Exhibit 10.2


 


FORM OF

AGREEMENT 


 


THIS AGREEMENT, dated as
of December 30, 2005, between Archipelago Holdings, Inc., a Delaware corporation (including
any successor thereto, the “Company”), and the undersigned executive (the “Executive”)
pertains to the Amended and Restated Change in Control Severance Agreement
between the Company and the Executive dated as of June 15, 2004
(the “CIC Agreement”), Executive’s Restricted Stock Units issued under the
Company 2004 Stock Incentive Plan (each an “RSU”) and Executive’s unvested
stock options issued under various Company equity compensation plans (each a “Stock
Option”), effective as of December 30, 2005.


 


WHEREAS, completion of
the mergers (the “Mergers”) contemplated by the Agreement and Plan of Merger,
dated as of April 20, 2005, as amended and restated as of July 20,
2005, and as amended as of October 20, 2005 and as of November 2,
2005, by and among, the New York Stock Exchange, Inc. (the “NYSE”), the
Company, and certain subsidiaries of such entities, is expected to occur during
the first quarter of 2006;


 


WHEREAS, the CIC
Agreement provides, among other things, that if, during the one-year period
following a Change in Control (as defined in the CIC Agreement) such as the
Mergers, the Executive’s employment is terminated by the Company without Cause
or the Executive resigns for Good Reason (as defined in the CIC Agreement), the
Executive will be entitled to receive the benefits described in the Agreement;


 


WHEREAS, the RSUs contain
provisions that provide for the accelerated vesting and delivery of the
underlying Company common stock upon certain terminations without cause or for
good reason following a merger of the Company (such as the Mergers);


 


WHEREAS, the Stock
Options contain provisions that provide for the accelerated vesting thereof
upon certain terminations without cause or for good reason following a merger
of the Company (such as the Mergers);


 


WHEREAS, the NYSE has
consented to the Company’s payment of the amounts set forth in Section 1
below and the other provisions hereof, and to entry into this Agreement by December 31,
2005 in order to ensure that Executive will continue employment with the
combined entity following the Mergers, comply with new Section 409A of the
Internal Revenue Code (which applies to certain arrangements that provide for
the deferral of compensation) and realize significant tax-related cost savings;
and


 


WHEREAS, the Company and
the Executive desire to enter into this Amendment;


 


NOW, THEREFORE, it is
hereby agreed as follows:


 


1.             CIC Agreement.  On December 30, 2005, the Company shall
pay to the Executive a lump sum cash payment in an amount equal to the minimum
amount set forth in Section 4(a)(ii) of the CIC Agreement, or if
greater, two times the sum of the Executive’s (i) current annual salary
plus (ii) annual bonus for 2005 (as provided for in Section 4(a)(ii) of
the CIC Agreement).  Such payment shall
be subject to applicable tax withholding. 
Upon payment


 





















 


of such amount, the CIC Agreement shall terminate and
be of no further force or effect, except that (a) Sections 4(a)(iv) (including
the related definitions in Section 1 of the CIC Agreement) shall continue
to apply to any Company stock options held by Executive as of the date hereof, (b) Sections
4(a)(iii) (relating to benefits continuation) and 4(a)(vi) (relating
to outplacement services) (including the related definitions in Section 1
of the CIC Agreement) shall continue to apply upon Executive’s termination of
employment to the extent provided in the CIC Agreement, provided that, in lieu
of continuation of benefits described in Section 4(a)(iii), the Company
shall pay Executive a cash payment of $30,000, less applicable taxes; (c) Section 5
of the CIC Agreement (relating to the “Gross-Up Payment”) shall continue to
apply, (d) Sections 6, 7 and 11(b) of the CIC Agreement (relating to
tax withholding and dispute resolution) and (e) Section 15 of the CIC
Agreement (relating to covenants not to solicit Company clients and employees
and confidential information) shall continue to apply during Executive’s
employment and following any termination thereof, in each instance as if such
provisions of the CIC Agreement were fully set forth herein.


 


2.             Restricted Stock Unit Vesting and Payment; Tax
Withholding.  On December 30,
2005, all RSUs shall vest in full and no longer be subject to any right of
recapture set forth in the applicable RSU award agreement.  On December 30, 2005, the Company shall
issue to the Executive the number of shares of Company common stock
attributable to such vesting, provided that the Company shall satisfy
applicable tax withholding by reducing the number of shares delivered to the
Executive by the amount of shares having a fair market value equal to the
minimum statutory withholding taxes applicable to the payment of such shares.


 


3.             Stock Options. 
Immediately prior to the consummation of the Mergers, subject to the
Executive’s continued employment with the Company through such date, 75 percent
of each tranche of Stock Options that are then outstanding and unvested shall
become immediately vested and exercisable in full and no longer subject to any
right of recapture set forth in the applicable stock option award agreement
(the “Option Acceleration”).  However, notwithstanding anything to the contrary
contained in this Agreement or the Employment Agreement to the contrary, in the event the Option Acceleration (together
with any other payments under this Agreement or otherwise (the “Payments”))
would constitute “excess parachute payments” under Section 280G of the
Code, the Option Acceleration will be reduced to the extent necessary so
that when aggregated with all other Payments, the Present Value (as defined
below) of the Option Acceleration shall be equal to three (3) times the Executive’s “base amount,” as determined in
accordance with Section 280G of the Code, less $10,000.00 (the “Reduced
Amount”).  If the Option
Acceleration is required to be reduced to result in the Reduced Amount, the
Company shall promptly give the Executive notice to that effect and a copy of
the detailed calculation thereof, and the Executive may then elect, in his sole
discretion, which and how much of the Option Acceleration shall be eliminated
or reduced (as long as after such election the Present Value of the aggregate
Payments equals the Reduced Amount), and shall advise the Company in writing of
his or her election within five days of his receipt of notice.  If no such election is made by the Executive
within such five-day period, the Company may elect which and how much of such Option
Acceleration shall be eliminated or reduced (as long as after such election the
Present Value of the aggregate Payments equals the Reduced Amount) and shall
notify the Executive promptly of such election, provided that if the
consummation of the Mergers occurs prior to the Executive’s and the Company’s
determination under this Section 3, the Executive’s right to exercise the
options that accelerate pursuant to the


 





















 


first sentence of this Section 3 shall be
suspended until such time as such determination shall be made.  “Present Value” means such value determined
in accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the
Code.


 


4.             Successors; Binding Agreement.  This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and on Executive and his
personal or legal representatives and successors.


 


5.             Governing Law.  The
interpretation, construction and performance of this Agreement shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Illinois without regard to the principle of conflicts of laws.


 


6.             Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one and the same
instrument.


 


IN WITNESS WHEREOF, the Executive
and the Company have executed this Amendment (which may be executed in
counterparts, each of which shall be an original and together shall constitute
one document) all as of the day and year first above written.


 


	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARCHIPELAGO HOLDINGS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: