SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
( X )ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1995
OR
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
____________________to____________________
Commission file number 0-14684
RYAN, BECK & CO., INC.
(exact name of issuer as specified in its charter)
NEW JERSEY 22-1773796
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
80 MAIN STREET, WEST ORANGE, N.J. 07052-5414
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 325-3000
Securities Registered Pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
___________________________________________
___________________________________________
___________________________________________
___________________________________________
___________________________________________
___________________________________________
Securities Registered Pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.10 PER SHARE
Title of Class
VOTING CUMULATIVE PREFERRED STOCK, SERIES A, PAR VALUE $.10 PER SHARE
Title of Class
Indicate by check mark whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this form 10-K or any amendment to this Form 10-K. X
The aggregate market value of the voting stock held by non-affiliates
computed by reference to the last sale price of such stock as of March
21, 1996: $16,568,643
Number of shares of Common Stock outstanding as of March 21, 1996:
3,231,302
DOCUMENTS INCORPORATED BY REFERENCE
Documents incorporated by reference: Certain exhibits to this report
are incorporated by reference to the Company's registration statement on
Form S-1 (No. 33. 5543) dated June 27, 1986 and its Annual Report on
Form 10-K for the year ended December 31, 1990 and its Annual Report on
Form 10-KSB for the year ended December 31, 1992, its Annual Report on
Form 10-K for the year ended December 31, 1994, and its current Report
on Form 8-K filed on February 23, 1996.
1. Part II - The Registrant's Annual Report to Stockholders for
the Fiscal Year Ended December 31, 1995.
2. Part III - Proxy Statement for the Registrant's 1996 Annual
Meeting of Stockholders.
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
Ryan, Beck & Co., Inc. (the "Company" or "Ryan, Beck") was organized in
1946 and is principally engaged in the underwriting, distribution and
trading of tax-exempt, bank equity and debt securities. The Company
provides consulting, research and financial services to the banking and
thrift industries, with a focus on corporate finance and merger related
services. The Company offers a general securities brokerage business
with investment products for retail and institutional clients, as well
as life insurance and annuity products. The Company's brokerage
customers consist primarily of high net worth individuals (primarily
residents of New Jersey, other Mid-Atlantic and Northeastern states and
Florida), banking institutions (primarily located in New Jersey and
Florida) and, to a lesser extent, insurance companies and bond funds.
The Company was organized in New Jersey in 1965 under the name of John
J. Ryan & Co., Incorporated, as a successor to various entities dating
from 1946. The Company changed its name to Ryan, Beck & Co., Inc. in
1981. Unless the context otherwise requires, all references herein to
the "Company" include Ryan, Beck & Co., Inc. and its predecessors and
subsidiaries.
The principal executive office of the Company is located at 80 Main
Street, West Orange, New Jersey 07052-5414 and its telephone number is
201-325-3000. The Company is registered as a broker-dealer with the
Securities and Exchange Commission ("SEC") and is a member of the
National Association of Securities Dealers, Inc. ("NASD") and the
Securities Investor Protection Corporation ("SIPC"). The Company is not
a member of any securities exchange.
The Company, like other securities firms, is directly affected by
national and international economic and political conditions, broad
trends in industry and finance, changes in and uncertainty regarding tax
laws and substantial fluctuations in the volume and price levels of
securities transactions (such as occurred in October 1987 and the fourth
quarter of 1989). A substantial portion of the Company's business is
particularly sensitive to developments, including political
developments, affecting municipal finance and financial institutions.
Reduced volume and prices generally result in lower investment banking
revenues and commissions and may result in losses from declines in the
market value of securities held in trading, investment and underwriting
positions. In periods of low business activity for the Company,
profitability may be adversely affected because a significant portion of
the Company's expenses are fixed.
On the other hand, as in the past, heavy trading volume has caused
clearance and processing problems for many securities firms, and this
could occur in the future. In addition, there is a risk of loss from
errors which can occur in the execution and settlement process. See
"Accounting, Administration and Operations."
TAX-EXEMPT BOND DIVISION
The Company maintains primary and secondary markets in tax-exempt
securities issued primarily by the State of New Jersey and its political
subdivisions. To a lesser extent, the Company also maintains primary
and secondary markets for tax-exempt securities issued by municipalities
located outside of New Jersey. Principal transactions in tax-exempt
securities accounted for 19.8% of the Company's revenues during 1995,
17.3% of the Company's revenues during 1994 and 18.8% during 1993.
The Company provides investment banking advice to, and raises capital
for, many types of issuers of tax-exempt securities, including counties,
cities, transportation authorities, sewer and water authorities and
housing, health and higher education agencies. Most of these issuers
are located in New Jersey. The Company arranges public offerings of
municipal securities and distributes these securities to individual and
institutional investors. In addition, the Company is often included in
national and regional syndications which underwrite tax-exempt issues.
Increasingly, underwritings of tax-exempt issues are being conducted on
a competitive, rather than negotiated, basis. The impact of this on
future revenue is unclear.
New issues of municipal bonds have declined as a result of the adoption
of the Tax Reform Act of 1986 (the "TRA"). The TRA limits the types of
municipal bonds eligible for tax-exempt status to "essential purpose"
bonds. It also includes certain municipal bond interest as an item of
tax preference in calculating the "alternative minimum tax" and denies
interest deductions to financial institutions on the debt they incur to
carry certain tax-exempt bonds.
The following tables set forth, for the periods indicated, (i) the total
number and dollar amount of municipal bond offerings managed or co-
managed by the Company and (ii) the total number and dollar amount of
the Company's underwriting participations in those offerings and in
offerings managed by others.
<TABLE>
Managed or Co-Managed Offerings
<CAPTION>
Number of Municipal
ISSUES AMOUNT OF OFFERINGS
(In Thousands)
<S> <C> <C>
1993 84$
1,107,491
1994 591,276,391
1995 591,556,210
</TABLE>
<TABLE>
Underwriting Participations<F1>
<CAPTION>
Number of Municipal
ISSUES AMOUNT OF PARTICIPATION
(In Thousands)
<S> <C> <C>
1993 159 $ 219,543
1994 131 221,429
1995 161 166,951
<FN>
<F1>
Does not include those issues in which the Company participated as a
selling group member.
</FN>
</TABLE>
Revenues from all municipal bond transactions were $4,940,000,
$5,046,000 and $5,249,000 for 1995, 1994 and 1993, respectively. The
decrease from 1994 to 1995 primarily reflects reduced product
availability and lower yields and the decrease from 1993 to 1994
reflected greater demand during 1993 for exchanging securities in a
lower interest rate environment as compared to a weak market for most of
1994.
TAXABLE BOND DIVISION
The Company maintains secondary markets in corporate bonds, mortgage
backed securities and unit investment trusts. Ryan, Beck also executes
trades in Treasury Bonds, Treasury Notes, Treasury Bills and makes
markets in U.S. Government Guaranteed Securities. Revenues relating to
such transactions increased in 1995 to $2,302,000 from $1,729,000 in
1994. Revenues in 1993 were $2,818,000. Principal transactions in
taxable securities accounted for 9.2% of the Company's revenues during
1995, 5.9% of revenues during 1994 and 10.2% of revenues during 1993.
FINANCIAL INSTITUTIONS DIVISION
The Company provides market-making, underwriting, financial advisory,
consulting and research for bank and thrift institutions throughout the
country.
The Company has participated as an underwriter in public offerings of
bank and thrift equity and debt issues as a sole underwriter without a
syndicate, as a manager or co-manager of underwriting syndicates, as a
member of underwriting syndicates managed by others and as a selling
group member in issues of others. Revenues from underwriting bank and
thrift securities for 1995 were $1,988,000, revenues for 1994 were
$809,000 and revenues for 1993 were $1,898,000.
The following tables set forth, for the periods indicated, (i) the total
number and dollar amount of bank/thrift related equity and debt
offerings managed or co-managed by the Company and (ii) the total number
and dollar amount of the Company's underwriting participations in those
offerings and in offerings managed by others. The table below also
includes offerings, including thrift conversion and mutual holding
Company formations whereby the Company acted as selling agent.
<TABLE>
Managed or Co-Managed Offerings
<CAPTION>
Number of Bank/Thrift
ISSUES AMOUNT OF OFFERINGS
(In Thousands)
<S> <C> <C>
1993 14 $ 137,117
1994 15 566,286
1995 13 221,114
</TABLE>
<TABLE>
Underwriting Participations<F1>
<CAPTION>
Number of Bank/Thrift
ISSUESAMOUNT OF PARTICIPATION<F2>
(In Thousands)
<S> <C> <C>
1993 21 $ 141,875
1994 15 561,129
1995 16 211,021
<FN>
<F1>
Does not include those issues in which the Company participated as a
selling group member and non-bank issues in which the Company
participated as an underwriter or selling group member.
</F1>
<F2>
Includes standby commitments.
</FN>
</TABLE>
The decreased level of activity in the Financial Institutions Division
reflected a reduced number of mutual to stock thrift conversions,
including mutual holding companies which closed in 1995 as compared to
1994, the smaller size of the transactions which closed in 1995 and
decreased fee income from merger and acquisition advisory work. The
Company has played a significant role in the introduction of the thrift
mutual holding company to the marketplace and raised $75,282,000 in
1995, $422,215,000 in 1994 and $316,047,000 in 1993 in equity for
thrifts in mutual holding company-related transactions.
Underwriting involves both economic and regulatory risks. An
underwriter may incur losses if it is unable to resell the securities it
is committed to purchase, or if it is forced to liquidate its
commitments at less than the agreed purchase price. In addition, an
underwriter is subject to substantial potential liability for material
misstatements or omissions in prospectuses and other communications with
respect to underwritten offerings. In the last several years,
investment banking firms, including the Company, have increasingly
participated in underwritten offerings with fewer syndicate participants
or without a syndicate. In such cases, the underwriter assumes a larger
part, or all, of the risk of an underwriting transaction. Furthermore,
because underwriting commitments constitute a charge against net
capital, the Company, as a broker-dealer, could find it necessary to
limit its underwriting activities to remain in compliance with net
capital requirements. See "Regulation."
Developments in the banking and thrift industries, including regulatory
policies with respect to thrift conversions and the trend toward
consolidation of banking institutions, have caused banks and thrift
institutions to seek advice from investment banking firms such as the
Company. The Company provides financial advisory services in connection
with capital formation and planning, branch sales, mergers and
acquisitions (including appraisals and fairness opinions),
shareholder/investor issues and financial management issues.
Consulting, valuations and placement fees decreased to $4,494,000 in
1995 from $11,902,000 in 1994 and accounted for 18.0% of the Company's
revenues during 1995 and 40.9% during 1994. Consulting, valuation and
placement fees amounted to $4,354,000 in 1993 or 15.6% of the Company's
revenues.
Ryan, Beck & Co. serves the capital needs of community-oriented
financial institutions by managing "best-efforts" public offerings,
including thrift conversions, mutual holding company formations (a
partial conversion of a thrift) and secondary offerings by banks and
thrifts. The objective is to provide on-site administrative support and
subscription enhancement for public offerings conducted by banks and
thrifts. This has been, and is anticipated to be, a significant source
of revenue for the Company. Revenue, however, is subject to political
and regulatory developments related to the thrift industry, especially
as they impact thrift conversions and mutual holding formations. These
activities generated gross revenues of $3,369,000 in 1995 as compared to
$8,586,000 in 1994 and $2,874,000 in 1993. Such revenue is reflected in
investment banking revenue as consulting, placement and valuation fees.
The Company's Research Department is dedicated principally to bank and
thrift securities. Its publications include Bank Stock Annuals for New
Jersey, Florida, New York, Maryland, Delaware and Pennsylvania, periodic
updates on the outlook for financial equities, reports on specific
financial institutions, and reports and analyses on general banking
developments.
SALES AND TRADING
Sales and trading activities are conducted both as principal and as
agent on behalf of individual and institutional investor clients.
Transactions as principal involve making markets in securities which are
held in inventory to facilitate sales to and purchases from customers in
an attempt to realize trading gains. When over-the-counter ("OTC")
transactions are executed by the Company as a dealer, the Company
receives, in lieu of commissions, mark-ups or mark-downs which are
included in revenues as principal transactions. As agent, the Company
effects brokerage transactions which generate commission revenues.
These commissions are charged on both exchange and OTC transactions in
accordance with a schedule which the Company has formulated and may
change from time to time. Discounts from the schedule may be granted in
certain cases. Total principal transactions accounted for 52.9% of the
Company's revenues during 1995, 40.4% during 1994 and 50.7% during 1993,
while total commissions accounted for 11.2% of revenues during 1995,
8.1% of revenues during 1994 and 12.4% of revenues during 1993.
The Company is an active market maker and distributor of equity
securities issued by financial institutions throughout the country and
tax-exempt bonds, particularly bonds issued by entities located in the
Mid-Atlantic region. As of December 31, 1995, the Company made markets
in 204 bank and thrift stocks quoted on the NASDAQ system. The Company
also maintains quotations in 362 additional bank and thrift stocks and
distributes and makes markets in certain issues of bank debt securities.
In making markets in equity and debt securities, the Company maintains
positions in such securities to service its customers and, accordingly,
has at risk its own capital in the event of a decline in the market
price of such securities or of a decrease in the liquidity of markets
(especially in the area of risk arbitrage, as described below), which
can limit the Company's ability to sell securities purchased or to
purchase securities sold in such transactions. Trading and investing in
corporate and municipal securities as principal and underwriting the
issuance of such securities represent an important part of the Company's
business and subjects the Company's capital to significant risk. While
the Company seeks to avoid market risk, it may, nonetheless, realize
profits and losses from market fluctuations. Trading profits (or
losses) depend upon the skills of the employees engaged in market
making, the amount of capital allocated to positions in securities and
the general level of activity and trend of prices in the securities
markets.
The Company also offers other financial instruments to its clients which
include U.S. Government and Agency obligations, zero coupon bonds,
collateralized mortgage obligations, utility and industrial bonds,
mutual funds and unit investment trusts.
Although the Company presently maintains no discretionary accounts for
customers, it may do so in the future. The Company introduced margin
accounts during early 1991. Margin transactions are subject to credit
risks. To the extent that funds are advanced in a securities
transaction, payment may not be received. If the securities decline in
value, the Company may not recover the amounts advanced. As of December
31, 1995, the Company had approximately $22.2 million in customer margin
debits with its clearing broker.
During 1995, the Company continued to maintain its salesforce by
recruiting and training both new and experienced sales personnel to
replace those who left during the period. The Company had 72 sales
account executives as of December 31, 1995.
As part of its trading activities, the Company may engage in risk
arbitrage, which involves investing for the Company's own account in
securities of companies engaged in publicly announced corporate
transactions. Such transactions include, mergers, acquisitions, changes
in capital structure and dividend payments. Risk arbitrage requires the
commitment of capital and involves substantial risk.
The following table shows, (i) for the year ended December 31, 1995, the
highest, lowest and average month-end inventories by type of securities
in which the Company trades as principal and (ii) the inventories for
these types of securities as of December 31, 1995.
<TABLE>
Highest, lowest and average month-end inventory by type of security
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
HIGHEST INVENTORY LOWEST INVENTORY AVERAGE IN
VENTORY
Long Short Long Short Long Short
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Type of Security:
Tax-Exempt Debt $ 19,400$ 406$ 5,993$ -$ 10,135$
113
Taxable Debt 3,898 1,145 1,101 53 2,044 319
Equity 13,130 5,037 1,630 670 6,787 2,368
<CAPTION>
AS OF DECEMBER 31, 1995
Long Short
(In Thousands)
<S> <C> <C>
Type of Security:
Tax-Exempt debt $ 19,400 $ 406
Taxable Debt 2,168 366
Equity 13,130 5,037
Total $ 34,698 $ 5,809
</TABLE>
OTHER SERVICES
The Company offers IRA and other retirement plans to its customers. In
1987, the Company began functioning as custodian and trustee for newly
opened IRA's and effective January 1, 1991 transferred these accounts to
its independent clearing broker as successor custodian and trustee.
Clients retain control over their own funds and may direct the purchase
and sale of a variety of investment instruments.
The Company has an arrangement with an independent investment manager
pursuant to which it offers various money market funds to its customers.
On a periodic basis, the Company's clearing broker sweeps participating
customers' free credit balances into a designated fund and also
withdraws funds to satisfy debit balances.
ACCOUNTING, ADMINISTRATION AND OPERATIONS
Accounting, administration and operations personnel are responsible for
internal financial control, accounting functions, office services,
personnel services, and compliance with regulatory and legal
requirements. The Company clears all securities transactions through
another broker/dealer on a fully-disclosed basis.
There is a considerable fluctuation in the volume of transactions which
a securities firm must process. In the past, when the volume of trading
in securities reached record levels, the securities industry has
experienced operating problems. The Company has not experienced any
material operating difficulties during periods of heavy volume.
The Company believes that its internal controls and safeguards against
securities theft are adequate. The Company carries fidelity bonds
covering any loss or theft of securities, employee dishonesty, forgery
and alteration of checks and similar items, and securities forgery. The
amounts of coverage provided by the bonds are believed to be adequate.
The Company generally posts its books and records daily. Periodic
reviews of certain controls are conducted to assure compliance with
applicable laws, rules and regulations.
COMPETITION
The Company is engaged in an extremely competitive business.
Competitors include, with respect to one or more aspects of its
business, all of the member organizations of the New York Stock Exchange
and other registered securities exchanges, all members of the NASD,
commercial banks, thrift institutions and financial consultants. As
related to the Company's investment banking and consulting merger-
related services, the Company also competes with many of the larger Wall
Street investment banking firms. Many of these organizations have
substantially more employees and greater financial resources than the
Company. The Company also competes for investment funds with banks,
insurance companies and investment companies. Discount brokerage firms
oriented to the retail market, including firms affiliated with
commercial banks and thrift institutions, are devoting substantial funds
to advertising and direct solicitation of customers in order to increase
their share of commission dollars and other securities-related income.
The Company typically has not engaged in extensive advertising programs
for this type of business. The Company believes that the principal
competitive factors relating to the Company's business are the quality
of advice and service provided to investors and financial institutions
and the competitive pricing of their products.
The securities industry has become considerably more concentrated and
more competitive since the late 1960's as numerous securities firms have
either ceased operation or have been acquired by or merged into other
firms. In addition, companies not engaging primarily in the securities
business, but having substantial financial resources, have acquired
leading securities firms. These developments have increased competition
from firms with greater capital resources than those of the Company.
Furthermore, many commercial banks offer various securities related
activities and investment vehicles. While it is presently not possible
to predict the type and extent of competitive services which other
financial institutions may offer or the extent to which administrative
or legal barriers are repealed or modified, ultimately these
developments may lead to the creation of integrated financial services
firms that may be able to compete more effectively than the Company for
investment funds by offering a greater range of financial services.
Fixed minimum commissions for securities transactions were eliminated in
1975. The elimination of fixed minimum commission rates has resulted in
substantial commission discounting by broker-dealers competing for
institutional and individual brokerage business. The Company believes
its commission structure compares favorably with firms with which it
competes. Nevertheless, the anticipated continuation of such
discounting and an increase in the number of new and existing firms
offering discounts could adversely affect the Company.
The SEC's Rule 415 permits the registration of certain securities that
are to be offered on a delayed or continuous basis in the future. This
procedure provides a competitive advantage to securities firms with
substantial capital and large in-house distribution networks and may
reduce opportunities for brokerage firms such as the Company to
participate in major underwritings.
REGULATION
The securities industry in the United States is subject to extensive
regulation under both federal and state laws. The SEC is the federal
agency charged with administration of the federal securities laws. Much
of the regulation of broker-dealers has been delegated to self-
regulatory authorities, principally the NASD and, in the case of broker-
dealers that are members of a securities exchange, the securities
exchanges. These self-regulatory organizations conduct periodic
examinations of member broker-dealers in accordance with rules they have
adopted and amended from time to time, subject to approval by the SEC.
Securities firms are also subject to regulation by state securities
commissions in those states in which they do business. As of December
31, 1995, the Company was registered as a broker-dealer in 49 states and
the District of Columbia.
Broker-dealers are subject to regulations which cover all aspects of the
securities business, including sales methods, trade practices among
broker-dealers, uses and safekeeping of customers funds and securities,
capital structure of securities firms, record keeping and the conduct of
directors, officers and employees. Additional legislation, changes in
rules promulgated by the SEC and self-regulatory authorities, or changes
in the interpretation or enforcement of existing laws and rules, may
directly affect the mode of operation and profitability of broker-
dealers. The SEC, self-regulatory authorities and state securities
commissions may conduct administrative proceedings which can result in
censure, fine, suspension or expulsion of a broker-dealer, its officers
or employees. Such administrative proceedings, whether or not resulting
in adverse findings, can require substantial expenditures. The
principal purpose of regulation and discipline of broker/dealers is the
protection of customers and the securities market, rather than
protection of creditors and shareholders of broker-dealers.
As a broker-dealer, the Company is required by federal law to belong to
the Securities Investors Protection Corp. ("SIPC"). When the SIPC fund
falls below a certain minimum amount, as it did in 1983, members are
required to pay annual assessments in amounts (based upon adjusted gross
revenues) necessary to restore the fund. Accounts are insured up to
$25,000,000, and Pro Cash Plus accounts are insured up to $50,000,000.
The first $500,000 of protection is provided by SIPC and the balance is
provided by a separate policy from a private insurer. There is a
limitation of $100,000 on claims for cash balances.
As a registered broker-dealer, the Company is also subject to the SEC's
Net Capital Rule (the "Rule"). The Rule specifies minimum net capital
requirements for registered brokers and dealers and is designed to
maintain the general financial integrity and liquidity of a broker-
dealer.
The Rule provides that a broker-dealer doing business with the public
shall not permit its aggregate indebtedness to exceed 15 times its net
capital or, alternatively, that it not permit its net capital to be less
than 2% of its aggregate debit balances (primarily receivables from
customers and broker-dealers) computed in accordance with Rule 15c3-3.
As of December 31, 1995, the Company had aggregate net capital of
$5,663,000, which exceeded minimum net capital requirements by
$4,663,000.
Compliance with the Net Capital Rule could limit the Company's
operations, such as underwriting and trading activities which require
the use of significant amounts of capital. A significant operating loss
or an extraordinary charge against net capital could adversely affect
the ability of the Company to expand or even maintain its present levels
of business.
EMPLOYEES
At December 31, 1995, the Company had 172 full-time employees. None of
the Company's employees are covered by a collective bargaining
agreement. The Company considers its relations with its employees to be
satisfactory. However, competition for experienced financial services
personnel, especially account executives, is intense in the securities
industry. Accordingly, from time to time the Company may experience the
loss of valuable personnel which could adversely impact revenues.
ITEM 2. DESCRIPTION OF PROPERTIES
The Company's offices, including its trading operations, occupy an
aggregate of approximately 22,000 square feet in West Orange, New
Jersey. Such space is leased pursuant to a seven-year lease term which
commenced January 19, 1992. The Company has a five-year renewal option
at the conclusion of the original term. In addition, the Company
occupies approximately 3,600 square feet of office space in Bala Cynwyd,
Pennsylvania under a five-year lease which commenced April 12, 1994.
The Company has a five-year renewal option at the conclusion of the
original term. The Company also occupies approximately 8,500 square
feet of office space in West Palm Beach, Florida under a four-year lease
which commenced May 1, 1995. While such space is suitable and sufficient
for the Company's present needs, the Company anticipates that, based on
its present operations and its anticipated future growth, additional
space will be required in the foreseeable future. The Company believes
that its current fire and casualty insurance policies provide sufficient
coverage to allow it to replace any of its properties that might be
damaged or destroyed.
ITEM 3. LEGAL PROCEEDINGS
Set forth below is information concerning certain litigation matters to
which the Company is a party and in which there have been developments
of a material nature during the year ended December 31, 1995.
On December 13, 1991, an action was filed in the United States District
Court for the District of New Jersey under the caption Schiffli
Embroidery Workers Pension Fund v. Ryan, Beck & Co., Inc., et al (Civ.
Act. No. 91-5433) ("Schiffli") alleging that the Company and one of its
former account executives had engaged in violations of federal
securities laws, the Employee Retirement Income Security Act ("ERISA"),
the Racketeering Influenced and Corrupt Practices Act ("RICO"), and
various common law claims in connection with the purchase of
securities. The plaintiff seeks compensatory damages in excess of
$1,400,000, punitive damages, treble damages, interest, attorneys' fees
and expenses and have submitted a preliminary expert's report alleging
damages in excess of $2,000,000. On February 20, 1992, the Company
filed a Motion to Dismiss and on September 25, 1992, the Court dismissed
the plaintiff's RICO claims. All other claims remain pending. The
Company has also filed crossclaims against the trustees of the Pension
Fund. On December 29, 1994, a status conference was held before the
Magistrate Judge assigned to this matter. On May 5, 1995, the
Magistrate Judge entered a scheduling order and discovery, which was
stayed pending a motion to disqualify plaintiff's counsel, recommenced.
In addition, certain defendants, other than the Company, have joined the
former legal counsel to the Pension Fund as a third-party defendant to
the action. Discovery in this matter is continuing. Although the
outcome of this litigation is inherently uncertain, and no assurances
regarding the final outcome of this matter can be given, the Company
intends vigorously to defend this matter and pursue its crossclaims and
believes it has meritorious defenses in this action.
On September 27, 1995, an action was filed in the United States District
Court for the District of New Jersey under the caption Luis Lozada,
Trustee of Local 211 Staff Employees' Pension Plan and Luis Lozada,
Individually v. Ryan, Beck & Co., Inc. and Douglas A. MacWright Civ.
Act. No. 95-4743 (AMW) (U.S.D.C.D.N.J.). The allegations asserted by
the plaintiffs in this action are substantially similar to the
allegations made by the plaintiffs in the Schiffli matter above. The
claims asserted against the Company are for violations of ERISA and
various state-law claims including breach of trust agreement, negligence
and breach of contract. On November 1, 1995, the Company filed a motion
to dismiss for failure to state a claim upon which relief can be
granted. On January 2, 1996, the Court granted the Company's motion in
part and denied it in part. The Court dismissed the breach of trust
agreement claim on the grounds that the Company was not a party to the
trust agreement for the Local 211 Plan. The remainder of the Company's
motion to dismiss was denied. On or about January 24, 1996, the Company
filed its answer to the complaint and asserted a counterclaim against
the plaintiff, Luis Lozada. Although the outcome of litigation is
inherently uncertain, and no assurances regarding the final outcome of
this matter can be given, the Company intends vigorously to defend this
matter and pursue its crossclaim and believes it has meritorious
defenses in this action.
The Company, Ryan Beck Financial Corp., a wholly-owned subsidiary of the
Company, and a former account executive of the Company have been named
as third-party defendants in Inrevco Associates v. BDO Seidman, et al.,
v. Ryan, Beck & Co., et al., Superior Court of New Jersey, Law Division,
No. MRS-L-2961-94. Inrevco is a New Jersey limited partnership. Ryan,
Beck Financial Corp. ("RBFC") is a special limited partner in the
partnership and such former account executive is a limited partner. The
third-party complaint alleges that certain duties were owed to the
partnership by the Company and RBFC. The third-party plaintiffs allege
that the Company and RBFC breached these duties and are liable to the
third-party plaintiffs for contribution in the event the plaintiff
prevails at trial.
On February 17, 1995, a motion to dismiss filed by the defendants was
granted in favor of RBFC and the former account executive. On March 9,
1995, RBFC and the Company's former account executive were dismissed by
order of the Court. Discovery in this case is proceeding. On September
5, 1995, certain defendants filed a new third-party complaint seeking
contribution from the Company, RBFC and certain present and former
employees and officers of the Company as additional third-party
defendants. All of the claims asserted against the Company are for
contribution. On October 15, 1995, the Company, RBFC and all individual
defendants named as third-party defendants in the litigation entered
into a settlement agreement with Inrevco. The terms of the settlement
agreement include a provision for an automatic judgment reduction in the
event any liability is apportioned against the Company, RBFC or any
individual third-party defendant on the contribution claims.
Subsequently, the third-party defendants filed a motion to dismiss on
the grounds that the claims against the third-party defendants were moot
as a result of the entering into of the settlement agreement. On
January 19, 1996 the Court heard argument on the motion to dismiss and
denied such motion. The third-party defendants have filed a motion for
permission to file an interlocutory appeal with respect to the motion to
dismiss with the Superior Court of New Jersey, Appellate Division.
On or about December 13, 1994, a complaint under the caption Robert J.
Buckley, et al. v. Northwest Savings Bank ("Northwest"), et. al., C.A.
No 94-340-E (U.S.D.C. W.D. Pa.), was filed in the United States District
Court of the Western District of Pennsylvania. The complaint alleges
violations of the Securities Act of 1933, the Securities Act of 1934, as
well as various state law securities and common law claims in connection
with Northwest Savings Bank's reorganization from a mutual state savings
bank to a stock mutual holding company.
The complaint alleges that the Company was retained as a consultant and
advisor to Northwest in connection with such transaction and engaged in
the promotion and sale of Northwest stock. The complaint further
alleges that the Offering Circular prepared in connection with the
initial public offering contained misstatements of material facts and
omitted to state material facts necessary to make the statements
contained in the Offering Circular not misleading, including false
statements representing the appraised valuation and number of shares to
be issued in the initial offering would be increased only if market and
economic conditions warranted such increase. The complaint alleges that
after the offering was concluded, the appraised value of Northwest was
increased and the offering was diluted by the sale of additional shares
and that such increase in appraised value was not warranted by market or
economic conditions.
The complaint seeks unspecified monetary damages against the defendants,
including the Company, on behalf of all persons who subscribed for and
purchased shares of common stock in Northwest's initial public offering.
In connection with the offering, Northwest executed an agency and
underwriting agreement with the Company whereby Northwest agreed among
other things to indemnify and contribute sums to the Company for losses
and legal fees in connection with the offerings. Pursuant to the Agency
Agreement, Northwest has agreed to indemnify the Company and to advance
reasonable expenses incurred by the Company in connection with the
lawsuit.
On March 13, 1995, the plaintiffs filed a Motion for Class
Certification. On March 24, 1995, the Company, as well as all other
defendants, filed a motion to dismiss the plaintiff's complaint. By
order dated November 17, 1995, the Court dismissed the complaint with
prejudice against all defendants on the ground that plaintiff failed to
identify affirmative misrepresentations and material omissions of fact
in the Offering Circular. On December 14, 1995, plaintiff filed an
appeal with the United States Court of Appeals for the Third Circuit.
The parties have not yet filed legal briefs on the appeal, and no date
for oral argument has been set. While the outcome of the appeal is
uncertain, the Company believes that the decision of the District Court
will be affirmed.
On January 11, 1996, the Company gave notice to Municipal Square
Associates ("Municipal Square"), its landlord at 80 Main Street, West
Orange, New Jersey that it had been constructively evicted as a result
of Municipal Square's breaches of the lease in failing to provide
adequate heating, air conditioning, security, janitorial and other
services.
On February 29, 1996 Municipal Square filed an action in the Superior
Court of New Jersey, Essex County, Law Division, under the caption
Municipal Square Associates v. Ryan, Beck & Co., Docket No. L 2751-96 in
which Municipal Square seeks a declaratory judgment that the lease is
not terminated and alternatively, that the Company's January 11th notice
had terminated the lease and triggered an early termination penalty of
$375,000.
The Company has filed a counter-claim alleging that Municipal Square
breached the lease by failing to provide services which Municipal Square
was required to provide under the lease and alleging that Municipal
Square's conduct constituted a constructive eviction of the Company.
Since the suit has just been instituted, no discovery has been taken in
the matter. Although the outcome of this litigation is inherently
uncertain and no assurances regarding the final outcome of this matter
can be given, the Company intends to defend vigorously this matter and
to pursue its counterclaim for damages. The Company believes that it
has a meritorious defense, that it has sustained substantial damages as
a result of breaches of the lease by Municipal Square, and that those
damages significantly exceed the damages claimed by Municipal Square.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
The Company's Common Stock is traded in the OTC market and quoted on the
National Market segment of the NASDAQ Stock Market under the symbol
"RBCO." The following table sets forth the high and low closing sales
prices of the common stock, as quoted by the NASDAQ Stock Market, and
dividends declared by the Company during the quarterly periods
indicated.
<TABLE>
High and low closing sales price of common stock
<CAPTION>
CLOSING SALES PRICE<F1, F2> DIVIDENDS DECLARED<F1>
Year Ended December 31, High Low Regular Special
1995:
<S> <C> <C> <C> <C>
First Quarter $7.375 $6.250 $.048 $.305
Second Quarter 7.000 5.625 .048 .000
Third Quarter 8.000 5.625 .048 .124
Fourth Quarter 7.375 6.500 .048 .067
1994:
First Quarter $7.125 $5.500 $ .010 $ .171
Second Quarter 7.125 5.500 .010 .343
Third Quarter 6.875 5.000 .010 .200
Fourth Quarter 7.500 6.250 .048 .124
<FN>
<F1> All share and per share data have been adjusted for a 5% stock
dividend declared on January 26, 1996 and paid on February 13, 1996.
<F2> The closing market prices are rounded to the nearest 1/8.
</FN>
</TABLE>
Due to the volatile nature of the Company's business, it has been the
policy of the Board of Directors to determine dividends individually for
each quarter. No assurance can be given as to the amount or frequency
of future dividend payments, if any. The Board currently intends to
continue to make future dividend payment decisions on a quarterly basis.
Special dividends will no longer be declared on a quarterly basis. In
the future, the Board of Directors will determine on an annual basis if
a special dividend will be paid and the amount of the dividend. In
evaluating the possible distribution of special dividends, the Board
considers, among other things, the level of the Company's earnings, its
operating capital requirements, the current and prospective business and
operating environment and alternative uses of any excess operating
capital. The policy is subject to change at any time.
The number of common shareholders of record as of March 21, 1995, was
535.
The number of preferred shareholders of record as of March 21, 1995, was
49.
ITEM 6. SELECTED FINANCIAL DATA
The information contained under the caption "Five Year Financial
Comparison" on page 10 of the Annual Report is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information contained under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 11
through 14 of the Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's Consolidated Financial Statements and Notes to
Consolidated Financial Statements and Independent Auditors' report on
pages 15 through 23 of the Annual Report is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
On February 16, 1996, the Company engaged Deloitte & Touche LLP as its
certifying accountant for the 1996 fiscal year, thereby replacing Trien,
Rosenberg, Felix, Rosenberg, Barr & Weinberg LLP ("Trien Rosenberg").
The change was approved by the Company's Board of Directors.
No report on the financial statements of the Company issued by Trien
Rosenberg during the last two fiscal years contained an adverse opinion
or disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope or accounting principles, nor were there any
disagreements during the last two fiscal years and through February 16,
1996, between Trien Rosenberg and the Company concerning any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements if not resolved would
have required Trien Rosenberg to make reference to the subject matter
thereof in connection with its report. During the last two fiscal years
and through February 16, 1996, none of the events listed in items (A)
through (D) of Item 304(a)(1)(b) of Regulation S-K have occurred; and
during such period the Company has not consulted with Deloitte & Touche
LLP regarding any matter referred to under paragraphs (i) or (ii) of
Item 304(a)(2) of Regulation S-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required herein is incorporated by reference to the
Company's Proxy Statement ("Proxy Statement") as filed with the
Securities and Exchange Commission.
ITEM 11. EXECUTIVE COMPENSATION
The information required herein is incorporated by reference to the
Company's Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required herein is incorporated by reference to the
Company's Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required herein is incorporated by reference to the
Company's Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-
K
<TABLE>
<CAPTION>
Financial Statements Table of Contents
<S> <C>
FINANCIAL STATEMENTS PAGE
All Consolidated Financial Statements<F1>
(a)Independent Auditors' Report 23
(b)Consolidated Statements of Financial Condition
at December 31, 1995 and 1994 15
(c)Consolidated Statements of Income for the
years ended December 31, 1995, 1994 and 1993 16
(d)Consolidated Statements of Changes in Stockholders'
Equity for the years ended December 31, 1995,
1994 and 1993 17
(e)Consolidated Statements of Cash Flows for the
years ended December 31, 1995, 1994 and 1993 18
(f)Notes to the Consolidated Financial Statements 19-23
All schedules have been omitted as the required information is
either inapplicable, immaterial or included in the Notes to the
Consolidated Financial Statements.
<FN>
<F1>
Incorporated by reference to the Annual Report.
</FN>
</TABLE>
EXHIBITS
3.1Restated Certificate of Incorporation, as amended (incorporated
by reference to Exhibit 3.1 of the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994
(the "1994 Form 10-K")).
3.2Bylaws, as amended (incorporated herein by reference to Exhibit
3.2 of the Registrant's Registration Statement on Form S-1
(No. 33-5543) filed with the SEC on June 27, 1986).
9.1Amended and Restated Stock Pooling Agreement by and among
Fenwick H. Garvey, Matthew R. Naula and Bruce M. Chodash
dated as of March 15, 1994 (incorporated by reference to
Exhibit 9.1 of the 1994 Form 10-K).
10.1Stock Option Plan, as amended (incorporated by reference to
Exhibit 10. 1 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1991).
10.2Employee Stock Ownership Plan dated May 15, 1994 (incorporated
by reference to Exhibit 10.2 of the 1994 Form 10-K).
10.3Term Loan Agreement by and among the Company, the Ryan, Beck &
Co., Inc. Employee Stock Ownership Plan and Northwest as of
June 23, 1995
10.4Employee Stock Ownership Plan Trust Agreement by and between
the Company and Matthew Naula as Trustee dated May 15, 1994
(incorporated by reference to Exhibit 10.3 of the 1994 Form
10-K).
10.5Lease pertaining to the Company's West Orange, New Jersey
offices effective as of January 1, 1992, (incorporated by
reference to Exhibit 10.2 to the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1992).
10.6Lease pertaining to the Company's Bala Cynwyd, Pennsylvania
offices effective as of April 12, 1994.
10.7Lease pertaining to the Company's West Palm Beach, Florida
offices effective as of February 28, 1995.
10.8Employment Agreement, dated November 14, 1990, by and between
Jack R. Rosenthal and Ryan, Beck & Co., Inc. (incorporated
by reference to Exhibit 10.7 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1990).
10.9Amended and Restated Employment Agreement dated December 14,
1995 by and between Allen S. Greene and Ryan, Beck & Co.,
Inc.
10.10Employment Agreement dated September 26, 1994 by and between
Fenwick H. Garvey and Ryan, Beck & Co., Inc. (the "Garvey
Employment Agreement") (incorporated by reference to Exhibit
10.8 of the 1994 Form 10-K).
10.11Amendment to the Garvey Employment Agreement, dated December
14, 1995.
10.12Employment Agreement dated September 26, 1994, by and between
Matthew R. Naula and Ryan, Beck & Co., Inc. (the "Naula
Employment Agreement") (incorporated by reference to Exhibit
10.9 of the 1994 Form 10-K).
10.13Amendment to the Naula Employment Agreement, dated December
14, 1995.
10.14Employment Agreement dated September 26, 1994 by and between
Bruce M. Chodash and Ryan, Beck & Co., Inc. (the "Chodash
Employment Agreement") (incorporated by reference to Exhibit
10.10 of the 1994 Form 10-K).
10.15Amendment to the Chodash Employment Agreement, dated December
14, 1995.
10.16Amended and Restated Employment Agreement, dated December 14,
1995 by and between Ben A. Plotkin and Ryan, Beck & Co.,
Inc.
10.17Amended and Restated Restricted Stock Grant Plan dated July
16, 1993 (incorporated by reference to Exhibit 10.12 of the
1994 Form 10-K).
11.Statement regarding computation of per share earnings is
omitted pursuant to SEC regulations.
12.Statement re: computation of ratios.
13.Annual Report for the fiscal year ended December 31, 1995.
16.Letter re: Change in Certifying Accountants (incorporated by
reference from the current Report on Form 8-K filed with the
SEC on February 23, 1996.).
21.Subsidiaries (incorporated by reference to Exhibit 21 of the
1994 Form 10-K).
23.Consent of Trien, Rosenberg, Felix, Rosenberg, Barr & Weinberg
27.Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
RYAN, BECK & CO., INC.
By: /S/ FENWICK H. GARVEY March 21, 1996
Fenwick H. Garvey
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant in the capacities indicated on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE, TITLE AND DATE OF SIGNING
<S> <C> <C>
SIGNATURE TITLEDATE
/S/ FENWICK H. GARVEY Chairman of the Board March 21, 1996
Fenwick H. Garvey
/S/ ALLEN S. GREENE President
Allen S. Greene Chief Executive Officer March 21, 1996
/S/ BRUCE M. CHODASH Executive Vice President March 21, 1996
Bruce M. Chodash Director
/S/ MICHAEL M. HORN Director March 21, 1996
Michael M. Horn
/S/ MATTHEW R. NAULA Executive Vice President March 21, 1996
Matthew R. Naula Director
/S/ RICHARD B. NEFF Director March 21, 1996
Richard B. Neff
/S/ BEN A. PLOTKIN Senior Executive Vice President March 21, 1996
Ben A. Plotkin Director
/S/ PETER W. RODINO, JR. Director March 21, 1996
Peter W. Rodino, Jr.
/S/ JACK R. ROSENTHAL Vice Chairman March 21, 1996
Jack R. Rosenthal Director
/S/ DAVID TENDLER Director March 21, 1996
David Tendler
/S/ LEONARD J. STANLEY Senior Vice President, Chief
Leonard J. Stanley Financial Officer (Principal Financial
and Accounting Officer) March 21, 1996
</TABLE>
June 23, 1995
Mr. Len Stanley
Ryan, Beck & Co.
80 Main Street
West Orange, NJ 07052
Dear Mr. Stanley:
We are pleased to announce that on June 14, 1995, Northwest Savings Bank
purchased Nationar's portfolio of employee stock ownership plan (ESOP)
loans.
All future loan payments should be made payable to Northwest Savings
Bank and mailed to:
Northwest Savings Bank
Attention: Kelly Walter
P.O. Drawer 128
Warren, PA 16365
Alternatively, loan payments can be wired to:
Northwest Savings Bank - Warren ABA #243374218
Attention: Tim Huber or Kelly Walter
In the next few weeks, Northwest will forward to your attention the
quarterly principal and interest billing. In the meantime, should you
have any questions regarding the transfer of servicing, please do not
hesitate to contact me.
We appreciate the opportunity to serve you and will appreciate your
cooperation during this transition.
Sincerely,
Timothy A. Huber, Vice President
SUBLEASE AGREEMENT - BALA CYNWYD, PENNSYLVANIA OFFICES
150 MONUMENT ROAD
STANDARD LEASE TABLE OF CONTENTS
Page
1. REFERENCE
DATA 1
2. PARTIES1
3. DEMISED
PREMISES 1
4. TERMl
5. USE OF
PREMISES 2
6. MINIMUM BASE
RENT AND ANNUAL CPI ADJUSTMENT 2
7. ADDITIONAL
RENT 3
8. LATE PAYMENT
3
9. ADDITIONAL
RENT FOR INCREASES IN OPERATING EXPENSES 3
10. OMITTED6
11. COMPLETION
OF PREMISES 6
12. WHEN
PREMISES READY FOR OCCUPANCY 6
13. TENANT'S
CHANGES 7
14. TENANT'S
PROPERTY 7
15. BUILDING
SERVICES 8
16. AFTER HOURS9
17. INTERRUPTION
OF SERVICES 10
18. REPAIRS AND
MAINTENANCE 10
19. NO
REPRESENTATIONS OR WARRANTIES 10
20. QUIET
ENJOYMENT 11
21. ACCESS TO
PREMISES 11
22. COMPLIANCE
WITH LAWS, RULES AND REGULATIONS 11
23. REMOVAL AND
SURRENDER OF PREMISES 11
24. HOLD
HARMLESS; PUBLIC LIABILITY INSURANCE; WAIVER OF SUBROGATION 12
25. DESTRUCTION
OR DAMAGE 12
26. CONDEMNATION
13
27.
SUBORDINATION, ATTORNMENT, AND NOTICE TO MORTGAGEES 14
28. ASSIGNMENT
AND SUBLETTING 14
29. ESTOPPEL
CERTIFICATES 15
30. DEFAULT16
31. REMEDIES17
32. WAIVER18
33. EXCULPATORY
AGREEMENTS 18
34. SUCCESSORS18
35. GOVERNING
LAW 19
36. SEPARABILITY
19
37. CAPTIONS19
38. GENDER19
39. NOTICES19
40. BROKER19
41. LEASE NOT AN
OFFER 20
42. FORCE
MAJEURE 20
43. RELOCATION
OF TENANT 20
44. SECURITY20
45. LEASE
MODIFICATION 20
46. EXHIBITS21
47. ENTIRE
AGREEMENT 21
48. CORPORATE
AUTHORITY 21
49. LITIGATION21
50. LEASE AS
SECURITY AGREEMENT 21
SIGNATURES 21
EXHIBIT LIST
EXHIBIT "A" - TENANT'S LAYOUT PLAN AND SPECIFICATION
EXHIBIT "B" - STANDARD BUILDING SPECIFICATION
EXHIBIT "C" - RULES AND REGULATIONS APPLICABLE TO TENANTS, ITS
EMPLOYEES, LICENSEES, INVITEES AND CONTRACTORS
EXHIBIT "D" - CLEANING SPECIFICATIONS
EXHIBIT "E" - SAMPLE INVENTORY OF ELECTRICAL EQUIPMENT
EXHIBIT "F" - SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
STANDARD FORM OF LEASE
150 MONUMENT ROAD
1. REFERENCE DATA. Any reference in this Lease to the following
subjects shall incorporate therein the data stated for the subject(s) in
this section:
1.1 LEASE DATE: APRIL 12, 1994
1.2 LANDLORD: MONUMENT DEVELOPMENT ASSOCIATES, a Pennsylvania Limited
partnership.
1.3 LANDLORD'S ADDRESS: 9 Union Avenue
Bala Cynwyd, Pennsylvania 19004
1.4 LANDLORD'S CONSTRUCTION REPRESENTATIVE: Philip Berman, ( 215) 839-
6700
1.5 TENANT: RYAN, BECK & CO., INC., a New Jersey corporation
1.6 TENANT'S CURRENT ADDRESS: 3 Parkway, Suite 1705, Phila, PA 19102
1.7 TENANT'S CONSTRUCTION REPRESENTATIVE: Tammi Walsh (568-4433)
1.8 LEASE TERM: 5 Years
1.9 ESTIMATED COMMENCEMENT DATE: May 1, 1994
1.10 EXPIRATION DATE - Last day of that month which is 60 months -
subsequent to the COMMENCEMENT DATE *
1.11 AGREED RENTABLE AREA OF LEASED PREMISES ON First FLOOR, 3620 SQ.
FT.
1.12 INITIAL ANNUAL MINIMUM BASE RENT $55,810.00 ** (actual Project
Operating Expenses)
1.13 OPERATING EXPENSE STOP: 1994 / PER RENTABLE SQ. FT.
1. 14 TENANT'S PRO RATA SHARE: 3%
2. PARTIES. This Lease is made as of the Lease Date (Section 1.1) by and
between LANDLORD (Section 1.2) and TENANT (Section 1.5), with the intent
to be legally bound.
3. DEMISED PREMISES. LANDLORD, for and in consideration of the rents
to be paid and the covenants and agreements to be performed by TENANT
hereunder, hereby leases to TENANT, and TENANT hereby leases from
LANDLORD the premises outlined in red on TENANT'S LAYOUT PLAN AND
SPECIFICATION, Exhibit "A" annexed hereto and made a part hereof, in the
Building located at 150 Monument: Road, Bala Cynwyd, Montgomery County,
Pennsylvania, known as 150 MONUMENT ROAD together with the right, in
common with other occupants of the building to use the lobbies,
entrances, stairs, elevators, hallways and other common areas of the
building, for the term and upon the conditions and agreements set forth
in this Lease. The demised premises are hereinafter called the
"PREMISES" The real property at 150 Monument Road is hereinafter called
the "PROPERTY". The building of which the | ) PREMISES are a part: is
hereinafter called the "BUILDING" . The PROPERTY, the BUILDING and any
improvements upon the PROPERTY are hereinafter called the "PROJECT".
4. TERM.
4.1 The term of this Lease shall commence on the COMMENCEMENT DATE as
defined in Section 4.2 below and shall end at midnight of the EXPIRATION
DATE (Section 1.10) unless sooner terminated as hereinafter provided.
4.2 The " COMMENCEMENT DATE" shall be the earlier of:
* Subject to Termination Option - SEE LEASE RIDER, PARAGRAPH 6.
** This amount becomes payable after an initial two (2) month period of
rent free occupancy of the PREMISES.
(a) the day TENANT or anyone claiming under or through TENANT shall take
possession of substantially the whole of the PREMISES, or
(b) the later of the estimated COMMENCEMENT DATE or the date the
PREMISES are, pursuant to ARTICLE 12 below, deemed ready for occupancy.
4.3 Promptly following the COMMENCEMENT DATE, LANDLORD and TENANT shall
enter into a supplementary agreement fixing the COMMENCEMENT DATE and,
if necessary for purposes of clarity, the EXPIRATION DATE of this Lease.
4.4 The term "lease Year" as used in this Lease shall refer to each
consecutive twelve (12) month period, the first such period to begin on
the COMMENCEMENT date.* Each Lease Year shall commence on the annual
anniversary. of the COMMENCEMENT DATE. Z or the first day of the next
calendar month in the event the COMMENCEMENT DATE does not occur on the
first day of the month and to end on the last day of the twelfth full
calendar month thereafter. Each successive twelve (12) month period
during the term of this Lease shall constitute a Lease Year.
5. USE OF PREMISES. TENANT shall not use or permit the PREMISES or any
part thereof to be used for any purpose other than as executive and
general offices of TENANT and for any lawful purposes incidental to such
use by TENANT.
6. MINIMUM BASE RENT AND ANNUAL INFLATION ADJUSTMENT.
6.1 Beginning on the COMMENCEMENT DATE, TENANT shall pay, without
offset, to LANDLORD a minimum base rent as follows:
6.1.1 For and during the first Lease Year, the sum of SEE LEASE RIDER,
PARAGRAPH 2 Dollars ($ ).
6.1.2 Commencing with the first annual anniversary date of the
COMMENCEMENT DATE of this Lease, and on each annual anniversary date
thereafter, including any renewals or extension of this Lease, the
minimum base rental shall be adjusted (but not below the minimum base
rent paid during the preceding Lease Year) for the ensuing Lease Year by
an amount calculated as follows:
6.1.2.1 The rent adjustment to be made at the end of the first Lease
Year shall be calculated as follows:
(i) The Consumer Price / Index (CPI), as hereinafter defined, shall be
determined for the month preceding the month in which the COMMENCEMENT
DATE shall occur.
(ii) The CPI shall be determined for the month preceding the first
annual anniversary date of the COMMENCEMENT DATE.
(iii) If the CPI determined in Paragraph (ii) exceeds the CPI determined
in Paragraph (i), then ( %) of such CPI increase shall be the
percentage to be multiplied by the minimum base rent payable during such
first Lease Year and the result shall be added to such minimum base rent
to arrive at the new adjusted minimum base rent to be paid during the
second Lease Year.
6 .1.2.2 The rent adjustment to be made for each subsequent Lease Year
shall be calculated as follows:
(i) The CPI shall be determined for the month preceding the start of the
prior Lease Year.
(ii) The CPI shall be determined for the month preceding the then
current Lease Year.
(iii) If the CPI determined in Paragraph (ii) exceeds the CPI determined
in Paragraph (i) then ( %) of such CPI increase shall be the
percentage to be multiplied by the minimum base rent for such prior
Lease Year and the result shall be added to such minimum base rent to
arrive at the new adjusted minimum base rent for the then current Lease
Year.
6.1.2.3 CPI is defined as consumer Price INDEX published by the US
Department of Labor (all items for Philadelphia and Urban Areas, 1982-84
Base = 100)
6.1.2.4 When the adjusted minimum base rent has been determined for
each Lease Year, LANDLORD shall give TENANT written notice of such
adjusted minimum base rent and the manner in which it was computed. The
adjusted minimum base rent shall thereafter be the minimum base rent for
such Lease Year for all purposes under this Lease.
6.2 Subject to the provisions of Section 6.1 above, The sums provided
for by Section 6.1 shall be payable in equal monthly installments in
advance, and without demand, abatement, counterclaim or offset, on the
first day of each calendar month of the term hereof at LANDLORD'S office
in Bala Cynwyd, Pennsylvania, or at such place as the LANDLORD may, from
time to time, designate. In the event that the TENANT takes possession
of the PREMISES on a day other than the first- day of a calendar month
or the ready for occupancy dale established pursuant to ARTICLE 12 shall
occur on a day other than the first day of a calendar month, the TENANT
shall pay to LANDLORD a pro rata portion of the monthly rental to be
based on the number of days remaining in such partial month prior to the
first day of the following month. NOTWITHSTANDING THE ABOVE PROVISIONS,
'TENANT SHALL PAY THE FIRST FULL CALENDAR MONTHLY INSTALLMENT OF MINIMUM
RENT ON THE EXECUTION OF THIS LEASE, TOGETHER WITH THE SECURITY DEPOSIT
REQUIRED BY THE TERMS OF SECTION 44 HEREOF.
7. ADDITIONAL RENT. In addition to the minimum base rent herein
provided, all other payments to be made by TENANT to LANDLORD or any
other person under this Lease shall be deemed to be and shall become
"Additional Rent" hereunder, whether or not the same be designated as
such and shall, unless otherwise specifically provided, be due and
payable within ten (10) business days of receipt of invoice therefor.
Non-payment of Additional Rent when due shall, at LANDLORD's option,
constitute a default under this Lease to the same extent, and shall
entitle the LANDLORD to the same remedies as for non-payment of minimum
base rent.
8. LATE PAYMENT. In the event that on any occasion or occasions any
installment of minimum base rent, as set forth in Section 6.1 above, or
any other sum collectible as rent under this Lease, is not paid within
ten (10) days after the date the same is due, TENANT agrees to pay
LANDLORD, upon receipt of invoice, a late charge equal to two percent
(2%) of the amount not so paid when due, such late charge to be deemed
"Rent" for all purposes under this Lease.
9. ADDITIONAL RENT FOR INCREASES IN OPERATING EXPENSES.
9.1 LANDLORD and TENANT recognize that during the term of this Lease the
expenses of operation and maintenance of the PROJECT ("Project Operating
Expenses") will likely increase from those existing at the time this
Lease is executed. The parties therefore agree that TENANT shall pay its
proportionate share of such increased Project Operating Expenses as
Additional Rent to be computed and paid as hereinafter provided.
9.2 For the purposes of this Lease, and this Article 9 in particular,
the following words and terms shall have these meanings:
9.2.1 "Project Operating Expenses" shall mean the aggregate of all
expenses (including real estate taxes) not excluded by the provisions of
Section 9.2.1.1 of this definition incurred in the ownership,
management, operation, maintenance and repair of the PROJECT which would
be construed as an operating expense by a reasonably prudent office
building owner, all determined in accordance with generally accepted
accounting and management principles on an accrual basis, including but
not limited to: (a) all payroll costs and benefits paid to or on behalf
of employees engaged solely in the operation, maintenance and management
of the PROJECT; (b) administrative costs of management of the PROJECT
including a management fee not to exceed five percent (5%) of the gross
receipts of the PROJECT; (c) costs of all utilities furnished to the
PROJECT, including water and sewer but not electricity, which cost shall
be paid as provided in Article 15, Section 15.1.1, (d) all supplies and
materials used in the operation and maintenance of the PROJECT; (e)
costs of any maintenance or service agreement such as alarm or security
services; landscape maintenance, janitorial and window cleaning, etc.;
(f) premium charges for all insurance carried by LANDLORD, including but
not limited to fire, casualty, liability and rental abatement insurance
applicable to the PROJECT; (g) costs of repairs, replacements and
general maintenance of the PROJECT; (h) all real or personal property
taxes, excises, levies, fees, or charges, general and special, ordinary
and extraordinary, of any kind which are assessed, levied, charged, or
imposed by any public authority upon the PROJECT, its operations or the
rentals provided for in this Lease and other leases of the PROJECT; (i)
amortization of capital improvements made to the PROJECT by LANDLORD
subsequent to the COMMENCEMENT DATE of this Lease which will improve the
operating efficiency of the PROJECT.
9.2.1.1 Expenses incurred for the following shall not be included in
Project Operating Expense:
9.2.1.1.2 Expenses for repairs or replacement to the extent that the
same are reimbursed to LANDLORD by insurance proceeds.
9.2.1.1.3 Leasing commissions paid to agents of LANDLORD or other
brokers.
9.2.1.1.4 Expenses of preparing or renovating space for new tenants
or renovating space vacated by any tenant.
9.2.1.1.5 Income and other taxes based upon the income of LANDLORD.
9.2.1.1.6 Depreciation of the PROJECT.
9.2.1.1.7 Cost of capital improvements, except that there shall be
included in Operating Expense the cost of any capital improvements made
for the purpose of reducing Operating Expenses, or which may be required
by governmental authority under any governmental law or regulation that
was not applicable to the PROJECT at the time it was constructed, or
which is intended to improve the services or facilities available to the
tenants of the PROJECT, which cost shall be amortized over such
reasonable period as LANDLORD shall determine together with interest on
the unamortized balance at the rate of ten percent (10%) per annum or,
if funds are borrowed for the purpose of constructing such capital
improvements, any higher rate as may have been paid for such funds by
LANDLORD.
9.2.1.1.8 Interest or amortization payments on any mortgage or
mortgages secured by the PROJECT.
9.2.1.1.9 Legal expense incurred in enforcing the terms of any lease
of space in the PROJECT, including this Lease.
9.2.2 "Operating Expense Stop" shall mean the amount set forth in
Section 1.13 hereof and represents on a square foot basis the projected
Project Operating Expenses of the PROJECT as of the date of this Lease.
9.2.3 "TENANT's Pro Rate Share" shall be as set forth in Section 1.14
hereof.
9.2.4 "Comparison Year" (which includes any Fractional Comparison
Year) shall mean each consecutive calendar year or Portion thereof
beginning January 1, 1995, adjusted and pro-rated as set forth in
Section 9.7 hereof.
9.3 At the beginning of each Comparison Year during the term of this
Lease, TENANT shall pay to LANDLORD the amount multiplied by TENANT 's
Proportionate Share by which the Project Operating Expenses per rentable
square foot for such Comparison Year exceeds the Project Operating
Expense Stop. Such sum to be paid by TENANT is hereinafter referred to
as TENANT's annual "Excess Expense Share".
9.4 To provide for current payment of TENANT's annual Excess Expense
Share, LANDLORD shall notify TENANT on or about the fifteenth (15th) day
of December preceding each Comparison Year that begins after the
COMMENCEMENT DATE of this Lease, of LANDLORD'S estimate thereof for the
forthcoming Comparison Year. TENANT agrees to pay monthly beginning
January 1 of each Comparison Year an amount equal to one-twelfth
(1/12th) of LANDLORD'S estimate of TENANT'S annual Excess Expense Share
for such Comparison Year. LANDLORD shall estimate, based upon LANDLORD'S
then experience in the operation of the PROJECT, TENANT'S annual Excess
Expense Share for each Comparison Year and then make an adjustment in
the following year based on the actual Excess Expense incurred for that
Comparison Year.
9.5 On or about April 1 of each year (or as soon thereafter as is
practical), LANDLORD shall deliver to TENANT an itemized statement
setting forth the calculation of and the actual amount of TENANT Annual
Excess Expense Share for the preceding Comparison Year. Any advance
overpayment or underpayment by TENANT with respect to any Comparison
Year shall be reflected on said statement. Any deficiency shown on said
statement shall be paid by TENANT to LANDLORD within fifteen (15) days
after receipt of said statement; any excess shown thereon shall be
reelected as a credit to TENANT to be applied against TENANT'S next
payment of minimum base rent. The obligations of TENANT and LANDLORD to
make payments hereunder or give credits or make payments in lieu thereof
shall survive the TERMINATION DATE. When TENANT'S Annual Excess Expense
Share has been finally determined for each Comparison Year or Fractional
Comparison Year, such increase or decrease shall be added to or
subtracted from TENANT'S then adjusted minimum base rent and such
adjusted minimum base rent shall thereafter be the minimum base rent for
such Lease Year for all purposes under this lease.
9.6 If any dispute arises as to the amount of any Additional Rent due
pursuant to this Article 9, TENANT shall have the right, after giving
reasonable notice and at reasonable times, to inspect LANDLORD'S
accounting records at LANDLORD'S accounting office and, if after such
inspection TENANT still disputes the amount of TENANT'S annual Excess
Expense Share, a "Reviewed Report" as to the proper amount thereof shall
be made by LANDLORD'S certified public accountants, which Reviewed
Report shall be final and conclusive. TENANT agrees to pay the cost of
preparation of such Report unless it is determined that LANDLORD'S
original statement overstated TENANT'S annual Excess Expense Share by
more than five percent (5%).
9.7 In the event (i) that the COMMENCEMENT DATE of this Lease shall
INITIAL be a day other than a January 1, or (ii) that the EXPIRATION or
TERMINATION DATE shall be a day other than a December 31, then in such
event the parties agree that the period from the Commencement Date of
this Lease through the next succeeding December 31, or in the period
from January 1 of the last Lease Year of the term hereof to the
EXPIRATION or TERMINATION DATE shall be considered Fractional Comparison
Year, and TENANT's Excess Expense Share for any such Fractional
Comparison Year shall be properly pro-rated with the Project Operating
Expenses and the Operating Expense Stop, each appropriately adjusted to
reflect a period of less than twelve (12) full months. Payment of
TENANT'S Excess Expense Share for a Fractional Comparison Year shall be
made monthly, based on LANDLORD'S estimate, with subsequent adjustment
based upon actual Excess Expenses consistent with the principals
applicable to a normal twelve (12) month Comparison Year and the
obligation to make payments hereunder shall survive the EXPIRATION DATE.
9.8 It is the purpose and intent of this Article 9 that during the
entire term of this Lease TENANT's Pro Rate Share of all Project
Operating Expenses in excess of the Operating Expense Stop shall be paid
or discharged by TENANT as Additional Rent.
10. OMITTED.
11. COMPLETION OF PREMISES.
11.1 The procedure to be followed in completing the PREMISES for
TENANT'S I s occupancy shall be as follows:
11.1.1 Prior to the execution of this Lease by the parties hereto,
LANDLORD and TENANT have agreed upon a layout drawing of the PREMISES
(TENANT'S LAYOUT PLAN AND SPECIFICATION") on the basis of which LANDLORD
has submitted to TENANT, and TENANT has approved, LANDLORD'S estimate of
the cost of changes, modifications or additions required by TENANT. A
copy of the TENANT'S LAYOUT PLAN AND SPECIFICATION, bearing the approval
of both LANDLORD and TENANT, is attached hereto, made a part hereof and
marked "Exhibit A."
11.1.2 Based upon the approved TENANT'S LAYOUT PLAN AND SPECIFICATION,
LANDLORD shall promptly and diligently, at LANDLORD's sole cost and
expense except as the parties may otherwise agree, complete and prepare
the PREMISES for TENANT'S occupancy in accordance with the approved
TENANT'S LAYOUT PLAN AND SPECIFICATION. TENANT agrees to make all
required material selections, color choices and other similar decisions
promptly upon LANDLORD'S request, and in this regard, time is of the
essence so as not to delay LANDLORD in the completion of the PREMISES.
11.1.3 TENANT agrees to pay LANDLORD in advance for all items of work
that have been agreed upon as being the responsibility of TENANT.
11.1.4 LANDLORD shall afford TENANT and its agents and employees access
to the PREMISES at reasonable times prior to the COMMENCEMENT DATE, at
TENANT'S sole risk and expense, for the purpose inspecting and verifying
the performance of work within the PREMISES. TENANT shall inspect the
performance of work within the PREMISES regularly and diligently and
shall advise LANDLORD promptly of any objection to the performance of
such work. Access for such purposes shall not be deemed to constitute
possession or occupancy accelerating the COMMENCEMENT DATE.
SEE LEASE RIDER, PARAGRAPH 3.
11. l .5It shall be conclusively presumed that the PREMISES are in
satisfactory condition (except for latent defects) as of the
COMMENCEMENT DATE and that LANDLORD has, as of the COMMENCEMENT DATE,
performed all of its build-out obligations under this Lease, unless
within thirty (30) days after the COMMENCEMENT DATE TENANT shall give
LANDLORD notice specifying in detail why PREMISES were not in
satisfactory condition or of any failure of the LANDLORD to meet its
build-out obligations under this lease.
12. WHEN PREMISES READY FOR OCCUPANCY.
12.1 The PREMISES shall be deemed ready for occupancy on the earliest
date on which all of the following conditions have been met:
12.1.1 A Use and Occupancy Permit has been applied for to the Township
of Lower Merion not inconsistent with TENANT'S use of the PREMISES as
provided by Article 4 hereof.
12.1.2 The PREMISES has been substantially completed in accordance with
the TENANT'S LAYOUT PLAN AND SPECIFICATION and it shall be deemed that
this condition has been met notwithstanding that minor or insubstantial
details of construction, mechanical adjustment or decoration remain to
be performed, the non-compliance of which does not materially interfere
with TENANT'S use of the PREMISES or the conduct of business therein.
12.1.3 If the completion of the PREMISES shall be delayed due to any act
or omission of TENANT or any of its employees or agents, including
failure by TENANT to act promptly with respect to the submission of
approvals, selections or consents when the same may be reasonably
requested by LANDLORD, the PREMISES shall be deemed ready for occupancy
on the date when they would have been ready but for any such delay.
13. TENANT'S CHANGES.
13.1 TENANT shall make no changes, alterations, additions or
improvements to the PREMISES ("TENANT's CHANGES") without the prior
written consent of LANDLORD.
13.2 In the event LANDLORD shall approve TENANT'S CHANGES, then at the
EXPIRATION DATE, or the date of any earlier termination of this Lease,
TENANT shall, on LANDLORD'S written request, restore the PREMISES to
their condition prior to the making of any such TENANT CHANGES.
13.3 TENANT agrees that it will not at any time prior to or during the
term of this Lease, either directly or indirectly, use any contractors,
labor or materials in the PREMISES which, in LANDLORD'S reasonable
opinion, create any difficulty with other contractors or labor engaged
by TENANT or LANDLORD or others or would in any way disturb harmonious
labor relations in the construction, maintenance or operation of the
BUILDING or any part thereof.
13.4 Prior to TENANT performing any construction or other work in or
about the PREMISES For which a lien could be filed against the PREMISES
or the BUILDING, TENANT shall enter into a written "Waiver of Liens"
agreement with the contractor who is to perform such work and such
written agreement shall be filed and recorded, in accordance with the
Mechanic's Lien Law of Pennsylvania, prior to the commencement of such
work. Notwithstanding the foregoing, if any mechanic's or other lien
shall be filed against the PREMISES or the BUILDING purporting to be for
labor or material furnished or to be furnished at the request of the
TENANT, then TENANT shall, at its expense, cause such lien to be
discharged of record by payment, bond or otherwise, within thirty (30)
days after the filing thereof. If TENANT shall fail to cause such lien
to be discharged of record within such thirty (30) day period, LANDLORD
may cause such lien to be discharged by payment, bond or otherwise,
without investigation as to the validity thereof or as to any of sets or
defenses thereto, and TENANT shall, upon demand, reimburse LANDLORD for
all amounts paid and costs incurred, including reasonable attorney's
fees, in having such lien discharged of record.
14. TENANT ' S PROPERTY.
14.1 All fixtures, improvements, wiring, conduits and appurtenances
attached to or built into the PREMISES at the commencement of or during
the term of this Lease, whether or not by or at the expense of TENANT,
shall be and remain a part of the PREMISES, shall be deemed the property
of LANDLORD and shall not be removed by TENANT, except as set forth in
Section 13.2 hereof and except as hereinafter in this section expressly
provided.
14.2 TENANT'S PROPERTY shall be defined to mean:
14.2.1 All counters, special cabinet work, other business and trade
fixtures, and all other machines and equipment not related to the TENANT
operation of BUILDING systems, whether or not attached to or built into
the PREMISES, which are installed in the PREMISES by Tenant (other then
wiring and conduits), and which can be removed without damage to or
defacement of the BUILDING; and
14.2.2 All furniture, furnishings and other articles of movable personal
property owned by TENANT and located in the PREMISES.
14.3 At or before the EXPIRATION DATE, or the date of any earlier
termination of this Lease, TENANT shall, at its expense, remove from the
PREMISES all of TENANT'S PROPERTY, repair any damage resulting therefrom
and pay all other costs of such removal.
14.4 Any items of TENANT'S PROPERTY which shall remain in the PREMISES
after the EXPIRATION DATE or after a period of ten (10) days following
an earlier termination date, may, at the option of the LANDLORD, be
deemed to have been abandoned, and in such case may be retained by
LANDLORD, or disposed of, without accountability, in such manner as
LANDLORD may see fit. TENANT agrees to reimburse LANDLORD for the costs
of removal and for the cost of repairing any damage to the BUILDING
arising out of TENANT's failure to remove TENANT'S PROPERTY. The
provisions of this section shall survive the expiration or sooner
termination of this Lease.
15. BUILDING SERVICES.
15.1 So long as this Lease is in full force and effect and TENANT not in
default thereunder, LANDLORD shall provide, within BUILDING standards on
each item, the following services during "REGULAR HOURS" meaning the
hours of 8:00 a.m. to 2:00 p.m. on Saturdays and 8:00 a.m. to 6:00 p.m.
on other 'BUSINESS DAYS" (which term is defined to mean all days except
(i) those days observed by the Federal or Pennsylvania State governments
as legal holidays, (ii) Sundays, and (iii) after 2:00 p.m. on
Saturdays), throughout the year:
15.1.1 Such electricity as is required to fulfill all of TENANT'S
ordinary electrical needs for office purposes, including heating,
ventilation, air conditioning, lighting and the operation of ordinary
small office machines and equipment. TENANT{P shall pay to LANDLORD its
proportionate share of the cost of demand, use and consumption of
electricity in the PROJECT, based upon TENANT'S PRO-RATA SHARE as set
forth in Article 1, Section 1.14 hereof, which shall be billed to TENANT
and paid by TENANT to LANDLORD monthly as a part of its rent. Billing to
TENANT for estimated electric usage charges may be based upon reasonably
projected or estimated utility company charges which shall be finally
determined on an annual or Lease Year basis, at which time any advance
overpayment made by TENANT shall be credited to TENANr on the next
monthly electric utility billing or, if there has been a deficiency in
the amount billed to TENANT, such deficiency shall be paid by TENANT to
LANDLORD within thirty (30) days of the receipt of an invoice showing
such deficiency. The obligations of TENANT and LANDLORD to make payments
hereunder or give credits or make payments in lieu thereof shall survive
the TERMINATION DATE. TENANT understands and agrees that manufacturing,
printing, duplicating, electronic data processing, equipment or machines
requiring the use of twenty (20) or more amperes for their operation,
supplementary heating equipment and other "heavy draw" electric
equipment installed by TENANT will not be treated as items of "ordinary
electrical need" and electricity required to operate the same shall be
subject to a special utility charge to be reasonably determined by
LANDLORD, or LANDLORD may cause submeters to be installed to measure
such excess electrical use, in which event TENANT shall pay LANDLORD for
the cost of the electricity so used and so measured at the same rates
(including additional charges in lieu of sales taxes and other charges
made from time to time by the electric utility in its billings to
customers for similar services) as TENANT would pay had it purchased
such electricity directly from the electric utility in the form used by
TENANT. TENANT SHALL PROVIDE TO LANDLORD, AT THE TIME OF TENANT'S
EXECUTION OF THIS LEASE, AN "INVENTORY OF ELECTRICAL EQUIPMENT" WHICH
TENANT CONTEMPLATES USING IN THE PREMISES, COMPLETE, DETAILED AND
SUBSTANTIALLY SIMILAR IN FORM TO THE SAMPLE INVENTORY ATTACHED HERETO
AND LABELED EXHIBIT "E". TENANT shall not alter or add to the office
machinery or other apparatus requiring electricity shown on the
aforementioned inventory (except for small office machines) without
first obtaining LANDLORD'S written consent, which consent shall not be
unreasonably withheld or delayed. In the event TENANT does so alter or
add any such machinery or apparatus without LANDLORD'S consent, TENANT
agrees to pay LANDLORD the applicable charges in respect thereto as of
the date of installation thereof.
15.1.1.1 TENANT's use of electricity in the PREMISES shall not at any
time exceed the capacity of any of the electrical conductors and
equipment in or otherwise servicing the PREMISES.
15.1.2 Except to the extent that any federal, state or local law or
regulations limit the same, such heating, ventilation and air
conditioning ("HVAC") shall operate in the PREMISES through the
BUILDING systems, in compliance with the STANDARD BUILDING
SPECIFICATIONS set forth in Exhibit "B".
15.1.2.1 LANDLORD will not be responsible for the failure of the HVAC
system to meet the STANDARD BUILDING SPECIFICATIONS stated in Exhibit
"B" if such failure results from use of the PREMISES in a manner
exceeding the occupancy and electrical load criteria set forth in said
Exhibit "B", or due to rearrangements of partitioning after the initial
preparation of the PREMISES.
15.1.2.2 TENANT agrees at all times to cooperate fully with LANDLORD and
to abide by all the reasonable regulations and requirements which
LANDLORD may prescribe for the proper functioning and protection of the
said air conditioning system. LANDLORD, throughout the term of this
Lease, shall have free and unrestricted access to any and all air
conditioning facilities in the PREMISES.
15.1.2.3 If, as a result of TENANT's installation or use of any heat
producing equipment or any activity as described in Section 15.1.2.1,
the HVAC system in the BUILDING is inadequate to service the PREMISES,
LANDLORD may at TENANT's request (i) at TENANT's cost, conduct a heat
load study of the PREMISES and (ii) at TENANT's cost, providing the
capacity or equipment is available and in accordance with the design of
LANDLORD's engineers, install supplemental HVAC capacity to provide
reasonable temperatures to the PREMISES and in such case, TENANT shall
pay monthly in advance during the term of this Lease, the reasonable
amount estimated by LANDLORD's engineers as the cost of operation and
maintenance of such supplementary HVAC equipment or service.
15.1.3 Continuous elevator service during BUSINESS DAYS and REGULAR
HOURS with at least one (1) passenger elevator subject to call at all
other times.
15.1.4 Janitorial service to the PREMISES, as specified on Exhibit "D"
annexed hereto.
15.1.5 Hot and cold water for drinking, lavatory and toilet purposes
drawn through fixtures installed by LANDLORD.
15.1.6 LANDLORD shall use reasonable efforts to keep and maintain the
public areas and the public facilities of the BUILDING clean and in good
order and the sidewalks adjoining the BUILDING in good repair and
reasonably free of accumulation of snow and ice or unlawful
obstructions. This Section 15.1.6 is included in this Lease for the
benefit only FOR TENANr and may be enforced only by TENANr and is not
intended to establish LANDLORD's duty as to any other persons
whatsoever.
15.1.7 LANDLORD, on TENANT's request, shall maintain listings on the
BUILDING directory of the names of TENANT, its organizational divisions
and any other person or business entities lawfully occupying the
PREMISES or any part thereof and the names of any of their officers and
employees, provided that the names so listed shall not take up more than
TENANT's PROPORTIONATE SHARE of the space on the BUILDING. In
directory, the size of which shall be determined by LANDLORD.
16. AFTER HOURS.
16.1 If TENANT shall occupancy its PREMISES or any portion or part
thereof at any time or times other than REGULAR HOURS, as are defined in
Section 15.1 hereof (hereinafter called "AFTER HOURS"), all BUILDING
services as hereinbefore enumerated shall be provided or be available to
TENANT, excluding the central core heating and air conditioning system,
provided TENANT shall reimburse LANDLORD for the cost of such AFTER
HOURS occupancy at the rate of Forty Eight Dollars ($48.00) per hour
cost to be pro-rated on the basis of quarter-hour occupancy. The
BUILDING security card system shall be used to determine periods of
AFTER HOURS occupancy of the PREMISES.
16.2AFTER HOURS air conditioning and heating for interior areas serviced
by the central core system shall be provided upon reasonable advance
written notice from TENANT to LANDLORD.
17. INTERRUPTION OF SERVICES.
17.1 In case LANDLORD is prevented or delayed in furnishing any service
as set forth in Section 15 herein or otherwise by reason of any cause
beyond LANDLORD'S reasonable control, LANDLORD shall not be liable to
TENANr therefor nor shall TENANT be entitled to any abatement or
reduction in rent by reason thereof nor shall the same give rise to a
claim in TENANT's favor that such absence of building services
constitutes actual or constructive, total or partial eviction or renders
the PREMISES untenantable.
17.2 LANDLORD reserves the right to stop any service or utility system,
when necessary by reason of accident or emergency, or until necessary
repairs have been completed, or due to any cause beyond LANDLORD'S
reasonable control, provided however, that in each instance of stoppage,
LANDLORD shall exercise reasonable diligence to eliminate the cause
thereof. Except in case of emergency repairs, LANDLORD will endeavor to
give TENANT' reasonable advance notice of any contemplated stoppage and
will use reasonable efforts to avoid unnecessary inconvenience to TENANr
by reason thereof.
18. REPAIRS AND MAINTENANCE.
18.1 TENANT shall take good care of the PREMISES and the fixtures and
appurtenances therein. TENANT, at its expense, shall promptly make all
repairs, in and about the PREMISES and the BUILDING, as shall be
required by reason of (i) the performance or existence of TENANT ' s
CHANGES, (ii) the installation, use or operation of TENANT'S PROPERTY in
the PREMISES, (iii) the moving of TENANT's PROPERTY in or out of the
BUILDING, or (iv) the misuse or neglect by TENANT or any of its
employees, agents, or contractors.
18.2 LANDLORD shall keep and maintain the BUILDING and its fixtures,
appurtenances, systems and facilities serving the PREMISES in good
working order, condition and repair and shall make all repairs,
structural and otherwise, interior and exterior, as and when needed in
the BUILDING and PREMISES, except for those repairs for which TENANT is
responsible pursuant to any other provisions of this Lease, including
but not limited to the provisions of Section 25.1 hereof.
18.3 TENANT shall give notice to LANDLORD, promptly after TENANT learns
thereof, of (i) any accident in or about the PREMISES or the BUILDING,
(ii) any fire in the PREMISES, (iii) any damage to or defect in the
PREMISES, including the fixtures, equipment and appurtenances thereof,
and (iv) any damage to or defect of any part or appurtenance of the
BUILDING'S sanitary, electrical, heating, ventilating, air conditioning,
elevator and other systems located in or passing through the PREMISES.
18.4 Although LANDLORD shall use reasonable diligence with respect to
repairs and maintenance required of it under this Lease and shall
perform such work, except in case of emergency, at times reasonably
convenient to TENANT, LANDLORD shall not be liable for any delay in
respect thereto unless due to intentional disregard of its obligation
under this Lease.
18.5 LANDLORD shall have no liability to TENANT by reason of any
inconvenience, annoyance, interruption or damage or injury to business
or property of TENANT or any employee or agent of TENANT arising from
LANDLORD or any tenant making any repairs or changes or performing
maintenance services, in or to any portion of the BUILDING or the
PREMISES.
19. NO REPRESENTATIONS OR WARRANTIES. TENANT acknowledges and agrees
that, except as expressly set forth in this Lease, there have been no
representations or warranties made by or on behalf of LANDLORD with
respect to the PREMISES or the BUILDING with respect to the suitability
of either for the conduct of TENANT's business.
20. QUIET ENJOYMENT. So long as TENANT pays all rent due hereunder and
performs all TENANT'S other obligations hereunder, LANDLORD shall not
disturb TENANT'S peaceable and quiet enjoyment of the PREMISES, subject,
nevertheless, to the obligations assumed by TENANT under the provisions
of this Lease and as provided in Article 27 hereof as to SUPERIOR
MORTGAGES.
21. ACCESS TO PREMISES.
21.1 TENANT and its employees and agents shall have access to the
PREMISES during REGULAR HOURS on BUSINESS DAYS and at all other times,
subject to compliance with LANDLORD's card access system and such other
security measures as shall, from time to time, be in effect for the
BUILDING, and subject to such AFTER HOURS charges as are set forth in
Section 16 hereof.
21.2 LANDLORD, its employees and agents, shall have the right upon
reasonable advance notice to enter the PREMISES at all reasonable times
by any reasonable means which will not unreasonably disturb TENANT in
the conduct of its business for the purpose of examining or inspecting
the same, enforcing the provisions of this Lease, showing the same to
prospective purchasers, mortgagees or prospective tenants of the
BUILDING, and making such alterations, repairs, improvements or
additions to the premises or to the BUILDING as LANDLORD may reasonably
deem necessary or desirable. Any such entry shall not constitute an
eviction of TENANT or termination of this Lease.
21.3 TENANT shall permit LANDLORD to install, use and maintain pipes,
ducts and conduits within or through the PREMISES, or through the walls,
columns and ceilings therein, provided that the installation work is
performed at such times and by such methods as will not unreasonably
interfere with TENANT'S use and occupancy of the PREMISES, or damage the
appearance thereof.
22. COMPLIANCE WITH LAWS, RULES AND REGULATIONS.
22.1 TENANT shall, at its expense, comply with all laws, orders,
ordinances, regulations and rules of all governmental authorities having
jurisdiction and the local Board of Fire Underwriters with respect to
the occupancy, use or manner or use of the PREMISES. TENANT shall give
LANDLORD prompt notice of any violation or recommendation of change of
which it shall have received notice TENANT shall not do or permit to be
done any act or thing which will invalidate or be in conflict with the
Certificate or Statement Or Occupancy covering the PREMISES.
22.2 Neither LANDLORD nor TENANT shall suffer, permit or commit any
waste or nuisance upon or within the PREMISES or the BUILDING, or allow
any health, safety or fire hazards to exist herein.
22.3 TENANT shall observe and comply with the Rules and TENANT
Regulations attached hereto as Exhibit "C" and made a part hereof and
with any reasonable amendments or modifications of the same not
inconsistent with any provisions of this Lease and nondiscriminatory
applicable to the tenants of the BUILDING. All Rules and Regulations
shall apply to TENANT and its employees, agents, licensees, invitees,
subtenants (to the extent, if any, authorized,) and contractors. TENANT
shall pay as additional rent all costs and expenses resulting from its
noncompliance therewith.
23. REMOVAL AND SURRENDER OF PREMISES.
23.1 At the end of the term of this Lease, TENANT shall arrange with
LANDLORD'S building manager a convenient date and time for the removal
of TENANT'S furniture, equipment and other possessions from the
PREMISES. Such removal, if it involves the use of the BUILDING
elevators, shall be coordinated so as not to interfere with normal
passenger use of the elevators during normal business hours. Upon such
expiration or termination of this Lease, TENANT shall, without notice of
any kind, surrender the PREMISES to LANDLORD in broom-clean condition
and in good order and repair except for ordinary wear and tear, damage
from fire or other insured casualty and damage for which TENANT is not
obligated to make repairs under this Lease. TENANT waives any right to
notice to so surrender the PREMISES as may, by any statute or ordinance,
be in effect in Pennsylvania. 'The provisions of this Section shall
survive the expiration or sooner termination of t this lease.
23.2 If TENANT retains possession of the Leased Premises or any are
thereof after the termination of this Lease by expiration of the Lease
term or otherwise, TENANT shall pay LANDLORD an amount, calculated on a
per diem basis, for use of the PREMISES equal to 125% of the minimum
base rent for the time TENANT thus remains in possession plus any actual
damages, costs and expenses sustained by LANDLORD by reason of TENANT'S
unlawful retention. Without limiting any rights and remedies of LANDLORD
resulting by reason of the wrongful holding over by TENANT, Or creating
any right in TENANT to continue in possession of the Leased Premises,
all TENANT'S obligations with respect to the use and occupancy and
maintenance of the leased PREMISES shall continue during such period of
unlawful retention.
24. HOLD HARMLESS; PUBLIC LIABILITY INSURANCE; WAIVER OF SUBROGATION.
24.1 TENANT covenants and agrees to exonerate, indemnify, defend,
protect and save LANDLORD harmless from and against any and all claims,
(demands, expenses for losses, suits and damages as may be occasioned by
reason of (i) any accident or matter occurring in or about the PREMISES,
causing injury to persons or damage to property (including but not
limited to the PREMISES), unless such accident or other her matter
resulted from the gross negligence or willful misconduct of LANDLORD or
LANDLORD'S agents or employees, (ii) The failure of TENANT to fully and
faithfully perform the obligations and observe the conditions of this
Lease, or (iii) the negligence or otherwise tortuous act of TENANT or
anyone in or about the BUILDING on behalf or at the invitation or right
of TENANT.
24.2 TENANT shall keep in force at its own expense workers compensation
and public liability insurance (including a contractual liability
insurance endorsement) in companies acceptable to LANDLORD sufficient to
cover such indemnification and naming LANDLORD as an additional insured
against claims for bodily injury, death or property damage with minimum
limits as to public liability coverage of $1,000,000.00 and TENANT will
further deposit the policy or policies of such insurance, or
certificates thereof, annually with LANDLORD. Said policy or policies
of insurance or certificates thereof shall contain a provision that such
policy shall not be canceled without at least thirty (30) days prior
written notice to LANDLORD and that no act or omission of TENANT shall
invalidate the interest of LANDLORD under said insurance. LANDLORD
shall*
24.3 LANDLORD and TENANT hereby release the other from any and all
liability or responsibility to the other or anyone claiming through or
under them by way of subrogation or otherwise for any loss or damage to
property covered by any insurance then in force, even if such fire or
other casualty shall have been caused by the default or negligence of
the other party, or anyone for whom such party may be responsible,
provided, however, that this release shall be applicable and in force
and effect only to the extent of and with respect to any loss, or damage
occurring during such time as the policy or policies of insurance
covering said risk shall contain a clause or endorsement to the effect
that this release shall not adversely affect or impair said insurance or
prejudice the right of the insured to recover thereunder.
24.4 In any event of loss or damage to the BUILDING, the PREMISES
and/or any contents therein, each party shall look first to any
insurance in it favor before making any claim against the other party.
25. DESTRUCTION OR DAMAGE.
25.1 If the PREMISES and/or access thereto shall be partially or
totally damaged or destroyed by fire or other casualty, then LANDLORD,
shall, subject to its rights under Subsection 25.4 hereof, repair the
damage and restore and rebuild the premises and/or access thereto as
nearly as may be reasonably practical to its condition and character
immediately prior to such damage or destruction, with reasonable
diligence after notice to it of the damage or destruction; provided,
however, that LANDLORD shall not be required to repair or rebuild any of
TENANT's PROPERTY or TENANT's CHANGES set forth or described in Articles
13 and 14 hereof, and TENANT is advised to carry insurance covering its
property and improvement and betterments to protect its interests
therein.
25.2 If the PREMISES and/or access thereto shall be partially or
totally damaged or destroyed by fire or other casualty, the rents
payable hereunder shall be abated to the extent that the PREMISES shall
have been rendered untenantable from the date of such damage or
destruction to the date the damage shall be substantially repaired,
restored or rebuilt. Should TENANT reoccupy a portion of the PREMISES
during the period that the repair, restoration, or rebuilding is in
progress and prior to the date that the same are made completely
tenantable, rents allocable to such portion shall be payable by TENANT
from the date of such occupancy.
25.3 If LANDLORD has not completed the making of the required repairs
and restored and rebuilt the PREMISES and/or access thereto within four
(4) months from the date of such damage or destruction, plus such
additional time after such date (but in no event to exceed two (2)
months) as shall equal the aggregate period LANDLORD may have been
delayed in doing so by adjustment of insurance or any force majeure as
set forth in Section 42 hereof, TENANT may serve notice on LANDLORD of
its intention to terminate this Lease. If within thirty (30) days
thereafter LANDLORD shall not have completed the making of the required
repairs and restored and rebuilt the PREMISES, this Lease shall
terminate on the expiration of such thirty (30) day period as if such
termination were the EXPIRATION DATE.
25.4 In the event that the BUILDING shall be so damaged by fire or other
casualty that substantial renovation, reconstruction or demolition of
the BUILDING shall, in LANDLORD's reasonable opinion be required
(whether or not the PREMISES shall have been damaged by such fire or
other casualty), then LANDLORD may, notwithstanding any provision to the
contrary contained in this Article 25, at its option, terminate this
Lease by written notice to TENANT within thirty (30) days after the date
of such damage. If at any time prior to LANDLORD giving TENANT the
aforesaid notice of termination or commencing the repair and restoration
pursuant to Section 25.1, the holder of a SUPERIOR MORTGAGE or any
person claiming under or through such holder takes possession of the
BUILDING through foreclosure or otherwise, either shall have a further
period of thirty (30) days from the date of so taking possession to
terminate this Lease by written notice to TENANT. In the event a notice
of termination shall be given pursuant to either of the last two
preceding sentences, this Lease and the term and estate hereby granted
shall expire as of the date of such termination and the base and
additional rent due and to become due hereunder shall be apportioned as
of such date if not earlier abated pursuant to Section 25.2 above.
25.5 No damages, compensation or claim shall be payable by LANDLORD for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the PREMISES or of the BUILDING pursuant
to this Article 25 or otherwise.
26. CONDEMNATION.
26.1 If the whole of the PREMISES shall be condemned or taken either
permanently or temporarily for any public or quasi-public use or
purpose, under any statute or by right of eminent domain, or by private
purchase in lieu thereof, then and in that event, the term of this Lease
shall cease and terminate from the earlier of the date of taking or of
possession of the PREMISES by such condemning authority, and TENANT
shall have no claims against LANDLORD for the value of any unexpired
term of said Lease, and shall release unto LANDLORD any such claim it
may have against any condemner. In the event a portion only of the
PREMISES or a portion of the BUILDING shall be so taken (even though the
PREMISES may not have been affected ), LANDLORD may elect to terminate
this Lease from the date of title vesting in such proceeding or
purchase, or the LANDLORD may elect to repair and restore, at its own
expense, the portion not taken and thereafter if a portion of the
PREMISES was taken and thereafter if a portion of the PREMISES was taken
the Rent shall be reduced proportionately (based on the ratio that the
square feet in the PREMISES immediately prior to such condemnation bears
to the square feet in the PREMISES remaining thereafter).
26.2 Nothing contained in this Article 26 shall deprive TENANT of any
separate award for removal and moving expenses, business dislocation
damages or for any other award which would not reduce the award
otherwise payable to LANDLORD.
* provide TENANT with insurance certificates from time to time as
evidence of the fact that the building is properly insured.
27. SUBORDINATION, ATTORNMENT, AND NOTICE TO MORTGAGEES.
27.1 This Lease, and all rights of TENANT hereunder, are and shall be
subject to subordination in all respects to any present and future
mortgages and building loan agreements, which may now or hereafter
affect the land and/or the BUILDING and to each and every advance made
or hereafter to be made under such mortgages, and to all renewals,
modifications, replacements and consolidations and correlation of such
mortgages. This section shall be self-operative and no further
instrument of subordination shall be required. In confirmation of such
subordination, TENANT shall promptly execute and deliver any reasonable
instrument that LANDLORD or the holder of any such mortgage or any of
their respective successors in interest may require to evidence such
subordination. The mortgages to which this Lease is, at the time
referred to, subject and subordinate are hereinafter called "SUPERIOR
MORTGAGES", and the holders thereof are referred to as "SUPERIOR
MORTGAGES".
27.2 TENANT covenants and agrees that it shall give notice to each
SUPERIOR MORTGAGEE whose name and address shall previously have been
furnished to TENANT in writing of any default or alleged default of
LANDLORD. In the event of any act or omission of LANDLORD which would
give TENANT the right, immediately or after lapse of a period of time,
to cancel or terminate this Lease, or to claim a partial or total
eviction, TENANT shall not exercise such right (i) until it has so given
written notice of such act or omission to the holder of each such
SUPERIOR MORTGAGE, and (ii) until a reasonable period for remedying such
act or omission shall have elapsed following the giving of such notice
and following the time when such holder shall have become entitled under
such SUPERIOR MORTGAGE to remedy the same, which reasonable period shall
in no event be more than the period to which LANDLORD would be entitled
under this Lease or otherwise, after similar notice, to effect such
remedy. SEE LEASE RIDER, PARAGRAPH 4.
27.3 If the holder of a SUPERIOR MORTGAGE shall succeed to the rights of
LANDLORD under this Lease, whether through possession or foreclosure
action or delivery of a deed, then at the request of such party so
succeeding to LANDLORD's rights (herein sometimes called "SUCCESSOR
LANDLORD") and upon such SUCCESSOR LANDLORD's written agreement to
accept TENANT's attornment, TENANT shall attorn to and recognize such
SUCCESSOR LANDLORD as TENANT's LANDLORD under this Lease, and shall
promptly execute and deliver any reasonable instrument that such
SUCCESSOR LANDLORD may reasonably request to evidence such attornment.
27.4 TENANT agrees that it shall promptly provide any SUPERIOR
MORTGAGEE, SUCCESSOR LANDLORD or LANDLORD such information as TENANT may
have and which may, in connection with the financing, refinancing or
prospective sale of the BUILDING, be reasonably requested of TENANT and
to execute all reasonable documents and certifications required by
LANDLORD or any SUPERIOR MORTGAGE or SUCCESSOR LANDLORD for such
purposes.
28. ASSIGNMENT AND SUBLETTING.
28.1 Except as expressly permitted in this section, TENANT shall not,
without the prior written consent of LANDLORD, assign or hypothecate
this Lease or any interest herein or sublet the PREMISES or any part
thereof. Whenever LANDLORD's consent is required under this Article 28,
such consent may be based upon the financial condition and business
reputation of an assignee or subtenant or its intended use of the space
to be occupied. Any of the foregoing acts without such consent shall be
void and shall constitute a breach of this Lease. This Lease shall not,
nor shall any interest herein, be assignable as to the interest of
TENANT by operation of law without the written consent of LANDLORD.
28.2 A corporate TENANT may, without consent of the LANDLORD, assign
this Lease to its parent or subsidiary in connection with a
consolidation or merger of the TENANT, provided the assignee assumes, in
full, the obligation of TENANT under the Lease. Any such assignment
shall not relieve the TENANT of its obligations under this Lease.
28.3 If at any time, or from time to time during the term of this Lease,
TENANT desires to sublet or assign all or any part of the PREMISES,
TENANT shall give notice to LANDLORD of such interest (referring
specifically to this Section 28.3) together with the name of the
prospective subtenant or assignee and the terms of such prospective
sublease or assignment. Upon receipt of such notice, LANDLORD shall have
the irrevocable option, exercisable by notice given to TENANT with
twenty (20) days after receipt of TENANT's notice, of terminating this
Lease with respect to the portion of the PREMISES proposed to be sublet
or assigned. If LANDLORD does so, this Lease shall terminate as of the
date the sublet or assignment was to be effective and TENANT's minimum
base rent shall thereafter abate proportionate to the space involved so
that the termination applies to only a portion of the PREMISES, and as
to that portion of the PREMISES, the provisions of Section 28.4 hereof
shall not apply. If the LANDLORD does not exercise such option, TENANT
shall be free to sublet or assign such space to any third party upon the
terms previously furnished to LANDLORD, subject to the following
conditions:
28.3.1 Consent of LANDLORD, which consent may not be unreasonably
withheld provided the subtenant or assignee agrees to be bound by all of
the terms of this Lease;
28.3.2 An executed counterpart of such sublease or assignment shall
promptly be delivered to LANDLORD for its written approval;
28.3.3 No subtenant or assignee shall have a right further to sublet or
assign; and
28.3.4 Any sums or other economic consideration received by TENANT as a
result of such subletting or assignment whether denominated rentals
under the sublease or otherwise, which exceed, on a square foot basis,
the rent per square foot which TENANT is obligated to pay LANDLORD under
this Lease (prorated to reflect obligations allocable to that portion of
the PREMISES subject to such sublease or assignment) shall be paid
monthly to LANDLORD as Additional Rent under this Lease without
affecting or reducing any other obligation of TENANT hereunder.
28.4 Regardless of LANDLORD's consent, no subletting or assignment shall
release TENANT of TENANT's obligation or alter the primary liability of
TENANT to pay the rental and to perform all other obligations to be
performed by TENANT hereunder. The acceptance of rental by LANDLORD from
any other person shall not be deemed to be a waiver by LANDLORD of any
provision hereof. Consent to one assignment or subletting shall not be
deemed consent to any subsequent assignment or subletting. In the
event of default by any assignee of TENANT or any successor of TENANT in
the performance of any of the terms hereof, LANDLORD may proceed
directly against TENANT without the necessity of exhausting remedies
against such assignee or successor.
29. ESTOPPEL CERTIFICATES TENANT shall, at any time and from time to
time, within twenty (20) days following written request from LANDLORD
(time being of the essence), execute, acknowledge and deliver without
charge or expense to LANDLORD a written statement certifying that this
Lease is in full force and effect and unmodified (or, if modified,
stating the nature of such modification), that TENANT is in occupancy
(if TENANT is so occupying), specifying the date to which the fixed and
additional rent reserved hereunder has been paid and certifying that the
TENANT is paying rent on a current basis with no rental offsets or
claims (or if TENANT is not paying rent on a current basis the date to
which rent was paid and the exact nature of any rental offset or claims
made by TENANT), stating whether or not there has been any prepayment of
rent other than that provided for in the applicable Lease, certifying
the date to which the fixed and Additional Rent reserved hereunder has
been paid, and certifying whether any action involving TENANT, is
pending under the Bankruptcy Laws of the United States or any state
thereof, and certifying that there are not, to TENANT's knowledge, any
defaults on the part of LANDLORD hereunder, or specifying in detail any
defaults claimed by TENANT. Any such statement may be relied upon by
any prospective purchaser or mortgagee of all or any part of the
BUILDING or the PROJECT and as to any such person TENANT shall be
estopped from asserting any claim inconsistent with such statement.
TENANT's failure to deliver such statement within such twenty (20) day
period shall be conclusive upon TENANT that this Lease is in full force
and effect and unmodified, and that there are no uncured defaults in
LANDLORD's performance hereunder. The foregoing sentence does not
specify the sole remedy of LANDLORD in the event of the failure of
TENANT to conform with its obligations under this Article 29.
30. DEFAULT.
30.1 The occurrence of any of the following shall, at LANDLORD's option,
constitute a material default and breach of this Lease by TENANT:
30.1.1 Failure of TENANT to take possession of the PREMISES within
thirty (30) days after notice to TENANT that same are, in accordance
with Article 12 hereof, deemed ready for occupancy by TENANT;
30.1.2 The vacation or abandonment of the PREMISES by TENANT.
30.1.3 A failure by TENANT to pay the rent reserved herein, or to make
any other payment required to be made by TENANT hereunder, where such
failure continues for ten (10) days after written notice thereof from
LANDLORD to TENANT.
30.1.4 A failure by TENANT to observe and perform or commence to
perform any other provisions or covenants of this Lease to be observed
or performed by TENANT, where such failure continues for thirty (30)
days after written notice thereof from LANDLORD to TENANT.
30.1.5 The making by TENANT of any assignment for the benefit of
creditors; the adjudication that TENANT is bankrupt or insolvent or
entry of order for relief as to TENANT in any proceeding under the
Bankruptcy Code; the filing by or against TENANT of a petition to have
TENANT adjudged a bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of
a petition filed against TENANT, the same is dismissed within sixty (60)
days after; the filing thereof); the appointment of a trustee or
receiver to take possession of substantially all of TENANT's assets
located in the PREMISES or of TENANT's interest in this Lease (unless
possession is restored to TENANT within thirty (30) days after such
appointment); or the attachment, execution or levy against, or other
judicial seizure of, substantially all of TENANT's interest in this
Lease or personal property located on thePREMISES (unless the same is
discharged within thirty (30) days after issuance thereof).
30.2 Notwithstanding other provisions contained in this Lease to the
contrary, LANDLORD shall not be deemed to be in default in the
performance of any obligation required to be performed by LANDLORD under
this Lease unless and until LAND LORD has failed to perform such
obligation within thirty (30) days after written notice thereof from
TENANT to LANDLORD provided, however, that if the nature of LANDLORD's
obligation is such that more than thirty (30) days are required for its
performance, then LANDLORD shall not be deemed to be in default if it
shall commence such performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.
31. REMEDIES.
31.1 In the event of any default or breach of this Lease by TENANT ANT
as set forth in Article 30 hereof or elsewhere herein:
SEE LEASE RIDER, PARAGRAPH 5.
31.1.1 / The Rent reserved herein for the entire unexpired portion of
the term of this Lease shall, at LANDLORD's option, thereupon
immediately become due and payable. TENANT shall be obligated for such
accelerated Rent regardless of which other of the remedies provided in
Section 31 hereof (or provided by law) LANDLORD elects to pursue.
31.1.2 LANDLORD, at its option, may terminate this Lease upon and by
giving notice of termination to TENANT, or LANDLORD, without terminating
this Lease, may at any time after such default or breach, without notice
or demand additional to that provided in Article 30 thereof, and without
limiting LANDLORD in the exercise of any other right or remedy which
LANDLORD may have by reason of such default or breach (other than the
aforementioned right of termination) exercise any one or more of the
remedies hereinafter provided in this Section or as otherwise provided
by law, all of such remedies (whether provided herein or by law) being
cumulative and not exclusive:
31.1.3 LANDLORD may enter the PREMISES (with or without process of law
and without thereby incurring liability to TENANT and without such entry
being constituted an eviction of TENANT or termination of this Lease)
and take possession of the PREMISES and all personal property of every
kind on the PREMISES, except for TENANT's business records, and LANDLORD
may, but shall not be required to: (i) apply against the accelerated
rent and the expenses, including attorneys' fees, which LANDLORD may
have incurred in connection with such repossession, either the value of
such personal property or the proceeds, after selling expenses from the
sale of such personal property and reduced by the proceeds of any
reletting of the PREMISES, whichever LANDLORD chooses to do, (ii) at any
time and from time to time relet the PREMISES or any part thereof for
the account of TENANT, for such terms, upon such conditions and at such
rental as LANDLORD may deem proper. LANDLORD is hereby authorized by
TENANT either to sell any such personal property at public or private
sale without notice to TENANT or to store the same or place the same in
storage at TENANT's expense. In the event of such reletting, (i)
LANDLORD shall receive and collect the Rent therefrom and shall first
apply such Rent against such expense as LANDLORD may have incurred in
recovering possession of the PREMISES, placing the same in good order
and condition, altering or repairing the same for reletting, and such
other expenses, commissions and charges, including attorneys' fees,
which LANDLORD may have paid or incurred in connection with such
repossession and reletting, and then shall apply such rent against the
accelerated Rent, and (ii) LANDLORD may execute any lease in connection
with such reletting in LANDLORD's name or in TENANT's name, as LANDLORD
may see fit, and the Tenant of such reletting shall be under no
obligation to see to the application by LANDLORD of Rent collected by
LANDLORD, nor shall TENANT have any right to collect any Rent under such
reletting. No reentry by LANDLORD shall be deemed to be an acceptance of
a surrender by TENANT of this Lease or of the PREMISES. SEE LEASE RIDER,
PARAGRAPH 6.
31.1.4 In the e event of any default, TENANT hereby empowers any
prothonotary, clerk or attorney of any court of record to appear for
TENANT in any and all actions which may be brought for rent, additional
rent, or other charges or expenses agreed to paid by TENANT hereunder
and to sign for TENANT an agreement for entering in any competent court
an amicable action or actions for the recovery of rent, additional rent,
or other charges or expenses and, in said suits or in said amicable
action or actions, to confess judgment against TENANT for all or any
part of such rent, additional rent, including, at LANDLORD's option, the
rent for the entire unexpired balance of the term of this Lease,
computed as aforesaid, and any other charges, payments, costs and
expenses reserved as rent or agreed to be paid by TENANT, and for
interest and costs together with an attorney's commission of five
percent ( %) thereof. Said authority shall not be exhausted by any one
exercise thereof, but judgment may confessed as aforesaid from time to
time and as often as any of said rent, additional rent or other charges
reserved as rent shall fall due be in arrears, and such powers may be
exercised at any time before or after the EXPIRATION DATE of this Lease.
It shall not be necessary for LANDLORD to file the original of this
Lease, but LANDLORD may file a true copy there of at the time of the
entry of such judgment or judgments.
31.1.5 When this Lease shall be determined by condition broken, and also
when and as soon as the term hereby created shall have expired, it shall
be lawful, following either or both events, for any attorney as attorney
for the TENANT to file an agreement for entering in any competent court
an amicable action and judgment in ejectment against TENANT and all
persons or entities claiming under TENANT for the recovery by LANDLORD
of possession of the PREMISES, for which this Lease shall be sufficient
warrant; whereupon, if LANDLORD so desires, a writ of possession may
issue forthwith, without any prior writ or proceeding whatsoever, and
provided that, if for any reason after such action shall have been
commenced the same shall be determined and the possession of the
PREMISES shall remain in or be restored to TENANT, LANDLORD shall have
the right, upon any subsequent default or defaults or upon the
termination or expiration of this Lease, to bring one or more amicable
action or actions to recover possession of the said PREMISES. In any
amicable actions of ejection, LANDLORD shall first cause to be filed in
such action an affidavit made by it or someone acting for it setting
forth the facts necessary to authorize the entry of judgment, and, if a
true copy of this Lease (and of the truth of the copy such affidavit
shall be sufficient evidence) be filed in such action, it shall not be
necessary to file the original as a warrant of attorney, any rule of
course, custom or practice to the contrary notwithstanding.
32. WAIVER. The failure or delay on the part of either party to enforce
or exercise at any time any of the provisions, rights or remedies in
this Lease shall in no way be construed to be a waiver thereof, nor in
any way to affect the validity of this Lease or any part hereof, or the
right of the party to thereafter enforce each and every such provision,
right or remedy. No waiver of any breach of this Lease shall be held to
be a waiver of any other or subsequent breach. The receipt by LANDLORD
of rent at a time when the rent is in default under this Lease shall not
be construed as a waiver of such default. The receipt by LANDLORD of a
lesser amount than the rent due shall not be construed to be other than
a payment on account of the Rent then due, nor shall any statement on
TENANT's check or any letter accompanying TENANT's check be deemed an
accord and satisfaction and LANDLORD may, but shall not be obligated to,
accept such payment without prejudice to LANDLORD's right to recover the
balance of the Rent due or to pursue any other remedies provided in this
Lease.
33. EXCULPATORY AGREEMENTS.
33.1 Anything contained in this Lease to the contrary notwithstanding,
TENANT agrees that it shall look solely to the estate and property of
the LANDLORD in the BUILDING in which the PREMISES form a part for the
collection of any judgment (or other judicial process) requiring the
payment of money by LANDLORD in the event of any default or breach by
LANDLORD with respect to any of the terms, covenants and conditions of
this Lease to be observed and/or performed by LANDLORD, and no other
property or assets of LANDLORD, or any partner, employee, agent or other
representative of LANDLORD, shall become subject to levy, execution,
attachment or other enforcement procedures for the satisfaction of
TENANT's remedies. If the BUILDING is transferred or conveyed, LANDLORD
shall be relieved of all covenants and obligations under this Lease
thereafter accruing and TENANT shall look to such transferee thereafter.
33.2 The parties hereto agree that neither party to this Lease shall
under any circumstances assert a claim for or be liable to the other for
any consequential damages of any nature whatsoever.
34. SUCCESSORS. The respective rights and obligations provided in this
Lease shall bind and inure to the benefit of the parties hereto, their
legal representatives, heirs, successors and permitted assigns;
provided, however, that no rights shall inure to the benefit of any
successor of TENANT unless LANDLORD's written consent for the transfer
to such successor has first been obtained as provided in Article 28
above.
35. GOVERNING LAW. This Lease shall be construed, governed and enforced
in accordance with the laws of the Commonwealth of Pennsylvania.
36. SEPARABILITY. If any provisions of this Lease shall be held to be
invalid, void or unenforceable, the remaining provisions hereof shall in
no way be affected or impaired and such remaining provisions shall
remain in full force and effect.
37. CAPTIONS. Captions, title of exhibits, riders and the table of
contents to this Lease, if any, are for convenience and reference only,
and are in no way to be construed as defining, limiting and modifying
the scope or intent of the various provisions of this Lease.
38. GENDER. As used in this Lease, the word "person" shall mean and
include, where appropriate, an individual, corporation, partnership, or
other entity; the plural shall be substituted for the singular and the
feminine for the masculine where appropriate.
39. NOTICES.
39.1 Except as set forth in Section 39.3, all notices and other
communications hereunder shall be in writing and shall be sent by
certified mail, return receipt requested, or may be personally delivered
to TENANT at the PREMISES or may be delivered by Federal Express or
another overnight delivery service, with a copy by ordinary first class
mail to the other party as follows:
39.1.1 If to TENANT:
RYAN, BECK & CO., INC.
to the PREMISES
Attention: Office Manager
With a copy by first class mail to:
Stephen Burdumy, Esq.
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
39.1.2 If to LANDLORD:
MONUMENT DEVELOPMENT ASSOCIATES
9 Union Avenue
Bala Cynwyd, Pa. 19004
39.2 Whenever a period of time is to be computed from the date ofnotice,
such period shall be computed from the date following the day of mailing
or delivery in accordance with the provisions of Section 39.1 hereof.
39.3 Billings, invoices, reminders, if any, and other non-formal
communications between the parties hereto may be sent by ordinary first
class mail to the person or office designated from time to time by
either of the parties.
39.4 Either party may change the address to which notice is to be given,
provided that notice of such change is given pursuant to Section 39.1
hereof.
40. BROKER. LANDLORD and TENANT mutually represent to each other that
they have not negotiated with any broker in connection with this Lease
other than Albert M. Greenfield Co & Cushman & Wakefield. Each party
agrees that should a claim be made against the other party for a
commission from any broker other than the broker(s) named herein by
reason of the acts of such party, the party upon whose acts such claim
is predicated shall hold the other party free and harmless from any and
all liability and expenses in connection therewith. LANDLORD agrees
that it is solely responsible for any commissions due the above named
broker(s).
41. LEASE NOT AN OFFER. The submission of this Lease to TENANT shall not
be construed as an offer, nor shall the TENANT have any rights with
respect thereto unless and until the LANDLORD shall execute a copy of
this Lease and deliver the same to TENANT.
42. FORCE MAJEURE. Except as otherwise expressly provided for by any
other provisions of this Lease, this Lease and the obligations of TENANT
to pay rent hereunder and perform all of the other covenants,
agreements, terms, provisions and conditions hereunder on the part of
TENANT to be performed shall in no wise be affected, impaired, or
excused because LANDLORD is unable to fulfill any of its obligations
under this Lease or is unable to supply or is delayed in supplying any
service, express or implied, to be supplied or is delayed in supplying
any equipment or fixtures if LANDLORD is prevented or delayed from so
doing by reason of any cause whatsoever beyond LANDLORD's reasonable
control (other than the unavailability of funds), including, but not
limited to, Acts of God, strikes, labor troubles, governmental
preemption in connection with a national emergency or by reason of the
conditions of supply and demand which have been or are affected by war,
hostilities or other similar emergency (any of which circumstances shall
constitute a "force majeure"); provided that LANDLORD shall in each
instance exercise reasonable diligence to effect performance when and as
soon as possible.
SEE LEASE RIDER, PARAGRAPH 7 .
43. / RELOCATION OF TENANT. One occasion during the term of this Lease,
LANDLORD, at its sole expense, on at least sixty (60) days prior written
notice, may require TENANT to move from the PREMISES to another suite of
comparable size and decor in order to permit LANDLORD to consolidate the
PREMISES with other adjoining space leased or to be leased to another
tenant in or coming into the BUILDING. In the event of any such
relocation, LANDLORD will pay all the expenses of preparing and
decorating the new PREMISES so that they will be substantially similar
to the PREMISES at the expense of moving TENANT's furniture and
equipment to the relocated PREMISES. Occupancy of the new PREMISES
shall be under and pursuant to the terms of this Lease.
44. SECURITY.
44.1 Concurrently with the execution of this Lease, TENANT shall deposit
with LANDLORD the sum of Five Thousand Five Hundred Eighty One Dollars
($5,581.00 ), the same to be held by LANDLORD without liability for
interest, as security for the full and faithful performance by TENANT of
the terms and conditions by it to be observed and performed hereunder.
If any of the Rents herein reserved, or any other sum payable by TENANT
to LAND RD become overdue and remain unpaid or should LANDLORD make any
payments on behalf of TENANT, or should TENANT fail to perform any of
the terms and conditions of this Lease, then LANDLORD, at its option,
and without prejudice to any other remedy which LANDLORD may have on
account thereof shall appropriate and apply said deposit, or so much
thereof as may be required to compensate or reimburse LANDLORD, as the
cause may be, toward the payment of Rent or Additional Rent, or loss or
damage sustained by LANDLORD due to the breach or failure to perform on
the part of TENANT, and upon demand TENANT shall restore such security
to the original sum deposited.
44.2 Conditioned upon the full compliance by TENANT with all of the
terms of this Lease, and the prompt payment of all rentals and other
sums due hereunder, as and when they fall due, said deposit shall be
returned in full to TENANT within thirty (30) days after the end of the
term hereof.
45. LEASE MODIFICATION. If, in connection with obtaining or maintaining
financing for the PROJECT, a SUPERIOR MORTGAGEE shall request reasonable
modifications in this Lease as a condition to such financing, or in
order to obtain the approval of this Lease by any SUPERIOR MORTGAGEE,
TENANT agrees not to withhold, delay or defer its consent thereto,
provided that such modifications do not materially and adversely affect
the leasehold interest hereby created, reduce the size of the PREMISES
or increase the rent.
46. EXHIBITS. Attached to this Lease and made part hereof are Exhibits
"A", "B", "C", "D", "E" and "F".
47 . ENTIRE AGREEMENT. This lease, including the Exhibits and any Rider
attached hereto, contains all the agreements, conditions, understanding,
representations, and warranties made between the parties hereto with
respect to the subject matter hereof, and may not be modified orally or
in any manner other than by an agreement in writing signed by both
parties hereto or their respective successors in interest.
48. CORPORATE AUTHORITY. If TENANT is a corporation, each individual
executing this Lease on behalf of said corporation represents and
warrants that he is duly authorized to execute and deliver this Lease on
behalf of said corporation in accordance with the duly adopted
resolution of the Board of Directors of said corporation, and that this
Lease is binding upon said corporation in accordance with its terms.
49. LITIGATION. In the event either party hereto commences litigation to
enforce its rights hereunder, the prevailing party in such litigation
shall be entitled to recover all costs and reasonable attorney's fees
incurred in connection with such litigation, including any such costs or
attorney's fees incurred in any appellate proceedings. Any litigation
brought by either of the parties hereto shall be instituted in
Montgomery County, Pennsylvania and the Parties submit to the
jurisdiction of its courts.
50. LEASE AS SECURITY AGREEMENT. This Lease is a security agreement
pursuant to the Pennsylvania Uniform Commercial Code, (the "U.C.C.") for
any of the items of TENANT's PROPERTY which may be subject to a security
interest pursuant to the U.C.C. and TENANT hereby grants LANDLORD a
security interest in said items. TENANT agrees that LANDLORD may file
this Lease, or a reproduction thereof, in the real-estate records or
other appropriate index, as a financing statement for any of the items
of TENANT's PROPERTY. Any reproduction of this Lease or of any other
Security agreement or financing statement shall be sufficient as a
financing statement. TENANT agrees to execute and delivery to LANDLORD,
upon LANDLORD's request, any financing statements as well as extensions,
renewals and amendments thereof and reproductions of the Lease in such
form as LANDLORD may require to perfect a security interest with respect
to times of TENANT's PROPERTY, including replacements and additions
thereto. LANDLORD shall have all the remedies of a secured party under
the U.C.C. in the event of TENANT's breach of any of the covenants or
agreements herein contained to be performed by TENANT.
IN WITNESS WHEREOF, LANDLORD and TENANT have respectively signed and
sealed this lease as of the day and year first above written.
TENANT:
ATTEST:RYAN, BECK & CO., INC.
________________________BY:___________________________
(Asst.) Secretary(Vice) President
LANDLORD:
MONUMENT DEVELOPMENT ASSOCIATES
BY: BERKO MANAGEMENT COMPANY
ATTEST:a Pennsylvania Corporation, General Partner
Partner
_________________________BY: ____________________________
SecretaryVice President
LEASE RIDER
This Rider is attached to and forms part of that certain Lease dated
even date herewith, between MONUMENT DEVELOPMENT ASSOCIATES, Landlord
and RYAN, BECK & CO., INC., Tenant, for the Premises on the first floor
of the Building located at 150 Monument Road, Bala Cynwyd, Pennsylvania,
as more fully described in the Lease.
The parties hereto agree that if there is a conflict between the
provisions of this Rider and the provisions of the Lease to which this
Rider is attached, the provisions of this Rider shall be controlling and
shall supersede the conflicting language of the Lease.
The terms and provisions of this Lease to which this Rider is attached
are hereby amended or clarified as follows:
1. Notwithstanding anything to the contrary contained in this Lease,
wherever in this Lease or the Rules and Regulations attached hereto,
LANDLORD's consent or approval is required, Landlord agrees that its
consent and/or approval shall not be unreasonably withheld or delayed.
2. Article 6 Section 6.1.1 shall provide as follows:
6.1.1 (i) For and during the first Lease Year, Tenant shall pay no rent
for the first two (2) months from the Commencement Date; thereafter,
Tenant shall pay the sum of Fifty Five Thousand Eight Hundred Ten
Dollars ($55,810.00), payable in monthly installment of Five Thousand
Five Hundred Eighty One Dollars
($5,581.00) each.
6.1.1 (ii) For and during the second Lease Year, and thereafter during
the original term of this Lease, tenant shall pay as minimum base rent
the annual sum of Sixty Six Thousand Nine Hundred Seventy Dollars
($66,970.00) payable in monthly installments of Five Thousand Five
Hundred Eighty One Dollars ($5,581.00) each.
3. Article 11 Section 11.1.5 is hereby modified to provide as follows:
TENANT's acceptance of the Premises will be subject to a list of
incomplete work items or defects to be corrected (the "Punch List")
which shall be provided by Tenant to Landlord within thirty (30) days of
Tenant taking possession of the Premises. All such Punch List items
shall be completed and remedied by Landlord as promptly as reasonably
possible. Nothing in this Paragraph shall relieve Landlord of any of its
repair obligations as set forth elsewhere in this Lease.
4. Pursuant to Article 27. Section 27.2, Tenant is hereby notified that
LANDLORD's mortgagees are:
(a) The Aetna Casualty and Surety Company
c/o Latimer & Buck Mellon Bank Center, 12th Floor
1735 Market Street Philadelphia, PA 19103-7501
(b) Marilyn Steinman Partnership, Irving H. Schwartz, Irving
Schwartz Trust under Deed of Trust dated September 26,
1979, Robert Berman, Trust "B" under Will of Celia W.
Berman, By: Robert Berman, Attorney-in-Fact.
9 Union Avenue
Bala Cynwyd, PA 19004
Landlord agrees to procure from Mortgagee "a" above, a Subordination,
Non-Disturbance and Attornment Agreement ("SNA Agreement"), in form
substantially similar to Exhibit "F-1" attached hereto, promptly
following the execution of this Lease by both Landlord and Tenant,
provided, however, that Tenant shall first take possession of the
Premises and execute a Tenant Estoppel Certificate that is required by
Mortgagee "a", in form substantially similar to Exhibit "F-2" attached
hereto. Landlord agrees, further, to procure from Mortgagee "b" above
the execution of a SNA Agreement substantially similar to Exhibit "F"-3"
attached hereto promptly following the execution of this Lease and the
approval thereof by Mortgagee "a" above.
5. Article 31. Section 31.1.1 is hereby deleted and the following is
substituted in its place:
31.1.1 The net present value of the Rent reserved herein, discounted at
Continental Bank (Norristown, PA) prime rate plus two (2%) percent, for
the entire unexpired portion of the term of this Lease shall, at
Landlord's option, thereupon immediately become due and payable. Tenant
shall be obligated for such accelerated Rent regardless of which other
of the remedies provided in Section 31 hereof (or provided by law)
Landlord elects to pursue. Provided however, such accelerated rent shall
be reduced or, if received by Landlord, shall be repaid to Tenant to the
extent that Landlord's rental loss is reduced or mitigated by net rental
payments received from a successor tenant after deducting therefrom all
of Landlord's reasonable costs of refitting and reletting the Premises
or any part thereof.
6. Article 31. Section 31.1.3 is hereby supplemented by adding thereto
the following provision:
Landlord agrees to use reasonable efforts to re-let the Premises upon
Tenant's default, however, Landlord shall not be required to give
priority to Tenant's Premises over other vacant space in the Project.
All costs and expenses of Landlord in connection with this Article 31
shall be reasonable.
7. Article 43 is hereby deleted and the following is substituted in its
place:
43. RELOCATION OF TENANT. On one occasion during the term of this Lease,
Landlord at its sole expense, on at least ninety (90) days prior written
notice, may require Tenant to move from the Premises to another site of
comparable size and decor in order to permit Landlord to consolidate the
Premises with other adjoining space leased or to be leased to another
tenant in or coming into the Building, provided, however, that in the
event of receipt of any such notice, Tenant by written notice to
Landlord may elect not to move to the other space and in lieu thereof to
terminate this Lease. In the event of any such relocation, Landlord will
pay all the expenses of preparing and decorating the new Premises so
that they will be substantially similar to the Premises and the expense
of moving Tenant's furniture and equipment to the relocated Premises.
Occupancy of the new Premises shall be under and pursuant to the terms
of this Lease.
8. The following additional Article 51 is hereby added to the Lease:
51. TENANT'S OPTION TO TERMINATE LEASE
51.1 With an effective termination date no earlier than three (3) years
from the Commencement Date of this Lease, Tenant is hereby given the
option, upon six (6) months prior written notice to Landlord, to
terminate this Lease upon payment to Landlord of a termination fee
("Termination Fee:) equivalent to the unamortized costs of preparing the
Premises for Tenant's occupancy, leasing commissions, design costs, etc.
Such Termination Fee is estimated to be $ 13,000.00 , and shall not
exceed the sum of $ 17,000.00. The Termination Fee shall be due and
payable to Landlord upon the date of notice from Tenant of the exercise
of such option.
9. The following additional Article 52 is hereby added to the Lease:
52. OPTION TO RENEW.
52.1 Landlord hereby grants unto Tenant the option to renew this Lease
for a period of five (5) years from the Expiration Date stated in the
Lease. For Tenant to exercise such option, Tenant must not be in default
and the Lease must be in full force and effect. Such renewal option
shall be exercised by Tenant providing Landlord with at least six (6)
full calendar months prior written notice of Tenant's exercise of its
option to renew, which time is of the essence.
52.2 The minimum base rent to be paid by Tenant to Landlord during such
renewal period shall be the then market rental rate being charged for
similar space in the Building. Such market rental rate shall be provided
to Tenant within thirty (30) days of Tenant's notice exercising the
renewal option set forth in Section 52.1 above. In the event that
Landlord and Tenant are unable to agree on such market rental rate,
Tenant shall have the right to rescind its notice to exercise its
renewal option, whereupon this Lease shall terminate at the end of the
initial term.
52.3 During such renewal period, Tenant shall pay to Landlord the
operating expense escalations as set forth in Article 9 of this Lease,
PROVIDED HOWEVER, that the Operating Expense Stop used to calculate
increases in operating expenses shall be the then current per square
foot annual operating expenses of the Project as of December 31, 1999.
10. The following additional Article 53 is hereby added to the Lease:
53. SIGNAGE. Tenant may have the right to install a sign at the end of
the lobby on the first floor indicating the entrance to Tenant's suite.
The design of the sign shall be subject to Landlord's review and
approval.
In all other respects, the Lease to which this Rider is attached is
hereby ratified and confirmed.
TENANT:
ATTEST:RYAN, BECK & CO., INC.
____________________________BY:_________________________
(Asst.) Secretary(Vice) President
LANDLORD:
MONUMENT DEVELOPMENT ASSOCIATES
BY: BERKO MANAGEMENT COMPANY,
a Pennsylvania Corporation,
General Partner
ATTEST:
_____________________________BY:__________________________
SecretaryVice President
EXHIBIT "B"
STANDARD BUILDING SPECIFICATIONS
A. PARTITIONS
Steel stud construction (2-1/2"). Studding to be covered with 1/2"
thick sheetrock on each side to ceiling height. Cove base to
be 4" black or brown vinyl.
B. DOORS, BUCKS AND HARDWARE
Doors to be nominal 3'-0" wide by 7 ' -0" high 1-3/4" thick, natural
finish, flush panel. Solid core doors for public entrance, hollow core
doors for interior offices. All doors and frames to be painted to match
adjoining wall surface or natural finish. Hardware shall consist of
Building Standard hinges and latch set on interior office and hinges,
lockset and closer on entrance door. Door frames to be hollow metal.
C. CEILINGS AND WINDOWS
1.Ceiling height shall be 8'-4" more or less depending upon
location in building
2.Ceilings to be fully accessible 2' x 4' acoustical fissured
mineral tile supported on an exposed steel T-frame system
3. Windows shall have Building Standard window coverings of 1" wide
Venetian blinds.
D. HEATING, COOLING, AND VENTILATING
The peripheral areas (to approximately 18 feet in from the glass
line)shall be serviced by incremental self-contained closed-loop heat
pump heating and cooling units with a thermostat and a reset control for
each unit.
2.Generally, the suspended ceiling spaces shall be used as return
air plenums.
3.The BUILDING air conditioning system for cooling, dehumidifying,
and heating the air in the PREMISES shall have the capacity to
accomplish the following results, effective during REGULAR HOURS
on BUSINESS DAYS (as those terms are defined in Lease Section
15.1):
(a) Maintain during the normal heating season indoor dry bulb
temperatures not less than 70 degrees F whenever the outdoor dry
bulb temperature is lower than 65 degrees F. and not lower than
10 degrees
b) Maintain by comfort cooling indoor dry bulb temperature of 78 degrees
F. whenever the outside dry bulb temperature is higher than 70 degrees
F. and not higher than 90 degrees F.
4. The foregoing performance criteria are based upon and limited to
the following conditions of internal sources of heat and moisture
and fresh air:
(a) Maximum population -- one person per 100 square feet of floor
area.
(b) Maximum total electrical lighting and ordinary office machine
connected load -- 4 watts per square
foot of floor area in any room or other area.
SCHEDULE "B"
5. The system of distribution ducts, supply registers and
diffusers, return grilles and associated fixtures shall be laid
out to provide, in conjunction with the perimeter incremental
units, the foregoing performance criteria in the PREMISES.
E. PAINTING AND WALL COVERING
1. Walls shall receive two coats of flat paint. Metal surfaces
(other than bucks described in Section "B" above) not having a
baked-on enamel finish shall receive two coats of semi-gloss
enamel over one prime coat.
2. Painting shall be in color shades selected by TENANT from twelve
(12) Building Standard colors.
F. FLOOR COVERINGS
1. Carpet or vinyl asbestos to be selected by TENANT from Building
Standard quality and color selections.
G. STRUCTURAL
1. Floor load capacity of 60 pounds per square foot of live load
plus 20 pounds per square foot of live load for partitions.
Reasonable additional loading to suite TENANT's requirements can
be accommodated on each floor in selected areas contiguous to the
core upon prior consultation with and approval by LANDLORD's
structural engineer.
H. LIGHTING
1. Recessed fluorescent lighting fixtures size 2' x 4' with virgin
acrylic lenses, to accommodate 4-40 watt rapid start tubes, shall
be provided to the extent of one such fixture per 85 square feet
of usable area.
2. Where required by design conditions, 2' x 2' recessed
fluorescent fixtures with virgin acrylic lenses, to accommodate 4-
20 watt rapid start tubes may be substituted for a like number of
2' x 4' fixtures.
3. Wall switches shall be provided to the extent of one switch per
private office and conference room and one switch per 2,000
square feet in all other areas, to service the above mentioned
lighting fixtures. Switches shall be single pole, quiet type,
with vertical plate, and will be recessed in partitions near
entrance doors and conveniently located in open spaces.
I. ELECTRICITY
1. Electricity conductors and distribution equipment is provided to
deliver 480/277 volts, 3 phase, 4 wire, 60 hertz alternating
current to each floor of the BUILDING.
2. Feeders serving the PREMISES are based upon a connected load of
10 watts per square foot of rentable floor area for lighting and
power, providing 3 watts per square foot for fluorescent lighting
at 480/277 volts, 1 watt per square foot for incandescent
lighting and appliances at 120/208 volts, and 6 watts per square
foot of power for space conditioning at 480/277 volts.
3. Circuit breaker panel boards are provided on each floor of the
BUILDING.
(a) For 277 volts lighting, 16 amperes continuous rating, for the
number of circuits required for 3 watts per square foot of usable
floor area connected load.
(b) For 120 volts power, 16 amperes continuous rating, with one
breaker for approximately every 1,600 square feet of usable floor
area.
(c) With transformers of adequate capacity to provide 120/208
volts, at 1 watt per square foot of usable area.
(d) For 480/277 volts space conditioning, the number of circuits
necessary to service the equipment required to maintain the space
conditions outlined in Section I.2 hereof.
J. TELEPHONE
1.Low tension wiring (including, but not limited to TENANT's
telephone wiring) to be furnished at TENANT's expense.
2.TENANT is responsible to arrange for telephone prewiring with
local telephone company or other telephone supplier.
K. GENERAL
1. All of the items and finishes above listed in these BUILDING
SPECIFICATIONS shall be supplied to the specifications, color,
quality and quantity designated. Design of the basic building
risers for the mechanical and electrical systems is such that
TENANT's requirements for additional power at various voltages
and phases, additional lighting, and various mechanical
facilities can be made available.
2. Any contractors engaged by TENANT for any permitted purpose
shall comply with all regulations established by LANDLORD to
promote safety and quality of construction and such contractors
shall coordinate their efforts to ensure timely completion of
work. All design, construction and installation shall conform to
the requirements of applicable building, plumbing and electrical
codes and the requirements of any authority having jurisdiction
over or with respect to such work. Nothing herein contained in
this Exhibit "B" shall supersede or contravene anything set forth
in the Lease to which this Exhibit is attached.
RULES AND REGULATIONS APPLICABLE TO
TENANTS, ITS EMPLOYEES, LICENSEES
INVITES AND CONTRACTORS
1. TENANT shall not obstruct or permit its employees, agents, servants,
invitees or licensees to obstruct, in any way, the sidewalks, entry
passages, corridors, halls, stairways or elevators of the BUILDING, or
use the same in any way other than as a means of passage to and from the
offices of TENANT; bring in, store, test or use any materials in the
BUILDING which could cause a fire or an explosion or produce any fumes
or vapor; smoke in any elevator; throw substances of any kind out of
windows or doors, or down the passages of the BUILDING, or in the halls
or passageways; sit in or place anything upon the window sills; or clean
the exterior of the windows.
2. Waterclosets and urinals shall not be used for any purposes other
than those for which they were constructed, and no sweepings, rubbish,
ashes, newspaper or any other substances of any kind shall be thrown
into them. Waste and excessive or unusual use of water or electricity is
prohibited.
3. The windows, doors, partitions and lights that reflect or admit light
into the halls or other places of the BUILDING shall not be obstructed.
No signs, advertisements or notices shall be inscribed, painted, affixed
or displayed in, on, upon or behind any windows, except as may be
required by law or agreed upon by the parties; and no sign,
advertisement or notice shall be inscribed, painted or affixed on any
doors, partitions or other part of the inside of the BUILDING, without
the prior written consent of LANDLORD. If such consent be given by
LANDLORD, any such sign, advertisement, or notice shall be inscribed,
painted or affixed at TENANT's sole expense.
4. No contract with any supplier of towels, water, ice, toilet articles,
waxing, venetian blind washing, furniture polishing, lamp servicing,
cleaning of electrical fixtures, removal of waste paper, rubbish or
garbage, or other like service shall be entered into by TENANT, nor
shall any vending machine of any kind be installed in the BUILDING or
the PREMISES without the prior written consent of LANDLORD.
5. When electric wiring of any kind is introduced, it must be connected
as directed by LANDLORD, and no stringing or cutting of wires will be
allowed, except with the prior written consent of LANDLORD, and shall be
done only by contractors approved by LANDLORD.
6. LANDLORD shall have the right to prescribe the weight, size and
position of all safes and other bulky or heavy equipment and all freight
brought into the BUILDING by any tenant; and the time of moving the same
in and out of the BUILDING. All such moving shall be done under the
supervision of LANDLORD. LANDLORD will not be responsible for loss of or
damage to any such equipment or freight from any cause; but all damage
done to the BUILDING by moving or maintaining any such equipment or
freight shall be repaired at the expense of TENANT. LANDLORD reserves
the right to inspect all freight to be brought into the BUILDING and to
exclude from the BUILDING all freight which violates any of these Rules
and Regulations or the Lease of which these Rules and Regulations are a
part. Business machines and mechanical equipment shall be placed and
maintained by TENANT, at TENANT's expense, in settings sufficient, in
LANDLORD's judgment, to absorb and prevent vibration, noise and
annoyance to other tenants.
7. No additional lock or locks shall be placed by TENANT on any door in
the BUILDING, without the prior written consent of LANDLORD. TENANT
shall be entitled, however, to change the lock on the door to TENANT's
premises provided TENANT furnishes LANDLORD with two (2) keys to any
such replacement lock and further provided any such replacement lock is
installed at Tenant's sole expense. All keys to doors to washrooms shall
be returned to LANDLORD on or before the TERMINATION DATE.
8. TENANT shall not employ any person or persons for the purpose of
cleaning the PREMISES, without the prior written consent of LANDLORD.
LANDLORD shall not be responsible to TENANT for any loss of property
from the PREMISES, however occurring, or for any damage done to the
effects of TENANT by such janitors or any of its employees, or by any
other person or any other cause.
9. No bicycles, vehicles, or animals of any kind shall be brought into
or kept in or about the PREMISES.
10. The requirements of TENANT will be attended to only upon application
at the BUILDING office of LANDLORD. Employees of LANDLORD shall not
perform any work for TENANT or do anything outside of their regular
duties, unless under special instructions from LANDLORD.
11. The PREMISES shall not be used for lodging or sleeping purposes, not
shall TENANT use the PREMISES for the sale of food or beverages.
12. TENANT shall not conduct, or permit any other person to conduct, any
auction upon the PREMISES; manufacture or store goods, wares or
merchandise upon the PREMISES, without the prior written approval of
LANDLORD, except the storage of usual supplies and inventory to be used
by TENANT in the conduct of its business; permit the PREMISES to be used
for gambling; make any unusual noises in the BUILDING; permit to be
played any musical instrument in the PREMISES; permit to be played any
radio, television, recorded or wires music in such a loud manner as to
disturb or any other tenants; or permit any cooking or other unusual
odors to be produced upon the PREMISES.
13. Between 6:00 p.m. and 8:00 a.m. on weekdays, before 8:00 a.m. and
after 2:00 p.m. on Saturdays, and all day Sunday and BUILDING holidays,
the BUILDING is closed. Use of the PREMISES when the BUILDING is closed
shall result in AFTER HOURS charges as set forth in Article 16 of this
LEASE. All persons using the BUILDING or entering or leaving same AFTER
HOURS shall use LANDLORD's security card system. LANDLORD reserves the
right to exclude from the BUILDING during such periods all persons who
do not present a security card issued by TENANT. Each TENANT shall be
responsible for all persons to whom such security cards are issued and
shall be liable to LANDLORD for all acts of such person.
14. No awnings or other projections shall be attached to the outside
walls of the BUILDING. No curtains, blinds, shades or screens shall be
attached to or hung in, or used in connection with, any window or door
of the PREMISES, without the prior written consent of LANDLORD. Such
curtains, blinds and shades must be of a quality, type, design, and
color, and attached in a manner approved by LANDLORD.
15. Canvassing, soliciting and peddling in the BUILDING are LANDLORD
prohibited, and TENANT shall cooperate to prevent the same.
16. There shall not be used in the PREMISES or in the BUILDING either
by TENANT or by others in the delivery or receipt of merchandise,
supplies or equipment, any hand trucks except those equipped with rubber
tires and side guards and otherwise not objectionable to LANDLORD.
17. Before closing and leaving the PREMISES, TENANT shall ensure that
all windows are closed and all entrance doors locked.
18. LANDLORD shall have the right to prohibit any advertising by TENANT
which in LANDLORD's opinion tends to impair the reputation of the
BUILDING or its desirability as a building for offices, and upon written
notice from LANDLORD, TENANT shall refrain from or discontinue such
advertising.
19. LANDLORD hereby reserves to itself any and all rights not granted to
TENANT hereunder, including, but not limited to, the following rights
which are reserved to LANDLORD for its purposes in operating the
BUILDING: (a) the exclusive right to the use of the name of the BUILDING
for all purposes, except that TENANT may use the name as its business
address and for no other purpose; (b) the right to change the name of
the BUILDING, without incurring any liability to TENANT for so doing;
(c) the right to install and maintain a sign or signs on the exterior of
the BUILDING; (d) the exclusive right to use or dispose of the use of
the roof of the BUILDING; (e) the right to limit the space on the
directory of the BUILDING to be allotted to TENANT; (f) the right to
grant to anyone the right to conduct any particular business or
undertaking in the BUILDING.
20. TENANT will refer all contractors, contractors' representatives and
installation technicians rendering any service on or to the PREMISES to
LANDLORD for LANDLORD's approval and supervision before performance of
any contractual service. This provision shall apply to all work
performed in the BUILDING, including installation of telephones,
telegraph equipment, electrical devices and attachments and
installations of any nature affecting floors, walls, woodwork, trim,
windows, ceilings, equipment or any other physical portion of the
BUILDING.
21. TENANT and its employees shall conform to reasonable security rules
and procedures which may from time to time be established by LANDLORD
and TENANT shall reimburse LANDLORD for the actual cost of any
identification or entry control cards issued to TENANT employees in
conjunction with any such security system and procedures.
22. TENANT shall not use, generate, treat, store, dispose of or
otherwise introduce, without limitation, any "hazardous substance" (as
defined in Section 101(14) of the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601(14)
and as further defined by the various environmental protection laws,
rules and regulations from time to time placed in effect by the
Commonwealth of Pennsylvania) on, in or upon the PROJECT or the
PREMISES.
23. TENANT, its employees, agents, business visitors and invitees shall
observe and comply with all non-smoking rules in common areas of the
BUILDING as shall be in effect from time to time.
24. TENANT hereby acknowledges that its rental payments to LANDLORD do
not include the cost of guard service or other security measures not
installed and operational at the time of the execution of this Lease and
that LANDLORD shall have no obligation to provide same. TENANT assumes
all responsibility for the protection of TENANT, its employees, agents,
and invitees from acts of third parties.
CLEANING SPECIFICATIONS
1. Empty all wastebaskets.
2. Dust all office furniture, ledges, window sills, wall vents.
3. Wipe clean all desk tops.
4. Empty all ashtrays, clean and wipe.
5. All water fountains and water coolers washed with germicidal
solution.
6. Vacuum all carpeted areas and spot clean as necessary.
7. Spot clean all metal and woodwork as necessary.
8. Damp mop with disinfectant all floors in:
1. Cafeteria or vending areas 2. Bathrooms
9. Dry sweep and damp mop all tile floors.
10. Entrance mats will be washed or vacuumed.
11. All stairwells will be kept clean.
12. Doors, door jams, switch plates will be spot cleaned.
13. All public telephones will be cleaned with disinfectant.
14. All elevators will be cleaned with disinfectant.
15. Dust exterior of all light fixtures as necessary.
16. All toilets and urinals will be wiped clean and sanitized with
disinfectant solution.
17. All sinks and fixtures will be cleaned with a non-abrasive cleaner.
18. All paper towel, sanitary napkin and toilet paper dispensers will be
wiped clean and polished with disinfectant.
19. All dispensers will be filled.
20. Clean all mirrors.
Any and all additional or specialized janitorial service desired or
required by TENANT shall be contracted for by TENANT directly with
LANDLORD's janitorial contractor or with LANDLORD if it provides such
services with its own employees and the cost and payment thereof shall
be and remain the sole responsibility of TENANT. TENANT shall pay to
LANDLORD on demand the costs incurred by LANDLORD for (a) cleaning work
in the PREMISES or the BUILDING required because of (i) misuse or
neglect on the part of TENANT or its employees or visitors, (ii) use of
portions of the PREMISES for preparation, serving, or consumption of
food or beverages, reproducing operations, private lavatories or toilets
or other special purposes requiring greater or more difficult cleaning
work than office areas, (iii) unusual quantity of interior glass
surfaces, (iv) non-building standard materials or finishes installed by
TENANT or at its request, (v) increases in frequency or scope in any of
the items set forth in Exhibit "E" as shall have been requested by
TENANT, and (b) remove from the PREMISES and the BUILDING of (i) so much
of any refuse and rubbish of TENANT as shall exceed that normally
accumulated daily in the routine or ordinary business office occupancy,
and (ii) all of the refuse and rubbish of TENANT's machines and the
refuse and rubbish of any other eating facilities requiring special
handling (known as "WET GARBAGE"). LANDLORD, its employees, and its
cleaning contractor (if any) and their employees shall have AFTER HOURS
access to the PREMISES and the use of TENANT's light, power and water in
the PREMISES as may be reasonably required for the purpose of cleaning
the PREMISES.
EXHIBIT "D
TENANT'S INVENTORY OF ELECTRICAL EQUIPMENT
TO BE USED IN THE DEMISED PREMISES
ITEM MODEL VOLTS AMPS BTU'S
NOTE:PURSUANT TO SECTION 15.1.1 OF THE LEASE, NO ALTERATIONS OR
ADDITIONS TO THE ITEMS LISTED ABOVE MAY BE MADE WITHOUT
LANDLORD'S WRITTEN CONSENT.
EXHIBIT "E"
SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
THIS AGREEMENT is dated the ________ day of ______________ 19__, and is
made between the AETNA CASUALTY AND SURETY COMPANY or one or more of its
affiliates or designees, ("Mortgagee"), and RYAN, BECK & CO., INC.
("TENANT").
RECITALS:
(a) Tenant has entered into a certain lease ("Lease") dated
APRIL 12, 1994 with MONUMENT DEVELOPMENT ASSOCIATES as lessor
("Landlord"), covering certain premises known as 150 Monument Road and
located in Bala Cynwyd, PA 19004 (the "Demised Premises"); and
(b) Mortgagee has/agreed to make a mortgage loan in the amount of
$7,500,000.00 (the "Mortgage") to the Landlord, secured by the Demised
Premises, and the parties desire to set forth their agreement herein.
NOW, THEREFORE, in consideration of the Demised Premises and of the sum
of ONE DOLLAR ($1.00) by each party in hand paid to the other, the
receipt of which is hereby acknowledged, the parties hereby agree as
follows:
1. Said Lease is and shall be subject and subordinate to the Mortgage
insofar as it affects the real property of which the Demised Premises
form a part, and to all renewals, modifications, consolidations,
replacements and extensions thereof, to the full extent of amounts
secured thereby and interest thereon.
2. Tenant agrees that it will attorn to and recognize any purchaser at
a foreclosure sale under the Mortgage, any transferee who acquires the
Demised Premises by deed in lieu of foreclosure, and the successors and
assigns of such purchaser(s), as its landlord for the unexpired balance
(and any extensions, if exercised) of the term of said Lease upon the
same terms and conditions set forth in said Lease.
3. If it becomes necessary to foreclose the Mortgage, Mortgagee will
not terminate said Lease nor join. Tenant in summary or foreclosure
proceedings so long as Tenant is not in default under any of the terms,
covenants, or conditions of said Lease.
4. If Mortgagee succeeds to the interest of Landlord under the Lease,
Mortgagee shall not be:
a. liable for any act or omission of any prior landlord (including
Landlord); or
b. liable for the return of any security deposit; or
c. subject to any offsets or defenses which Tenant might have against
any prior landlord (including Landlord); or
d. bound by any rent or additional rent which Tenant might have paid
for more than the current month to any prior landlord (including
Landlord); or
e. bound by any amendment or modification of the Lease made without its
consent.
5. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their successors and assigns.
6. Tenant agrees to give Mortgagee, by registered mail, a copy of any
notice of default served upon the Landlord, provided that prior to such
notice Tenant has been notified in writing, (by way of Notice of
Assignment of Rents and Leases, or otherwise) of the address of such
Mortgagee. Tenant further agrees that if Landlord shall have failed to
cure such default within the time provided for in this Lease, then the
Mortgagee shall have an additional thirty (30) days within which to cure
such default or of such default cannot be cured within that time, then
such additional time as may be necessary to cure such default shall be
granted if within such thirty (30) days Mortgagee has commenced and is
diligently pursuing the remedies necessary to cure such default
(including, but not limited to, commencement of foreclosure proceedings,
if necessary to effect such cure), in which event the Lease shall not be
terminate while such remedies are being so diligently pursued.
IN WITNESS WHEREOF, the parities hereto have executed these presents as
of the day and year first above written.
_____________________________________
Mortgagee:________________________________
Date:By:______________________________________
Its:
Address: c/o AETNA Realty Investors, Inc.
242 Trumbull
Hartford, CT 06156
TENANT ESTOPPEL CERTIFICATE
TO : AETNA CASUALTY & SURETY COMPANY and/or its affiliates:
1. The undersigned is the Lessee (Tenant) under that certain Lease dated
April 1994 by and between Monument Development Associates as Lessor
(Landlord) and Ryan. Beck & Co.. Inc. as Lessee, covering those certain
premises commonly known and designated as 150 Monument Road, Bala
Cynwyd, PA 19004.
2. The Lease has not been modified, changed, altered or amended in any
respect (except as indicated following this sentence) and is the only
Lease or agreement between the undersigned and the Lessor affecting said
premises. If none, state "none".
3. The undersigned has made no agreements with Lessor or its agents or
employees concerning free rent, partial rent, rebate of rental payments
or any other type of rental concession (except as indicated following
this sentence) . If none, state ' none".
4. The undersigned has accepted and now occupies the premises, and is
and has been open for business since , 19 . The lease term began , 19 ,
and the rent for said premises has been paid to and including _, 19 _ .
No rent has been prepaid for more than two (2) months. The fixed minimum
rent being paid as above is 5 per month.
5. The Lease is not in default and is in full force and effect. As of
the date hereof, the undersigned is entitled to no credit, no free rent
and no offset or deduction in rent.
6. The undersigned has received or will receive payment or credit for
tenant improvement work in the total amount of S (or if other than cash,
describe below). If none, state "none".
7. The Lease does not contain and the undersigned does not have any
outstanding options or rights of first refusal to purchase the premises
or any part thereof the real property of which the premises are a part.
8. No actions, whether voluntary or otherwise, are pending against the
undersigned under the bankruptcy laws of the United States or any state
thereof.
9. The undersigned acknowledges that all the interest of Lessor in and
to the above-mentioned Lease is being duly assigned to AETNA CASUALTY &
SURETY COMPANY or one of its affiliates hereinafter "Aetna" and that
pursuant to the terms thereof all rental payments under said Lease shall
continue to be paid to Lessor in accordance with the terms of the Lease
unless and until you are otherwise notified in writing by Aetna, or its
successor or assigns.
It is particularly noted:
(a) That under the provisions of said assignment, said assignment
said Lease cannot be terminated (either directly or by the
exercise of any option which could lead to termination) or
modified in any of its terms, or consent be given to the
release of any party having liability thereon, without the
prior written consent of Aetna, or its successors and assigns,
and without such consent no rent may be collected or accepted
more than two months in advance.
(b) That the interest of the lessor in said Lease has been assigned
to Aetna, for the purposes specified in the assignment and
Aetna, or its successors and assigns, assumes no duty,
liability or obligation whatever under said Lease or any
extension or renewal thereof.
(c) Any notices sent to AETNA CASUALTY & SURETY COMPANY or its
affiliates should be sent by Registered Mail and addressed to
242 Trumbull Street, Hartford, CT 06156, Attention: Real Estate
Investment Department.
10. Tenant agrees to give Mortgage and/or Trust Deed Holders, by
Registered Mail a copy of any Notice of Default served upon the
Landlord, provided that prior to such notice tenant has been notified,
in writing, (by way of Notice of Assignment of Rents and Leases or
otherwise) of the address of such Mortgagees and/or Trust Deed Holders.
Tenant further agrees that if Landlord shall have failed to cure such
default within the time provided for in this Lease, then the Mortgagees
and/or Trust Deed Holders shall have an additional thirty (30) days
within which to cure such default or if such default cannot be cured
within that time, then such additional time as may be necessary if
within such (30) days, any Mortgagee and/or Trust Deed holder has
commenced and is diligently pursuing the remedies necessary to cure such
default (including but not limited to commencement of foreclosure
proceedings, if necessary to effect such cure), in which event this
Lease shall not be terminated while such remedies are being so
diligently pursued.
11. This certification is made to induce AETNA CASUALTY & SURETY COMPANY
or one of its affiliates to make certain fundings, knowing that AETNA
CASUALTY & SURETY COMPANY relies upon the truth of this certification in
disbursing said funds.
Dated this 8 day of APRIL, 1994
RYAN, BECK & CO. LESSEE
BY:_______________________________
BY:_______________________________
SUBORDINATION. NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT dated the day of , 1994, between MARILYN STEINMAN
PARTNERSHIP, IRVING IS. SCHWARTZ, IRVING N. SCHWARTZ TRUST UNDER DEED OF
TRUST DATED SEPTEMBER 26, 1979, ROBERT BERMAN, TRUST "B" UNDER WILL OF
CELIA W. BERMAN, By: Robert Berman, Attorney-in-Fact (hereinafter called
"MORTGAGEE"), and RYAN BECK & CO., INC. (hereinafter called "TENANT"').
WITNESSETH:
(a) TENANT has entered into a certain lease dated April 12, 1994 with
MONUMENT DEVELOPMENT ASSOCIATES (hereinafter referred to as "LANDLORD")
covering premises improved by a certain building known as 150 Monument
Road and located in Bala Cynwyd, Pennsylvania; and
(b) MORTGAGEE is the assignee of a Note in the amount of Four Million
Five hundred Thousand Dollars ($4,500,000.00) from LANDLORD, and is the
holder of a certain mortgage securing said Note (the "MORTGAGE") dated
as of August 31, 1983 and recorded with the Recorder of Deeds in
Montgomery County, Pennsylvania, and the parties desire to set forth
their agreements as hereinafter set forth
NOW THEREFORE, in consideration of the Premises and of the sum of One
Dollar ($1.00) by each party in hand paid to the other, the receipt of
which is hereby acknowledged, and intending to be legally bound hereby,
it is agreed as follows:
1. Said Lease is and shall be subject and subordinate to the MORTGAGE
and (so long as the same are subject to the provisions of Paragraph 3
below) to all renewals, assignments, modifications, consolidations,
replacements and extensions thereof, to the full extent of the principal
sum secured thereby and interest thereon.
2. TENANT agrees that it will attorn to and recognize any purchaser at a
foreclosure sale under the MORTGAGE, any transferee who acquires the
demised premises by deed in lieu of foreclosure, and the successors and
assigns of such purchasers, and/or transferees as its LANDLORD for the
unexpired balance (and any extensions, if exercised) of the term of said
Lease upon the same terms and conditions set forth in said Lease.
3. In the event that it should become necessary to foreclose the
MORTGAGE (as the same shall be renewed, assigned, modified,
consolidated, replaced or extended), the MORTGAGEE thereuruder will not
terminate said Lease or join TENANT in summary or foreclosure
proceedings nor disturb the quiet enjoyment or peaceable possession of
TENANT under its lease so long as TENANT is not in default under any of
the terms, covenants or conditions of said lease beyond any applicable
grace, notice or cure periods.
4. In tile event that MORTGAGEE shall succeed to the interest of
LANDLORD under the Lease, MORTGAGEE shall not be:
a. liable for any act or omission of any prior landlord (including
LANDLORD: or
b. liable for the return of any security deposit; or
c. subject to any offsets or defenses which TENANT might have
against any prior landlord (including
LANDLORD); or
d. bound by any amendment or modification of the Lease made without
its consent.
5. TENANT shall not, until any such attornment, pay rent or additional
rent under the Lease for more than one (1) month in advance and shall
not amend or modify the Lease without the prior written consent of the
MORTGAGEE.
6. TENANT shall, from time to time, deliver such certificate as
MORTGAGEE shall request as to the continuance of the Lease in effect, as
to payment of rents thereunder and as to such related matters as
MORTGAGEE shall request.
7. TENANT shall promptly notify MORTGAGEE of the occurrence of any
default or event of default by LANDLORD under the Lease or of any event
which, with the giving of notice or passage of time, could become an
event of default.
8. MORTGAGEE shall be construed to include, the present holders of the
MORTGAGE and any successors or assigns of it or any other holder of the
MORTGAGE.
9. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto, with intent that this Agreement
shall bind their respective successors and assigns, have executed these
presents the day and year first above written.
MORTGAGEETENANT
MARILYN STEINMAN PARTNERSHIP,RYAN, BECK & CO., INC.
IRVING H. SCHWARTZ, IRVING H.
SCHWARTZ TRUST UNDER DEED OFBY:_____________________________
TRUST DATED SEPTEMBER 26, 1979,Vice President
ROBERT BERMAN, TRUST "B" UNDER
WILL OF CELIA W. BERMAN.WITNESS:________________________
BY ROBERT BERMAN, ATTORNEY-IN-FACT
BY:__________________________________
WITNESS:_____________________________
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT dated the 27th day of July, 1994, between MARILYN
STEINMAN PARTNERSHIP, IRVING IS. SCHWARTZ, IRVING N. SCHWARTZ TRUST
UNDER DEED OF TRUST DATED SEPTEMBER 26, 1979, ROBERT BERMAN, TRUST "B"
UNDER WILL OF CELIA W. BERMAN, By: Robert Berman, Attorney-in-Fact
(hereinafter called "MORTGAGEE"), and RYAN BECK & CO., INC. (hereinafter
called "TENANT"').
WITNESSETH:
(a) TENANT has entered into a certain lease dated April 12, 199 4 with
MONUMENT DEVELOPMENT ASSOCIATES (hereinafter referred to as "LANDLORD")
covering premises improved by a certain building known as 150 Monument
Road and located in Bala Cynwyd, Pennsylvania; and
(b) MORTGAGEE is the assignee of a Note in the amount of Four Million
Five hundred Thousand Dollars ($4,500,000.00) from LANDLORD, and is the
holder of a certain mortgage securing said Note (the "MORTGAGE") dated
as of August 31, 1983 and recorded with the Recorder of Deeds in
Montgomery County, Pennsylvania, and the parties desire to set forth
their agreements as hereinafter set forth
NOW THEREFORE, in consideration of the Premises and of the sum of One
Dollar ($1.00) by each party in hand paid to the other, the receipt of
which is hereby acknowledged, and intending to be legally bound hereby,
it is agreed as follows:
1. Said Lease is and shall be subject and subordinate to the MORTGAGE
and (so long as the same are subject to the provisions of Paragraph 3
below) to all renewals, assignments, modifications, consolidations,
replacements and extensions thereof, to the full extent of the principal
sum secured thereby and interest thereon.
2. TENANT agrees that it will attorn to and recognize any purchaser at a
foreclosure sale under the MORTGAGE, any transferee who acquires the
demised premises by deed in lieu of foreclosure, and the successors and
assigns of such purchasers, and/or transferees as its LANDLORD for the
unexpired balance (and any extensions, if exercised) of the term of said
Lease upon the same terms and conditions set forth in said Lease.
3. In the event that it should become necessary to foreclose the
MORTGAGE (as the same shall be renewed, assigned, modified,
consolidated, replaced or extended), the MORTGAGEE thereuruder will not
terminate said Lease or join TENANT in summary or foreclosure
proceedings nor disturb the quiet enjoyment or peaceable possession of
TENANT under its lease so long as TENANT is not in default under any of
the terms, covenants or conditions of said lease beyond any applicable
grace, notice or cure periods.
4. In tile event that MORTGAGEE shall succeed to the interest of
LANDLORD under the Lease, MORTGAGEE shall not be:
a. liable for any act or omission of any prior landlord (including
LANDLORD: or
b. liable for the return of any security deposit; or
c. subject to any offsets or defenses which TENANT might have
against any prior landlord (including
LANDLORD); or
d. bound by any amendment or modification of the Lease made without
its consent.
5. TENANT shall not, until any such attornment, pay rent or additional
rent under the Lease for more than one (1) month in advance and shall
not amend or modify the Lease without the prior written consent of the
MORTGAGEE.
6. TENANT shall, from time to time, deliver such certificate as
MORTGAGEE shall request as to the continuance of the Lease in effect, as
to payment of rents thereunder and as to such related matters as
MORTGAGEE shall request.
7. TENANT shall promptly notify MORTGAGEE of the occurrence of any
default or event of default by LANDLORD under the Lease or of any event
which, with the giving of notice or passage of time, could become an
event of default.
8. MORTGAGEE shall be construed to include, the present holders of the
MORTGAGE and any successors or assigns of it or any other holder of the
MORTGAGE.
9. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto, with intent that this Agreement
shall bind their respective successors and assigns, have executed these
presents the day and year first above written.
MORTGAGEETENANT
MARILYN STEINMAN PARTNERSHIP,RYAN, BECK & CO., INC.
IRVING H. SCHWARTZ, IRVING H.
SCHWARTZ TRUST UNDER DEED OFBY:_____________________________
TRUST DATED SEPTEMBER 26, 1979,Vice President
ROBERT BERMAN, TRUST "B" UNDER
WILL OF CELIA W. BERMAN.WITNESS:________________________
BY ROBERT BERMAN, ATTORNEY-IN-FACT
BY:__________________________________
WITNESS:_____________________________
SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
THIS AGREEMENT is dated the ________ day of ______________ 19__, and is
made between the AETNA CASUALTY AND SURETY COMPANY or one or more of its
affiliates or designees, ("Mortgagee"), and RYAN, BECK & CO., INC.
("TENANT").
RECITALS:
(a) Tenant has entered into a certain lease ("Lease") dated
APRIL 12, 1994 with MONUMENT DEVELOPMENT ASSOCIATES as lessor
("Landlord"), covering certain premises known as 150 Monument Road and
located in Bala Cynwyd, PA 19004 (the "Demised Premises"); and
(b) Mortgagee has/agreed to make a mortgage loan in the amount of
$7,500,000.00 (the "Mortgage") to the Landlord, secured by the Demised
Premises, and the parties desire to set forth their agreement herein.
NOW, THEREFORE, in consideration of the Demised Premises and of the sum
of ONE DOLLAR ($1.00) by each party in hand paid to the other, the
receipt of which is hereby acknowledged, the parties hereby agree as
follows:
1. Said Lease is and shall be subject and subordinate to the Mortgage
insofar as it affects the real property of which the Demised Premises
form a part, and to all renewals, modifications, consolidations,
replacements and extensions thereof, to the full extent of amounts
secured thereby and interest thereon.
2. Tenant agrees that it will attorn to and recognize any purchaser at
a foreclosure sale under the Mortgage, any transferee who acquires the
Demised Premises by deed in lieu of foreclosure, and the successors and
assigns of such purchaser(s), as its landlord for the unexpired balance
(and any extensions, if exercised) of the term of said Lease upon the
same terms and conditions set forth in said Lease.
3. If it becomes necessary to foreclose the Mortgage, Mortgagee will
not terminate said Lease nor join. Tenant in summary or foreclosure
proceedings so long as Tenant is not in default under any of the terms,
covenants, or conditions of said Lease.
4. If Mortgagee succeeds to the interest of Landlord under the Lease,
Mortgagee shall not be:
a. liable for any act or omission of any prior landlord (including
Landlord); or
b. liable for the return of any security deposit; or
c. subject to any offsets or defenses which Tenant might have against
any prior landlord (including Landlord); or
d. bound by any rent or additional rent which Tenant might have paid
for more than the current month to any prior landlord (including
Landlord); or
e. bound by any amendment or modification of the Lease made without its
consent.
5. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their successors and assigns.
6. Tenant agrees to give Mortgagee, by registered mail, a copy of any
notice of default served upon the Landlord, provided that prior to such
notice Tenant has been notified in writing, (by way of Notice of
Assignment of Rents and Leases, or otherwise) of the address of such
Mortgagee. Tenant further agrees that if Landlord shall have failed to
cure such default within the time provided for in this Lease, then the
Mortgagee shall have an additional thirty (30) days within which to cure
such default or of such default cannot be cured within that time, then
such additional time as may be necessary to cure such default shall be
granted if within such thirty (30) days Mortgagee has commenced and is
diligently pursuing the remedies necessary to cure such default
(including, but not limited to, commencement of foreclosure proceedings,
if necessary to effect such cure), in which event the Lease shall not be
terminate while such remedies are being so diligently pursued.
IN WITNESS WHEREOF, the parities hereto have executed these presents as
of the day and year first above written.
JULY 28, 1994Mortgagee: AETNA CASUALTY &
SURETY CO.
Date:By: /S/ ELAINE A. SARSYNSKI
Its: Vice President
Address: c/o AETNA Realty Investors, Inc.
242 Trumbull
Hartford, CT 06156
APRIL 8, 1994Tenant: RYAN, BECK & CO., INC.
DateBy:
Its: Vice President
SUBLEASE AGREEMENT - WEST PALM BEACH, FLORIDA OFFICES
This sublease agreement is made as of the 28th day of February, 1995, by
and between Ryan, Beck and Co., of 80 Main Street, West Orange, New
Jersey 07052 hereinafter referred to as "Sublessee," and Republic
Security Bank, F.S.B., successor in interest to Governors Bank, of 4400
Congress Avenue, West Palm Beach, Florida, 33407 hereinafter referred to
as "Lessee."
SECTION ONE
DESCRIPTION OF PREMISES
A. Lessee has leased a portion of a building consisting of approximately
Eight Thousand Four Hundred Ninety-Two and 28/100 (8,492.28) square feet
of office space located at 603 Village Boulevard, West Palm Beach,
Florida 33407, from The Governors, a Pennsylvania Partnership, Lessor,
with an address of c/o Cornerstone Realty, inc., 8233-18 Gator Lane,
West Palm Beach, Florida 33411 (the "Lessee").
B. Lessee shall demise to Sublessee Three Thousand Four Hundred Ninety-
Four and no/100 (3,494) square feet of the building, all located on the
first floor, as more fully described in exhibit A which is attached to
and made part of this sublease Agreement (the "leased Premises").
SECTION TWO
PURPOSE OF SUBLEASE
A. The Leaded Premises demised under this Sublease Agreement are to be
used by Sublessee in the conduct of a stock brokerage business,
investment banking business and general office use and all tasks related
to such use.
B. Sublessee shall not use the Leased Premises for any illegal, immoral
or ultra-hazardous activity, whether within or outside the scope of the
business of the Sublessee.
SECTION THREE
TERM OF SUBLEASE
A. The term of this Sublease shall commence on the later of May 1, 1995
or the date of issuance of Sublessee's certificate of occupancy (unless
the issuance is delayed due to the negligence or willful misconduct of
the Sublessee) (the "Commencement Date") and terminate on May 31, 1999
unless earlier terminated by breach of the terms and conditions of this
Sublease Agreement.
B. Lessor agrees that Sublessee may remain in possession of the Leased
Premises for the full term of this Sublease Agreement, despite any
change that may occur in the status of Lessee or the Lease agreement
between Lessee and Lessor.
SECTION FOUR
RENT
Sublessee shall pay to Lessee as rent hereunder the sum of Two Thousand
Six Hundred Twenty and 50/100 Dollars ($2,620.50) per month, on the
first day of each month, commending on the Commencement Date and
continuing each month thereafter during the term of this Sublease
Agreement, together with any sales or use tax due thereunder ("Base
Rent"). The Base Rent hereunder shall increase annually in the same
manner as the annual increases in the base rent due under the Lease. If
the Commencement Date is a date other than the first day of any monthly
period, Base Rent and Additional Rent, hereafter defined, for such month
shall be prorated from the Commencement Date through the end of such
month.
In addition to Base Rent, Sublessee shall pay, on the same day Base Rent
is due, one-twelfth of Sublessee's annual proportionate share of
Lessee's Overhead Rent due under the Lease. Sublessee's proportionate
share shall be determined by dividing the square footage of Sublessee
Leased premises with the total square footage leased by Lessee under the
Lease ("Additional Rent"). For the first year of the Sublease, the
Additional Rent due hereunder shall be the sum of One Thousand Four
Hundred Fifty-Five and 84/100 Dollars ($1,455.84) per month together
with any sales or use tax due thereunder.
SECTION FIVE
SERVICES AND UTILITIES
Lessee shall furnish all electric, water and sewer services to Sublessee
at the expense of the Lessee. All other utilities required by Sublessee
on the Leased Premises, including gas and telephone services, shall be
obtained by and at the expense of Sublessee. Sublessee shall also
obtain and pay the expense of all janitorial services required on the
Leased Premises.
Sublessee shall pay to Lessee monthly, during the first year of the
Lease Term, the sum of One Hundred Seventy Four and 70/100 Dollars
($174.70) as reimbursement to Sublessee of Lessee's cost for electricity
for the Premises ("Electricity Charges"). The Electricity Charge
hereunder shall increase annually in the same manner as the annual
increases in the base rent due under the Lease, so long as Sublessee's
electric usage is commensurate with the use clause herein. If the
Commencement Date is a date other than the first day of any monthly
period, electricity Charge for such month shall be prorated from the
Commencement Date through the end of such month. If Sublessee obtains a
separate meter for electrical service. the Electricity Charge described
herein shall be eliminated upon assumption of payment for electrical
services by Sublessee.
SECTION SIX
COMPLIANCE WITH ORIGINAL LEASE AND LAWS
A. Sublessee shall not cause or allow any undue waste on the Leased
Premises and shall comply with all applicable laws and ordinances
respecting the use an occupancy of the Leased Premises relating to
matters not covered elsewhere in this Sublease Agreement.
B. Sublessee shall perform and observe the terms and conditions to be
performed on the part of the Lessee under the provisions of the original
Lease Agreement between Lessee and Lessor, excepting the covenant for
the payment of rent reserved thereby, and to indemnify Lessee against
any and all claims, damages, costs, and expenses, in respect to the
nonperformance or nonobservance of any such terms or conditions.
C. All terms and conditions of the Lease are incorporated herein as if
set forth at length, a copy of which is attached hereto and made a part
hereof in its entirety except for those specific provision of such Lease
which are intentionally blacked out therein and except for any conflict
between this Sublease and the Lease, which conflict shall be controlled
by the terms of this Sublease herein.
D. Notwithstanding the foregoing, Lessee agrees to the following:
1. Sublessee shall not be liable for any increases in Overhead Rent
passed through by Lessor to Lessee for any capital expenditures by the
Lessor as determined by generally accepted accounting principles.
2. At the end of the Sublease term, Sublessee shall not be required to
remove any approved existing improvements and shall not be obligated to
restore the Subleased premises to its pre-sublease condition, except for
improvements made without consent of Lessor and Lessee.
SECTION SEVEN
APPROVAL BY LESSOR
This Sublease is subject to prior written approval of lessor. Approval
of this Sublease and Sublessee's planned improvements, signage and use
shall be evidenced by Lessor's joinder hereunder.
SECTION EIGHT
SIGNAGE
Sublessee shall have the right to utilize the existing monument sign
located at the southeast corner of the building wherein the Leased
premises are located, at Sublessee's sole cost and expense, including
maintenance thereof after installation of any signage. Installation of
signage shall be subject to prior written approval of Lessor and Lessee
hereunder. Sublessee's proposed drawings for the signage are attached
hereto and made a part hereof as Exhibit B, and the execution of this
Sublease by Lessee and joinder by Lessor shall evidence their approval
of such drawings.
SECTION NINE
CONSTRUCTION OF IMPROVEMENTS
Lessee shall be responsible for the follow construction and costs prior
to commencement of the Sublease term:
A. Construction of a demising wall between the Lessee's remaining lease
space and the Leased Premises;
B. Moving the restroom door;
C. Construction of a vestibule area for access to the existing
restrooms; and
D. Payment of all architect fees for the above, as well as the cost of
such plans and permits.
All additional construction shall be at Sublessee's sole cost and
expense and any and all improvements shall be subject to Lessor's and
Lessee's prior approval. Sublessee's proposed drawings for the
improvements to the Leased Premises are attached hereto and made a part
hereof as Exhibit C, and the execution of this Sublease by Lessee and
joinder by Lessor shall evidence their approval of such drawings.
Lessee shall provide Sublessee an allowance for the installation of
carpet, not to exceed Two and no/100 Dollars ($2.00) per square foot.
Sublessee shall provide Lessee with written receipts for the carpet
prior to payment of the carpet allowance.
This Sublease and Sublessee's obligations to perform hereunder shall be
contingent upon Sublessee obtaining appropriate municipal approval for
Sublessee's planned improvements and signage. Sublessee agrees to
diligently make reasonable changes to the proposed improvements and sign
plans requested by the municipal authority having authority over the
Premises.
SECTION TEN
PERSONAL PROPERTY
Sublessee shall have the option of purchasing all or a portion of the
existing furniture located upon the Premises and listed on Exhibit D
attached hereto and made a part hereof and the option to assume the
existing telephone equipment lease. The terms and costs of the personal
property shall be determined by separate agreement of the parties. Any
furniture not purchased by Sublessee shall be removed by Lessee prior to
the Commencement Date. If Sublessee does not agree to assume the
existing telephone system, Lessee shall remove the telephone system
(excluding wiring and all plates) prior to the Commencement Date.
In Witness Whereof, the parties have executed this Sublease as of the
day and year first above written.
Witnesses:
Lessee, Republic Security Bank, F.S.B.
Sublessee, Ryan, Beck & Co.
JOINDER AND CONSENT
The undersigned Lessor of the Leased Premises hereby consents to the
terms and conditions of this Sublease and all attached exhibits.
The Governors, a Pennsylvania partnership
EXHIBITS
Exhibit A - Description of Premises
Exhibit B - Signage Plans
Reference artwork prepared by Jones and Song
Exhibit C - Drawings for Premises Improvements
Reference artwork prepared by Jones and Song
Exhibit D - List of Furniture/Phone System
Furniture:
1.2Brochure Racks
2.5Mica gray desks
3.2L-shaped gray desks
4.2 U-shaped gray desks
5.1small desk
6.credenzas
7.1 4-drawer lateral file
8.14-drawer fireking file
9.16-drawer lateral file
10.15-drawer lateral file
11.1In-coming fax machine
12.4Gray chairs (wood trim)
13.2Gray metal chairs
14.3Storage racks
15.1kitchen table and chairs
16.1refrigerator
17.1board table and 16 chairs
18.2chandeliers
Telephone System:
1.18x24 KSU Modular Northern telcom Norstar System
2.25Essx lines
3.2Trunk modules
4.1station module
5.4trunk cartridge
6.30M7208 set gray
7.2M7324 expanded set gray
8.1M7100 Norstar set gray
9.16 port expansion cartridge
10.1CP1105 power conditioner
11.1design release 3 software
12.1power strip
AMENDED AND RESTATED EMPLOYMENT AGREEMENT - ALLEN S. GREENE
This AGREEMENT, made as of this 14th day of December, 1995, shall
constitute an amendment to and restatement of that certain amended and
restated employment agreement dated September 26, 1994 (the "the Amended
and Restated Agreement"), by and between RYAN, BECK & CO., INC., a
corporation organized under the laws of the State of New Jersey, with
its principal office at 80 Main Street, West Orange, New Jersey 07052
(hereinafter the "Company"), and ALLEN S. GREENE, whose address is 100
Minnisink Road, Short Hills, New Jersey 07578 (hereinafter the
"Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently serving as President and Chief
Executive Officer of the Company; and
WHEREAS, the Company desires that the Executive continue in a
commensurate position with the Company and the Executive desires to
continue his employment relationship in such a position;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties agree as follows:
1. Employment and Duties.
(a) The Company shall continue to employ the Executive, during the term
of this Agreement and, subject to the terms and conditions contained
herein, in the position of President and Chief Executive Officer of the
Company.. During the term hereof, the Company shall take such action as
is necessary to nominate Executive to stand for election as a director
of the Company. From and after the date hereof, the terms of this
Agreement shall control and the terms of the Amended and Restated
Agreement shall have no further force or effect.
(b) The Executive agrees to continue to perform duties and services of
such character and in such manner as are usually and customarily
performed by persons in such positions in the investment banking and
bank consulting business. The Executive's duties and services shall be
performed under the general supervision of the Chief Executive Officer
and the Board of Directors of the Company and shall include such
additional related duties and services as may from time to time be
determined and assigned to him by the Board of Directors of the Company.
(c) The Executive shall devote sufficient time, attention, and energies
to properly perform his duties and services under this Agreement
(allowing for reasonable vacation periods as established by the
personnel policies of the Board of Directors), and shall not during the
term of this Agreement be engaged in any other business activity which
will impair his ability to properly perform his duties and services
hereunder.
(d) The Executive agrees that he will not, without the prior approval
of the Board of Directors, undertake any activity or position of
responsibility i) which conflicts with or competes with the business of
the Company; or ii) whether or not it is related to the business of the
Company, which will materially inhibit the performance of his duties
hereunder.
2. Term.
Except in the case of earlier termination, as hereinafter specifically
provided, the term of this Agreement shall be for three years commencing
on the date set forth above, with one year being added at each
anniversary date of the Agreement, provided that the Executive is
actively employed by the Company on such anniversary date. For purposes
of this provision, the Executive shall not be deemed to be actively
employed by the Company if he is disabled on the anniversary date, and
the period of disability extends for such length of time as to terminate
this Agreement under paragraph 5.
3. Compensation.
(a) Salary. From the effective date of this Agreement through
December 31, 1995 (the "Initial Period"), subject to the provisions
herein regarding resignation, termination with or without cause, death,
disability, and liquidation (the "Terminaation Provisions"), the Company
shall pay the Executive a salary in connection with his services
hereunder in the amount of $200,000 per annum, pro rated for the number
of weeks in the Initial Period. Commencing January 1, 1996, and for
each year thereafter during the term of this Agreement, subject to the
Termination Provisions, the Company shall pay the Executive a salary in
connection with his services hereunder in the amount of $250,000 per
annum, subject to increase in the discretion of the Board of Directors,
but in any event not less than Executive's salary of the previous year.
The Executive's salary shall not be decreased without the Executive's
prior written approval.
(b) Benefits/Expenses. The Company shall also cause the Executive to
receive, in addition to his salary, all other employee benefits
(including a bonus or bonuses if declared by the Board of Directors in
its discretion and contributions to any profit-sharing plan) in effect
or hereafter to be offered by the Company, plus reimbursement for
ordinary and necessary expenses incurred while acting on behalf of the
Company.
(c) Stock Options. Pursuant to a stock option agreement (the "Option
Agreement") of even date herewith made pursuant and subject to the terms
of the Company's 1986 Stock Option Plan, as amended (the "Option Plan"),
the Company will grant to the Executive qualified stock options (the
"Options") to purchase up to 30,000 shares (the "Shares") of the
Company's common stock, $.10 par value (the "Common Stock"). The
exercise price of the Options shall be the closing price of the Common
Stock on the National Association of Securities Dealers Automated
Quotation System on September 21, 1995 (the "Date of Grant") of $7.75.
Except as otherwise provided herein and in the Stock Option Agreement
with respect to a "Transaction" (as defined in the Stock Option
Agreement), the Options shall vest and be exercisable in one-fifth
increments on each annual anniversary of the Date of Grant. In the
event of a Transaction, all Options not vested shall immediately vest
and be exercisable. The Options shall expire ten years from the Date of
Grant. A copy of the Option Agreement is attached hereto as Exhibit 3.
4. Death of the Executive.
(a) In the event of the Executive's death during the term of this
Agreement, the Company shall pay to the Executive's designated
beneficiary, or if no beneficiary has been designated then to the
Executive's estate, in addition to the salary earned by the Executive
but unpaid as of the date of death, the amount of $200,000. Said amount
shall be paid in a lump sum, within thirty (30) days after the date of
death.
(b) The Company shall also pay to the Executive's designated
beneficiary or estate a cash bonus reflecting Executive's performance
for the partial calendar year in which his death occurs if, but only if,
a bonus or bonuses are declared for the salaried officer/directors of
the Company for such calendar year in an amount equal to the greater of
(x) $200,000 multiplied by a fraction, the numerator of which is the
number of days of the calendar year in which Executive was actively
employed and the denominator of which is 365 and (y) the dollar amount
of the Company's Executive Bonus Pool (as hereinafter defined) for such
calendar year, multiplied first by that percentage of the prior year's
Executive Bonus Pool actually paid to the Executive and then by a
fraction, the numerator of which is the number of days of the calendar
year in which Executive was actively employed and the denominator of
which is 365; in each case subtracting from the product so calculated
any cash bonus or bonuses previously paid to Executive relating to (not
necessarily paid during) such calendar year. Such bonus, if any, shall
be payable at such time as the Company next pays bonuses generally to
other executives. For the purposes of this Section 4(b) "Executive
Bonus Pool" shall mean the aggregate dollar amount of the bonuses, if
any, paid to the Company's five (5) most highly compensated executive
officers relating to a calendar year.
(c) The Executive's entitlement to the accrual of profit-sharing under
the Company's profit-sharing plan shall terminate upon his death. Any
unpaid profit-sharing benefits to which the Executive is entitled at the
time of his death shall be paid to the Executive's designated
beneficiary or estate no later than one (1) month following the
Executive's death.
(d) In the event of the death of Executive, the right of his estate to
receive any stock of the Company pursuant to the Company's Restricted
Stock Grant Plan (the "Plan") as required by Section 7 hereof, shall be
limited to (i) stock which has become vested pursuant to the provisions
of Section 7 and column 3 of Exhibit 7 prior to Executive's death; and
(ii) as to stock which has commenced vesting, as indicated in column 2
of Exhibit 7 but which has not become vested, such portion thereof as
called for pursuant to the Plan.
(e) In the event of the death of the Executive, the Executive's
personal representative, executor or administrator, as the case may be,
shall be entitled, for a period of one year from the date of the
Executive's death, to exercise such Options as would otherwise have
vested and been exercisable, pursuant to Section 3 hereof, had the
Executive not died prior to the date that such Options are exercised.
All Options not so exercised shall terminate.
5. Disability of the Executive.
(a) If the Executive is unable to perform his regular duties and
services by reason of illness or incapacity for a period of up to six
(6) months, the Company shall continue to pay his salary at his then
current rate during such period of illness or incapacity, less the
amount of any disability insurance benefits paid directly to the
Executive from any policy or policies the premiums for which have been
paid by the Company.
(b) If the Executive's disability continues for more than six (6)
months, the Executive's employment under this Agreement shall terminate,
and the Company shall assign to the Executive at no cost to him all
rights which the Company may then have in any disability income
insurance policies on the Executive, which shall become the property of
the disabled Executive.
(i) If such termination occurs and the Executive is receiving
disability income from such insurance policies, then the Company shall
pay severance pay to the Executive in the amount of $200,000, provided
he executes a notice of resignation from any position(s) he holds with
the Company, a confidentiality agreement, and a mutual release with the
Company (concerning its subsidiaries and affiliates, and its present and
former officers, directors, and employees), in the form attached hereto
with blanks appropriately completed. Such severance pay shall be paid
in a lump sum, within thirty (30) days after the effective date of
termination.
(ii) If such termination occurs but the Executive shall not be
receiving, or shall not be eligible to receive, disability income from
insurance policies provided by or through the Company, then the Company
shall continue to pay a salary to the Executive at a per annum rate of
$100,000, for the balance of the term of this Agreement. At the end of
the term, the Company shall pay severance pay to the Executive in the
amount of $200,000, provided he executes a notice of resignation from
any position(s) he holds with the Company, a confidentiality agreement,
and a mutual release with the Company (concerning its subsidiaries and
affiliates, and its present and former officers, directors and
employees), in the form attached hereto with blanks appropriately
completed. Such severance pay shall be paid in a lump sum, within
thirty (30) days after the date of the end of the term of the Agreement.
(c) If within three (3) months after returning to full-time employment
from a period of disability of less than six (6) months' duration, the
Executive again becomes disabled, the subsequent disability shall be
considered as part of the original disability for the purpose of
calculating the maximum six (6) month period during which the
Executive's employment shall be continued while he is disabled.
(d) For any calendar year during which (i) the Executive is disabled
as of December 31, or (ii) the Executive was disabled during part of the
year but has returned to active status as of December 31, or (iii) the
Executive's employment is terminated by reason of disability under this
paragraph, the Company shall pay the Executive a bonus if, but only if,
a bonus is declared for the salaried officer/directors of the Company
for such calendar year, in an amount calculated as set forth in 4(b)
above. Such bonus, if any, shall be payable at such time as the Company
next pays bonuses generally to other executives.
(e) The parties agree that the within provisions will serve as general
guidance in situations not specifically contemplated hereby and the
Company reserves the right to review each occurrence of disability on a
case-by-case basis to determine in its discretion the applicability of
the policy to situations where, for example, the Executive is partially
disabled or has multiple periods of disability.
(f) If the Company and the Executive disagree as to the Executive's
status of disability or fitness and there is in force a disability
income insurance policy on Executive (whether paid for by the Executive
or the Company), then the Executive shall be deemed to be disabled for
purposes of this Agreement if any such policy pays benefits because of
the Executive's disability. If no such insurance is in force and there
is a disagreement, the Executive shall be examined by a physician
appointed jointly by a physician for the Company and a physician for the
Executive, and the decision of such physician jointly chosen shall be
binding upon the Company and the Executive. The fees and expenses of
the physician so jointly selected shall be paid by the Company. In the
event that the physician for the Company and the Executive cannot
mutually agree on an examining physician, then such physician shall be
chosen by the Essex County (New Jersey) Medical Society. The fees and
expenses of the physician so chosen shall be paid by the Company.
(g) The Executive agrees to submit annually, at the request of the
Company, to a general physical examination to be conducted at the
Company's expense by a physician acceptable to the Company and the
Executive. The Executive further agrees to authorize said physician to
release medical information to the Board of Directors if, in the opinion
of the physician, the physical examination reveals a condition relevant
to the performance by the Executive of his duties under this Agreement.
(h) In the event of termination of the Agreement upon the disability
of Executive, the right of Executive to receive any stock of the Company
granted pursuant to the Plan as required by Section 7 hereof, shall be
limited to (i) stock which has become vested pursuant to the provisions
of Section 7 and column 3 of Exhibit 7 prior to termination; and (ii) as
to stock which has commenced vesting, indicated in column 2 of Exhibit 7
but which has not become vested, such portion thereof as called for
pursuant to the Plan.
(i) In the event of termination of the Agreement upon the disability
of Executive, the Executive shall be entitled, for a period of one year
from the date of such termination, to exercise such Options as would
otherwise have vested and been exercisable, pursuant to Section 3
hereof, had this Agreement not been terminated prior to the date that
such Options are exercised. All Options not so exercised shall
terminate.
6. Termination and Severance Pay.
This Agreement may be terminated during its term as follows:
(a) Voluntary Resignation.
(i) The Executive may terminate this Agreement without cause by
voluntary resignation upon thirty (30) days' written notice to the
Company.
(ii) In that event, monetary compensation (salary or otherwise) will be
terminated upon the effective date of the employment termination.
(iii) In the event of such voluntary resignation, the Executive's
entitlement to the accrual of profit-sharing under the Company's profit-
sharing plan shall terminate upon the effective date of termination of
the Executive's employment. Any unpaid profit-sharing benefits to which
the Executive is entitled as of such date shall be paid to the
Executive, no later than one (1) month thereafter.
(iv) In the event of such voluntary resignation, the right of Executive
to receive any stock of the Company granted pursuant to the Plan as
required by Section 7 hereof shall be limited to stock which has become
vested pursuant to the provisions of Section 7 and column 3 of Exhibit 7
prior to the effective date of resignation.
(v) In the event of such voluntary resignation, the Executive shall
be entitled, for a period of sixty (60) days after the effective date of
such resignation, to exercise all Options which have vested and become
exercisable, pursuant to the provisions of Section 3 hereof, prior to
the effective date of such resignation. All Options not so exercised
shall terminate.
(vi) Notwithstanding anything contained herein to the contrary, the
right of the Executive to receive any payment of other benefit under
this Section 6(a) shall be conditioned upon the execution by the
Executive of a notice of resignation from any position(s) he holds with
the Company, a confidentiality agreement, and a mutual release with the
Company (concerning its subsidiaries and affiliates, and its present or
former officers, directors and employees), in the form attached hereto
with blanks appropriately completed.
(vii) Following such termination of the Executive's employment, the
Company shall continue to provide such medical and other benefits to
Executive as it is required by law to provide and such other benefits as
called for pursuant to the Company's plans and policies, if any.
(b) Involuntary Termination Without Cause.
(i) The Company may terminate this Agreement without cause upon thirty
(30) days' written notice to the Executive.
(ii) In that event, and provided the Executive executes a notice of
resignation from any position(s) he holds with the Company, a
confidentiality agreement, and a mutual release with the Company
(concerning its subsidiaries and affiliates, and its present and former
officers, directors, and employees), in the form attached hereto with
blanks appropriately completed. The Company shall pay severance pay to
the Executive in an amount equal to the remaining salary which would
otherwise be paid to the Executive, at the annual rate of $200,000, for
the balance of the term of this Agreement. Such severance pay shall be
paid in a lump sum, within thirty (30) days after the effective date of
termination.
(iii) In the event of such termination, the Executive's entitlement
to the accrual of profit-sharing under the Company's profit-sharing plan
shall terminate upon the effective date of termination. Any unpaid
profit-sharing benefits to which the Executive is entitled as of such
date shall be paid to the Executive no later than one (1) month
thereafter.
(iv) In the event of such termination, the right of the Executive to
receive any stock of the Company under the Plan, as required by Section
7 hereof, shall immediately vest with respect to all stock required to
be granted pursuant to Section 7 and the vesting schedule set forth in
Exhibit 7 shall be of no further force or effect.
(v) Following such termination, the Company shall continue to provide
such medical and other benefits to Executive as it is required by law to
provide and such other benefits as called for pursuant to the Company's
then current plans and policies, if any.
(vi) The Company shall also pay to the Executive a cash bonus for such
calendar year, if, but only if, a bonus or bonuses are declared for the
salaried officers and directors of the Company for such calendar year,
in a minimum amount as determined as set forth in Section 4(b) above.
(vii) In the event of such termination, all unvested and
unexercisable Options, granted pursuant to Section 3 hereof, shall
immediately vest and become exercisable. All Options not exercised
within sixty (60) days after the effective date of such termination
shall terminate.
(c) Involuntary Termination With Cause.
(i) In the event that the Executive engages in willful misconduct or
gross negligence in his performance of the services contemplated by this
Agreement, or engages in conduct which is otherwise materially
detrimental to the Company's interest, including but not limited to the
commission of a felony or perpetration of a common law fraud, the
Company may terminate this Agreement for cause by giving written notice
to the Executive stating that it is the Company's intention to terminate
the Agreement effective immediately, and the Agreement shall so
terminate.
(ii) In that event, and provided the Executive executes a notice of
resignation from any position(s) he holds with the Company, a
confidentiality agreement, and a mutual release with the Company
(concerning its subsidiaries and affiliates, and its present and former
officers, directors, and employees), in the form attached hereto with
blanks appropriately completed. The Company shall pay severance pay to
the Executive in the amount of $100,000. Such severance pay shall be
paid in a lump sum, within thirty (30) days after the effective date of
termination.
(iii) In the event of such termination, the Executive's entitlement
to the accrual of profit-sharing under the Company's profit-sharing plan
shall terminate upon the effective date of termination. Any unpaid
profit-sharing benefits to which the Executive is entitled as of such
date shall be paid to the Executive no later than one (1) month
thereafter.
(iv) Following such termination, the Company shall continue to provide
such medical and other benefits to Executive as it is required by law to
provide and such other benefits as called for pursuant to the Company's
then current plans and policies, if any.
(v) In the event of such termination, the right of the Executive to
receive any stock of the Company granted pursuant to the Plan as
required by Section 7 hereof, shall be limited to stock which has become
vested pursuant to the provisions of Section 7 and column 3 of Exhibit 7
prior to the date of termination.
(vi) In the event of such termination, the Executive shall be entitled,
for a period of sixty (60) days after the effective date of such
termination, to exercise all Options which have vested and become
exercisable, pursuant to the provisions of Section 3 hereof, prior to
the effective date of such resignation. All Options not so exercised
shall terminate.
(d) Liquidation Of The Company.
(i) In the event that the Board of Directors votes to liquidate the
Company, the Executive shall not be guaranteed employment with the
Company for more than one (1) month from the date of the vote to
liquidate the Company, and his employment and this Agreement shall
terminate after said one (1) month, unless the Board of Directors
decides that the Executive's employment should be continued to assist in
the orderly liquidation of the Company, in which case the Executive's
employment shall continue subject to termination at any time thereafter
by the Board of Directors. In no event shall any such continuation
extend for a period of more than four (4) months from the date of the
vote to liquidate.
(ii) When the Executive's employment is terminated as a result of the
liquidation of the Company, the Company shall pay severance pay to the
Executive in an amount equal to $200,000, provided he executes a notice
of resignation from any position(s) he holds with the Company, a
confidentiality agreement, and a mutual release with the Company
(concerning its subsidiaries and affiliates, and its present and former
officers, directors, and employees), in the form attached hereto with
blanks appropriately completed. Such severance pay shall be paid in a
lump sum, on the effective date of termination.
(iii) In the event of such termination, the right of the Executive
to receive any stock of the Company under the Plan, as required by
Section 7 hereof, shall immediately vest with respect to all stock
required to be granted pursuant to Section 7 and the vesting schedule
set forth in Exhibit 7 shall be of no further force or effect.
(iv) In the event of such termination, all unvested and unexercisable
Options, granted pursuant to Section 3 hereof, shall immediately vest
and become exercisable. All Options not exercised within sixty (60)
days after the effective date of such termination shall terminate.
(e) Change of Control
(i) If, after a "Change of Control" (as hereinafter defined) of the
Company, either (A) the Company shall terminate the employment of the
Executive during the period of employment under this Agreement for any
reason other than cause, as defined herein, or cause a reduction in the
Executive's responsibilities or authority or compensation or other
benefits provided under this Agreement without the written consent of
the Executive, or (B) the Executive shall voluntarily resign upon
written notice to the Company, then (notwithstanding anything contained
in Section 6(a) hereof to the contrary) the Company shall pay to the
Executive a sum equal to the Executive's then annual salary times the
number of years, pro rated for any
partial year, remaining in the term of this Agreement. At the election
of the Executive, which election shall be made annually not later than
January 31 of each year and shall be irrevocable for the year in which
made (and once payments commence), such payment may be made in a lump
sum or paid in equal monthly installments. In the event no election is
made, payment to the Executive will be made on a monthly basis. Such
payment shall not be reduced in the event Executive obtains other
employment following Executive's termination or resignation pursuant to
this Section 6.
(ii) In the event of such termination or resignation upon a "Change of
Control", the right of the Executive to receive any stock of the Company
under the Plan, as required by Section 7 hereof, shall immediately vest
with respect to all stock required to be granted pursuant to Section 7
and the vesting schedule set forth in Exhibit 7 shall be of no further
force or effect.
(iii) In the event of such termination or resignation upon a "Change
of Control", the Executive and his spouse shall be entitled to the
continuation of health related benefits (including life and disability
insurance) in an amount equal to at least the amount of such benefits
provided to the Executive on the date of a Change of Control. Unless
otherwise terminated pursuant to this Section 6(e)(iii), such
continuation of benefits shall continue until the death of the Executive
and his spouse notwithstanding the termination of this Agreement.
However, such benefits shall terminate (i) as to the Executive and his
spouse upon the occurrence of Executive's employment by another company
or other business organization (not including self employment) which
actually provides, at such other company's expense, comparable medical
benefits for which the Executive is eligible ("Employment With
Comparable Benefits") or (ii) as to his spouse only, upon the occurrence
of his spouse's Employment With Comparable Benefits or remarriage.
Provided, however, that in order to obtain the continuation of benefits
described in this Section 6(e)(iii), the Executive or his spouse, as the
case may be, shall pay to the Company an amount equal to the amount that
the Company would otherwise have been required to pay on behalf of the
Executive and/or his spouse with respect to such health benefits if the
Executive were then employed by the Company.
(iv) In the event that payments under this Section 6(e) are determined
to constitute "excess parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended, the Executive
shall have the right, but not the obligation, to require the Company to
reduce the amount payable pursuant to this Section 6(e) to the maximum
amount which may be paid to Executive without such payments constituting
"excess parachute payments."
(v) For the purposes of this Agreement a "Change of Control" shall be
deemed to have taken place if: (A) any Person (as hereinafter defined)
except a Related Party (as hereinafter defined) shall become the record
or beneficial owner in the aggregate of 20% or more of the Common Stock
of the Company then outstanding (whether or not such acquisition is
approved by the Company's Board of Directors) and individuals who
constituted the Board of Directors of the Company prior to such Person
becoming the record or beneficial owner of 20% or more of the Company's
Common Stock (the "Existing Directors") cease to constitute a majority
of the Board for any reason including, but not limited to, the
nomination or election of individuals to the Board with the affirmative
vote of a majority of the Existing Directors who were members of the
Board at the time of such nomination or election; or (B) any Person,
except a Related Party, makes a proxy solicitation in connection with
the election of directors of the Company and if any of the Executive and
Fenwick H. Garvey, Matthew R. Naula, Bruce M. Chodash and Ben A. Plotkin
stand for reelection to the Board and each of them so standing for
reelection is not reelected by the Company's shareholders; or (C)
following an unsolicited public tender offer for all or substantially
all of the Company's outstanding common stock all, or substantially
all, of the assets of the Company are sold and, following such sale, the
Executive is not employed by the purchaser thereof on substantially the
terms contained in this Agreement.
Person means any individual, firm, corporation, partnership, syndicate,
other entity or group (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
together with all Affiliates and Associates (each as defined in Rule 12b-
2 under the Exchange Act) of such Person.
Related Party means the Executive, or any Affiliate or Associate of the
Executive, and any employee benefit plan of the Company and any Person
or entity organized, appointed or established by the Company for or
pursuant to the terms of any such employee benefit plan.
Notwithstanding anything contained herein to the contrary, expiration,
renewal, non-renewal, amendments, substitutions or termination of that
certain Amended and Restated Stock Pooling Agreement, dated March 15,
1994, by and between Fenwick H. Garvey, Bruce M. Chodash and Matthew R.
Naula shall not be deemed to be an acquisition of securities of the
Company for purposes of clause (A) of this subsection.
(vi) Notwithstanding anything contained herein to the contrary, the
right of the Executive to receive any payment or other benefit under
this subsection shall be conditioned upon the execution by the Executive
of a Notice of Resignation from any position(s) he holds with the
Company, a confidentiality agreement and a mutual release with the
Company (concerning its subsidiaries and affiliates, and its present and
former officers, directors and employees) in the form attached hereto
with blanks appropriately completed.
7. Company Stock.
(a) In connection with the execution of the Original Agreement, the
Company sought to provide an equity building program for the Executive
as described herein. The parties stipulate that this program is not in
lieu of any discretionary bonus which the Company may declare from time
to time for its employees.
(i) The Company has since the date of the original Agreement made stock
purchases and restricted stock grants to the Executive pursuant to the
Plan and further agrees, to the extent permitted by applicable law, to
make additional stock purchases and restricted stock grants to the
Executive pursuant to the Plan, all in accordance with this Section 7
and Exhibit 7 attached hereto. Each restricted stock grant made
pursuant to this Section 7(a) shall begin to vest and shall vest as
indicated on Exhibit 7 and otherwise in accordance with the terms of the
Plan, provided that (A) the Executive continues to be employed by the
Company on such indicated dates and (B) the Executive continues to own
all shares of stock purchased by him prior to such dates pursuant to
Section 7(b) immediately below.
(ii) The determination of the method by which the Company purchases
shares pursuant to this Section 7(a) shall be made by the Company in its
sole reasonable discretion in a manner consistent with its past
administration of the Plan.
(iii) In the event of circumstances involving financial hardship to
the Executive, the Executive may petition the Board of Directors of the
Company to waive (in whole or in part) the requirement of clause (B) of
Section 7(a)(i) hereof. The Board of Directors of the Company shall be
free to grant or deny all or a portion of any such waiver in its sole
discretion.
(b) In order to obtain the benefits described in this Section 7, the
Executive (or a personal benefit plan(s) to which he, his wife or
children is/are the sole beneficiary(ies)) has made open market
purchases in the aggregate amount of $300,005.
8. Notice.
Any notice to be given by either party under this Agreement shall be in
writing, mailed by certified mail with return receipt requested, and
addressed to the other party at the address stated herein or such other
address as may subsequently have been furnished by such other party in
writing. Any such notice shall be deemed to have been given on the date
of mailing. Notices to the Company shall be sent to its National
Headquarters/Northeast at:
80 Main Street
West Orange, New Jersey 07052;
and notices to the Executive shall be sent to him at:
100 Minnisink Drive
Short Hills, New Jersey 07578.
9. Governing Law.
This Agreement has been executed and delivered in the State of New
Jersey and shall in all respects be governed by and construed and
enforced in accordance with the laws of New Jersey, including all
matters of construction, validity, and performance.
10. Entire Agreement.
This Agreement constitutes the entire agreement of the parties with
respect to the Executive's employment and his compensation therefor,
specifically superseding all prior employment agreements between the
Executive and the Company and any modifications thereof prior to the
date of this Agreement; provided, however, that this Agreement shall not
limit or in any way affect the rights, duties, or obligations that the
Executive may have under any benefit plan of the Company, including, but
not limited to, any pension plan, profit-sharing plan, or medical or
health plan, except as may specifically be set forth herein.
11. Modifications, etc.
No modification, amendment, or waiver of any of the provisions of this
Agreement shall be effective unless in writing specifically referring to
this Agreement and signed by both parties.
12. Enforcement of Agreement.
The failure of either party at any time to enforce any of the provisions
of this Agreement or to require performance by the other party of any of
the provisions hereof shall not operate as or be construed as a waiver
of such provisions or to affect either the validity of this Agreement,
or any part hereof, or the right of either party thereafter to enforce
each and every provision in accordance with the terms of this Agreement.
13. Severability.
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects and to the fullest extent
permitted by law as if such invalid or unenforceable provision were
omitted.
14. Binding Agreement; Assignment.
This Agreement shall be binding upon and shall inure to the benefit of
the Company and any legal successor to the Company shall be deemed to be
substituted for the Company under the provisions hereof.
This Agreement shall also be binding upon and shall inure to the benefit
of the Executive, his heirs, executors, legal representatives and
assigns.
Other than as set forth above in this Section 14, neither the Company
nor Executive shall have the right to assign its or his obligations or
duties hereunder. Except as provided in Section 6(e) hereof, in the
event that the Company proposes to Executive, in connection with a sale
of all or a substantial portion of the assets of the Company to an
entity with tangible net equity equal to or greater than that of the
Company as of such date, that the Executive consent to the assignment of
the Company's obligations and duties hereunder (and the right to
Executive's services hereunder) to such Purchaser, and Executive does
not give such consent, then the Company shall have the right in its
discretion, effective upon the consummation of the above-referenced
sale, to terminate this Agreement. If the Company so terminates, the
Executive shall have such rights as provided for in Section 6(b) above.
15. Arbitration.
Any claims, controversies, demands, disputes or differences between or
among the parties hereto or any persons bound hereby arising out of, or
by virtue of, or in connection with, or otherwise relating to this
Agreement shall be submitted to and settled by arbitration conducted in
Newark, New Jersey before one or three arbitrators, each of whom shall
be knowledgeable in the fields of employment law and investment banking.
Such arbitration shall otherwise be conducted in accordance with the
rules then obtaining of the American Arbitration Association. The
parties hereto agree to share equally the responsibility for all fees of
the arbitrators, abide by any decision rendered as final and binding,
and waive the right to appeal the decision or otherwise submit the
dispute to a court of law for a jury or non-jury trial. The parties
hereto specifically agree that neither party may appeal or subject the
award or decision of any such arbitrator(s) to appeal or review in any
court of law or in equity or by any other tribunal, arbitration system
or otherwise. Judgement upon any award granted by such an arbitrator(s)
may be enforced in any court having jurisdiction thereof. The successful
party to the arbitration shall be entitled to reimbursement of fees and
expenses from the losing party in an amount not to exceed $50,000.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives on the day and date
first above written.
ATTEST: RYAN, BECK & CO., INC.
By: FENWICK H. GARVEY, Chairman of the Board
WITNESS: ALLEN S. GREENE
DESIGNATION OF BENEFICIARY
For purposes of the payment of death benefits in accordance with the
within Amended and Restated Employment Agreement, I hereby designate
__________________ as my beneficiary to receive such payments, subject
to any conditions imposed by law.
WITNESS: BEN A. PLOTKIN
DATED:
<TABLE>
EXHIBIT 7
(Allen Greene Restricted Stock Matters)
<CAPTION>
COLUMN 1 COLUMN 2 COLUMN 3
Company Purchase/DateCommencement of Vesting/Date Vesting/Date and
Grant/Date
<S> <C> <C>
$250,000/October 1994 $50,000/October 1994
$50,000/January 1, 1996
$50,000/October 1994 $50,000/January 1, 1997
$50,000/January 1, 1995 $50,000/January 1, 1998
$50,000/January 1, 1996 $50,000/January 1, 1999
$50,000/January 1, 1997 $50,000/January 1, 2000
$50,005/September 22, 1995 $50,005/September 22, 1995
$50,005/September 22, 1998
</TABLE>
AMENDMENT TO EMPLOYMENT AGREEMENT, GARVEY
This Amendment to the Employment Agreement dated as of the 26th day of
September, 1994 (the "Employment Agreement"), by and between Ryan, Beck
& Co., Inc. (the "Company") and Fenwick H. Garvey (the "Executive") is
hereby made as of this 14th day of December, 1995.
WHEREAS, the parties hereto desire to amend the Employment Agreement
upon the following terms and conditions:
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby
and in consideration of the mutual covenants herein contained, the
Employment Agreement is hereby
amended as follows:
1. Section 4(b) shall be deleted in its entirety and in lieu thereof
the following shall be substituted:
(b) The Company shall also pay to the Executive's designated
beneficiary or estate a cash bonus reflecting Executive's performance
for the partial calendar year in which his death occurs if, but only if,
a bonus or bonuses are declared for the salaried officer/directors of
the Company for such calendar year in an amount equal to the greater of
(x) $200,000 multiplied by a fraction, the numerator of which is the
number of days of the calendar year in which Executive was actively
employed and the denominator of which is 365 and (y) the dollar amount
of the Company's Executive Bonus Pool (as hereinafter defined) for such
calendar year, multiplied first by that percentage of the prior year's
Executive Bonus Pool actually paid to the Executive and then by a
fraction, the numerator of which is the number of days of the calendar
year in which Executive was actively employed and the denominator of
which is 365; in each case subtracting from the product so calculated
any cash bonus or bonuses previously paid to Executive relating to (not
necessarily paid during) such calendar year. Such bonus, if any, shall
be payable at such time as the Company next pays bonuses generally to
other executives. For the purposes of this Section 4(b) "Executive
Bonus Pool" shall mean the aggregate dollar amount of the bonuses, if
any, paid to the Company's five (5) most highly compensated executive
officers relating to a calendar year.
2. Section 5(d) shall be deleted in its entirety and in lieu thereof
the following shall be substituted:
(d) For any calendar year during which (i) the Executive is disabled as
of December 31, or (ii) the Executive was disabled during part of the
year but has returned to active status as of December 31, or (iii) the
Executive's employment is terminated by reason of disability under this
paragraph, the Company shall pay the Executive a bonus if, but only if,
a bonus is declared for the salaried officer/directors of the Company
for such calendar year, in an amount calculated as set forth in 4(b)
above. Such bonus, if any, shall be payable at such time as the Company
next pays bonuses generally to other executives.
3. Following Section 6(d), Section 6(e) shall be added as set forth
below:
(e). Change in Control
(i) If, after a "Change of Control" (as hereinafter defined) of the
Company, either (A) the Company shall terminate the employment of the
Executive during the period of employment under this Agreement for any
reason other than cause, as defined herein, or cause a reduction in the
Executive's responsibilities or authority or compensation or other
benefits provided under this Agreement without the written consent of
the Executive, or (B) the Executive shall voluntarily resign upon
written notice to the Company, then (notwithstanding anything contained
in Section 6(a) hereof to the contrary) the Company shall pay to the
Executive a sum equal to the greater of Executive's then annual salary
and $200,000 times the number of years, pro rated for any partial year,
remaining in the term of this Agreement. Such payment shall be paid in
a lump sum within thirty (30) days after such termination, reduction or
resignation.
(ii) In the event that payments under this Section 6(e) are determined
to constitute "excess parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended, the Executive
shall have the right, but not the obligation, to require the Company to
reduce the amount payable pursuant to this Section 6(e) to the maximum
amount which may be paid to Executive without such payments constituting
"excess parachute payments."
(iii) For the purposes of this Agreement a "Change of Control"
shall be deemed to have taken place if: (A) any Person (as hereinafter
defined) except a Related Party (as hereinafter defined) shall become
the record or beneficial owner in the aggregate of 20% or more of the
Common Stock of the Company then outstanding (whether or not such
acquisition is approved by the Company's Board of Directors) and
individuals who constituted the Board of Directors of the Company prior
to such Person becoming the record or beneficial owner of 20% or more of
the Company's Common Stock (the "Existing Directors") cease to
constitute a majority of the Board for any reason including, but not
limited to, the nomination or election of individuals to the Board with
the affirmative vote of a majority of the Existing Directors who were
members of the Board at the time of such nomination or election; or (B)
any Person, except a Related Party, makes a proxy solicitation in
connection with the election of directors of the Company and if any of
the Executive and Ben A. Plotkin, Matthew R. Naula, Bruce M. Chodash and
Allen S. Greene stand for reelection to the Board and each of them so
standing for reelection is not reelected by the Company's shareholders;
or (C) following an unsolicited public tender offer for all or
substantially all of the Company's outstanding common stock all, or
substantially all, of the assets of the Company are sold and, following
such sale, the Executive is not employed by the purchaser thereof on
substantially the terms contained in this Agreement.
Person means any individual, firm, corporation, partnership, syndicate,
other entity or group (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
together with all Affiliates and Associates (each as defined in Rule 12b-
2 under the Exchange Act) of such Person.
Related Party means the Executive, or any Affiliate or Associate of the
Executive, and any employee benefit plan of the Company and any Person
or entity organized, appointed or established by the Company for or
pursuant to the terms of any such employee benefit plan.
Notwithstanding anything contained herein to the contrary, expiration,
renewal, non-renewal, amendments, substitutions or termination of that
certain Amended and Restated Stock Pooling Agreement, dated March 15,
1994, by and between Matthew R. Naula, Bruce M. Chodash and the
Executive shall not be deemed to be an acquisition of securities of the
Company for purposes of clause (A) of this subsection.
(iv) Notwithstanding anything contained herein to the contrary, the
right of the Executive to receive any payment or other benefit under
this subsection shall be conditioned upon the execution by the Executive
of a Notice of Resignation from any position(s) he holds with the
Company, a confidentiality agreement and a mutual release with the
Company (concerning its subsidiaries and affiliates, and its present and
former officers, directors and employees) in the form attached hereto
with blanks appropriately completed.
4. Any capitalized terms not otherwise defined herein shall have the
same meaning as is ascribed to such term in the Employment Agreement.
5. Except as otherwise provided herein, all the terms and conditions
of the Employment Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
ATTEST: RYAN, BECK & CO., INC.
[Corporate Seal]
By:
Name:
Title:
WITNESS: EXECUTIVE:Fenwick H. Garvey
AMENDMENT TO EMPLOYMENT AGREEMENT, NAULA
This Amendment to the Employment Agreement dated as of the 26th day of
September, 1994 (the "Employment Agreement"), by and between Ryan, Beck
& Co., Inc. (the "Company") and Matthew R. Naula (the "Executive") is
hereby made as of this 14th day of December, 1995.
WHEREAS, the parties hereto desire to amend the Employment Agreement
upon the following terms and conditions:
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby
and in consideration of the mutual covenants herein contained, the
Employment Agreement is hereby amended as follows:
1. Section 4(b) shall be deleted in its entirety and in lieu thereof
the following shall be substituted:
(b) The Company shall also pay to the Executive's designated
beneficiary or estate a cash bonus reflecting Executive's performance
for the partial calendar year in which his death occurs if, but only if,
a bonus or bonuses are declared for the salaried officer/directors of
the Company for such calendar year in an amount equal to the greater of
(x) $150,000 multiplied by a fraction, the numerator of which is the
number of days of the calendar year in which Executive was actively
employed and the denominator of which is 365 and (y) the dollar amount
of the Company's Executive Bonus Pool (as hereinafter defined) for such
calendar year, multiplied first by that percentage of the prior year's
Executive Bonus Pool actually paid to the Executive and then by a
fraction, the numerator of which is the number of days of the calendar
year in which Executive was actively employed and the denominator of
which is 365; in each case subtracting from the product so calculated
any cash bonus or bonuses previously paid to Executive relating to (not
necessarily paid during) such calendar year. Such bonus, if any, shall
be payable at such time as the Company next pays bonuses generally to
other executives. For the purposes of this Section 4(b) "Executive
Bonus Pool" shall mean the aggregate dollar amount of the bonuses, if
any, paid to the Company's five (5) most highly compensated executive
officers relating to a calendar year.
2. Section 5(d) shall be deleted in its entirety and in lieu thereof
the following shall be substituted:
(d) For any calendar year during which (i) the Executive is disabled as
of December 31, or (ii) the Executive was disabled during part of the
year but has returned to active status as of December 31, or (iii) the
Executive's employment is terminated by reason of disability under this
paragraph, the Company shall pay the Executive a bonus if, but only if,
a bonus is declared for the salaried officer/directors of the Company
for such calendar year, in an amount calculated as set forth in 4(b)
above. Such bonus, if any, shall be payable at such time as the Company
next pays bonuses generally to other executives.
3. Following Section 6(d), Section 6(e) shall be added as set forth
below:
(e). Change in Control
(i) If, after a "Change of Control" (as hereinafter defined) of the
Company, either (A) the Company shall terminate the employment of the
Executive during the period of employment under this Agreement for any
reason other than cause, as defined herein, or cause a reduction in the
Executive's responsibilities or authority or compensation or other
benefits provided under this Agreement without the written consent of
the Executive, or (B) the Executive shall voluntarily resign upon
written notice to the Company, then (notwithstanding anything contained
in Section 6(a) hereof to the contrary) the Company shall pay to the
Executive a sum equal to the Executive's then annual salary times the
number of years, pro rated for any partial year, remaining in the term
of this Agreement. Such payment shall be paid in a lump sum within
thirty (30) days after such termination, reduction or resignation.
(ii) In the event of such termination or resignation upon a "Change of
Control", the Executive and his spouse shall be entitled to the
continuation of health related benefits (including life and disability
insurance) in an amount equal to at least the amount of such benefits
provided to the Executive on the date of a Change of Control. Unless
otherwise terminated pursuant to this Section 6(e)(ii), such
continuation of benefits shall continue until the death of the Executive
and his spouse notwithstanding the termination of this Agreement.
However, such benefits shall terminate (i) as to the Executive and his
spouse upon the occurrence of Executive's employment by another company
or other business organization (not including self employment) which
actually provides, at such other Company's expense, comparable medical
benefits for which the Executive is eligible ("Employment With
Comparable Benefits") or (ii) as to his spouse only, upon the occurrence
of his spouse's Employment With Comparable Benefits or remarriage.
Provided, however, that in order to obtain the continuation of benefits
described in this Section 6(e)(ii), the Executive or his spouse, as the
case may be, shall pay to the Company an amount equal to the amount that
the Company would otherwise have been required to pay on behalf of the
Executive and/or his spouse with respect to such health benefits if the
Executive were then employed by the Company.
(iii) In the event that payments under this Section 6(e) are
determined to constitute "excess parachute payments" within the meaning
of Section 280G of the Internal Revenue Code of 1986, as amended, the
Executive shall have the right, but not the obligation, to require the
Company to reduce the amount payable pursuant to this Section 6(e) to
the maximum amount which may be paid to Executive without such payments
constituting "excess parachute payments."
(iv) For the purposes of this Agreement a "Change of Control" shall be
deemed to have taken place if: (A) any Person (as hereinafter defined)
except a Related Party (as hereinafter defined) shall become the record
or beneficial owner in the aggregate of 20% or more of the Common Stock
of the Company then outstanding (whether or not such acquisition is
approved by the Company's Board of Directors) and individuals who
constituted the Board of Directors of the Company prior to such Person
becoming the record or beneficial owner of 20% or more of the Company's
Common Stock (the "Existing Directors") cease to constitute a majority
of the Board for any reason including, but not limited to, the
nomination or election of individuals to the Board with the affirmative
vote of a majority of the Existing Directors who were members of the
Board at the time of such nomination or election; or (B) any Person,
except a Related Party, makes a proxy solicitation in connection with
the election of directors of the Company and if any of the Executive and
Fenwick H. Garvey, Ben A. Plotkin, Bruce M. Chodash and Allen S. Greene
stand for reelection to the Board and each of them so standing for
reelection is not reelected by the Company's shareholders; or (C)
following an unsolicited public tender offer for all or substantially
all of the Company's outstanding common stock all, or substantially
all, of the assets of the Company are sold and, following such sale, the
Executive is not employed by the purchaser thereof on substantially the
terms contained in this Agreement.
Person means any individual, firm, corporation, partnership, syndicate,
other entity or group (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
together with all Affiliates and Associates (each as defined in Rule 12b-
2 under the Exchange Act) of such Person.
Related Party means the Executive, or any Affiliate or Associate of the
Executive, and any employee benefit plan of the Company and any Person
or entity organized, appointed or established by the Company for or
pursuant to the terms of any such employee benefit plan.
Notwithstanding anything contained herein to the contrary, expiration,
renewal, non-renewal, amendments, substitutions or termination of that
certain Amended and Restated Stock Pooling Agreement, dated March 15,
1994, by and between Fenwick H. Garvey, Bruce M. Chodash and the
Executive shall not be deemed to be an acquisition of securities of the
Company for purposes of clause (A) of this subsection.
(v) Notwithstanding anything contained herein to the contrary, the
right of the Executive to receive any payment or other benefit under
this subsection shall be conditioned upon the execution by the Executive
of a Notice of Resignation from any position(s) he holds with the
Company, a confidentiality agreement and a mutual release with the
Company (concerning its subsidiaries and affiliates, and its present and
former officers, directors and employees) in the form attached hereto
with blanks appropriately completed.
4. Any capitalized terms not otherwise defined herein shall have the
same meaning as is ascribed to such term in the Employment Agreement.
5. Except as otherwise provided herein, all the terms and conditions
of the Employment Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
ATTEST: RYAN, BECK & CO., INC.
[Corporate Seal]
By:
Name:
Title:
WITNESS: EXECUTIVE:Matthew R. Naula
AMENDMENT TO EMPLOYMENT AGREEMENT, CHODASH
This Amendment to the Employment Agreement dated as of the 26th day of
September, 1994 (the "Employment Agreement"), by and between Ryan, Beck
& Co., Inc. (the "Company") and Bruce Chodash (the "Executive") is
hereby made as of this _14th day of December, 1995.
WHEREAS, the parties hereto desire to amend the Employment Agreement
upon the following terms and conditions:
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby and in consideration of the mutual covenants herein contained,
the Employment Agreement is hereby amended as follows:
1. Section 4(b) shall be deleted in its entirety and in lieu
thereof the following shall be substituted:
(b) The Company shall also pay to the Executive's designated
beneficiary or estate a cash bonus reflecting Executive's performance
for the partial calendar year in which his death occurs if, but only if,
a bonus or bonuses are declared for the salaried officer/directors of
the Company for such calendar year in an amount equal to the greater of
(x) $150,000 multiplied by a fraction, the numerator of which is the
number of days of the calendar year in which Executive was actively
employed and the denominator of which is 365 and (y) the dollar amount
of the Company's Executive Bonus Pool (as hereinafter defined) for such
calendar year, multiplied first by that percentage of the prior year's
Executive Bonus Pool actually paid to the Executive and then by a
fraction, the numerator of which is the number of days of the calendar
year in which Executive was actively employed and the denominator of
which is 365; in each case subtracting from the product so calculated
any cash bonus or bonuses previously paid to Executive relating to (not
necessarily paid during) such calendar year. Such bonus, if any, shall
be payable at such time as the Company next pays bonuses generally to
other executives. For the purposes of this Section 4(b) "Executive
Bonus Pool" shall mean the aggregate dollar amount of the bonuses, if
any, paid to the Company's five (5) most highly compensated executive
officers relating to a calendar year.
2. Section 5(d) shall be deleted in its entirety and in lieu thereof
the following shall be substituted:
(d) For any calendar year during which (i) the Executive is disabled as
of December 31, or (ii) the Executive was disabled during part of the
year but has returned to active status as of December 31, or (iii) the
Executive's employment is terminated by reason of disability under this
paragraph, the Company shall pay the Executive a bonus if, but only if,
a bonus is declared for the salaried officer/directors of the Company
for such calendar year, in an amount calculated as set forth in 4(b)
above. Such bonus, if any, shall be payable at such time as the Company
next pays bonuses generally to other executives.
3. Following Section 6(d), Section 6(e) shall be added as set forth
below:
(e) Change in Control
(i) If, after a "Change of Control" (as hereinafter defined) of the
Company, either (A) the Company shall terminate the employment of the
Executive during the period of employment under this Agreement for any
reason other than cause, as defined herein, or cause a reduction in the
Executive's responsibilities or authority or compensation or other
benefits provided under this Agreement without the written consent of
the Executive, or (B) the Executive shall voluntarily resign upon
written notice to the Company, then (notwithstanding anything contained
in Section 6(a) hereof to the contrary) the Company shall pay to the
Executive a sum equal to the executive's then annual salary times the
number of years, pro rated for any partial year, remaining in the term
of this Agreement. Such payment shall be paid in a lump sum within
thirty (30) days after such termination, reduction or resignation.
(ii) In the event of such termination or resignation
upon a "Change of Control", the Executive and his spouse shall be
entitled to the continuation of health related benefits (including life
and disability insurance) in an amount equal to at least the amount of
such benefits provided to the Executive on the date of a Change of
Control. Unless otherwise terminated pursuant to this Section 6(e)(ii),
such continuation of benefits shall continue until the death of the
Executive and his spouse notwithstanding the termination of this
Agreement. However, such benefits shall terminate (i) as to the
Executive and his spouse upon the occurrence of Executive's employment
by another company or other business organization (not including self
employment) which actually provides, at such other company's expense,
comparable medical benefits for which the Executive is eligible
("Employment With Comparable Benefits") or (ii) as to his spouse only,
upon the occurrence of his spouse's Employment With Comparable Benefits
or remarriage. Provided, however, that in order to obtain the
continuation of benefits described in this Section 6(e)(ii), the
Executive or his spouse, as the case may be, shall pay to the Company an
amount equal to the amount that the Company would otherwise have been
required to pay on behalf of the Executive and/or his spouse with
respect to such health benefits if the Executive were then employed by
the Company.
(iii) In the event that payments under this
Section 6(e) are determined to constitute "excess parachute payments"
within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended, the Executive shall have the right, but not the obligation,
to require the Company to reduce the amount payable pursuant to this
Section 6(e) to the maximum amount which may be paid to Executive
without such payments constituting "excess parachute payments."
(iv) For the purposes of this Agreement a "Change of
Control" shall be deemed to have taken place if: (A) any Person (as
hereinafter defined) except a Related Party (as hereinafter defined)
shall become the record or beneficial owner in the aggregate of 20% or
more of the Common Stock of the Company then outstanding (whether or not
such acquisition is approved by the Company's Board of Directors) and
individuals who constituted the Board of Directors of the Company prior
to such Person becoming the record or beneficial owner of 20% or more of
the Company's Common Stock (the "Existing Directors") cease to
constitute a majority of the Board for any reason including, but not
limited to, the nomination or election of individuals to the Board with
the affirmative vote of a majority of the Existing Directors who were
members of the Board at the time of such nomination or election; or (B)
any Person, except a Related Party, makes a proxy solicitation in
connection with the election of directors of the Company and if any of
the Executive and Fenwick H. Garvey, Matthew R. Naula, Ben A. Plotkin
and Allen S. Greene stand for reelection to the Board and each of them
so standing for reelection is not reelected by the Company's
shareholders; or (C) following an unsolicited public tender offer for
all or substantially all of the Company's outstanding common stock all,
or substantially all, of the assets of the Company are sold and,
following such sale, the Executive is not employed by the purchaser
thereof on substantially the terms contained in this Agreement.
Person means any individual, firm, corporation, partnership, syndicate,
other entity or group (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
together with all Affiliates and Associates (each as defined in Rule 12b-
2 under the Exchange Act) of such Person.
Related Party means the Executive, or any Affiliate or Associate of the
Executive, and any employee benefit plan of the Company and any Person
or entity organized, appointed or established by the Company for or
pursuant to the terms of any such employee benefit plan.
Notwithstanding anything contained herein to the contrary, expiration,
renewal, non-renewal, amendments, substitutions or termination of that
certain Amended and Restated Stock Pooling Agreement, dated March 15,
1994, by and between Fenwick H. Garvey, Matthew R. Naula and the
Executive shall not be deemed to be an acquisition of securities of the
Company for purposes of clause (A) of this subsection.
(v) Notwithstanding anything contained herein to the contrary, the
right of the Executive to receive any payment or other benefit under
this subsection shall be conditioned upon the execution by the Executive
of a Notice of Resignation from any position(s) he holds with the
Company, a confidentiality agreement and a mutual release with the
Company (concerning its subsidiaries and affiliates, and its present and
former officers, directors and employees) in the form attached hereto
with blanks appropriately completed.
4. Any capitalized terms not otherwise defined herein shall have the
same meaning as is ascribed to such term in the Employment Agreement.
5. Except as otherwise provided herein, all the terms and conditions
of the Employment Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
ATTEST: RYAN, BECK & CO., INC.
[Corporate Seal]
By:
Name:
Title:
WITNESS: EXECUTIVE: Bruce Chodash
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, BEN PLOTKIN
This AGREEMENT, made as of December 14, 1995, shall constitute an
amendment to and restatement of that certain amended and restated
employment agreement dated September 26, 1994 (the "the Amended and
Restated Agreement"), by and between RYAN, BECK & CO., INC., a
corporation organized under the laws of the State of New Jersey, with
its principal office at 80 Main Street, West Orange, New Jersey 07052
(hereinafter the "Company"), and BEN A. PLOTKIN, whose address is 168
Western Drive, Short Hills, New Jersey 07578 (hereinafter the
"Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently serving as an Executive Vice
President of the Company; and
WHEREAS, the Company desires that the Executive continue in a
commensurate position with the Company and the Executive desires to
continue his employment relationship in such a position;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties agree as follows:
1. Employment and Duties.
(a) The Company shall continue to employ the Executive, during the
term of this Agreement and, subject to the terms and conditions
contained herein, in a commensurate position with the Company, and with
commensurate title. During the term hereof, the Company shall take such
action as is necessary to nominate Executive to stand for election as a
director of the Company. From and after the date hereof, the terms of
this Agreement shall control and the terms of the Amended and Restated
Agreement shall have no further force or effect.
(b) The Executive agrees to continue to perform duties and services of
such character and in such manner as are usually and customarily
performed by persons in such positions in the investment banking and
bank consulting business. The Executive's duties and services shall be
performed under the general supervision of the Chief Executive Officer
and the Board of Directors of the Company and shall include such
additional related duties and services as may from time to time be
determined and assigned to the Executive by the Chief Executive Officer
or the Board of Directors of the Company. If elected or appointed as a
corporate officer and/or director of the Company, the Executive shall
also perform such duties and services as are prescribed for such
position in the By-Laws of the Company and such additional related
duties and services as may from time to time be determined and assigned
to him by the Board of Directors.
(c) The Executive shall devote sufficient time, attention, and energies
to properly perform his duties and services under this Agreement
(allowing for reasonable vacation periods as established by the
personnel policies of the Board of Directors), and shall not during the
term of this agreement be engaged in any other business activity which
will impair his ability to properly perform his duties and services
hereunder.
(d) The Executive agrees that he will not, without the prior approval
of the Board of Directors, undertake any activity or position of
responsibility i) which conflicts with or competes with the business of
the Company; or ii) whether or not it is related to the business of the
Company, which will materially inhibit the performance of his duties
hereunder.
2. Term.
Except in the case of earlier termination, as hereinafter specifically
provided, the term of this Agreement shall be for three years commencing
on the date set forth above, with one year being added at each
anniversary date of the Agreement, provided that the Executive is
actively employed by the Company on such anniversary date. For purposes
of this provision, the Executive shall not be deemed to be actively
employed by the Company if he is disabled on the anniversary date, and
the period of disability extends for such length of time as to terminate
this Agreement under paragraph 5.
3. Compensation.
(a) Salary. For each year during the term of this Agreement, subject
to the provisions herein regarding resignation, termination with or
without cause, death, disability, and liquidation, the Company shall pay
the Executive a salary in connection with his services hereunder in the
initial amount of $187,500 per annum, subject to increase in the
discretion of the Board of Directors, but in any event not less than
Executive's salary of the previous year. The Executive's salary shall
not be decreased without the Executive's prior written approval.
(b) Benefits/Expenses. The Company shall also cause the Executive to
receive, in addition to his salary, all other employee benefits
(including a bonus or bonuses if declared by the Board of Directors in
its discretion and contributions to any profit-sharing plan) in effect
or hereafter to be offered by the Company, plus reimbursement for
ordinary and necessary expenses incurred while acting on behalf of the
Company.
(c) Stock Options. Pursuant to a stock option agreement (the "Option
Agreement") of even date herewith made pursuant and subject to the terms
of the Company's 1986 Stock Option Plan, as amended (the "Option Plan"),
the Company will grant to the Executive qualified stock options (the
"Options") to purchase up to 30,000 shares (the "Shares") of the
Company's common stock, $.10 par value (the "Common Stock"). The
exercise price of the Options shall be the closing price of the Common
Stock on the National Association of Securities Dealers Automated
Quotation System on September 21, 1995 (the "Date of Grant") of $7.75.
Except as otherwise provided herein and in the Stock Option Agreement
with respect to a "Transaction" (as defined in the Stock Option
Agreement), the Options shall vest and be exercisable in one-fifth
increments on each annual anniversary of the Date of Grant. In the
event of a Transaction, all Options not vested shall immediately vest
and be exercisable. The Options shall expire ten years from the Date of
Grant. A copy of the Option Agreement is attached hereto as Exhibit 3.
4. Death of the Executive.
(a) In the event of the Executive's death during the term of this
Agreement, the Company shall pay to the Executive's designated
beneficiary, or if no beneficiary has been designated then to the
Executive's estate, in addition to the salary earned by the Executive
but unpaid as of the date of death, the amount of $150,000. Said amount
shall be paid in a lump sum, within thirty (30) days after the date of
death.
(b) The Company shall also pay to the Executive's designated
beneficiary or estate a cash bonus reflecting Executive's performance
for the partial calendar year in which his death occurs if, but only if,
a bonus or bonuses are declared for the salaried officer/directors of
the Company for such calendar year in an amount equal to the greater of
(x) $150,000 multiplied by a fraction, the numerator of which is the
number of days of the calendar year in which Executive was actively
employed and the denominator of which is 365 and (y) the dollar amount
of the Company's Executive Bonus Pool (as hereinafter defined) for such
calendar year, multiplied first by that percentage of the prior year's
Executive Bonus Pool actually paid to the Executive and then by a
fraction, the numerator of which is the number of days of the calendar
year in which Executive was actively employed and the denominator of
which is 365; in each case subtracting from the product so calculated
any cash bonus or bonuses previously paid to Executive relating to (not
necessarily paid during) such calendar year. Such bonus, if any, shall
be payable at such time as the Company next pays bonuses generally to
other executives. For the purposes of this Section 4(b) "Executive
Bonus Pool" shall mean the aggregate dollar amount of the bonuses, if
any, paid to the Company's five (5) most highly compensated executive
officers relating to a calendar year.
(c) The Executive's entitlement to the accrual of profit-sharing under
the Company's profit-sharing plan shall terminate upon his death. Any
unpaid profit-sharing benefits to which the Executive is entitled at the
time of his death shall be paid to the Executive's designated
beneficiary or estate no later than one (1) month following the
Executive's death.
(d) In the event of the death of Executive, the right of his estate to
receive any stock of the Company pursuant to the Company's Restricted
Stock Grant Plan (the "Plan") as required by Section 7 hereof, shall be
limited to (i) stock which has become vested pursuant to the provisions
of Section 7 and column 3 of Exhibit 7 prior to Executive's death; and
(ii) as to stock which has commenced vesting, as indicated in column 2
of Exhibit 7 but which has not become vested, such portion thereof as
called for pursuant to the Plan.
(e) In the event of the death of the Executive, the Executive's
personal representative, executor or administrator, as the case may be,
shall be entitled, for a period of one year from the date of the
Executive's death, to exercise such Options as would otherwise have
vested and been exercisable, pursuant to Section 3 hereof, had the
Executive not died prior to the date that such Options are exercised.
All Options not so exercised shall terminate.
5. Disability of the Executive.
(a) If the Executive is unable to perform his regular duties and
services by reason of illness or incapacity for a period of up to six
(6) months, the Company shall continue to pay his salary at his then
current rate during such period of illness or incapacity, less the
amount of any disability insurance benefits paid directly to the
Executive from any policy or policies the premiums for which have been
paid by the Company.
(b) If the Executive's disability continues for more than six (6)
months, the Executive's employment under this Agreement shall terminate,
and the Company shall assign to the Executive at no cost to him all
rights which the Company may then have in any disability income
insurance policies on the Executive, which shall become the property of
the disabled Executive.
(i) If such termination occurs and the Executive is receiving
disability income from such insurance policies, then the Company shall
pay severance pay to the Executive in the amount of $150,000, provided
he executes a notice of resignation from any position(s) he holds with
the Company, a confidentiality agreement, and a mutual release with the
Company (concerning its subsidiaries and affiliates, and its present and
former officers, directors, and employees), in the form attached hereto
with blanks appropriately completed. Such severance pay shall be paid
in a lump sum, within thirty (30) days after the effective date of
termination.
(ii) If such termination occurs but the Executive shall not be
receiving, or shall not be eligible to receive, disability income from
insurance policies provided by or through the Company, then the Company
shall continue to pay a salary to the Executive at a per annum rate of
$75,000, for the balance of the term of this Agreement. At the end of
the term, the Company shall pay severance pay to the Executive in the
amount of $150,000, provided he executes a notice of resignation from
any position(s) he holds with the Company, a confidentiality agreement,
and a mutual release with the Company (concerning its subsidiaries and
affiliates, and its present and former officers, directors and
employees), in the form attached hereto with blanks appropriately
completed. Such severance pay shall be paid in a lump sum, within
thirty (30) days after the date of the end of the term of the Agreement.
(c) If within three (3) months after returning to full-time employment
from a period of disability of less than six (6) months' duration, the
Executive again becomes disabled, the subsequent disability shall be
considered as part of the original disability for the purpose of
calculating the maximum six (6) month period during which the
Executive's employment shall be continued while he is disabled.
(d) For any calendar year during which (i) the Executive is disabled
as of December 31, or (ii) the Executive was disabled during part of the
year but has returned to active status as of December 31, or (iii) the
Executive's employment is terminated by reason of disability under this
paragraph, the Company shall pay the Executive a bonus if, but only if,
a bonus is declared for the salaried officer/directors of the Company
for such calendar year, in an amount calculated as set forth in 4(b)
above. Such bonus, if any, shall be payable at such time as the Company
next pays bonuses generally to other executives.
(e) The parties agree that the within provisions will serve as general
guidance in situations not specifically contemplated hereby and the
Company reserves the right to review each occurrence of disability on a
case-by-case basis to determine in its discretion the applicability of
the policy to situations where, for example, the Executive is partially
disabled or has multiple periods of disability.
(f) If the Company and the Executive disagree as to the Executive's
status of disability or fitness and there is in force a disability
income insurance policy on Executive (whether paid for by the Executive
or the Company), then the Executive shall be deemed to be disabled for
purposes of this Agreement if any such policy pays benefits because of
the Executive's disability. If no such insurance is in force and there
is a disagreement, the Executive shall be examined by a physician
appointed jointly by a physician for the Company and a physician for the
Executive, and the decision of such physician jointly chosen shall be
binding upon the Company and the Executive. The fees and expenses of
the physician so jointly selected shall be paid by the Company. In the
event that the physician for the Company and the Executive cannot
mutually agree on an examining physician, then such physician shall be
chosen by the Essex County (New Jersey) Medical Society. The fees and
expenses of the physician so chosen shall be paid by the Company.
(g) The Executive agrees to submit annually, at the request of the
Company, to a general physical examination to be conducted at the
Company's expense by a physician acceptable to the Company and the
Executive. The Executive further agrees to authorize said physician to
release medical information to the Board of Directors if, in the opinion
of the physician, the physical examination reveals a condition relevant
to the performance by the Executive of his duties under this Agreement.
(h) In the event of termination of the Agreement upon the disability
of Executive, the right of Executive to receive any stock of the Company
granted pursuant to the Plan as required by Section 7 hereof, shall be
limited to (i) stock which has become vested pursuant to the provisions
of Section 7 and column 3 of Exhibit 7 prior to termination; and (ii) as
to stock which has commenced vesting, indicated in column 2 of Exhibit 7
but which has not become vested, such portion thereof as called for
pursuant to the Plan.
(i) In the event of termination of the Agreement upon the disability
of Executive, the Executive shall be entitled, for a period of one year
from the date of such termination, to exercise such Options as would
otherwise have vested and been exercisable, pursuant to Section 3
hereof, had this Agreement not been terminated prior to the date that
such Options are exercised. All Options not so exercised shall
terminate.
6. Termination and Severance Pay.
This Agreement may be terminated during its term as follows:
(a) Voluntary Resignation.
(i) The Executive may terminate this Agreement without cause by
voluntary resignation upon thirty (30) days' written notice to the
Company.
(ii) In that event, monetary compensation (salary or otherwise) will be
terminated upon the effective date of the employment termination.
(iii) In the event of such voluntary resignation, the Executive's
entitlement to the accrual of profit-sharing under the Company's profit-
sharing plan shall terminate upon the effective date of termination of
the Executive's employment. Any unpaid profit-sharing benefits to which
the Executive is entitled as of such date shall be paid to the
Executive, no later than one (1) month thereafter.
(iv) In the event of such voluntary resignation, the right of Executive
to receive any stock of the Company granted pursuant to the Plan as
required by Section 7 hereof shall be limited to stock which has become
vested pursuant to the provisions of Section 7 and column 3 of Exhibit 7
prior to the effective date of resignation.
(v) In the event of such voluntary resignation, the Executive shall
be entitled, for a period of sixty (60) days after the effective date of
such resignation, to exercise all Options which have vested and become
exercisable, pursuant to the provisions of Section 3 hereof, prior to
the effective date of such resignation. All Options not so exercised
shall terminate.
(vi) Notwithstanding anything contained herein to the contrary, the
right of the Executive to receive any payment of other benefit under
this Section 6(a) shall be conditioned upon the execution by the
Executive of a notice of resignation from any position(s) he holds with
the Company, a confidentiality agreement, and a mutual release with the
Company (concerning its subsidiaries and affiliates, and its present or
former officers, directors and employees), in the form attached hereto
with blanks appropriately completed.
(vii) Following such termination of the Executive's employment, the
Company shall continue to provide such medical and other benefits to
Executive as it is required by law to provide and such other benefits as
called for pursuant to the Company's plans and policies, if any.
(b) Involuntary Termination Without Cause.
(i) The Company may terminate this Agreement without cause upon thirty
(30) days' written notice to the Executive.
(ii) In that event, and provided the Executive executes a notice of
resignation from any position(s) he holds with the Company, a
confidentiality agreement, and a mutual release with the Company
(concerning its subsidiaries and affiliates, and its present and former
officers, directors, and employees), in the form attached hereto with
blanks appropriately completed. The Company shall pay severance pay to
the Executive in an amount equal to the remaining salary which would
otherwise be paid to the Executive, at the annual rate of $150,000, for
the balance of the term of this Agreement. Such severance pay shall be
paid in a lump sum, within thirty (30) days after the effective date of
termination.
(iii) In the event of such termination, the Executive's entitlement
to the accrual of profit-sharing under the Company's profit-sharing plan
shall terminate upon the effective date of termination. Any unpaid
profit-sharing benefits to which the Executive is entitled as of such
date shall be paid to the Executive no later than one (1) month
thereafter.
(iv) In the event of such termination, the right of the Executive to
receive any stock of the Company under the Plan, as required by Section
7 hereof, shall immediately vest with respect to all stock required to
be granted pursuant to Section 7 and the vesting schedule set forth in
Exhibit 7 shall be of no further force or effect.
(v) Following such termination, the Company shall continue to provide
such medical and other benefits to Executive as it is required by law to
provide and such other benefits as called for pursuant to the Company's
then current plans and policies, if any.
(vi) The Company shall also pay to the Executive a cash bonus for such
calendar year, if, but only if, a bonus or bonuses are declared for the
salaried officers and directors of the Company for such calendar year,
in a minimum amount as determined as set forth in Section 4(b) above.
(vii) In the event of such termination, all unvested and
unexercisable Options, granted pursuant to Section 3 hereof, shall
immediately vest and become exercisable. All Options not exercised
within sixty (60) days after the effective date of such termination
shall terminate.
(c) Involuntary Termination With Cause.
(i) In the event that the Executive engages in willful misconduct or
gross negligence in his performance of the services contemplated by this
Agreement, or engages in conduct which is otherwise materially
detrimental to the Company's interest, including but not limited to the
commission of a felony or perpetration of a common law fraud, the
Company may terminate this Agreement for cause by giving written notice
to the Executive stating that it is the Company's intention to terminate
the Agreement effective immediately, and the Agreement shall so
terminate.
(ii) In that event, and provided the Executive executes a notice of
resignation from any position(s) he holds with the Company, a
confidentiality agreement, and a mutual release with the Company
(concerning its subsidiaries and affiliates, and its present and former
officers, directors, and employees), in the form attached hereto with
blanks appropriately completed. The Company shall pay severance pay to
the Executive in the amount of $75,000. Such severance pay shall be
paid in a lump sum, within thirty (30) days after the effective date of
termination.
(iii) In the event of such termination, the Executive's entitlement
to the accrual of profit-sharing under the Company's profit-sharing plan
shall terminate upon the effective date of termination. Any unpaid
profit-sharing benefits to which the Executive is entitled as of such
date shall be paid to the Executive no later than one (1) month
thereafter.
(iv) Following such termination, the Company shall continue to provide
such medical and other benefits to Executive as it is required by law to
provide and such other benefits as called for pursuant to the Company's
then current plans and policies, if any.
(v) In the event of such termination, the right of the Executive to
receive any stock of the Company granted pursuant to the Plan as
required by Section 7 hereof, shall be limited to stock which has become
vested pursuant to the provisions of Section 7 and column 3 of Exhibit 7
prior to the date of termination.
(vi) In the event of such termination, the Executive shall be entitled,
for a period of sixty (60) days after the effective date of such
termination, to exercise all Options which have vested and become
exercisable, pursuant to the provisions of Section 3 hereof, prior to
the effective date of such resignation. All Options not so exercised
shall terminate.
(d) Liquidation Of The Company.
(i) In the event that the Board of Directors votes to liquidate the
Company, the Executive shall not be guaranteed employment with the
Company for more than one (1) month from the date of the vote to
liquidate the Company, and his employment and this Agreement shall
terminate after said one (1) month, unless the Board of Directors
decides that the Executive's employment should be continued to assist in
the orderly liquidation of the Company, in which case the Executive's
employment shall continue subject to termination at any time thereafter
by the Board of Directors. In no event shall any such continuation
extend for a period of more than four (4) months from the date of the
vote to liquidate.
(ii) When the Executive's employment is terminated as a result of the
liquidation of the Company, the Company shall pay severance pay to the
Executive in an amount equal to $150,000, provided he executes a notice
of resignation from any position(s) he holds with the Company, a
confidentiality agreement, and a mutual release with the Company
(concerning its subsidiaries and affiliates, and its present and former
officers, directors, and employees), in the form attached hereto with
blanks appropriately completed. Such severance pay shall be paid in a
lump sum, on the effective date of termination.
(iii) In the event of such termination, the right of the
Executive to receive any stock of the Company under the Plan, as
required by Section 7 hereof, shall immediately vest with respect to all
stock required to be granted pursuant to Section 7 and the vesting
schedule set forth in Exhibit 7 shall be of no further force or effect.
(iv) In the event of such termination, all unvested and unexercisable
Options, granted pursuant to Section 3 hereof, shall immediately vest
and become exercisable. All Options not exercised within sixty (60)
days after the effective date of such termination shall terminate.
(e) Change of Control
(i) If, after a "Change of Control" (as hereinafter defined) of the
Company, either (A) the Company shall terminate the employment of the
Executive during the period of employment under this Agreement for any
reason other than cause, as defined herein, or cause a reduction in the
Executive's responsibilities or authority or compensation or other
benefits provided under this Agreement without the written consent of
the Executive, or (B) the Executive shall voluntarily resign upon
written notice to the Company, then (notwithstanding anything contained
in Section 6(a) hereof to the contrary) the Company shall pay to the
Executive a sum equal to the Executive's then annual salary times the
number of years, pro rated for any partial year, remaining in the term
of this Agreement. Such payment shall paid in a lump sum, within thirty
(30) days after such termination, reduction or resignation.
(ii) In the event of such termination or resignation upon a "Change of
Control", the right of the Executive to receive any stock of the Company
under the Plan, as required by Section 7 hereof, shall immediately vest
with respect to all stock required to be granted pursuant to Section 7
and the vesting schedule set forth in Exhibit 7 shall be of no further
force or effect.
(iii) In the event of such termination or resignation upon a "Change
of Control", the Executive and his spouse shall be entitled to the
continuation of health related benefits (including life and disability
insurance) in an amount equal to at least the amount of such benefits
provided to the Executive on the date of a Change of Control. Unless
otherwise terminated pursuant to this Section 6(e)(iii), such
continuation of benefits shall continue until the death of the Executive
and his spouse notwithstanding the termination of this Agreement.
However, such benefits shall terminate (i) as to the Executive and his
spouse upon the occurrence of Executive's employment by another company
or other business organization (not including self employment) which
actually provides, at such other company's expense, comparable medical
benefits for which the Executive is eligible ("Employment With
Comparable Benefits") or (ii) as to his spouse only, upon the occurrence
of his spouse's Employment With Comparable Benefits or remarriage.
Provided, however, that in order to obtain the continuation of benefits
described in this Section 6(e)(iii), the Executive or his spouse, as the
case may be, shall pay to the Company an amount equal to the amount that
the Company would otherwise have been required to pay on behalf of the
Executive and/or his spouse with respect to such health benefits if the
Executive were then employed by the Company.
(iv) In the event that payments under this Section 6(e) are determined
to constitute "excess parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended, the Executive
shall have the right, but not the obligation, to require the Company to
reduce the amount payable pursuant to this Section 6(e) to the maximum
amount which may be paid to Executive without such payments constituting
"excess parachute payments."
(v) For the purposes of this Agreement a "Change of Control" shall be
deemed to have taken place if: (A) any Person (as hereinafter defined)
except a Related Party (as hereinafter defined) shall become the record
or beneficial owner in the aggregate of 20% or more of the Common Stock
of the Company then outstanding (whether or not such acquisition is
approved by the Company's Board of Directors) and individuals who
constituted the Board of Directors of the Company prior to such Person
becoming the record or beneficial owner of 20% or more of the Company's
Common Stock (the "Existing Directors") cease to constitute a majority
of the Board for any reason including, but not limited to, the
nomination or election of individuals to the Board with the affirmative
vote of a majority of the Existing Directors who were members of the
Board at the time of such nomination or election; or (B) any Person,
except a Related Party, makes a proxy solicitation in connection with
the election of directors of the Company and if any of the Executive and
Fenwick H. Garvey, Matthew R. Naula, Bruce M. Chodash and Allen S.
Greene stand for reelection to the Board and each of them so standing
for reelection is not reelected by the Company's shareholders; or (C)
following an unsolicited public tender offer for all or substantially
all of the Company's outstanding common stock all, or substantially
all, of
the assets of the Company are sold and, following such sale, the
Executive is not employed by the
purchaser thereof on substantially the terms contained in this
Agreement.
Person means any individual, firm, corporation, partnership, syndicate,
other entity or group (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
together with all Affiliates and Associates (each as defined in Rule 12b-
2 under the Exchange Act) of such Person.
Related Party means the Executive, or any Affiliate or Associate of the
Executive, and any employee benefit plan of the Company and any Person
or entity organized, appointed or established by the Company for or
pursuant to the terms of any such employee benefit plan.
Notwithstanding anything contained herein to the contrary, expiration,
renewal, non-renewal, amendments, substitutions or termination of that
certain Amended and Restated Stock Pooling Agreement, dated March 15,
1994, by and between Fenwick H. Garvey, Bruce M. Chodash and Matthew R.
Naula shall not be deemed to be an acquisition of securities of the
Company for purposes of clause (A) of this subsection.
(vi) Notwithstanding anything contained herein to the contrary, the
right of the Executive to receive any payment or other benefit under
this subsection shall be conditioned upon the execution by the Executive
of a Notice of Resignation from any position(s) he holds with the
Company, a confidentiality agreement and a mutual release with the
Company (concerning its subsidiaries and affiliates, and its present and
former officers, directors and employees) in the form attached hereto
with blanks appropriately completed.
7. Company Stock.
(a) In connection with the execution of the Original Agreement, the
Company sought to provide an equity building program for the Executive
as described herein. The parties stipulate that this program is not in
lieu of any discretionary bonus which the Company may declare from time
to time for its employees.
(i) The Company has since the date of the original Agreement made
stock purchases and restricted stock grants to the Executive pursuant to
the Plan and further agrees, to the extent permitted by applicable law,
to make additional stock purchases and restricted stock grants to the
Executive pursuant to the Plan, all in accordance with this Section 7
and Exhibit 7 attached hereto. Each restricted stock grant made
pursuant to this Section 7(a) shall begin to vest and shall vest as
indicated on Exhibit 7 and otherwise in accordance with the terms of the
Plan, provided that (A) the Executive continues to be employed by the
Company on such indicated dates and (B) the Executive continues to own
all shares of stock purchased by him prior to such dates pursuant to
Section 7(b) immediately below.
(ii) The determination of the method by which the Company purchases
shares pursuant to this Section 7(a) shall be made by the Company in its
sole reasonable discretion in a manner consistent with its past
administration of the Plan.
(iii) In the event of circumstances involving financial hardship to
the Executive, the Executive may petition the Board of Directors of the
Company to waive (in whole or in part) the requirement of clause (B) of
Section 7(a)(i) hereof. The Board of Directors of the Company shall be
free to grant or deny all or a portion of any such waiver in its sole
discretion.
(b) In order to obtain the benefits described in this Section 7, the
Executive (or a personal benefit plan(s) to which he, his wife or
children is/are the sole beneficiary(ies)) has made open market
purchases in the aggregate amount of $250,000.
8. Notice.
Any notice to be given by either party under this Agreement shall be in
writing, mailed by certified mail with return receipt requested, and
addressed to the other party at the address stated herein or such other
address as may subsequently have been furnished by such other party in
writing. Any such notice shall be deemed to have been given on the date
of mailing. Notices to the Company shall be sent to its National
Headquarters/Northeast at:
80 Main Street
West Orange, New Jersey 07052;
and notices to the Executive shall be sent to him at:
168 Western Drive
Short Hills, New Jersey 07578.
9. Governing Law.
This Agreement has been executed and delivered in the State of New
Jersey and shall in all respects be governed by and construed and
enforced in accordance with the laws of New Jersey, including all
matters of construction, validity, and performance.
10. Entire Agreement.
This Agreement constitutes the entire agreement of the parties with
respect to the Executive's employment and his compensation therefor,
specifically superseding all prior employment agreements between the
Executive and the Company and any modifications thereof
prior to the date of this Agreement; provided, however, that this
Agreement shall not limit or in
any way affect the rights, duties, or obligations that the Executive may
have under any benefit
plan of the Company, including, but not limited to, any pension plan,
profit-sharing plan, or
medical or health plan, except as may specifically be set forth herein.
11. Modifications, etc.
No modification, amendment, or waiver of any of the provisions of this
Agreement
shall be effective unless in writing specifically referring to this
Agreement and signed by both
parties.
12. Enforcement of Agreement.
The failure of either party at any time to enforce any of the provisions
of this Agreement or to require performance by the other party of any of
the provisions hereof shall not operate as or be construed as a waiver
of such provisions or to affect either the validity of this Agreement,
or any part hereof, or the right of either party thereafter to enforce
each and every provision in accordance with the terms of this Agreement.
13. Severability.
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects and to the fullest extent
permitted by law as if such invalid or unenforceable provision were
omitted.
14. Binding Agreement; Assignment.
This Agreement shall be binding upon and shall inure to the benefit of
the Company and any legal successor to the Company shall be deemed to be
substituted for the Company under
the provisions hereof.
This Agreement shall also be binding upon and shall inure to the benefit
of the Executive, his heirs, executors, legal representatives and
assigns.
Other than as set forth above in this Section 14, neither the Company
nor Executive shall have the right to assign its or his obligations or
duties hereunder. Except as provided in Section 6(e) hereof, in the
event that the Company proposes to Executive, in connection with a sale
of all or a substantial portion of the assets of the Company to an
entity with tangible net equity equal to or greater than that of the
Company as of such date, that the Executive consent to the assignment of
the Company's obligations and duties hereunder (and the right to
Executive's services hereunder) to such Purchaser, and Executive does
not give such consent, then the Company shall have the right in its
discretion, effective upon the consummation of the above-referenced
sale, to terminate this Agreement. If the Company so terminates, the
Executive shall have such rights as provided for in Section 6(b) above.
15. Arbitration.
Any claims, controversies, demands, disputes or differences between or
among the parties hereto or any persons bound hereby arising out of, or
by virtue of, or in connection with, or otherwise relating to this
Agreement shall be submitted to and settled by arbitration conducted in
Newark, New Jersey before one or three arbitrators, each of whom shall
be knowledgeable in the fields of employment law and investment banking.
Such arbitration shall otherwise be conducted in accordance with the
rules then obtaining of the American Arbitration Association. The
parties hereto agree to share equally the responsibility for all fees of
the arbitrators, abide by any decision rendered as final and binding,
and waive the right to appeal the decision or otherwise submit the
dispute to a court of law for a jury or non-jury trial. The parties
hereto specifically agree that neither party may appeal or subject the
award or decision of any such arbitrator(s) to appeal or review in any
court of law or in equity or by any other tribunal, arbitration system
or otherwise. Judgement upon any award granted by such an arbitrator(s)
may be enforced in any court having jurisdiction thereof. The successful
party to the arbitration shall be entitled to reimbursement of fees and
expenses from the losing party in an amount not to exceed $50,000.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives on the day and date
first above written.
ATTEST: RYAN, BECK & CO., INC.
By:ALLEN S. GREENE, President and Chief Executive Officer
WITNESS:
BEN A. PLOTKIN
DESIGNATION OF BENEFICIARY
For purposes of the payment of death benefits in accordance with
the within Amended and Restated Employment Agreement, I hereby designate
__________________ as my beneficiary to receive such payments, subject
to any conditions imposed by law.
WITNESS:
BEN A. PLOTKIN
DATED:
<TABLE>
EXHIBIT 7
(Ben Plotkin Restricted Stock Matters)
<CAPTION>
COLUMN 1 COLUMN 2 COLUMN 3
Company Purchase/DateCommencement of Vesting/Date Vesting/Date and
Grant/Date
<S> <C> <C>
$50,000/November 1992 $50,000/December 1992 $50,000/January 1,
1996
$50,000/January 1993 $50,000/December 1993 $50,000/January 1,
1997
$50,000/January 1994 $50,000/December 1994 $50,000/January 1, 1998
$100,000/August- $50,000/December 1995 $50,000/January 1,
1999
September 1994 $50,000/December 1996
$50,000/January 1, 2000
</TABLE>
<TABLE>
RYAN, BECK & CO. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
<CAPTION>
Years Ended December 31,
Pro Forma1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income (loss) before provision
(benefit) for income taxes $2,066 $2,866 $7,880 $6,785 $5,586$484
Add:
Interest Expense - net 1,273 473 200 127 10715
Rental expense representative
of interest factor 196 196 172 193 197 196
Earnings for computation purposes $3,535 $3,535 $8,252 $7,105
$5,890 $695
Fixed charges and preferred stock
dividend requirements:
Interest expense - net $1,273 $473 $200 $127 $107$15
Rental expense representative
of interest factor 196 196 172 193 197 196
Pretax effect of dividends on
preferred stock of the company 299 299 435 - --
Combined fixed charges and
preferred stock dividend
requirements $1,768 $968 $807 $320 $304 $211
Ratio of earnings to combined
fixed charges and preferred
stock dividend requirements 2.00 3.65 10.23 22.20 19.383.29
</TABLE>
ANNUAL REPORT ON FORM 10K
<TABLE>
Item 6 - Selected Financial Data
<CAPTION>
At or for the years ended December 31,
(In thousands, except per share amounts) 1995 1994 1993 19921991
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues:
Principal transactions $13,224 $11,770$14,122 $12,734 $8,578
Commissions 2,802 2,362 3,456 1,747 964
Investment banking 7,840 14,092 9,232 8,864 3,760
Interest and dividends 894 641 675 660 491
Other 228 235 368 187 101
Total Revenues 24,988 29,100 27,853 24,192 13,894
Operating expenses:
Compensation and benefits 15,235 15,526 15,358 13,050 9,148
Communications 1,288 1,074 1,174 1,066 844
Occupancy and equipment rental
and depreciation 991 822 883 882 828
Floor brokerage, exchange and clearing fees1,7301,131 1,737 1,3961,0
10
Interest 473 200 127 107 15
Other operating expenses 2,405 2,467 1,789 2,105 1,565
Total operating expenses 22,122 21,220 21,068 18,606 13,410
Income (loss) before income taxes2,866 7,880 6,785 5,586 484
Income tax provision (benefit) 1,078 3,114 2,631 2,013 (37)
Net income (loss) $ 1,788 $ 4,766$ 4,154 $ 3,573 $ 521
Earnings (loss) per share - primary<F1>$ .50$ 1.37$ 1.12$
.97 $ .14
Earnings (loss) per share - fully diluted$ .50$ 1.32$ 1.12$
.97 $ .14
Weighted average shares - primary<F1> 3,250 3,296 3,701 3,699
3,771
Weighted average shares - fully diluted 3,574 3,609 3,701 3,699
3,771
Selected Statement of Financial Condition Data:
Total assets $38,126 $20,396$19,442 $32,209 $19,767
Total liabilities 26,040 7,915 7,248 20,680 8,145
Total stockholders' equity 12,086 12,481 12,194 11,529 11,622
Book value per share - fully diluted$ 3.40$ 3.52$ 3.29$ 3.12
$ 3.26
Cash dividends declared $ .69$ .91$ .91$ 1.15$
.03
<FN>
<F1>
All share and per share information has been retroactively restated to
reflect a 5% stock dividend declared on January 26, 1996. Net income
and net income per share information has been restated to reflect tax
refunds of $92,000, $93,000 and $39,000 for the years ended December 31,
1994, 1993 and 1992, respectively.
</FN>
</TABLE>
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis should be read in conjunction with
the Company's consolidated financial statements and the notes related
thereto presented elsewhere herein. The discussion of results, causes
and trends should not be construed to imply any conclusion that such
results, causes or trends will necessarily continue in the future.
Ryan, Beck is principally engaged in the underwriting, distribution and
trading of tax-exempt, bank equity and debt securities. The company
also provides consulting, research, and financial services to the
banking and thrift industries. All aspects of the company's business
are highly competitive and impacted by regulatory, economic and other
factors outside of its control, including the volatility and price
levels of securities markets, the demand for investment banking services
and interest rate changes. In addition, a significant portion of the
company's expenses, including salaries and benefits, occupancy and
communications, are relatively fixed and do not vary with market
activity. Consequently, operating results of any individual period
should not be considered representative of future performance.
RESULTS OF OPERATIONS
The following table sets forth certain information regarding the
revenues of the Company by source:
<TABLE>
Selected Financial Data
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
Amount PercentAmount Percent AmountPercent
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Principal transactions:
Tax-Exempt debt securities $ 4,94019.8%$ 5,046 17.3%$ 5,249 18.8%
Taxable debt securities 2,302 9.2 1,729 5.9 2,818 10.2
Equity securities 5,98223.9 4,995 17.2 6,055 21.7
Total 13,224 52.9 11,770 40.414,122 50.7
Commissions:
Tax-Exempt debt securities - - - - 187 .7
Equity securities 1,395 5.6 1,281 4.4 1,833 6.6
Mutual funds 1,407 5.6 1,081 3.7 1,436 5.1
Total 2,802 11.2 2,362 8.1 3,456 12.4
Investment banking(1):
Tax-Exempt debt securities 913 3.7 1,258 4.3 2,469 8.9
Taxable debt securities 456 1.8 309 1.2 381 1.4
Equity securities 1,977 7.9 623 2.1 2,028 7.3
Consulting, placement and valuation fees 4,494 18.011,90240.9
4,354 15.6
Total 7,840 31.4 14,092 48.5 9,232 33.2
Interest and dividends 894 3.6 641 2.2 675 2.4
Other 228 .9 235 0.8 368 1.3
Total $ 24,988100.0%$ 29,100100.0%$ 27,853100.0%
<FN>
<F1>
(1)Investment banking revenue includes management fees and underwriting
fees earned in connection with all underwriting participations and
selling concessions earned in connection with the Company's
participation in tax-exempt debt, corporate debt and equity
underwritings.
</FN>
</TABLE>
Since the various activities of the Company are interdependent and
substantially the same sales personnel and office facilities are engaged
in the generation of the above revenues, the Company does not believe
that a meaningful allocation of expenses can be made among these
operations.
The following tables set forth, for the periods indicated, (i) items in
the Company's Consolidated Statement of Earnings as percentages of total
revenue and (ii) the increase (or decrease) by item as a percentage of
the amount for the previous period:
<TABLE>
Percentage of Total Revenues
<CAPTION>
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Revenues:
Principal transactions 52.9% 40.4% 50.7%
Commissions 11.2 8.1 12.4
Investment banking 31.4 48.5 33.2
Interest and dividends 3.6 2.2 2.4
Other .9 .8 1.3
Total revenues 100.0 100.0 100.0
Operating expenses:
Compensation and benefits 61.0 53.3 55.1
Communications 5.1 3.7 4.2
Occupancy and equipment rental and depreciation 4.02.83.2
Floor brokerage, exchange and clearing fees 6.93.96.2
Interest 1.9 .7 .5
Other operating expenses 9.6 8.5 6.4
Total operating expense 88.5 72.9 75.6
Income before income taxes 11.5 27.1 24.4
Income tax provision (benefit) 4.3 10.7 9.5
Net income 7.2% 16.4% 14.9%
</TABLE>
<TABLE>
Period to Period Change
<CAPTION>
1995 1994
Compared withCompared with
1994 1993
<S> <C> <C>
Revenues:
Principal transactions 12.4% (16.7)%
Commissions 18.6 (31.7)
Investment banking (44.4) 52.6
Interest and dividends 39.5 (5.0)
Other (3.0) (36.1)
Total revenues (14.1) 4.5
Operating expenses:
Compensation and benefits (1.9) 1.1
Communications 20.0 (8.5)
Occupancy and equipment rental and depreciation 20.6(6.9)
Floor brokerage, exchange and clearing fees 53.0(34.9)
Interest 136.5 57.5
Other operating expenses (2.5) 37.9
Total operating expenses 4.3 .7
Income before income taxes (63.6) 16.1
Income taxes (65.4) 18.4
Net income (62.5)% 14.7%
</TABLE>
1995 COMPARED WITH 1994
All share and per share data were adjusted to reflect the 5% stock
dividend declared on January 26, 1996.
Net income for the year ended December 31, 1995 was $1,788,000 compared
to $4,766,000 during the same period ending December 31, 1994. On a
fully diluted basis, earnings per common share decreased 62.1% to $.50
per share in 1995 compared to $1.32 per share in 1994. Income tax
expense and net income for the year ended December 31, 1994 has been
restated to reflect a $92,000 income tax refund (equal to $.03 per
share) resulting from amending that year's income tax return.
Total revenues during 1995 decreased $4,112,000 or 14.1% to $24,988,000
from $29,100,000 in 1994.
Revenues from principal transactions increased $1,454,000 or 12.4% to
$13,224,000 in 1995 from $11,770,000 in 1994. This increase can be
attributed to an increase of $987,000 from trading equity securities, an
increase of $573,000 from trading corporate debt securities, which was
partially offset by a decrease of $106,000 from trading tax-exempt
securities. The increase in trading revenues attributable to equity and
corporate securities reflected greater demand during 1995 for exchanging
securities in a lower interest rate environment as compared with 1994.
The decrease in revenue attributable to trading tax-exempt securities
primarily reflects reduced product availability and lower yields.
Revenues from investment banking services decreased $6,252,000 or 44.4%
to $7,840,000 in 1995 from $14,092,000 in the comparable 1994 period.
This decrease was due to a $7,408,000 decrease in revenues related to
consulting, placement and valuation fees and $345,000 from underwriting
tax-exempt debt securities which was partially offset by an increase in
revenue from underwriting equity securities and taxable debt securities
of $1,354,000 and $147,000 respectively.
The decrease in fee income resulted from a reduced number of mutual to
stock thrift conversions, including mutual holding companies which
closed in 1995 as compared to 1994, the smaller size of the transactions
which closed in 1995, and decreased fee income from merger and
acquisition advisory work. Despite the closing of several large
conversion or mutual holding company transactions subsequent to December
31, 1995 which resulted in significant revenues, there is expected to be
greater uncertainty with respect to future revenues resulting from
thrift conversions or mutual holding company transactions because of
increased competition and potential changes in federal regulatory policy
regarding thrift conversions. The reduced fee income from merger and
acquisition advisory work is primarily due to the smaller size of many
of the Company's merger and acquisition transactions in 1995. The
increase in revenues from underwriting equity securities resulted
primarily from the closing of several underwritings for financial
institutions seeking additional capital for growth purposes as well as
the closing of the Ryan, Beck Banking Opportunity Trust, Series 2.
Commission revenue increased $440,000 or 18.6% to $2,802,000 in 1995
from $2,362,000 in 1994. The increase in revenues is primarily due to
an increase in mutual fund commissions of $326,000 and in equity
commissions of $114,000 reflecting increased activity in the general
stock market.
Revenue from interest and dividends increased $253,000 or 39.5% to
$894,000 in 1995 from $641,000 in 1994. This increase is a result of
increased levels of inventory carried during 1995, partially offset by a
lower interest rate environment in 1995.
Total operating expenses increased $902,000 or 4.3% to $22,122,000 in
1995 from $21,220,000 in 1994. This increase is primarily attributed to
an increase in Floor brokerage, exchange and clearance fees of $599,000
or 53.0%, and interest expense of $273,000 or 136.5%. The increase in
Floor brokerage, exchange and clearance fees reflects both increased
activity and a rebate of certain clearance costs incurred in connection
with transferring to a new clearing agent in 1994. The increase in
interest expense reflects the cost of carrying higher levels of
inventory during 1995.
1994 COMPARED WITH 1993
Net income for the year ended December 31, 1994 was $4,766,000 compared
to $4,154,000 during the same period ending December 31, 1993. On a
fully diluted basis, earnings per common share increased 17.9% to $1.32
per share in 1994 from $1.12 per share in 1993. Income tax expense and
net income for the years ended December 31, 1994 and 1993 have been
restated by $92,000 and $93,000, respectively.
Total revenues during 1994 increased $1,247,000 or 4.5% to $29,100,000
in 1994 from $27,853,000 in 1993.
Revenues from principal transactions decreased $2,352,000 or 16.7% to
$11,770,000 in 1994 from $14,122,000 during 1993. This decrease can be
attributed to a decrease of $1,089,000 from trading corporate debt
securities, a decrease of $1,060,000 from trading equity securities, and
a decrease of $203,000 from trading tax-exempt securities. The decrease
in trading revenues attributable to tax-exempt and corporate securities
reflected greater demand during 1993 for exchanging securities in a
lower interest rate environment as compared with a weak market for most
of 1994. The decrease in revenue attributable to trading equity
securities primarily reflects reduced investor interest in bank and
thrift stocks and an overall weakness in bank and thrift equities.
Revenues from investment banking services increased $4,860,000 or 52.6%
to $14,092,000 in the 1994 period from $9,232,000 in the comparable 1993
period. This was due to a $7,548,000 increase in revenues related to
consulting, placement and valuation fees which was partially offset by a
decline in revenue from underwriting equity securities of $1,405,000, a
decrease in revenue from underwriting tax-exempt debt securities of
$1,211,000 and a $72,000 decrease in revenue from underwriting taxable
debt securities.
The increase in fee income resulted from greater activity in mutual to
stock thrift conversions, including mutual holding companies and
increased merger and acquisition activity among banks and thrifts.
Additionally, the weaker market for financial institution equity
securities creates greater uncertainty about future merger and
acquisition revenues. The decrease in revenues from underwriting equity
securities results primarily from reduced interest in raising capital by
financial institutions which have at present adequate capital. Much of
the prior underwriting activity in tax-exempt debt securities was due to
refinancing activity. As a result of recent increases in interest
rates, refinancing activity declined significantly during 1994 and is
expected to remain at low levels in the foreseeable future.
Commission revenue decreased $1,094,000 or 31.7% to $2,362,000 in 1994
from $3,456,000 in 1993. The decrease in revenues includes a decrease
in mutual fund commissions of $355,000 and in equity commissions of
$552,000 and is mainly attributable to reduced activity in the general
stock market.
Revenue from interest and dividends decreased $34,000 or 5.0% to
$641,000 in 1994 from $675,000 in 1993. This decrease is a result of
decreased levels of inventory carried during 1994, partially offset by a
higher interest rate environment in 1994.
Total operating expenses increased $152,000 or .7% to $21,220,000 in
1994 from $21,068,000 in 1993. This increase is primarily attributed to
an increase in other operating expenses of $678,000 or 37.9% partially
offset by a decrease in Floor brokerage, exchange and clearance fees of
$606,000 or 34.9%. The increase in other operating expenses is a result
of an increase in the legal reserve as well as an increase in bad debt
expense resulting from recording additional bad debt reserves. The
decrease in Floor brokerage, exchange and clearance fees reflects both
reduced activity, lower costs and a rebate of certain 1994 clearance
costs incurred in connection with transferring to a new clearing agent.
LIQUIDITY AND CAPITAL FUNDS
As of December 31, 1995, the Company's Consolidated Statement of
Financial Condition reflects an essentially liquid financial position,
with most of the Company's assets consisting of cash or assets readily
convertible into cash. The Company's securities positions in its
trading accounts (both long and short) are, in most instances, readily
marketable.
The Company finances its business through the use of available capital
and short term secured borrowings. The Company maintains a facility
pursuant to which it may borrow additional funds on a secured short-term
basis from its clearing broker. The amount available for borrowing
under this facility is related to the level of securities inventory at
the clearing broker which may be pledged as collateral; the borrowing
rate for such funds at December 31, 1995 was 7.375%. The Company may
seek to increase its capital position in the future to support
additional growth.
The Company is subject to the SEC's net capital requirements. The
Company's regulatory net capital has consistently exceeded such minimum
net capital requirements. As of December 31, 1995, the Company had
aggregate net capital, after required adjustments, of $5,663,000 which
exceeded the minimum net capital requirements by $4,663,000.
EFFECTS OF INFLATION
Because the company's assets are largely liquid, and because securities
inventories are carried at current market values, the impact of
inflation is reflected in its consolidated financial statements.
However, the rate of inflation also affects expenses such as employee
compensation, rent, and communications, and such effects may not be
readily recoverable through increased commission rates, trading profits
or fees. To the extent that inflation has other adverse effects on
prices and activities in the securities markets and, in particular, on
interest rate conditions in the credit markets, it may adversely affect
the Company's financial position and results of operations.
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
(Dollars in thousands, except per share data)
%Increase
1995 1994 (DECREASE)
<S> <C> <C> <C>
Total revenue $24,988 $29,100 (14%)
Total expenses 22,122 21,220 4%
Net income 1,788 4,766 (62%)
Net income per share:
Primary .50 1.37 (64%)
Fully diluted .50 1.32 (62%)
Dividends per share .69 .91 (24%)
Shareholders' equity 12,086 12,481 (3%)
Return on average shareholders' equity 15.1% 40.7% -
Shareholders' equity per share - fully diluted 3.40 3.52(3%)
Weighted average number of common and
common equivalent shares outstanding(F1):
Primary 3,250 3,296 -
Fully diluted 3,574 3,609 -
Number of shares outstanding at year end:
Primary 3,256 3,235 -
Fully diluted 3,555 3,544 -
<FN>
<F1>
Does not include 125,851 and 150,000 shares held by the company's
Employee Stock Ownership Plan at December 31, 1995 and 1994
respectively.
All share and per share information has been retroactively restated to
reflect a 5% stock dividend declared on January 26, 1996. Net income
and net income per share information for 1994 have been restated to
reflect applicable tax refunds resulting from amending the 1994 tax
return.
</FN>
</TABLE>
<TABLE>
SELECTED QUARTERLY FINANCIAL DATA(F1)
<CAPTION>
QUARTER ENDED
March June September December
31 30 30 31
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
1995
Revenues $ 5,533 $ 7,088 $ 6,438 $ 5,929
Income before income taxes 287 1,712 814 53
Income tax provision 100 652 306 20
Net income 187 1,060 508 33
Earnings per share
Primary .05 .31 .14 -
Fully diluted .05 .30 .14 -
Weighted average number of shares
Primary 3,244 3,249 3,259 3,259
Fully diluted 3,574 3,574 3,593 3,567
<CAPTION>
QUARTER ENDED
March June September December
31 30 30 31
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
1994 (Restated)
Revenues $7,371 $5,879 $6,145 $9,705
Income before income taxes 2,360 1,381 1,282 2,857
Income tax provision 934 528 482 1,170
Net income 1,426 853 800 1,687
Earnings per share
Primary .39 .24 .24 .50
Fully diluted .39 .24 .21 .48
Weighted average number of shares
Primary 3,701 3,269 3,050 3,162
Fully diluted 3,701 3,624 3,554 3,549
<CAPTION>
MARKET AND DIVIDEND INFORMATION
Closing Market Price Dividends Declared
High Low Regular Special
<S> <C> <C> <C> <C>
1995:
First Quarter $7.375 $6.250 $.048 $.305
Second Quarter 7.000 5.625 .048 .000
Third Quarter 8.000 5.625 .048 .124
Fourth Quarter 7.375 6.500 .048 .067
1994:
First Quarter $7.125 $5.500 $ .010 $ .171
Second Quarter 7.125 5.500 .010 .343
Third Quarter 6.875 5.000 .010 .200
Fourth Quarter 7.500 6.250 .048 .124
<FN>
<F1>
All share and per share data have been adjusted for the 5% stock
dividend declared on January 26, 1996.
The closing market prices are rounded to the nearest 1/8.
</FN>
</TABLE>
Item 8 - Financial Statements and Supplementary Data
<TABLE>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<CAPTION>
ASSETS
DECEMBER 31
1995 1994
<S> <C> <C>
Cash $ 71 $ 64
Cash segregated under federal and other regulations 1111
Receivable from:
Brokers, dealers and clearing organizations 90942
Accrued revenues 110 51
Other 302 358
Securities owned, at market value 34,698 18,688
Prepaid income taxes 228 -
Deferred income taxes 634 433
Property and equipment, at cost, less
accumulated depreciation and amortization 703508
Other assets
460 241
Total assets $ 38,126 $ 20,396
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
DECEMBER 31
1995 1994
<S> <C> <C>
Payable to clearing broker $ 16,180 $ 1,284
Securities sold, but not yet purchased,
at market value 5,809 891
Accrued employee compensation and benefits 1,6982,163
Accounts payable and other accrued expenses 1,678
1,460
Income taxes payable - 1,271
ESOP loan obligation 675 846
Total liabilities 26,040 7,915
Commitments and contingencies
Stockholders' equity
Preferred stock - $.10 par value
Authorized: 2,000,000 shares
Issued: 410,855 and 444,180 in 1995 and 1994, respectively4144
Common stock - $.10 par value
Authorized: 30,000,000 shares
Issued: 3,270,092 and 3,081,049 shares
in 1995 and 1994, respectively 327308
Additional paid-in capital 12,04910,907
Retained earnings 818 2,547
Treasury stock, at cost, 13,618 common shares
(91) -
Unearned compensation - restricted stock grants (401)
(488)
Unearned ESOP compensation (657)
(837)
Total stockholders equity 12,086
12,481
Total liabilities and stockholders' equity $ 38,126$
20,396
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
<S> <C> <C> <C>
Revenues
Principal transactions $ 13,224 $ 11,770 $ 14,122
Commissions 2,802 2,362 3,456
Investment banking 7,840 14,092 9,232
Interest and dividends 894 641 675
Other 228 235
368
Total revenues 24,988 29,100 27,853
Operating expenses
Compensation and benefits 15,235 15,526 15,358
Communications 1,288 1,074 1,174
Occupancy and equipment
rental and depreciation 991 822 883
Floor brokerage, exchange
and clearance fees 1,730 1,131 1,737
Interest 473 200 127
Other 2,405 2,467 1,789
Total operating expenses 22,122 21,220 21,068
Income before provision for income taxes 2,866 7,8806,785
Provision for income taxes 1,078 3,114 2,631
Net income $ 1,788 $ 4,766$
4,154
Earnings per common share:
Primary $ .50 $ 1.37 $ 1.12
Fully diluted $ .50 $ 1.32 $ 1.12
Weighted average number of shares:
Primary 3,250 3,296 3,701
Fully diluted 3,574 3,609 3,701
See notes to consolidated financial statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS EXCEPT SHARE DATA)
<CAPTION>
UnearnedUnearned Total
Additional CompensationESOP Stock-
CommonPreferredPaid-in RetainedRestricted Compen
- - Treasuryholders'
Stock Stock Capital EarningsStock Grants sationStock
Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1993
as previously reported$ 352$ -$10,861$ 277$ -$
- - $ -$11,490
Prior period adjustment- - - 39 - - - 39
Issuance of 13,592 shares through
exercised stock options 1 - 42 - - - -
43
Tax related benefit from stock transac-
tions with employees - - 16 - - - - 16
Retirement of 11,454 shares
of common stock (1) -(23) (18) - - -
(42)
Unearned compensation -
restricted stock grants - - - - (12
2) - - (122)
Net income - - - 4,154 - - - 4,154
Cash dividends declared: Common - - - (3384)
- - - - (3,384)
Balance at December 31, 1993352 - 10,896 1,068
(122) - - 12,194
Conversion of common stock
to preferred stock (635,789 shares) (63) 63 - - --
- - -
Exchange offering costs- - - (110) - - - (110)
Unearned compensation -
restricted stock grants - - - - (466) - -
(466)
Unearned compensation related to
Preferred stock purchased by ESOP - - - - - (994)-
(994)
Amortization of restricted
stock grants - unearned compensation - - - - 100-
- - 100
Amortization of ESOP unearned
compensation - - 9 - - 157 - 166
Conversion of preferred stock
to common stock (191,609 shares) 19 (19) - - - --
- -
Issuance of 625 shares
through exercised stock options - - 2
- - - - - 2
Net income - - - 4,766 - - - 4,766
Cash dividends declared: Common - - - (2,916) - --
(2,916)
Preferred - - - (261)
- - - - (261)
Balance at December 31, 1994 308 44 10,907 2,547 (488) (
837) - 12,481
Tax related benefit from stock transac-
tions with employees - - 16 - - - - 16
Unearned compensation -
restricted stock grants - - - - (167) - -
(167)
Amortization of restricted
stock grants - unearned compensation - - - - 254-
- - 254
Amortization of ESOP unearned
compensation - - 30 - - 180 - 210
Conversion of preferred stock
to common stock (33,325 shares) 3 (3) - - - --
- -
Treasury stock (13,618 shares) - - - - - -
(91) (91)
Net income - - - 1,788 - - - 1,788
Cash dividends declared: Common - - - (2,226) - --
(2,226)
Preferred - - - (179)
- - - - (179)
5% stock dividend declared on
January 26, 1996 16 - 1,096 (1,112)
- - - - -
Balance at December 31, 1995$ 327$ 41$ 12,049$ 818$ (401)
$ (657) $ (91)$ 12,086
See notes to consolidated financial statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities
Net income $ 1,788$ 4,766$
4,154
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 289 165 128
Amortization of restricted stock grants 254 100 48
Amortization of ESOP unearned compensation210 166 -
Deferred income taxes (201) (433) -
Increase (decrease) in allowance
for doubtful accounts (10) 15 5
Increase (decrease) in assets:
Receivables
Brokers, dealers and clearing organizations (867) 331,775
Accrued revenues (59) 38 (24)
Other 66 (64) 111
Securities owned, at market value (16,010) (974) 11,199
Prepaid income taxes (228) - -
Other assets (219) 72 (109)
Increase (decrease) in liabilities
Payables
Payable to clearing broker 14,896 (3,334) (11,580)
Securities sold, but not yet purchased - at
market value 4,918 (49) (883)
Accrued employee compensation and benefits (465) 1,153640
Accounts payable and other accrued expenses 218 75924
Income taxes payable (1,271) 1,226 (1,633)
Total adjustments 1,521 (1,127)
(299)
Net cash provided by operating activities,
carried forward
Cash flows from investing activities:
Capital expenditures (484) (206) (211)
Net cash used in investing activities (484) (206) (211)
Cash flows from financing activities:
Common stock repurchased for restricted stock grants (167) (466)(133)
Principal payments of ESOP obligation (171) (126) -
Proceeds from the exercise of stock options - 2 43
Exchange offering costs - (110) -
Purchase of treasury stock (91) - -
Tax related benefit from stock
transactions with employees 16 - 16
Dividends paid: Common (2,226) (2,916) (3,384)
Preferred (179) (217) -
Net cash used in financing activities (2,818) (3,833) (3,458)
Net increase (decrease) in cash 7 (400) 186
Cash at beginning of year 75 475 289
Cash at end of year $ 82 $ 75$ 475
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 462 $ 228$ 156
Income taxes 2,976 2,322 4,264
Supplemental disclosure of non cash financing activity:
During the year ended December 31, 1994, the Company's Employee
Stock Ownership Plan borrowed $993,750. The Company recorded the
ESOP obligation as a Company liability offset with an equal value
contra-equity account (unearned ESOP compensation) in the Company's
consolidated statements of financial condition.
Disclosure of accounting policy:
For purposes of the consolidated statements of cash flows, the
Company includes in cash all cash and securities segregated in
compliance with federal and other regulations.
See notes to consolidated financial statements.
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Nature of Business and Summary of Significant Accounting
Policies
Nature of Business
The Company is a boutique investment firm that is principally
engaged in the underwriting, distribution and trading of tax-
exempt, bank equity and debt securities. The Company provides
consulting, research and financial services to the banking and
thrift industries, with a focus on corporate finance and merger
related services. The Company also offers a general securities
brokerage business with investment and insurance products for
retail and institutional clients. The Company operates on a fully-
disclosed basis. For regulatory compliance requirements, see Note
9.
The Company, like other securities firms, is affected by economic
and political conditions. Additionally, a substantial portion of
the operations of the Company is subject to developments affecting
municipal finance and financial institutions.
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All intercompany
transactions and accounts have been eliminated.
Recognition of Revenues
The Company's securities transactions (and related revenues and
expenses) are recorded on a trade date basis. Selling concessions,
consulting fees, management fees and underwriting fees, less
related expenses, are recorded in income as earned. All securities
owned, sold, but not yet purchased by the Company are valued at
market which result in unrealized gains and losses reflected in
earnings currently.
Investment banking revenues include gains, losses, and fees net of
syndicate expense arising from securities offerings in which the
Company acts as an underwriter or agent. Investment banking
revenues also include fees earned from providing merger and
acquisition and financial restructuring advisory services.
Reclassifications
Certain reclassifications have been made to prior years' financial
statements to conform to the current year's presentation.
Property and Equipment
Depreciation is provided for either on a straight-line or declining
balance basis using estimated useful lives of three to seven years
for financial statement purposes. Accelerated depreciation methods
are generally used for federal income tax purposes. Leasehold
improvements are amortized over the lesser of the economic useful
life of the improvement or the term of the lease.
Pervasiveness of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Note 2 - Postemployment Benefits
During 1994, the Company adopted Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment
Benefits" ("SFAS 112"). SFAS 112 requires that employers expense
the costs of postemployment benefits paid before retirement,
principally severance benefits (including health care coverage),
over the service lives of employees if certain conditions are met.
Prior to 1994, the Company had no postemployment benefit
agreements, therefore, there was no cumulative effect resulting
from the adoption of SFAS 112. The initial effect of adopting SFAS
112 was a one time after-tax non cash charge of $170,000 ($.05 per
share on a fully diluted basis), which was recognized during 1994.
Compensation expense charged to operations was $47,000 for the year
ended December 31, 1995 (see Note 13).
Note 3 - Securities Owned, at Market Value
<TABLE>
Securities in the Company's trading account consisted of the
following:
<CAPTION>
DECEMBER 31
19951994
(In Thousands)
<S> <C> <C>
States and municipalities $ 19,400 $ 13,604
Corporate debt 1,8331,913
Corporate equity 13,1302,956
U.S. Government and agency 310215
Other 25
- -
Total $ 34,698$ 18,688
</TABLE>
Note 4 - Property and Equipment
<TABLE>
Property and equipment, stated at cost, consist of the following:
<CAPTION>
DECEMBER 31
1995 1994
(In Thousands)
<S> <C> <C>
Office furniture and equipment $ 2,317$ 1,882
Leasehold improvements 912 863
3,229 2,745
Less: Accumulated depreciation
and amortization 2,526 2,237
$ 703 $ 508
</TABLE>
Note 5 - Payable to Clearing Broker
The Company has an agreement with its clearing broker that enables
the Company to borrow by pledging securities owned. As of December
31, 1995 and 1994 the balances due were approximately $16,180,000
and $1,284,000, respectively. At December 31, 1995, the interest
rate paid on these borrowings was 7.375%.
Note 6 - Securities Sold, But Not Yet Purchased
<TABLE>
Securities sold, but not yet purchased consisted of the following:
<CAPTION>
DECEMBER 31
1995 1994
(In Thousands)
<S> <C> <C>
State and municipalities $ 406 $ 179
Corporate debt 347 46
Corporate equity 5,037 666
U.S. Government and agency 19 -
Total $ 5,809$ 891
</TABLE>
Securities sold, but not yet purchased are a part of the Company's
normal activities as a broker and dealer in securities and are
subject to off-balance-sheet market risk of loss should the Company
be unable to acquire the securities for delivery to the purchaser
at prices equal to or less than the current recorded amounts.
Note 7 - Prior Period Adjustment
During October 1995, the Company received total refunds of
approximately $224,000 plus interest resulting from amended tax
returns for the years ended December 31, 1994, 1993, and 1992.
Accordingly, the Company has restated its previously issued 1994
and 1993 financial statements to reflect a correction to its income
tax provision. The impact on previously reported net income and
earnings per share (after giving effect for a 5% stock dividend
paid on February 13, 1996) were as follows:
<TABLE>
Prior Period Adjustment
<CAPTION>
Year ended December 31, 1994 1993
(in thousands) Net Per SharePer Share Net Per Share Per Share
Income PrimaryFully DilutedIncomePrimaryFully Diluted
<S> <C> <C> <C> <C> <C> <C>
Increase from
previously reported $ 92 $ .03 $ .03 $ 93 $ .03$
.03
</TABLE>
Note 8 - Income Taxes
The current provision for federal income taxes has been restated to
reflect $92,000 and $93,000 income tax refunds for the years ended
December 31, 1994 and 1993, respectively resulting from amending
those years' tax returns.
<TABLE>
The provision (benefit) for income taxes consists of:
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
(In Thousands)
<S> <C> <C> <C>
Current Provision:
Federal $ 929$ 2,588$ 1,944
State and local 350 959
687
$ 1,279$ 3,547$ 2,631
Deferred Benefit:
Federal $ (152)$ (329)-
State and local (49) (104)
- -
$ (201)$ (433)$ -
Total $ 1,078$ 3,114$ 2,631
</TABLE>
<TABLE>
Provision (benefit) for income taxes is reconciled to amounts
computed by applying the federal corporate tax rate to income
before income taxes as follows:
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
(In Thousands)
<S> <C> <C> <C>
Tax provision at federal statutory rate $ 974 $ 2,680$ 2,307
State and local income taxes,
net of federal income tax benefit 230 564 453
Net reduction relating to interest income on
state and municipal government obligations(135) (134)(133)
Other 9 4 4
$ 1,078 $ 3,114$ 2,631
</TABLE>
<TABLE>
The tax effects of the principal temporary differences resulting in
a deferred tax asset are as follows:
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994
(In Thousands)
<S> <C> <C>
Deferred compensation -
Restricted stock grants$ (138) $ (40)
Postemployment benefits (123) (113)
Accrued expenses (335) (250)
Other, net (38) (30)
$ (634) $ (433)
</TABLE>
Note 9 - Regulatory Requirements
The Company is subject to the net capital provision of Rule 15c3-
1 under the Securities Exchange Act of 1934 which requires that the
Company's aggregate indebtedness shall not exceed 15 times net
capital as defined under such provision. Additionally, the
Company, as a market maker, is subject to supplemental requirements
of Rule 15c3-1(a)4 which provides computation for the net capital
to be based on the number and price of issues in which markets are
made by the Company, not to exceed $1,000,000. At December 31,
1995 and 1994, the Company's net capital was approximately
$5,663,000 and $9,198,000 (as restated), respectively, which
exceeded net capital rule requirements by approximately $4,663,000
and $8,198,000 (as restated), respectively.
The Company operates under the provisions of paragraph (K)(2)(ii)
of Rule 15c3-3 of the Securities and Exchange Commission as a fully-
disclosed broker and, accordingly, customer accounts are carried on
the books of the clearing broker. However, the Company safekeeps
and redeems municipal bond coupons for the benefit of its
customers. Accordingly, the Company is subject to the provision of
SEC Rule 15c3-3 relating to possession or control and customer
reserve requirements.
Note 10 - Common Stock Dividend, Earnings per Common Share and Dividends
Paid
On January 26, 1996, the Company's Board of Directors declared a 5%
stock dividend for shareholders of record as of February 5, 1996.
The stock dividend is payable on February 13, 1996. Accordingly,
all share and per share information in the consolidated statements
of operations have been restated to reflect this stock dividend
except as noted.
Primary earnings per share are computed by deducting preferred
dividends from net income in order to determine net income
attributable to common stockholders. This amount is then divided
by the weighted average number of common shares outstanding and
common stock equivalents arising from stock options. The weighted
average number of common shares outstanding for primary earnings
per share is 3,250,000, 3,296,000 and 3,701,000 shares for each of
the years ended December 31, 1995, 1994 and 1993, respectively.
Fully diluted earnings per share are computed by dividing net
income by the weighted average number of common shares outstanding
during the year after giving effect for common stock equivalents
arising from stock options and preferred stock assumed converted to
common stock. The weighted average number of common shares
outstanding for full dilution is 3,574,000, 3,609,000 and 3,701,000
shares for each of the years ended December 31, 1995, 1994 and
1993, respectively.
The preferred stock shares outstanding, including 125,851
unallocated and unreleased issued shares in 1995 held by the ESOP
trust, were excluded in computing the primary earnings per share
pursuant to the Company's adoption of Statement of Position 93-6,
"Employers' Accounting for Employee Stock Ownership Plans." (see
Note 12).
Dividends declared on common stock during the years ended December
31, 1995, 1994, and 1993 were $.69, $.91, and $.91, respectively,
after giving effect to the 5% stock dividend in 1996. Dividends
declared on preferred stock during the years ended December 31,
1995 and 1994 were $.60 each year.
Note 11 - Accounting for Stock Based Compensation (SFAS #123)
The Company applies APB Opinion 25 and related interpretations in
accounting for its stock option plan. Accordingly, no compensation
cost has been recognized for years ended December 31, 1995, 1994
and 1993. (see Note 12).
In October, 1995, the Financial Accounting Standards Board issued
Statement (SFAS) No. 123, Accounting for Stock Based Compensation
which becomes effective for transactions entered into in fiscal
years that begin after December 15, 1995. This statement permits
an entity to apply the fair value based method to stock options
awarded during 1995 and thereafter in order to measure the
compensation cost at the grant date and recognize it over its
vesting period. This statement also allows an entity to continue
to measure compensation costs for these plans pursuant to APB
Opinion 25. Entities electing to remain with the accounting
treatment under APB Opinion 25 must make proforma disclosures of
net income and earnings per share to include the effects of all
awards granted in fiscal years beginning after December 31, 1994,
as if the fair value based method of accounting pursuant to SFAS
No. 123 had been applied. The Company intends to adopt the
disclosure requirements for this statement effective for year
ending December 31, 1996, if material, while continuing to measure
compensation cost using APB 25. Had compensation cost been
determined on the basis of SFAS No. 123, the proforma effect on the
Company's net income and earnings per share for the year ended
December 31, 1995 would have been deminimus.
Note 12 - Employees Benefit Plans
Employee Stock Ownership Plan (ESOP)
Effective June 1, 1994 the Company established a leveraged tax-
qualified Employee Stock Ownership Plan (ESOP) for all nonexcluded
employees who meet the Company's eligibility and participation
requirements. The ESOP purchased 150,000 shares of the Company's
preferred stock at a cost of $993,750 using the proceeds of a loan
utilizing the preferred shares as collateral. All dividends
received by the ESOP in 1994, totaling $82,000, were used to pay
debt service. None of the ESOP dividends received were used to pay
debt service in fiscal 1995. The Company makes annual
contributions to the ESOP equal to the ESOP's debt service, which
totaled $171,000 and $67,000 for the years ended December 31, 1995
and 1994 respectively. For each plan year during the duration of
the loan, the number of shares committed to be released is based on
a predetermined formula tied into the Company's debt service paid
during the year.
The Company accounts for its ESOP in accordance with Statement of
Position 93-6. Accordingly, the debt of the ESOP is recorded as a
liability and the shares pledged as collateral are reported as
unearned ESOP shares in the statement of financial position. As
shares are committed to be released from collateral, the Company
reports compensation expense equal to the current market price of
the shares, and the shares become outstanding for earnings per
share (EPS) computations upon actual release and allocation to
active employees. Dividends on allocated ESOP shares are recorded
as a reduction of retained earnings. ESOP compensation expense for
fiscal 1995 and 1994 was $209,000 and $166,000, respectively. The
status of ESOP shares as of December 31, 1995 was as follows:
<TABLE>
Status of ESOP Shares
<CAPTION>
<S> <C>
Total ESOP shares 150,000
Allocated shares in 1994 (24,149)
Shares committed to be released for year 1995 (26,588)
Unreleased shares 99,263
Fair value of unreleased shares
at December 31, 1995 $ 769,288
</TABLE>
Stock Option Plan
On April 29, 1986, the Board of Directors approved a nonqualified
Stock Option Plan under which 656,250 shares (reflecting the 5%
stock dividend declared on January 26, 1996) of common stock are
reserved for issuance to officers and other key employees of the
Company and are exercisable beginning one year from date of grant
at various percentages expiring ten years from such date. The
Stock Option Plan is administered by a Board Committee.
<TABLE>
Stock option activity is shown below as adjusted for the 5% stock
dividend declared on January 26, 1996:
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Shares under options outstanding January 1 9,515 10,17124,443
Stock options granted at $7.20 - $7.38 per share127,575 --
Options exercised at $3.02 per share - (656)(14,272)
Shares under options outstanding and
exercisable at $3.02 - $7.38 per share
at December 31 137,090 9,515 10,171
</TABLE>
At December 31, 1995, 369,865 shares were available for future
grants under the Plan. The Company derives a tax deduction
measured by the excess of the market value over the option price at
the date nonqualified options are exercised. The related tax
benefit is credited to additional paid-in capital. The Company
makes no charges against capital with respect to options granted.
Restricted Stock Grant Plan
The Company's Restricted Stock Grant Plan provides for the award of
up to $1,000,000 of the Company's common stock to certain key
employees pursuant to the Plan terms. Plan participants are
entitled to receive dividends and to vote their respective shares.
The shares awarded are restricted for a period not to exceed seven
years, as amended in 1993. Additionally, the Plan was amended on
September 25, 1992 to include acceleration of vesting as determined
by the Plan's committee. Upon issuance of restricted stock,
unearned compensation, equivalent to the market value of the shares
awarded at the time of the grant, is charged to stockholders'
equity and is amortized to expense over the periods until the
restrictions lapse. The Company derives a tax deduction measured
by the excess of the market value over the original cost of the
grants at the time of vesting. The related tax benefit is credited
to additional paid-in capital.
The Company awarded 24,541, 71,979 and 23,859 shares during the
years ended December 31, 1995, 1994, and 1993, respectively
(reflecting the 5% stock dividend declared on January 26, 1996).
Compensation expense relating to this plan charged to operations
totaled $254,000, $100,000 and $30,000 for the years ending
December 31, 1995, 1994, and 1993, respectively.
Profit Sharing Plan/Savings Plan
Effective June 1, 1994, the Company amended its qualified profit
sharing plan to include a 401(k) savings plan covering all
eligible employees. The Company's contributions consist of the
total salary reduction election by up to 6% of eligible
participants, plus a discretionary amount determined annually
within the allowable limits of the Plan. The Company's profit
sharing discretionary contributions as included in the Company's
operating expenses were $629,000, $792,000, and $1,002,000 for the
years ended December 31, 1995, 1994, and 1993, respectively.
Note 13 - Commitments and Contingencies
The Company leases office space in various locations under
noncancellable operating leases with options to renew.
<TABLE>
At December 31, 1995, the future minimum rental commitments were as
follows:
<CAPTION>
Amount
YEAR (IN THOUSANDS)
<S> <C> <C>
1996 $ 574
1997 574
1998 565
1999 45
$1,758
</TABLE>
Total office rental expenses charged to operations were
approximately $587,000, $521,000, and $586,000 for the years ended
December 31, 1995, 1994, and 1993, respectively.
The Company is involved in various legal actions arising in the
ordinary course of business. In accordance with the Company's
accounting policy the Company maintains a legal reserve to help
offset any adverse decisions or unusual legal expense. Legal
counsel is vigorously defending these actions and believes that the
Company has meritorious defenses. However, the ultimate outcome
cannot be predicted with certainty, and the impact on operating
results (if any) cannot reliably be estimated. Nevertheless, due
to uncertainties in the settlement process, it is at least
reasonably possible that management's view of the outcome could
change in the near term.
The Company has employment contracts with certain of its key
officers for terms ranging from one to three years, with one year
being added at each anniversary date. The agreements contain
provisions that would entitle individual officers to receive a
minimum of $75,000 to a maximum of $750,000 plus certain benefits
(as applicable), depending on varying events such as, death,
disability, voluntary or involuntary termination, change of control
and liquidation. The largest potential liability would be in the
event of a change of control. In this event the Company's
contingent liability would not exceed $2,895,000 ($3,225,000
liability net of approximately $330,000 of postemployment benefits,
which were provided for in the Company's financial statements at
December 31, 1995).
Note 14 - Financial Instruments, Off-Balance-Sheet Risk and
Concentration of Credit Risk
The Company's customers' securities transactions are introduced on
a fully-disclosed basis with its clearing broker/dealer. The
clearing broker/dealer carries all of the accounts of the customers
of the Company and is responsible for execution, collection of and
payment of funds and, receipt and delivery of securities relative
to customer transactions. Customers' securities activities are
mainly transacted on a cash basis, however, during 1991 the
Company introduced margin accounts. These transactions may expose
the Company to off balance sheet risk, wherein the clearing
broker/dealer may charge any losses it incurs in the event that
customers may be unable to fulfill their contractual commitments
and margin requirements are not sufficient to fully cover losses
which customers may incur. The Company seeks to minimize this risk
through procedures designed to monitor the creditworthiness of its
customers and that customer transactions are executed properly by
the clearing broker/dealer.
The financial instruments of the Company are reported in the
consolidated statement of financial condition at market or fair
value, or at carrying amounts that approximate fair value because
of the short maturity of the instruments.
The Company's securities owned at market value consist primarily of
state and municipal obligations issued by the State of New Jersey
or municipalities within that state.
Note 15 - Preferred Stock
Pursuant to a stock offer consummated on April 29, 1994, there were
485,789 shares of common stock exchanged for a new voting
cumulative convertible preferred stock and 103,641 shares of common
stock were purchased at a price of $6.75 per share. Subsequent to
April 29, 1994, an additional 46,359 shares of common stock were
purchased in the open market. All the common stock shares acquired
(totaling 150,000) were retired and an equal number of shares of
new voting cumulative convertible preferred stock were issued to a
newly formed Employee Stock Option Plan (ESOP) for cash equal to
the amount paid by the Company for the common stock (see Note 12).
The preferred shares are convertible at any time at the option of
the holder into 1.05 shares (as adjusted for the 5% stock dividend)
of common stock. In the event of liquidation, each preferred share
will participate equally with each share of common stock, plus
unpaid dividends. At any time after three years from the date of
issuance, the Company may, upon 20 days prior written notice, in
its sole discretion, redeem all preferred stock at a redemption
price equal to the purchase price. Dividends, which commenced in
May 1994, are payable quarterly at an annual rate of $.60 per
share.
Additionally, 33,325 and 191,609 shares of preferred stock were
converted into an equal number of shares of common stock during the
years ended December 31, 1995 and 1994.
Note 16 - Subsequent Events
On January 26, 1996, the Board of Directors declared a 5% stock
dividend and a regular fourth quarter cash dividend of $.05 per
share, payable on February 13, 1996 to stockholders of record on
February 5, 1996. All share and per share information in the
consolidated financial statements reflect the stock dividend for
all periods presented.
Consent of Certified Public Accountants
Ryan, Beck & Co. and Subsidiaries
We hereby consent to the incorporation by reference of our report dated
February 5, 1996, on our audits of the consolidated statements of
financial condition of the Company and its Subsidiaries as of December
31, 1995 and 1994 and the related consolidated statements of cash flows
for the three years then ended listed in Item 14(a) of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995.
TRIEN, ROSENBERG, FELIX, ROSENBERG, BARR & WEINBERG, LLP
Morristown, New Jersey
March 7, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the December
31, 1995 10-K and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 82
<SECURITIES> 34698
<RECEIVABLES> 1321
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1094
<PP&E> 3230
<DEPRECIATION> 2527
<TOTAL-ASSETS> 38126
<CURRENT-LIABILITIES> 26040
<BONDS> 0
<COMMON> 327
0
41
<OTHER-SE> 11718
<TOTAL-LIABILITY-AND-EQUITY> 38126
<SALES> 24988
<TOTAL-REVENUES> 24988
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21649
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 473
<INCOME-PRETAX> 2866
<INCOME-TAX> 1078
<INCOME-CONTINUING> 1788
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1788
<EPS-PRIMARY> 0.5
<EPS-DILUTED> 0.5
</TABLE>
