**Exhibit 10.16****CHANGE IN CONTROL AGREEMENT**          AGREEMENT, dated as of the first day of February, 2008 (this “Agreement”), by and between KBW,Inc., a Delaware corporation (the “Company”), and Mitchell B. Kleinman, Executive Vice Presidentand General Counsel (the “Executive”).          WHEREAS, the Board of Directors of the Company (the “Board”), has determined that it is in thebest interests of the Company and its stockholders to assure that the Company will have thecontinued dedication of the Executive, notwithstanding the possibility, threat or occurrence of aChange of Control (as defined herein). The Board believes it is imperative to diminish theinevitable distraction of the Executive by virtue of the personal uncertainties and risks createdby a pending or threatened Change of Control and to encourage the Executive’s full attention anddedication to the Company in the event of any threatened or pending Change of Control, and toprovide the Executive with compensation and benefits arrangements upon a Change of Control thatensure that the compensation and benefits expectations of the Executive will be satisfied and thatprovide the Executive with compensation and benefits arrangements that are competitive with thoseof other corporations. Therefore, in order to accomplish these objectives, the Board has causedthe Company to enter into this Agreement.          NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:          **Section 1.****Certain Definitions****.**(a) “Effective Date” means the first date during theChange of Control Period (as defined herein) on which a Change of Control occurs. Notwithstandinganything in this Agreement to the contrary, if a Change of Control occurs and if the Executive’semployment with the Company is terminated prior to the date on which the Change of Control occurs,and if it is reasonably demonstrated by the Executive that such termination of employment (1) wasat the request of a third party that has taken steps reasonably calculated to effect a Change ofControl or (2) otherwise arose in connection with or anticipation of a Change of Control, then“Effective Date” means the date immediately prior to the date of such termination of employment.          (b) “Change of Control Period” means the period commencing on the date hereof and ending onthe third anniversary of the date hereof; *provided*, *however*, that, commencing on the date one yearafter the date hereof, and on each annual anniversary of such date (such date and each annualanniversary thereof, the “Renewal Date”), unless previously terminated, the Change of ControlPeriod shall be automatically extended so as to terminate three years from such Renewal Date,unless, at least 60 days prior to the Renewal Date, the Company shall give notice to the Executivethat the Change of Control Period shall not be so extended. The Change of Control Period shallterminate upon termination of the Executive’s employment with the Company if such termination ofemployment occurs prior to the date on which a Change of Control occurs, unless the Effective Dateprecedes or coincides with such termination pursuant to clause (1) or (2) of Section 1(a)          (c) “Affiliated Company” means any company controlled by, controlling or under common controlwith the Company.
 

 
          (d) “Change of Control” means:          (1) Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) becomes thebeneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% ormore of either (A) the then-outstanding shares of common stock of the Company (the “OutstandingCompany Common Stock”) or (B) the combined voting power of the then-outstanding voting securitiesof the Company entitled to vote generally in the election of directors (the “Outstanding CompanyVoting Securities”); *provided*, *however*, that, for purposes of this Section 1(d), the followingacquisitions shall not constitute a Change of Control: (i) any acquisition directly from theCompany, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan(or related trust) sponsored or maintained by the Company or any Affiliated Company or (iv) anyacquisition by any corporation pursuant to a transaction that complies with Sections 1(d)(3)(A),1(d)(3)(B) and 1(d)(3)(C);          (2) Any time at which individuals who, as of the date hereof, constitute the Board (the“Incumbent Board”) cease for any reason to constitute at least a majority of the Board; *provided*,*however*, that any individual becoming a director subsequent to the date hereof whose election, ornomination for election by the Company’s stockholders, was approved by a vote of at least amajority of the directors then comprising the Incumbent Board shall be considered as though suchindividual were a member of the Incumbent Board, but excluding, for this purpose, any suchindividual whose initial assumption of office occurs as a result of an actual or threatenedelection contest with respect to the election or removal of directors or other actual or threatenedsolicitation of proxies or consents by or on behalf of a Person other than the Board;          (3) Consummation of a reorganization, merger, statutory share exchange or consolidation orsimilar transaction involving the Company or any of its subsidiaries, a sale or other dispositionof all or substantially all of the assets of the Company, or the acquisition of assets or stock ofanother entity by the Company or any of its subsidiaries (each, a “Business Combination”), in eachcase unless, following such Business Combination, (A) all or substantially all of the individualsand entities that were the beneficial owners of the Outstanding Company Common Stock and theOutstanding Company Voting Securities immediately prior to such Business Combination beneficiallyown, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, fora non-corporate entity, equivalent securities) and the combined voting power of thethen-outstanding voting securities entitled to vote generally in the election of directors (or, fora non-corporate entity, equivalent governing body), as the case may be, of the entity resultingfrom such Business Combination (including, without limitation, an entity that, as a result of suchtransaction, owns the Company or all or substantially all of the Company’s assets either directlyor through one or more subsidiaries) in substantially the same proportions as their ownershipimmediately prior to such Business Combination of the Outstanding Company Common Stock and theOutstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporationresulting from such Business Combination or any employee benefit plan (or related trust) of theCompany or such corporation resulting from such Business Combination) beneficially owns, directlyor indirectly, 20% or more of, respectively, the then-outstanding shares of common stock of thecorporation resulting from such Business Combination or the combined voting power of thethen-outstanding voting
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securities of such corporation, except to the extent that such ownership existed prior to theBusiness Combination, and (C) at least a majority of the members of the board of directors (or, fora non-corporate entity, equivalent governing body) of the entity resulting from such BusinessCombination were members of the Incumbent Board at the time of the execution of the initialagreement or of the action of the Board providing for such Business Combination; or          (4) Approval by the stockholders of the Company of a complete liquidation or dissolution ofthe Company.          **Section 2.****Employment Period****.**The Company hereby agrees to continue the Executive inits employ, subject to the terms and conditions of this Agreement, for the period commencing on theEffective Date and ending on the third anniversary of the Effective Date (the “Employment Period”).The Employment Period shall terminate upon the Executive’s termination of employment for anyreason.          **Section 3.****Terms of Employment****.**(a) **Position and Duties****.**(1) During theEmployment Period, (A) the Executive’s position (including status, offices, titles and reportingrequirements), authority, duties and responsibilities shall be at least commensurate in allmaterial respects with the most significant of those held, exercised and assigned at any timeduring the 120-day period immediately preceding the Effective Date and (B) the Executive’s servicesshall be performed at the headquarters of the Company located in the City of New York or at anyother such headquarters location less than 25 miles from the office where the Executive wasemployed immediately preceding the Effective Date.          (2) During the Employment Period, and excluding any periods of vacation and sick leave towhich the Executive is entitled, the Executive agrees to devote reasonable attention and timeduring normal business hours to the business and affairs of the Company and, to the extentnecessary to discharge the responsibilities assigned to the Executive hereunder, to use theExecutive’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(A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfillspeaking engagements or teach at educational institutions and (C) manage personal investments, solong as such activities do not significantly interfere with the performance of the Executive’sresponsibilities as an employee of the Company in accordance with this Agreement. It is expresslyunderstood and agreed that, to the extent that any such activities have been conducted by theExecutive prior to the Effective Date, the continued conduct of such activities (or the conduct ofactivities similar in nature and scope thereto) subsequent to the Effective Date shall notthereafter be deemed to interfere with the performance of the Executive’s responsibilities to theCompany.          (b) **Compensation****.**(1) **Base Salary****.**During the Employment Period, theExecutive shall receive an annual base salary (the “Annual Base Salary”) at an annual rate at leastequal to 12 times the highest monthly base salary paid or payable, including any base salary thathas been earned but deferred, to the Executive by the Company and the Affiliated Companies inrespect of the 12-month period immediately preceding the month in which the Effective Date occurs.The Annual Base Salary shall be paid at such intervals as the Company pays executive salariesgenerally. During the Employment Period, the Annual Base Salary shall
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be reviewed at least annually, beginning no more than 12 months after the last salary increaseawarded to the Executive prior to the Effective Date. Any increase in the Annual Base Salary shallnot serve to limit or reduce any other obligation to the Executive under this Agreement. TheAnnual Base Salary shall not be reduced after any such increase and the term “Annual Base Salary”shall refer to the Annual Base Salary as so increased.          (2) **Annual Bonus****.**In addition to the Annual Base Salary, the Executive shall beawarded, for each fiscal year ending during the Employment Period, an annual bonus (the “AnnualBonus”) in cash at least equal to the Executive’s highest bonus earned under the Company’s AnnualIncentive Plan, as in effect from time to time, or any comparable bonus under any predecessor orsuccessor plan, for the last three full fiscal years prior to the Effective Date (or for suchlesser number of full fiscal years prior to the Effective Date for which the Executive was eligibleto earn such a bonus, and annualized in the case of any pro rata bonus earned for a partial fiscalyear) (the “Recent Annual Bonus”). (If the Executive has not been eligible to earn such a bonusfor any period prior to the Effective Date, the “Recent Annual Bonus” shall mean the Executive’starget annual bonus for the year in which the Effective Date occurs.) Each such Annual Bonus shallbe paid no later than two and a half months after the end of the fiscal year for which the AnnualBonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonuspursuant to an arrangement that meets the requirements of Section 409A of the Internal Revenue Codeof 1986, as amended (the “Code”).          (3) **Incentive, Savings and Retirement Plans****.**During the Employment Period, theExecutive shall be entitled to participate in all cash incentive, equity incentive, savings andretirement plans, practices, policies, and programs applicable generally to other peer executivesof the Company and the Affiliated Companies, but in no event shall such plans, practices, policiesand programs provide the Executive with incentive opportunities (measured with respect to bothregular and special incentive opportunities, to the extent, if any, that such distinction isapplicable), savings opportunities and retirement benefit opportunities, in each case, lessfavorable, in the aggregate, than the most favorable of those provided by the Company and theAffiliated Companies for the Executive under such plans, practices, policies and programs as ineffect at any time during the 120-day period immediately preceding the Effective Date or, if morefavorable to the Executive, those provided generally at any time after the Effective Date to otherpeer executives of the Company and the Affiliated Companies.          (4) **Welfare Benefit Plans****.**During the Employment Period, the Executive and/or theExecutive’s family, as the case may be, shall be eligible for participation in and shall receiveall benefits under welfare benefit plans, practices, policies and programs provided by the Companyand the Affiliated Companies (including, without limitation, medical, prescription, dental,disability, employee life, group life, accidental death and travel accident insurance plans andprograms) to the extent applicable generally to other peer executives of the Company and theAffiliated Companies, but in no event shall such plans, practices, policies and programs providethe Executive with benefits that are less favorable, in the aggregate, than the most favorable ofsuch plans, practices, policies and programs in effect for the Executive at any time during the120-day period immediately preceding the Effective Date or, if more favorable to the Executive,those provided generally at any time after the Effective Date to other peer executives of theCompany and the Affiliated Companies.
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          (5) **Expenses****.**During the Employment Period, the Executive shall be entitled toreceive prompt reimbursement for all reasonable expenses incurred by the Executive in accordancewith the Company’s policies.          (6) **Office and Support Staff****.**During the Employment Period, the Executive shall beentitled to an office or offices of a size and with furnishings and other appointments and withsecretarial and support staff, no less favorable than that provided similarly situated executivesof the Company.          (7) **Vacation****.**During the Employment Period, the Executive shall be entitled to paidvacation in accordance with the most favorable plans, policies, programs and practices of theCompany and the Affiliated Companies as in effect for the Executive at any time during the 120-dayperiod immediately preceding the Effective Date or, if more favorable to the Executive, as ineffect generally at any time thereafter with respect to other peer executives of the Company andthe Affiliated Companies.          (8) **Indemnification and D&O Insurance****.**During the Employment Period and for seven (7)years following the Date of Termination (as defined herein), the Company shall provide theExecutive with indemnification and directors’ and officers’ liability insurance coverage as ineffect at any time during the 120-day period immediately preceding the Effective Date, or, if morefavorable to the Executive, as in effect generally at any time thereafter with respect to otherpeer executives, or directors, of the Company and the Affiliated Companies.          **Section 4.****Termination of Employment****.**(a) **Death or Disability****.**TheExecutive’s employment shall terminate automatically if the Executive dies during the EmploymentPeriod. If the Company determines in good faith that the Disability (as defined herein) of theExecutive has occurred during the Employment Period (pursuant to the definition of “Disability”),it may give to the Executive written notice in accordance with Section 11(b) of its intention toterminate the Executive’s employment. In such event, the Executive’s employment with the Companyshall terminate effective on the 30th day after receipt of such notice by the Executive (the“Disability Effective Date”), *provided*that, within the 30 days after such receipt, the Executiveshall not have returned to full-time performance of the Executive’s duties. “Disability” means theabsence of the Executive from the Executive’s duties with the Company on a full-time basis for 180consecutive business days as a result of incapacity due to mental or physical illness that isdetermined to be total and permanent by a physician selected by the Company or its insurers andacceptable to the Executive or the Executive’s legal representative. The foregoing to the contrarynotwithstanding, if the Executive’s employment would otherwise be considered to have terminated byreason of the Executive’s death or Disability, but circumstances described in clause (1), (2), (3),(4) or (5) of Section 4(c) (definition of Good Reason) occurred on or before the date of theExecutive’s death or the Executive’s Disability Effective Date, as the case may be, the Executive’semployment with the Company shall be deemed to have been terminated by the Executive for GoodReason.          (b) **Cause****.**The Company may terminate the Executive’s employment during the EmploymentPeriod with or without Cause. “Cause” means:
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     (1) the willful and continued failure substantially to perform the Executive’s duties(as contemplated by Section 3(a)(1)(A)) with the Company or any Affiliated Company (otherthan as a result of physical or mental illness or injury or following the Executive’sdelivery of a Notice of Termination for Good Reason), after a written demand for substantialperformance is delivered to the Executive by the Board or the Chief Executive Officer of theCompany that specifically identifies the manner in which the Board or the Chief ExecutiveOfficer of the Company believes that the Executive has not substantially performed theExecutive’s duties;     (2) illegal conduct or gross misconduct by the Executive, in either case that iswillful and results in material and demonstrable damage to the business or reputation of theCompany; or     (3) conviction of, or plea of guilty or nolo contendere to, a charge of commission of afelony.For purposes of this Section 4(b), no act, or failure to act, on the part of the Executive shall beconsidered “willful” unless it is done, or omitted to be done, by the Executive in bad faith orwithout reasonable belief that the Executive’s action or omission was in the best interests of theCompany. Any act, or failure to act, based upon authority (A) given pursuant to a resolution dulyadopted by the Board, or if the Company is not the ultimate parent corporation of the AffiliatedCompanies and is not publicly-traded, the board of directors of the ultimate parent of the Company(the “Applicable Board”), (B) upon the instructions of the Chief Executive Officer of the Companyor a senior officer of the Company or (C) based upon the advice of counsel for the Company, shallbe conclusively presumed to be done, or omitted to be done, by the Executive in good faith and inthe best interests of the Company. The cessation of employment of the Executive shall not bedeemed to be for Cause unless and until (I) the Executive has been given notice in reasonabledetail by the Company of the existence of the circumstances claimed to constitute Cause withinninety (90) days following the initial existence of such circumstances, and given an opportunity ofthirty (30) days to cure, and such circumstances remain uncured at the end of such thirty (30)-dayperiod, and (II) there shall have been delivered to the Executive a copy of a resolution dulyadopted by the affirmative vote of not less than three-quarters of the entire membership of theApplicable Board (excluding the Executive, if the Executive is a member of the Applicable Board) ata meeting of the Applicable Board called and held for such purpose (after reasonable notice isprovided to the Executive and the Executive is given an opportunity, together with counsel for theExecutive, to be heard before the Applicable Board), finding that, in the good faith opinion of theboard, the Executive is guilty of the conduct described in Section 4(b)(1), (2) or (3), andspecifying the particulars thereof in detail.          (c) **Good Reason****.**The Executive’s employment may be terminated by the Executive forGood Reason or by the Executive voluntarily without Good Reason. “Good Reason” means:(1) the assignment to the Executive of any duties materially inconsistent in any respectwith the Executive’s position (including status, offices, titles and reportingrequirements), authority, duties or responsibilities as contemplated by Section 3(a), or anyother material diminution in such position, authority, duties or responsibilities
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(whether or not occurring solely as a result of the Company’s ceasing to be a publiclytraded entity);(2) any material failure by the Company to comply with any of the provisions of Section3(b);(3) the Company’s requiring the Executive (i) to be based at any office or location otherthan as provided in Section 3(a)(1)(B), (ii) to be based at a location other than theprincipal executive offices of the Company if the Executive was employed at such locationimmediately preceding the Effective Date, or (iii) to travel on Company business to asubstantially greater extent than required immediately prior to the Effective Date;(4) any purported termination by the Company of the Executive’s employment otherwise than asexpressly permitted by this Agreement; or(5) any failure by the Company to comply with and satisfy Section 10(c).The Executive’s employment shall not be deemed to have been terminated by the Executive for GoodReason unless he has provided the Company with written notice of the existence of the circumstancesclaimed to constitute Good Reason within ninety (90) days following the initial existence of suchcircumstances, and the Company has not remedied such circumstances within thirty (30) days of itsreceipt of such notice from the Executive. The Executive’s mental or physical incapacity followingthe occurrence of an event described above in clauses (1) through (5) shall not affect theExecutive’s ability to terminate employment for Good Reason.          (d) **Notice of Termination****.**Any termination by the Company for Cause, or by theExecutive for Good Reason, shall be communicated by Notice of Termination to the other party heretogiven in accordance with Section 11(b). “Notice of Termination” means a written notice that (1)indicates the specific termination provision in this Agreement relied upon, (2) to the extentapplicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basisfor termination of the Executive’s employment under the provision so indicated, and (3) if the Dateof Termination is other than the date of receipt of such notice, specifies the Date of Termination(which Date of Termination shall be not more than 30 days after the giving of such notice). Thefailure by the Executive or the Company to set forth in the Notice of Termination any fact orcircumstance that contributes to a showing of Good Reason or Cause shall not waive any right of theExecutive or the Company, respectively, hereunder or preclude the Executive or the Company,respectively, from asserting such fact or circumstance in enforcing the Executive’s or theCompany’s respective rights hereunder.          (e) **Date of Termination****.**“Date of Termination” means (1) if the Executive’s employmentis terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt ofthe Notice of Termination or any later date specified in the Notice of Termination, (which dateshall not be more than 30 days after the giving of such notice), as the case may be, (2) if theExecutive’s employment is terminated by the Company other than for Cause or Disability, the date onwhich the Company notifies the Executive of such termination, (3) if the Executive resigns withoutGood Reason, the date on which the Executive notifies the Company of such termination, and (4) ifthe Executive’s employment is terminated by reason of
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death or Disability, the date of death of the Executive or the Disability Effective Date, asthe case may be.          (f) **Compensation During Dispute****.**With respect to any termination of the Executive’semployment during the Employment Period, if within fifteen (15) days after any Notice ofTermination is given, or, if later, prior to the Date of Termination, the party receiving suchNotice of Termination notifies the other party that a dispute exists concerning the termination,the Company shall continue to pay the Executive the full compensation in effect when the noticegiving rise to the dispute was given (including, but not limited to, Annual Base Salary) andcontinue the Executive as a participant in all compensation, benefit and insurance plans in whichthe Executive was participating when the notice giving rise to the dispute was given, until theearlier of (i) the date on which the Employment Period ends or (ii) the date on which the disputeis finally resolved, either by mutual written agreement of the parties or by a final judgment,order or decree of an arbitrator or a court of competent jurisdiction (which is not appealable orwith respect to which the time for appeal therefrom has expired and no appeal has been perfected);*provided*, *however*, that this Section 4(f) shall be applicable in the event of a notice of disputegiven by the Executive only if such notice is given in good faith and the Executive pursues theresolution of such dispute with reasonable diligence. Amounts paid under this Section 4(f) are inaddition to other amounts due under this Agreement and shall not, for example, be offset againstor reduce any amounts otherwise due under Section 5(a) hereof.          **Section 5.****Obligations of the Company upon Termination****. (a)****Good Reason; OtherThan for Cause, Death or Disability****.**If, during the Employment Period, the Company terminatesthe Executive’s employment other than for Cause, death or Disability or the Executive terminatesemployment for Good Reason:(1) the Company shall pay to the Executive, in a lump sum in cash within 30 days after theDate of Termination, the aggregate of the following amounts:     (A) the sum of (i) the Executive’s Annual Base Salary and any accrued vacationpay through the Date of Termination, (ii) the Executive’s Annual Bonus for thefiscal year immediately preceding the fiscal year in which the Date of Terminationoccurs if such bonus has not been paid as of the Date of Termination, and (iii) theExecutive’s business expenses that have not been reimbursed by the Company as of theDate of Termination that were incurred by the Executive prior to the Date ofTermination in accordance with the applicable Company policy (the sum of the amountsdescribed in subclauses (i) through (iii), the “Accrued Obligations”);     (B) the product of (x) the higher of (I) the Recent Annual Bonus and (II) theAnnual Bonus paid or payable, including any bonus or portion thereof that has beenearned but deferred (and annualized for any fiscal year consisting of less than 12full months or during which the Executive was employed for less than 12 fullmonths), for the most recently completed fiscal year during the Employment Period,if any (such higher amount, the “Highest Annual Bonus”) and (y) a fraction, thenumerator of which is the number of days in the current fiscal year through the Dateof Termination and the denominator of which is 365; and
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     (C) an amount equal to two and one-half times the sum of (1) the Executive’sAnnual Base Salary, (2) the Highest Annual Bonus and (3) the Company’s contributionon behalf of the Executive to the Company’s Profit Sharing Retirement Plan (orsuccessor plan) for the year ending immediately prior to the plan year during whichthe Date of Termination occurs;(2) for eighteen months after the Executive’s Date of Termination, or such longer period asmay be provided by the terms of the appropriate plan, program, practice or policy, but, tothe extent required in order to comply with Section 409A, in no event beyond the end of thesecond calendar year that begins after the Executive’s “separation from service” within themeaning of Section 409A (the applicable period hereinafter referred to as the “BenefitContinuation Period”), the Company shall continue benefits to the Executive and/or theExecutive’s family at least equal to, and at the after-tax same cost to the Executive and/orthe Executive’s family, as those that would have been provided to them in accordance withthe plans, programs, practices and policies described in Section 3(b)(4) if the Executive’semployment had not been terminated or, if more favorable to the Executive, as in effectgenerally at any time thereafter with respect to other peer executives of the Company andthe Affiliated Companies and their families; *provided*, *however*, that, if the Executivebecomes reemployed with another employer and is eligible to receive such benefits underanother employer provided plan, the medical and other welfare benefits described hereinshall be secondary to those provided under such other plan during such applicable period ofeligibility. The Executive’s entitlement to COBRA continuation coverage under Section 4980Bof the Code (“COBRA Coverage”) shall not be offset by the provision of benefits under thisSection 5(a)(2) and the period of COBRA Coverage shall commence at the end of the BenefitContinuation Period. For purposes of determining eligibility (but not the time ofcommencement of benefits) of the Executive for retiree benefits pursuant to such plans,practices, programs and policies, the Executive shall be considered to have remainedemployed until the end of the Benefit Continuation Period and to have retired on the lastday of such period; and(3) to the extent not theretofore paid or provided, the Company shall timely pay or provideto the Executive any Other Benefits (as defined in Section 6).Notwithstanding the foregoing provisions of this Section 5(a), to the extent required in order tocomply with Section 409A of the Code, cash amounts that would otherwise be payable under thisSection 5(a) during the six-month period immediately following the Date of Termination shallinstead be paid, with interest on any delayed payment at the applicable federal rate provided forin Section 7872(f)(2)(A) of the Code (“Interest”), on the first business day after the date that issix months following the Executive’s “separation from service” within the meaning of Section 409Aof the Code.Notwithstanding the foregoing, the Company’s obligations to pay or provide any amounts or benefitsrequired by Section 5(a)(1)(c) or (a)(2) shall be conditioned on the Executive signing a generalrelease of claims in favor of the Company and its affiliates in the form attached hereto as ExhibitA and the expiration of any revocation period provided for in such release, within sixty (60) daysfollowing the Date of Termination.
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          (b) **Death****.**Except as set forth in Section 4(a), if the Executive’s employment isterminated by reason of the Executive’s death during the Employment Period, the Company shallprovide the Executive’s estate or beneficiaries with the Accrued Obligations and the timely paymentor delivery of the Other Benefits, and shall have no other severance obligations under thisAgreement. The Accrued Obligations shall be paid to the Executive’s estate or beneficiary, asapplicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to theprovision of the Other Benefits, the term “Other Benefits” as utilized in this Section 5(b) shallinclude, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled toreceive, benefits at least equal to the most favorable benefits provided by the Company and theAffiliated Companies to the estates and beneficiaries of peer executives of the Company and theAffiliated Companies under such plans, programs, practices and policies relating to death benefits,if any, as in effect with respect to other peer executives and their beneficiaries at any timeduring the 120-day period immediately preceding the Effective Date or, if more favorable to theExecutive’s estate and/or the Executive’s beneficiaries, as in effect on the date of theExecutive’s death with respect to other peer executives of the Company and the Affiliated Companiesand their beneficiaries.          (c) **Disability****.**Except as set forth in Section 4(a), if the Executive’s employment isterminated by reason of the Executive’s Disability during the Employment Period, the Company shallprovide the Executive with the Accrued Obligations and the timely payment or delivery of the OtherBenefits, and shall have no other severance obligations under this Agreement. The AccruedObligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date ofTermination, *provided*that to the extent required in order to comply with Section 409A of the Code,amounts and benefits to be paid or provided under this Section 5(c) shall be paid, with Interest,or provided to the Executive on the first business day after the date that is six months followingthe Executive’s “separation from service” within the meaning of Section 409A of the Code. Withrespect to the provision of the Other Benefits, the term “Other Benefits” as utilized in thisSection 6(c) shall include, and the Executive shall be entitled after the Disability Effective Dateto receive, disability and other benefits at least equal to the most favorable of those generallyprovided by the Company and the Affiliated Companies to disabled executives and/or their familiesin accordance with such plans, programs, practices and policies relating to disability, if any, asin effect generally with respect to other peer executives and their families at any time during the120-day period immediately preceding the Effective Date or, if more favorable to the Executiveand/or the Executive’s family, as in effect at any time thereafter generally with respect to otherpeer executives of the Company and the Affiliated Companies and their families.          (d) **Cause; Other Than for Good Reason****.**If the Executive’s employment is terminatedfor Cause during the Employment Period, the Company shall provide the Executive with theExecutive’s Annual Base Salary through the Date of Termination, and the timely payment or deliveryof the Other Benefits, and shall have no other severance obligations under this Agreement. If theExecutive voluntarily terminates employment during the Employment Period, excluding a terminationfor Good Reason, the Company shall provide to the Executive the Accrued Obligations and the timelypayment or delivery of the Other Benefits, and shall have no other severance obligations under thisAgreement. In such case, all the Accrued Obligations shall be paid to the Executive in a lump sumin cash within 30 days of the Date of Termination, *provided*that to the extent required in order tocomply with Section 409A of the Code, amounts
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and benefits to be paid or provided under this sentence of Section 5(d) shall be paid, withInterest, or provided to the Executive on the first business day after the date that is six monthsfollowing the Executive’s “separation from service” within the meaning of Section 409A of the Code.          **Section 6.****Non-exclusivity of Rights****.**Nothing in this Agreement shall prevent orlimit the Executive’s continuing or future participation in any plan, program, policy or practiceprovided by the Company or the Affiliated Companies and for which the Executive may qualify, nor,subject to Section 11(f), shall anything herein limit or otherwise affect such rights as theExecutive may have under any other contract or agreement with the Company or the AffiliatedCompanies. Amounts that are vested benefits or that the Executive is otherwise entitled to receiveunder any plan, policy, practice or program of or any other contract or agreement with the Companyor the Affiliated Companies at or subsequent to the Date of Termination (“Other Benefits”) shall bepayable in accordance with such plan, policy, practice or program or contract or agreement, exceptas explicitly modified by this Agreement. Without limiting the generality of the foregoing, theExecutive’s resignation under this Agreement with or without Good Reason, shall in no way affectthe Executive’s ability to terminate employment by reason of the Executive’s “retirement” under anycompensation and benefits plans, programs or arrangements of the Affiliated Companies, includingwithout limitation any retirement or pension plans or arrangements or to be eligible to receivebenefits under any compensation or benefit plans, programs or arrangements of the AffiliatedCompanies, including without limitation any retirement or pension plan or arrangement of theAffiliated Companies or substitute plans adopted by the Company or its successors, and anytermination which otherwise qualifies as Good Reason shall be treated as such even if it is also a“retirement” for purposes of any such plan. Notwithstanding the foregoing, if the Executivereceives payments and benefits pursuant to Section 5(a) of this Agreement, the Executive shall notbe entitled to any severance pay or benefits under any severance plan, program or policy of theCompany and the Affiliated Companies, unless otherwise specifically provided therein in a specificreference to this Agreement.          **Section 7.****Full Settlement****.**The Company’s obligation to make the payments providedfor in this Agreement and otherwise to perform its obligations hereunder shall not be affected byany set-off, counterclaim, recoupment, defense, or other claim, right or action that the Companymay have against the Executive or others. In no event shall the Executive be obligated to seekother employment or take any other action by way of mitigation of the amounts payable to theExecutive under any of the provisions of this Agreement, and such amounts shall not be reducedwhether or not the Executive obtains other employment. The Company agrees to pay as incurred(within 10 days following the Company’s receipt of an invoice from the Executive; *provided*,*however*, that in no event shall any such payments be made later than the last day of theExecutive’s taxable year following the taxable year in which the fee or expense was incurred), tothe full extent permitted by law, all legal fees and expenses that the Executive may reasonablyincur as a result of any contest (regardless of the outcome thereof) by the Company, the Executiveor others of the validity or enforceability of, or liability under, any provision of this Agreementor any guarantee of performance thereof (including as a result of any contest by the Executiveabout the amount of any payment pursuant to this Agreement), in connection with any tax audit orproceeding to the extent attributable to the application of Section 4999 or 409A of the Code to anypayment or benefit provided hereunder or otherwise by
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the Company or any Affiliated Company or otherwise relating to the Executive’s employment, ortermination from employment, with the Company or any Affiliated Company, plus, in each case,Interest.          **Section 8.****Certain Additional Payments by the Company****.**          (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below,in the event it shall be determined that any Payment would be subject to the Excise Tax, then theExecutive shall be entitled to receive an additional payment (the “Gross-Up Payment”) in an amountsuch that, after payment by the Executive of all taxes (and any interest or penalties imposed withrespect to such taxes), including, without limitation, any income taxes (and any interest andpenalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, butexcluding any income taxes and penalties imposed pursuant to Section 409A of the Code, theExecutive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon thePayments. Notwithstanding the foregoing provisions of this Section 8(a), if it shall be determinedthat the Executive is entitled to the Gross-Up Payment, but that the Parachute Value of allPayments does not exceed 110% of the Safe Harbor Amount, then no Gross-Up Payment shall be made tothe Executive and the amounts payable under this Agreement shall be reduced so that the ParachuteValue of all Payments, in the aggregate, equals the Safe Harbor Amount (the “Capped Benefit”). Thereduction of the amounts payable hereunder, if applicable, shall be made by first reducing thepayments under Section 5(a)(1)(C), unless an alternative method of reduction is elected by theExecutive, and in any event shall be made in such a manner as to maximize the Value of all Paymentsactually made to the Executive. For purposes of reducing the Payments to the Safe Harbor Amount,only amounts payable under this Agreement (and no other Payments) shall be reduced. If thereduction of the amount payable under this Agreement would not result in a reduction of theParachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Agreementshall be reduced pursuant to this Section 8(a). The Company’s obligation to make Gross-Up Paymentsunder this Section 8 shall not be conditioned upon the Executive’s termination of employment.          (b) Subject to the provisions of Section 8(c), all determinations required to be made underthis Section 8, including whether and when a Gross-Up Payment is required, the amount of suchGross-Up Payment and the assumptions to be utilized in arriving at such determination, shall bemade by a nationally recognized certified public accounting firm designated by the Executive andreasonably acceptable to the Company (the “Accounting Firm”). The Accounting Firm shall providedetailed supporting calculations both to the Company and the Executive within 15 business days ofthe receipt of notice from the Executive that there has been a Payment or such earlier time as isrequested by the Company. In the event that the Accounting Firm is serving as accountant orauditor for the individual, entity or group effecting the Change of Control, the Executive mayappoint another nationally recognized accounting firm to make the determinations required hereunder(which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees andexpenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, asdetermined pursuant to this Section 8, shall be paid by the Company to the Executive within 5 daysof the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firmshall be binding upon the Company and the Executive. As a result of the uncertainty in theapplication of Section 4999 of the Code at the time of the initial determination by the AccountingFirm hereunder, it is
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possible that Gross-Up Payments that will not have been made by the Company should have beenmade (the “Underpayment”), consistent with the calculations required to be made hereunder. In theevent the Company exhausts its remedies pursuant to Section 8(c) and the Executive thereafter isrequired to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of theUnderpayment that has occurred (including, if such redetermination causes the Capped Benefit to nolonger apply, the full amount of the Excise Tax) and any such Underpayment (plus any interest,penalties or additions payable by the Executive with respect to such Underpayment) shall bepromptly 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 RevenueService that, if successful, would require the payment by the Company of the Gross-Up Payment.Such notification shall be given as soon as practicable, but no later than 10 business days afterthe Executive is informed in writing of such claim. The Executive shall apprise the Company of thenature of such claim and the date on which such claim is requested to be paid. The Executive shallnot pay such claim prior to the expiration of the 30-day period following the date on which theExecutive gives such notice to the Company (or such shorter period ending on the date that anypayment of taxes with respect to such claim is due). If the Company notifies the Executive inwriting prior to the expiration of such period that the Company desires to contest such claim, theExecutive shall:(1) give the Company any information reasonably requested by the Company relating to suchclaim,(2) take such action in connection with contesting such claim as the Company shallreasonably request in writing from time to time, including, without limitation, acceptinglegal representation with respect to such claim by an attorney reasonably selected by theCompany,(3) cooperate with the Company in good faith in order effectively to contest such claim, and(4) permit the Company to participate in any proceedings relating to such claim;*provided*, *however*, that the Company shall bear and pay directly all costs and expenses (includingadditional interest and penalties) incurred in connection with such contest, and shall indemnifyand hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (includinginterest and penalties) imposed as a result of such representation and payment of costs andexpenses. Without limitation on the foregoing provisions of this Section 8(c), the Company shallcontrol all proceedings taken in connection with such contest, and, at its sole discretion, maypursue or forgo any and all administrative appeals, proceedings, hearings and conferences with theapplicable taxing authority in respect of such claim and may, at its sole discretion, either paythe tax claimed to the appropriate taxing authority on behalf of the Executive and direct theExecutive to sue for a refund or contest the claim in any permissible manner, and the Executiveagrees to prosecute such contest to a determination before any administrative tribunal, in a courtof 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
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the Executive to sue for a refund, the Company shall indemnify and hold the Executive harmless, onan after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposedwith respect to such payment or with respect to any imputed income in connection with such payment;and *provided*, *further*, that any extension of the statute of limitations relating to payment oftaxes for the taxable year of the Executive with respect to which such contested amount is claimedto be due is limited solely to such contested amount. Furthermore, the Company’s control of thecontest shall be limited to issues with respect to which the Gross-Up Payment would be payablehereunder, and the Executive shall be entitled to settle or contest, as the case may be, any otherissue 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 ofan amount on the Executive’s behalf pursuant to Section 8(c), the Executive receives any refundwith respect to the Excise Tax to which such Gross-Up Payment relates or with respect to suchclaim, the Executive shall (subject to the Company’s complying with the requirements of Section8(c), if applicable) promptly pay to the Company the amount of such refund (together with anyinterest paid or credited thereon after taxes applicable thereto). If, after payment by theCompany of an amount on the Executive’s behalf pursuant to Section 8(c), a determination is madethat the Executive shall not be entitled to any refund with respect to such claim and the Companydoes not notify the Executive in writing of its intent to contest such denial of refund prior tothe expiration of 30 days after such determination, then the amount of such payment shall offset,to the extent thereof, the amount of Gross-Up Payment required to be paid.          (e) Notwithstanding any other provision of this Section 8, the Company may, in its solediscretion, withhold and pay over to the Internal Revenue Service or any other applicable taxingauthority, for the benefit of the Executive, all or any portion of any Gross-Up Payment, and theExecutive hereby consents to such withholding.          (f) Definitions. The following terms shall have the following meanings for purposesof this Section 8.          (i) “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, together withany interest or penalties imposed with respect to such excise tax.          (ii) “Parachute Value” of a Payment shall mean the present value as of the date of the changeof control for purposes of Section 280G of the Code of the portion of such Payment that constitutesa “parachute payment” under Section 280G(b)(2), as determined by the Accounting Firm for purposesof determining whether and to what extent the Excise Tax will apply to such Payment.          (iii) A “Payment” shall mean any payment or distribution in the nature of compensation (withinthe meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Executive, whether paidor payable pursuant to this Agreement or otherwise.          (iv) The “Safe Harbor Amount” means 2.99 times the Executive’s “base amount,” within themeaning of Section 280G(b)(3) of the Code.
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          (v) “Value” of a Payment shall mean the economic present value of a Payment as of the date ofthe change of control for purposes of Section 280G of the Code, as determined by the AccountingFirm using the discount rate required by Section 280G(d)(4) of the Code.          **Section 9.****Confidential Information****.**The Executive shall hold in a fiduciary capacityfor the benefit of the Company all secret or confidential information, knowledge or data relatingto the Company or the Affiliated Companies, and their respective businesses, which information,knowledge or data shall have been obtained by the Executive during the Executive’s employment bythe Company or the Affiliated Companies and which information, knowledge or data shall not be orbecome public knowledge or known within the relevant trade or industry (other than by acts by theExecutive or representatives of the Executive in violation of this Agreement). After terminationof the Executive’s employment with the Company, the Executive shall not, without the prior writtenconsent of the Company or as may otherwise be required by law or legal process or by anyadministrative or legislative body (including any committee thereof) with actual or apparentjurisdiction to order such information, knowledge or data to be disclosed, and then only to theextent required, after prompt notice, if permitted by law, to the Company of any such order, or inconnection with any litigation involving this Agreement, communicate or divulge any suchinformation, knowledge or data to anyone other than the Company and those persons designated by theCompany. In no event shall an asserted violation of the provisions of this Section 9 constitute abasis for deferring or withholding any amounts otherwise payable to the Executive under thisAgreement.          **Section 10.****Successors****.**(a) This Agreement is personal to the Executive, and,without the prior written consent of the Company, shall not be assignable by the Executive otherthan by will or the laws of descent and distribution. This Agreement shall inure to the benefit ofand be enforceable by the Executive’s legal representatives.          (b) This Agreement shall inure to the benefit of and be binding upon the Company and itssuccessors and assigns. Except as provided in Section 10(c), without the prior written consent ofthe Executive this Agreement shall not be assignable by the Company.          (c) The Company 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 theCompany to assume expressly and agree to perform this Agreement in the same manner and to the sameextent that the Company would be required to perform it if no such succession had taken place.“Company” means the Company as hereinbefore defined and any successor to its business and/or assetsas aforesaid that assumes and agrees to perform this Agreement by operation of law or otherwise.          **Section 11.****Miscellaneous****.**(a) This Agreement shall be governed by and construed inaccordance with the laws of the State of New York, without reference to principles of conflict oflaws. The captions of this Agreement are not part of the provisions hereof and shall have no forceor effect. This Agreement may not be amended or modified other than by a written agreementexecuted by the parties hereto or their respective successors and legal representatives.
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          (b) All notices and other communications hereunder shall be in writing and shall be given byhand delivery to the other party or by registered or certified mail, return receipt requested,postage prepaid, addressed as follows:          if to the Executive:At the most recent address on file at the Company.          if to the Company:KBW, Inc.