Document:

EX-10.3

 

Exhibit
10.3

EMPLOYMENT AGREEMENT

AGREEMENT made as of the 28th day of September, 2005, between BKF Capital Group,
Inc., a Delaware corporation (the “Company”), and John C. Siciliano (the “Executive”).

The Board of Directors of the Company (the “Board”) desires to provide for the employment of
the Executive. The Executive is willing to commit himself to serve the Company on the terms and
conditions herein provided.

In order to effect the foregoing, the Company and the Executive wish to enter into an
employment agreement on the terms and conditions set forth below. Accordingly, in consideration of
the premises and the respective covenants and agreements of the parties herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:

	1.	 	Employment. The Company hereby agrees to employ the Executive, and the Executive hereby
agrees to serve the Company, on the terms and conditions set forth herein.
	 
	2.	 	Term. The employment of the Executive by the Company as provided in Section 1 will
commence on September 28, 2005 (the “Effective Date”) and end on the fourth anniversary of
the Effective Date (the “Original Term”), unless further extended or sooner terminated as
hereinafter provided (as extended or sooner terminated, the “Term”). Commencing on the
expiration of the Original Term, the Term of the Executive’s employment shall automatically
be extended for successive additional one-year periods, thereafter, unless, not later than
60 days prior to the expiration of the Original Term or any one-year extension thereof,
either party shall have given notice to the other party hereto that it does not wish to
extend this Agreement.
	 
	3.	 	Position and Duties. The Executive shall serve as Chief Executive Officer and President
of each of the Company and John A. Levin & Co., Inc. and he shall have such
responsibilities, duties and authority commensurate with such positions (or any position to
which he may be promoted after the date hereof) and as may from time to time be assigned to
the Executive by the Board that are consistent with such responsibilities, duties and
authority. As of the Effective Date, the Executive shall be appointed as a member of the
Board and the Company shall nominate the Executive for re-election to the Board upon the
expiration of each of the Executive’s terms as a director that occurs during the Term. The
Executive, in carrying out his duties under this Agreement, shall report directly to the
Board. During the Term, the Executive shall devote substantially all his working time
(excluding periods of vacation and other approved leaves of absence) and efforts to the
business and affairs of the Company.
	 
	4.	 	Place of Performance. In connection with the Executive’s employment by the Company
during the Term, the Executive shall be based at the principal executive offices of the
Company in New York City, New York, except for required travel on the Company’s business.
	 
	5.	 	Compensation and Related Matters.

	 	(a)	 	Salary. During the Term, the Company shall pay to the Executive an annual base
salary at a rate of $950,000 per annum or such higher rate as may from time to time
be determined by the Board, such salary to be paid in substantially equal
installments in accordance with Company policy (but in any event not less frequently
than monthly). The Executive’s base salary shall be subject to annual review for
increase or decrease by the Board (or a committee thereof); provided that in no event
shall the Executive’s base salary be payable at a rate of less than $950,000 per
annum. Compensation of the Executive by salary payments shall not be deemed
exclusive and shall not prevent the Executive from participating in any other
compensation or benefit plan of the Company.

 

 

	 	(b)	 	Annual Bonus. The Executive will be eligible to receive an annual bonus
(including for the 2005 calendar year) in an amount to be set at the sole discretion
of the compensation committee of the Board. The Executive’s annual bonus will be
paid in the form (and at the same general time) as bonuses are generally paid to
senior managers and portfolio managers of the Company.
	 
	 	(c)	 	Equity Grants.

	 	(i)	 	On the Effective Date the Executive shall be granted 250,000
restricted shares of the Company’s common stock, par value $.01 per share (“Stock”) (the
“Sign-On Restricted Stock”). On December 30, 2005 (provided that Executive
is then still in employment with the Company), the Executive shall be granted
250,000 stock options (the “Sign-On Options”) to acquire Stock for an
exercise price per share equal to the fair market value of a share of Stock
on the date of grant as determined by the Compensation Committee in
accordance with the terms of the Company’s 1998 Incentive Compensation Plan,
as amended (the “Company Equity Plan”). The Sign-On Restricted Stock and
Sign-On Options (collectively, the “Sign-On Equity Grants”) shall each be 20%
vested on December 30, 2005 and the remaining 80% of each type of grant shall
vest ratably in 20% (i.e., 25% of the unvested 80%) installments on the first
through fourth anniversaries of the Effective Date. Upon the death or
disability (as described in Section 7(b) hereof) of the Executive, the
Sign-On Equity Grants shall be vested (to the extent not then already vested)
and, in the case of the Sign-On Options, shall remain exercisable in
accordance with the terms of the Company Equity Plan and the Option Agreement
evidencing such grant as described in Section 5(c)(iii) hereof.
	 
	 	(ii)	 	The Sign-On Restricted Shares and, on or following December 30, 2005,
the Sign-On Options, shall vest on an accelerated basis if performance
measures (including EBITDA and assets under management targets) to be agreed
upon by the Company and the Executive are achieved. The Company and the
Executive shall negotiate the terms of such performance objectives in good
faith and shall use their reasonable best efforts to reach an agreement on
such terms as soon as reasonably practicable but in no event later than March
31, 2006. In addition, immediately prior to the occurrence of a “Change in
Control of the Company” (as defined herein), all Sign-On Equity Grants shall
immediately vest.
	 
	 	(iii)	 	All Sign-On Equity Grants shall be awarded pursuant to the Company
Equity Plan. The Sign-On Restricted Stock award shall be evidenced by a
written Restricted Stock Agreement in substantially the form attached hereto
as Exhibit A and the Sign-On Options shall be evidenced by a written
Option Agreement in substantially the form attached hereto as Exhibit
B, in each case modified, as necessary, to reflect the specific
provisions of this Agreement. All shares of the Sign-On Restricted Stock and
all shares of Stock that may be issued upon the exercise of the Sign-On
Options shall have been timely registered with the Securities & Exchange
Commission pursuant to a Form S-8 or otherwise.
	 
	 	(iv)	 	For purposes hereof, a “Change in Control of the Company” shall be
deemed to have occurred upon (A) the acquisition (other than from the
Company) by any “person” (as such term is defined in Sections 13(d) of 14(d)
of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of
beneficial ownership (within the meaning of rule 13d-3 promulgated under the
1934 Act) of 50% or more of the combined voting power of the Company’s then
outstanding voting securities; or (B) (1) a merger of consolidation involving
the Company if the stockholders of the Company, immediately before such
merger or consolidation, do not, as result of

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such merger or consolidation, own, directly or indirectly, more than 50% of
the combined voting power of the then outstanding voting securities of the
corporation resulting from such merger or consolidation in substantially the
same proportion as their ownership of the combined voting power of the voting
securities of the Company outstanding immediately before such merger or
consolidation, or (2) the adoption by the Board of a plan of liquidation
providing for the distribution of substantially all of the assets of the
Company or an agreement for the sale or other disposition of all or
substantially all of the assets of the Company (including without limitation
a sale or other disposition of more than 50% of the capital stock of John A.
Levin & Co., Inc). Notwithstanding the foregoing, a Change in Control of the
Company shall not be deemed to occur solely because 50% or more of the
combined voting power of the Company’s then outstanding securities is
acquired by (i) a trustee or other fiduciary holding securities under one or
more employee benefit plans maintained by the Company or any of its
subsidiaries or (ii) any corporation which, immediately prior to such
acquisition, is owned directly or indirectly by the stockholders of the
Company in the same proportion as their ownership of stock in the Company
immediately prior to such acquisition.

	 	(v)	 	The Executive shall be eligible for additional equity grants during the
Term as determined by the Compensation Committee in its sole discretion.

	 	(d)	 	Expenses/Short Term Living and Commuting Expenses. The Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by the
Executive in performing services hereunder, including all expenses of travel and
living while away from home on business or at the request of and in the service of
the Company, provided that such expenses are incurred and accounted for in accordance
with the policies and procedures established by the Company and applicable to its
senior executives. In addition, the Executive shall be reimbursed for his temporary
housing costs in the New York City metropolitan region and for any reasonable
commuting expenses (at economy fare rates for airplane travel) incurred between his
current residence in California and New York City through the earlier of December 31,
2005 and the date that the Executive permanently relocates to the New York City
metropolitan region, provided that the Executive provides the Company with written
verification of such expenses and further provided, that such reimbursement will not
exceed $50,000 in the aggregate.
	 
	 	(e)	 	Other Benefits. The Executive shall be entitled to participate in all of the
current employee benefit plans, fringe and perquisite plans, practices, programs,
policies and arrangements the Company generally makes available to its executives and
key management employees at a level and on such terms as are commensurate with his
positions (including, without limitation, each retirement plan, annual and long-term
incentive compensation plans, stock option and purchase plans, group life insurance
and accident plan, medical and dental insurance plans, and disability plan). The
Executive shall be entitled to participate in or receive benefits under any employee
benefit plan, fringe and perquisite plans, practices, programs, policies and
arrangement generally made available by the Company in the future to its executives
and key management employees at a level and on such terms as are commensurate with
his positions, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements. Nothing herein shall be
construed as preventing the Company from amending or terminating any current or
future employee benefit plan or arrangement. Unless otherwise agreed to in writing
by the Executive, nothing paid to the Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to be in lieu of
the salary payable to the Executive pursuant to paragraph (a) of this Section.

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	 	(f)	 	Vacations. The Executive shall be entitled to not less than four weeks’ paid
vacation for each twelve-month period during the Term (prorated for partial years).
The Executive shall also be entitled to all paid holidays and personal days given by
the Company to its executives.
	 
	 	(g)	 	Services Furnished. The Company shall furnish the Executive with office space,
stenographic assistance and such other facilities and services as shall be suitable
to the Executive’s position and adequate for the performance of his duties as set
forth in Section 3.

	6.	 	Offices. The Executive shall serve without additional compensation as a director of the
Company and, if elected or appointed, any of its subsidiaries, and in one or more executive
offices of any of the Company’s subsidiaries, provided that the Executive is indemnified for
serving in any and all such capacities on a basis no less favorable than is currently
provided by the Company or any of its subsidiaries.
	 
	7.	 	Termination. The Executive’s employment hereunder may be terminated only under the
following circumstances:

	 	(a)	 	Death. The Executive’s employment hereunder shall terminate upon his death.
	 
	 	(b)	 	Disability. If, as a result of the Executive’s incapacity due to physical or
mental illness, the Executive shall have been absent from his duties hereunder on a
full-time basis for the entire period of six consecutive months and within thirty
(30) days after written notice of such termination is received by the Executive
(after the end of such six-month period) Executive shall not have returned to the
performance of his duties hereunder on a full-time basis, the Company may terminate
Executive’s employment hereunder.
	 
	 	(c)	 	Termination by the Company.

	 	(i)	 	The Company may terminate the Executive’s employment hereunder
with or without Cause. For purposes of this Agreement, the Company shall have
“Cause” to terminate the Executive’s employment hereunder upon (i) the willful
and continued failure of Executive to substantially perform his duties with the
Company (other than any such failure resulting from Executive’s incapacity due
to physical or mental illness or any such failure subsequent to Executive being
delivered a Notice of Termination without Cause by the Company or delivering a
Notice of Termination for Good Reason to the Company) after a written demand for
substantial performance is delivered to Executive by the Board which
specifically identifies the manner in which the Board believes that Executive
has not substantially performed Executive’s duties and Executive has not cured
to the satisfaction of the Board any such failure that is capable of being cured
in all respects within ten (10) days of receiving such written demand; (ii) the
willful engaging by Executive in misconduct which is demonstrably and materially
injurious to the Company or its affiliates; (iii) any act of willful dishonesty
towards the Company that has a material adverse effect on the Company; (iv)
Executive’s willful, material, knowing and intentional failure to comply with
applicable laws with respect to the execution of the Company’s business
operations; (v) Executive’s theft, fraud, embezzlement, dishonesty or similar
conduct which has resulted or is likely to result in material damage to the
Company or any of its affiliates or subsidiaries; (vi) Executive’s habitual
intoxication or continued abuse of illegal drugs which materially interferes
with Executive’s ability to perform his assigned duties and responsibilities; or
(vii) Executive’s conviction of, or plea of guilty or no contest to, any felony.
For purposes of this Section 7(c), no act or failure to act by Executive shall
be considered “willful” unless done or omitted to be done by

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Executive in bad faith and without reasonable belief that Executive’s action
or omission was in the best interests of the Company. Without in any way
limiting the acts or failures to act which shall not be considered willful,
any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board, based upon the advice of counsel for
the Company (or upon the instructions of an officer of the Company) shall be
conclusively presumed to be done, or omitted to be done, by Executive in good
faith in the best interests of the Company. “Cause” shall not include mere
poor performance or underperformance of the Company, John A. Levin & Co.,
Inc., the Executive (other than in respect of an action or inaction
specifically provided in the second sentence of this Section 7(c)(i)), or any
funds, trading groups or other business units thereof. The Company must
notify Executive of any event constituting Cause within thirty (30) days
following the Company’s knowledge of its existence or such event shall not
constitute Cause under this Agreement.

	 	(ii)	 	The Company may not terminate the Executive for Cause under clauses
(i)-(v) of Section 7(c)(i) above unless: (i) prior to the Date of Termination
(as defined herein), the Company provides the Executive with a Notice of
Termination (as defined herein) of its intent to consider termination of the
Executive’s employment for Cause, including a description of the specific
reasons which form the basis for such consideration; (ii) the Executive is
given reasonable advance notice by the Board and shall have the opportunity
to appear before the Board, with or without legal representation, at the
Executive’s election, to present arguments and evidence on his own behalf;
and (iii) the Board, by a majority of its members (excluding the Executive),
determines in good faith that the actions or inactions of the Executive
specified in the Notice of Termination occurred, that such actions or
inactions constitute Cause, and that the Executive’s employment should
accordingly be terminated for Cause.

	 	(d)	 	Termination by the Executive.

	 	(i)	 	The Executive may terminate his employment hereunder with or without Good
Reason.
	 
	 	(ii)	 	For purposes of this Agreement, “Good Reason” shall mean

	 	(A)	 	(1) any material diminution or material adverse change in the
duties or responsibilities of the Executive, (2) any adverse change in
the Executive’s titles or offices with the Company or reporting
responsibilities or obligations, including, without limitation, any
failure to nominate the Executive to the Board or removal of the
Executive from the Board other than for an event or circumstance
constituting Cause or (3) any assignment of duties or responsibilities
that are materially inconsistent with the Executive’s position;
	 
	 	(B)	 	a reduction by the Company in the Executive’s rate of annual base
salary (as provided in Section 5(a) hereof);
	 
	 	(C)	 	any requirement of the Company that the Executive be based
anywhere other than the office where the Executive is located at the
date of this Agreement, if such relocation increases the Executive’s
commute by more than thirty-five (35) miles;

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	 	(D)	 	the failure by the Company or any of its affiliates to pay any
compensation to the Executive within thirty (30) days of its becoming
due hereunder;
	 
	 	(E)	 	the failure of the Company to grant to Executive any Sign-On
Equity Grants pursuant to Section 5(c) hereof;
	 
	 	(F)	 	the failure of the Company to continue to provide the Executive
participation in any employee benefit plans, fringe and perquisite
plans, practices, programs, policies and arrangements at a level of
participation equal to that generally provided to other executives and
key management employees of the Company; or
	 
	 	(G)	 	the adoption by the Board of a plan of liquidation providing for
the distribution of substantially all of the assets of the Company;

provided, that, in the case of any event described in clauses (A), (B), (D), (E) or
(F) of this Section 7(d)(iii) which is an isolated, insubstantial and inadvertent
event, the Company has not cured such change, reduction, requirement or failure
within thirty (30) days after receiving written notice thereof from the Executive;
and provided, further, that Executive may resign his employment for
Good Reason if in connection with any Change in Control of the Company the successor
does not assume this Agreement.

	 	(e)	 	Any termination of the Executive’s employment by the Company or by the Executive
(other than termination pursuant to subsection (a) hereof) shall be communicated by
written Notice of Termination to the other party hereto in accordance with Section
15. 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.
	 
	 	(f)	 	“Date of Termination” shall mean (i) if the Executive’s employment is terminated
by his death, the date of his death, (ii) if the Executive’s employment is terminated
pursuant to subsection (b) above, thirty (30) 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 thirty (30)-day period), (iii) if the
Executive’s employment is terminated pursuant to subsection (c) above, the date
specified in the Notice of Termination; provided that if the Company terminates the
Executive’s employment without Cause the Date of Termination shall not be less than
thirty (30) days following the date such Notice of Termination is provided to the
Executive, and (iv) if the Executive’s employment is terminated pursuant to
subsection (d), the date specified in the Notice of Termination.

	8.	 	Compensation Upon Termination or During Disability.

	 	(a)	 	During any period that the Executive fails to perform his duties hereunder as a
result of incapacity due to physical or mental illness (“disability period”), the
Executive shall continue to receive his full salary at the rate then in effect for
such period until his employment is terminated pursuant to Section 7(b) hereof,
provided that payments so made to the Executive during the first 180 days of the
disability period shall be reduced by the sum of the amounts, if any, payable to the
Executive at or prior to the time of any such payment under disability benefit plans
of the Company or under the Social Security disability insurance program, and which
amounts were not previously applied to reduce any such payment. In addition, upon
termination pursuant to Section 7(b), the Company shall pay the Executive the Accrued
Obligations (as defined in Section 8(b)) through the date of

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Termination and the Sign-On Equity Grants shall not terminate and shall continue to
vest in accordance with Section 5(c)(i) hereof.

	 	(b)	 	If the Executive’s employment is terminated by his death, the Company shall pay
to the Executive’s estate his (w) annual base salary through the Date of Termination,
to the extent not previously paid, and if not yet paid, any annual bonus earned for
the calendar year that preceded the Date of Termination (x) reimbursement for any
unreimbursed business expenses incurred by the Executive prior to the Date of
Termination that are subject to reimbursement pursuant to Section 5(d), (y) payment
for vacation time accrued as of the Date of Termination but unused and (z) any other
amount or benefit due under an employee benefit plan or arrangement maintained or
provided by the Company; including the benefits and payments described in the Section
5(e) (such amounts under clauses (w), (x), (y) and (z), collectively the “Accrued
Obligations”) in accordance with Section 12(c). In addition, upon termination
pursuant to Section 7(a) the Sign-On Equity Grants shall not terminate and shall
continue to vest in accordance with Section 5(c)(i) hereof.
	 
	 	(c)	 	If the Executive’s employment shall be terminated by the Company for Cause or by
the Executive for other than Good Reason, the Company shall pay the Executive the
Accrued Obligations (excluding any earned but unpaid bonus for a prior calendar year
if the event or events giving rise to the termination for Cause occurred in whole or
in part during such prior calendar year) through the Date of Termination and the
Company shall have no further obligations to the Executive under this Agreement.
	 
	 	(d)	 	If (A) the Company shall terminate the Executive’s employment without Cause or
(B) the Executive shall terminate his employment for Good Reason, then

	 	(i)	 	the Company shall pay the Executive the Accrued Obligations through the
Date of Termination at the rate at the time Notice of Termination is given;
and
	 
	 	(ii)	 	the Company shall, not later than fifteen (15) business days following
the Date of Termination, pay to the Executive in a lump sum an amount equal
to his then current annual base salary.
	 
	 	(iii)	 	all unvested Sign On Equity Grants that would have become vested in
accordance with Section 5(c)(i) hereof on the anniversary of the Effective
Date next following the Date of Termination had the Executive remained
employed with the Company through such anniversary of the Effective Date
shall become vested as of the Date of Termination on a prorated basis
determined on the basis of the number of months elapsed from the most recent
anniversary of the Effective Date preceding the Date of Termination through
the Date of Termination.

	 	(e)	 	If, on or prior to October 6, 2005, the Company shall terminate the Executive in
connection with any material adverse finding by the independent investigative firm
retained by the Company prior to the Effective Date to perform a background check on
the Executive involving the Executive’s conviction of, or plea of guilty or no
contest to, any felony or crime of moral turpitude, liability for any securities law
violation, sanctions by the Securities & Exchange Commission or similar regulatory
body or bankruptcy or insolvency or any other finding which would reasonably be
expected to be materially injurious to the business or reputation of the Company or
its affiliates if the Executive were to continue to serve in the position and with
the duties designated in Section 3 hereof, then the Executive’s employment may be
terminated without any obligation owing to the Executive with respect to compensation
(other than any accrued but unpaid salary) or benefits (including Sign-On Equity
Grants).

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	 	(f)	 	All amounts under this Section 8 shall be conditioned upon the execution by the
Executive of a standard release of the Company and its affiliates then being
generally used by the Company.

	9.	 	Mitigation/Offset. The Executive shall have no duty to mitigate any payments hereunder
by seeking other employment or otherwise.
	 
	10.	 	Protection of the Company’s Interests.

	 	(a)	 	As a condition of his employment, the Executive shall be required to execute the
Company’s standard proprietary inventions and confidentiality agreement. The
Executive recognizes that the services to be performed by him hereunder are special,
unique and extraordinary in that, by reason of his employment hereunder, he may
acquire confidential information and trade secrets concerning the operation of the
Company or its affiliates or subsidiaries, the use or disclosure of which could cause
the Company or its affiliates or subsidiaries substantial losses and damages which
could not be readily calculated and for which no remedy at law would be adequate.
Accordingly, the Executive covenants and agrees that he will not at any time, except
in performance of his obligations hereunder, or with the prior written consent of the
Board, or as otherwise required by law or in response to a lawful and valid subpoena
or other legal process or other governmental or regulatory inquiry directly or
indirectly disclose to any person, any confidential information that he may learn or
has learned by reason of his association with the Company, or any of its
predecessors, subsidiaries and affiliates. The term “confidential information” means
any information not previously disclosed or otherwise available to the public or to
the trade with respect to the Company’s, or any of its predecessors’, affiliates’ or
subsidiaries’ products, facilities and methods, trade secrets and other intellectual
property, systems, procedures, manuals, confidential reports, product price lists,
customer lists, financial information, business plans, prospects or opportunities.
	 
	 	(b)	 	The Executive confirms that all confidential information is and shall remain the
exclusive property of the Company, its affiliates and subsidiaries. All business
records, papers and documents kept or made by the Executive relating to the business
of the Company, its predecessors, affiliates and subsidiaries shall be and remain the
property of the Company. Upon the termination of his employment with the Company or
upon the request of the Company at any time, the Executive shall promptly deliver to
the Company, and shall not without the consent of the Board retain copies of, any
written materials not made available to the public, or records and documents made by
the Executive or coming into his possession concerning the business or affairs of the
Company or any of its affiliates or subsidiaries; provided that the Executive may
retain his contact list, address book and similar information, any non-proprietary
documents he may have received as a director, and any personal information or files
that he possessed prior to the Effective Date relating the money management or
similar business.
	 
	 	(c)	 	During the Executive’s employment with the Company and for a period of six months
following termination of employment for any reason during the Term (the “Restricted
Period”), the Executive shall not, without the Board’s prior written consent, whether
as owner, part owner, shareholder, partner, member, director, officer, trustee,
employee, agent or consultant, or in any other capacity, on behalf of himself or any
“Person” (as defined below) other than the Company or its “Affiliates” (as defined
below):

	 	(i)	 	compete, directly or indirectly, whether as owner, partner, investor,
consultant, agent, employee, co-venturer or otherwise, with the Company
and/or its subsidiaries or Affiliates in the United States in the money
management business (“Competitive Endeavor”) or undertake any planning for
any business that would constitute a

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Competitive Endeavor (for purposes hereof, the business of the Company and/or
its subsidiaries or Affiliates shall include all products and services
offered by the Company or any of its subsidiaries of Affiliates or under
development);

	 	(ii)	 	provide “Investment Management Services” (as defined below) to any
Person that is a “Past Client,” “Present Client” or “Potential Client” (each
as defined below); provided, however, that this clause (ii) shall not be
applicable to Clients (including Potential Clients) who are also members of
the “Immediate Family” (as defined below) of the Executive;
	 
	 	(iii)	 	directly or indirectly solicit or induce any Person for the purpose of
(A) causing any funds (other than funds of which the Executive and/or members
of his Immediate Family are the sole beneficial owners) with respect to which
the Company or its Affiliates provides Investment Management Services to be
withdrawn from such management, or (B) causing any “Client” (as defined
below), including any Potential Client, not to engage the Company or any of
its Affiliates to provide Investment Management Services for any additional
funds; provided, however, that this clause (iii) shall not be applicable to
Clients (including Potential Clients) who are also members of the Immediate
Family of the Executive;
	 
	 	(iv)	 	directly or indirectly solicit or induce any Past Client on behalf of
any Person other than the Company or its Affiliates for the purpose of
providing Investment Management Services; provided, however, that this clause
(iv) shall not be applicable to Past Clients who are also members of the
Immediate Family of the Executive;
	 
	 	(v)	 	contact or communicate with, whether directly or indirectly, any Past,
Present or Potential Clients in connection with Investment Management
Services; provided, however, that this clause (v) shall not be applicable to
Clients (including Potential Clients) who are also members of the Immediate
Family of the Executive; or
	 
	 	(vi)	 	(A) directly or indirectly solicit or induce, or attempt to solicit or
induce any employee or exclusive agent of, or exclusive consultant to, the
Company or any of its Affiliates to terminate its, his or her relationship
therewith, or (B) hire any employee, exclusive external researcher or similar
exclusive agent or exclusive consultant who was employed by or acted as an
external researcher or similar agent or consultant of the Company or its
Affiliates at any time during the one year period preceding such hiring of
such Person (excluding for all purposes of this sentence, secretaries and
persons holding other similar positions).

For purposes of this Section 10,

the term “Past Client” shall mean at any particular time, any Person who at any point prior to
such time is known to the Executive to have been an advisee or investment advisory customer of, or
otherwise a recipient of Investment Management Services from, the Company or any of its Affiliates,
but at such time is not an advisee or investment advisory customer or client of, or recipient of
Investment Management Services from the Company or any of its Affiliates; provided however, that
the term “Past Client” shall be limited to those Past Clients who were recipients of Investment
Management Services, directly or indirectly, from the Company or its Affiliates at the date of
termination of the Executive’s employment or at any time during the six (6) months immediately
preceding the date of such termination;

the term “Potential Client” shall mean, at any particular time, any Person to whom the Company
or any of its Affiliates, or any director, officer employee, agent or consultant (or persons acting
in any similar capacity) of the Company or any such Affiliate (acting on its behalf), has, to the
knowledge of the Executive, within six

9

 

(6) months prior to such time, offered (whether by means of a personal meeting or by telephone
call, letter, written proposal or otherwise) to provide Investment Management Services, but who is
not at such time an investment advisory customer of, or otherwise a recipient of Investment
Management Services from, the Company or any of its Affiliates (directly or indirectly);

the term “Present Client” shall mean, at any particular time, any Person who is, to the
knowledge of the Executive, at such time an advisee or investment advisory customer of, or
otherwise a recipient of Investment Management Services from, the Company or its Affiliates
(directly or indirectly);

the term “Client” shall mean all Past Clients, Present Clients and Potential Clients, subject
to the following general rules: (i) with respect to each Client, the term shall also include any
Persons which are known to the Executive to be Affiliates of such Client, directors, officers or
employees of such Client or any such Affiliates thereof, or Persons who are members of the
Immediate Family of any of the foregoing Persons or Affiliates of any of them; (ii) with respect to
any Client that is a collective investment vehicle (provided that, for the avoidance of doubt, a
401(k) retirement plan shall not itself be considered a “collective investment vehicle” except to
the extent the Executive (as applicable) has actual knowledge of the identities of investors
therein), the term shall also include any investor or participant in such Client; and (iii) with
respect to any Client that is a trust or similar entity, the term shall include the settler and
each of the beneficiaries of such Client and the Affiliates and Immediate Family members of any
such Persons (and, for the avoidance of doubt, the Company will provide the Executive with a list
of “Clients” within five business days following the Executive’s termination of employment during
the term hereof);

the term “Immediate Family” shall mean, with respect to any individual, such individual, the
individual’s spouse; the descendants (natural or adoptive, of the whole or half blood) of such
individual, such individual’s spouse and the parents (natural or adoptive) of such individual or
such individual’s spouse; the grandparents and parents (natural or adoptive) of such individual or
such individual’s spouse; the aunts and uncles of such individual or such individual’s spouse; and
the siblings and their children (natural or adoptive) of such individual or such individual’s
spouse;

the term “Investment Management Services” shall mean any services (including sub-advisory
services) which involve (a) the management of an investment account or fund (or portions thereof or
a group of investment accounts or funds) of any Person other than the Company or its Affiliates for
compensation and (b) the rendering of advice with respect to the investment and reinvestment of
assets or funds (or any group of assets or funds) of any Person other than the Company or any of
its Affiliates for compensation, and performing activities related or incidental thereto;

the term “Person” shall mean any individual, corporation, partnership, joint venture,
association, joint-stock company, business trust, limited liability company, trust, unincorporated
organization or government or a political subdivision, agency or instrumentally thereof or other
entity or organization of any kind; and

the term “Affiliate” shall mean, with respect to any Person, any other Person which directly
or indirectly controls, is controlled by, or is under common control with that first Person. For
purposes of this definition, “control” of a Person shall mean the power, direct or indirect, to
direct or cause the direction of the management and policies of such Person, whether through the
ownership of voting stock, by contract, or otherwise.

Notwithstanding the provisions of this Section 10, the Executive may, following the
termination of his employment, make personal investments in an enterprise which is competitive with
the Company or its Affiliates, the shares or other equity interests of which are publicly traded
provided his holdings therein, together with any holdings of his Affiliates and members of his
Immediate Family, are less than three percent (3%) of the outstanding shares or comparable
interests in such entity.

Upon any knowing, material violation of this Section 10, the Company shall have no further
obligations to the Executive hereunder.

10

 

	 	(d)	 	Without intending to limit the remedies available to the Company, the Executive
acknowledges that a breach of any of the covenants contained in this Section 10 may
result in material irreparable injury to the Company 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 thereof, the Company, its affiliates or subsidiaries, 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 10 or such other relief as may be required to specifically enforce any of the
covenants in this Section 10.
	 
	 	(e)	 	To the extent that any provision of this Section 10 is found by a court of
competent jurisdiction to be unenforceable due to geographic scope, duration or
otherwise, the relevant provision or provisions shall be deemed automatically
modified to the minimum extent necessary to be held enforceable by such court.

	11.	 	Scope of Agreement. Nothing in this Agreement shall be deemed to entitle the Executive
to continued employment with the Company or its subsidiaries; provided, that any termination
of the Executive’s employment shall be subject to all of the provisions of this Agreement.
	 
	12.	 	Assignment; Successors; Binding Agreement.

	 	(a)	 	This Agreement shall not be assignable by the Executive.
	 
	 	(b)	 	This Agreement shall inure to the benefit of and be binding upon any successor or
assign of the Company.
	 
	 	(c)	 	This Agreement and all rights of the Executive hereunder shall inure to the
benefit of and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and legatees.
If the Executive should die while any amounts would still be payable to him hereunder
if he had continued to live, all such amount unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Executive’s devisee,
legatee, or other designee or, if there be no such designee, to the Executive’s
estate.

	14.	 	Notice. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or (unless otherwise specified) mailed by United States
certified or registered mail, return receipt requested, postage prepaid, addressed as
follows:
	 
	 	 	If to the Executive:
	 
	 	 	John C. Siciliano

955 Avondale Road

San Marino, California 91108

	 
	 	 	If to the Company:
	 
	 	 	BKF Capital Group, Inc.

1 Rockefeller Plaza

New York, NY 10020

	 
	 	 	Attn: General Counsel

11

 

or to such other address as any party may have furnished to the others in writing in
accordance herewith, except that notices of change of address shall be effective only upon
receipt.

	17.	 	Code Section 409A. If any provision of this Agreement (or of any award of compensation,
including equity compensation) would cause the Executive to incur any additional tax or
interest under Section 409A of the Code or any regulations or Treasury guidance promulgated
thereunder, the Company shall use its reasonable best efforts to reform such provision to
preserve the intended tax treatment of the payments and benefits provided by this Agreement;
provided that the Company shall: (i) maintain, to the maximum extent practicable, the
original intent of the applicable provision without violating the provisions of Section 409A
of the Code and (ii) notify and consult with the Executive regarding such amendments or
modifications prior to the effective date of any such change.
	 
	18.	 	Miscellaneous. No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by the
Executive and such officer of the Company as may be specifically designated by the Board.
No waiver by either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by either party
which are not set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by and construed under the
laws of the State of New York without regard to its conflicts of law principles.
	 
	19.	 	Validity. The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
	 
	20.	 	Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one and the same
instrument.
	 
	21.	 	Section Headings. The section headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
	 
	22.	 	Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto
in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether
oral or written, by any officer, employee or representative of any party hereto; and any
prior agreement of the parties hereto in respect of the subject matter contained herein is
hereby terminated and cancelled.
	 
	23.	 	Indemnification. The Executive shall be entitled to indemnification to the maximum
extent allowed under the Company’s By-Laws and under the laws of the State of Delaware and
on a basis (and subject to an indemnification agreement, if any) no less favorable than any
other director or officer of the Company is indemnified by the Company. The Executive shall
be entitled to the protection of any insurance policies the Company may elect to maintain
generally for the benefit of its directors and officers against all costs, charges and
expenses incurred or sustained by him in connection with any action, suit or proceeding to
which he may be made a party by reason of his being or having been a director, officer or
employee of the Company or any of its subsidiaries or his serving or having served any other
enterprise or benefit plan as a director, officer, employee or fiduciary at the request of
the Company. Notwithstanding anything to the contrary herein, the Executive’s rights under
this section 23 shall survive the termination of his employment for any reason and the
expiration of this Agreement for any reason.

12

 

[signature page follows]

13

 

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above
written.

	 	 	 
	 

	BKF CAPITAL GROUP, INC.
	 
	 	 
	 

	By: 	/s/ Anson M. Beard, Jr.
	 

	 	 
	 

	Name: Anson M. Beard,
Jr.
	 

	Title: Chairman of the Board

14

 

Attest:

	 	 	 	 	 	 	 
	By:
	 	/s/ Wendy W. Siciliano	 	 	 	                                         /s/ John C. Siciliano
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	                                         JOHN C. SICILIANO

15EX-10.4

 

Exhibit
10.4

September 28, 2005

Mr. Glenn Aigen

27 Summit Road

Port Washington, NY 11050

Dear Glenn:

     This letter will confirm our agreement concerning the terms of your 2005 compensation. This
Agreement is entered into for and in consideration of the mutual covenants, agreements and promises
set forth herein, and for other good and valid consideration, the receipt and sufficiency of which
is hereby acknowledged. Your signature at the end of this letter will signify your acceptance of
and agreement to the provisions of this letter.

     1. 2005 Compensation. Subject to the terms and conditions of this Agreement, you
shall receive 2005 total compensation in an amount at least equal to $1,049,000 (“2005 Minimum
Total Compensation”). Your 2005 Minimum Total Compensation amount (which includes amounts already
paid to you for services rendered in calendar year 2005) includes your current base salary through
December 31, 2005, Company contributions made on your behalf into the 401(k) plan, and any other
form of cash compensation that you may receive. You shall continue to receive your current base
salary on regularly scheduled paydays through December 31, 2005. The 2005 year-end benefit
payments are payable on or around January 15, 2006.

     2. Termination of Employment. If your employment ceases prior to December 31, 2005,
you shall only be entitled to payment as follows.

     a. Termination for Cause. The Company, in it sole discretion, may terminate
your employment for Cause (as defined herein), upon written notice, and your employment
shall terminate on the date such notice is given. For purposes of this Agreement, “Cause”
means (i) continued failure to substantially perform your duties with the Company after
delivery by your Manager of a written demand for substantial performance and a failure to
cure in all respects within 10 days of receiving the written demand; (ii) committing any
willful act of fraud, dishonesty, misrepresentation, breach of trust or act of moral
turpitude; (iii) willful violation of any law, rule, order or regulation that is
demonstrably and

 

 

materially injurious to the Company; (iv) committing any act not approved of or
ratified by the Company involving any conflict of interest or self-dealing relating to any
aspect of the Company that is demonstrably and materially injurious to the Company.

          (i) Payment upon Termination for Cause. If you are
terminated for Cause, the Company shall pay you all earned and
accrued base salary and you shall not be entitled to any other
compensation or payments from the Company.

     b. Termination without Cause. The Company may terminate your employment
without Cause at any time between now and December 31, 2005.

        (i) Payment upon Termination without Cause. If the Company
terminates your employment without Cause, the Company shall provide you
with the amounts below as applicable:

	 	A.	 	any unpaid base salary that
has been earned and accrued up to and including the
termination date, payable no later than the next regularly
scheduled payday; and
	 
	 	B.	 	any unused vacation days
that you have accrued up to the termination date, payable no
later than the next regularly scheduled payday; and
	 
	 	C.	 	a lump sum payment in an
amount equal to your 2005 Minimum Total Compensation, less
any compensation payments that the Company has made to you
for services rendered in calendar year 2005, provided
however, that you provide the Company with a complete
release of all claims in a form provided by the Company. The
lump sum described in this sub-paragraph C shall be payable
within 10 business days of the date that the Company receives
a complete release of claims from you. The Company may
increase this lump sum payment in its sole discretion.

     c. Resignation. You may terminate your employment with the Company at any
time. If you resign from your employment, the Company shall pay you all earned and accrued
base salary on the next regularly scheduled payroll date. You shall not be entitled to any
portion of your 2005 year-end benefit. Provided that you give the Company at least two
weeks advance notice of your resignation, the Company shall pay you for any accrued and
unused vacation days.

 

 

        d. Death or Disability. In the event that you die or become entitled to the Company’s
long-term disability benefits under the Company’s long-term disability policy, you shall be
entitled to receive (i) earned and accrued base salary and (ii) a pro rata portion of any year-end
benefit that may be due to you as of the date of your death or disability.

     3. Non-Solicitation. You acknowledge that the Company provides you with the
opportunity to work closely with various Company employees, officers and directors and that the
knowledge and experience acquired by these employees in the course of their employment constitutes
a valuable asset of the Company. Accordingly, you agree that in order to protect the goodwill and
valuable assets of the Company, you shall not, without the express written consent of the Company,
directly or indirectly, on your behalf or on the behalf of any other person or entity (i) solicit,
induce or encourage the resignation of any employee, officer, director or independent contractor of
the Company; (ii) interfere in any way with the relationship between the Company and any employee,
officer, director or independent contractor thereof; or (iii) hire any individual whom the Company
employed at any time during the six month period preceding your departure from the Company. The
restrictions in this paragraph 3 shall apply through December 31, 2005.

     a. Reformation and Severability. It is the intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permitted by law. In case
any provision of this Agreement shall be declared by a court of competent jurisdiction to
be invalid, illegal or unenforceable as written, the parties agree that the court shall
modify and reform such provision to permit enforcement to the greatest extent permitted by
law. In addition, if any provision of this Agreement shall be declared invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions of
this Agreement shall in no way be affected or impaired thereby.

     b. Remedies for Breach. You acknowledge that a breach by you of the
Non-Solicitation provision in this paragraph 3 would be material, and would cause
irreparable injury. You therefore agree that the rights and remedies of the Company
hereunder may be enforced both at law and in equity, by injunction or otherwise, without
the requirement that the Company post any bond or security.

     c. Survival of Provision. You understand that this paragraph 3 shall survive
the termination of your employment, whether such termination is voluntary or involuntary,
by you or the Company, with or without cause.

     4. Entire Agreement. This letter agreement constitutes the entire agreement between
you and the Company as of the date hereof with respect to your compensation and cannot be amended
or terminated orally.

 

 

     5. Governing Law. This letter agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made and to be performed
in that State, without regard to conflicts of law.

     6. Paragraph Headings. Paragraph headings used herein are included for convenience of
reference only and shall not affect the meaning of any provision of this letter agreement.

     If you are in agreement with the terms of this letter, please so indicate by signing and
returning the enclosed copy of this letter, whereupon this letter shall constitute a binding
agreement between you and the Company.

	 	 	 	 	 
	 

	 	 
	 	Very truly yours,
	 
	 	 	 	 
	 

	 	 	 	Levin Management Co., Inc.
	 
	 	 	 	 
	 

	 	 	 	By: /s/ Norris Nissim
	 

	 	 	 	 
	 

	 	 	 	Name: Norris Nissim
	 

	 	 	 	Title: Vice President and General Counsel
	 
	 	 	 	 
	 

	 	 	 	BKF Capital Group, Inc.
	 
	 	 	 	 
	 

	 	 	 	By: /s/ Anson M. Beard, Jr.
	 

	 	 	 	 
	 

	 	 	 	Name: Anson M. Beard, Jr.
	 

	 	 	 	Title: Chairman
	 
	 	 	 	 
	 

	 	 	 	By: /s/ John C. Siciliano
	 

	 	 	 	 
	 

	 	 	 	Name: John C. Siciliano
	 

	 	 	 	Title: Chief Executive Officer
	 
	 	 	 	 
	Acknowledged and Agreed:
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	
 /s/ Glenn A. Aigen     
            
            
            
             
                
              9/28/05

	        Date

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