Exhibit 10.2
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is made as of the Effective Date, by and
between Gleacher Partners, LLC (“Partners”), Broadpoint
Capital, Inc., a New York corporation (“Capital”),
Broadpoint Securities Group, Inc. (“Broadpoint”), and
Eric Gleacher (“Employee”).
W I T N E S S E T
H :
WHEREAS, Capital and Broadpoint desire to cause
Employee to be appointed as Chairman of Broadpoint, and Employee
desires to be appointed to that position;
WHEREAS, Capital desires to employ Employee as a
senior member of the Investment Banking Division of Capital and its
affiliates, and Employee desires to be employed in that
position;
WHEREAS, an Agreement and Plan of Merger by and
among Broadpoint, Magnolia Advisory LLC, Gleacher Partners Inc.,
certain of the stockholders of Gleacher Partners Inc., and each of
the holders of interests in Gleacher Holdings, LLC, dated as of
March 2, 2009 (the “Merger Agreement”) will be entered
into concurrently with the execution of this Agreement, pursuant to
which Gleacher Partners Inc. will be merged with and into Magnolia
Advisory LLC (the “Merger”);
WHEREAS, Employee currently is an employee of
Partners, and Partners will be a wholly-owned subsidiary of
Magnolia Advisory LLC following the Merger;
WHEREAS, Partners desires to continue to employ
Employee following the Merger as a senior member of the Investment
Banking Division of Partners until Employee is employed by Capital,
and Employee desires to continue to be employed in that
position;
WHEREAS, in connection with the Merger, Employee
shall receive significant consideration pursuant to the terms of
the Merger Agreement;
WHEREAS, as a condition to the Merger, the
Merger Agreement contemplates, among other things, that Employee
shall enter into this Agreement; and
WHEREAS, as a condition to the Merger, the
Merger Agreement also contemplates Broadpoint and Employee shall
enter into a Non-Competition and Non-Solicitation Agreement
concurrently with the execution of this Agreement (the
“Non-Competition Agreement”).
NOW, THEREFORE, in consideration of the mutual
covenants and promises hereinafter set forth and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Partners, Capital and Employee hereby agree as
follows:
1.
Employment and Employment Period .
(a) The
“Effective Date” of this Agreement shall be the
“Closing Date” as defined in the Merger
Agreement. In the event the Effective Date does not
occur, this Agreement shall be void ab initio and of no
force and effect.
(b) Company
(as defined below) agrees to employ Employee and Employee agrees to
be employed by Company, on the terms and conditions set forth in
this Agreement, for a period commencing on the Effective Date and
continuing thereafter until the third anniversary thereof, unless
sooner terminated pursuant to Section 5 hereof (the
“Employment Period”). The Employment Period
shall automatically be extended for one additional year upon the
third anniversary of the Effective Date without the necessity of
any affirmative action by any party, unless either party provides
at least six (6) months’ advance written notice to the other
party that the Employment Period will not be
extended. Following the termination of Employee’s
employment for any reason, he shall resign any and all officerships
and directorships he then holds with Broadpoint, Company or any of
their affiliates.
(c) For
purposes of this Agreement, “Company” shall mean
Partners during the period commencing on the Effective Date and
ending as of the date on which Broadpoint determines that
Employee’s employment shall be transferred to
Capital. Thereafter, Company shall mean
Capital. Employee acknowledges and agrees that the
transfer of Employee’s employment from Partners to Capital as
contemplated by this Agreement (and without any other event) shall
not constitute a termination of employment or Good Reason (as
defined below) for purposes of this
Agreement. Notwithstanding the foregoing definition of
“Company,” Broadpoint shall be jointly and severally
liable for, and guarantee any obligations of, Partners hereunder
during the period that Partners is “Company” for
purposes of this Agreement. Broadpoint will use its
reasonable best efforts to combine Company and Partners, or to
transfer the employment of all employees of Partners to
Company, by December 31, 2009.
(a) Effective
as of the Effective Date, the Board of Directors of Broadpoint (the
“Board”) shall appoint Employee as a member and
Chairman of the Board and thereafter during the Employment Period
shall nominate Employee for election as a member of the Board when
his seat on the Board is up for re-election. While
serving on the Board, Employee shall serve as Chairman of
Broadpoint and shall (i) have the duties, responsibilities and
authority commensurate with such position and such other duties and
responsibilities as are otherwise set forth in Broadpoint’s
By-Laws, (ii) be responsible for the origination and execution of
signature investment banking transactions, (iii) assist in building
Broadpoint, Company and their investment banking brand through pro
active interaction with the media, and (iv) work with the Chief
Executive Officer of Broadpoint and Company on strategic direction
and sourcing capital consistent with the business plan of
Broadpoint and Company.
(b) (i)
During the Employment Period, Employee shall serve as a senior
member of the Investment Banking Division of Company and its
affiliates (the “Division”), (ii) during the portion of
the Employment Period that Partners is “Company” for
purposes of this Agreement, Employee shall also serve as the Chief
Executive Officer of Partners, with such
duties and
responsibilities as are commensurate with such position, and (iii)
during the Employment Period, Employee shall devote substantially
all of his working time and attention during normal working hours
to the performance of his duties hereunder. For purposes
of any applicable regulatory or self regulatory requirements,
Employee’s supervisory duties and responsibilities shall be
as set forth in the Joint Marketing Agreement to be entered into,
and on terms mutually agreed between the date hereof and the
Effective Date, by Partners and Capital. Notwithstanding
the foregoing, nothing in this Agreement shall restrict Employee
from managing his personal investments, personal business affairs
and other personal matters, or serving on civic or charitable
boards or committees, if such activities do not interfere with the
performance of his duties hereunder or conflict with the
Company’s interests (it being understood that
Employee’s continued provision of services to Gleacher
Mezzanine Funds and Gleacher Fund Advisors at the same level as
Employee provided such services prior to the Effective Date shall
in no event be deemed a violation of this Section 2(b); provided
that Employee does not devote more than ten hours to the provision
of such services during any month during the Employment
Period).
3.
Compensation and Benefits . For the
services rendered by Employee to Company during the Employment
Period, Employee shall be paid and provided the compensation and
benefits set forth in this Section 3.
(a)
Base Salary . As compensation for
services performed under and during the Employment Period, Company
shall pay to Employee, in regular periodic installments as in
effect immediately prior to the Effective Date, a base salary (the
“Base Salary”) at the rate of Three Hundred Fifty
Thousand Dollars ($350,000.00) per
year. Employee’s Base Salary shall be reviewed
each year and may be adjusted upward from time to time at the
discretion of the Chief Executive Officer of the Company and, where
appropriate, the compensation committee of the Board.
(b)
Annual Bonus . Employee shall participate
in the annual bonus pool for the Division for each fiscal year of
Broadpoint that begins during the Employment Period;
provided , however , that Employee’s bonus with
respect to the fiscal year that begins prior to the Effective Date
shall be pro-rated to correspond to the portion of such fiscal year
that follows the Effective Date. The amount, if any, of
Employee’s annual bonus will be determined under terms and
conditions developed by the compensation committee of the Board, as
recommended by the Chief Executive Officer of the
Company.
(c)
Benefits . At all times during the
Employment Period, Employee shall be entitled to receive employee
benefits on such basis as is comparable to those provided to other
senior Employees of Broadpoint, subject to the terms and conditions
of the relevant benefits plans and policies; provided ,
however , that during the Benefits Continuation Period (as
defined in the Merger Agreement), Employee shall be entitled to
receive employee benefits on a basis that is no less favorable than
as set forth in Section 7.10(a) of the Merger
Agreement. Employee shall be entitled to vacation and
paid holidays consistent with Company’s practices as adopted
from time to time. During the Employment Period,
Employee shall be entitled to automobile transportation related
benefits for business purposes that are no less favorable than
those provided to Employee immediately prior to the Effective
Date.
(d)
Equity Compensation Awards . During the
Employment Period, Employee shall be eligible to participate in,
and receive awards under, Broadpoint’s 2007 Incentive
Compensation Plan (or any successor plan thereto), subject to the
terms and conditions of such Plan and the applicable award
agreements.
4.
Expenses . Employee shall be entitled to
be fully reimbursed for all reasonable expenses incurred by him in
the performance of his duties hereunder on the same basis as
applied to him at Gleacher Partners Inc. as of immediately prior to
the Effective Date. Any reimbursement or advancement
payable to Employee pursuant to this Agreement shall be conditioned
on the submission by Employee of all expense reports reasonably
required by Company under the applicable expense reimbursement
policy, and shall be paid to Employee as soon as practicable
following receipt of such expense reports, but in no event later
than the last day of the calendar year following the calendar year
in which Employee incurred the reimbursable expense. Any
amount of expenses eligible for reimbursement, or in-kind benefit
provided, during a calendar year shall not affect the amount of
expenses eligible for reimbursement, or in-kind benefit to be
provided, during any other calendar year. The right to
any reimbursement or in-kind benefit pursuant to this Agreement
shall not be subject to liquidation or exchange for any other
benefit.
5.
Termination and Termination of Benefits .
Employee’s employment with Company shall
terminate under the following circumstances:
(a)
Expiration of Employment Period Without Continued Employment
of Employee by Company . Employee’s
employment shall terminate as of the last day of the Employment
Period. In such event, and subject to the other
provisions of this Section 5, Employee shall be entitled to
the following payments and benefits and Company shall have no
further obligations to Employee under this Agreement:
(i) Employee
shall be entitled to receive any accrued but unpaid Base Salary
through the last day of the Employment Period within 30 days after
such last day of the Employment Period, and any accrued benefits
payable to Employee in accordance with Company’s benefits
policies or the provisions of any benefit plan in which he is then
a participant to the extent provided therein;
(ii) Company
shall pay Employee a pro-rated bonus for the fiscal year in which
termination occurs, to be paid in cash at the time such bonus would
have been paid if Employee remained employed determined consistent
with Section 3(b) (but in no event later than 2-1/2 months
following the end of the year in which Employee’s employment
is terminated), and shall also pay Employee any other bonus with
respect to any other fiscal year that had been earned at the time
of the termination of Employee’s employment, but not yet paid
(payable in no event later than 2-1/2 months following the end of
the year in which such bonus was earned); and
(iii) Any
equity compensation awards previously made to Employee shall vest
or be forfeited in accordance with the terms of Broadpoint’s
2007 Incentive Compensation Plan (or any successor plan under which
such awards were granted) and the applicable award
agreements.
(b)
Termination By Employee Without Good Reason .
Employee may resign from Company at any time upon sixty
(60) days’ prior written notice to Company. In the
event of resignation by Employee under this Subsection (b), Company
may elect to waive the period of notice, or any portion thereof and
thereby accelerate the date of termination. In the event
of termination by Employee of his employment under this Subsection
(b), Employee shall be entitled to the following payments and
benefits and Company shall have no further obligations to Employee
under this Agreement:
(i) Employee
shall be entitled to receive any accrued but unpaid Base Salary
through the effective date of such termination within 30 days
following the date of termination and any accrued benefits payable
to Employee in accordance with Company’s benefits policies or
the provisions of any benefit plan in which he is then a
participant to the extent provided therein;
(ii) Company
shall pay Employee any bonus with respect to any concluded fiscal
year that had been earned at the time of the termination of
Employee’s employment, but not yet paid (payable in no event
later than 2-1/2 months following the end of the year in which such
bonus was earned); and
(iii) Any
equity compensation awards previously made to Employee shall vest
or be forfeited in accordance with the terms of Broadpoint’s
2007 Incentive Compensation Plan (or any successor plan under which
such awards were granted) and the applicable award
agreements.
(c)
Termination by Company Without Cause .
Employee’s employment under this Agreement may be
terminated by Company without Cause (as defined in Section 5(e) of
this Agreement) and sixty (60) days’ prior written notice to
Employee. In the event of such termination, Employee
shall be entitled to the following payments and benefits and
Company shall have no further obligations to Employee under this
Agreement:
(i) Company
shall continue to pay to Employee his Base Salary until the date
which is twelve (12) months following the termination of his
employment under this Section 5(c) (the “Severance
Period’’). Company shall also pay Employee a
pro-rated bonus for the fiscal year in which the Severance Period
ends determined consistent with Section 3(b), to be paid in cash at
the time such bonus would have been paid if Employee remained
employed (but in no event later than 2-1/2 months following the end
of the year in which Employee’s employment is terminated);
and Company shall pay Employee any other bonus with respect to any
other fiscal year that had been earned at the time of the
termination of Employee’s employment, but not yet paid
(payable in no event later than 2-1/2 months following the end of
the year in which such bonus was earned);
(ii) Company
shall maintain in full force and effect, for the continued benefit
of Employee for the Severance Period, the medical, hospitalization
and dental insurance plans and programs in which Employee was
participating immediately prior to the date of termination at the
level in effect and upon substantially the same terms and
conditions (including, if applicable, contributions required by
Employee for such
benefits) as
existed immediately prior to the date of termination;
provided , that , if Employee cannot continue to
participate in Company’s plans and programs providing such
benefits, Company shall arrange to provide Employee with the
equivalent benefits under an individual policy (“Continued
Benefits”). Such Continued Benefits shall
terminate on the date or dates Employee receives substantially
similar coverage and benefits, without waiting period or
pre-existing condition limitations, under the plans and programs of
a subsequent employer; provided , that , the
determination of coverage and benefits shall be made on a plan by
plan and benefit by benefit basis and Company’s obligation
under this Section 5(c) shall continue with respect to any
plan or benefit that is not substantially similar to those in
effect when Employee’s employment terminated. At
the end of the Severance Period, Employee shall have the right to
elect continuation coverage under COBRA to the extent still
eligible under applicable law;
(iii) Employee
shall be paid or provided any accrued benefits payable to Employee
in accordance with Company’s benefits policies or the
provisions of any benefit plan in which he is then a participant to
the extent provided therein; and
(iv) Any
equity compensation awards previously made to Employee shall vest
or be forfeited in accordance with the terms of Broadpoint’s
2007 Incentive Compensation Plan (or any successor plan under which
such awards were granted) and the applicable award
agreements. As a condition to any vesting or continued
vesting of awards, and subject to receiving a release from
Broadpoint and its affiliates (which release shall exclude their
rights to seek contribution and/or indemnification from Employee
and any rights Company may have under the Merger Agreement),
Employee shall be required to sign a separation agreement with a
general release (which release shall exclude Employee’s
rights to seek contribution and/or indemnification from Broadpoint
and its affiliates and any rights Employee may have under the
Merger Agreement) in such form as is reasonably acceptable to the
parties and their respective counsel.
(d)
Termination by Employee for Good Reason .
Employee may terminate his employment hereunder for
Good Reason by giving written notice to the Chief Executive Officer
of Company within thirty (30) days after the occurrence of any one
of the events specified in Subsection (d)(i) of this Section 5,
without his prior written consent, specifying that such termination
shall occur thirty (30) days after such notice has been given to
the Chief Executive Officer; provided , however ,
that such notice shall not be effective to cause termination under
this Subsection (d) if the specified event is cured by Company
within thirty (30) days of such written notice thereof.
(i) Only
the following shall constitute “Good Reason” for such
termination:
(A) Failure
by Broadpoint or its affiliates to perform fully the terms of this
Agreement, or any plan or agreement referenced in this Agreement,
other than an immaterial and inadvertent failure not occurring in
bad faith and remedied by Broadpoint or its affiliates promptly
(but not later than five (5) days) after receiving notice thereof
from Employee;
(B) Any
reduction in Employee’s Base Salary or failure to pay any
bonuses or other material amounts due under this Agreement in
accordance herewith;
(C) The
assignment to Employee of any duties inconsistent in any material
respect with his position or with his authority, duties or
responsibilities as Chairman of Broadpoint or as a senior member of
the Division or as Chief Executive Officer of Partners during the
period required by this Agreement, or any other action by Company
which results in a diminution in such positions,
authorit
