AMENDED AND RESTATED AGREEMENT RELATING TO RETENTION AND NONCOMPETITION AND OTHER COVENANTS
Exhibit
10.1
AMENDED
AND RESTATED
AGREEMENT
RELATING
TO RETENTION
AND
NONCOMPETITION
AND OTHER
COVENANTS
AMENDED
AND RESTATED AGREEMENT by and
among Lazard Ltd, a company incorporated under the laws of Bermuda (the “Company”), Lazard
Group LLC, a Delaware limited liability company (“Lazard Group”), and
Xxxxx Xxxxxxxxxxx (the “Executive”), dated
as
of the 29th day of January, 2008 (the “Agreement”).
(b) From
and after the Effective Date, this Agreement shall supersede the Prior Retention
Agreement with respect to the subject matter hereof. The execution of
this Agreement shall have no effect on the continuing application or the
terms
of the Agreement Relating to the Reorganization of Lazard, dated as of May
10th,
2005, between
Lazard LLC and the Executive (the “Reorganization
Agreement”) or any other agreements entered into in connection with the
Reorganization (as defined in the Reorganization Agreement) (collectively,
the
“Reorganization
Documents”), including any agreements with respect to the HoldCo
Interests or Exchangeable Interests (each as defined in the Reorganization
Documents), which shall continue in full force and effect in accordance with
their terms, and all references to (including the terms defined by reference
to)
the Prior Retention Agreement contained in any Reorganization Document or
any
other agreement between the Executive and the Company or its affiliates entered
into prior to the Effective Date, including without limitation any stock
unit
award agreements entered into prior to the Effective Date (which for purposes
hereof shall include the stock unit award agreement entered into as of the
date
hereof with respect to 2007 annual compensation), shall continue to refer
to and
be controlled by the Prior Retention Agreement.
(ii) During
the Employment Period, and excluding any periods of vacation and sick leave
to
which the Executive is entitled, the Executive agrees to devote substantially
all of his attention and time during normal business hours to the business
and
affairs of the Company and Lazard Group and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use
the
Executive’s reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, it shall not be a
violation of this Agreement for the Executive to, consistent with and subject
to
the policies applicable to members of the Board, (A) serve on corporate,
civic
or charitable boards or committees, (B) deliver lectures or fulfill speaking
engagements and (C) manage personal investments or engage in other activities
consistent with past practice (including, without limitation, with respect
to
Xxxxxxxxxxx & Co., LP consistent with Section 9(b)(ii) of this Agreement),
so long as such activities do not significantly interfere with the performance
of the Executive’s responsibilities as an employee of the Company and Lazard
Group in accordance with this Agreement.
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provisions
following such Change in Control). Notwithstanding the
foregoing, in the event that, during the Employment Period, the Company
terminates the Executive’s employment other than for Cause or the Executive’s
employment terminates due to death or Disability, all RSUs previously awarded
pursuant to any Annual Award shall vest on the earliest of
(A) December 31, 2012, (B) the Executive’s death and (C) the
occurrence of a Change in Control (subject to the proviso contained in the
immediately preceding sentence); provided,
however,
that in the event of any
non-compliance with the restrictive covenants under the applicable Annual
Award
Agreements during the applicable periods specified therein following a
termination other than for Cause or due to the Executive’s Disability (other
than following a Change in Control), all such RSUs shall be
forfeited. Except as otherwise provided above, all RSUs awarded
pursuant to any Annual Award shall be settled as soon as practicable (but
in no
event more than 30 days) after the applicable vesting date. In the
event that, during the Employment Period, the Company terminates the Executive’s
employment for Cause or the Executive terminates his employment for any reason
(other than due to death or Disability), all RSUs awarded pursuant to any
Annual
Award shall be forfeited. The Compensation Committee and the Board
may also award the Executive an additional bonus for each such fiscal year
in
the amount and form and with such other terms and conditions as the Compensation
Committee and the Board may determine in their absolute
discretion.
(iii) With
respect to each of the Company’s
2011 and 2012 fiscal years, the Compensation Committee and the Board shall
assess the Executive’s performance on the basis of such criteria as they may
deem appropriate in their absolute discretion. Based on such
assessment for each such fiscal year, the Compensation Committee and the
Board
may award the Executive for such fiscal year an annual bonus, which shall
be in
the amount and form and have such other terms and conditions as the Compensation
Committee and the Board may determine in their absolute
discretion.
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(i) conviction
of the Executive of, or a guilty or nolo contendere plea (or the
equivalent in a non-United States jurisdiction) by the Executive to, a felony
(or the equivalent in a non-United States jurisdiction), or of any other
crime
that legally prohibits the Executive from working for the Company or its
affiliates;
(ii) breach
by the Executive of a regulatory rule that materially adversely affects the
Executive’s ability to perform his duties;
(iii) willful
and deliberate failure on the part of the Executive (A) to perform his
employment duties in any material respect or (B) to follow specific reasonable
directions received from the Board, in each case following written notice
to the
Executive of such failure and, if such failure is curable, the Executive’s
failing to cure such failure within a reasonable time (but in no event less
than
30 days); or
(iv) a
breach of a Covenant that is (individually or combined with other such breaches)
demonstrably and materially injurious to the Company or any of its
affiliates.
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For
purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions
of
the Board or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive
in
good faith and in the best interests of the Company.
The
Executive shall not be terminated (including for Cause) or asked to resign
unless and until there shall have been delivered to the Executive a copy
of the
resolutions duly adopted by the affirmative vote of a majority of the members
of
the Board then in office at a meeting called and held for such purpose, provided that,
with
respect to any such meeting, the Executive and the members of the Board shall
have been given reasonable notice of such meeting (which shall, in any event,
not require more than five (5) days notice) and the Executive shall have
been
given an opportunity, together with counsel, to be heard at such meeting
(it
being understood that the failure to provide such adequate notice shall
invalidate any action or resolution of the Board to terminate the
Executive). The cessation of employment of the Executive shall not be
deemed to be for Cause unless and until there shall have been delivered to
the
Executive a copy of the resolutions complying with the provisions set forth
in
the foregoing sentence, which resolutions find that, in the good faith opinion
of the Board, the Executive is guilty of conduct constituting Cause as described
above, and specifies the particulars thereof in detail. The Executive
agrees that the Company, Lazard Group and their respective affiliates shall
be
entitled, without the consent of the Executive, to amend (a) the proviso
to the
last sentence of Section 24.03 and the last sentence of Section 24.09 of
the
Amended and Restated Bye-Laws of Lazard Ltd, adopted as of May 10, 2005 and
(b) the last sentence to Section 3.01(d) and the proviso to Section
3.01(f) to the Operating Agreement of Lazard Group LLC, dated as of May 10,
2005
to conform to the procedural requirements specified in the prior two
sentences.
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(i) Lazard
Group shall pay to the Executive in a lump sum in cash within 30 days after
the
Date of Termination the sum of (A) the Executive’s Annual Base Salary through
the Date of Termination and (B) any earned and unpaid cash bonus amounts
for
fiscal years of the Company completed prior to the Date of Termination, in
each
case, to the extent not theretofore paid (the sum of the amounts described
in
subclauses (A) and (B), the “Accrued
Obligations”); provided that, notwithstanding the foregoing, if the
Executive has made an irrevocable election under any deferred compensation
arrangement subject to Section 409A of the Code to defer any portion of any
cash
bonus described in clause (B) above, then such deferral election, and the
terms
of the applicable deferred compensation arrangement, shall apply to such
portion
of such cash bonus, and such portion shall not be considered part of the
“Accrued Obligations”
but shall instead be deemed an “Other Benefit” (as defined below) for purposes
of Sections 5(a) through (d);
(ii) (A)
for the remainder of the Executive’s life and that of his current spouse, the
Executive, his spouse and his eligible dependents shall continue to be eligible
to participate in the medical and dental benefit plans of Lazard Group on
the
same basis as the Executive participated in such plans immediately prior
to the
Date of Termination, to the extent that the applicable plan permits such
continued participation for all or any portion of such period (it being agreed
that Lazard Group will use its reasonable efforts to cause such continued
coverage to be permitted under the applicable plan for the entire period)
and
(B) in the event such benefits continuation period is required to be limited
to
a shorter period, the actual period of continuation shall not run concurrently
with or reduce the Executive’s right to continued coverage under COBRA and, for
purposes of determining the Executive’s eligibility for and right to commence
receiving benefits under the retiree health care benefit plans of Lazard
Group,
the Executive shall receive additional years of age and service credit equal
to
the number of years and portions thereof in the applicable benefits continuation
period (collectively, the “Medical Benefits”)
(the amount of Medical Benefits provided in any given calendar year shall
not
affect the amount of Medical Benefits provided in any other calendar year,
and
the Executive’s right to Medical Benefits may not be liquidated or exchanged for
any other benefit); and
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(iii) to
the extent not theretofore paid or provided, Lazard Group shall timely pay
or
provide to the Executive any other amounts or benefits required to be paid
or
provided or which the Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of Lazard Group and its affiliates
through the Date of Termination (such other amounts and benefits shall be
hereinafter referred to as the “Other
Benefits”).
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(b) Subject
to the provisions of Section 8(c), all determinations required to be made
under
this Section 8, including whether and when a Gross-Up Payment is required
and
the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by Deloitte & Touche LLP or
such other nationally recognized certified public accounting firm reasonably
acceptable to the Company as may be designated by the Executive (the “Accounting Firm”),
which shall provide detailed supporting calculations both to the Company
and the
Executive within 15 business days of the receipt of notice from the Executive
that there has been a Payment, or such earlier time as is requested by the
Company. All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any determination by the Accounting Firm shall
be binding upon the Company and its affiliates and the Executive. As
a result of the uncertainty in the application of Section 4999 of the Code
at
the time of the initial determination by the Accounting Firm hereunder, it
is
possible that Gross-Up Payments which will not have been made by the Company
should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder. In
the event that the Company exhausts its remedies pursuant to Section 8(c)
and
the Executive thereafter is required to make a payment of any Excise Tax,
the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for
the
benefit of the Executive.
(c) The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment of the Gross-Up
Payment. Such notification shall be given as soon as practicable but
no later than ten business days after the Executive is informed in writing
of
such claim, and shall apprise the Company of the nature of such claim and
the
date on which such claim is requested to be paid. The Executive shall
not pay such claim prior to the expiration of the 30-day period following
the
date on which it gives such notice to the Company (or such shorter period
ending
on the date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(i) give
the Company any information reasonably requested by the Company relating
to such
claim,
(ii) take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate
with the Company in good faith in order effectively to contest such claim,
and
(iv) permit
the Company to participate in any proceedings relating to such
claim;
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provided,
however,
that the
Company shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest, and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise
Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
Section 8(c), the Company shall control all proceedings taken in connection
with
such contest, and, at its sole discretion, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the
applicable taxing authority in respect of such claim and may, at its sole
discretion, either pay the tax claimed to the appropriate taxing authority
on
behalf of the Executive and direct the Executive to xxx for a refund or contest
the claim in any permissible manner, and the Executive agrees to prosecute
such
contest to a determination before any administrative tribunal, in a court
of
initial jurisdiction and in one or more appellate courts, as the Company
shall
determine; provided, however,
that, if the
Company pays such claim and directs the Executive to xxx for a refund, the
Company shall indemnify and hold the Executive harmless, on an after-tax
basis,
from any Excise Tax or income tax (including interest or penalties) imposed
with
respect to such payment or with respect to any imputed income with respect
to
such payment; and further provided,
that any
extension of the statute of limitations relating to payment of taxes for
the
taxable year of the Executive with respect to which such contested amount
is
claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which the Gross-Up Payment would be payable
hereunder, and the Executive shall be entitled to settle or contest, as the
case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
(d) If,
after the receipt by the Executive of a Gross-Up Payment or payment by the
Company of an amount on the Executive’s behalf pursuant to Section 8(c), the
Executive becomes entitled to receive any refund with respect to the Excise
Tax
to which such Gross-Up Payment relates or with respect to such claim, the
Executive shall (subject to the Company’s complying with the requirements of
Section 8(c), if applicable) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after payment by the Company of an amount on
the Executive’s behalf pursuant to Section 8(c), a determination is made that
the Executive shall not be entitled to any refund with respect to such claim
and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then the amount previously paid shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
(e) Any
Gross-Up Payment, as determined pursuant to this Section 8, shall be paid
by the
Company to the Executive within five days of the receipt of the Accounting
Firm’s determination; provided that,
the
Gross-Up Payment shall in all events be paid no later than the end of the
Executive’s taxable year next following the Executive’s taxable year in which
the Excise Tax (and any income or other related taxes or interest or penalties
thereon) on a Payment are remitted to the Internal Revenue Service or any
other
applicable taxing authority or, in the case of amounts relating to a claim
described in Section 8(c) that does not result in the remittance of any federal,
state, local and foreign income, excise, social security and other taxes,
the
calendar year in which the claim is finally settled or otherwise
resolved. Notwithstanding any other provision of this Section 8, the
Company may, in its sole discretion, withhold and pay over to the Internal
Revenue Service or any other applicable taxing authority, for the benefit
of the
Executive, all or any portion of any Gross-Up Payment, and the Executive
hereby
consents to such withholding.
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Co.,
LP
that do not involve the direct rendering of services by the Executive), on
the
Executive’s behalf or on behalf of any other person, firm, corporation,
association or other entity, as an employee, director, advisor, partner,
consultant or otherwise, engage in a “Competing Activity,” or acquire or
maintain any ownership interest in, a “Competitive Enterprise.” For
purposes of this Agreement, (x) “Competing Activity”
means the providing of services or performance of activities for a Competitive
Enterprise in a line of business that is similar to any line of business
in
respect of which the Executive provided services to the Company and (y) “Competitive
Enterprise” means a business (or business unit) that (1) engages in any
activity or (2) owns or controls a significant interest in any entity that
engages in any activity, that in either case, competes anywhere with any
activity in which the Company is engaged up to and including the Executive’s
Date of Termination. Notwithstanding anything in this Section 9(b),
the Executive shall not be considered to be in violation of this Section
9(b)
solely by reason of owning, directly or indirectly, any stock or other
securities of a Competitive Enterprise (or comparable interest, including
a
voting or profit participation interest, in any such Competitive Enterprise)
if
the Executive’s interest does not exceed 5% of the outstanding capital stock of
such Competitive Enterprise (or comparable interest, including a voting or
profit participation interest, in such Competitive Enterprise).
(ii) The
Executive acknowledges that the Company is engaged in business throughout
the
world. Accordingly, and in view of the nature of the Executive’s
position and responsibilities, the Executive agrees that the provisions of
this
Section 9(b) shall be applicable to each jurisdiction, foreign country, state,
possession or territory in which the Company may be engaged in business while
the Executive is employed by the Company. Notwithstanding anything
contained in Sections 9(b) and 9(c) of this Agreement to the contrary or
in any
restricted stock unit agreement between the Executive and the Company or
its
affiliates entered into on, prior to or after the Effective Date (including,
without limitation, the RSU Award Agreements), in no event shall the Executive’s
services to or relationship with Xxxxxxxxxxx & Co., LP, to the extent
consistent with his relationship with and services to Xxxxxxxxxxx & Co., LP
as of the date hereof, be considered to be in violation of, or give rise
to a
violation of, Section 9(b) or 9(c) of this Agreement (or any similar provisions
in any restricted stock unit agreement between the Executive and the Company
or
its affiliates entered into on, prior to or after the Effective Date (including,
without limitation, the RSU Award Agreements). If the Executive
desires to make available to Xxxxxxxxxxx & Co., LP any corporate opportunity
of the Company that arises from a relationship of the Company (other than
any
relationship of the Executive existing on November 15, 2001), the Executive
shall first receive the written consent of the Nominating and Governance
Committee of the Board; it being understood, for the avoidance of doubt,
that
such written consent shall not be required in connection with the offering
to
Xxxxxxxxxxx & Co., LP of an opportunity by the Company on behalf of a client
of the Company.
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(b) This
Agreement shall inure to the benefit of and be binding upon the Company and
Lazard Group and their respective successors and assigns.
(c) The
Company and Lazard Group will 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 or Lazard Group to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that the Company and Lazard Group would be required to perform it if no such
succession had taken place. As used in this Agreement, “Company” and
“Lazard Group” shall mean the Company and Lazard Group as hereinbefore defined
and any successor to their respective businesses and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation of law or
otherwise.
11. Miscellaneous. (a) This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York, without reference to principles of conflict of
laws. Any dispute, controversy or claim between the parties arising
out of or relating to or in connection with this Agreement, or in any way
relating to any other relationship that exists or has existed between the
parties hereto, or any amendment or modification hereof, shall be settled
by the
courts of the State of New York. Notwithstanding the foregoing, any
dispute regarding the Executive’s HoldCo Interests or Exchangeable Interests
(each as defined in the Reorganization Agreement) or any other matter relating
to the Reorganization, but not any dispute concerning an actual or purported
termination of the Executive’s employment or any actual or purported breach of
the Covenants, or any other dispute required by applicable law or regulation
to
be arbitrated, shall be governed by, and subject to, the dispute resolution
provision in the applicable Reorganization Document.
(b) All
notices and other communications hereunder shall be in writing and shall
be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
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If
to the
Executive:
At
the most recent address on file at the Company.
If
to the Company:
Lazard
Ltd
00
Xxxxxxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention: General
Counsel
or
to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) For
purposes of this Agreement, “affiliate”
shall mean
any entity controlled by, controlling or under common control with the
Company.
(d) The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement. Upon the expiration or other termination of this
Agreement, the respective rights and obligations of the parties hereto shall
survive such expiration or other termination to the extent necessary to carry
out the intentions of the parties under this Agreement.
(e) Lazard
Group may withhold from any amounts payable under this Agreement such Federal,
state, local or foreign taxes as shall be required to be withheld pursuant
to
any applicable law or regulation.
(f) The
Executive’s, the Company’s or Lazard Group’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive, the Company or Lazard Group may have hereunder, including,
without limitation, the right of the Company to terminate the Executive for
Cause pursuant to
Section 4(b) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
Section 4(b) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
(g) The
captions of this Agreement are not part of the provisions hereof and shall
have
no force or effect.
(h) This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
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|
/s/ Xxxxx Xxxxxxxxxxx | |
|
XXXXX
XXXXXXXXXXX
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| LAZARD LTD | |||
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By:
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/s/ Xxxxx X. Xxxxxxx | |
| LAZARD GROUP LLC | |||
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By:
|
/s/ Xxxxx X. Xxxxxxx | |