Document:

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                              EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of January 1, 2000 (this "Agreement"), by
and between Hoenig Group Inc., a Delaware corporation (the "Company"), and
Fredric P. Sapirstein (the "Executive").

     WHEREAS, the Executive is employed by the Company as President and Chief
Executive Officer of the Company and serves as Chief Executive Officer of Hoenig
& Co., Inc., a wholly-owned subsidiary of the Company ("Hoenig").

     WHEREAS, the Company desires to continue to employ the Executive in such
capacities, and the Executive desires to continue to be so retained, on the
terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
made herein, the Company and the Executive agree as follows:

     1. Employment; Duties.

         (a) The Company shall employ the Executive as President and Chief
Executive Officer of the Company for the "Employment Period" as defined in
Section 2. The Executive, in his capacity as President and Chief Executive
Officer of the Company and Chief Executive Officer of Hoenig, shall have such
duties, responsibilities and authority normally incident to such offices,
subject to the provisions of the bylaws of the Company and Hoenig, respectively.
The precise duties, responsibilities and authority of the Executive may be
expanded, limited or modified, from time to time, at the discretion of the Board
of Directors of the Company (the "Board"), consistent with the ordinary duties,
responsibilities and authority of a President and Chief Executive Officer.

         (b) The Company shall use its best efforts to cause the Executive to be
elected to the Board and serve as its Chairman and shall include him in the
management slate for election as a director at every stockholders' meeting at
which his term as a director would otherwise expire. If requested by the Board,
the Executive shall serve as a member of the board of directors of any one or
more subsidiaries of the Company.

         (c) During the Employment Period, the Executive shall render his
services solely in the performance of his duties and responsibilities hereunder.
The Executive agrees that, during the Employment Period, he shall devote his
full working time, attention, knowledge and experience and give his best effort,
skill and abilities, exclusively to promote the business and interests of the
Company and its direct or indirect parents, subsidiaries and affiliates
(collectively, the "Affiliates"). The Executive may not serve as an officer or
director of, make investments in, or otherwise participate in, any

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other entity without the prior written approval of the Board; provided, however,
that the foregoing shall not be deemed to prohibit the Executive from acquiring,
directly or indirectly, solely as an investment, not more than two percent (2%)
of any class of securities of any corporation having a class of securities
registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended (the "1934 Act"),which securities are publicly owned and
regularly traded on any national exchange or in the over-the-counter market, or
investments in non-public entities, in all events consistent with Section 8 and
the policies and procedures generally applicable to executives of the Company
and its Affiliates; and provided further, that, so long as it does not interfere
with the Executive's employment, the Executive may serve as an officer, director
or otherwise participate in purely educational, welfare, social, religious and
civic organizations.

     2. Employment Term. Executive's employment under this Agreement shall
commence on the date hereof and end on December 31, 2001 (the "Initial Period"),
unless sooner terminated in accordance with the provisions of Section 4. On the
expiration of the Initial Period and on each yearly anniversary thereof, this
Agreement shall automatically renew for an additional one-year period (each such
one-year period being referred to as a "Renewal Period"), unless sooner
terminated in accordance with the provisions of Section 4; provided, however,
that no renewal shall occur if the Company or the Executive notifies the other
in writing of its intention not to renew this Agreement not less than [three]
months prior to such expiration date or anniversary, as the case may be. The
period during which Executive is employed under this Agreement, as in effect
from time to time, is referred to herein as the "Employment Period".

     3. Compensation and Benefits. The Executive shall be entitled to the
following compensation and benefits, in each case subject to applicable
statutory withholdings:

         (a) Base Compensation. The Executive shall be paid an aggregate base
salary (the "Base Salary") of $400,000 per annum. The Base Salary shall be
payable in a manner consistent with the normal payroll practices of the Company
in effect from time to time. The Board, in its sole discretion, or at the
recommendation of the Compensation and Stock Option Committee of the Board (the
"Compensation Committee"), may increase (but not decrease) the Base Salary, at
any time.

         (b) Annual Bonus. In addition to the Base Salary, the Executive shall
be entitled to receive a discretionary annual bonus for each fiscal year of the
Company that ends during the Employment Period (the "Bonus Award") based upon
the achievement of annual Company and individual performance goals to be set by
the Compensation Committee in consultation with the Executive; provided,
however, that in no case shall the Bonus Award for fiscal years ending December
31, 2000 and December 31, 2001 be less than $600,000 (the "Minimum Bonus
Award"). The Minimum Bonus Award shall operate as a draw against the Bonus Award
otherwise payable. To the extent necessary to avoid the limitation on the
federal tax deductibility of the Bonus Award for

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any year under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), payment thereof may, at the discretion of the Company, be either
(i) made pursuant to the Company's 1996 Cash Bonus Plan or such other comparable
plan adopted by the Company, which plan may be contingent upon approval by the
Company's stockholders, or (ii) deferred to the first taxable year of the
Company in which the payment would be fully deductible. Except as provided in
the preceding sentence, the Bonus Award for a fiscal year shall be payable as
soon as practicable after the release of the Company's audited financial
statements for such fiscal year. In the case of clause (i) above, such a plan
shall conform to the requirements of Section 162(m) of the Code and shall be
adopted by the Board prior to, and presented for the approval of stockholders
at, a meeting of the Company's stockholders. In the case of clause (ii) above,
amounts deferred shall be credited with such interest and on such other terms as
the Company and the Executive shall mutually agree.

         (c) Stock Options.

            (1) The Executive shall be granted, as soon as practicable after the
execution of this Agreement (the "Grant Date"), a non-qualified stock option
(the "Option") with respect to 150,000 shares of the Company's common stock, par
value $0.01 per share (the "Common Stock"), under the Company's 1996 Long-Term
Stock Incentive Plan (the "1996 Plan") or such other comparable plan in effect
at that time. The exercise price per share of Common Stock subject to the Option
shall equal one hundred percent (100%) of the Fair Market Value (as defined in
the 1996 Plan) of a share of Common Stock on the Grant Date (as defined in the
1996 Plan). Subject to Section 3(c)(2) herein, the Option shall become vested
and exercisable with respect to 50,000 shares on each of the first three
anniversaries of the Grant Date. The term of the Option shall be ten years.

            (2) Upon the Executive's termination of employment with the Company
for any reason, (i) any portion of the Option that is not then vested shall
immediately terminate, and (ii) that portion of the Option which was vested at
the Date of Termination (as defined herein) shall remain exercisable thereafter
for a period of three months, or, if such termination is by reason of death or
Disability, for a period of one year; provided, however, that in the event of
termination of the Executive's employment by the Company other than for Cause or
by Executive for Good Reason, the Option shall become fully vested and
exercisable at the Termination Date and shall remain exercisable for three
months. If such termination is for Cause, all Options, whether or not vested and
exercisable, shall terminate immediately. In no event may any Option be
exercised after the tenth anniversary of the date such Option is granted.

            (3) The Option shall be subject to the terms and conditions of the
plan or plans pursuant to which it is granted (including acceleration of vesting
upon a change in control of the Company) and the availability of options under
such plan or plans, and shall be evidenced by an option agreement which shall
contain terms not inconsistent with the provisions of this Section 3(c).

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         (d) Benefits. Executive also shall be entitled to participate in the
employee and fringe benefit and group insurance programs provided by the Company
for its officers and employees generally and in accordance with the terms of the
applicable plan documents as they may be revised from time to time. Executive
shall be entitled to receive such other benefits as are generally provided to
executives of the Company and itsAffiliates. Executive also shall be entitled to
reimbursement for reasonable out-of-pocket expenses incurred in connection with
the business of the Company and its Affiliates in accordance with the Company's
policies and procedures.

     4. Termination.

         (a) The Company may, with or without prior notice, terminate the
Employment Period with or without Cause, or upon the Executive's Disability.
Executive may terminate the Employment Period for Good Reason or upon the
Executive's Disability. The Employment Period shall automatically terminate upon
the Executive's death and upon expiration of the Initial Period or any Renewal
Period, as the case may be, if either party elects not to renew Executive's
employment under this Agreement in accordance with Section 2. Except as
otherwise provided in this Agreement, Executive's rights and the obligations of
the Company hereunder shall cease as of the effective date of the termination of
the Executive's employment under this Agreement (the "Termination Date");
provided, however, that Executive shall be entitled to receive (i) any accrued
but unpaid Base Salary as of the Termination Date; (ii) any awarded but unpaid
Bonus Awards (including any deferred Bonus Awards) as of the Termination Date;
and (iii) any amount accrued under Company benefit plans as provided pursuant to
the terms of such plans (collectively, the "Accrued Obligations").

         (b) In the event that the Company terminates the Employment Period
other than for Cause, or if the Executive terminates the Employment Period for
Good Reason, Executive shall be entitled to receive, in addition to the Accrued
Obligations, the following payments ("Termination Payments"), in each case
subject to applicable statutory withholdings :

            (1) a payment equal to the product of (i) the sum of Executive's
Base Salary and Bonus Awards payable (without regard to any deferral) for the
three fiscal years ending prior to such termination, divided by three, and (ii)
the greater of one or the number of years and/or fraction thereof remaining in
the then existing Initial Period or Renewal Period, as the case may be; and

            (2) a Bonus Award equal to the greater of the Bonus Award earned by
the Executive for the immediately preceding fiscal year or the Minimum Bonus
Award, in either case, multiplied by a fraction, (i) the numerator of which
shall be the number of days elapsed in the fiscal year in which the Termination
Date occurred, and (ii) the denominator of which shall be 365; provided,
however, that there shall be

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deducted from any such Bonus Award the amount of any Bonus Award previously paid
to the Executive with respect to such period.

            (3) Payment of the amounts due under Sections 4(b)(1) and 4(b)(2)
shall be made in equal monthly installments over such remaining Initial Period
or Renewal Period or such one year period, as the case may be.

            (4) In the event of the Executive's death after the Employment
Period is terminated other than for Cause or for Good Reason, the Company shall
make any Termination Payments which would otherwise have been payable to the
Executive if he had lived under this Section 4(b) to Executive's estate or
designated beneficiary.

         (c) In the event that the Employment Period is terminated by reason of
the Executive's Disability, the Executive shall be entitled to receive, in
addition to the Accrued Obligations:

            (1) a payment equal to the product of (i) the sum of Executive's
then current Base Salary and the Minimum Bonus Award and (ii) the number of
years and/or fraction thereof then remaining in the Initial Period or any
Renewal Period, as the case may be, which amount shall be paid in equal monthly
installments over such remaining Initial Period or Renewal Period; provided,
however, that such installments shall cease upon any employment by the Executive
on a full-time basis; and

            (2) Executive shall participate, and the Company shall continue
contributions on the Executive's behalf, in all Company-sponsored health and
welfare plans on terms no less favorable than as in effect on the Termination
Date, which benefits shall continue until the earlier of:

                (A)  one year from the Termination Date;

                (B)  the entitlement to coverage of the Executive under a
                     comparable plan provided by a new employer;

                (C)  the death of the Executive; or

                (D)  expiration of the Initial Period or Renewal Period, as the
                     case may be.

The cash amounts and benefits set forth in Sections 4(c)(1) and 4(c)(2) are
collectively referred to herein as "Disability Benefits."

         (d) In the event that the Employment Period terminates by reason of
Executive's death, in addition to the Accrued Obligations, the Company shall pay
to the Executive's estate or designated beneficiaries within ninety (90) days
after the

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Termination Date, a lump sum equal to the greater of the Minimum Bonus Award or
the amount of any Bonus Award (without regard to any deferral) for the fiscal
year ending immediately prior to such termination, in either such case,
multiplied by a fraction, (i) the numerator of which shall be the number of days
elapsed in the fiscal year during which the Termination Date occurred, and (ii)
the denominator of which shall be 365 (the "Death Benefit"); provided, however,
that there shall be deducted from any such Death Benefit the amount of any Bonus
Award previously paid to the Executive with respect to such period.

         (e) A termination of the Executive's employment (i) upon expiration of
the Initial Period or any Renewal Period, whether at the Company's option or the
Executive's option, or (ii) by reason of the Executive's death or Disability,
shall not constitute a termination other than for Cause or for Good Reason under
this Agreement.

         (f) As a condition to his entitlement to receive Death or Disability
Benefits or Termination Payments, Executive or his estate or designated
beneficiary shall (i) have executed and delivered to the Company a waiver and
release satisfactory to the Company waiving and releasing all rights and claims
against the Company and its Affiliates and their respective officers, agents,
directors and employees, and such waiver and release shall have become
irrevocable, and (ii) comply with Sections 5 through 9.

         (g) In the event that the Employment Period is terminated for any
reason (except by death), Executive agrees that, if at that time he is a
director or officer of the Company or any of its Affiliates, he will immediately
deliver his written resignation as such director or officer, such resignation to
become effective immediately.

         (h)(1) If any of the payments or benefits received or to be received by
the Executive in connection with a Change in Control (as defined in the 1996
Plan) or the Executive's termination of employment (whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement with the
Company, any Person (within the meaning of Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended, as modified and used in Sections 13(d) and
14(d) thereof) whose actions result in a Change of Control or any Person
affiliated with the Company or any such Person) (all such payments and benefits,
excluding the Gross-Up Payment, collectively, the "Total Payments") will be
subject to the excise tax imposed under section 4999 of the Code (the "Excise
Tax"), the Company shall pay to the Executive an additional amount (the
"Gross-Up Payment") such that the net amount retained by the Executive, after
deduction of any Excise Tax on the Total Payments and any federal, state and
local income and employment taxes and Excise Tax upon the Gross-Up Payment,
shall be equal to the Total Payments.

         (2) For purposes of determining whether any of the Total Payments will
be subject to the Excise Tax and the amount of such Excise Tax, (i) all of

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the Total Payments shall be treated as "parachute payments" (within the meaning
of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax
Counsel") reasonably acceptable to the Executive and selected by the accounting
firm which was, immediately prior to the Change in Control, the Company's
independent auditor (the "Auditor"), such payments or benefits (in whole or in
part) do not constitute parachute payments, including by reason of section
280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within the
meaning of section 280G(b)(1) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of
the Base Amount (as defined in section 280G(b)(3) of the Code) allocable to such
reasonable compensation, or are otherwise not subject to the Excise Tax, and
(iii) the value of any non-cash benefits or any deferred payment or benefit
shall be determined by the Auditor in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income tax at the
highest marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Executive's
residence on the date on which the Gross-Up Payment is calculated for purposes
of this Section, net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes.

         (3) In the event that the Excise Tax is finally determined to be less
than the amount taken into account hereunder in calculating the Gross-Up
Payment, the Executive shall repay to the Company, within five (5) business days
following the time that the amount of such reduction in the Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income and employment taxes imposed on the
Gross-Up Payment being repaid by the Executive, to the extent that such
repayment results in a reduction in the Excise Tax and a dollar-for-dollar
reduction in the Executive's taxable income and wages for purposes of federal,
state and local income and employment taxes, plus interest on the amount of such
repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined to exceed the amount taken into
account hereunder in calculating the Gross-Up Payment (including by reason of
any payment the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5) business days following
the time that the amount of such excess is finally determined. The Executive and
the Company shall each reasonably cooperate with the other in connection with
any administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.

         (i) For purposes of this Agreement:

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            (1) "Cause" shall mean an event where the Executive: (i) commits any
act of fraud, willful misconduct or dishonesty in connection with his employment
or which materially injures the Company or any of its Affiliates; (ii) breaches
Section 8 or 9, or any other material provision of this Agreement or any
material representation, warranty, covenant or condition in this Agreement or
any material fiduciary duty to the Company or any of its Affiliates; (iii)
fails, refuses or neglects to timely perform any material duty, responsibility
or obligation under this Agreement and such failure, refusal or neglect is not
cured by the Executive within fifteen (15) days from the date the Company
notifies the Executive thereof; (iv) commits a material violation of any
material law, rule, regulation or by-law of any governmental authority (state,
federal or foreign), any securities exchange or association or other regulatory
or self-regulatory body or agency applicable to the Company or any of its
Affiliates or any general policy or directive of the Company or any of its
Affiliates communicated in writing to the Executive; (v) is charged with a crime
involving moral turpitude, dishonesty, fraud or unethical business conduct, or a
felony; (vi) is subject to the occurrence of an event or condition which makes
it unlawful for the Executive to perform his duties or responsibilities
hereunder, including the issuance of any order, decree, decision or judgment,
which remains in effect for eight (8) weeks or more; (vii) gives or accepts
undisclosed commissions or other payments in cash or in kind in connection with
the affairs of the Company or any of its Affiliates or their respective clients;
(viii) is expelled or suspended in excess of eight (8) weeks, or is subject to
an order temporarily (for a period in excess of eight (8) weeks) or permanently
enjoining the Executive from the securities, investment management or investment
banking business or from acting in the capacity contemplated by this Agreement
by the Securities Exchange Commission ("SEC"), the National Association of
Securities Dealers ("NASD"), any national securities exchange or any
self-regulatory agency or governmental authority, state, foreign or federal; or
(ix) fails to obtain or maintain any registration, license or other
authorization or approval that the Company or any of its Affiliates in their
discretion reasonably believes is required for the Executive to perform his
duties and responsibilities hereunder.

            (2) "Good Reason" shall mean (i) the Company changes the Executive's
status, title, duties, responsibilities, authority or position as President and
Chief Executive Officer of the Company, and such change represents a material
reduction in such status, title, duties, responsibilities, authority or position
conferred hereunder; (ii) the Executive is not elected to the Board or not
elected Chairman of the Board, or does not remain a director of the Board or
Chairman of the Board, at any time during the Employment Period while the
Company is the ultimate parent of the businesses carried on by the Company and
its Affiliates (other than as a result of a resignation by the Executive
pursuant to Section 4(c) or otherwise); (iii) the failure of the Company to make
a timely grant to the Executive of the stock options described in Section
3(c)(1); or (iv) the Company materially breaches this Agreement. With respect to
a termination for Good Reason within the meaning of Section 4(i)(2)(i), (ii),
(iii) or (iv), the Company shall have thirty (30) days after the date the
Executive delivers a notice of termination for Good

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Reason to correct the matters constituting Good Reason as specified in the
notice of termination or, if not curable within thirty (30) days, shall have
thirty (30) days in which to commence correcting the matters constituting Good
Reason as specified in the notice of termination and diligently pursue such
correction, but in no event shall the period to correct such matters exceed
forty-five (45) days after the date of delivery of a notice of termination for
Good Reason. Such notice of termination for Good Reason shall include the
specific section of this Agreement which was relied upon and the reason that the
Company's act or failure to act has given rise to his termination for Good
Reason.

            (3) "Disability" shall mean the Executive's inability to perform his
duties by reason of mental or physical disability for at least one hundred and
twenty (120) consecutive days or any one hundred and twenty (120) days (whether
or not consecutive) in any one-hundred eighty (180) consecutive day period. In
the event of a dispute as to whether the Executive is disabled within the
meaning hereof, either party may from time to time request a medical examination
of the Executive by a doctor appointed by the Chief of Staff of a hospital
selected by mutual agreement of the parties, or as the parties may otherwise
agree, or, failing agreement, a hospital selected in good faith by the Board.
The written medical opinion of such doctor shall be conclusive and binding upon
the parties as to whether the Executive has become disabled and the date when
such disability arose. The cost of any such medical examination shall be borne
by the Company.

            5. Trade Secrets. The Executive recognizes that it is in the
legitimate business interest of the Company and its Affiliates to restrict his
disclosure or use of Trade Secrets and Confidential Information relating to the
Company and its Affiliates for any purpose other than in connection with his
performance of his duties and responsibilities to the Company and its
Affiliates, and to limit any potential appropriation of such Trade Secrets and
Confidential Information by the Executive. The Executive therefore agrees that
all Trade Secrets and Confidential Information relating to the Company and its
Affiliates heretofore or in the future obtained by the Executive shall be
considered confidential and the proprietary information of the Company and its
Affiliates. During the Employment Period, the Executive shall not use or
disclose, or authorize any other person or entity to use or disclose, any Trade
Secrets and Confidential Information, other than as necessary to further the
business objectives of the Company and its Affiliates in accordance with the
terms of his employment hereunder. The term "Trade Secrets and Confidential
Information" includes, by way of example and without limitation, matters of a
technical nature, "know-how", formulas, secret processes, works of authorship,
computer programs (including without limitation documentation of such programs),
services, materials, patent applications, new product plans, other plans,
technical information, technical improvements, test data, progress reports and
research projects, and matters of a business nature of the Company and its
Affiliates, such as business plans, prospects, financial information, marketing
plans and strategies, proprietary information about costs, profits, markets and
sales, lists of customers and suppliers, procurement and promotional
information, credit and financial data concerning customers or suppliers,
information relating to the management, operation and planning,

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plans for future development, and other information of a similar nature to the
extent not available to the public. After termination of the Employment Period
for any reason, the Executive shall not use or disclose Trade Secrets and
Confidential Information.

         6. Company Property; Return of Documents and Property.

         (a) All records, files, documents, computer programs, software, discs
and magnetic tape, equipment and similar items relating to the business of, or
provided by, the Company or its Affiliates, including but not limited to all
correspondence, manuals, letters, notes, notebooks, reports, flow-charts,
proposals, documents concerning clients, products, services or processes, and
all materials derived therefrom, in each case in whatever medium, (collectively,
"Company Property"), which Executive shall prepare or receive from the Company
or its Affiliates, shall remain the sole and exclusive property of the Company
and its Affiliates.

         (b) Upon the termination of the Employment Period, or at any time upon
the request of the Company, the Executive (or his heirs or personal
representatives) shall deliver to the Company (1) all documents and materials
(including, without limitation, computer files) containing Trade Secrets and
Confidential Information relating to the business and affairs of the Company or
any of its Affiliates, and (2) all Company Property, which is in the possession
or under the control of the Executive (or his heirs or personal
representatives).

         7. Discoveries and Work. All Discoveries and Works made or conceived by
the Executive during his employment by the Company or any of its Affiliates,
whether during the Employment Period or prior thereto, jointly or with others,
that relate to the present or anticipated activities of the Company or any of
its Affiliates, or are used or usable by the Company or any of its Affiliates,
shall be owned by the Company and its Affiliates. The term "Discoveries and
Works" includes, by way of example but without limitation, Trade Secrets and
Confidential Information, patents and patent applications, trademarks and
trademark registrations and applications, service marks and service mark
registrations and applications, trade names, copyrights and copyright
registrations and applications. The Executive shall (a) promptly notify, make
full disclosure to, and execute and deliver any documents requested by, the
Company or any of its Affiliates, as the case may be, to evidence or better
assure title to Discoveries and Works in the Company or its Affiliates; (b)
renounce any and all claims, including but not limited to claims of ownership
and royalty, with respect to all Discoveries and Works and all other property
owned or licensed by the Company or any of its Affiliates; (c) assist the
Company or any of its Affiliates in obtaining or maintaining for itself at its
own expense United States and foreign patents, copyrights, trade secret
protection or other protection of any and all Discoveries and Works; and (d)
promptly execute, whether during the Employment Period or thereafter, at the
Company's expense, all applications or other endorsements necessary or
appropriate to maintain patents and other rights for the Company and its
Affiliates and to protect the title of the Company and its Affiliates thereto,
including but not limited to assignments of such patents and other rights. Any

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Discoveries and Works which, within six (6) months after the termination of the
Employment Period, are made, disclosed, reduced to a tangible or written form or
description, or are reduced to practice by the Executive and which pertain to
the business carried on or products or services being sold or developed by the
Company or any of its Affiliates at the time of such termination shall, as
between the Executive and the Company and its Affiliates, be rebuttably presumed
to have been made during the Executive's employment by the Company. The
Executive acknowledges that all Discoveries and Works shall be deemed "works
made for hire" under the Copyright Act of 1976, as amended, 17 U.S.C.
(Section)101.

         8. NonCompetition. From and after the date hereof, the Executive shall
not, except pursuant to the terms hereof, directly or indirectly, own, manage,
operate, join, finance, control or participate in the ownership, management,
operation or control of, or be employed or be otherwise connected in any manner
with, any business under a name similar to the name of the Company or any of its
Affiliates. During the Noncompetition Period, the Executive shall not (except as
an officer, director, employee, agent or consultant of the Company or its
Affiliates) directly or indirectly, own, manage, operate, join, or have a
financial interest in, control or participate in the ownership, management,
operation or control of, or be employed as an employee, agent or consultant, or
in any other individual or representative capacity whatsoever, or use or permit
his name to be used in connection with, or be otherwise connected in any manner
with, (i) any business or enterprise engaged (wherever located) in the design,
development, manufacture, distribution or sale of any products, or the provision
of any services, which the Company or any of its subsidiaries were designing,
developing, manufacturing, distributing, selling or providing at any time during
the one year immediately preceding the termination of Executive's employment
with the Company or (ii) any business which is similar to or competitive with
the business carried on or planned by the Company or any of its subsidiaries at
any time during the one year immediately preceding the termination of the
Executive's employment with the Company, unless the Executive shall have
obtained the prior written consent of the Board; provided, however, that the
foregoing restriction shall not be construed to prohibit the ownership by the
Executive of not more than two percent (2%) of any class of securities of any
corporation which is engaged in any of the foregoing businesses, having a class
of securities registered pursuant to Section 12(b) or 12(g) of the 1934 Act,
which securities are publicly owned and regularly traded on any national
exchange or in the over-the-counter market; provided further, that such
ownership represents a passive investment and that neither the Executive nor any
group of persons including the Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees any
of its financial obligations, otherwise takes part in its business other than
exercising his rights as a stockholder or seeks to do any of the foregoing. For
purposes of this Agreement, the Noncompetition Period shall mean (i) the
Employment Period; (ii) the lesser of one year following termination of the
Employment Period or the remaining term of the Initial Period or any Renewal
Period, as the case may be, if such termination is by the Company for Cause or
by the Executive other than for Good Reason; and (iii) the period during which
the Executive is receiving Termination Payments or Disability

                                       12
<PAGE>

Benefits. Notwithstanding the foregoing, in the event that the Company
terminates the Employment Period other than for Cause, or if the Executive
terminates the Employment Period for Good Reason, the Executive may elect at any
time after such termination, by ten (10) days' advance written notice to the
Company, to be relieved of the provisions of this Section 8 and Section 9(a). On
and after such election, the Company shall have no further obligation to make
any payments to the Executive pursuant to Section 4, except for such amounts as
shall have been accrued prior to the date of such election. Such election shall
not effect any of the rights of the Company with respect to any violation of
this Section 8 or Section 9 occurring prior to such election.

         9. Non-Solicitation. (a) During the Noncompetition Period, the
Executive shall not, directly or indirectly, whether for his own account or for
the account of any other individual or entity, solicit or canvas the trade,
business or patronage of, or sell any products or services which are the same as
or similar to those designed, developed, manufactured, distributed or sold by
the Company or any of its subsidiaries to, any individuals or entities that were
either customers of the Company or any of its subsidiaries during the twelve
(12) months immediately preceding the termination of the Executive's employment
with the Company, or prospective customers with respect to whom a sales effort,
presentation or proposal was made by the Company or any of its subsidiaries
during the twelve months immediately preceding the Termination Date.

            (b) Executive further agrees that, during the longer of the
Noncompetition Period or one-year after termination of employment, he shall not,
directly or indirectly, (i) solicit, induce, enter into any agreement with, or
attempt to influence any individual, who was an employee or consultant of the
Company or any of its Affiliates at any time during the time that the Executive
was employed by the Company or any of its Affiliates, to terminate his or her
employment relationship with the Company or any of its Affiliates or to become
employed by the Executive or any individual or entity by which Executive is
employed or (ii) interfere in any other way with the employment, or other
relationship, of any employee or consultant of the Company or any of its
subsidiaries.

         10. Enforcement. (a) The Executive agrees that the remedies at law for
any breach or threat of breach by him of any of the provisions of Sections 5
through 9 will be inadequate, and that, in addition to any other remedy to which
the Company may be entitled at law or in equity, the Company shall be entitled
to a temporary or permanent injunction or injunctions or temporary restraining
order or orders to prevent breaches of any of the provisions of Sections 5
through 9 and to enforce specifically the terms and provisions thereof, in each
case without the need to post any security or bond. Nothing herein contained
shall be construed as prohibiting the Company from pursuing, in addition, any
other remedies available to the Company for such breach or threatened breach. A
waiver by the Company of any breach of any provision hereof shall not operate or
be construed as a waiver of a breach of any other provision of this Agreement or
of any subsequent breach by the Executive.

                                       13
<PAGE>

            (b) It is expressly understood and agreed that although the Company
and the Executive consider the restrictions contained in Sections 5 through 9 to
be reasonable for the purpose of preserving the goodwill, proprietary rights and
going concern value of the Company and its Affiliates, if a final judicial
determination is made by a court having jurisdiction that the time or territory
or any other restriction contained in such Sections 5 through 9 is an
unenforceable restriction on the Executive's activities, the provisions of such
Sections 5 through 9 shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such other extent as such
court may judicially determine or indicate to be reasonable. Alternatively, if
the court referred to above finds that any restriction contained in Sections 5
through 9 is unenforceable, and such restriction or remedy cannot be amended so
as to make it enforceable, such finding shall not affect the enforceability of
any of the other restrictions contained therein or the availability of any other
remedy. The provisions of Sections 5 through 9 shall in no respect limit or
otherwise affect the Executive's obligations under other agreements with the
Company.

         11. Executive's Representations. The Executive represents and warrants
to the Company that (a) he is able to perform fully his duties and
responsibilities contemplated by this Agreement and (b) there are no
restrictions, covenants, agreements or limitations of any kind on his right or
ability to enter into and fully perform the terms of this Agreement.

         12. Key Man Life Insurance. During the Employment Period, the Company
and any of its Affiliates may at any time apply for insurance on the Executive's
life and/or health in such amounts and in such form as the Company or any of its
Affiliates may in its sole discretion decide. The Executive shall not have any
interest in such insurance, but shall, if the Company or any of its Affiliates
requests, submit to such medical examinations, supply such information and
execute such documents as may be required in connection with, or so as to enable
the Company to obtain, such insurance. The Company's or any of its Affiliates'
inability to obtain insurance on the Executive's life and/or health shall not
constitute a breach of this Agreement; provided, however, that the Executive has
submitted to medical examinations, supplied information, executed documents and
otherwise cooperated with the Company and its Affiliates in their efforts to
obtain such insurance.

         13. Assignment. The rights and obligations of the parties under this
Agreement shall not be assignable by either the Company or the Executive,
provided, however, that this Agreement is assignable by the Company to any
Affiliate of the Company, to any successor in interest to the business of the
Company, or to a purchaser of all or substantially all of the assets of the
Company.

         14. Notices. Any notice required or permitted under this Agreement
shall be in writing and shall be deemed to have been effectively made or given
upon receipt if personally delivered, on the third business day after having
been mailed properly addressed in a sealed envelope, postage prepaid by
certified or registered mail,

                                       14
<PAGE>

or on the first business day after having been delivered by a reputable
overnight delivery service. Unless otherwise changed by notice, notice shall be
properly addressed to the Executive if addressed to:

                           Fredric P. Sapirstein
                           1140 Fifth Avenue
                           New York, NY 10019

and properly addressed to the Company if addressed to:

                           Hoenig Group Inc.
                           Reckson Executive Park
                           4 International Drive
                           Rye Brook, NY 10573
                           Attention:  General Counsel

         15. Severability. Wherever there is any conflict between any provision
of this Agreement and any statute, law, regulation or judicial precedent, the
latter shall prevail, but in such event the provisions of this Agreement thus
affected shall be curtailed and limited only to the extent necessary to bring
them within the requirements of the law.

         16. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

         17. Effect of Termination. Any termination of the Employment Period
shall not terminate any provision of this Agreement except as expressly provided
herein.

         18. Disputes. Any claim or controversy arising out of or relating to
this Agreement, or any breach thereof, or otherwise arising out of or relating
to the Executive's employment, compensation and benefits with the Company or the
termination thereof, shall be settled by arbitration in New York, New York in
accordance with the Voluntary Labor Arbitration Rules of the American
Arbitration Association ("AAA"), or if the AAA refuses to accept and process any
such claim or controversy for arbitration, then the rules of procedure
established by the Center for Public Resources; provided, however, that the
parties agree that (a) the panel of arbitrators shall be prohibited from
disregarding, adding to or modifying the terms of this Agreement; (b) the panel
of arbitrators shall be required to follow established principles of substantive
law and the law governing burdens of proof; (c) only legally protected rights
may be enforced in arbitration; (d) the panel of arbitrators shall be without
authority to award punitive or exemplary damages; (e) the chairperson of the
arbitration panel shall be an attorney licensed to practice law in New York who
has experience in similar matters; (f) the panel of arbitrators shall consist
solely of arbitrators from the securities industry; and (g) any

                                       15
<PAGE>

demand for arbitration made by the Executive must be filed and served, if at
all, within 180 days of the occurrence of the act or omission complained of. Any
claim or controversy not submitted to arbitration in accordance with this
Section 18 shall be considered waived and, thereafter, no arbitration panel or
tribunal or court shall have the power to rule or make any award on any such
claim or controversy. The award rendered in any arbitration proceeding held
under this Section 18 shall be final and binding, and judgment upon the award
may be entered in any court having jurisdiction thereof; provided, however, that
the judgment conforms to established principles of law and is supported by
substantial record evidence. Notwithstanding the foregoing, either the Company
or the Executive may elect not to have this Section 18 apply with respect to
matters arising from the provisions of Sections 5 through 9, in which case such
matters shall be subject to the enforcement provisions of Section 10.

         19. Miscellaneous; Choice of Law. This Agreement constitutes the entire
agreement, and supersedes all prior agreements, of the parties hereto relating
to the subject matter hereof, and there are no written or oral terms or
representations made by either party other than those contained herein. This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.

         IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the day and year first above written.

                                         HOENIG GROUP INC.

                                         By:/s/ Alan B. Herzog
                                            ------------------------------------
                                         Its:   Chief Operating Officer
                                            ------------------------------------

EXECUTIVE
   /s/ Fredric P. Sapirstein
------------------------------------
       Fredric P. Sapirstein

                                       16<PAGE>

29th March 1999

Hugh Humfrey Esq.
Lower Churn
South Cerney
Cirencester

GL7 5TN

Dear Hugh,

     I am pleased that you have accepted the position of Managing Director
(designate) of Hoenig & Company Limited. We look forward to you joining us on
May 1, 1999.

     As Managing Director (designate), you shall be responsible for performing
such duties as the Company's Board of Directors shall from time to time
designate, consistent with your position. We trust that you shall use your best
efforts to perform these duties consistent with the policies of the Company and
shall devote your full working time, attention and efforts toward the
performance of your duties and the business of the Company.

     Your employment by the Company shall be subject to the following terms:

1. Salary:                 (pounds sterling)100,000 per annum.

2. Pension:                the Company will pay an amount equal to 10% of your
                           annual salary into your pension fund.

3. Payment of Salary:      monthly in arrears.

4. Probationary period:    5 months from starting date. On confirmation (1st
                           October 1999), your salary will rise to (pounds
                           sterling)115,000 per annum. On 1st January 2000, your
                           job title will change to Managing Director (i.e.,
                           without the epithet designate).

5. Notice period:          one month on either side, during and after the
                           probationary period.

6. Health cover:           BUPA - London hospital rate, or equivalent, for you
                           and your immediate family. Health check every year at
                           BUPA or equivalent. Permanent Health insurance.

7. Holiday:                25 days within a calendar year (determined pro rata),
                           plus normal public holidays.

8. Bonus scheme:           a guaranteed minimum bonus for the year ended
                           December 31, 1999 equal to(pounds sterling)33,333,
                           which shall operate as a draw against any amounts
                           awarded to you
                                                                               2
<PAGE>

                           under a bonus pool, consisting of two components,
                           based on the net operating profits (as defined) of
                           the management accounts in a given year, as described
                           on the attached Schedule A. The formula used to
                           determine the bonus pool may be amended from time to
                           time by the Company in its sole discretion.

                           The Managing Director shall be responsible for
                           determining how the bonus pool will be distributed to
                           employees, including yourself, subject to the
                           approval of the Board of Directors and, where
                           appropriate, the Compensation and Stock Option
                           Committee of Hoenig Group Inc. All bonus amounts
                           shall be paid as soon as practicable after the
                           satisfactory completion of the Company's annual
                           audit.

                           For the years after December 31, 1999, there shall be
                           no guaranteed bonus, but, you shall be entitled to
                           participate in the bonus pool.

9. Referees:               this offer is subject to receipt of satisfactory
                           references of two independent referees and to our
                           standard terms of employment.

10. Registration:          this offer is subject to your obtaining and
                           maintaining any registration, license or other
                           authorization or approval that the Company considers
                           is required for you to perform your duties.

     All compensation shall be subject to all applicable deductions and shall be
payable in accordance with the Company's policies.

     In the event that the Company terminates your employment other than for
"cause" prior to December 31, 1999, the Company shall pay you your pro-rated
salary and pension contribution for the year and your guaranteed bonus of
(pounds sterling)33,333, less all applicable deductions. For purposes of
calculating this amount, your salary to be pro-rated will be based on a salary
of (pounds sterling)100,000 per annum for the period 1st May through and
including 30th September 1999 and, subject to confirmation following your
probationary period, a salary of (pounds sterling)115,000 per annum for the
period 1st October 1999 through and including 31st December 1999. For purposes
of this letter, the term "cause" shall have the same meaning given it in the
Hoenig Group Inc. Section 162(m) Cash Bonus Plan, a copy of which is attached.
The Company's obligation to make this payment to you is subject to the receipt
of an irrevocable waiver and release from you in a form that is satisfactory to
the Company.

     As a matter of course, we expect, and you agree that, you shall not,
directly or indirectly, use, disclose or permit to be known, to any person or
entity, any non-public or confidential information acquired by you during the
course of, or as an incident to, your employment, which relates to the Company,
its affiliates, any of their officers or directors or any of their clients. Some
examples of confidential information include competitive analyses, pricing
policies, business plans or proposals, the substance of

3
<PAGE>

agreements with customers and others, marketing arrangements, servicing
arrangements, customer lists, information about customers, customer prospects,
profits, or markets, information relating to management operations and future
planning.

     We also need to ask you to agree that, during your employment with the
Company and for a period of six months thereafter, you shall not, directly or
indirectly, (i) solicit or induce any person or entity that currently is, or at
any time during your employment was, a customer or customer prospect of the
Company to engage in business with someone other than the Company, or (ii)
solicit, interfere with, or induce any employee of the Company to leave its
employ or join the employ of another.

     Please sign and return to us the duplicate copy of this letter to
acknowledge your agreement to use these terms.

     Now that most of the formalities have been addressed, I welcome you to the
Hoenig organization.

Yours sincerely,

/s/ Nigel Johnson-Hill
Nigel Johnson-Hill
Managing Director

Agreed and acknowledged
/s/ Hugh Humfrey
-------------------------
Date: April 5, 1999
     -------------------------

                                                                               4

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