You will not make any comment or take any action which disparages, defames, or places in a negative light the Company, its affiliates or related entities or their past or present officers, directors or employees.

 

 

Artio Global Investors

330 Madison Avenue

New York, NY 10013

November 23, 2011

Dear Mr. Harte:

We are pleased to confirm your employment, subject to the condition in paragraph 1, for the position of Chief Financial Officer and Managing Director at Artio Global Investors Inc. (the “Company”), reporting to Richard Pell the Company’s Managing Director and Chief Executive Officer.  Your office will be located in New York City. This letter agreement, and any amendments thereto, (the “Agreement”), sets forth the terms and conditions of your employment.  You will also be subject to the general employment policies of the Company as established from time to time, including those set forth in the Employee Handbook and Code of Ethics.

 

 

6.  Termination of Employment: Your employment may be terminated by you or by the Company for any reason at any time prior to the end of the Employment Term, provided that you give the Company at least 60 days advance notice of resignation.  The provisions of this paragraph 6 exclusively govern your rights upon the termination of your employment, and any payments and benefits paid to you pursuant to this paragraph shall be the entire severance related payments owed to you, and shall be in lieu of any severance benefits under the Company’s or its affiliates’ severance plans (including without limitation the Artio Global Investors Inc. Severance Pay Plan) and notwithstanding any provisions to the contrary in such plans.

 

(a)           If your employment is terminated for “Cause” as defined below or if you resign for any reason, you will be entitled to your unpaid salary and accrued vacation (“Accrued Benefits”) through the date of your termination, and you will not be entitled to any severance payments.

(b)           If your employment is terminated by the Company without Cause (whether or not related to a Change in Control) after the end of the Initial Term, you will be entitled to: (i) the Accrued Benefits; (ii) continued payment of your base salary for 12 months, to be paid through salary continuation in accordance with the Company’s payroll procedures; (iii) a bonus payment equal to the higher of (A) the average of the discretionary bonuses awarded to you during the most recent three years or (B) the discretionary bonus awarded to you in the immediately preceding year; (iv) an additional prorated bonus equal to the bonus to be awarded as calculated in clause (iii) multiplied by the percentage of the then-current year (calculated in days, with a start date of January 1) during which you were employed prior to your receipt of notice of termination; (v) continued receipt of medical and dental benefits under the Company’s benefits plans on the same terms applicable to continuing senior executives until (A) the end of the Employment Term, (B) the date you become eligible for coverage under group medical and dental benefits of another employer or (C) such date when a determination is made that the provision of medical and dental benefits are discriminatory in accordance with applicable law under Section 105(h) of the Internal Revenue Code, whichever is soonest, subject to the terms of the applicable benefit plans then in effect; (vi) an amount in cash such that the after-tax payment is equivalent to the amount of the pension contribution made or credited to the pension plans in the immediately preceding plan year; and (vii) continued vesting or lapse of restrictions of your initial restricted stock unit award described in paragraph 4 above.  If provision of medical and dental benefits are determined to be discriminatory, as described in paragraph 6(b)(v)(C), you shall receive a lump sum cash payment, within 30 days of such determination, equal to the reasonable value of the Company’s provision of medical and dental benefits for the remaining amount of time you shall continue to receive base salary payments through the Company’s payroll system. 

 

(d)  Notwithstanding paragraph 6(b) above, if your employment is terminated without Cause within two years of a Change in Control that occurs on or before the end of the Initial Term, you will be entitled to the sums or benefits described in paragraphs 6(b)(i), (iv), (v) and (vii), plus the sums described in paragraphs 6(c) (i), (ii) and (iii).

 

(e)  If your employment is terminated as a result of a Change in Control as that term is defined in the Stock Incentive Plan, as amended from time to time, in addition to the payments and benefits set forth in paragraph 6(b) or 6(d), above as applicable, all of your unvested awards under the Plan will fully vest (and all restrictions on such awards shall lapse) as of such Change in Control.

(f)  If your employment is terminated due to death or Disability (as defined below), you or your estate or legal representative shall be entitled to receive the Accrued Benefits, and as applicable, the annual bonus and pro-rata bonus described in paragraphs 6(b)(iii) and (iv), respectively, above.  In addition, a percentage of awards under the Stock Incentive Plan referred to above, which would have vested (or with respect to which restrictions would have lapsed) in the year of your death, will vest (or will have restrictions lapse), which percentage shall be calculated by dividing the number of days you were employed in that year (beginning on January 1 with respect to annual bonus awards and September 29 with respect to initial restricted stock unit awards) by 365.

 

(g)  If the Company elects not to enter into a new employment agreement with you after the Employment Term, provided you are willing and able to continue to provide services to the Company, and the facts and circumstances indicate that you have had an involuntary separation from service within the meaning of Section 409A (as defined in paragraph 6(h) below), you will be entitled to receive, as if you had been terminated by the Company without Cause, the payments and benefits set forth in paragraph 6(b), (c) or (d), above, whichever would then be applicable.

 

(h)  If at the time of your termination of employment you are a “specified employee” as defined in Section 409A of Internal Revenue Code of 1986, as amended (“Section 409A”), you will not be entitled to any payments upon such termination of employment until the earlier of (i) the date that is six months after such termination of employment for any reason other than death or (ii) the date of your death.  The preceding sentence will only apply if required to comply with Section 409A.

(i) If, within two years following a Change in Control, as that term is defined in the Stock Incentive Plan, as amended from time to time, your employment is terminated by you for “Good Reason,” you will be entitled to the benefits set forth in paragraph 6(d) above as if you had been terminated without Cause.  “Good Reason” shall mean, within two years following a Change of Control, any of the following without your written consent: (i) a substantial and material diminution of your responsibilities, duties, authority, title or a change in your reporting structure; (ii) the failure by the Company to pay compensation or provide benefits to you as and when required by this Agreement; (iii) a material reduction in annual incentive compensation, except as a result of neglect or failure in any material respect to perform or to discharge your duties or the imposition of similar reductions affecting all senior officers of the Company and its subsidiaries, or all senior officers of the successor to the Company’s business; (iv) requiring you to relocate your office more than 40 miles from its present location; or (v) the failure by the Company to assign this Agreement to any successor to the Company’s business; provided, however, Good Reason shall not exist unless you have given the Company written notice specifying a Good Reason event and the Company has failed to cure such event within 30 days of having been given such written notice.

(a) To be considered an “Employee in Good Standing,” you must not be in material violation of this Agreement or any Company policy, must not have engaged in conduct which would constitute Cause (as defined in this Agreement) and have not given a notice of your intent to terminate your employment.

(b) “Disability” means (i) you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (ii) you are, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an employer-sponsored accident and health plan covering you; or (iii) you are determined to be totally disabled by the Social Security Administration.

 

(c) “Cause” shall mean willful failure to follow legitimate directions of your supervisors after both notice and 30 days’ allowance to cure such failure was given; neglect or failure in any material respect to perform or to discharge your duties; gross negligence in the performance of your responsibilities; any act or acts constituting a felony or any crime involving fraud, moral turpitude or misrepresentation, or any violation of securities or other laws, regulations or rules governing the Company’s or its affiliates’ business; any act or omission which in the reasonable judgment of the Company could reasonably be expected to injure the reputation, business or business relationships of the Company or its affiliates; any breach of the policies of the Company and its affiliates with respect to the conduct of its business or the trading of securities; any material breach of any agreement between the Company and you by which you may be bound.

 

For purposes of this Agreement, “Confidential Information” shall mean any confidential or private information not generally known to the public, including business plans, opportunities, and strategies; marketing and merchandising techniques and plans; information regarding the identity, finances, business, pricing and trading terms, opinions, needs, requirements, desires, demands, or practices of, or charges made to or by, clients or prospective clients of the Company, its affiliates and related entities; information regarding contacts with clients and potential clients; information regarding the identities, skills, qualities, competencies, characteristics, expertise, or experience of the directors, officers, or employees of the Company, its affiliates and related entities; information regarding the compensation practices of, or payments made to or by, the Company, its affiliates and related entities; the contents of communications, oral or written, with, by, or between directors, officers, employees, or agents of the Company, its affiliates and related entities; intellectual property, such as trade secrets, designs, inventions, know-how, manufacturing processes, product formulae, design specifications, writings and other works of authorship, computer programs, and other works, whether patentable or not.

Nothing in this Agreement, however, shall prohibit you from complying with a court order or other legal obligation to produce information, but you agree to provide the Company notice (to the extent you are permitted to do so), immediately upon becoming aware of any such obligation, or of any subpoena or order, to produce information related to the Company, and to cooperate fully with the Company in obtaining such protection as the Company deems appropriate.

 

You further agree that all work produced by you while employed by the Company or in connection with your employment with the Company and all associated copyrights and commercial proprietary rights are the exclusive property of the Company.  You will return all such information, in whatever form, to the Company upon separation from employment with the Company for any reason and, during your employment, upon request from the Company.

 

Any non-disclosure provision in this paragraph does not prohibit or restrict you (or your attorney) from responding to any inquiry, or providing testimony by or before the Securities and Exchange Commission, FINRA (formerly the National Association of Securities Dealers, Inc.), any other self-regulatory organization, or any other federal or state regulatory authority.

(a) Engage in or perform any services that involve the direct or indirect responsibility for management, in whole or in part, of one or more investment accounts or funds, or a group of investment accounts or funds, including performing any senior management role involving authority over one or more persons performing such investment management services.  This restriction does not include managing your own investment accounts or those of your immediate family.

 

(b)  Solicit or induce any person for the purpose of causing any funds or accounts for which the Company provides investment management services to be withdrawn from the Company or any affiliate.

 

(c) Solicit, induce, or influence, or attempt to solicit, induce, or influence, any employee of the Company (other than clerical or secretarial staff) or any affiliate to terminate his or her employment;

 

(d)  Recruit, hire, or assist in the recruitment or hiring of any employee of the Company or any affiliate by any person, association, or entity not affiliated with the Company; and

 

(e)  Solicit, induce, or influence, or attempt to solicit, induce, or influence, any client of, or person or entity that is reasonably anticipated in the following six months to become a client of, the Company or an affiliate to reduce business with, or divert business from, the Company or any affiliate.

The restrictions set forth in paragraph (a) above will not apply if, and only if, the Company elects not to renew this Agreement or terminates this Agreement for any reason other than for Cause as defined above. You agree that these restrictions are reasonable in all respects and necessary to protect the legitimate business interests of the Company and that the payments and benefits in paragraph 6, above, are satisfactory compensation and consideration for such restrictions.  You further agree that any breach of these obligations will result in irreparable harm to the Company.  The Company reserves the right to pursue all remedies available as a result of a breach of these provisions, including, but not limited to, injunctive relief, as appropriate, and damages.

10.  Cooperation and Non-Disparagement:  During your employment with the Company and its affiliates and thereafter, you agree that:

 

·

You will cooperate at the expense of the Company (except that you are not authorized to retain legal counsel without the prior approval of the Company) with any reasonable request from the Company or its authorized representatives in connection with any internal or external investigation, matter before any governmental agency, or legal proceeding; and

·	You will not make any comment or take any action which disparages, defames, or places in a negative light the Company, its affiliates or related entities or their past or present officers, directors or employees.

13.  Successors:  You may not assign any rights and obligations created by this Agreement.  The Company, however, may assign this Agreement and all rights and obligations it creates to any successor to the Company’s business.

14.  Construction of Agreement and Controlling Law:  Except as specifically provided for herein, this Agreement shall constitute the entire understanding relating to your employment.  No delay by either party in exercising any rights under this Agreement shall operate as a waiver of such right or any other rights.  If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the other provisions of this Agreement shall remain in full force and effect, and the provisions that are determined to be invalid, unenforceable, or unlawful will either be limited so that they will remain in effect to the extent permissible by law, or the court may substitute, to the extent enforceable, provisions similar thereto so as to provide, to the fullest extent allowed by law, the benefits and protections intended by this Agreement.  This Agreement may not be amended unless any such amendment is made in writing and executed by the Chief Executive Officer of the Company and you.  Subject to its obligations hereunder, the Company and its affiliates reserve the right to amend, modify or terminate any of its or their employment policies, employee benefit plans, incentive compensation arrangements at any time and, thereby, to modify the terms and conditions of employment generally applicable to all employees at any time.  This Agreement shall be governed by the laws of the State of New York, excluding its conflict-of-law principles.

Please acknowledge your acceptance of this Agreement by signing and returning a copy of this Agreement to Barbara Hahn, Head of Human Resources within ten business days of receipt.  By signing below, you also agree to waive any past express or implied contract of employment which might otherwise have arisen during your prior conversations. Consequently, as of the Effective Date, this Agreement supersedes any prior letters or agreements of employment or engagement. It likewise supersedes any prior understandings, conversations or agreements, verbal or in writing, regarding your employment ¾ past and future ¾ with Artio Global Investors Inc., Artio Global Management LLC or any affiliated company, and it constitutes the full understanding between you and the Company.

Very truly yours,

Artio Global Investors Inc.

by:	/s/ Richard Pell		by:	/s/ Barbara Hahn
	Richard Pell			Barbara Hahn
	Managing Director			Senior Vice President &
	Chief Executive Officer			Head of Human Resources
				Artio Global Management LLC
Accepted:
by:	/s/ Francis Harte			November 23, 2011
	Francis Harte			Date