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EXHIBIT 10.2
 
EMPLOYMENT AGREEMENT
 

 
EMPLOYMENT AGREEMENT (the “Agreement”), entered into as of _________, 2013, by
and between National Holdings Corporation, a Delaware corporation (the
“Parent”), Gilman Ciocia, Inc. (“Gilman”), a wholly owned subsidiary of the
Parent and Michael P. Ryan (the “Executive”).
 
W I T N E S S E T H:
 
WHEREAS, Gilman desires to employ the Executive as its President and Chief
Executive Officer upon the terms and subject to the conditions set forth in this
Agreement; and
 
WHEREAS, the Executive is willing to accept such employment upon such terms;
 
WHEREAS, Gilman has entered into Service Agreements with Abel Southeast, Inc.
and Abel HRO Services, Inc. (“Abel”) for Abel to provide professional employment
organization services to Gilman and Abel and Gilman are co-employers over
Gilman’s employees with Abel acting as the administrative co-employer.
 
NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
 
1.           EMPLOYMENT AND DUTIES
 
1.1.           Term of Employment.  The Executive’s employment under this
Agreement shall commence as of ______, 20131 (the “Effective Date”) and shall
continue until September 30, 2015 (such period being herein referred to as the
“Term”). At the end of the Term, the Parent and Executive shall negotiate in
good faith the terms of Executive’s employment with the Parent and/or Gilman.
 

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1 Date of closing of Merger.

 
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1.2.           General.
 
1.2.1.           During the Term, the Executive shall have the title of Chief
Executive Officer and President of Gilman and Executive Vice President of the
Parent, which shall be deemed to be a senior management position of the Parent
reporting to the Chief Executive Officer of the Parent.
 
1.2.2.           The Executive shall faithfully and diligently discharge his
duties hereunder and use his best efforts to implement the policies established
by the Board of Directors of the Parent (“Board”).  The Executive's
responsibilities shall include, among other things, to render executive, policy,
operations and other management services to the Parent and Gilman of the type
customarily provided by persons situated in similar executive and management
capacities, including but not limited to running the operations of Gilman.
 
1.2.3.           The Executive shall serve the Parent and Gilman loyally,
faithfully and to the best of the Employee’s abilities and shall devote the
Employee’s full working time and efforts to the performance of the Employee’s
duties hereunder.  The Executive shall not engage in any business activity that
interferes with the performance of the Executive’s obligations under this
Agreement and, specifically, shall not engage in any business similar to the
Parent’s business as defined in the Parent’s then most recently filed Form 10-K,
10-Q or 8-K apart from the Employee’s employment hereunder during the Term.
 
1.2.4.           The Executive acknowledges that Abel and Gilman are
co-employers over Gilman’s employees with Abel acting as the administrative
co-employer.
 
1.2.5.           The Parent hereby irrevocably and unconditionally guarantees
the performance of all obligations of Gilman pursuant to this Agreement.
 
1.3.           Reimbursement of Expenses.  Gilman shall pay to the Executive the
reasonable expenses incurred by him in the performance of his duties hereunder,
in accordance with current practice, including, without limitation, those
incurred in connection with business related travel or entertainment, or, if
such expenses are paid directly by the Executive, Gilman shall promptly
reimburse him for such payments, provided that the Executive properly accounts
for such expenses in accordance with Gilman’s policy.
 
 
 
 
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1.4.           Consideration.  In consideration for the Executive’s execution of
this Agreement, Gilman agrees that the Executive shall become employed by Gilman
as set forth in this Agreement, the Executive shall be permitted access to
Gilman’s confidential information and shall be eligible to receive post-Term
severance payments as set forth in this Agreement (subject to his compliance
with Sections 7 and 8 of this Agreement).  The Executive understands,
acknowledges and agrees that the Executive would not receive the consideration
specified in this Section 1.4, except for the Executive’s execution of this
Agreement and the fulfillment of the promises contained herein.
 
 
2.           COMPENSATION
 
2.1.            Base Salary.  During the Term, the Executive shall be entitled
to receive a base salary at a rate of Three Hundred Sixty Thousand Dollars
($360,000) per annum (“Base Salary”) during the Term, which Base Salary shall be
payable in arrears in equal installments not less frequently than on a bi-weekly
basis in accordance with the payroll practices of Gilman. The Base Salary may be
increased by the recommendation of the Compensation Committee of the Board of
Directors of the Parent (the “Board”) and as approved by the majority vote of
the entire Board.
 
2.2.           Bonus.  The Executive will be paid a bonus with respect to each
fiscal year (the “Bonus”) at such time and in such amount as determined by the
Compensation Committee of the Board, but not later than one hundred twenty (120)
days after the due date of the Parent’s 10-K for such fiscal year, and not later
than the March 15th  following such fiscal year.

2.3           Initial Option Grant. On the Effective Date, the Parent shall
grant to Executive non-qualified options to purchase up to 300,000 shares of
common stock of the Parent (the “Options”) pursuant to a stock option plan of
the Parent in effect at the time of grant (the “Plan”). To the extent the Plan
is not covered by an effective registration statement on Form S-8, the Parent
shall exert commercially reasonable efforts to cause the Plan to be covered by
an effective registration statement on Form S-8. The Options shall vest
according to the following vesting schedule: (i) 100,000 shall vest immediately
upon grant (the “First Tranche”), (ii) 100,000 shall vest on the first
anniversary of the Effective Date (the “Second Tranche”), and (iii) the
remaining 100,000 shall vest on the second anniversary of the Effective Date
(the “Final Tranche”). The First Tranche of Options shall be exercisable at
$0.50 per share, the Second Tranche of Options shall be exercisable at $0.70 per
share and the Final Tranche of Options shall be exercisable at $0.90 per share,
in each case subject to adjustment for stock splits, dividends,
recapitalizations and the like and the Options shall expire on September 30,
2020. The terms of the Options shall otherwise be subject to the Parent’s
standard option agreement for other senior management employees and the Plan.
 
 
 
 
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2.5.           Additional Compensation.  In addition to the Base Salary and the
Bonus, the Executive shall be entitled to receive such other cash bonuses and
such other compensation in the form of stock, stock options or other property or
rights as may from time to time be awarded him by the Board during or in respect
of his employment hereunder.  The Base Salary, the Bonus and such other
compensation may be increased by the recommendation of the Compensation
Committee  of the Board and as approved by the majority vote of the entire
Board.

 
3.           PLACE OF PERFORMANCE
 
In connection with his employment by Gilman, the Executive shall be based in
Fort Lauderdale, Florida, subject to the mutual agreement of the Executive and
Parent to relocate him to another office of the Parent.
 
 
4.           EMPLOYEE BENEFITS
 
4.1.           Benefit Plans.  The Executive shall, during the Term, be included
to the extent eligible thereunder in all employee benefit plans, programs or
arrangements of general application (including, without limitation, any plans,
programs or arrangements providing for retirement benefits, options and other
equity-based incentive compensation, profit sharing, bonuses, disability
benefits, health and life insurance, or vacation and paid holidays) which shall
be established by Parent, for, or made available to, their respective senior
executives (“Benefits”).  During the Term, the Benefits described in this
paragraph 4 may only be reduced as a result of a general reduction for all
senior executives of Parent.
 
 
 
 
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4.2.           Vacation.  The Executive shall be entitled to not less than four
(4) weeks vacation at full pay for each year during the Term.  Such vacation may
be taken in the Executive’s discretion, and at such time or times as are not
inconsistent with the reasonable business needs of Gilman.
 
4.3.           Car Allowance. The Executive shall be entitled to a car allowance
of $1,000 per month for the duration of the Term.
 

5.           TERMINATION OF EMPLOYMENT
 
5.1.           General.  The Executive’s employment under this Agreement may be
terminated with or without cause only on the following circumstances:
 
5.1.1.           Death.  The Executive’s employment under this Agreement shall
terminate upon his death.
 
5.1.2.           Disability.  If, as a result of the Executive’s Disability (as
defined below), the Executive shall have been absent from his duties under this
Agreement for ninety (90) consecutive days, or for an aggregate of one hundred
twenty (120) days during any 360 consecutive day period, Gilman may terminate
the Executive’s employment upon fifteen (15) days prior written notice following
the last day of such ninety (90) day or one hundred twenty (120) day period;
provided that the Executive has not returned to full time performance of his
duties during such fifteen (15) day period.  For purposes hereof, “Disability”
shall mean that the Executive is unable to perform his normal and customary
duties hereunder as a result of physical or mental incapacity, illness or
disability.
 
5.1.3           Cause.  Gilman may terminate the Executive’s employment under
this Agreement for Cause.  Termination for “Cause” shall mean termination of the
Executive’s employment because of the occurrence of any of the following as
determined by the Board after an in person hearing to determine if Cause
exists.  The Executive shall have the opportunity to appear at the hearing with
counsel to testify and to present evidence to the Board.
 
 
 
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(i)           the failure or refusal by the Executive to substantially perform
his obligations under this Agreement or any directive of the Board which is not
inconsistent with the terms of this Agreement, or any material breach of this
Agreement by the Executive (other than any such failure resulting from the
Executive’s Disability); provided, however, that Gilman shall have provided the
Executive with written notice that such actions are occurring and the Executive
has been afforded a reasonable opportunity of at least ten (10) days to cure
same, or
 
(ii)           the indictment of the Executive for a felony or other crime
involving moral turpitude or dishonesty, or the conviction of the Executive or
the plea of nolo contendere by the Executive to a misdemeanor (other than
traffic infractions); or
 
(iii)           a material breach of Section 7 or Section 8 hereof or a breach
of any representation contained in this Agreement by the Executive; or
 
(iv)           a breach of fiduciary duty involving personal profit; or
 
(v)           an  act of dishonesty in connection with his employment with
Gilman; or
 
(vi)           the Executive’s possession or use of illicit drugs, a prohibited
substance or alcohol, to the extent that in the reasonable determination of the
Board it impairs his ability to perform his duties and responsibilities; or
 
(vii)           the Executive having committed acts or omissions constituting
gross negligence or willful misconduct (including theft, fraud, embezzlement,
and securities law violations) which is injurious to the Parent or Gilman,
monetarily; or.
 
 
 
 
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(viii)   If at any time the Parent’s securities are listed on a stock exchange
or Nasdaq Stock Market, the Executive having committed any material violation
of, or material noncompliance with, any securities law, rule or regulation or
stock exchange or Nasdaq Stock Market regulation rule relating to or affecting
the Parent;
 
(ix)   The Executive’s material failure or refusal to honestly provide a
certificate in support of the chief executive officer’s and/or principal
executive officer’s certification required under the Sarbanes-Oxley Act of 2002,
or any other filings under the federal securities laws including the rules and
regulations promulgated thereunder.
 
            5.1.4.           Termination by the Executive for Good Reason.  The
Executive may terminate this Agreement for Good Reason (as defined below) by
delivering to the Board written Notice of Termination within fifteen (15) days
following the event which constitutes such Good Reason, to be effective on the
tenth (10th) day following the date of such Notice of Termination.   “Good
Reason” means that, without the express written consent of the Executive, the
occurrence of any of the following events occurs:  (i) there is any material
reduction or diminution (except temporarily during any period of disability) in
the Executive’s authority, duties or responsibilities with the Parent or Gilman;
(ii) the Executive no longer reports to the Parent’s Chief Executive Officer, or
(iii) there is a material breach by the Parent or Gilman of any material
provision of this Agreement, including a reduction in the Base Salary or the
relocation of the Executive’s principal place of employment from Fort
Lauderdale, in either case, without the Executive’s consent)  and, in any such
case, within 90 days following the occurrence of an event described in (i), (ii)
or (iii) the Executive notifies the Parent and Gilman that such event has
occurred and Parent or Gilman, as applicable, fails to cure the event (and the
Executive does not waive the Parent’s or Gilman’s failure to cure the event)
within thirty (30) days after its receipt of such notice.
 
 
 
 
 
 

 
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5.2.           Notice of Termination.  Any termination of the Executive’s
employment by Gilman or by the Executive (other than termination by reason of
the Executive’s death) shall be communicated by written Notice of Termination to
the other party of this Agreement.  For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated.
 
5.3.           Date of Termination.   The “Date of Termination” shall mean
(a) if the Executive’s employment is terminated by his death, the date of his
death, (b) if the Executive’s employment is terminated pursuant to subsection
5.1.2 above, fifteen (15) days after Notice of Termination is given (provided
that the Executive shall not have returned to the performance of his duties on a
full-time basis during such fifteen (15)-day period), (c) if the Executive’s
employment is terminated pursuant to subsection 5.1.3 above, the date specified
in the Notice of Termination after the expiration of any applicable cure
periods, if any, (d) if the Executive’s employment is terminated pursuant to
subsection 5.1.4 above, the date specified in the written Notice, and (e) if the
Executive’s employment is terminated for any other reason, the date on which a
Notice of Termination is given.
 
5.4           Compensation Upon Termination.
 
5.4.1           Termination for Cause.  If prior to the expiration of the Term,
the Executive’s employment shall be terminated by Gilman for Cause or the
Executive terminates this Agreement without Good Reason, Gilman shall pay the
Executive his Base Salary (but no Bonus for the current fiscal year) through the
Date of Termination, at the rate in effect at the time Notice of Termination is
given, and all expenses and accrued Benefits arising prior to such termination
which are payable to the Executive pursuant to this Agreement through the Date
of Termination and the Parent or Gilman shall have no further obligation with
respect to this Agreement.  In addition, the Executive shall be entitled to any
Bonus earned but not yet paid for a prior fiscal year.
 
5.4.2           Termination Without Cause
 
(a) Subject to the provisions of subsections 5.4.3 and 5.4.4 hereof, if the
Executive’s employment hereunder is terminated Without Cause, Gilman shall pay
to the Executive (i) his Base Salary through the Date of Termination, at the
rate in effect at the time Notice of Termination is given, (ii) expenses and
accrued Benefits arising prior to such termination which are payable to the
Executive pursuant to this Agreement through the Date of Termination, (iii) an
amount equal to 100% of his Base Salary, at the rate in effect at the time
Notice of Termination is given, and (iv) any Bonus earned but not yet paid for a
prior fiscal year in accordance with Section 2.2 (such payments in each of (i)
through (iv), collectively the “Severance”).
 
 
 
 
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(b) In the case of termination Without Cause, during the period beginning on the
Date of Termination and ending on the first anniversary of the Date of
Termination (the “Severance Period”), the Executive shall be entitled to
continue to participate in all employee benefit plans that Parent provides (and
continues to provide) generally to its senior executives except for any bonus
plans.
 
(c) “Without Cause” under this Section 5.4.2 shall mean termination of this
Agreement by Gilman that is without Cause, termination due to the death or
disability of the Executive; termination by the Executive with Good Reason; the
expiration of the Term without having entered into an employment agreement with
Parent and/or Gilman, upon terms substantially similar to this Agreement; and
termination as a result of Change of Control.
 
(d) “Change of Control” shall be deemed to have occurred when, whether or not
initiated or solicited by Parent, Gilman or by the Executive, by tender offer,
merger, acquisition or similar means, any “person” as defined in Section 3(a)(9)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as
used in Section 13(d) and 14(d) thereof, including a “group” as defined in
Section 13(d) of the Exchange Act, but excluding the Executive, or Parent or any
subsidiary or any affiliate of Parent or any employee benefit plan sponsored or
maintained by Parent or any subsidiary of Parent (including any trustee of such
plan acting as trustee), becomes the “beneficial owner” (as defined in Rule
13(d)(3) under the Exchange Act) of securities of Parent representing 50% or
more of the combined voting power of Parent’s then outstanding securities, or
there is a sale of substantially all of Parent’s assets (meaning more than 50%
of the assets are sold).
 
 
 
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5.4.3.          Death During Severance Period.  In the event of the Executive’s
death during the Severance Period, payments of Base Salary under this Section
5.4 and payments under Parent’s employee benefit plan(s) shall continue to be
made in accordance with their terms during the remainder of the Severance Period
to the beneficiary designated in writing for such purpose by the Executive or,
if no such beneficiary is specifically designated, to the Executive’s estate.
 
5.4.4           Payments and Benefits During Severance Period.
 
(a) Except as provided in Subsection (b), the cash amounts payable under Section
5.4.2, 5.4.3 and 5.4.4 shall be paid in equal monthly installments during the
Severance Period.
 
(b) If the Executive is a “specified employee” within the meaning of section
409A of the Internal Revenue Code of 1986, as amended, as of his Date of
Termination (as determined in accordance with the methodology established by
Gilman as in effect on the Date of Termination), then to the extent that cash
payments and benefits under Sections 5.4.2, 5.4.3 or 5.4.4  (other than benefits
described in Subsection (c)) during the Applicable Period would exceed the
Applicable Amount, such payments shall be paid to the Executive in a single sum
on the first business day following the end of the Applicable Period.
 
(c) The “Applicable Period” is the period beginning on the Executive’s Date of
Termination and ending on the first date that is six (6) months after the
Executive’s Date of Termination.
 
(d) The “Applicable Amount” is the amount equal to two times the lesser of: (1)
the sum of the Executive’s annualized compensation from Gilman based upon the
annual rate of pay for services provided hereunder for the taxable year of the
Executive preceding the taxable year of the Executive’s Date of Termination
(adjusted for any increase during that year that was expected to continue
indefinitely if the Executive had not terminated employment); or (2) the maximum
amount that may be taken into account under a qualified plan pursuant to section
401(a)(17) of the Code for the year of the Executive’s Date of Termination.
 

 
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6.             INSURABILITY; RIGHT TO INSURE
 
During the continuance of the Executive’s employment hereunder, Parent shall
have the right to maintain key man life insurance in its own name covering the
Executive’s life in such amount as shall be determined by Parent, for a term
ending on the termination or expiration of this Agreement.  The Executive shall
use his reasonable best efforts to assist Parent in procuring of such insurance
by submitting to the required medical examinations, if any, and by filling out,
executing and delivering truthful applications and other instruments in writing
as may be reasonably required by an insurance company or companies to which
application or applications for insurance may be made by or for Parent.
 
 
7.
PROPRIETARY INFORMATION; CONFIDENTIALITY; NON-COMPETITION; NONSOLICITATION

 
7.1.           The term “Proprietary Information” means information that was or
is developed by, became or becomes known by, or was or is assigned or otherwise
conveyed to or required by Gilman, and which has any commercial or economic
value, actual or potential, in Gilman’s business, and includes, without
limitation, trade secrets, copyrights, ideas, techniques, know-how, inventions
(whether patentable or not), and/or any other information of any type relating
to designs, configurations, toolings, documentation, recorded data, schematics,
source code; object code, master works, master databases, algorithms, flow
charts, formulae, circuits, works of authorship, mechanisms, research,
manufacture, improvements, assembly, installation, intellectual property
including patents and patent applications, business plans, past or future
financing, marketing, forecasts, pricing, customers, vendors, costs, the
salaries, duties, qualifications, performance levels, and terms of compensation
of other employees, and/or cost, financial statements or other financial data
concerning any of the foregoing or Gilman and its operations generally.  The
Executive understands that the provision of his employment creates a
relationship of confidence and trust between him and Gilman with respect to
Gilman and the Proprietary Information of Gilman and its customers which may be
learned by the Executive during the period of the Executive’s employment.
 
7.2           The Executive acknowledges and agrees that all Proprietary
Information and all patents, copyrights, trade secret rights, rights with
respect to mask works and other rights (including throughout, without
limitation, any extensions, renewals, continuations or divisions of any of the
foregoing) in connection therewith shall be the sole property of Gilman.  To the
extent that, for any reason, such Proprietary Information or rights may not vest
in Gilman, the Executive hereby sells, transfers, conveys and assigns to Gilman
any such rights or rights he may have or acquire in such Proprietary
Information.  At all times, both during the Term and thereafter, the Executive
will keep in strict confidence and trust and will not use or disclose any
Proprietary Information or anything relating to it to any other person, whether
or not for reasons of gain, without the written consent of Gilman, except as may
be necessary in the ordinary course of performing his duties to Gilman.  The
Executive will defend Gilman against all claims, actions, suits, or other
proceedings against Gilman arising out of or resulting from breach of this
Section 7, and shall indemnify and hold Gilman harmless from and against all
judgments, losses, liabilities, damages, costs and expenses (including without
limitation, reasonable attorneys’ fees and attorneys’ disbursements) arising out
of or incurred in connection with all such claims, actions, suits or other
proceedings.
 
 
 
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7.3           In the event of the termination of the Executive’s employment,
whether by Gilman or the Executive, for any reason, the Executive shall return
all documents, records, apparatus, equipment and other physical property, or any
reproduction of such property, whether or not pertaining to Proprietary
Information, furnished to the Executive by Gilman or produced by the Executive
or others in connection with the Executive’s employment immediately as and when
requested by Gilman.
 
7.4           During the Term of this Agreement and for a period of two (2)
years thereafter (whether or not this Agreement has been terminated by Gilman or
the Executive for any reason prior to the expiration of the Term), the Executive
will not, either directly or through others:
 
(a)           solicit, cause to be solicited, or attempt to solicit any
employee, independent contractor, consultant or customer or client of Gilman to
terminate his relationship with Gilman in order to become an employee,
consultant, independent contractor, customer or client to or for any other
person or entity, or otherwise encourage or solicit any employee, consultant,
independent contractor, customer or client of Gilman to leave Gilman for any
reason or to devote less than all of any such employee’s efforts to the affairs
of Gilman; or
 
(b)           take any action which constitutes an interference with or a
disruption of any of the business activities of Gilman.
 
 
 
 
 
 
 
 
 
 
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7.5           During the Term of this Agreement and for a period of one (1) year
thereafter (whether or not this Agreement has been terminated by Gilman or the
Executive for any reason prior to the expiration of the Term), the Executive
will not, either directly or through others:  engage, directly or indirectly, or
have an interest, directly or indirectly, anywhere in the United States of
America or any other geographic area where Gilman does business or in which its
products or services are marketed, alone or in association with others, as
principal, officer, agent, employee, director, partner or stock­holder (except
with respect to the Executive's employment by Gilman), or through the
invest­ment of capital, lending of money or property, rendering of services or
otherwise, in any business competitive with or substantially similar to the
businesses engaged in by Gilman during the Term of this Agreement (it being
understood hereby, that the ownership by the Employee of five percent (5%) or
less of the stock of any company listed on a national securities exchange shall
not be deemed a violation of this Section 7.5).
 
7.6           At no time during the Term, or thereafter shall the Executive
directly or indirectly, disparage the commercial, business or financial
reputation of Parent or Gilman;
 
7.7           The Executive represents that his performance of services
hereunder will not breach any agreement or obligation to keep in confidence
Proprietary Information acquired by him in confidence or in trust prior to the
Executive’s provision of services hereunder.  The Executive has not entered
into, and the Executive agrees that he will not enter into, any agreement either
written or oral in conflict with this Agreement or in conflict with his
employment hereunder.
 
7.8           During the Executive’s employment hereunder, the Executive will
not improperly use or disclose any confidential information or trade secrets, if
any, of any former employer or any other person to whom the Executive has an
obligation of confidentiality, and the Executive will not bring onto the
premises of Gilman any unpublished documents or any property belonging to any
former employer or any other person to whom the Executive has an obligation of
confidentiality unless expressly authorized in writing by that former employer
or person.  The Executive will use in the performance of his services only
information which is generally known and used by persons with training and
experience comparable to his own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by Gilman.
 
 
 
 
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7.9           In the event that the Executive is no longer employed by Gilman,
he hereby consents to the notification of any new employer of his rights and
obligations under this Agreement.
 
7.10          Without intending to limit the remedies available to Gilman,
including damages for breach of contract, the Executive acknowledges that a
breach of any of the covenants contained in this Section 7 may result in
material and irreparable injury to Gilman, or its affiliates or subsidiaries,
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat Gilman shall be entitled to seek a temporary restraining order
and/or a preliminary or permanent injunction restraining the Executive from
engaging in activities prohibited by this Section 7 or such other relief as may
be required specifically to enforce any of the covenants in this Section 7.  The
Executive hereby acknowledges and agrees that the type and periods of
restrictions imposed in this Section 7 are fair and reasonable and are
reasonably required for the protection of Gilman’s confidential information and
the goodwill associated with the business of Gilman.  Further, the Executive
acknowledges and agrees that the restrictions imposed in this Section 7 will not
prevent his from obtaining suitable employment after his employment with the
Executive ceases or from earning a livelihood.  If for any reason it is held
that the restrictions under this Section 7 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be interpreted or
modified to include as much of the duration and scope identified in this Section
as will render such restrictions valid and enforceable.
 
8.             EXECUTIVE’S COOPERATION
 
During the Term and thereafter, the Executive shall cooperate with Gilman in any
internal investigation or administrative, regulatory or judicial proceeding as
reasonably requested by Gilman (including, without limitation, the Executive
being available to Gilman upon reasonable notice for interviews and factual
investigations, appearing at Gilman’s request to give testimony without
requiring service of a subpoena or other legal process, volunteering to Gilman
all pertinent information and turning over to Gilman all relevant documents
which are or may come into the Executive’s possession, all at times and on
schedules that are reasonably consistent with the Executive’s other permitted
activities and commitments).  In the event Gilman requires the Executive’s
cooperation in accordance with this section after the termination of the Term,
Gilman shall reimburse the Executive for all of his reasonable costs and
expenses incurred, in connection therewith, plus pay the Executive a reasonable
amount per day for his time spent.
 
 
 
 
 
 
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9.           RIGHTS OF INDEMNIFICATION
 
Gilman shall indemnify the Executive to the fullest extent permitted by the
General Corporation Law of the State of Delaware, as amended from time to time,
for all amounts (including without limitation, judgments, fines, settlement
payments, expenses and attorney’s fees) incurred or paid by the Executive in
connection with any action, suit, investigation or proceeding arising out of or
relating to the performance by the Executive of services for, or the acting by
the Executive as a director, officer or employee of Gilman, or any other person
or enterprise at Gilman’s request.
 
10.           MISCELLANEOUS
 
10.1.         Notices.  All notices or communications hereunder shall be in
writing, addressed as follows:
 
To the Parent:
National Holdings Corporation
120 Broadway, 27th Floor
New York, NY 10271
Attn: Chief Executive Officer
   
To Gilman:
Gilman Ciocia, Inc.
11 Raymond Avenue
Poughkeepsie, NY 12603
Attn: Chief Executive Officer
   
To the Executive:
Michael P. Ryan
347 North New River Drive East
Apartment 1401
Fort Lauderdale, FL 33301
 

 
 
 
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All such notices shall be conclusively deemed to be received and shall be
effective (i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy
or facsimile transmission, upon confirmation of receipt by the sender of such
transmission, (iii) if sent by overnight courier, one business day after being
sent by overnight courier, or (iv) if sent by registered or certified mail,
postage prepaid, return receipt requested, on the fifth day after the day on
which such notice is mailed.
 
10.2.           Severability.  Each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement, including the provisions of Section 7,
is held to be prohibited by or invalid under applicable law, such provision will
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
 
10.3.           Binding Effect; Benefits.  Executive may not delegate his duties
or assign his rights hereunder.  This Agreement shall inure to the benefit of,
and be binding upon, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
 
10.4           Entire Agreement.  This Agreement represents the entire agreement
of the parties and shall supersede any and all previous contracts, arrangements
or understandings between the Parent, Gilman and the Executive. At the Effective
Time, that certain Employment Agreement between Gilman and Executive dated as of
August 20, 2007, as amended, is hereby terminated. This Agreement may be amended
at any time by mutual written agreement of the parties hereto.  In the case of
any conflict between any express term of this Agreement and any statement
contained in any employment manual, memo or rule of general applicability of
Gilman or Parent, this Agreement shall control.
 
10.5           Warranty.  The Executive hereby represents and warrants as
follows: (i) that the execution of this Agreement and the discharge of the
Executive’s obligations hereunder will not breach or conflict with any other
contract, agreement, or understanding between the Executive and any other party
or parties; and (ii) the Executive’s resume which was provided to Gilman by the
Executive and other statements made about the Executive’s employment history to
Gilman by the Executive are true, accurate and complete in all material
respects.
 
 
 
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10.6           Withholding.  The payment of any amount pursuant to this
Agreement shall be subject to applicable withholding and payroll taxes, and such
other deductions as may be required under Parent’s employee benefit plans, if
any.
 
10.7           Governing Law; Consent to Personal Jurisdiction.
 
(a) This Agreement shall be deemed to have been made and delivered in
Poughkeepsie New York and shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal laws of the State
of New York.
 
(b) At Parent or Gilman’s option, any dispute or controversy under this
Agreement shall be determined: in an arbitration proceeding before three (3)
arbitrators at the AAA; or in a lawsuit in Broward County, Florida.  The award
in any arbitration hereunder shall be final, and judgment upon the award
rendered may be entered in any court, state or Federal, having jurisdiction and
the parties hereby submit to the jurisdiction of any such court for the purpose
of such arbitration and the entering of such judgment.
 
(c) The venue of the arbitration or the Supreme Court action shall be Broward
County, Florida.
 
(d) The prevailing party in any arbitration or lawsuit shall recover from the
other party all costs and disbursements of the arbitration or lawsuit, including
reasonable legal fees.
 
(e)  The parties further agree to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding, and agree
that service of process upon either such party may be made in accordance with
Section 10.1 of this Agreement and shall be deemed in every respect effective
service of process upon such party, in any such suit, action or proceeding.
 
 
 
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10.8          Execution in Counterparts.  This Agreement may be executed by the
parties in one or more counterparts, each of which shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto.  A photocopy or electronic facsimile of this Agreement or of any
signature hereon shall be deemed an original for all purposes.
 
10.9          Survival.  The provisions of Sections 7 and 8 of this Agreement
shall survive the termination of this Agreement.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
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IN WITNESS WHEREOF, Parent and Gilman has caused this Agreement to be duly
executed and the Executive has hereunto set his hand, as of the day and year
first above written:
 
 
NATIONAL HOLDINGS CORPORATION
By:
 
Name:
Title:

GILMAN CIOCIA, INC.
 
By:
 
Name:
Title:

 
EXECUTIVE:
   
Michael P. Ryan

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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