perform his services at the headquarters of the Company in New York, New York. In addition,the Company shall cause the Executive to be appointed as a member of the Board of Directors of theCompany (the “Board of Directors”), and shall nominate the Executive for election andre-election to the Board of Directors as and when the Executive’s term expires while the Executiveremains employed under this Agreement.          (ii) During the Employment Period, and excluding any periods of vacation and sick leave towhich the Executive is entitled, the Executive agrees to devote substantially all of his attentionand time during 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 toserve on corporate, civic or charitable boards or committees, deliver lectures, fulfill speakingengagements or teach at educational institutions and manage personal investments, so long as suchactivities do not significantly interfere with the performance of the Executive’s responsibilitiesas an employee of the Company in accordance with this Agreement. It is expressly understood andagreed that to the extent that any such activities have been conducted by the Executive prior tothe Effective Date, the continued conduct of such activities (or the conduct of activities similarin nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed tointerfere with the performance of the Executive’s responsibilities to the Company.          (b) Compensation (i) Base Salary. During the Employment Period, theExecutive shall receive an annual base salary (“Annual Base Salary”) of not less than theExecutive’s annual base salary as in effect immediately prior to the Effective Date, in accordancewith the Company’s normal payroll policies. The Executive’s Annual Base Salary shall be reviewedfor increase (but not decrease) at least annually by the Compensation Committee of the Board ofDirectors (the “Compensation Committee”) pursuant to its normal performance review policiesfor senior executives. Any increase in Annual Base Salary shall not serve to limit or reduce anyother obligation to the Executive under this Agreement. Annual Base Salary shall not be reducedafter any increase and the term Annual Base Salary as utilized in this Agreement shall refer toAnnual Base Salary as so increased.          (ii) Annual Bonus. In addition to the Annual Base Salary, the Executive shall beeligible to be awarded, for each fiscal year of the Company or portion of a fiscal year endingduring the Employment Period, an annual bonus (the “Annual Bonus”) pursuant to the terms ofthe Company’s Annual Incentive Plan, as in effect from time to time. “Annual Bonus” for any givenfiscal year shall mean the amount, if any, of annual bonus earned by the Executive with respect tothe applicable fiscal year of the Company, including amounts deferred and/or paid in the form ofequity compensation. Each such Annual Bonus shall be paid no later than two and a half monthsafter the end of the fiscal year for which the Annual Bonus is awarded, unless the Executive shallelect to defer the receipt of such Annual Bonus pursuant to an arrangement that meets therequirements of Section 409A of the Code.          (iii) Other Benefits. During the Employment Period: (A) the Executive shall beentitled to participate in incentive, savings and retirement plans, practices, policies andprograms of the Company to the same extent as provided generally to similarly situated
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executives of the Company; and (B) the Executive and/or the Executive’s family, as the casemay be, shall be eligible for participation in, and shall receive benefits under, welfare benefitplans, practices, policies and programs provided by the Company (including, without limitation,medical, prescription, dental, disability, employee life insurance, group life insurance,accidental death and travel accident insurance plans and programs) to the same extent as providedgenerally to similarly situated executives of the Company.          (iv) 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.          (v) 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.          3. Termination of Employment. (a) Death or Disability. The Executive’semployment shall terminate automatically upon the Executive’s death during the Employment Period.If the Company determines in good faith that the Disability (as defined below) of the Executive hasoccurred during the Employment Period, it may provide the Executive with written notice inaccordance with Section 11(b) of this Agreement of its intention to terminate the Executive’semployment. In such event, the Executive’s employment with the Company shall terminate effectiveon the 30th day after receipt of such notice by the Executive (the “Disability EffectiveDate”), provided that, within the 30 days after such receipt, the Executive shall nothave returned to full-time performance of the Executive’s duties. For purposes of this Agreement,“Disability” shall mean the absence of the Executive from the Executive’s duties with theCompany on a full-time basis for 180 consecutive business days as a result of incapacity due tomental or physical illness which is determined to be total and permanent by a physician selected bythe Company or its insurers and acceptable to the Executive or the Executive’s legalrepresentative.          (b) Cause. The Company may terminate the Executive’s employment during the EmploymentPeriod either with or without Cause. For purposes of this Agreement, “Cause” shall mean:     (i) the willful and continued failure substantially to perform the Executive’s duties(other than as a result of physical or mental illness or injury), after the Chief ExecutiveOfficer of the Company delivers to the Executive a written demand for substantialperformance that specifically identifies the manner in which the Chief Executive Officer ofthe Company believes that the Executive has not substantially performed the Executive’sduties; or     (ii) 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
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     (iii) conviction of, or plea of guilty or nolo contendere to, a charge of commission ofa felony.For purposes of this provision, 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 given pursuant to a resolution dulyadopted by the Board of Directors or based upon the advice of counsel for the Company shall beconclusively presumed to be done, or omitted to be done, by the Executive in good faith and in thebest interests of the Company. The cessation of employment of the Executive shall not be deemed tobe for Cause unless and until there shall have been delivered to the Executive a copy of aresolution duly adopted by the affirmative vote of not less than two-thirds of the entiremembership of the Board of Directors at a meeting of the Board of Directors called and held forsuch purpose (after reasonable notice is provided to the Executive and the Executive is given anopportunity, together with counsel, to be heard before the Board of Directors), finding that, inthe good faith opinion of the Board of Directors, the Executive is guilty of the conduct describedin subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.          (c) Good Reason. The Executive’s employment may be terminated by the Executive withor without Good Reason. For purposes of this Agreement, “Good Reason” shall mean in theabsence of the prior written consent of the Executive:     (i) the failure of the Company to nominate the Executive for election and re-electionto the Board of Directors, or the assignment to the Executive of any duties inconsistent inany respect with the Executive’s job description, or any other action by the Company thatresults in a diminution in the Executive’s position, authority, duties or responsibilities,other than an isolated, insubstantial and inadvertent action that is not taken in bad faithand is remedied by the Company promptly after receipt of notice thereof from the Executive;     (ii) any failure by the Company to comply with any of the provisions of Section 2(b) ofthis Agreement, other than an isolated, insubstantial and inadvertent failure not occurringin bad faith and which is remedied by the Company promptly after receipt of notice thereofgiven by the Executive;     (iii) any requirement by the Company that the Executive’s services be renderedprimarily at a location or locations other than the location set forth in this Agreement;     (iv) any purported termination by the Company of the Executive’s employment otherwisethan as expressly permitted by this Agreement; or     (v) any failure by the Company to comply with and satisfy Section 9(c) of thisAgreement.          (d) Notice of Termination. Any termination by the Company for Cause, or by theExecutive for Good Reason, shall be communicated by Notice of Termination (as defined below) to theother party hereto given in accordance with Section 11(b) of this Agreement. For purposes of thisAgreement, a “Notice of Termination” means a written notice which (i)
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indicates the specific termination provision in this Agreement relied upon, (ii) 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 (iii) if theDate of Termination (as defined below) is other than the date of receipt of such notice, specifiesthe termination date (which date shall be not more than 30 days after the giving of such notice).The failure by the Executive or the Company to set forth in the Notice of Termination any fact orcircumstance which contributes to a showing of Good Reason or Cause shall not waive any right ofthe Executive 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 rights hereunder.          (e) Date of Termination. “Date of Termination” means (i) if the Executive’semployment is terminated by the Company for Cause, or by the Executive with or without Good Reason,the date of receipt of the Notice of Termination or any later date specified therein within 30 daysof such notice, as the case may be, (ii) if the Executive’s employment is terminated by the Companyother than for Cause or Disability, the Date of Termination shall be the date on which the Companynotifies the Executive of such termination and (iii) if the Executive’s employment is terminated byreason of death or Disability, the Date of Termination shall be the date of death of the Executiveor the Disability Effective Date, as the case may be. Notwithstanding the foregoing, in no eventshall the Date of Termination occur until the Executive experiences a “separation from service”within the meaning of Section 409A of the Code, and the date on which such separation from servicetakes place shall be the “Date of Termination.”          4. Obligations of the Company upon Termination. (a) Good Reason; Other Than forCause, Death or Disability. If, during the Employment Period, the Company shall terminate theExecutive’s employment other than for Cause, death or Disability or the Executive shall terminateemployment for Good Reason:     (i) the Company shall pay to the Executive the aggregate of the following amounts in alump sum in cash within 30 days after the Date of Termination:     A. the sum of (1) the Executive’s Annual Base Salary and any accrued vacationpay through the Date of Termination, (2) the Executive’s Annual Bonus for the fiscalyear immediately preceding the fiscal year in which the Date of Termination occursif such bonus has not been paid as of the Date of Termination, and (3) 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, in each case, to theextent not theretofore paid (the sum of the amounts described in clauses (1) through(3), shall be hereinafter referred to as the “Accrued Obligations”);provided, that notwithstanding the foregoing, if the Executive has made anirrevocable election under any deferred compensation arrangement subject to Section409A of the Code to defer any portion of the Annual Base Salary or Annual Bonusdescribed in clause (1) or clause (3) above, then for all purposes of this Section 4(including, without limitation, Sections 4(b) through 4(d)), such deferral election,and the terms of the applicable arrangement
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shall apply to the same portion of the amount described in such clause (1) orclause (3), and such portion shall not be considered as part of the “AccruedObligations” but shall instead be an “Other Benefit” (as defined below); and     B. the product of (1) the highest Annual Bonus earned by the Executive for thelast three full fiscal years of the Company ending prior to the year in which theDate of Termination occurs (including any amounts deferred or satisfied with equityaward grants) (the “Highest Annual Bonus”) and (2) a fraction, the numeratorof which is the number of days in the fiscal year in which the Date of Terminationoccurs through the Date of Termination, and the denominator of which is 365 (the“Pro-rata Bonus”); and     C. an amount equal to three times the sum of (1) the Executive’s Annual BaseSalary, (2) the Highest Annual Bonus and (3) the Company’s contribution on behalf ofthe Executive to the Company’s Profit Sharing Retirement Plan (or successor plan)for the plan year ending immediately prior to the plan year during which the Date ofTermination occurs; and     (ii) during the three-year period following the Date of Termination or such longerperiod as may be provided by the terms of the appropriate plan, program, practice or policy,but, to the extent required in order to comply with Section 409A, in no event beyond the endof the second calendar year that begins after the Executive’s “separation from service”within the meaning of Section 409A (the “Benefit Continuation Period”), theExecutive and/or the Executive’s family shall be provided with welfare benefits at least asfavorable, and at the after-tax same cost to the Executive and/or the Executive’s family, asthose that would have been provided to them under Section 2(b)(iii)(B) of this Agreement ifthe Executive’s employment had continued until the end of the Continuation Period;provided, however, that during any period when the Executive is eligible toreceive such benefits under another employer-provided plan, the benefits provided by theCompany under this Section 4(a)(ii) may be made secondary to those provided under such otherplan. The Executive’s entitlement to COBRA continuation coverage under Section 4980B of theCode (“COBRA Coverage”) shall not be offset by the provision of benefits under thisSection 4(a)(ii) 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     (iii) to the extent not theretofore paid or provided, the Company shall timely pay orprovide to the Executive any other amounts or benefits required to be paid or provided orwhich the Executive is eligible to receive under any plan, program, policy or practice orcontract or agreement of the Company and its affiliated companies through the Date ofTermination (such other amounts and benefits shall be hereinafter referred to as the“Other Benefits”).
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Notwithstanding the foregoing provisions of this Section 4(a), to the extent required in order tocomply with Section 409A of the Code, cash amounts that would otherwise be payable under thisSection 4(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 datethat is six months following the Executive’s “separation from service” within the meaning ofSection 409A.          (b) Death. If the Executive’s employment is terminated by reason of the Executive’sdeath during the Employment Period, this Agreement shall terminate without further obligations tothe Executive’s legal representatives under this Agreement, other than for payment of AccruedObligations and the timely payment or provision of Other Benefits. In addition, the Executiveshall be entitled to the Pro-rata Bonus. Accrued Obligations and the Pro-rata Bonus shall be paidto the Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days ofthe Date of Termination. With respect to the provision of Other Benefits, the term Other Benefitsas utilized in this Section 4(b) shall include death benefits as in effect on the date of theExecutive’s death with respect to similarly situated executives of the Company and theirbeneficiaries.          (c) Disability. If the Executive’s employment is terminated by reason of theExecutive’s Disability during the Employment Period, this Agreement shall terminate without furtherobligations to the Executive, other than for payment of Accrued Obligations and the timely paymentor provision of Other Benefits. In addition, the Executive shall be entitled to the Pro-rataBonus. Accrued Obligations and the Pro-rata Bonus shall be paid to the Executive in a lump sum incash within 30 days of the Date of Termination, provided, that to the extent required inorder to comply with Section 409A of the Code, amounts and benefits to be paid or provided underthis Section 4(c) shall be paid, with Interest, or provided to the Executive on the first businessday after the date that is six months following the Executive’s “separation from service” withinthe meaning of Section 409A. With respect to the provision of Other Benefits, the term OtherBenefits as utilized in this Section 4(c) shall include, and the Executive shall be entitled afterthe Disability Effective Date to receive, disability and other benefits as in effect at any timethereafter generally with respect to similarly situated executives of the Company.          (d) Cause; Other than for Good Reason. If the Executive’s employment shall beterminated for Cause or the Executive terminates his employment other than for Good Reason duringthe Employment Period, this Agreement shall terminate without further obligations to the Executiveother than the obligation to pay to the Executive (i) the Accrued Obligations through the Date ofTermination and (ii) Other Benefits, in each case to the extent theretofore unpaid. 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 ofthe Code, amounts and benefits to be paid or provided under this sentence of this Section 4(d)shall be paid, with Interest, or provided to the Executive on the first business day after the datethat is six months following the Executive’s “separation from service” within the meaning ofSection 409A.          5. Non-exclusivity of Rights. Except as specifically provided, nothing in thisAgreement shall prevent or limit the Executive’s continuing or future participation in any plan,
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program, policy or practice provided by the Company or any of its affiliated companies and forwhich the Executive may qualify, nor shall anything herein limit or otherwise affect such rights asthe Executive may have under any contract or agreement with the Company or any of its affiliatedcompanies. Amounts that are vested benefits or which the Executive is otherwise entitled toreceive under any plan, policy, practice or program of or any contract or agreement with theCompany or any of its affiliated companies at or subsequent to the Date of Termination shall bepayable in accordance with such plan, policy, practice or program or contract or agreement exceptas explicitly modified by this Agreement.          6. Full Settlement. The Company’s obligation to make the payments provided for in,and otherwise to perform its obligations under, this Agreement shall not be affected by anyset-off, counterclaim, recoupment, defense or other claim, right or action that the Company mayhave against the Executive or others. In no event shall the Executive be obligated to seek otheremployment or take any other action by way of mitigation of the amounts payable to the Executiveunder any of the provisions of this Agreement and, except as specifically provided in Section4(a)(ii), such amounts shall not be reduced, regardless of whether the Executive obtains otheremployment.          7. Certain Additional Payments by the Company. (a) Anything in this Agreement to thecontrary notwithstanding and except as set forth below, in the event it shall be determined thatany Payment (as defined below) would be subject to the Excise Tax (as defined below), then theExecutive shall be entitled to receive an additional payment (the “Gross-Up Payment”) in anamount such that, after payment by the Executive of all taxes (and any interest or penaltiesimposed with respect to such taxes), including, without limitation, any income taxes (and anyinterest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-UpPayment, but excluding any income taxes and penalties imposed pursuant to Section 409A of the Code,the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon thePayments. Notwithstanding the foregoing provisions of this Section 7(a), if it shall be determinedthat the Executive is entitled to the Gross-Up Payment, but that the Parachute Value (as definedbelow) of all Payments does not exceed 110% of the Safe Harbor Amount, then no Gross-Up Paymentshall be made to the Executive and the amounts payable under this Agreement shall be reduced sothat the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount (asdefined below). The reduction of the amounts payable hereunder, if applicable, shall be made byreducing the payments and benefits under the following sections in the following order: (i) Section4(a)(i)(C), (ii) Section 4(a)(i)(B) and (iii) Section 4(a)(ii). For purposes of reducing thePayments to the Safe Harbor Amount, only amounts payable under this Agreement (and no otherPayments) shall be reduced. If the reduction of the amount payable under this Agreement would notresult in a reduction of the Parachute Value of all Payments to the Safe Harbor Amount, no amountspayable under the Agreement shall be reduced pursuant to this Section 7(a). The Company’sobligation to make Gross-Up Payments under this Section 7 shall not be conditioned upon theExecutive’s termination of employment.          (b) Subject to the provisions of Section 7(c), all determinations required to be made underthis Section 7, 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
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designated by the Executive and reasonably acceptable to the Company (the “AccountingFirm”). The Accounting Firm shall provide detailed supporting calculations both to the Companyand the Executive within 15 business days of the receipt of notice from the Executive that therehas been a Payment or such earlier time as is requested by the Company. All fees and expenses ofthe Accounting Firm shall be borne solely by the Company. 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 possible that Gross-Up Payments that will not have been made by the Companyshould have been made (the “Underpayment”), consistent with the calculations required to bemade hereunder. In the event the Company exhausts its remedies pursuant to Section 7(c) and theExecutive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shalldetermine the amount of the Underpayment that has occurred and any 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 ten 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:     (i) give the Company any information reasonably requested by the Company relating tosuch claim,     (ii) 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,     (iii) cooperate with the Company in good faith in order effectively to contest suchclaim, and     (iv) permit the Company to participate in any proceedings relating to such claim;provided, however, that the Company shall bear and pay directly all costs andexpenses (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 orincome tax (including interest and penalties) imposed as a result of such representation andpayment of costs and expenses. Without limitation on the foregoing provisions of this Section7(c), the Company shall control all proceedings taken in connection with such contest, and, at itssole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings and
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conferences with the applicable taxing authority in respect of such claim and may, at its solediscretion, either pay the tax claimed to the appropriate taxing authority on behalf of theExecutive and direct the Executive to sue for a refund or contest the claim in any permissiblemanner, and the Executive agrees to prosecute such contest to a determination before anyadministrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, asthe Company shall determine; provided, however, that, if the Company pays suchclaim and directs the Executive to sue for a refund, the Company shall indemnify and hold theExecutive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest orpenalties) imposed with respect to such payment or with respect to any imputed income in connectionwith such payment; and provided, further, that any extension of the statute oflimitations relating to payment of taxes for the taxable year of the Executive with respect towhich 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 whichthe Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle orcontest, as the case may be, any other issue raised by the Internal Revenue Service or any othertaxing 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 7(c), the Executive becomes entitled toreceive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or withrespect to such claim, the Executive shall (subject to the Company’s complying with therequirements of Section 7(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, afterpayment by the Company of an amount on the Executive’s behalf pursuant to Section 7(c), adetermination is made that the Executive shall not be entitled to any refund with respect to suchclaim and the Company does not notify the Executive in writing of its intent to contest such denialof refund prior to the expiration of 30 days after such determination, then the amount of suchpayment 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 7, shall be paid by theCompany 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 ofthe 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 remittedto the Internal Revenue Service or any other applicable taxing authority or, in the case of amountsrelating to a claim described in Section 7(c) that does not result in the remittance of anyfederal, state, local and foreign income, excise, social security and other taxes, the calendaryear in which the claim is finally settled or otherwise resolved. Notwithstanding any otherprovision of this Section 7, the Company may, in its sole discretion, withhold and pay over to theInternal Revenue Service or any other applicable taxing authority, for the benefit of theExecutive, all or any portion of any Gross-Up Payment, and the Executive hereby consents to suchwithholding.          (f) Definitions. The following terms shall have the following meanings for purposesof this Section 7:
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     (i) “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code,together with any interest or penalties imposed with respect to such excise tax.     (ii) “Parachute Value” of a Payment shall mean the present value as of the dateof the change of control for purposes of Section 280G of the Code of the portion of suchPayment that constitutes a “parachute payment” under Section 280G(b)(2), as determined bythe Accounting Firm for purposes of determining whether and to what extent the Excise Taxwill apply to such Payment.     (iii) A “Payment” shall mean any payment, distribution or benefit in the natureof compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefitof the Executive, whether paid or payable pursuant to this Agreement or otherwise.     (iv) The “Safe Harbor Amount” means 2.99 times the Executive’s “base amount,”within the meaning of Section 280G(b)(3) of the Code.          8. Restrictive Covenants. (a) Confidential Information. The Executive shallhold in a fiduciary capacity for the benefit of the Company all secret or confidential information,knowledge or data relating to the Company or any of its affiliated companies, and their respectivebusinesses, which shall have been obtained by the Executive during the Executive’s employment bythe Company or any of its affiliated companies and which shall not be or become public knowledge(other than by acts by the Executive or representatives of the Executive in violation of thisAgreement). After termination of the Executive’s employment with the Company, the Executive shallnot, without the prior written consent of the Company or as may otherwise be required by law orlegal process, communicate or divulge any such information, knowledge or data to anyone other thanthe Company and those designated by it.          (b) Non-competition. While employed by the Company and during the two-year periodfollowing the Executive’s termination of employment with the Company (the “CovenantPeriod”), the Executive shall not:     (i) form, or acquire a five percent or greater equity ownership, voting or profitparticipation interest in, any Competitive Enterprise (as defined below); or     (ii) associate (including, but not limited to, association as an officer, employee,partner, director, consultant, agent or advisor) with any Competitive Enterprise and inconnection with such association engage in, or directly or indirectly manage or supervisepersonnel engaged in, any activity:     A. which is similar or substantially related to any activity in which theExecutive was engaged, in whole or in part, at the Company,     B. for which the Executive had direct or indirect managerial or supervisoryresponsibility at the Company, or     C. which calls for the application of the same or similar specialized knowledgeor skills as those utilized by the Executive in the Executive’s activities
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at the Company, and, in any such case, irrespective of the purpose of theactivity or whether the activity is or was in furtherance of advisory, agency,proprietary or fiduciary business of either the Company or the CompetitiveEnterprise.For purposes of the Executive Covenants (as defined below), a “Competitive Enterprise” is abusiness enterprise that engages in, or owns or controls a significant interest in any entity thatengages in financial services such as investment banking, public or private finance, financialadvisory services, private investing (for anyone other than the Executive and members of theExecutive’s family), merchant banking, asset or hedge fund management, securities brokerage, sales,lending, custody, clearance, settlement or trading. It is the intention of the parties to restrictthe activities of the Executive under this Section 8(b) only to the extent necessary for theprotection of the legitimate business interests of the Company.     (c) Non-Solicitation of Clients.     (i) the Executive hereby agrees that during the Covenant Period, the Executive willnot, in any manner, directly or indirectly, (A) Solicit (as defined below) a Client (asdefined below) to transact business with a Competitive Enterprise or to reduce or refrainfrom doing any business with the Company or (B) interfere with or damage (or attempt tointerfere with or damage) any relationship between the Company and a Client.     (ii) For purposes of this Section 8, the term “Solicit” means any direct orindirect communication of any kind whatsoever, regardless of by whom initiated, inviting,advising, encouraging or requesting any person or entity, in any manner, to take or refrainfrom taking any action.     (iii) For purposes of this Section 8, the term “Client” means any client orprospective client of the Company to whom the Executive provided services, or for whom theExecutive transacted business, or whose identity became known to the Executive in connectionwith the Executive’s relationship with or employment by the Company.          (d) Nonsolicitation of Employees. The Executive hereby agrees that during theCovenant Period, the Executive will not, in any manner, directly or indirectly, Solicit any personwho is an employee of the Company or any of its subsidiaries (or was an employee of the Company orany of its subsidiaries at any time during the six-month period prior to any such solicitation) toresign from the Company or any of its subsidiaries or to apply for or accept employment with anyCompetitive Enterprise.          (e) Transfer of Client Relationships. During the portion of the Covenant Periodfollowing the date of the Executive’s termination of employment, the Executive hereby agrees totake all actions and do all such things as may be reasonably requested by the Company from time totime to maintain for the Company the business, goodwill and business relationships with any of theCompany’s Clients with whom the Executive worked during the Employment Period.          (f) Prior Notice Required. The Executive hereby agrees that prior to acceptingemployment with any other person or entity during the Covenant Period, the Executive
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will provide such prospective employer with written notice of the provisions of thisAgreement, with a copy of such notice delivered simultaneously to the General Counsel of theCompany.     (g) Executive Covenants Generally.     (i) The Executive’s covenants as set forth in this Section 8 are from time to timereferred to herein as the “Executive Covenants.” If any of the Executive Covenantsis finally held to be invalid, illegal or unenforceable (whether in whole or in part), suchExecutive Covenant shall be deemed modified to the extent, but only to the extent, of suchinvalidity, illegality or unenforceability and the remaining Executive Covenants shall notbe affected thereby; provided, however, that if any of the ExecutiveCovenants is finally held to be invalid, illegal or unenforceable because it exceeds themaximum scope determined to be acceptable to permit such provision to be enforceable, suchExecutive Covenant will be deemed to be modified to the minimum extent necessary to modifysuch scope in order to make such provision enforceable hereunder.     (ii) The Executive understands that the Executive Covenants may limit the Executive’sability to earn a livelihood in a business similar to the business of the Company.          (h) Remedies. The Executive acknowledges that the Company would be irreparablyinjured by a violation of this Section 8 and that it is impossible to measure in money the damagesthat will accrue to the Company by reason of a failure by the Executive to perform any of hisobligations under this Section 8. Accordingly, if the Company institutes any action or proceedingto enforce any of the provisions of this Section 8, to the extent permitted by applicable law, theExecutive hereby waives the claim or defense that the Company has an adequate remedy at law, andthe Executive shall not urge in any such action or proceeding the defense that any such remedyexists at law. Furthermore, in addition to other remedies that may be available, the Company shallbe entitled to specific performance and other injunctive relief, without the requirement to postbond.          9. Successors. (a) This Agreement is personal to the Executive and without the priorwritten consent of the Company shall not be assignable by the Executive otherwise than by will orthe laws of descent and distribution. This Agreement shall inure to the benefit of and beenforceable 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.          (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. Asused in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successorto its business and/or assets as aforesaid which assumes and agrees to perform this Agreement byoperation of law, or otherwise. As used in this
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Agreement, the term “affiliated companies” shall include any company controlled by,controlling or under common control with the Company.          10. Attorneys’ Fees. The Company agrees to pay, as incurred (within ten business daysof receipt of an invoice from the Executive), to the fullest extent permitted by law, all legalfees and expenses that the Executive may reasonably incur as a result of any contest by theCompany, the Executive or others of the validity or enforceability of or liability under, orotherwise involving, any provision of this Agreement (whether such contest is between the Companyand the Executive or between either of them and any third party), together with Interest.          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 otherwise than by a written agreementexecuted by the parties hereto or their respective successors and legal representatives.          (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.  787 Seventh Avenue  New York, New York 10019  Attention: Mitchell B. Kleinman, Esq.  Executive Vice President and General Counsel  Facsimile: (212) 541-6668or to such other address as either party shall have furnished to the other in writing in accordanceherewith. Notice and communications shall be effective when actually received by the addressee.          (c) The invalidity or unenforceability of any provision of this Agreement shall not affect thevalidity or enforceability of any other provision of this Agreement.          (d) The Company 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 orregulation.          (e) The Executive’s or the Company’s failure to insist upon strict compliance with anyprovision of this Agreement or the failure to assert any right the Executive or the Company mayhave hereunder, including, without limitation, the right of the Executive to terminate employmentfor Good Reason pursuant to Section 3(c)(i)-(v) of this Agreement, shall not be deemed to be awaiver of such provision or right or any other provision or right of this Agreement.
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          (f) If any compensation or benefits provided by this Agreement may result in the applicationof Section 409A of the Code, the Company shall, in consultation with the Executive, modify theAgreement in the least restrictive manner necessary in order to exclude such compensation from thedefinition of “deferred compensation” within the meaning of such Section 409A or in order to complywith the provisions of Section 409A, other applicable provision(s) of the Code and/or any rules,regulations or other regulatory guidance issued under such statutory provisions and without anydiminution in the value of the payments to the Executive. All reimbursements, legal fee andexpense payments and in-kind benefits provided under this Agreement that constitute deferredcompensation within the meaning of Section 409A of the Code shall be made or provided in accordancewith the requirements of Section 409A of the Code, including, without limitation, that (i) in noevent shall such reimbursements and payments by the Company under this Agreement be made later thanthe end of the calendar year next following the calendar year in which the applicable fees andexpenses were incurred, provided, that the Executive shall have submitted an invoice forsuch fees and expenses at least 10 days before the end of the calendar year next following thecalendar year in which such fees and expenses were incurred; (ii) the amount of suchreimbursements, payments and in-kind benefits that the Company is obligated to pay or provide inany given calendar year shall not affect the reimbursements, payments and in-kind benefits that theCompany is obligated to pay or provide in any other calendar year; (iii) the Executive’s right tohave the Company pay or provide such reimbursements, payments and in-kind benefits may not beliquidated or exchanged for any other benefit; and (iv) in no event shall the Company’s obligationsto make such reimbursements and payments or to provide such in-kind benefits apply later than theExecutive’s remaining lifetime (or if longer, through the 20th anniversary of the Effective Date).          (g) Any provision of this Agreement that by its terms continues after the expiration of theEmployment Period or the termination of the Executive’s employment shall survive in accordance withits terms. From and after the date first written above, except as specifically provided herein,this Agreement shall supersede any other agreement between the parties with respect to the subjectmatter hereof, including, without limitation, the Prior Agreement.[Remainder of page intentionally left blank]
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          IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to theauthorization from its Board of Directors, the Company has caused these presents to be executed inits name on its behalf, all as of the day and year first above written.        ANDREW M. SENCHAK         /s/ Andrew M. Senchak             KBW, INC.         By /s/ Mitchell B. Kleinman        Name:Mitchell B. Kleinman   Title:General Counsel & ExecutiveVice President 
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