SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 5, 1996
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Hoenig Group Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 0-19619 13-3625520
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Royal Executive Park, 4 International Drive, Rye Brook, New York 10573
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 935-9000
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
On September 5, 1996, the Board of Directors of the Company increased
the number of directorships from ten to eleven, elected Fredric P. Sapirstein
to the newly created Class III vacancy on the Board, and elected Mr.
Sapirstein as Chairman, President and Chief Executive Officer, effective
immediately.
On September 5, 1996, the Company and Mr. Sapirstein executed an
Employment Agreement in the form attached hereto as Exhibit 10.7 (the
"Employment Agreement").
Pursuant to the Employment Agreement Mr. Sapirstein purchased 250,000
shares of the Company's Common Stock from the Company at a purchase price of
$3.625 per share and was granted ten-year options on 500,000 shares of Common
Stock at an exercise price of $3.625 per share and on 132,500 shares at an
exercise price of $5.00 per share. The Employment Agreement obligates the
Company to grant an additional 367,500 options exercisable at $5.00 per share
to Mr. Sapirstein, subject to approval of an appropriate plan by the
shareholders of the Company. The terms of vesting of the options, conditions
to the exercise of certain options and other terms relating to the options and
Mr. Sapirstein's employment, including termination payments required to be
made to Mr. Sapirstein if his employment is terminated under certain
conditions, are contained in the Employment Agreement.
On September 5, 1996, the Company issued the press release in the
form attached hereto as Exhibit 99.
Item 7c.
10.7 Employment Agreement between Fredric P. Sapirstein and the Company,
dated September 5, 1996.
99. September 5, 1996 Press Release Issued by the Company.
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SIGNATURE
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Pursuant to the requirements 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.
Date: September 16, 1996 Hoenig Group Inc.
By:
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Fredric P. Sapirstein
Chief Executive Officer
EXHIBIT 10.7
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EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, dated September 5, 1996 (this "Agreement"), by
and between Hoenig Group Inc., a Delaware corporation (the "Company"), and
Fredric P. Sapirstein (the "Executive").
WHEREAS, the Company desires to employ the Executive as President and
Chief Executive Officer, and the Executive desires to be retained in such
capacities, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements made herein, the Company and the Executive agree as follows:
1. Employment; Duties.
(a) The Company shall employ the Executive as President and
Chief Executive Officer for the "Employment Period" as defined in Section 2.
The Executive, in his capacity as President and Chief Executive Officer, shall
have such duties, responsibilities and authority normally incident to such
offices, subject to the provisions of the bylaws of the Company. The precise
duties, responsibilities and authority of the Executive may be expanded,
limited or modified, from time to time, at the discretion of the Board of
Directors of the Company (the "Board") consistent with the ordinary duties,
responsibilities and authority of a President and Chief Executive Officer.
(b) The Company shall use its best efforts to cause the
Executive to be elected to the Board and serve as its Chairman and shall
include him in the management slate for election as a director at every
stockholders' meeting at which his term as a director would otherwise expire.
If requested by the Board, the Executive shall serve as a member of the board
of directors of any one or more subsidiaries of the Company.
(c) During the Employment Period, the Executive shall render his
services solely in the performance of his duties hereunder. The Executive
agrees that during the Employment Period, he shall devote his full working
time, attention, knowledge and experience and give his best effort, skill and
abilities, exclusively to promote the business and interests of the Company.
The Executive may not serve as an officer or director of, make investments in,
or otherwise participate in, any other entity without the prior written
approval of the Board; provided, that the foregoing shall not be deemed to
prohibit the Executive from acquiring, directly or indirectly, solely as an
investment, not more than two percent (2%) of any class of securities of any
entity that are registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as
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amended (the "1934 Act") or investments in non-public entities pursuant to
policies and procedures generally applicable to executives of the Company and
its direct or indirect subsidiaries; and provided further, that so long as it
does not interfere with the Executive's employment, the Executive may serve as
an officer, director or otherwise participate in purely educational, welfare,
social, religious and civic organizations.
2. Employment Period. This Agreement shall have a term commencing on
the date hereof and ending on December 31, 1999 (the "Initial Period"), unless
sooner terminated in accordance with the provisions of Section 4. On the
expiration of the Initial Period and on each yearly anniversary thereof, this
Agreement shall automatically renew for an additional one-year period (each
such one-year period being referred to as a "Renewal Period"), unless sooner
terminated in accordance with the provisions of Section 4, provided, however,
that no renewal shall occur if the Company or the Executive notifies the other
in writing of its intention not to renew this Agreement not less than six
months prior to such expiration date or anniversary, as the case may be. The
term of this Agreement, as in effect from time to time, is referred to herein
as the "Employment Period".
3. Compensation and Benefits. The Executive shall be entitled to the
following compensation and benefits, in each case subject to applicable
statutory withholdings:
(a) Base Compensation. The Executive shall be paid an aggregate
base salary (the "Base Salary") of $400,000 per annum. The Base Salary shall
be payable in a manner consistent with the normal payroll practices of the
Company in effect from time to time. The Board, in its sole discretion, or at
the recommendation of the Compensation Committee, may increase (but not
decrease) the Base Salary, at any time.
(b) Annual Bonus. In addition to the Base Salary, the Executive
shall be entitled to receive a discretionary annual bonus for each fiscal year
of the Company that ends during the Employment Period (the "Bonus Award")
based upon the achievement of annual Company and individual performance goals
to be set by the Compensation Committee in consultation with the Executive,
provided, that in no case shall the Bonus Award for fiscal years ending
December 31, 1997 and December 31, 1998 be less than $300,000, and for the
fiscal year ending on December 31, 1996, $300,000 pro-rated based on the
portion of the fiscal year that includes the Employment Period. Such minimum
shall operate as a draw against the Bonus Award otherwise payable. To the
extent necessary to avoid the limitation on the federal tax deductibility of
the Bonus Award for any year under Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code"), payment thereof may, at the discretion of
the Company, be either (i) made pursuant to a plan to be adopted by the
Company, which plan may be contingent upon approval by the Company's
stockholders (in which case, if stockholder approval is not obtained, the
Bonus Award above the minimum shall not be paid), or (ii) deferred to the
first taxable year of the Company in which the payment would be fully
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deductible. Except as provided in the preceding sentence, the Bonus Award for
a fiscal year shall be payable as soon as practicable after the release of the
Company's audited financial statements for such fiscal year. In the case of
clause (i) above, such a plan shall conform to the requirements of Section
162(m) of the Code and shall be adopted by the Board prior to, and presented
for the approval of Stockholders at, a meeting of the Company's stockholders
occurring no later than the Company's 1997 Annual Meeting of Stockholders. In
the case of clause (ii) above, amounts deferred shall be credited with such
interest and on such other terms as the Company and the Executive shall
mutually agree.
(c) Stock Options.
(1) The Executive shall be granted, on the date hereof,
options to purchase 500,000 shares of the Company's common stock, par value
$.01 per share ("Common Stock") as follows: (i) an option with respect to
382,500 shares of Common Stock shall be granted under the Company's 1991 Stock
Option Plan, and (ii) an option with respect to 117,500 shares of Common Stock
shall be granted under the Company's 1994 Stock Option Plan (the
"Non-Performance Options", and collectively, with the options granted pursuant
to clause (2), the "Options"). The exercise price per share of Common Stock
subject to the Non-Performance Options shall equal the closing sales price of
a share of Common Stock on the date of this Agreement. The Non-Performance
Options shall be immediately vested and exercisable on the date hereof as to
25% of the shares subject thereto, and, subject to clause (3) below, an
additional 25% shall become vested and exercisable on each of the first three
anniversaries of the date hereof. Non-Performance Options granted under the
Company's 1991 Stock Option Plan shall be non-qualified options, and of those
granted under the Company's 1994 Stock Option Plan, 110,000 shall be incentive
stock options and 7,500 shall be non-qualified options.
(2) The Executive shall be granted non-qualified options to
purchase an additional 500,000 shares of Common Stock as follows: (i) an
option with respect to 132,500 shares of Common Stock shall be granted as of
the date hereof under the Company's 1994 Stock Option Plan, and (ii) an option
with respect to 367,500 shares of Common Stock shall be granted on the date of
the next meeting of stockholders which shall take place no later than the
Company's 1997 Annual Meeting of Stockholders, provided that at such meeting
the stockholders approve an amendment to one or more of the Company's stock
option plans or the adoption of a new plan that will enable such option to be
granted (the "Performance Options"). The exercise price per share of Common
Stock subject to the Performance Options shall equal $5.00. Subject to
acceleration as provided in the next sentence, the Performance Options shall
become vested and exercisable on the ninth anniversary of the date such
options are granted, subject to clause (3) below. If, during any period of at
least 20 consecutive trading days commencing after the date of this Agreement,
the average of the closing price of the Common Stock on each such trading day
shall equal or exceed the target stock prices as set forth below, then each
Performance Options shall, subject to clause (3) below, become
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vested and exercisable as of the end of such 20-day period (or, if later, the
date the option is granted) as to such number of shares equal to the total
number of shares subject to the option on the date the option is granted,
multiplied by the applicable vesting percentage set forth below:
Target Stock Price Vesting Percentage
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$7.00 50%
$8.00 100%.
(3) Upon Executive's termination of employment with the
Company for any reason (except termination for Cause) (i) all Options that are
not then vested and exercisable shall immediately terminate, except in the
event of termination of Executive's employment after September 5, 1997, by the
Company other than for Cause or by the Executive with Good Reason, in which
event all Non-Performance Options shall become fully vested and exercisable at
the time of such termination of employment, and (ii) all Options that are or
become vested and exercisable at the time of such termination of employment
shall remain exercisable thereafter for a period of three months, or, if such
termination is by reason of death or Disability, for a period of one year. If
such termination is for Cause, all Options, whether or not vested and
exercisable, shall terminate. In no event may any option be exercised after
the tenth anniversary of the date such Option is granted.
(4) Each Option shall be subject to the terms and conditions
of the plans pursuant to which it is granted (including acceleration of
vesting upon a change in control of the Company), and shall be evidenced by an
option agreement which shall contain terms not inconsistent with the
provisions of this Section 3(c).
(d) Stock Purchase. On the date of this Agreement, the Executive
shall purchase from the Company 250,000 shares of Common Stock (the "Shares")
at a price per share equal to the closing sales price of a share of Common
Stock on the last trading date immediately prior to the date of this
Agreement, payable by the Executive no later than the third business day
following the date of this Agreement. The Executive may not sell or otherwise
dispose of the Shares prior to the second anniversary of the date of this
Agreement. The Shares will be restricted securities under Rule 144 issued
under the Securities Act of 1933, provided that the Company will provide one
registration statement on demand to any pledgee of the Shares at the Company's
cost and expense. The Shares shall be duly authorized, validly issued, fully
paid and nonassessable. The Shares shall be represented by stock certificates
registered in the name of the Executive, and shall bear a legend reflecting
the restrictions set forth above.
(e) Benefits. The Executive shall also be entitled to
participate in the employee and fringe benefit and group insurance programs
provided by the
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Company for its officers and employees generally and in accordance with the
terms of the applicable plan documents as they may be revised from time to
time. Executive shall be entitled to receive such other benefits as are
generally provided to executives of the Company and its subsidiaries. The
Executive shall also be entitled to reimbursement for reasonable out-of-pocket
expenses incurred in connection with the business of the Company in accordance
with the Company's policies and procedures.
4. Termination.
(a) The Company may, with or without prior notice, terminate
this Agreement with or without Cause, or upon the Executive's Disability. The
Executive may terminate this Agreement for Good Reason, or upon the
Executive's Disability. This Agreement shall automatically terminate upon the
Executive's death. This Agreement shall also terminate upon expiration of the
Initial Period or any Renewal Period if notice is provided by either party in
accordance with Section 2. Except as provided in Sections 3(c) and 4(b), in
the event this Agreement is terminated, the Executive's rights and the
obligations of the Company hereunder shall cease as of the effective date of
the termination, provided, however, that the Executive shall be entitled to
receive any accrued but unpaid Base Salary, any earned but unpaid Bonus Awards
and any amount accrued under Company benefit plans as provided pursuant to the
terms of such plans (the "Accrued Obligations").
(b) In the event the Company terminates this Agreement other
than for Cause, or if the Executive terminates this Agreement for Good Reason,
the Executive shall be entitled to receive, in addition to the Accrued
Obligations, the following payments ("Termination Payments"), in each case
subject to applicable statutory withholdings :
(1) if such termination occurs on or prior to the first
anniversary hereof, a payment equal to $700,000, such payment to be made in
equal monthly installments over the one-year period following such
termination;
(2) if such termination occurs after the first anniversary
hereof, and on or prior to the second anniversary hereof, a payment equal to
$1,400,000, such payment to be made in equal monthly installments over the
two-year period following such termination; and
(3) if such termination occurs after the second anniversary
hereof, a payment equal to the product of (i) the sum of Executive's Base
Salary and Bonus Awards payable (without regard to any deferral necessary to
comply with Section 162(m) of the Code) for the three fiscal years ending
prior to such termination, or, if less, the number of fiscal years ending
after the date hereof and prior to such termination (if the fiscal year ended
December 31, 1996 is to be taken into account, the Base Salary and Bonus Award
for such year shall be annualized) divided by three, or, if less, the number
of fiscal years ending after the date hereof and prior to such
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termination, and (ii) the number of years and/or fraction thereof remaining in
the then existing Employment Period. Payment of this amount shall be made in
equal monthly installments over such remaining Employment Period.
(4) in the event of the Executive's death after this
Agreement is terminated other than for Cause or for Good Reason, the Company
shall make any Termination Payments which would otherwise have been payable to
the Executive if he had lived under this Section 4(b) to Executive's estate or
designated beneficiary.
(c) In the event that after the second anniversary hereof, the
Company terminates this Agreement other than for Cause, or the Executive
terminates this Agreement for Good Reason, the Executive shall be entitled to
receive, in addition to the Accrued Obligations and any Termination Payments
as provided in Section 4(b)(3) hereof, a Bonus Award equal to the Bonus Award
earned by the Executive for the immediately preceding fiscal year multiplied
by a fraction the numerator of which shall be the number of days elapsed in
the fiscal year to the date of such termination and the denominator of which
shall be 365; provided there shall be deducted from any such Bonus Award the
amount of any Bonus Award previously paid to the Executive with respect to
such period.
(d) A termination of the Executive's employment (i) upon
expiration of this Agreement at the end of the Initial Period or any Renewal
Period, whether at the Company's option or the Executive's option, or (ii) by
reason of the Executive's Death or Disability, shall not constitute a
termination other than for Cause or for Good Reason under this Agreement, and
therefore, upon such termination, the Executive shall be entitled to receive
only the Accrued Obligations.
(e) As a condition to his entitlement to receive Termination
Payments, the Executive shall (i) have executed and delivered to the Company a
waiver and release satisfactory to the Company waiving and releasing all
rights and claims against the Company and its direct or indirect subsidiaries
and their respective officers, agents, directors and employees, and such
waiver and release shall have become irrevocable, and (ii) comply with
Sections 3(d), and 5 through 9.
(f) In the event this Agreement is terminated for any reason
(except by death), the Executive agrees that if at that time he is a director
or officer of the Company or any of its direct or indirect subsidiaries, he
will immediately deliver his written resignation as such director or officer,
such resignation to become effective immediately.
(g) Notwithstanding anything contained herein to the contrary,
the Company may reduce the Termination Payments to the extent such Termination
Payments, when added to other payments made to the Executive (including the
vesting of stock options), constitute a "parachute payment" as defined in
Section 280G of the Code.
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(h) For purposes of this Agreement:
(1) "Cause" shall mean an event where the Executive: (i)
commits any act of fraud, willful misconduct or dishonesty in connection with
his employment or which materially injures the Company or its direct or
indirect subsidiaries; (ii) breaches Section 3(d), 8 or 9, or any other
material provision of this Agreement or any material representation, warranty,
covenant or condition in this Agreement or any material fiduciary duty to the
Company or its direct or indirect subsidiaries; (iii) fails, refuses or
neglects to timely perform any material duty or obligation under this
Agreement and such failure, refusal or neglect is not cured by the Executive
within fifteen (15) days from the date the Company notifies the Executive
thereof; (iv) commits a material violation of any material law, rule,
regulation or by-law of any governmental authority (state, federal or
foreign), any securities exchange or association or other regulatory or
self-regulatory body or agency applicable to the Company or its direct or
indirect subsidiaries or any general policy or directive of the Company or its
direct or indirect subsidiaries communicated in writing to the Executive; (v)
is charged with a crime involving moral turpitude, dishonesty, fraud or
unethical business conduct, or a felony; (vi) is subject to the occurrence of
an event or condition which makes it unlawful for the Executive to perform his
duties hereunder, including the issuance of any order, decree, decision or
judgment, which remains in effect for eight weeks or more; (vii) gives or
accepts undisclosed commissions or other payments in cash or in kind in
connection with the affairs of the Company or any of its direct or indirect
subsidiaries or their respective clients; (viii) is expelled or suspended in
excess of eight weeks, or is subject to an order temporarily (for a period in
excess of eight weeks) or permanently enjoining the Executive from the
securities, investment management or investment banking business or from
acting in the capacity contemplated by this Agreement by the SEC, the NASD,
any national securities exchange or any self-regulatory agency or governmental
authority, state, foreign or federal; or (ix) fails to obtain or maintain any
registration, license or other authorization or approval that the Company or
its direct or indirect subsidiaries in their discretion reasonably believe is
required for the Executive to perform his duties hereunder.
(2) "Good Reason" shall mean (i) the Company changes the
Executive's status, title or position as President and Chief Executive Officer
of the Company and such change represents a material reduction in such status,
title or position conferred hereunder; (ii) Executive is not elected to the
Board or elected Chairman of the Board, or does not remain a director of the
Board or Chairman of the Board during the Employment Term (other than as a
result of a voluntary resignation by the Executive pursuant to Section 4(f) or
otherwise); (iii) the failure of the Company to make a timely grant to the
Executive of the stock options described in part (ii) of the first sentence of
Section 3(c)(2) hereof; and (iv) the Company materially breaches this
Agreement, and such change or breach is not cured by the Company within thirty
(30) days from the date the Executive delivers a Notice of Termination for
Good Reason. Such "Notice of Termination for Good Reason" shall include the
specific section of this Agreement which
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was relied upon and the reason that the Company's act or failure to act has
given rise to his termination for Good Reason.
(3) "Disability" shall mean the Executive's inability to
perform his duties by reason of mental or physical disability for at least one
hundred and twenty (120) consecutive days or any one hundred and twenty (120)
days (whether or not consecutive) in any one-hundred eighty (180) consecutive
day period. In the event of a dispute as to whether the Executive is disabled
within the meaning hereof, either party may from time to time request a
medical examination of the Executive by a doctor appointed by the Chief of
Staff of a hospital selected by mutual agreement of the parties, or as the
parties may otherwise agree, or, failing agreement, a hospital selected in
good faith by the Board of Directors of the Company. The written medical
opinion of such doctor shall be conclusive and binding upon the parties as to
whether the Executive has become disabled and the date when such disability
arose. The cost of any such medical examination shall be borne by the Company.
5. Trade Secrets. The Executive recognizes that it is in the
legitimate business interest of the Company to restrict his disclosure or use
of Trade Secrets and Confidential Information relating to the Company and its
direct or indirect subsidiaries for any purpose other than in connection with
his performance of his duties to the Company, and to limit any potential
appropriation of such Trade Secrets and Confidential Information by the
Executive. The Executive therefore agrees that all Trade Secrets and
Confidential Information relating to the Company and its direct or indirect
subsidiaries heretofore or in the future obtained by the Executive shall be
considered confidential and the proprietary information of the Company and its
direct or indirect subsidiaries. During the Employment Period the Executive
shall not use or disclose, or authorize any other person or entity to use or
disclose, any Trade Secrets or other Confidential Information, other than as
necessary to further the business objectives of the Company in accordance with
the terms of his employment hereunder. The term "Trade Secrets or other
Confidential Information" includes, by way of example and without limitation,
matters of a technical nature, "know-how", formulas, secret processes, works
of authorship, computer programs (including documentation of such programs),
services, materials, patent applications, new product plans, other plans,
technical information, technical improvements, test data, progress reports and
research projects, and matters of a business nature, such as business plans,
prospects, financial information, marketing plans and strategies, proprietary
information about costs, profits, markets and sales, lists of customers and
suppliers of the Company and its direct or indirect subsidiaries, procurement
and promotional information, credit and financial data concerning customers or
suppliers of the Company and its direct or indirect subsidiaries, information
relating to the management, operation and planning of the Company and its
direct and indirect subsidiaries, plans for future development, and other
information of a similar nature to the extent not available to the public.
After termination of the Executive's employment with the Company for any
reason, the Executive shall not use or disclose Trade Secrets or other
Confidential Information.
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6. Return of Documents and Property. Upon the termination of the
Executive's employment with the Company, or at any time upon the request of
the Company, the Executive (or his heirs or personal representatives) shall
deliver to the Company (a) all documents and materials (including, without
limitation, computer files) containing Trade Secrets or other Confidential
Information relating to the business and affairs of the Company and its direct
and indirect subsidiaries, and (b) all documents, materials and other property
(including, without limitation, computer files) belonging to the Company or
its direct or indirect subsidiaries, which in either case are in the
possession or under the control of the Executive (or his heirs or personal
representatives).
7. Discoveries and Work. All Discoveries and Works made or
conceived by the Executive during his employment by the Company, jointly or
with others, that relate to the present or anticipated activities of the
Company or its direct or indirect subsidiaries, or are used or usable by the
Company or its direct or indirect subsidiaries shall be owned by the Company
or its direct or indirect subsidiaries. The term "Discoveries and Works"
includes, by way of example but without limitation, Trade Secrets and other
Confidential Information, patents and patent applications, trademarks and
trademark registrations and applications, service marks and service mark
registrations and applications, trade names, copyrights and copyright
registrations and applications. The Executive shall (a) promptly notify, make
full disclosure to, and execute and deliver any documents requested by, the
Company, as the case may be, to evidence or better assure title to Discoveries
and Works in the Company or its direct or indirect subsidiaries, as so
requested, (b) renounce any and all claims, including but not limited to
claims of ownership and royalty, with respect to all Discoveries and Works and
all other property owned or licensed by the Company or its direct or indirect
subsidiaries, (c) assist the Company or its direct or indirect subsidiaries in
obtaining or maintaining for itself at its own expense United States and
foreign patents, copyrights, trade secret protection or other protection of
any and all Discoveries and Works, and (d) promptly execute, whether during
his employment with the Company or thereafter at the Company's expense, all
applications or other endorsements necessary or appropriate to maintain
patents and other rights for the Company or its direct or indirect
subsidiaries and to protect the title of the Company or its direct or indirect
subsidiaries thereto, including but not limited to assignments of such patents
and other rights. Any Discoveries and Works which, within six months after the
termination of the Executive's employment with the Company, are made,
disclosed, reduced to a tangible or written form or description, or are
reduced to practice by the Executive and which pertain to the business carried
on or products or services being sold or developed by the Company or its
direct or indirect subsidiaries at the time of such termination shall, as
between the Executive and, the Company, be rebuttably presumed to have been
made during the Executive's employment by the Company. The Executive
acknowledges that all Discoveries and Works shall be deemed "works made for
hire" under the Copyright Act of 1976, as amended, 17 U.S.C. ss.101.
8. Non-Competition. From and after the date hereof, the
Executive will not, except pursuant to the terms hereof, directly or
indirectly, own, manage, operate, join, finance control or participate in the
ownership, management,
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operation or control of, or be employed or be otherwise connected in any
manner with, any business under a name similar to the name of the Company or
any direct or indirect subsidiary thereof. During the Noncompetition Period,
the Executive will not (except as an officer, director, employee, agent or
consultant of the Company) directly or indirectly, own, manage, operate, join,
or have a financial interest in, control or participate in the ownership,
management, operation or control of, or be employed as an employee, agent or
consultant, or in any other individual or representative capacity whatsoever,
or use or permit his name to be used in connection with, or be otherwise
connected in any manner with (i) any business or enterprise engaged (wherever
located) in the design, development, manufacture, distribution or sale of any
products, or the provision of any services, which the Company or its direct or
indirect subsidiaries were designing, developing, manufacturing, distributing,
selling or providing at any time during the one year immediately preceding the
termination of this Agreement or (ii) any business which is similar to or
competitive with the business carried on or planned by the Company or its
direct or indirect subsidiaries at any time during the one year immediately
preceding the termination of this Agreement, unless the Executive shall have
obtained the prior written consent of the Board, provided that the foregoing
restriction shall not be construed to prohibit the ownership by the Executive
of not more than two percent (2%) of any class of securities of any
corporation which is engaged in any of the foregoing businesses, having a
class of securities registered pursuant to Sections 12(b) or 12(g) of the 1934
Act, which securities are publicly owned and regularly traded on any national
exchange or in the over-the-counter market, provided further, that such
ownership represents a passive investment and that neither the Executive nor
any group of persons including the Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees
any of its financial obligations, otherwise takes part in its business other
than exercising his rights as a stockholder, or seeks to do any of the
foregoing. For purposes of this Agreement, the Noncompetition Period shall
mean the period during which the executive is employed by the Company or any
of its direct or indirect subsidiaries, and (i) the lesser of one year
following termination of this Agreement or the remaining term of the
Employment Period if such termination is for Cause; (ii) the lesser of one
year following termination of this Agreement, or the remaining term of the
Employment Period if this Agreement is terminated by the Executive other than
for Good Reason; and (iii) the period during which the Executive is receiving
Termination Payments. Notwithstanding the foregoing, in the event that the
Company terminates this Agreement other than for Cause, or if the Executive
terminates this Agreement for Good Reason, the Executive may elect at any time
after such termination, by ten days advance written notice to the Company, to
be relieved of the provisions of this Section 8 and Section 9. On and after
such election, the Company shall have no further obligation to make any
payments to the Executive pursuant to Section 4(b) hereof, except for such
amounts as shall have been accrued prior to the date of such election. Such
election shall not effect any of the rights of the Company with respect to any
violation of this Section 8 or Section 9 occurring prior to such election.
9. Non-Solicitation. During the Noncompetition Period, the
Executive agrees, directly or indirectly, whether for his own account or for
the account of
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any other individual or entity, not to solicit or canvas the trade, business
or patronage of, or sell any products or services which are the same as or
similar to those designed, developed, manufactured, distributed or sold by the
Company or its direct or indirect subsidiaries to, any individuals or entities
that were either customers of the Company or any of its direct or indirect
subsidiaries during the twelve months immediately preceding the termination of
this Agreement, or prospective customers with respect to whom a sales effort,
presentation or proposal was made by the Company or any of its direct or
indirect subsidiaries during the twelve months immediately preceding the date
of termination or expiration, as the case may be. The Executive further agrees
that during the Noncompetition Period, he shall not, directly or indirectly,
(i) solicit, induce, enter into any agreement with, or attempt to influence
any individual who was an employee or consultant of the Company or any of its
direct or indirect subsidiaries at any time during the time the Executive was
employed by the Company, to terminate his or her employment relationship with
the Company or any of its direct or indirect subsidiaries or to become
employed by the Executive or any individual or entity by which Executive is
employed or (ii) interfere in any other way with the employment, or other
relationship, of any employee or consultant of the Company or any of its
direct or indirect subsidiaries.
10. Enforcement. (a) The Executive agrees that the remedies at
law for any breach or threat of breach by him of any of the provisions of
Sections 5 through 9 will be inadequate, and that, in addition to any other
remedy to which the Company may be entitled at law or in equity, the Company
shall be entitled to a temporary or permanent injunction or injunctions or
temporary restraining order or orders to prevent breaches of the provisions of
Sections 5 through 9 and to enforce specifically the terms and provisions
thereof, in each case without the need to post any security or bond. Nothing
herein contained shall be construed as prohibiting the Company from pursuing,
in addition, any other remedies available to the Company for such breach or
threatened breach. A waiver by the Company of any breach of any provision
hereof shall not operate or be construed as a waiver of a breach of any other
provision of this Agreement or of any subsequent breach by the Executive.
(b) It is expressly understood and agreed that although the
Company and the Executive consider the restrictions contained in Sections 5
through 9 to be reasonable for the purpose of preserving the goodwill,
proprietary rights and going concern value of the Company, if a final judicial
determination is made by a court having jurisdiction that the time or
territory or any other restriction contained in such Sections 5 through 9 is
an unenforceable restriction on the Executive's activities, the provisions of
such Sections 5 through 9 shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such other
extent as such court may judicially determine or indicate to be reasonable.
Alternatively, if the court referred to above finds that any restriction
contained in Sections 5 through 9 or any remedy provided herein is
unenforceable, and such restriction or remedy cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained therein or the availability of any other remedy.
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The provisions of Sections 5 through 9 shall in no respect limit or otherwise
affect the Executive's obligations under other agreements with the Company.
11. Executive's Representations. The Executive represents and
warrants to the Company that (i) he is able to perform fully his duties and
responsibilities contemplated by this Agreement and (ii) there are no
restrictions, covenants, agreements or limitations of any kind on his right or
ability to enter into and fully perform the terms of this Agreement.
12. Assignment. The rights and obligations of the parties under
this Agreement shall not be assignable by either the Company or the Executive,
provided that this Agreement is assignable by the Company to any affiliate of
the Company, to any successor in interest to the business of any of the
Company, or to a purchaser of all or substantially all of the assets of the
Company.
13. Notices. Any notice required or permitted under this
Agreement shall be deemed to have been effectively made or given if in writing
and personally delivered, mailed properly addressed in a sealed envelope,
postage prepaid by certified or registered mail, or delivered by a reputable
overnight delivery service. Unless otherwise changed by notice, notice shall
be properly addressed to the Executive if addressed to:
Fredric P. Sapirstein
150 Central Park South
New York, NY 10019
and properly addressed to the Company if addressed to:
Hoenig Group Inc.
Royal executive Park
4 International Drive
Rye Brook, NY 10573
Attention: General Counsel
14. Severability. Wherever there is any conflict between any
provision of this Agreement and any statute, law, regulation or judicial
precedent, the latter shall prevail, but in such event the provisions of this
Agreement thus affected shall be curtailed and limited only to the extent
necessary to bring them within the requirements of the law. In the event that
any provision of this Agreement shall be held by a court of proper
jurisdiction to be indefinite, invalid, void or voidable or otherwise
unenforceable, the balance of the Agreement shall continue in full force and
effect unless such construction would clearly be contrary to the intentions of
the parties or would result in an unconscionable injustice.
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15. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
16. Effect of Termination. Notwithstanding anything to the
contrary contained herein, if this Agreement or the Executive's employment is
validly terminated pursuant to Section 4 or expires by its terms, the
provisions of Sections 5 through 10, 14, 17 and 18 shall continue in full
force and effect.
17. Disputes. Any claim or controversy arising out of or
relating to this Agreement, or any breach thereof, or otherwise arising out of
or relating to the Executive's employment, compensation and benefits with the
Company or the termination thereof, shall be settled by arbitration in New
York, New York in accordance with the Voluntary Labor Arbitration Rules of the
American Arbitration Association ("AAA"), or if the AAA refuses to accept and
process any such dispute for arbitration, then the rules of procedure
established by the Center for Public Resources, provided, however, that the
parties agree that (i) the panel of arbitrators shall be prohibited from
disregarding, adding to or modifying the terms of this Agreement; (ii) the
panel of arbitrators shall be required to follow established principles of
substantive law and the law governing burdens of proof; (iii) only legally
protected rights may be enforced in arbitration; (iv) the panel of arbitrators
shall be without authority to award punitive or exemplary damages; (v) the
chairperson of the arbitration panel shall be an attorney licensed to practice
law in New York who has experience in similar matters; (vi) the panel of
arbitrators shall consist solely of arbitrators from the securities industry;
and (vii) any demand for arbitration made by the Executive must be filed and
served, if at all, within 180 days of the occurrence of the act or omission
complained of. Any claim or controversy not submitted to arbitration in
accordance with this Section 19 shall be considered waived and, thereafter, no
arbitration panel or tribunal or court shall have the power to rule or make
any award on any such claim or controversy. The award rendered in any
arbitration proceeding held under this Section 19 shall be final and binding,
and judgment upon the award may be entered in any court having jurisdiction
thereof, provided that the judgment conforms to established principles of law
and is supported by substantial record evidence. Notwithstanding the
foregoing, either the Company or the Executive may elect not to have this
Section 17 apply with respect to matters arising from the provisions of
Sections 5 through 9, in which case such matters shall be subject to the
enforcement provisions of Section 10 hereof.
18. Attorney's Fees. The Company shall pay Executive's
reasonable attorneys' fees incurred in connection with the negotiation and
preparation of this Agreement in an amount not exceed $15,000.
19. Miscellaneous; Choice of Law. This Agreement constitutes the
entire agreement, and supersedes all prior agreements, of the parties hereto
relating to the subject matter hereof, and there are no written or oral terms
or representations made by either party other than those contained herein.
This Agreement shall be governed by
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and construed in accordance with the domestic laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day and year first above written.
HOENIG GROUP INC.
By:
-----------------------------
Its:
----------------------------
- - -----------------------------
Fredric P. Sapirstein
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[HOENIG LETTERHEAD] EXHIBIT 99
- - ------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
For Further Information Contact:
Alan B. Herzog
914-935-9000
FREDRIC P. SAPIRSTEIN NAMED CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF
HOENIG GROUP INC.
Rye Brook, NY, September 5, 1996 -- Fredric P. Sapirstein was named chairman,
chief executive officer, president, and director of Hoenig Group Inc. (NASDAQ:
HOEN), a financial services company specializing in securities brokerage and
institutional investment management. His appointment was announced today,
following the unanimous election by the board of directors, and is effective
immediately. He replaces Joseph A. D'Andrea who was serving as interim
chairman following the death of Hoenig's chairman and founder, Ronald H.
Hoenig.
Mr. Sapirstein, 54, joins Hoenig from Bear Stearns, where he was managing
director, head of Asian Equity Capital Markets and most recently head of Asian
Investment Banking, based in Hong Kong. Prior to that he was chief executive
officer of Schroder Wertheim & Co., Inc., Equity Division, co-managing
director of Schroder Securities Worldwide, and a member of both the Wertheim
and Schroder PLC Group Executive Committees.
Mr. D'Andrea, 71, will remain a director and vice president in charge of
business development. In announcing the news today, Mr. D'Andrea commented,
"Fred Sapirstein brings a wealth of experience and knowledge to Hoenig. His
solid background in institutional brokerage, asset management and investment
banking makes him highly qualified to lead Hoenig into the future."
Mr. Sapirstein commented, "I am looking forward to working with Hoenig's
talented team and to building a stronger financial service organization. We
will continue to focus on strategically expanding upon our current base of
business."
Hoenig Group Inc. provides global securities brokerage, marketing, and
distribution of independent third-party research to institutional clients
through its wholly-owned subsidiaries in the U.S., the UK, and Asia. Through
its wholly-owned subsidiary Axe-Houghton Associates, Inc., it also provides a
wide range of investment management services to public and corporate employee
benefit plans, investment partnerships and other institutional clients.
Founded in 1970, Hoenig's headquarters are in Rye Brook, New York. Hoenig's
organization includes offices in Boston, London, Tokyo and Hong Kong.
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