Exhibit 10.1

 

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GLEACHER & COMPANY

 

SENIOR MANAGEMENT COMPENSATION AND RETENTION PLAN

 

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Effective August 17, 2012

 

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TABLE OF CONTENTS

 

Section 1. Introduction

 

1

 

 

 

 

1.1.

Establishment and Purpose

1

 

1.2.

Effective Date

1

 

 

 

 

Section 2. Definitions and Construction

 

2

 

 

 

 

2.1.

Definitions

2

 

2.2.

Gender and Number

5

 

 

 

Section 3. Participation by Eligible Employees

 

6

 

 

 

 

3.1.

Generally

6

 

3.2.

Nature of Benefit

6

 

 

 

 

Section 4. Severance Benefits

 

7

 

 

 

 

4.1.

In General

7

 

4.2.

Cash Benefit

7

 

4.3.

Equity Vesting Benefit

7

 

4.4.

Medical Benefits

8

 

4.5.

Qualifying Termination

9

 

4.6.

Application of Section 409A of the Code

10

 

4.7.

Application of Section 4999 of the Code

11

 

 

 

 

Section 5. Covenants

 

12

 

 

 

 

5.1.

Generally

12

 

5.2.

Noncompetition

12

 

5.3.

Non-Solicitation of Customers

12

 

5.4.

Non-Solicitation/No Hire of Employees

13

 

5.5.

Return of Property; Intellectual Property Rights

13

 

5.6.

Confidentiality

14

 

 

 

 

Section 6. Release and Acknowledgement

 

15

 

 

 

 

6.1.

Generally

15

 

6.2.

Time Limit for Providing Release and Acknowledgement

15

 

 

 

 

Section 7. Nature of Participant’s Interest in the Plan

 

16

 

 

 

 

7.1.

No Right to Assets

16

 

7.2.

No Right to Transfer Interest

16

 

7.3.

No Employment Rights

16

 

Gleacher & Company

 

Senior Management Compensation and Retention Plan

 

 

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7.4.

Withholding and Tax Liabilities

16

 

7.5.

Attorneys’ Fees and Costs

16

 

 

 

 

Section 8. Administration and modification

 

17

 

 

 

 

8.1.

Plan Administrator

17

 

8.2.

Powers of the Administrator

17

 

8.3.

Finality of Committee Determinations

17

 

8.4.

Incapacity

17

 

8.5.

Amendment, Suspension, and Termination

17

 

8.6.

Power to Delegate Authority

17

 

8.7.

Headings

18

 

8.8.

Severability

18

 

8.9.

Governing Law

18

 

8.10.

Complete Statement of Plan

18

 

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SECTION 1. INTRODUCTION

 

1.1.                            Establishment and Purpose.

 

The Company has established the Plan in order to enable the Company to achieve
its long-term and operating objectives by (1) aligning the interests of key
executive and management employees with those of the Company’s shareholders,
(2) helping to retain key executive and management talent, and (3) protecting
the Company’s interests by ensuring that key executive and management employees
are bound by certain restrictive covenants.

 

The Plan is unfunded.  Any assets set aside to pay Plan benefits remain subject
to the claims of the unsecured creditors of the Company.  Benefits due under the
Plan that are not paid from a Rabbi trust or other funding mechanism established
under the Plan shall be paid from the Company’s general assets.

 

1.2.                            Effective Date.

 

The Plan, as set forth in this document, is established effective August 17,
2012.

 

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SECTION 2. DEFINITIONS AND CONSTRUCTION

 

2.1.                            Definitions.

 

When used in capitalized form in the Plan, the following words and phrases have
the following meanings, unless the context clearly indicates that a different
meaning is intended:

 

(a)                                  “Administrative Committee” means the
Administrative Committee or officer(s) appointed to administer the Plan or, if
no such committee or officer(s) is appointed, the Compensation Committee.

 

(b)                                 “Affiliate” means an entity in control of,
controlled by or under common control with Company.

 

(c)                                  “Beneficiary” means the person designated
by a Participant to receive the Participant’s benefits under the Plan following
the Participant’s death.  If a Participant dies without a valid Beneficiary
designation in effect, the Beneficiary will be the Participant’s estate.  A
Participant may revoke a prior Beneficiary designation at any time before the
Participant dies.  No designation or change in Beneficiary shall be effective
unless it is in writing and received by the Administrative Committee before the
Participant’s death.

 

(d)                                 “Board of Directors” means the Board of
Directors of the Company.

 

(e)                                  “Cause” means, as determined by the
Administrative Committee, the Participant’s: (1) conviction of, or plea of
guilty or “no contest” to, any felony; (2) conviction of, or plea of guilty or
“no contest” to, a violation of criminal law involving the Company and its
business; (3) commission of an act of fraud or theft, or material dishonesty in
connection with the performance of the Participant’s duties to the Company and
its Affiliates; or (4) willful refusal or gross neglect to perform the duties
reasonably assigned to the Participant and consistent with the Participant’s
position with the Company and its Affiliates or otherwise to comply with the
material terms of any agreement with the Company or any of its Affiliates, which
refusal or gross neglect continues for more than fifteen (15) days after the
Participant receives written notice thereof from the Company providing
reasonable detail of the asserted refusal or gross neglect (and which is not due
to a physical or mental impairment).

 

(f)                                    “Change in Control” means the first to
occur of the following events:

 

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(1)                                  The acquisition, after the Effective Date,
by an individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (A) the
shares of Company Common Stock (the “Common Stock”), or (B) the combined voting
power of the voting securities of the Company entitled to vote generally in the
election of directors (the “Voting Securities”); provided, however, that the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition by any individual, entity or group (within meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) who, on the Effective Date,
beneficially owned 10% or more of the Common Stock, (ii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any of its subsidiaries, (iii) any acquisition by any underwriter in
connection with any firm commitment underwriting of securities to be issued by
the Company, or (iv) any acquisition by any corporation (or other entity) if,
immediately following such acquisition, more than 50% of the then outstanding
shares of common stock of such corporation (or other entity) and the combined
voting power of the then outstanding voting securities of such corporation (or
other entity) entitled to vote generally in the election of directors, is
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who, immediately prior to such acquisition, were the
beneficial owners of the Common Stock and the Voting Securities in substantially
the same proportions, respectively, as their ownership, immediately prior to
such acquisition, of the Common Stock and Voting Securities; or

 

(2)                                  Individuals who, as of the Effective Date,
constitute the Board (the “Incumbent Board”) cease thereafter for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Effective Date whose election,
or nomination for election by the Company’s shareholders, was approved by at
least a majority of the directors then serving and comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents; or

 

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(3)                                  Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a “Corporate Transaction”), other than a Corporate
Transaction with respect to which all or substantially all of the individuals
and entities who were the beneficial owners, immediately prior to such Corporate
Transaction, of the Common Stock and Voting Securities beneficially own,
directly or indirectly, immediately after such Corporate Transaction, more than
50% of the then outstanding common stock and voting securities (entitled to vote
generally in the election of directors) of the corporation (or other entity)
resulting from Corporate Transaction in substantially the same proportions as
their respective ownership, immediately prior to such Corporate Transaction, of
the Common Stock and the Voting Securities; or

 

(4)                                  Approval by the shareholders of the Company
of a complete liquidation or dissolution of the Company.

 

(g)                                 “Code” means the Internal Revenue Code of
1986, as amended.

 

(h)                                 “Company” means Gleacher & Company, Inc.,
and any successor to Gleacher & Company, Inc.

 

(i)                                     “Compensation Committee” means the
Executive Compensation Committee of the Board of Directors.

 

(j)                                     “Disability” means a disability within
the meaning of the Company-sponsored long-term disability plan in which the
Participant participates or, if there is no such plan, a total disability as
determined by the Social Security Administration.

 

(k)                                  “Effective Date” means August 17, 2012.

 

(l)                                     “Eligible Employee” means an employee of
the Company who is an officer of the Company or holds any other key position
designated by the Compensation Committee in its sole discretion as eligible to
participate in the Plan.

 

(m)                               “Good Reason” has the meaning provided in
Section 4.5(d).

 

(n)                                 “Participant” means an individual who has
become a participant in the Plan under Section 3.

 

(o)                                 “Participation Agreement” has the meaning
provided in Section 3.1.

 

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(p)                                 “Plan” means the Gleacher & Company, Inc.,
Senior Management Compensation and Retention Plan, as set forth in this
document.

 

(q)                                 “Qualifying Termination” has the meaning
provided in Section 4.5.

 

(r)                                    “Restricted Period” shall be the period
of time following a Participant’s Qualifying Termination that certain covenants
set forth in Section 5 shall remain in effect, as provided in the applicable
Participation Agreement.

 

(s)                                  “Section” means a section of this Plan and
any subsections of that section.

 

2.2.                            Gender and Number.

 

Words used in the masculine gender in the Plan are intended to include the
feminine and neuter genders, where appropriate.  Words used in the singular form
in the Plan are intended to include the plural form, where appropriate, and vice
versa.

 

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SECTION 3. PARTICIPATION BY ELIGIBLE EMPLOYEES

 

3.1.                            Generally.

 

An Eligible Employee will not become a Participant in the Plan unless the
Compensation Committee designates the Eligible Employee as eligible to
participate in the Plan and the Eligible Employee receives and properly executes
a Participation Agreement substantially in the form that is attached as
Exhibit A to the Plan.

 

3.2.                            Nature of Benefit.

 

To the extent that a Participant experiences a Qualifying Termination and is
entitled to a cash severance or severance-type payment under a different
agreement, plan or arrangement, the benefit under the Plan shall be in addition
to, and not in lieu of, such cash severance or severance-type payment.

 

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SECTION 4. SEVERANCE BENEFITS

 

4.1.                            In General.

 

A Participant who experiences a Qualifying Termination shall be entitled to
receive the benefits provided below.  However, notwithstanding the foregoing, a
Participant shall not be entitled to any benefits under the Plan if the
Participant does not comply with all of the requirements of the Plan, including
the covenants in Section 5 and the requirement to execute (and not revoke) a
release and acknowledgement in accordance with 6.1.

 

4.2.                            Cash Benefit.

 

(a)                                  Amount.  Subject to Section 5 and the
timely execution of a release as provided in Section 6.1, a Participant who
experiences a Qualifying Termination is entitled to the cash benefit, if any, as
set forth in the Participant’s Participation Agreement.

 

(b)                                 Time and Form of Payment.  Except as
provided in Section 4.6, the basic cash benefit will be paid in a single lump
sum within 60 days following the date of the Participant’s Qualifying
Termination (or, if the Participant’s  termination of employment occurs before a
Change in Control, within 60 days of the Change in Control), provided that the
payment will be made no earlier than the expiration of the 7-day revocation
period under the release and acknowledgement executed pursuant to 6.1.

 

(c)                                  Death Benefit.  If the Participant dies
after experiencing a Qualifying Termination but before receiving his or her
basic cash benefit, the basic cash benefit will be paid to the Participant’s
Beneficiary.

 

4.3.                            Equity Vesting Benefit.

 

(a)                                  Nature of Benefit.  Subject to the timely
execution of a release as provided in Section 6.1, to the extent provided in the
applicable Participation Agreement, a Participant who experiences a Qualifying
Termination shall vest in, or otherwise have the restrictions lapse with respect
to, all stock options, restricted shares, stock appreciation rights, restricted
stock units and other equity-based awards that are outstanding at the time of
the Qualifying Termination.

 

(b)                                 Payment.  The equity vesting benefit
described in this Section 4.3 is in addition to, and not in lieu of, any rights
the Participant may have under the terms of any outstanding stock options,
restricted shares, stock appreciation rights and restricted stock units.  All
such

 

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outstanding equity awards will be paid in accordance with the terms under which
the award was granted.

 

4.4.                            Medical Benefits.

 

Subject to the timely execution of a release as provided in Section 6.1 and to
the extent provided in the applicable Participation Agreement, a Participant who
experiences a Qualifying Termination is entitled to medical benefits as follows—

 

(a)                                  A Participant will continue to receive
medical benefits under the Company’s medical insurance plan under the same terms
and conditions and at the same rates as active employees for the period
beginning on the date medical benefits otherwise would cease as a result of the
Participant’s experiencing a Qualifying Termination and continuing for eighteen
(18) months following the Qualifying Termination.

 

(b)                                 If the Participant’s employment terminates
before a Change in Control and such termination subsequently becomes a
Qualifying Termination because a Change in Control occurs during the six-month
period immediately following the Participant’s termination of employment, the
Participant shall become eligible for the benefits provided in Section 4.4(a) as
of the date of the Change in Control and such benefits shall continue for
eighteen (18) months following the Change in Control.

 

(c)                                  The medical benefits provided in this
Section 4.4 shall not constitute coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”).  COBRA coverage shall
not commence (or re-commence with respect to Participants described in
Section 4.4(b)) until the medical benefits described in this Section 4.4 have
ceased.

 

(d)                                 The Company shall provide the benefit
described in this Section 4.4 on a pre-tax basis to the maximum extent
possible.  However, the Company shall provide the benefit on an after-tax basis
(or provide a taxable lump sum cash payment) if necessary to prevent the
Company’s medical plan from being impermissibly discriminatory under applicable
law or otherwise to avoid any adverse tax consequences to the Participant.

 

(e)                                  The Company reserves the right to modify,
amend, or terminate at any time, the medical benefits that would have been
provided to the Participant if he had continued employment with the Company,

 

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provided that any such changes must be applicable to employees generally and not
just to the Participant or other former employees.

 

4.5.                            Qualifying Termination.

 

(a)                                  A Participant experiences a Qualifying
Termination if the Participant’s employment with the Company terminates in
Connection with a Change in Control and terminates —

 

(1)                                  involuntarily by the Company for any reason
other than for Cause, Disability or death; or

 

(2)                                  by the Participant for Good Reason.

 

(b)                                 If there is a Change in Control, a
Participant will not be considered to have experienced an involuntary
termination of employment solely because the Participant becomes employed by a
successor business.

 

(c)                                  Qualifying Termination in Connection with a
Change in Control.

 

A Participant’s employment with the Company terminates “in Connection with a
Change in Control” if the Participant’s termination occurs during the
thirty-month period that begins six months before the Change in Control and ends
twenty-four months after the Change in Control.  If the Participant’s employment
terminates before a Change in Control and such termination subsequently becomes
a Qualifying Termination because a Change in Control occurs during the six-month
period immediately following the Participant’s termination of employment, the
Participant will be deemed to have experienced the Qualifying Termination on the
date of the Change in Control.

 

(d)                                 Good Reason.  The occurrence of any one of
the following events without the Participant’s written consent constitutes Good
Reason for termination—

 

(1)                                  a material diminution in the Participant’s
base compensation;

 

(2)                                  a material diminution in the Participant’s
authorities, duties or responsibilities with the Company;

 

(3)                                  a material diminution in the authorities,
duties, or responsibilities of the supervisor to whom the Participant is
required to report (or, if, immediately before the Change in Control, the
Participant reports directly to the Board of Directors, a requirement that the
Participant be required to report to a corporate officer or employee instead of
reporting

 

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directly to the board of directors or similar governing body of any successor
entity);

 

(4)                                  the imposition of any requirement that the
Participant’s principal office be based anywhere other than within 50 miles of
where the Participant’s principal office was located on the date the Participant
became eligible to participate in the Plan; or

 

(5)                                  a material breach by the Company of the
terms of the Plan or any other agreement under which the Participant provides
services to the Company.

 

Notwithstanding the foregoing, no event shall constitute Good Reason unless
(y) the Participant notifies the Company of the condition that is alleged to
constitute Good Reason in writing within thirty (30) days of the first
occurrence of the condition and (z) the Company fails to correct the condition
within thirty (30) days of its receipt of such notice from the Participant.  If
the Company fails to remedy the condition constituting Good Reason during the
thirty-day cure period, the Participant must terminate employment within ninety
(90) days following the end of the cure period in order for such termination to
constitute a termination for Good Reason.

 

The notice and cure periods set forth in the preceding paragraph shall not apply
to a Participant whose employment terminates before a Change in Control.  Such a
Participant must notify the Company in writing within thirty (30) days following
the Change in Control that the Participant’s employment terminated for Good
Reason and that the Participant is entitled to benefits under the Plan.

 

4.6.                            Application of Section 409A of the Code.

 

(a)                                  This Section 4.6 (1) applies only to the
extent section 409A of the Code applies to any benefit payable under the Plan,
(2) supersedes any provision of the Plan or a Participation Agreement to the
extent that such provision conflicts with this Section 4.6, (3) is intended to
comply with and avoid the adverse tax consequences of Section 409A of the Code,
and (4) will be interpreted, operated, and administered in a manner consistent
with this intent.

 

(b)                                 A payment that is required to be made on a
certain date may be made as soon as practicable following such date, provided
that the payment must be made during the same calendar year as the required
payment date or, if later, by the 15th day of the third calendar month following

 

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the required payment date, or otherwise in accordance with section 409A.

 

(c)                                  Nothing in this Plan shall be interpreted
or construed to transfer any liability for any tax (including a tax or penalty
due as a result of a failure to comply with section 409A) from the Participant
to the Company or to any other individual or entity.

 

(d)                                 Any payment by the Company to the
Participant under this Plan that is subject to section 409A and that is
contingent on a termination of employment is contingent on a “separation from
service” within the meaning of section 409A.  Each such payment shall be
considered to be a separate payment for purposes of section 409A.

 

(e)                                  If, upon separation from service, the
Participant is a “specified employee” within the meaning of section 409A, any
payment under this Plan that is subject to section 409A and would otherwise be
paid within six months after the Participant’s separation from service will
instead be paid in the seventh month following the Participant’s separation from
service (to the extent required by section 409A(a)(2)(B)(i)).

 

(f)                                    If the period during which the
Participant has discretion to execute or revoke a release straddles two calendar
years, the Company shall make the payments that are conditioned upon the release
no earlier than January 1st of the second of such calendar years, regardless of
which taxable year the Participant actually delivers the executed release to the
Company.

 

(g)                                 A Change in Control shall not be treated as
a triggering event for a payment that is subject to section 409A unless such
Change in Control constitutes a permissible payment triggering event under
section 409A.

 

4.7.                            Application of Section 4999 of the Code.

 

If any amount payable to the Participant under this Plan or otherwise would
constitute a “parachute payment” within the meaning of section 280G of the Code
and, but for this Section 4.7, would be subject to the excise tax imposed by
section 4999 of the Code, then the Participant’s payments under the Plan shall
be reduced to the greatest amount that would not be subject to the excise tax
if, after taking into account applicable federal, state, local and foreign
income and employment taxes, the excise tax, and any other applicable taxes, the
Participant would retain a greater amount on an after-tax basis following such
reduction.

 

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SECTION 5. COVENANTS

 

5.1.                            Generally.

 

(a)                                  In consideration for the opportunity to
receive the benefits provided under the Plan, each Participant will agree to the
covenants set forth in this Section 5.

 

(b)                                 The Participant shall be bound by all of the
covenants set forth in this Section 5 during the Participant’s employment with
the Company and its Affiliates, and shall remain bound by the covenants
following the termination of that employment for any reason, except that the
covenants in Sections 5.2 (“Noncompetition”), 5.3 (“Non-Solicitation of
Customers”), and 5.4 (“Non-Solicitation/No Hire of Employees”) shall not apply
following the Participant’s termination of employment unless such termination is
a Qualifying Termination.

 

(c)                                  The covenants set forth in this Section 5
shall apply in addition to, and not in lieu of, any similar covenants to which
the Participant may be bound pursuant to the terms of a separate agreement with
or plan sponsored by the Company or its Affiliates.

 

5.2.                            Noncompetition.

 

During the period of a Participant’s employment with the Company and at all
times during the Restricted Period, the Participant will not, without the
Company’s written consent, directly or indirectly, (a) be employed by, engaged
as a consultant, director or advisor for or provide any services or assistance
in any capacity to any company or other entity, firm or organization that
provides, sells or markets products or services that compete or will compete
with the products and/or services provided, marketed, sold or being developed by
the Company or its Affiliates (a “Competitor”), (b) organize, establish or
operate as a Competitor or manage or direct persons engaged in any business in
competition with the businesses of the Company or any of its Affiliates, or
(c) acquire or have an ownership interest in any entity that derives revenues
from any business in competition with the business of the Company or any of its
Affiliates (except for passive ownership of five percent (5%) or less of an
entity).

 

5.3.                            Non-Solicitation of Customers.

 

During the period of a Participant’s employment with the Company and at all
times during the Restricted Period, the Participant will not, without the
Company’s written consent, directly or indirectly, solicit, induce or persuade
or attempt to solicit, induce or persuade any customer, client, investor

 

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(excluding anyone who is an investor solely as a holder of shares of Company
common stock), supplier, licensee or other business relation (in each case,
whether former, current or prospective) of the Company or any of its Affiliates
to cease doing business with the Company or such Affiliate, or in any way
interfere with the relationship between any such customer, client, investor,
supplier, licensee or business relation, on the one hand, and the Company or any
Affiliate, on the other hand.

 

5.4.                            Non-Solicitation/No Hire of Employees.

 

During the period of a Participant’s employment with the Company and at all
times during the Restricted Period, the Participant will not, without the
Company’s written consent, directly or indirectly, (a) solicit, induce or
persuade or attempt to solicit, induce or persuade any individual who is (or
was, during the preceding twelve months) employed by or providing services to
the Company or one of its Affiliates to terminate or refrain from renewing or
extending such employment or services, or to become employed by or become a
consultant to any other individual, entity, firm or organization other than the
Company or its Affiliates or (b) hire any person who is (or who was during the
preceding twelve months) an employee of the Company or its Affiliates.

 

5.5.                            Return of Property; Intellectual Property
Rights.

 

On or before a Participant’s termination of employment with the Company or an
Affiliate for any reason, the Participant will return to the Company all
property owned by the Company or an Affiliate or in which the Company or an
Affiliate has an interest, including files, documents, data and records (whether
on paper or in tapes, disks, or other machine-readable form), office equipment,
credit cards, and employee identification cards.  In addition, the Participant
will acknowledge that the Company is the rightful owner of any programs, ideas,
inventions, discoveries, patented or copyrighted material, or trademarks that
the Participant may have originated or developed, or assisted in originating or
developing, during his period of employment with the Company or an Affiliate,
where any such origination or development involved the use of Company or
Affiliate time or resources, or the exercise of his responsibilities for or on
behalf of the Company or an Affiliate.  The Participant will at all times, both
before and after his or her termination, cooperate with the Company in executing
and delivering documents requested by the Company, and taking any other actions,
that are necessary or requested by the Company to assist the Company in
patenting, copyrighting, or registering any programs, ideas, inventions,
discoveries, patented or copyrighted material, or trademarks, and to vest title
thereto in the Company.

 

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5.6.                            Confidentiality.

 

(a)                                  Except (1) as required in order to perform
your obligations to the Company, (2) as may otherwise be required by law or any
legal process, or (3) as is necessary in connection with any adversarial
proceeding against the Company (in which case you shall use your reasonable best
efforts in cooperating with the Company in obtaining a protective order against
disclosure by a court of competent jurisdiction), you shall not, without the
express prior written consent of the Company, disclose or divulge to any other
person or entity, or use or modify for use, directly or indirectly, in any way,
for any person or entity any of the Company’s or an Affiliate’s Confidential
Information at any time during or after your employment with the Company or any
of its Affiliates.

 

(b)                                 Definitions.

 

(1)                                  “Confidential Information” means any
valuable, competitively sensitive, proprietary or non-public data and
information related to business carried on by the Company or any Affiliate (the
“Business”), including, without limitation, Trade Secrets, that are not
generally known by or readily available to the Company’s or any Affiliate’s
competitors.

 

(2)                                  “Trade Secrets” means information or data
of Company or any of its Affiliates in connection with the Business, including,
but not limited to, technical or non-technical data, financial information,
strategies, forecasts, new products, programs, devices, methods, techniques,
drawings, processes, financial plans, product plans, or any information related
to actual or potential customers or suppliers, that: (A) derive economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from their disclosure or use; and (B) are the subject of efforts that are
reasonable under the circumstances to maintain their secrecy.

 

14

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SECTION 6. RELEASE AND ACKNOWLEDGEMENT

 

6.1.                            Generally.

 

A Participant will not be entitled to any benefits under this Plan unless, at
the time of the Participant’s Qualifying Termination, the Participant executes
and does not subsequently revoke a release and acknowledgement satisfactory to
the Company releasing the Company, its affiliates, shareholders, directors,
officers, employees, representatives, and agents and their successors and
assigns from any and all employment-related claims the Participant or his
successors and beneficiaries might then have against them (excluding any claims
the Participant might then have under this Plan or any employee benefit plan
sponsored by the Company) and acknowledging an intent to continue to be bound by
the covenants.  The release and acknowledgement will be substantially in the
form that is attached as Exhibit B to the Plan.

 

6.2.                            Time Limit for Providing Release and
Acknowledgement.

 

A Participant will execute and submit the release and acknowledgement to the
Company within 30 days after the Participant’s Qualifying Termination.  However,
if the Participant’s Qualifying Termination is in connection with an exit
incentive or other employment termination program offered to a group or class of
employees, the Participant will have 50 days after the Participant terminates
employment to execute and submit the release and acknowledgement to the Company.

 

15

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SECTION 7. NATURE OF PARTICIPANT’S INTEREST IN THE PLAN

 

7.1.                            No Right to Assets.

 

Participation in the Plan does not create, in favor of any Participant or
Beneficiary, any right or lien in or against any asset of the Company or an
Affiliate.  Nothing contained in the Plan, and no action taken under its
provisions, will create or be construed to create a trust of any kind, or a
fiduciary relationship, between the Company and a Participant or any other
person.  The Company’s promise to pay benefits under the Plan will at all times
remain unfunded as to each Participant and Beneficiary, whose rights under the
Plan are limited to those of a general and unsecured creditor of the Company.

 

7.2.                            No Right to Transfer Interest.

 

Rights to benefits payable under the Plan are not subject in any manner to
alienation, sale, transfer, assignment, pledge, or encumbrance.

 

7.3.                            No Employment Rights.

 

No provisions of the Plan and no action taken by the Company, the Board of
Directors, the Compensation Committee, or the Administrative Committee will give
any person any right to be retained in the employ of the Company, and the
Company specifically reserves the right and power to dismiss or discharge any
Participant.

 

7.4.                            Withholding and Tax Liabilities.

 

The amount of any withholdings required to be made by any government or
government agency will be deducted from benefits paid under the Plan to the
extent deemed necessary by the Administrative Committee.  In addition, the
Participant or Beneficiary (as the case may be) will bear the cost of any taxes
not withheld on benefits provided under the Plan, regardless of whether
withholding is required.

 

7.5.                            Attorneys’ Fees and Costs.

 

The Company will pay or reimburse a Participant for all reasonable legal fees
(including court costs and expenses) that the Participant incurs in connection
with or as a result of any claim, action or proceeding brought by the Company or
the Participant with respect to the Plan if the Participant prevails with
respect to any part of the claim, action or proceeding.

 

16

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SECTION 8.  ADMINISTRATION AND MODIFICATION

 

8.1.                            Plan Administrator.

 

The Administrative Committee will administer the Plan.

 

8.2.                            Powers of the Administrator.

 

The Administrative Committee’s powers include, but are not limited to, the power
to adopt rules consistent with the Plan; the power to decide all questions
relating to the interpretation of the terms and provisions of the Plan; and the
power to resolve all other questions arising under the Plan (including, without
limitation, the power to remedy possible ambiguities, inconsistencies, or
omissions by a general rule or particular decision).  The Administrative
Committee has full discretionary authority to exercise each of the foregoing
powers.

 

8.3.                            Finality of Committee Determinations.

 

Determinations by the Administrative Committee and any interpretation, rule, or
decision adopted by the Administrative Committee under the Plan or in carrying
out or administering the Plan will be final and binding for all purposes and
upon all interested persons, their heirs, and their personal representatives.

 

8.4.                            Incapacity.

 

If the Administrative Committee determines that any person entitled to benefits
under the Plan is unable to care for his affairs because of illness or accident,
any payment due (unless a duly qualified guardian or other legal representative
has been appointed) may be paid for the benefit of such person to his spouse,
parent, brother, sister, or other party deemed by the Administrative Committee
to have incurred expenses for such person.

 

8.5.                            Amendment, Suspension, and Termination.

 

The Board of Directors has the right by written resolution to amend, suspend, or
terminate the Plan at any time.  However, no amendment, suspension, or
termination that reduces the benefits to which a Participant is entitled under
the Plan will apply to an employee who already is a Participant in the Plan
without his express written consent.

 

8.6.                            Power to Delegate Authority.

 

The Board of Directors and the Administrative Committee may, in their sole
discretion, delegate to any person or persons all or part of its authority and

 

17

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responsibility under the Plan, including, without limitation, the authority to
amend the Plan.

 

8.7.                            Headings.

 

The headings used in this document are for convenience of reference only and may
not be given any weight in interpreting any provision of the Plan.

 

8.8.                            Severability.

 

If any provision of the Plan is held illegal or invalid for any reason, the
illegality or invalidity of that provision will not affect the remaining
provisions of the Plan, and the Plan will be construed and enforced as if the
illegal or invalid provision had never been included in the Plan.

 

8.9.                            Governing Law.

 

The Plan will be construed, administered, and regulated in accordance with the
laws of the state of Delaware (without regard to its conflict of laws
principles), except to the extent that those laws are preempted by federal law.

 

8.10.                     Complete Statement of Plan.

 

This Plan contains a complete statement of its terms.  The Plan may be amended,
suspended, or terminated only in writing and then only as provided in
Section 8.5.  A Participant’s right to any benefit of a type provided under the
Plan will be determined solely in accordance with the terms of the Plan.  No
other evidence, whether written or oral, will be taken into account in
interpreting the provisions of the Plan.  Notwithstanding the preceding
provisions of this Section 8.10, for purposes of determining benefits with
respect to a Participant, this Plan will be deemed to include (a) the provisions
of any Participation Agreement and (b) the provisions of any other written
agreement between the Company and the Participant to the extent such other
agreement explicitly provides for the incorporation of some or all of its terms
into this Plan.

 

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EXHIBIT A

 

MODEL PARTICIPATION AGREEMENT

 

[Gleacher Letterhead]

 

August     , 2012

 

[Participant Name]

Gleacher & Company, Inc.

1290 Avenue of the Americas

New York, NY 10104

 

Re:                             Participation in Gleacher & Company Senior
Management Compensation and Retention Plan

 

Dear                         :

 

As you know, this is an exciting and challenging time for Gleacher &
Company, Inc.  As part of its strategy to retain key employees to help meet
these challenges, Gleacher has adopted the Gleacher & Company Senior Management
Compensation and Retention Plan (the “Plan”).

 

Because of your position with Gleacher, you have been selected to participate in
the Plan.  If you satisfy all of the requirements of the Plan, you are eligible
to receive a cash severance benefit of $[                          ], [full
vesting] of all of your outstanding equity-based awards and medical benefits for
[                          ] (    ) months following your termination of
employment, and your Restricted Period shall be [    ] months following your
termination of employment.  In general, to receive the cash payment and the
other benefits under the Plan, your employment with Gleacher must be
involuntarily terminated without Cause or you must terminate your employment for
Good Reason, in either case within six months before or two years after a Change
in Control of Gleacher (all as defined in the Plan).

 

A copy of the Plan is attached to this letter.  Please retain a copy of this
letter and the attachment for your records.

 

To accept this award and to agree to be bound by the terms of the Plan, please
sign a copy of this letter and return it to Gleacher, attention General Counsel,
by [                        , 2012].  If you fail to do so, this agreement will
be void and you will not be eligible to receive any of the benefits offered
under the Plan.

 

A-1

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Congratulations on your selection to participate in the Plan.  We look forward
to continuing to work with you to help Gleacher achieve its goals.

 

 

Sincerely,

 

 

 

 

 

[Name]

 

on behalf of the Administrator of the Plan

 

Attachment

 

By signing below, you agree and acknowledge that: (1) you have received and
reviewed a copy of the Plan, (2) you agree to be bound by the terms of the Plan,
including the covenants set forth in Section 5 of the Plan, (3) the Company will
suffer irreparable harm if you violate or threaten to violate the provisions in
Section 5, (4) the provisions of Section 5 are reasonable and necessary for the
protection of the business of the Company and do not impose a greater restraint
than is necessary to protect the goodwill or other business interests of the
Company, (5) in addition to any other remedies, the Company will be entitled to
seek a preliminary injunction, temporary restraining order, or other equivalent
relief, restraining you from any actual or threatened breach of Section 5 in any
court that may have competent jurisdiction over the matter in dispute, and
(6) you understand that you will not be entitled to any benefits under the Plan
unless you experience a Qualifying Termination and execute (and do not revoke) a
release and acknowledgement as described in Section 6 of the Plan.

 

 

 

 

 

Date

 

Signature of Participant

 

A-2

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EXHIBIT B

 

MODEL RELEASE AND ACKNOWLEDGEMENT

 

In consideration of the benefits I am entitled to receive under the Gleacher &
Company, Inc., Senior Management Compensation and Retention Plan (the
“Plan”), I, [employee name], on behalf of myself, and on behalf of my heirs,
successors and assigns, hereby agree to release Gleacher & Company, Inc. (the
“Company”), all of its past, present and future subsidiaries, affiliates,
directors, officers, employees; and all of its and their respective heirs,
predecessors, successors, and assigns from any and all claims, demands, actions,
and liabilities that I might otherwise have asserted arising out of my
employment with the Company, including the termination of that employment.

 

I also promise not to sue the Company; any of its past, present and future
subsidiaries, affiliates, directors, officers, employees, agents, and
representatives; or any of its or their respective heirs, predecessors,
successors, and assigns based, in whole or in part, on any claims relating to my
employment with the Company or the termination of that employment.  However, I
am not releasing my rights, if any, under any qualified employee retirement plan
nor am I releasing any rights or claims that may arise after the date on which I
sign this Release.  Those rights, and only those rights, survive unaffected by
this Release.

 

I understand that as a consequence of my signing this Release I am giving up,
with respect to my employment and the termination of that employment, any and
all rights I might otherwise have under (1) the Age Discrimination in Employment
Act of 1967, as amended; (2) and all other federal, state or municipal laws
prohibiting discrimination in employment on the basis of sex, race, national
origin, religion, age, handicap or other invidious factor; and (3) any and all
theories of contract or tort law, whether based on common law or otherwise.

 

I acknowledge and agree that:

 

1.                                       The benefits I am receiving under the
Plan constitute consideration over and above any benefits that I might be
entitled to receive without executing this Release.

 

2.                                       The Company advised me in writing to
consult with an attorney prior to executing a copy of the Plan document and the
Release.

 

3.                                       I was given a period of at least
[21/45] days within which to consider the Plan and the Release.

 

B-1

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4.                                       The Company has advised me of my
statutory right to revoke my acceptance of the terms of the Plan and this
Release at any time within seven (7) days of my signing of this Release.

 

5.                                       I warrant and represent that my
decision to accept the Plan (including this Release) was (a) entirely voluntary
on my part; (b) not made in reliance on any inducement, promise or
representation, whether express or implied, other than the inducements,
representations and promises expressly set forth in the Plan or in the Release;
and (c) did not result from any threats or other coercive activities to induce
acceptance of the Plan or Release.

 

In the event I decide to exercise my right to revoke within seven (7) days of my
acceptance of this Release, I warrant and represent that I will do the
following: (1) notify the Company in writing of my intent to revoke my
agreement, and (2) simultaneously return in full the consideration received from
the Company under the Plan.

 

I understand that the provisions of Section 5 of the Plan may limit my ability
to earn a livelihood in a business similar to the business of the Company, but I
nevertheless agree that such provisions do not impose a greater restraint than
is necessary to protect the goodwill or other business interests of the Company,
are reasonable limitations as to scope and duration and are not unduly
burdensome to me.  I further agree that the Company would be irreparably harmed
by any actual or threatened breach of the covenants in Section 5 of the Plan and
that, in addition to any other remedies at law including money damages and the
right to withhold payments otherwise due to me, the Company will be entitled to
seek a preliminary injunction, temporary restraining order, or other equivalent
relief, restraining me from any actual or threatened breach of Section 5 of the
Plan in any court which may have competent jurisdiction over the matter in
dispute.  With respect to any provision of Section 5 of the Plan finally
determined by a court of competent jurisdiction to be unenforceable, I hereby
agree that a court shall have jurisdiction to reform such provisions, including
the duration or scope of such provisions, as the case may be, so that they are
enforceable to the maximum extent permitted by law.  If any of the covenants of
Section 5 of the Plan are determined to be wholly or partially unenforceable in
any jurisdiction, such determination will not be a bar to or in any way diminish
the rights of the Company to enforce any such covenant in any other
jurisdiction.

 

B-2

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I further warrant and represent that I fully understand and appreciate the
consequence of my signing this Release.

 

IN WITNESS WHEREOF, I hereby acknowledge receipt of consideration and execute
the foregoing agreement at       , this          day of
                        , 20    .

 

 

 

 

 

[name of employee]

 

Witnessed by                                on this            day of
                        , 20    .

 

 

 

 

 

WITNESS

 

B-3

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