AGREEMENT
THIS AGREEMENT, dated as of October 30, 2007 (the “Retirement Date”) (together with the
exhibit hereto, this “Agreement”), by and between Xxxxxxx Xxxxx & Co., Inc., a Delaware corporation
(the “Company”), and E. Xxxxxxx X’Xxxx (the “Executive”).
WHEREAS, the Company and the Executive have agreed that as of the Retirement Date the
Executive shall, among other things, retire and resign as Chairman and Chief Executive Officer; and
WHEREAS, the parties intend that this Agreement shall set forth the terms regarding the
Executive’s retirement from service and retirement;
NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth in this
Agreement, the parties agree as follows:
1. Retirement.
1.1 Effective as of the Retirement Date, the Executive’s service as a director, officer,
employee or otherwise to the Company and all its subsidiaries and affiliates (collectively, the
“Company Group”), and his service as a director of BlackRock, Inc., shall terminate. Following the
Retirement Date, the Executive shall execute and deliver to the Company (or any subsidiary or
affiliate thereof as the Company may direct) any documentation or written evidence of such
resignation and termination as may be reasonably requested by the Company.
1.2 The Company hereby confirms and agrees that (i) for purposes of all Equity Plans (as
hereinafter defined), all Benefit Plans (as hereinafter defined), including the Executive’s
Executive Annuity Agreement dated January 28, 2002 (the “Annuity Agreement”), any other agreements
entered into by the Executive in favor of the Company or any member of the Company Group, and any
other document, arrangement, policy or rule of the Company or of a member of the Company Group, the
Executive has, prior to the Retirement Date, satisfied all age, years of service and other
requirements for retirement from the Company, (ii) for all such purposes, his termination of
employment hereunder shall constitute a termination of employment with the Company by reason of
“Retirement,” “Career Retirement” or whatever descriptive terminology is used in a particular plan,
agreement or arrangement to describe a termination qualifying as a retirement under such plan,
agreement or arrangement, and (iii) the Board of Directors of the Company has taken all necessary
and appropriate action under all of the foregoing Plans, agreements and arrangements to provide
that the Executive so qualifies and will be deemed to have so retired. The Company hereby waives
any notice requirement and/or notice period in respect of the Executive’s termination of employment
by retirement on the Retirement Date.
2. Effect of Retirement.
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2.1 Treatment of Equity-Based Compensation. In accordance with the terms and
conditions of the equity-based compensation plans of the Company and the grant and other agreements
and documents used in connection therewith in which the Executive participates or has participated,
including, without limitation, the Long-Term Incentive Compensation Plan, the Long-Term Incentive
Compensation Plan for Managers and Producers and the Managing Partners Incentive Program (together
with the individual grant and other agreements and documents, the “Equity Plans”), the Company
hereby confirms and agrees that the Executive, as of the Retirement Date, satisfied all age, years
of service and other requirements to qualify for “Retirement” as defined in the Equity Plans, and
the Executive shall be entitled to all the rights and benefits arising from such qualification. As
soon as practicable after the date hereof, the Company shall deliver to the Executive a list of all
Equity Plans and all equity awards to the Executive thereunder, and the respective vesting dates,
restricted periods, and, in the case of stock options, expiration dates and exercise prices, in
respect thereof.
2.2 Other Benefits. As soon as practicable after the date hereof, the Company shall
deliver to the Executive a list of each of the Company benefit plans in which he is a participant
as of the Retirement Date (collectively with the Annuity Agreement, the “Benefit Plans”). Except
as otherwise provided in this Agreement, this Agreement shall not change the terms of the Benefit
Plans or the payments or benefits earned by or due to the Executive and/or his eligible dependents
thereunder for services rendered to the Company through the Retirement Date. Without limiting the
generality of the foregoing, the Executive, his spouse and/or his other eligible dependents shall
receive any and all available post-termination and post-retirement welfare benefits for which he
may be eligible as of the Retirement Date and on the same basis as other retired executive officers
and in accordance with the terms and conditions of the applicable Benefit Plans as in effect from
time to time. The benefits earned by or due to the Executive, his spouse and/or his other eligible
dependents in accordance with the terms of the Benefit Plans shall be paid or provided by the
Company or the respective Benefit Plan (as the case may be) when due (whether such due date is on,
before or after the Retirement Date) in accordance with their respective terms (including any terms
involving forfeiture or similar provisions (except as modified hereby)). Furthermore, following
the Retirement Date and except as otherwise permitted by this Agreement, the Executive shall not be
eligible to participate as an active employee in any perquisite or employee welfare benefit plan,
program, policy or arrangement of the Company or any member of the Company Group. Anything to the
contrary contained herein notwithstanding, the Company hereby confirms and agrees that, following
the Retirement Date, the Executive, his spouse and his other eligible dependents shall be covered
by the Xxxxxxx Xxxxx Medical Plan through COBRA and following the COBRA period the Executive, his
spouse and his other eligible dependents shall be covered by the Xxxxxxx Xxxxx Retiree Medical Plan
as in effect from time to time and on the same basis as other retired executive officers.
2.3 Reimbursement for Expenses; Legal Fees. The Company shall promptly reimburse the
Executive for any reasonable business expenses incurred by him through the Retirement Date, upon
submission of appropriate documentation in accordance with the Company’s policies in effect from
time to time. The Company shall also promptly reimburse the Executive for all reasonable legal
fees and related expenses
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incurred by him in connection with the preparation and negotiation of this Agreement.
Notwithstanding any other provision in this Agreement to the contrary, all expenses eligible for
reimbursement under any provision of this Agreement shall be paid to the Executive promptly in
accordance with the Company’s customary practices (if any) applicable to the reimbursement of
expenses of such type, but in any event by no later than December 31 of the calendar year after the
calendar year in which such expenses are incurred. The expenses incurred by the Executive in any
calendar year that are eligible for reimbursement under this Agreement shall not affect the
expenses incurred by the Executive in any other calendar year that are eligible for reimbursement
hereunder. The Executive’s right to receive any reimbursement hereunder shall not be subject to
liquidation or exchange for any other benefit.
2.4 Office and Executive Assistant. The Company shall make available to the Executive
reasonable office space in New York City, NY for his personal use (other than at the Company’s
corporate headquarters) and the full-time services of an executive assistant. The Company’s
obligation to make such office space and assistant available shall expire on the earlier of (i) the
third anniversary of the Retirement Date and (ii) the first day after the Retirement Date on which
the Executive becomes employed, retained or engaged by or in, or otherwise commences providing
services to or for, any business or other organization, excluding any activities that relate solely
to (x) the Executive’s management of his personal finances, (y) the Executive’s services for
charitable organizations and (z) the Executive’s service as a director of any publicly-traded
company that is not in competition with the Company or the Company Group (as determined by the
Board in its discretion). The amount of services provided to the Executive under this Section 2.4
shall not affect the amounts made available in any other calendar year. The Executive’s rights
under this Section 2.4 shall not be subject to liquidation or exchange for any other benefit.
2.5 Exclusive Payments and Benefits. Except as otherwise provided in (and subject to
the terms of) this Agreement and the Equity Plans and Benefit Plans, the Executive agrees that he
shall not be entitled to receive any other payment, compensation or benefits from the Company or
any other member of the Company Group in connection with his employment or service, the termination
of such employment or service or otherwise. Notwithstanding anything herein or in any Equity Plan
or Benefit Plan to the contrary, the Executive shall not be entitled to receive any bonus or
incentive based compensation with respect to the 2007 calendar, fiscal or performance year. Except
as otherwise provided in this Agreement, following the Retirement Date, the Executive further
agrees that he is not entitled to any severance, change-in control-related or similar payments or
benefits under any agreement, guidelines, plan, program, policy or arrangement, whether formal or
informal, written or unwritten, of the Company or any member of the Company Group, including,
without limitation, the Letter Agreement between the Company and the Executive dated February 12,
1996 (relating to change in control severance) which shall expire on the Retirement Date, or the
Company’s severance guidelines.
3. Non-Competition. The Company and the Executive agree that, for a period of
eighteen (18) months commencing with the Retirement Date (the “Non-Competition Period”), the
Executive shall not provide services in any capacity for any entity listed on
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Exhibit A or any of its subsidiaries or affiliates. The engagement by the Executive
in any activities for any other entity shall not be a violation of this Section 3. If the
Executive starts his own business at any time, such business will not be deemed to be a competitor
of the Company or any other member of the Company Group for any purpose, provided that such
business is not a subsidiary or affiliate of any entity listed on Exhibit A. The provisions of
this Section 3 shall supersede and replace any and all obligations of the Executive in respect of
non-competition arising pursuant to any and all other non-competition covenants of all types
(collectively, the “Existing Non-Compete Obligations”) contained in the Equity Plans, the Benefit
Plans, any other agreement entered into by the Executive in favor of the Company or any member of
the Company Group, or any other document, arrangement, policy or rule of the Company or any member
of the Company Group (the “Covered Arrangements”). In connection with the foregoing, (i) all such
Existing Non-Compete Obligations, wherever contained, shall be, and they hereby are, null and void
and terminated without additional or continuing obligation or liability of the Executive and shall
be replaced in their entirety with the non-compete covenants contained in this Section 3, (ii) any
breach by the Executive of his non-compete obligations under this Section 3 shall have the same
effect under each Covered Arrangement as a breach by the Executive of the applicable Existing
Non-Compete Obligation would have had without giving effect to this Agreement, and the Company or
the applicable member of the Company Group shall have the benefit of all remedies for such breach
of the non-compete obligations of this Section 3 that are provided in such Covered Arrangement
(including, without limitation, but only to the extent explicitly provided in such Covered
Agreement, the forfeiture of awards under Equity Plans, forfeiture of retirement benefits under the
Annuity Agreement, money damages and injunctive relief, as applicable) and (iii) this Section 3
shall have no effect on any other restrictive covenant to which the Executive is subject as of the
Retirement Date, including any covenants as to (A) the solicitation or hiring of employees, (B) the
making of disparaging statements, (C) the protection of the Company Group’s confidential
information and trade secrets and (D) the Executive’s cooperation with legal matters affecting the
Company Group, in each case, whether under the Equity Plans, Benefit Plans, the Agreement between
the Company and the Executive dated September 27, 2004 (relating to restrictive covenants) or
otherwise.
4. Indemnification/D&O Liability Insurance. The Executive shall continue to be
indemnified for acts and omissions occurring on or prior to the Retirement Date to the fullest
extent permitted under applicable law and pursuant to the corporate governance documents of the
Company and of any other member of the Company Group in accordance with their terms as in effect
from time to time. The Company agrees that for purposes of this Section 4 it (or any member of the
Company Group, as the case may be) shall interpret and/or apply any provision of applicable law or
any corporate governance document relating to indemnification (including advancement of expenses)
with respect to the Executive in a manner consistent with how such provisions are interpreted and
applied by the Company (or the relevant member of the Company Group) to then active executive
officers of the Company or of the relevant member of the Company Group. The Executive shall be
covered under the Company’s directors’ and officers’ liability insurance policies in effect from
time to time on the same basis that other former directors and officers are covered.
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5. Legal Matters.
5.1 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts of laws principles
thereof.
5.2 Arbitration. Any controversy, dispute or claim arising out of or relating to this
Agreement, any other agreement or arrangement between the Executive and the Company, the
Executive’s employment with the Company, or the termination thereof (collectively, “Covered
Claims”) shall be resolved by binding arbitration, to be held in the Borough of Manhattan in New
York City, in accordance with the Commercial Arbitration Rules of the American Arbitration
Association and this Section 5.2. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
5.3 Notice of Claims. The Executive agrees to promptly notify the Company of any
claims made against him in his capacity as a former director or officer/employee of the Company or
any other member of the Company Group, provided that, if the Company or a member of the Company
Group is, along with the Executive, also a named party to any such claim, the Executive shall have
no liability to the Company for a delay or failure in providing notice of such claim.
6. Miscellaneous.
6.1 Successors. Except as otherwise expressly provided herein, this Agreement shall
be binding upon and inure to the benefit of the parties and their respective successors, heirs (in
the case of the Executive) or assigns. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, “Company” shall mean the Company as defined
above and any successor to its business and/or assets which by reason hereof assumes and agrees to
perform this Agreement by operation of law or otherwise; provided, however, that, for purposes of
Section 2.4, if following a merger, consolidation or similar transaction in which the Company is
not the surviving entity, the surviving entity thereof or its subsidiaries or affiliates conducts
businesses (“Other Businesses”) that were not conducted by the Company and its subsidiaries and
affiliates immediately prior to such merger, consolidation or other transaction, references to the
“Company” or the “Company Group” shall not include such Other Businesses carried on by such
successor entity nor shall any reference to a director, officer or employee of the Company or the
Company Group include a reference to a director, officer or employee of the successor entity unless
such director, officer or employee also served in such capacity for the Company or the Company
Group prior to such merger, consolidation or other transaction. In the event of the Executive’s
death or a judicial determination of his incompetence, with respect to any payments, entitlements
or benefits payable or due hereunder, references in this Agreement to the Executive shall be deemed
to refer, where appropriate, to his legal representatives or his beneficiary or beneficiaries.
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6.2 No Mitigation. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable under this
Agreement. There shall be no offset by the Company or any other member of the Company Group
against the Executive’s entitlements under this Agreement for any compensation or other amounts
that the Executive earns from subsequent employment or engagement of his services nor on account of
any claim that the Company or any other member of the Company Group (including any Merrill
Representative) may have against the Executive. In no event shall the Company or any other member
of the Company Group have a right of offset against any account that the Executive maintains with
the Company or any member of the Company Group, including, without limitation, the Executive’s CMA
account or any brokerage account, on account of any claims arising under this Agreement; provided,
however, that nothing in this Agreement shall preclude the Company from enforcing any award
obtained in its favor in accordance with Section 5.2 hereof against any account or other assets of
the Executive maintained with or held by the Company or any other member of the Company Group,
including, without limitation, the Executive’s CMA Account or any brokerage account.
6.3 Notices. For the purpose of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be sent by messenger,
overnight courier (provided in each case confirmation of receipt is obtained), certified or
registered mail, postage prepaid and return receipt requested or by facsimile transmission to the
parties at their respective addresses and fax numbers set forth below or to such other address or
fax number as to which notice is given.
If to the Executive:
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to his home address as indicated on the Company’s records | |
with a copy to:
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Xxxxxx X. Xxxxxxxxx, Esq. 000 Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 Fax: (000) 000-0000 |
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If to the Company:
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Xxxxxxx Xxxxx & Co., Inc. 0 Xxxxx Xxxxxxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention: Corporate Secretary Fax: (000) 000-0000 |
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with a copy to:
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Xxxxxx X. Xxxxx, Esq. Xxxxxxx Xxxxxx & Xxxxx LLP Worldwide Plaza 000 Xxxxxx Xxxxxx Xxx Xxxx, XX 00000 Fax: (000) 000-0000 |
Notices, demands and other communications shall be deemed given on delivery thereof.
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6.4 Entire Agreement. Any document produced in the course of negotiating the terms of
this Agreement shall not be deemed to constitute a part of this Agreement and shall not be used to
interpret the terms of this Agreement or the intent of the parties hereto. Neither party is
relying upon any representation, understanding, undertaking or agreement not set forth in this
Agreement, and each party expressly disclaims any reliance on any such representation,
understanding, undertaking or agreement. In the event there is a conflict between any provision of
this Agreement and any provision of any Equity Plan, Benefit Plan or other agreement, plan, policy
or program of the Company or any other member of the Company Group, the provisions of this
Agreement shall control.
6.5 Representations of the Company. The Company represents and warrants to the
Executive that (i) the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized and approved on
behalf of the Company by its Board of Directors (including by the affirmative vote of a majority of
the whole Board of Directors specifically directing that the Executive’s termination of employment
be treated as a retirement for all purposes) and that all corporate action required to be taken by
the Company for the execution, delivery and performance of this Agreement has been duly and
effectively taken; (ii) the officer signing this Agreement on behalf of the Company is duly
authorized to do so; (iii) the execution, delivery and performance of this Agreement by the Company
does not violate any applicable law, regulation, order, judgment or decree or any agreement, plan
or corporate governance document to which the Company is a party or by which it is bound; and (iv)
upon execution and delivery of this Agreement by the parties, it shall be a valid and binding
obligation of the Company enforceable against it in accordance with its terms, except to the extent
that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally.
6.6 Amendment; Waiver. This Agreement may not be amended except by mutual written
agreement of the Executive and an authorized officer of the Company. No waiver by any party to
this Agreement at any time of any breach by the other party 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. Any
waiver to be effective must be in writing and signed by the party against whom it is being
enforced.
6.7 Tax Matters.
6.7.1 The payment of any amount pursuant to this Agreement shall be subject to all applicable
withholding and payroll taxes and other applicable deductions consistent with past practice,
including, without limitation, deductions for payments or benefits provided prior to the Retirement
Date and deductions required under the Company’s employee benefit plans, if any.
6.7.2 Notwithstanding any provision to the contrary in this Agreement or in any of the Equity
Plans or Benefit Plans referred to in Section 2.1 and 2.2 hereof (each, a
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“Plan”), any payment otherwise required to be made to the Executive under any Plan on account
of the Executive’s “separation from service”, within the meaning of the Section 409A Rules (as
defined below), to the extent such payment (after taking into account all exclusions applicable to
such payment under the Section 409A Rules) is properly treated as deferred compensation subject to
the Section 409A Rules, shall not be made until the first business day after (i) the expiration of
six (6) months from the date of the Executive’s separation from service, or (ii) if earlier, the
date of the Executive’s death (the “Delayed Payment Date”). On the Delayed Payment Date, there
shall be paid to the Executive or, if the Executive has died, the Executive’s estate, in a single
cash lump sum, an amount equal to aggregate amount of the payments delayed pursuant to the
preceding sentence. In the case of each Plan under which the Executive is entitled to receive
amounts treated as deferred compensation subject to the Section 409A Rules and which provides for
payment of such amounts in the form of “a series of installment payments”, as defined in Treas.
Reg. §1.409A-2(b)(iii), (A) the Executive’s right to receive such payments shall be treated as a
right to receive a series of separate payments under Treas. Reg. §1.409A-2(b)(iii), and (B) to the
extent such Plan does not already so provide, it is hereby amended to so provide, with respect to
amounts payable to the Executive thereunder. For purposes of this Section 6.7.2, the “Section 409A
Rules” shall mean Section 409A of the Code, the regulations issued thereunder, and all notices,
rulings and other guidance issued by the Internal Revenue Service interpreting same.
Notwithstanding the foregoing, the Executive shall be solely responsible, and the Company and
Company Group shall have no liability, for any taxes, acceleration of taxes, interest or penalties
arising under the Section 409A Rules.
6.8 Headings. The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation of this Agreement.
6.9 Construction. The Executive and the Company have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the Executive and
the Company, and no presumption or burden of proof shall arise favoring or disfavoring either of
them by virtue of the authorship of any of the provisions of this Agreement.
6.10 Counterparts. This Agreement may be executed in one or more counterparts,
including by fax or PDF, each of which shall be deemed to be an original but all of which together
shall constitute one and the same instrument.
6.11 Certain Defined Terms. For purposes of this Agreement, except as may otherwise
be explicitly provided herein, the following definitions shall apply: (i) a “subsidiary” of an
entity means any entity 50% or more of the equity or voting power of which is owned by such other
entity; and (ii) an “affiliate” of an entity means an entity, other than a subsidiary of such other
entity, that, directly or indirectly, controls, is controlled by, or is under common control with,
such other entity.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
indicated below.
| XXXXXXX XXXXX & CO., INC. |
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| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Vice President | |||
| Signed on October 30, 2007 EXECUTIVE |
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| /s/ E. Xxxxxxx X’Xxxx | ||||
| Signed on October 30, 2007 | ||||
