. McCarthy John M. Dempsey, III
John O. Pickett, III John N. Durante
Michael C. Ziebarth Gerard A. Competello
Anthony Giardina William J. Burke, III
Sean M. McCooey Christopher Connors
Mark Soltz Christopher Keelips
Christopher M. Smith Vincent G. Quigley
Joseph Corso, Jr. Anthony Picerni
Robert A. Conte
