Exhibit 10.1
Execution Version
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J NET ENTERPRISES, INC.
STOCKHOLDERS AGREEMENT
Dated as of June 2, 2004
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TABLE OF CONTENTS
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ARTICLE I
VESTING OF EMPLOYEE-OWNER SHARES
Section 1.1. Vesting Schedule
Section 1.2. Unvested Shares Subject to Call Right
ARTICLE II
LIMITATIONS ON TRANSFER OF SHARES
Section 2.1. Transfers Generally
Section 2.2. Transfers Following Death or Disability
Section 2.3. Transfers with the Consent of Board of Directors
Section 2.4. Compliance with Law and Regulations
Section 2.5. Legend on Certificates; Entry of Stop Transfer Orders
Section 2.6. Certificates to be Held by Parent
Section 2.7. Transfers in Violation of Agreement Void
ARTICLE III
VOTING AGREEMENT
Section 3.1. Nomination Rights
Section 3.2. CEO Agreement
Section 3.3. Form ADV
Section 3.4. Termination of Voting Provisions
Section 3.5. Proxy
ARTICLE IV
RIGHT TO PURCHASE SHARES
Section 4.1. Right of Parent to Purchase Shares in case of
Harmful Activity
Section 4.2. Notice of Harmful Activity
Section 4.3. Procedures for Purchase of Initial Shares
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties of the Shareholders
Section 5.2. Representations and Warranties of Parent
ARTICLE VI
DEFINITIONS
ARTICLE VII
MISCELLANEOUS
Section 7.1. Notices
Section 7.2. Term of the Agreement
Section 7.3. Amendments; Waivers
Section 7.4. Adjustment Upon Changes in Capitalization
Section 7.5. Disinterested Board Members to Make Determinations
Section 7.6. Severability
Section 7.7. Representatives, Successors and Assigns
Section 7.8. Governing Law
Section 7.9. Specific Performance
Section 7.10. Submission to Jurisdiction; Waiver of Immunity
Section 7.11. Power of Attorney
Section 7.12. Further Assurances
Section 7.13. Execution in Counterparts
Section 7.14. Entire Agreement
Schedule I
STOCKHOLDERS AGREEMENT
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This STOCKHOLDERS AGREEMENT (this "Agreement") is dated as of
June 2, 2004, by and among (i) J Net Enterprises, Inc., a Nevada
corporation ("Parent"), (ii) the persons listed on Schedule I hereto (the
"Non-Employee Owners), (iii) the Employee Owners (as defined herein) listed
on Schedule II hereto and (iv) the Family Affiliates (as defined herein)
listed on Schedule III hereto (the Non-Employee Owners, the Employee Owners
and the Family Affiliates collectively, the "Shareholders"). Capitalized
terms used herein have their respective meanings set forth in Article VI of
this Agreement.
W I T N E S S E T H:
_ _ _ _ _ _ _ _ _ _
WHEREAS, Parent, Epoch Acquisition Corp., a Delaware corporation
("Merger Sub") and a wholly-owned direct subsidiary of Parent, and Epoch
Investment Partners, Inc., a Delaware corporation ("Epoch"), hereto have
entered into a Merger Agreement, dated as of the date hereof (the "Merger
Agreement"), pursuant to which Merger Sub will merge with and into Epoch,
with Epoch surviving as a wholly-owned direct subsidiary of Parent, and
Berenson and the Employee Owners and their Family Affiliates, as the sole
shareholders of Epoch, will receive shares of common stock, par value $0.01
(the "Common Stock") of Parent in exchange for their shares of Epoch (the
"Merger");
WHEREAS, as a result of the Merger, Berenson and the Employee
Owners and their Family Affiliates will have the right to receive a
majority of the issued and outstanding Common Stock, subject to certain
adjustments following the date hereof;
WHEREAS, Parent, the Employee Owners and their Family Affiliates
and the Non-Employee Owners desire to enter into certain agreements with
respect to the Transfer and voting of their Common Stock and various other
matters in order to continue harmonious relationships among themselves with
respect to the conduct of the business and affairs of Parent; and
WHEREAS, it is a condition precedent to the closing under the
Merger Agreement that the parties hereto enter into this Agreement.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements, covenants and provisions herein contained and for good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
VESTING OF EMPLOYEE-OWNER SHARES
Section 1.1 Vesting Schedule. The Initial Shares of each
Employee Owner and his or her Family Affiliates shall vest and not be
subject to Parent's right of purchase pursuant to Section 1.2 on the
following schedule:
(a) 12.5% of the Initial Shares shall be vested on the date
hereof;
(b) 25% of the Initial Shares shall be vested on the first
anniversary of the date hereof;
(c) 50% of the Initial Shares shall be vested on the second
anniversary of the date hereof; and
(d) 100% of the Initial Shares shall be vested on third
anniversary of the date hereof.
Section 1.2. Unvested Shares Subject to Call Right. Each
Employee Owner and his or her Family Affiliates agrees that upon
termination of such Employee Owner's employment with Parent, the unvested
Initial Shares held by such Employee Owner and Family Affiliates will be
subject to the right of Parent to purchase such Initial Shares in
accordance with the procedures in Section 4.3.
ARTICLE II
LIMITATIONS ON TRANSFER OF SHARES
Section 2.1. Transfers Generally. Each Shareholder agrees
that, in addition to any restrictions imposed by law, no Shareholder shall
Transfer any Initial Shares Owned by such Shareholder, except that:
(a) Subject to Sections 2.1(c), each Employee Owner together
with his or her Family Affiliates may in the aggregate Transfer (1) on and
after June 2, 2007 and prior to June 2, 2008, a number of Initial Shares
not to exceed 12.5% of the aggregate Starting Amount of Shares Owned by
such Employee Owner and Family Affiliates, (2) on and after June 2, 2008
and prior to June 2, 2009, a number of Initial Shares not to exceed 12.5%
of the aggregate Starting Amount of Shares Owned by such Employee Owner and
Family Affiliates, (3) on and after June 2, 2009 and prior to June 2, 2010,
a number of Initial Shares not to exceed 25% of the aggregate Starting
Amount of Shares Owned by such Employee Owner and Family Affiliates and (4)
on and after June 2, 2010, any number of Initial Shares, provided that, in
the case of each of the preceding clauses (1) through (4):
(i) Prior to the first anniversary of the Employment
Termination Date of any Employee Owner, neither such Employee Owner nor his
or her Family Affiliates may Transfer Initial Shares if, as a result of
such Transfer, such Employee Owner and Family Affiliates would in the
aggregate Own less than that number of Initial Shares that is equal to 30%
of the aggregate Starting Amount of Shares Owned by such Employee Owner and
Family Affiliates; and
(ii) Any Initial Shares in respect of which Parent has
exercised its right of purchase pursuant to Article IV hereof may only be
Transferred in accordance with Article IV.
Any number of Initial Shares eligible to be Transferred in any annual
period under this Section 2.1(a) but not so Transferred may be Transferred
in any future annual period without any restriction imposed by this Section
2.1(a).
(b) Subject to Section 2.1(c), each Non-Employee Owner may
Transfer any Initial Shares on and after the third anniversary of the date
hereof.
(c) Notwithstanding Sections 2.1(a) or 2.1(b), no Shareholder
may Transfer Initial Shares during the pendency of any dispute between
Parent and such Shareholder regarding the obligations under this Agreement
of such Shareholder.
Section 2.2. Transfers Following Death or Disability.
Notwithstanding any other provisions of this Agreement, (a) upon the death
or Disability of any Employee Owner, such Employee Owner (or his or her
estate) and his or her Family Affiliates may Transfer any Initial Shares
that, prior to the date of such event, had become vested in accordance with
Section 1.2 hereof free of any provisions of this Agreement and (b) upon
the death or Disability of any other Shareholder, such other Shareholder
(or his or her estate) may Transfer Initial Shares free of any provisions
of this Agreement.
Section 2.3. Transfers with the Consent of Board of Directors.
Notwithstanding any other provisions of this Agreement, a Shareholder may
Transfer any number of vested Initial Shares at any time with the prior
written consent of the Board of Directors, which consent may be withheld or
delayed, or granted on such terms and conditions as it may determine, in
its sole discretion.
Section 2.4. Compliance with Law and Regulations. Each
Shareholder agrees that any Transfer of Initial Shares by such Shareholder
shall be in compliance with any applicable federal and state securities
laws, and any applicable law, rule or regulation of the Commission or any
other governmental agency having jurisdiction.
Section 2.5. Legend on Certificates; Entry of Stop Transfer
Orders. (a) Each Shareholder agrees that each outstanding certificate
representing any Initial Shares that are subject to this Agreement shall
bear an endorsement noted conspicuously on each such certificate reading
substantially as follows:
"The securities represented by this certificate were
issued without registration under the Securities Act
of 1933. No transfer of such securities may be made
without an opinion of counsel, reasonably satisfactory
to Parent, that such transfer may properly be made without
registration under the Securities Act of 1933 or that such
securities have been so registered under a registration
statement which is in effect at the date of such transfer.
The securities represented by this certificate are subject
to the provisions of an agreement dated as of June 2, 2004
among Parent and certain persons listed on the signature
pages to such agreement, a copy of which is on file at
the principal executive office of Parent, and such
securities may be sold, assigned, pledged or otherwise
transferred only in accordance with such agreement."
(b) Each Shareholder agrees to the entry of stop transfer orders
against the transfer of legended certificates representing shares of
Common Stock except in compliance with this Agreement.
(c) Each Shareholder that Owns Initial Shares issued prior to
the date of this Agreement agrees to submit or cause the submission of
any share certificates representing such Initial Shares to Parent for the
application of the endorsement provided in Section 2.5(a) to each such
certificate.
Section 2.6. Certificates to be Held by Parent. (a) Each
Shareholder agrees that the certificates representing such Shareholder's
Initial Shares shall be held in custody by Parent at its principal office.
Subject to Section 2.6(c), Parent shall, upon the request of any such
Shareholder or the estate of any Shareholder, as the case may be, in
writing addressed to the Secretary of Parent or any officer designated by
the Secretary (which request shall include a representation by such
Shareholder or estate thereof that such Shareholder is then permitted to
Transfer a specified number of Initial Shares under the provisions of this
Agreement), promptly release from custody the certificates representing
such specified number of such Shareholder's Initial Shares which are then
intended and permitted to be Transferred under the provisions of this
Agreement. Unless the Initial Shares represented by such certificates have
been registered under the Securities Act of 1933, each Shareholder agrees
such certificates shall bear an endorsement noted conspicuously on each
such certificate reading substantially as follows:
"The securities represented by this certificate
were issued without registration under the Securities
Act of 1933. No transfer of such securities may be
made without an opinion of counsel, reasonably
satisfactory to Parent, that such transfer may properly
be made without registration under the Securities Act
of 1933 or that such securities have been so registered
under a registration statement which is in effect at
the date of such transfer."
Upon delivery of the opinion of counsel described in such legend by a
Shareholder, Parent shall issue to such Shareholder a new certificate
evidencing such Initial Shares without the legend required by this section
endorsed thereon.
(b) During the time Parent has possession of any
Shareholder's Initial Shares, such Shareholder shall retain all rights to
receive and retain dividends, to vote such Initial Shares, subject to the
terms of this Agreement, and to execute consents, waivers or releases and
otherwise to act in respect thereto in all corporate matters.
(c) Parent agrees to use ordinary care, and shall not be
liable for any matter requiring the exercise of greater than ordinary care,
in the safekeeping of the Initial Shares.
Section 2.7. Transfers in Violation of Agreement Void. Any
attempted Transfer of Initial Shares not made in accordance with the
provisions of this Agreement shall be void, and Parent shall not register,
or cause or permit the registry, of Common Stock Transferred in violation
of this Agreement.
ARTICLE III
VOTING AGREEMENT, ETC.
Section 3.1. Nomination Rights. Each of the Shareholders hereby
agree to use, at all times and as promptly as practicable, their respective
reasonable best efforts and to take or cause the taking of all necessary or
desirable actions within their respective powers (including, but not
limited to, the voting of all Common Stock and other securities
respectively owned by them or over which they hold a proxy, attendance at
meetings in person or by proxy for purposes of obtaining a quorum and
execution of written consents in lieu of meetings), to effectuate and carry
out the following provisions:
(a) Epoch Nomination Rights. The board of directors of Parent
will at all times include four (4) directors selected by Priest (the "Epoch
Directors"), provided at least two such Epoch Directors are not current or
former shareholders or officers of Epoch. Pursuant to the Merger
Agreement, two such persons, Priest and Xxxxxxx Xxxxxxxx, will be appointed
to the board of directors at the Effective Time. Priest's current
intention is for the additional initial Epoch Directors to be appointed at
or after the first shareholders meeting occurring after the date hereof.
Priest shall have the right at any time to select a person to fill a
vacancy amongst or to remove and/or replace any existing Epoch Director.
In the event of the death or permanent incapacity of Priest, Priest's
rights under this Section 3.1(a) may be exercised by a majority of the
remaining Epoch Directors.
(b) Current Directors. Each of Xxxxx Xxxxxxx, Xxxxx Xxxxxx and
Xxxxxx Xxxxxxxx (the "Current Directors") shall continue to serve as a
member of the board of directors of Parent and shall be re-nominated and
re-elected as a director so long as each them is willing and able to serve
as a director. In the event that any Current Director shall cease to be a
member of the board of directors of Parent, the remaining Current Directors
may select a replacement to fill such vacancy.
(c) Size of Board. Parent shall at all times be managed by or
under the direction of a board of directors, which shall consist of not
more than seven (7) members.
(d) Approval of Certain Matters. The by-laws of Parent shall be
amended to provide, and shall continue to provide, that all decisions
regarding the following matters shall be approved by a two-thirds majority
of the board of directors of Parent: (i) subject to Section 3.2 below,
compensation of Priest as an officer or employee of Parent Group, (ii)
issuance of additional equity interests to any Employee Owner (other than
pursuant to the Merger Agreement) and (iii) any amendment or modification
of this Agreement.
Section 3.2. CEO Agreement. Parent hereby covenants to enter
into with Priest, prior to the third anniversary of the date hereof, a
contractual employment arrangement including compensation and severance
provisions as is customary for chief executive officers of peer group
companies, provided that any such arrangement shall not become effective
until the third anniversary hereof. Such arrangement need only be approved
by a simple majority of the board of directors of Parent.
Section 3.3. Form ADV. The obligation of any Shareholder to
vote for any person to serve as a director of Parent shall not apply to any
person whose appointment would cause Parent or any its affiliates
registered under the Investment Advisers Act as an investment adviser to
provide (i) an affirmative answer to any question of Item 11 of Part I of
Form ADV or (ii) any disclosure to investment advisory clients or
prospective clients under Rule 206(4)-4 of the Investment Advisers Act.
Section 3.4. Termination of Voting Provisions. Notwithstanding
any other provisions of this Agreement, the provisions of this Article III,
and the obligation of any Shareholder to vote in accordance with Section
3.1, shall terminate on the third anniversary of the date of this
Agreement, provided that the obligations of each Employee Owner and his or
her Family Affiliates to vote in accordance with Section 3.1(a) and, unless
waived in writing by Priest, Section 3.1(c) shall continue as long as such
Employee Owner or his or her Family Affiliates continue to hold any Initial
Shares and Priest continues to be employed by Parent Group.
Section 3.5. Proxy. Each Shareholder, with respect to all
Initial Shares, does hereby irrevocably constitute and appoint Priest with
full power of substitution, as his or its true and lawful attorney and
proxy, for and in his or its name, place and stead, to vote each of such
Initial Shares as his or its proxy, at the any annual, special or adjourned
meeting of the shareholders (or in any action by written consent of the
shareholders) of Parent following the Effective Time (including the right
to sign his or its name, as stockholder, to any consent, certificate or
other document relating to Parent that may be permitted or required by
applicable law) to effect the actions required by Section 3.1 of this
Agreement. THE SHAREHOLDERS ACKNOWLEDGE THAT THE COMPANY IS ENTERING THE
MERGER AGREEMENT IN RELIANCE UPON THIS AGREEMENT AND INTENDS THIS PROXY TO
BE IRREVOCABLE AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER
ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE
THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY
THE SHAREHOLDER WITH RESPECT TO THE INITIAL SHARES. NOTWITHSTANDING THE
FOREGOING, THIS PROXY SHALL BE AUTOMATICALLY REVOKED AS TO ANY SHAREHOLDER
WITHOUT ANY FURTHER ACTION ON THE PART OF SUCH SHAREHOLDER UPON THE
TERMINATION OF SUCH SHAREHOLDER'S VOTING OBLIGATIONS PURSUANT TO SECTION
3.4 OF THIS AGREEMENT. The Shareholder further agrees to cause all Initial
Shares controlled by him beneficially and of record to be voted in
accordance with the foregoing. The Shareholder hereby acknowledges both
receipt of a copy of the Merger Agreement and that such Shareholder
understands the contents thereof.
ARTICLE IV
RIGHT TO PURCHASE SHARES
Section 4.1 Right of Parent to Purchase Shares in case of
Harmful Activity. i. If, on or prior to the first anniversary of the
Employment Termination Date of any Employee Owner (including during such
Employee Owner's employment with Parent), the Board of Directors determines
in its good faith judgment that such Employee Owner has engaged in Harmful
Activity, Parent shall have the right to purchase, at any time or from time
to time, from such Employee Owner (or, to the extent an Employee Owner does
not Own sufficient shares of Common Stock to satisfy his or her obligations
under this Section 4.1, to purchase from his or her Family Affiliates pro
rata in accordance with the number of Initial Shares Owned by such Family
Affiliates on the Notice Date) a number of Initial Shares Owned by such
Employee Owner equal to 30% of such Employee Owner and Family Affiliate's
aggregate Starting Amount of Shares. The purchase price of each Initial
Share (the "Purchase Price") purchased by Parent pursuant to this Section
4.1 shall equal $0.01 per share.
Section 4.2. Notice of Harmful Activity. Prior to the first
anniversary of such Employee Owner's Employment Termination Date (including
during such Employee Owner's employment with Parent Group), (a) each
Employee Owner agrees not to engage in Harmful Activity and (b) each
Employee Owner who engages (or intends to engage) in Harmful Activity
agrees (i) to notify Parent in writing in reasonable detail at least 30
days prior to engaging in such Harmful Activity, (ii) to respond to such
questions and furnish such additional information as Parent may request
with respect to such Harmful Activity and (iii) to update such written
notice or inquiries promptly in the event of any circumstances that would
cause any notices or responses to be inaccurate or incomplete.
Section 4.3. Procedures for Purchase of Initial Shares. The
Parent may exercise its right to purchase Initial Shares under Section 1.2
or Section 4.1 one or more times in accordance with the following
procedures:
(i) The Parent shall give notice to the Employee Owner and his
or her Family Affiliates that Own the Initial Shares subject to such
right of purchase not later than the close of business on the first
anniversary of the Employment Termination Date of such Employee Owner
(the "Notice Date"), advising such Employee Owner and Family Affiliate
of Parent's election to exercise such right, stating the number of
Initial Shares to be so purchased, the Purchase Price, closing
arrangements and a closing date at which payment of the consideration
for such Initial Shares will be made, which date shall be not less than
five days nor more than 90 days after the Notice Date.
(ii) On such closing date, Parent and such Employee Owner and
Family Affiliates shall cause the Person holding the Initial Shares
being so purchased to deliver the certificates representing such
Initial Shares, properly endorsed for transfer by such Employee Owner
or Family Affiliate or his, her or its attorney-in-fact, to Parent at
its principal place of business and Parent shall deliver to such
Employee Owner or Family Affiliate the consideration therefor.
(b) If an Employee Owner or his or her Family Affiliate is
unable to satisfy its obligations under this Section 4.3 to deliver Initial
Shares to Parent for any reason, such Employee Owner or Family Affiliate
shall be liable to Parent, as liquidated damages and not as a penalty, for
an amount equal to the product of (i) the number of Initial Shares that
should have been sold to Parent under this Section 4.3 but were not sold
and (ii) the excess, if any, of the Market Value of such shares as of the
Notice Date over the Purchase Price.
(c) In the event such Employee Owner or Family Affiliate shall
fail to cooperate reasonably with the provisions of this Section 4.3,
Parent shall have the power and authority pursuant to Section 7.11 hereof
to take as attorney-in-fact all actions required to be taken by such
Employee Owner or Family Affiliate and to deliver any consideration payable
to such Employee Owner or Family Affiliate to the address listed in
Schedule I.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties of the Shareholders.
Each Shareholder severally represents and warrants to Parent and to each
other Shareholder that (a) in the case of a Shareholder who is not a
natural person, such Shareholder is duly authorized to execute, deliver and
perform this Agreement; (b) this Agreement has been duly executed by such
Shareholder or his, her or its attorney-in-fact on behalf of such
Shareholder and is a valid and binding agreement of such Shareholder,
enforceable against such Shareholder in accordance with its terms; (c) the
execution, delivery and performance by such Shareholder of this Agreement
does not violate or conflict with or result in a breach of or constitute
(or with notice or lapse of time or both constitute) a default under any
agreement to which such Shareholder is a party; and (d) such Shareholder
has good and marketable title to the shares of Common Stock subject to this
Agreement free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind, other than pursuant to this
Agreement.
Section 5.2. Representations and Warranties of Parent. The
Parent represents and warrants to the Shareholders that (a) Parent is duly
authorized to execute, deliver and perform this Agreement; (b) this
Agreement has been duly authorized, executed and delivered by Parent and is
a valid and binding agreement of Parent, enforceable against Parent in
accordance with its terms; and (c) the execution, delivery and performance
by Parent of this Agreement does not violate or conflict with or result in
a breach by Parent of or constitute (or with notice or lapse of time or
both constitute) a default by Parent under its Certificate of Incorporation
or By-Laws, any existing applicable law, rule, regulation, judgment, order,
or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over Parent or its property
including the requirements of any securities exchange, or any agreement or
instrument to which Parent is a party or by which Parent or its property
may be bound.
ARTICLE VI
DEFINITIONS
For purposes of this Agreement, the following terms shall have
the following meanings:
"Agreement" has the meaning set forth in the preamble to this
Agreement.
"Berenson" means Berenson Epoch LLC.
"Board of Directors" means the Board of Directors of Parent or,
to the extent expressly authorized by the Board of Directors to exercise
the powers of the Board of Directors under this Agreement, (i) any
committee of such Board of Directors or (ii) any board of directors or
committee of any Subsidiary of Parent.
"Business Day" means a day on which the principal national
securities exchange on which shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of
Common Stock are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on
which banking institutions in the Borough of Manhattan, City and State of
New York are not authorized or obligated by law or executive order to
close.
"Closing Price" means, on any day, the last sales price, regular
way, per share of Common Stock on such day, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, as reported in the principal consolidated transaction reporting system
covering securities listed or admitted to trading on the NYSE or, if shares
of Common Stock are not listed or admitted to trading on the NYSE, as
reported in the principal consolidated transaction reporting system
covering securities listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or, if
the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National
Quotation Bureau, Inc., or a similar reporting service designated by the
Board of Directors.
"Commission" means the Securities and Exchange Commission.
"Common Stock" has the meaning set forth in the recitals to this
Agreement.
"Disability" means the inability of a person to perform his or
her employment duties, obligations and responsibilities in all material
respects for a continuous period of not less than one hundred and eighty
(180) days by reason of any medically determinable physical or mental
impairment as determined by the Board of Directors in good faith.
"Effective Time" shall have the meaning given therefor in the
Merger Agreement.
"Employee Owner" means each of Priest, Xxxxxxx Xxxxxxx, Xxxxxx
Xxxxx and Xxxxx Xxxxx.
"Employment Termination Date" means, with respect to any Employee
Owner, the date of termination of such Employee Owner's employment with
Parent Group for any reason (whether or not terminated by action of Parent
Group), as determined by the Board of Directors in its sole and absolute
discretion.
"Epoch" has the meaning set forth in the recitals to this
Agreement.
"Epoch Directors" has the meaning set forth in Section 3.1(b).
"Family Affiliates" means, as the context requires, (a) the
Persons listed on Schedule III hereto or (b) with respect to any Employee
Owner, (i) the Persons listed on Schedule III hereto to whom such Employee
Owner transferred shares of Epoch common stock prior to the Merger and (ii)
any Person to whom such Employee Owner Transfers Initial Shares with the
written consent of the Board of Directors in accordance with Section 2.3
and who agrees in writing to be subject to the terms and provisions of this
Agreement as a Family Affiliate.
"Harmful Activity" by an Employee Owner means for such Employee
Owner to, directly or indirectly, either individually or as owner, partner,
agent, employee, consultant or otherwise:
(a) solicit, recruit or induce for employment, hire or
otherwise engage in any capacity an individual who is, or has within
the previous 12 months been, a shareholder, employee or officer of
Parent Group or solicit, recruit or induce any such person to
terminate his or her employment with Parent Group; or;
(b) (A) interfere or attempt to interfere with Parent
Group's relations with any person who is or during the 12 months prior
to such Employee Owner's termination date was a client or, to the
knowledge of such Employee Owner, is or was proposed to be a client or
(B) solicit, assist others in soliciting or accept business from any
such person, including without limitation, by offering to serve as
such person's investment adviser or recommending that such person
consider engaging another person to serve as such person's investment
adviser;
provided that (1) ownership of less than 5% of the publicly-held
voting stock of any corporation shall not, in and of itself, cause an
Employee Owner to be deemed an owner or partner of such corporation
for purposes of this definition, (2) soliciting or accepting business
from a client or prospective client of Parent Group for the management
of a class of asset not then provided or proposed to be provided by
the Parent Group within the next 12 months shall not constitute
Harmful Activity and (3) the acceptance, by a firm that employs an
Employee Owner, of business from any person who is or during the 12
months prior to such Employee Owner's termination date was a client of
Parent Group or, to the knowledge of such Employee Owner, is or was
proposed to be a client of Parent Group shall not constitute Harmful
Activity if such Employee Owner did not and does not interfere or
attempt to interfere with Parent Group's relations with such client
and such Employee Owner did not and does not participate or assist in
any way in the solicitation or provision of services to such client at
such employer.
"Initial Shares" means, at any time, with respect to (i) Berenson
and each of the Employee Owners and Family Affiliates, the shares of Common
Stock received by such person as a result of the Merger (including any
shares received as Per Share Escrow Consideration or Per Share Contingent
Consideration (as such terms are defined in the Merger Agreement) and
currently Owned by such Person or, (ii) in the case of other Shareholder,
the shares of Common Stock designated on Schedule I as such Shareholder's
Initial Shares and currently Owned by such Person.
"Investment Advisers Act" means the Investment Advisers Act of
1940, as amended, and the rules and regulations promulgated thereunder.
"Market Value" means the average of the daily Closing Prices for
the ten consecutive Business Days ending on the Business Day immediately
prior to the date of determination.
"Merger" has the meaning set forth in the recitals to this
Agreement.
"Merger Agreement" has the meaning set forth in the recitals to
this Agreement.
"Merger Sub" has the meaning set forth in the recitals to this
Agreement.
"Non-Employee Owners" has the meaning set forth in the recitals
to this Agreement.
"Notice Date" has the meaning set forth in Section 4.3.
"NYSE" means the New York Stock Exchange, Inc.
"Option Period" has the meaning set forth in Section 4.1(a).
"Own" means to own of record or beneficially, whether directly or
through any other Person.
"Parent" has the meaning set forth in the preamble to this
Agreement and any successors thereof, whether by operation of law or
otherwise.
"Parent Group" means Parent and its Subsidiaries.
"Person" means any natural person or any firm, partnership,
limited liability partnership, association, corporation, limited liability
company, trust, business trust, governmental authority or other entity.
"Priest" means Xxxxxxx X. Xxxxxx.
"Purchase Price" has the meaning set forth in Section 4.1(a).
"Shareholders" has the meaning set forth in the first paragraph
of this Agreement.
"Starting Amount of Shares" means, with respect to Berenson or
any Employee Owner and his or her Family Affiliates the aggregate number of
Initial Shares received by such person in the Merger (including any shares
received as Per Share Escrow Consideration or Per Share Contingent
Consideration (as such terms are defined in the Merger Agreement)) or, in
the case of any other Shareholder, the aggregate number of shares of Common
Stock designated on Schedule I as such Shareholder's Initial Shares.
"Subsidiary" means a corporation, limited liability company or
other entity of which Parent, directly or indirectly, has the power,
whether through the ownership of voting securities, equity interests,
contract or otherwise, (i) to elect at least a majority of the members of
such entity's board of directors or other governing body or (ii) in the
absence of a governing body, to control the business affairs of such
entity.
"Transfer" means, with respect to any Initial Shares, directly or
indirectly, (i) to sell, assign, transfer, pledge (including in margin
transactions), convey, distribute, mortgage, encumber, hypothecate or
otherwise dispose, whether by gift, for consideration or for no
consideration and (ii) to grant any right to vote, whether by proxy, voting
agreement, voting trust or otherwise.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Notices. (a) All notices, requests, demands,
waivers and other communications to be given by any party hereunder shall
be in writing and shall be (i) mailed by first-class, registered or
certified mail, postage prepaid, (ii) sent by hand delivery or reputable
overnight delivery service or (iii) transmitted by telecopy (provided that
a copy is also sent by reputable overnight delivery service) addressed, in
the case of any Shareholder, to him or her at the address set forth on
Schedule I, II or III, as the case may be, or, in the case of Parent, to J
Net Enterprises, Inc., c/o Epoch Investment Partners, Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Secretary, or, in each case, to
such other address as may be specified in writing to the other parties
hereto.
(b) All such notices, requests, demands, waivers and other
communications shall be deemed to have been given and received (i) if by
personal delivery or telecopy, on the day of such delivery, (ii) if by
first-class, registered or certified mail, on the fifth Business Day after
the mailing thereof or (iii) if by reputable overnight delivery service,
on the day delivered.
Section 7.2. Term of the Agreement. (a) This Agreement shall
become effective upon the occurrence of the Effective Time and shall
terminate on the earliest to occur of (i) the first date on which there are
no Shareholders who remain bound by its terms, (ii) the date on which
Parent and all Shareholders who are then bound by its terms agree to
terminate this Agreement and (iii) the tenth anniversary of the date
hereof.
(b) Unless this Agreement is theretofore terminated pursuant to
Section 7.2(a) hereof, a Shareholder shall be bound by its terms until all
Initial Shares Owned by such Shareholder are free of the provisions of
Articles I, II, III and IV hereof.
Section 7.3. Amendments; Waivers. (a) This Agreement may be
amended or modified, and any provision in this Agreement may be waived, if
such amendment, modification or waiver is approved by the Board of
Directors, in accordance, if applicable, with any voting provisions set
forth in the by-laws of Parent, provided that any amendment that would
materially adversely affect any Shareholder (other than an amendment that,
in the good faith judgment of the Board of Directors, is intended to cure
any ambiguity or correct or supplement any provisions of this Agreement
that may be incomplete or inconsistent with any other provision contained
herein) must be approved by the Shareholders that Own a majority of the
Initial Shares subject to this Agreement as of the date of such amendment
or modification, provided, further, that, without the consent of any
Person, the Board of Directors may permit any Person who executes and
delivers a counterpart of this Agreement to become a party to this
Agreement by amending Schedule I hereto.
(b) The failure of any party at any time or times to require
performance of any provision of this Agreement shall in no manner affect
the rights at a later time to enforce the same. No waiver by any party of
the breach of any term contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be or construed
as a further or continuing waiver of any such breach or the breach of any
other term of this Agreement.
Section 7.4. Adjustment Upon Changes in Capitalization. In the
event of any change in the outstanding shares of Parent by reason of stock
dividends, split-ups, recapitalizations, combinations, exchanges of shares
and the like, the term "shares of Common Stock" shall refer to and include
the securities received or resulting therefrom and the terms and provisions
of this Agreement, including without limitation the terms "Initial Shares"
and "Purchase Price," shall be appropriately adjusted so that each
Shareholder will thereafter continue to have and be subject to, to the
greatest extent practicable, the same rights and obligations he, she or it
had been subject to prior to such change.
Section 7.5. Disinterested Board Members to Make Determinations.
In the event that any Shareholder breaches its obligations under this
Agreement, then the Board of Directors shall have the exclusive right to
make (on behalf of Parent) any and all determinations that may be necessary
or appropriate under this Agreement, including without limitation,
determinations relating to the exercise and enforcement of remedies
hereunder. If a Shareholder who is also a member of the Board of Directors
breaches his or her obligations under this Agreement, such Shareholder must
refrain from exercising his or her vote at meetings of the Board and
general meetings of Parent to give effect to this Section 7.5.
Section 7.6. Severability. If the final determination of a
court of competent jurisdiction declares, after the expiration of the time
within which judicial review (if permitted) of such determination may be
perfected, that any term or provision hereof is invalid or unenforceable,
(a) the remaining terms and provisions hereof shall be unimpaired and (b)
the invalid or unenforceable term or provision shall be deemed replaced by
a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision.
Section 7.7. Representatives, Successors and Assigns. Each
Employee Owner shall cause his or her Family Affiliates to comply with the
terms and provisions of this Agreement. This Agreement shall be binding
upon and inure to the benefit of the respective parties hereto and their
respective legatees, legal representatives, successors and assigns;
provided that Shareholders may not assign, delegate or otherwise transfer
any of their rights or obligations under this Agreement except with the
written consent of the Board of Directors.
Section 7.8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA (WITHOUT
REGARD TO THE CONFLICT OF LAWS PRINCIPLES OR RULES THEREOF).
Section 7.9. Specific Performance. Each of the parties hereto
acknowledges that it will be impossible to measure in money the damage to
Parent or the Shareholders if any party hereto fails to comply with the
provisions of Article I, II, III or IV and each party hereto agrees that in
the event of any such failure, neither Parent nor any Shareholder will have
an adequate remedy at law. Therefore, Parent and each Shareholder, in
addition to all of the other remedies which may be available, shall have
the right to equitable relief, including, without limitation, the right to
enforce specifically the provisions of Articles I, II, III and IV by
obtaining injunctive relief against any violation thereof, or otherwise.
All claims for specific performance of one or more provisions of this
Agreement shall be resolved exclusively by litigation before a court of
competent jurisdiction located in the State of New York.
Section 7.10. Submission to Jurisdiction; Waiver of Immunity.
Each Shareholder, for itself and its successors and assigns, hereby
irrevocably waives (a) any objection, and agrees not to assert, as a
defense in any legal or equitable action, suit or proceeding against such
Shareholder arising out of or relating to this Agreement or any transaction
contemplated hereby or the subject matter of any of the foregoing, that (i)
it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable before or in said courts, (ii) the venue
thereof may not be appropriate and (iii) the internal laws of the State of
Nevada do not govern the validity, interpretation or effect of this
Agreement, (b) any immunity from jurisdiction to which it might otherwise
be entitled in any such action, suit or proceeding which may be instituted
before any state or federal court in the State of New York in accordance
with Section 7.9 and (c) any immunity from the maintaining of an action
against it to enforce any judgment for money obtained in any such action,
suit or proceeding and, to the extent permitted by applicable law, any
immunity from execution.
Section 7.11. Power of Attorney. (a) Each Shareholder hereby
makes, constitutes and appoints the Secretary of Parent, and any successor
thereof, with full power of substitution and resubstitution, his, her or
its true and lawful attorney for his, her or its and in his, her or its
name, place and stead and for his, her or its use and benefit, to execute
and deliver all stock powers, instruments of assignment, endorsements and
other documents necessary, appropriate, advisable or convenient to
facilitate or consummate the sale of Initial Shares in accordance with
Section 4.3. Each Shareholder authorizes such attorney-in-fact to take any
further action which such attorney-in-fact shall consider necessary,
appropriate, advisable or convenient in connection with any of the
foregoing, hereby giving such attorney-in-fact full power and authority to
do and perform each and every act or thing whatsoever requisite,
appropriate, advisable or convenient to be done in and about the foregoing
as fully as such Shareholder might or could do if personally present, and
hereby ratifying and confirming all that such attorney-in-fact shall
lawfully do or cause to be done by virtue hereof. The power of attorney
granted pursuant to this Section is a special power of attorney coupled
with an interest and, until terminated in accordance with Section 7.2, is
irrevocable.
Section 7.12. Further Assurances. Each Shareholder agrees to
execute such additional documents and take such further action as may be
requested by Parent to effect the provisions of this Agreement.
Section 7.13. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute but one and
the same instrument.
Section 7.14. Entire Agreement. This Agreement, including the
Schedules hereto, contains the entire understanding of the parties with
respect to the subject matter hereof, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect
to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
J NET ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxxxx
____________________
Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
Employee Owners
_______________
/s/ Xxxxxxx X. Xxxxxx
_______________________________
Xxxxxxx X. Xxxxxx
/s/ J. Xxxxxx Xxxxx
_______________________________
J. Xxxxxx Xxxxx
/s/ Xxxxxxx Xxxxxxx
_______________________________
Xxxxxxx Xxxxxxx
/s/ Xxxxx Xxxxx
_______________________________
Xxxxx Xxxxx
Non-Employee Owners
___________________
BERENSON EPOCH LLC
By: /s/ Berenson & Company, Inc., its managing member
_________________________________________________
Name: Xxxxxx Xxxxx
Title: Secretary and Treasurer
/s/ Xxxxx Xxxxxxx
_______________________________
Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxx
_______________________________
Xxxxx Xxxxxx
Family Affiliates
_________________
J XXXXXX/XXXXXXX X XXXXX
TRUST U/A 10/06/1994
By: /s/ J. Xxxxxx Xxxxx
____________________
Name: J. Xxxxxx Xxxxx
Title: Trustee
Schedule I
Non-Employee Owners
___________________
Name Address Initial Shares
____________________ _____________________ ______________
Xxxxx Xxxxxxx 0000 Xxxx Xxxxxx
Xxxxxxx, XX 00000 673,557
Xxxxx Xxxxxx Chairmans Club
000 X. Xxxxxxx
Xxxx Xxxxx, XX 00000 510,320
Berenson Epoch LLC 000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 [Shares received in
Merger]
Schedule II
Employee Owners
_______________
Name Address
_________________________ __________________________________
Xxxxxxx X. Xxxxxx Epoch Investment Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
J. Xxxxxx Xxxxx Epoch Investment Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxx Xxxxxxx Epoch Investment Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxx Epoch Investment Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Schedule III
Family Affiliates
_________________
Name Address
______________________________ __________________________________
J Xxxxxx/Xxxxxxx X Xxxxx Trust c/o J. Xxxxxx Xxxxx
U/A 10/06/1994 Epoch Investment Partners, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
