EXHIBIT 10.1
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FIRST AMENDMENT TO
TRANSITION/SEPARATION AGREEMENT
This First Amendment (the "AMENDMENT") to the
Transition/Separation Agreement (the "AGREEMENT") dated as of August 22, 2005 by
and between BKF Capital Group, Inc. ("BKF") and Xxxx X. Xxxxx ("JAL") is dated
as of December 21, 2005. All capitalized terms used herein without definition
shall have the respective meanings ascribed to such terms in the Agreement.
WHEREAS, BKF and JAL entered into the Agreement regarding
JAL's transition to resignation as Chief Executive Officer and as an employee of
BKF, JAL's ongoing consulting relationship with BKF and JAL's ability to
establish a Successor Business.
WHEREAS, Xxxx X. Xxxxxxxxx was appointed as Chief Executive
Officer of BKF effective as of September 28, 2005.
WHEREAS, BKF and JAL desire to amend the Agreement in certain
respects, as provided hereinbelow.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, BKF and JAL agree as follows:
1. Section 3(a)(i) of the Agreement shall be amended to read as follows:
"(i) JAL shall not be able to solicit or hire any employee of
BKF prior to the date which is 36 months following the Resignation
Date, except that (x) JAL shall be permitted at any time to solicit
and, on or following January 1, 2006, to hire, Xxxxx Xxxxx and any of
those employees of BKF listed on Schedule A and (y) JAL shall be
permitted at any time to solicit and, on or following January 1, 2007,
to hire any employee of BKF identified on Schedule B; and"
2. A new section 19 shall be added to the Agreement, to read as follows:
"19. Extension Period
a. EXTENSION OF JAL'S EMPLOYMENT. Following the
Resignation Date, notwithstanding Section 1(a) and
Section 2(d), JAL shall remain as an employee of BKF
through December 31, 2005, serving as senior
portfolio manager and as a securities analyst at BKF
with respect to the accounts of BKF that JAL is
authorized to solicit pursuant to Section 4 of the
Agreement (the period from the Resignation Date
through December 31, 2005 being referred to herein as
the "EXTENSION PERIOD"); PROVIDED that for purposes
of Section 3 of the Agreement (Restrictive Covenants)
and Section 4 of the Agreement (Successor Business),
JAL shall be deemed to have ceased to be an employee
of BKF and its affiliates as of the Resignation Date.
b. COMPENSATION OF XXXX X. XXXXX FOLLOWING SEPTEMBER 30,
2005. JAL shall not receive any bonus compensation in
respect of 2005, but he shall continue to be
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paid base salary at a rate of $200,000 per annum for
the period commencing October 16, 2005 and ending on
the expiration of the Extension Period. JAL shall
forfeit all unvested or undelivered equity awards as
of September 30, 2005 notwithstanding any terms of
such awards or the plans under which such awards were
made to the contrary.
c. COMPENSATION OF EMPLOYEES WHO WILL MOVE TO THE
SUCCESSOR BUSINESS FOLLOWING THE EXTENSION PERIOD.
BKF employees whose names are set forth on Schedule A
to the Agreement, excluding those three employees
indicated by asterisk on Schedule A (collectively,
"JAL EMPLOYEES") shall continue to receive base
salaries from BKF during the Extension Period at
their current rate of pay. Notwithstanding any other
terms of the Agreement to the contrary, BKF shall
establish a bonus pool for the JAL Employees which
shall be administered in the following manner:
i. BKF shall calculate the aggregate investment
management fees generated during the
Extension Period by accounts that JAL is
authorized to solicit pursuant to Section 3
of the Agreement and who are identified on
Schedule C to the Agreement ("JAL
REVENUES"), excluding broker-dealer revenues
because a transfer of the broker-dealer
entity was not completed by October 1, 2005;
ii. Reduce JAL Revenues by 15%;
iii. Further reduce JAL Revenues by base salaries
paid and benefit expenses incurred during
the Extension Period with respect to JAL and
the JAL Employees;
iv. Further reduce JAL Revenues by (i) rent
expense payable by JAL to BKF pursuant to
Section 12 of the Agreement, (ii) other
expenses incurred by BKF which are allocable
to JAL (including an allocable portion of
the compensation and employee benefits
expense relating to the three employees
indicated by asterisk on Schedule A to the
Agreement) that would have been charged to,
or incurred by, the Successor Business had
JAL started the Successor Business as of
October 1, 2005 as reasonably agreed between
JAL and BKF and determined in a manner
consistent with past practice, and (iii) all
other expenses related to the continuation
of employment of JAL and the JAL Employees
through the expiration of the Extension
Period which would not have been incurred by
BKF had the Extension Period not been agreed
to by BKF as reasonably agreed between JAL
and BKF and determined in a manner
consistent with past practice;
v. Increase the bonus pool by $90,000 (to
reflect the $30,000 monthly consulting fee
that is not being paid by BKF to JAL during
the Extension Period pursuant to Section 5
of the Amendment); and
vi. The bonus pool shall be allocated in the
discretion of JAL with respect to the JAL
Employees, subject, however, to the approval
(not to be unreasonably withheld) of the
Chief Executive Officer of BKF (with input
from the Chief Financial Officer of BKF).
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d. Equity awards previously made by BKF to JAL Employees
and the other employees on Schedule A will continue
to vest and, to the extent vested, be delivered by
BKF according to their respective terms during the
Extension Period. BKF shall offer Xxx Xxxx an
amendment to his equity award agreement which will
provide for the delivery of the award underlying
4,072 share units which would otherwise forfeit if he
were to join the Successor Business prior to March
12, 2006 provided that, with the exception of
becoming employed by the Successor Business, he does
not otherwise violate his noncompetition restrictions
under such equity award agreement prior to March 12,
2006.
e. BKF acknowledges and agrees that those three
employees listed on Schedule A and who are indicated
with an asterisk next to their name and who do not
resign from their employment with BKF prior to
December 31, 2005, shall be entitled (unless he or
she has entered into a written agreement with BKF
which provides otherwise) to receive his or her
annual bonus incentive compensation to which he or
she would otherwise be entitled for 2005 had he or
she remained in employment to the date or dates
following December 31, 2005 on which such annual
bonus incentive compensation becomes payable.
3. BKF and JAL hereby agree and acknowledge that the
Resignation Date occurred on September 28, 2005 and that, as of the Resignation
Date, (i) subject to Section 2 of this Amendment (and Section 19 of the
Agreement as added to the Agreement by this Amendment), JAL resigned from all
positions as an employee of BKF and its affiliates; (ii) the Consulting Period
commenced; and (iii) JAL assumed the title of CE.
4. The Consulting Period (as defined in Section 2 of the
Agreement) shall terminate effective as of the close of business on December 31,
2005. In consideration for, and subject to BKF's performance of, the
undertakings of BKF pursuant to Section 2 of this Amendment (and Section 19 of
this Agreement as added to the Agreement by this Amendment), JAL hereby waives
entitlement to the Consulting Fee.
5. The arrangement for BKF to provide office space and
office services to JAL and the Successor Business pursuant to Section 12 of the
Agreement shall continue until midnight on March 31, 2006 or such earlier date
as JAL and BKF shall agree in writing. Because of the application of Section
19.c.iv. of the Agreement (as added by this Amendment), BKF hereby waives
entitlement to the payment by JAL of reimbursement amounts for the use of such
office space and related office services through and including December 31,
2005.
7. This Amendment may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
8. Except as hereinabove provided, the Agreement, as
modified by this Amendment is hereby ratified and confirmed and shall continue
in full force and effect.
9. The provisions of Section 10 of the Agreement (other
than with respect to the reimbursement of legal fees) shall apply with respect
to this Amendment.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
as of the date first above written.
BKF CAPITAL GROUP, INC. XXXX X. XXXXX
By: /s/ Xxxxxx Xxxxxx /s/ Xxxx X. Xxxxx
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Senior Vice President,
General Counsel and Secretary
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