EX-10.18






Exhibit 10.18



This exhibit amends and restates the agreement between KBW, Inc. and the executive that was
included as an exhibit to KBW Inc.’s previously filed periodic reports with the Securities and
Exchange Commission. The agreement was amended and restated as set forth below in order to comply
with certain technical requirements of Section 409A of the Internal Revenue Code.




AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT




          AGREEMENT, dated as of the 31st day of December, 2008 (this “Agreement”), by and
between KBW, Inc., a Delaware corporation (the “Company”), and Mitchell B. Kleinman, Executive Vice
President and General Counsel (the “Executive”).




          WHEREAS, the Board of Directors of the Company (the “Board”), has determined that it is in the
best interests of the Company and its stockholders to assure that the Company will have the
continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined herein). The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties and risks created
by a pending or threatened Change of Control and to encourage the Executive’s full attention and
dedication to the Company in the event of any threatened or pending Change of Control, and to
provide the Executive with compensation and benefits arrangements upon a Change of Control that
ensure that the compensation and benefits expectations of the Executive will be satisfied and that
provide the Executive with compensation and benefits arrangements that are competitive with those
of other corporations. Therefore, in order to accomplish these objectives, the Board has caused
the 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 the
Change of Control Period (as defined herein) on which a Change of Control occurs. Notwithstanding
anything in this Agreement to the contrary, if a Change of Control occurs and if the Executive’s
employment 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) was
at the request of a third party that has taken steps reasonably calculated to effect a Change of
Control 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 on
the third anniversary of the date hereof; provided, however, that, commencing on the date one year
after the date hereof, and on each annual anniversary of such date (such date and each annual
anniversary thereof, the “Renewal Date”), unless previously terminated, the Change of Control
Period 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 Executive that the Change of Control Period shall not be so extended.



 









 






The Change of Control Period shall terminate upon termination of the Executive’s employment with
the Company if such termination of employment occurs prior to the date on which a Change of Control
occurs, unless the Effective Date precedes 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 control
with 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 the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) becomes the
beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities
of the Company entitled to vote generally in the election of directors (the “Outstanding Company
Voting Securities”); provided, however, that, for purposes of this Section 1(d), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the
Company, (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) any
acquisition 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, or
nomination for election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation 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 or
similar transaction involving the Company or any of its subsidiaries, a sale or other disposition
of all or substantially all of the assets of the Company, or the acquisition of assets or stock of
another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each
case unless, following such Business Combination, (A) all or substantially all of the individuals
and entities that were the beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for
a non-corporate entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of directors (or, for
a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting
from such Business Combination (including, without limitation, an
entity that, as a result of such transaction, owns the Company or all or substantially all of the



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Company’s assets either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business Combination of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation resulting from such Business Combination
or the combined voting power of the then-outstanding voting securities of such corporation, except
to the extent that such ownership existed prior to the Business Combination, and (C) at least a
majority of the members of the board of directors (or, for a non-corporate entity, equivalent
governing body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement 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 of
the Company.




          Section 2. Employment Period. The Company hereby agrees to continue the Executive in
its employ, subject to the terms and conditions of this Agreement, for the period commencing on the
Effective 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 any
reason.




          Section 3. Terms of Employment. (a) Position and Duties. (1) During the
Employment Period, (A) the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held, exercised and assigned at any time
during the 120-day period immediately preceding the Effective Date and (B) the Executive’s services
shall be performed at the headquarters of the Company located in the City of New York or at any
other such headquarters location less than 25 miles from the office where the Executive was
employed immediately preceding the Effective Date.




          (2) During the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable attention and time
during normal business hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities.
During the Employment Period, it shall not be a violation of this Agreement for the Executive to
(A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (C) manage personal investments, so
long as such activities do not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this Agreement. It is expressly
understood and agreed that, to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to the Effective Date
shall not thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.




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          (b) Compensation. (1) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary (the “Annual Base Salary”) at an annual rate at least
equal to 12 times the highest monthly base salary paid or payable, including any base salary that
has been earned but deferred, to the Executive by the Company and the Affiliated Companies in
respect 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 salaries
generally. During the Employment Period, the Annual Base Salary shall be reviewed at least
annually, beginning no more than 12 months after the last salary increase awarded to the Executive
prior to the Effective Date. Any increase in the Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. The Annual 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 be
awarded, for each fiscal year ending during the Employment Period, an annual bonus (the “Annual
Bonus”) in cash at least equal to the Executive’s highest bonus earned under the Company’s Annual
Incentive Plan, as in effect from time to time, or any comparable bonus under any predecessor or
successor plan, for the last three full fiscal years prior to the Effective Date (or for such
lesser number of full fiscal years prior to the Effective Date for which the Executive was eligible
to earn such a bonus, and annualized in the case of any pro rata bonus earned for a partial fiscal
year) (the “Recent Annual Bonus”). (If the Executive has not been eligible to earn such a bonus
for any period prior to the Effective Date, the “Recent Annual Bonus” shall mean the Executive’s
target annual bonus for the year in which the Effective Date occurs.) Each such Annual Bonus shall
be paid no later than two and a half months after the end of the fiscal year for which the Annual
Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus
pursuant to an arrangement that meets the requirements of Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”).




          (3) Incentive, Savings and Retirement Plans. During the Employment Period, the
Executive shall be entitled to participate in all cash incentive, equity incentive, savings and
retirement plans, practices, policies, and programs applicable generally to other peer executives
of the Company and the Affiliated Companies, but in no event shall such plans, practices, policies
and programs provide the Executive with incentive opportunities (measured with respect to both
regular and special incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each case, less
favorable, in the aggregate, than the most favorable of those provided by the Company and the
Affiliated Companies for the Executive under such plans, practices, policies and programs as in
effect at any time during the 120-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 the Company and the Affiliated Companies.




          (4) Welfare Benefit Plans. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices, policies and programs provided by the Company
and the Affiliated Companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other peer executives of the Company and the



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Affiliated Companies, but in no event shall such plans, practices, policies and programs provide
the Executive with benefits that are less favorable, in the aggregate, than the most favorable of
such plans, practices, policies and programs in effect for the Executive at any time during the
120-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 the
Company and the Affiliated Companies.




          (5) Expenses. During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance
with the Company’s policies.




          (6) Office and Support Staff. During the Employment Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and other appointments and with
secretarial and support staff, no less favorable than that provided similarly situated executives
of the Company.




          (7) Vacation. During the Employment Period, the Executive shall be entitled to paid
vacation in accordance with the most favorable plans, policies, programs and practices of the
Company and the Affiliated Companies as in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of the Company and
the 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 the
Executive with indemnification and directors’ and officers’ liability insurance coverage as in
effect at any time during the 120-day period immediately preceding the Effective Date, or, if more
favorable to the Executive, as in effect generally at any time thereafter with respect to other
peer executives, or directors, of the Company and the Affiliated Companies.




          Section 4. Termination of Employment. (a) Death or Disability. The
Executive’s employment shall terminate automatically if the Executive dies during the Employment
Period. If the Company determines in good faith that the Disability (as defined herein) of the
Executive 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 to
terminate the Executive’s employment. In such event, the Executive’s employment with the Company
shall 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 Executive
shall not have returned to full-time performance of the Executive’s duties. “Disability” means the
absence of the Executive from the Executive’s duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to
mental or physical illness that is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal
representative. The foregoing to the contrary notwithstanding, if the Executive’s employment would
otherwise be considered to have terminated by reason 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 the Executive’s death or the



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Executive’s Disability
Effective Date, as the case may be, the Executive’s employment with the Company shall be deemed to
have been terminated by the Executive for Good Reason.




          (b) Cause. The Company may terminate the Executive’s employment during the Employment
Period with or without Cause. “Cause” means:





     (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 (other
than as a result of physical or mental illness or injury or following the Executive’s
delivery of a Notice of Termination for Good Reason), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief Executive Officer of the
Company that specifically identifies the manner in which the Board or the Chief Executive
Officer of the Company believes that the Executive has not substantially performed the
Executive’s duties;




     (2) illegal conduct or gross misconduct by the Executive, in either case that is
willful and results in material and demonstrable damage to the business or reputation of the
Company; or




     (3) conviction of, or plea of guilty or nolo contendere to, a charge of commission of a
felony.


For purposes of this Section 4(b), no act, or failure to act, on the part of the Executive shall be
considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority (A) given pursuant to a resolution duly
adopted by the Board, or if the Company is not the ultimate parent corporation of the Affiliated
Companies 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 Company
or a senior officer of the Company or (C) based upon the advice of counsel for the Company, shall
be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in
the best interests of the Company. The cessation of employment of the Executive shall not be
deemed to be for Cause unless and until (I) the Executive has been given notice in reasonable
detail by the Company of the existence of the circumstances claimed to constitute Cause within
ninety (90) days following the initial existence of such circumstances, and given an opportunity of
thirty (30) days to cure, and such circumstances remain uncured at the end of such thirty (30)-day
period, and (II) there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire membership of the
Applicable Board (excluding the Executive, if the Executive is a
member of the Applicable Board) at a meeting of the Applicable Board called and held for such
purpose (after reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel for the Executive, to be heard before the Applicable Board),
finding that, in the good faith opinion of the board, the Executive is guilty of the conduct
described in Section 4(b)(1), (2) or (3), and specifying the particulars thereof in detail.




6









 








          (c) Good Reason. The Executive’s employment may be terminated by the Executive for
Good 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 respect
with the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section 3(a), or any
other material diminution in such position, authority, duties or responsibilities (whether
or not occurring solely as a result of the Company’s ceasing to be a publicly traded
entity);




(2) any material failure by the Company to comply with any of the provisions of Section
3(b);




(3) the Company’s requiring the Executive (i) to be based at any office or location other
than as provided in Section 3(a)(1)(B), (ii) to be based at a location other than the
principal executive offices of the Company if the Executive was employed at such location
immediately preceding the Effective Date, or (iii) to travel on Company business to a
substantially greater extent than required immediately prior to the Effective Date;




(4) any purported termination by the Company of the Executive’s employment otherwise than as
expressly 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 Good
Reason unless he has provided the Company with written notice of the existence of the circumstances
claimed to constitute Good Reason within ninety (90) days following the initial existence of such
circumstances, and the Company has not remedied such circumstances within thirty (30) days of its
receipt of such notice from the Executive. The Executive’s mental or physical incapacity following
the occurrence of an event described above in clauses (1) through (5) shall not affect the
Executive’s ability to terminate employment for Good Reason.




          (d) Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto
given 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 extent
applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive’s employment under the provision so indicated, and (3) if the Date
of 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). The
failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance that contributes to a showing of Good Reason or Cause
shall not waive any right of the 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 the Company’s respective rights hereunder.




7









 








          (e) Date of Termination. “Date of Termination” means (1) if the Executive’s employment
is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified in the Notice of Termination, (which date
shall not be more than 30 days after the giving of such notice), as the case may be, (2) if the
Executive’s employment is terminated by the Company other than for Cause or Disability, the date on
which the Company notifies the Executive of such termination, (3) if the Executive resigns without
Good Reason, the date on which the Executive notifies the Company of such termination, and (4) if
the Executive’s employment is terminated by reason of death or Disability, the date of death of the
Executive or the Disability Effective Date, as the case may be. Notwithstanding the foregoing, in
no event shall 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
service takes place shall be the “Date of Termination.”




          (f) Compensation During Dispute. With respect to any termination of the Executive’s
employment during the Employment Period, if within fifteen (15) days after any Notice of
Termination is given, or, if later, prior to the Date of Termination, the party receiving such
Notice 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 notice
giving rise to the dispute was given (including, but not limited to, Annual Base Salary) and
continue the Executive as a participant in all compensation, benefit and insurance plans in which
the Executive was participating when the notice giving rise to the dispute was given, until the
earlier of (i) the date on which the Employment Period ends or (ii) the date on which the dispute
is 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 or
with 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 dispute
given by the Executive only if such notice is given in good faith and the Executive pursues the
resolution of such dispute with reasonable diligence. Amounts paid under this Section 4(f) are in
addition to other amounts due under this Agreement and shall not, for example, be offset against
or reduce any amounts otherwise due under Section 5(a) hereof.




          Section 5. Obligations of the Company upon Termination. (a) Good Reason; Other
Than for Cause, Death or Disability. If, during the Employment Period, the Company terminates
the Executive’s employment other than for Cause, death or Disability or the Executive terminates
employment for Good Reason:





(1) the Company shall pay to the Executive, in a lump sum in cash within 30 days after the
Date of Termination, the aggregate of the following amounts:




     (A) the sum of (i) the Executive’s Annual Base Salary and any accrued vacation
pay through the Date of Termination, (ii) the Executive’s Annual Bonus
for the fiscal year immediately preceding the fiscal year in which the Date of
Termination occurs if such bonus has not been paid as of the Date of Termination,
and (iii) the Executive’s business expenses that have not been reimbursed by the
Company as of the Date of Termination that were incurred by the Executive prior to
the Date of Termination in accordance with the applicable Company policy (the



8









 







sum of
the amounts described in subclauses (i) through (iii), the “Accrued Obligations”);
provided, that notwithstanding the foregoing, if the Executive has made an
irrevocable election under any deferred compensation arrangement subject to Section
409A of the Code to defer any portion of the Annual Base Salary or Annual Bonus
described in clause (i) or clause (iii) above, then for all purposes of this Section
5 (including, without limitation, Sections 5(b) through 5(d)), such deferral
election, and the terms of the applicable arrangement shall apply to the same
portion of the amount described in such clause (i) or clause (iii), and such portion
shall not be considered as part of the “Accrued Obligations” but shall instead be an
“Other Benefit” (as defined below);




     (B) the product of (x) the higher of (I) the Recent Annual Bonus and (II) the
Annual Bonus paid or payable, including any bonus or portion thereof that has been
earned but deferred (and annualized for any fiscal year consisting of less than 12
full months or during which the Executive was employed for less than 12 full
months), for the most recently completed fiscal year during the Employment Period,
if any (such higher amount, the “Highest Annual Bonus”) and (y) a fraction, the
numerator of which is the number of days in the current fiscal year through the Date
of Termination and the denominator of which is 365; and




     (C) an amount equal to two and one-half times the sum of (1) the Executive’s
Annual Base Salary, (2) the Highest Annual Bonus and (3) the Company’s contribution
on behalf of the Executive to the Company’s Profit Sharing Retirement Plan (or
successor plan) for the year ending immediately prior to the plan year during which
the Date of Termination occurs;




(2) for eighteen months after the Executive’s Date of Termination, or such longer period 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 end of the
second calendar year that begins after the Executive’s “separation from service” within the
meaning of Section 409A (the applicable period hereinafter referred to as the “Benefit
Continuation Period”), the Company shall continue benefits to the Executive and/or the
Executive’s family at least equal to, and at the after-tax same cost to the Executive and/or
the Executive’s family, as those that would have been provided to them in accordance with
the plans, programs, practices and policies described in Section 3(b)(4) if the Executive’s
employment had not been terminated or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the Company and
the Affiliated Companies and their families; provided, however, that, if the Executive
becomes reemployed with another employer and is eligible to receive such benefits under
another employer provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such applicable period of
eligibility. The Executive’s entitlement to
COBRA continuation coverage under Section 4980B of the Code (“COBRA Coverage”) shall not be
offset by the provision of benefits under this Section 5(a)(2) and the period of COBRA
Coverage shall commence at the end of the Benefit Continuation Period. For purposes of
determining eligibility (but not the time of commencement of benefits) of the Executive for
retiree benefits pursuant to such plans, practices, programs and policies, the



9









 







Executive
shall be considered to have remained employed until the end of the Benefit Continuation
Period and to have retired on the last day of such period; and




(3) to the extent not theretofore paid or provided, the Company shall timely pay or provide
to 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 to
comply with Section 409A of the Code, cash amounts that would otherwise be payable under this
Section 5(a) during the six-month period immediately following the Date of Termination shall
instead be paid, with interest on any delayed payment at the applicable federal rate provided for
in Section 7872(f)(2)(A) of the Code (“Interest”), on the first business day after the date that is
six months following the Executive’s “separation from service” within the meaning of Section 409A
of the Code.



Notwithstanding the foregoing, the Company’s obligations to pay or provide any amounts or benefits
required by Section 5(a)(1)(C) or (a)(2) shall be conditioned on the Executive signing a general
release of claims in favor of the Company and its affiliates in the form attached hereto as Exhibit
A and the expiration of any revocation period provided for in such release, within sixty (60) days
following the Date of Termination.




          (b) Death. Except as set forth in Section 4(a), if the Executive’s employment is
terminated by reason of the Executive’s death during the Employment Period, the Company shall
provide the Executive’s estate or beneficiaries with the Accrued Obligations and the timely payment
or delivery of the Other Benefits, and shall have no other severance obligations under this
Agreement. The Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the
provision of the Other Benefits, the term “Other Benefits” as utilized in this Section 5(b) shall
include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to
receive, benefits at least equal to the most favorable benefits provided by the Company and the
Affiliated Companies to the estates and beneficiaries of peer executives of the Company and the
Affiliated 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 time
during the 120-day period immediately preceding the Effective Date or, if more favorable to the
Executive’s estate and/or the Executive’s beneficiaries, as in effect on the date of the
Executive’s death with respect to other peer executives of the Company and the Affiliated Companies
and their beneficiaries.




          (c) Disability. Except as set forth in Section 4(a), if the Executive’s employment is
terminated by reason of the Executive’s Disability during the Employment Period, the Company shall
provide the Executive with the Accrued Obligations and the timely payment or delivery of the Other
Benefits, and shall have no other severance obligations under this Agreement. The Accrued
Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination, 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 following the Executive’s “separation from service” within the
meaning of Section 409A of the Code. With respect to the provision of the Other Benefits, the





10












 




term “Other Benefits” as utilized in this
Section 6(c) shall include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and other benefits at least equal to the most favorable of those generally
provided by the Company and the Affiliated Companies to disabled executives and/or their families
in accordance with such plans, programs, practices and policies relating to disability, if any, as
in effect generally with respect to other peer executives and their families at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to the Executive
and/or the Executive’s family, as in effect at any time thereafter generally with respect to other
peer executives of the Company and the Affiliated Companies and their families.




          (d) Cause; Other Than for Good Reason. If the Executive’s employment is terminated
for Cause during the Employment Period, the Company shall provide the Executive with the
Executive’s Annual Base Salary through the Date of Termination within 30 days of the Date of
Termination, and the timely payment or delivery of the Other Benefits, and shall have no other
severance obligations under this Agreement. If the Executive voluntarily terminates employment
during the Employment Period, excluding a termination for Good Reason, the Company shall provide to
the Executive the Accrued Obligations and the timely payment or delivery of the Other Benefits, and
shall have no other severance obligations under this Agreement. In such case, all the Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination, 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 sentence of Section 5(d) shall be paid, with
Interest, or provided to the Executive on the first business day after the date that is six months
following 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 or
limit the Executive’s continuing or future participation in any plan, program, policy or practice
provided 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 the
Executive may have under any other contract or agreement with the Company or the Affiliated
Companies. Amounts that are vested benefits or that the Executive is otherwise entitled to receive
under any plan, policy, practice or program of or any other contract or agreement with the Company
or the Affiliated Companies at or subsequent to the Date of Termination (“Other Benefits”) shall be
payable in accordance with such plan, policy, practice or program or contract or agreement, except
as explicitly modified by this Agreement. Without limiting the generality of the foregoing, the
Executive’s resignation under this Agreement with or without Good Reason, shall in no way affect
the Executive’s ability to terminate employment by reason of the Executive’s “retirement” under any
compensation and benefits plans, programs or arrangements of the Affiliated Companies, including
without limitation any retirement or pension plans or arrangements or to be eligible to receive
benefits under any compensation or benefit plans, programs or arrangements of the Affiliated
Companies, including without limitation any retirement or pension plan or arrangement of the
Affiliated Companies or substitute plans adopted by the Company or its successors, and any
termination 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 Executive
receives payments and benefits pursuant to Section 5(a) of this Agreement, the Executive shall not
be entitled to any severance pay or benefits under any severance plan, program or policy of the
Company and the Affiliated




11









 








Companies, unless otherwise specifically provided therein in a specific
reference to this Agreement.




          Section 7. Full Settlement. The Company’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by
any set-off, counterclaim, recoupment, defense, or other claim, right or action that the Company
may have against the Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and
such amounts shall not be reduced whether 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 the Executive’s taxable year following the taxable year in which the fee or expense
was incurred), to the full extent permitted by law, all legal fees and expenses that the Executive
may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company,
the Executive or others of the validity or enforceability of, or liability under, any provision of
this Agreement or any guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), in connection with any tax
audit or proceeding to the extent attributable to the application of Section 4999 or 409A of the
Code to any payment or benefit provided hereunder or otherwise by the Company or any Affiliated
Company or otherwise relating to the Executive’s employment, or termination 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 the
Executive shall be entitled to receive an additional payment (the “Gross-Up Payment”) in an amount
such that, after payment by the Executive of all taxes (and any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, 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 the
Payments. Notwithstanding the foregoing provisions of this Section 8(a), if it shall be determined
that the Executive is entitled to the Gross-Up Payment, but that the Parachute Value of all
Payments does not exceed 110% of the Safe Harbor Amount, then no Gross-Up Payment shall be made to
the Executive and the amounts payable under this Agreement shall be reduced so that the Parachute
Value of all Payments, in the aggregate, equals the Safe Harbor Amount (the “Capped Benefit”). The
reduction of the amounts payable hereunder, if applicable, shall be made by reducing the payments
and benefits under the following sections in the following order: (i) Section 5(a)(1)(C); (ii)
Section 5(a)(1)(B) and (iii) Section 5(a)(2). 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 the reduction of the amount payable under this Agreement would not result in a reduction of the
Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Agreement
shall be reduced pursuant to this Section 8(a). The Company’s obligation to make




12









 







Gross-Up Payments
under 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 under
this Section 8, including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized certified public accounting firm
designated by the Executive and reasonably acceptable to the Company (the “Accounting Firm”). The
Accounting Firm shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the Executive that there has been a
Payment or such earlier time as is requested by the Company. In the event that the Accounting Firm
is serving as accountant or auditor for the individual, entity or group effecting the Change of
Control, the Executive may appoint 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 and expenses of the Accounting Firm shall be borne solely by
the Company. Any determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should have been made (the “Underpayment”),
consistent with the calculations required to be made hereunder. In the event the Company exhausts
its remedies pursuant to Section 8(c) and the Executive thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred (including, if such redetermination causes the Capped Benefit to no longer 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 be promptly paid by the Company
to or for the benefit of the Executive.




          (c) The Executive shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable, but no later than 10 business days after
the Executive is informed in writing of such claim. The Executive shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid. The Executive shall
not pay such claim prior to the expiration of the 30-day period following the date on which the
Executive gives such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that the Company desires to contest such claim, the
Executive shall:





(1) give the Company any information reasonably requested by the Company relating to such
claim,




(2) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the
Company,



13









 






(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 (including
additional interest and penalties) incurred in connection with such contest, and shall indemnify
and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties) imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this Section 8(c), the Company shall
control all proceedings taken in connection with such contest, and, at its sole discretion, may
pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the
applicable taxing authority in respect of such claim and may, at its sole discretion, either pay
the tax claimed to the appropriate taxing authority on behalf of the Executive and direct the
Executive to sue for a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company shall determine;
provided, however, that, if the Company pays such claim and directs the Executive to sue for a
refund, the Company shall indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties) imposed with respect to such payment
or with respect to any imputed income in connection with such payment; and provided, further, that
any extension of the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which the Gross-Up Payment would be payable hereunder, and the Executive
shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.




          (d) If, after the receipt by the Executive of a Gross-Up Payment or payment by the Company of
an amount on the Executive’s behalf pursuant to Section 8(c), the Executive receives any refund
with respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such
claim, the Executive shall (subject to the Company’s complying with the requirements of Section
8(c), if applicable) promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after payment by the
Company of an amount on the Executive’s behalf pursuant to Section 8(c), a determination is made
that the Executive shall not be entitled to any refund with respect to such claim and the Company
does not notify the Executive in writing of its intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then the amount of such payment shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.




          (e) Any Gross-Up Payment, as determined pursuant to this Section 8, shall be paid by the
Company to the Executive within five days of the receipt of the Accounting Firm’s determination;
provided that, the Gross-Up Payment shall in all events be paid no later than the end of the
Executive’s taxable year next following the Executive’s taxable year in which the Excise Tax (and
any income or other related taxes or interest or penalties thereon) on a Payment




14









 







are remitted to
the Internal Revenue Service or any other applicable taxing authority or, in the case of amounts
relating to a claim described in Section 8(c) that does not result in the remittance of any
federal, state, local and foreign income, excise, social security and other taxes, the calendar
year in which the claim is finally settled or otherwise resolved. Notwithstanding any other provision of this Section 8, the Company may, in its sole
discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing
authority, for the benefit of the Executive, all or any portion of any Gross-Up Payment, and the
Executive hereby consents to such withholding.




          (f) Definitions. The following terms shall have the following meanings for purposes
of this Section 8.




          (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 date of the change
of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes
a “parachute payment” under Section 280G(b)(2), as determined by the Accounting Firm for purposes
of 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 (within
the meaning of Section 280G(b)(2) of the Code) to or for the benefit of 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.




          Section 9. Confidential Information. The Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential information, knowledge or data relating
to 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 by
the Company or the Affiliated Companies and which information, knowledge or data shall not be or
become public knowledge or known within the relevant trade or industry (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement). After termination
of the Executive’s employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process or by any
administrative or legislative body (including any committee thereof) with actual or apparent
jurisdiction to order such information, knowledge or data to be disclosed, and then only to the
extent required, after prompt notice, if permitted by law, to the Company of any such order, or in
connection with any litigation involving this Agreement, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those persons designated by the
Company. In no event shall an asserted violation of the provisions of this Section 9 constitute a
basis for deferring or withholding any amounts otherwise payable to the Executive under this
Agreement.




15









 








          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 other than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive’s legal representatives.




          (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. Except as provided in Section 10(c), without the prior written consent of
the 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 the
Company to assume expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place.
“Company” means the Company as hereinbefore defined and any successor to its business and/or assets
as 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 in
accordance with the laws of the State of New York, without reference to principles of conflict of
laws. The captions of this Agreement are not part of the provisions hereof and shall have no force
or effect. Subject to the last sentence of Section 11(g), this Agreement may not be amended or
modified other than by a written agreement executed 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 by
hand 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) 541-6668



or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.




          (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.




16









 








          (d) The Company may withhold from any amounts payable under this Agreement such United States
federal, state or local or foreign taxes as shall be required to be withheld pursuant to any
applicable law or regulation.




          (e) The Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive or the Company may
have hereunder, including, without limitation, the right of the Executive to terminate employment
for Good Reason pursuant to Sections 4(c)(1) through 4(c)(5), shall not be deemed to be a waiver of
such provision or right or any other provision or right of this Agreement.




          (f) The Executive and the Company acknowledge that, except as may otherwise be provided under
any other written agreement between the Executive and the Company, the employment of the Executive
by the Company is “at will” and, subject to Section 1(a), prior to the Effective Date, the
Executive’s employment may be terminated by either the Executive or the Company at any time prior
to the Effective Date, in which case the Executive shall have no further rights under this
Agreement. From and after the Effective Date, except as specifically provided herein, this
Agreement shall supersede any other agreement between the parties with respect to the subject
matter hereof.




          (g) Compensation or benefits provided by this Agreement are intended to comply with, or be
exempt from, Section 409A of the Code, and this Agreement shall be interpreted and administered in
a manner that is consistent with such intention. If any compensation or benefits provided by this
Agreement may result in the application of Section 409A of the Code, the Company shall, in
consultation with the Executive, modify the Agreement in the least restrictive manner necessary in
order to exclude such compensation from the definition of “deferred compensation” within the
meaning of such Section 409A or in order to comply with 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 any diminution in the value of the payments to
the Executive. All reimbursements, legal fee and expense payments and in-kind benefits provided
under this Agreement that constitute deferred compensation within the meaning of Section 409A of
the Code shall be made or provided in accordance with the requirements of Section 409A of the Code,
including, without limitation, that (i) in no event shall such reimbursements and payments by the
Company under this Agreement be made later than the end of the calendar year next following the
calendar year in which the applicable fees and expenses were incurred, provided, that the Executive
shall have submitted an invoice for such fees and expenses at least 10 days before the end of the
calendar year next following the calendar year in which such fees and expenses were incurred; (ii)
the amount of such reimbursements, payments and in-kind benefits that the Company is obligated to
pay or provide in any given calendar year shall not affect the reimbursements, payments and in-kind
benefits that the Company is obligated to pay or provide in any other calendar year; (iii) the
Executive’s right to have the Company pay or provide such reimbursements, payments and in-kind benefits may not be liquidated or exchanged
for any other benefit; and (iv) in no event shall the Company’s obligations to make such
reimbursements and payments or to provide such in-kind benefits apply later than the Executive’s
remaining lifetime (or if longer, through the 20th anniversary of the Effective Date).




17









 








          (h) The respective rights and obligations of the parties to this Agreement hereunder shall
survive any termination of this Agreement or the Executive’s employment with the Company or any
Affiliated Company.




          (i) This Agreement may be executed in several counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same instrument.




          IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from the Board, the Company has caused these presents to be executed in its name on
its behalf, all as of the day and year first above written.




	 	 	 	 	 	 	 
	 
	 	 	/s/ Mitchell B. Kleinman	 	 
	 	 	 	 	 
	 	 	Mitchell B. Kleinman	 	 






	 	 	 	 	 
	 

	 	KBW, INC.
	 
	 

	 	By	 	/s/ Robert Giambrone 
	 

	 	 	 
 	 
 
	 

	 	Name:	Robert Giambrone 
	 

	 	Title:	Chief Financial Officer &
Executive Vice President






18









 





Exhibit A




 SEPARATION AND RELEASE AGREEMENT




                              
(“Employee”) and Keefe, Bruyette & Woods, Inc., its parents,
subsidiaries, affiliated companies and related entities (collectively, “KBW”), hereby knowingly and
voluntarily agree to enter into this Separation and Release Agreement (“Agreement’) in order to
resolve all outstanding issues and set forth all the obligations between the parties. Employee and
KBW acknowledge and agree that this Agreement constitutes the sole obligation of each to the other,
that no other promises, commitments or representations have been made with or by each of the
parties to the other and that they have not relied on any other promises, commitments or
representations in signing this Agreement.



          1. Employee’s employment with KBW terminated [terminates] effective                    , and
all compensation and benefits cease as of this date (except as expressly provided herein or as
otherwise required by law). Employee acknowledges that Employee has been paid [will be paid]
Employee’s regular rate of pay, less applicable payroll and other deductions, through that date.
Employee further acknowledges that Employee has been paid [will be paid]                     , less applicable
payroll and other deductions, representing payment for                      days of accrued and unused
vacation. Employee may continue health insurance benefits at Employee’s own expense pursuant to
COBRA and will receive additional information regarding COBRA under separate cover. Employee also
will receive additional information regarding any KBW savings and/or pension plan under separate
cover and Employee’s rights to benefits under such plan(s) will be determined by law and in
accordance with the terms of such plan(s). Employee acknowledges that Employee is not entitled to
any other benefits, payments or wages except as expressly provided in this paragraph.




          2. In consideration for Employee entering into this Agreement and other valuable
consideration, KBW will pay Employee $                    , less applicable payroll and other deductions
(“Severance Payment”). All obligations under this Agreement shall commence only after this
Agreement has been executed and the seven (7) calendar day revocation period provided in paragraph
15, below, has expired.




          3. Employee will return all KBW property (whether owned or leased), documents, records and
other information of any type whatsoever concerning or relating to the business and affairs of KBW
or any successor.




          4. In consideration for the Severance Payment and other valuable consideration to which the
Employee would not otherwise be entitled, Employee agrees that acceptance of this Agreement
constitutes a full, complete and knowing waiver and release of any claims asserted or non-asserted
that Employee may have against KBW and its parents, subsidiaries, direct and indirect partners,
shareholders, affiliated companies and related entities, and successors and assigns, and each of
their respective present and former directors, officers, employees, shareholders, representatives,
agents, assigns, attorneys, employees, and all persons acting by, through, under or in concert with
any of them (collectively, “Releasees”), or any of them, individually and in their official
capacities, from any and all complaints, claims, controversies, damages, actions, causes of action,
suits, rights, demands, costs,




19









 







losses, debts and expenses (including attorneys’ fees and costs actually incurred), of any
nature whatsoever, known or unknown, from the beginning of time until the date thereof, arising out
of or in any manner relating to Employee’s employment and separation of employment (other than
Employee’s vested rights, if any, under KBW’s pension plan), against each of the Releasees.




          This waiver and release includes, but is not limited to, any claims Employee may have under
applicable laws for torts, public policy, contracts or employment agreements (whether oral or
written, express or implied) or common law, or under any other federal, state, or local statute,
regulation, rule, ordinance or order which covers or purports to cover or relates to any aspect of
employment and separation of employment (including, but not limited to, discrimination based on
race, sex, age, religion, national origin, sexual orientation, physical, medical or mental
condition, or marital status) under, among other statutes (each as amended), the National Labor
Relations Act; Title VII of the Civil Rights Act of 1964; the Age Discrimination in Employment Act
of 1967; the Civil Rights Acts of 1866 and 1991; Sections 1981 through 1988 of Title 42 of the
United States Code; the Employee Retirement Income Security Act of 1974 (other than with respect to
Employee’s vested rights, if any, under KBW’s pension plan); the Fair Credit Reporting Act; the
Immigration Reform Control Act; the Americans with Disabilities Act of 1990; the Rehabilitation Act
of 1973; the Occupational Safety and Health Act; the Family and Medical Leave Act of 1993; the
Equal Pay Act of 1963; the Older Workers Benefit Protection Act of 1990; the Occupational Safety
and Health Act of 1970; the Sarbanes-Oxley Act of 2002; the Uniformed Services Employment and
Reemployment Rights Act; the Worker Adjustment and Retraining Notification Act; the Employee
Polygraph Protection Act; the New York State Human Rights Law; the New York State Labor Law and the
New York City Human Rights Law; and any other similar federal, state and/or local laws.




          5. Notwithstanding anything herein to the contrary, this Agreement does not affect Employee’s
right to file a charge or complaint with any state, local or federal agency or to participate or
cooperate in such a matter. Employee further acknowledges that Employee is not entitled to, and
hereby waives any right to, monetary damages or other personal recovery resulting from actions
brought by state, local or federal agencies (including with respect to charges or complaints filed
by Employee with respect to matters arising out of or relating to Employee’s employment and
separation of employment).




          6. In the course of Employee’s employment with KBW prior to the date hereof, Employee may have
had access to confidential and proprietary information and records, data and other trade secrets of
KBW (“Confidential Information”). Confidential Information shall include, without limitation, the
following types of information or material, both existing and contemplated, regarding KBW or its
parents, subsidiaries or affiliated companies or related entities: corporate information,
including plans, strategies, policies, resolutions and any litigation or negotiations;
marketing information, including strategies, methods, current or prospective customer
lists, market research data; financial information, including cost and performance data,
debt arrangement, equity structure, investors and holdings; and personnel information,
including personnel lists, resumes, personnel data, organizational structure, compensation
structure and performance evaluations. Employee shall not directly or indirectly disclose
Confidential Information to any person or entity or use any Confidential Information in any way.
For purposes of this paragraph, Confidential Information does not include any information that
becomes public other than through Employee’s breach of this paragraph, or any information or other
rights that Employee had or owned prior to employment with KBW.




20









 








          7. Employee acknowledges that the terms of this Agreement and all discussions relating to it
are confidential and agrees that Employee will not divulge the terms of this Agreement to any third
party, except Employee’s immediate family, financial advisor, attorney or as required by court
order or as otherwise required by law.




          8. This Agreement shall be governed by, and interpreted and construed in accordance with, the
laws of the State of New York, and any claims relating to this Agreement, Employee’s employment or
separation thereof must be brought in a state or federal court located in New York City. The
parties hereby waive any objection either may have to the jurisdiction of, or venue in, such court,
including without limitation the objection that such forum is inconvenient.




          9. Employee agrees not to directly or indirectly take, support, encourage or participate in
any act or attempted act which in any way would damage the reputation of KBW, its parents,
subsidiaries, direct and indirect shareholders, affiliated companies or related entities, and their
respective shareholders, directors, officers and employees. Nothing in this paragraph is intended
to prohibit Employee from bringing an action to challenge the enforceability of the waiver and
release (contained in paragraph 4 above) pursuant to the federal Older Worker Benefit Protection
Act.




          10. Nothing contained in this Agreement nor the fact that the parties have signed this
Agreement shall be considered an admission by either party.




          11. Employee agrees that Employee will cooperate in any legal disputes, proceedings or
business matters relating to issues or incidents which took place during Employee’s term of
employment. Such cooperation may include appearances in court or discovery proceedings.
Employee’s reasonable and pre-approved out-of-pocket expenses incurred in connection therewith
shall be reimbursed by KBW. Such expenses, however, will not include reimbursement for lost wages
or attorney’s fees and costs. KBW will provide Employee with reasonable notice whenever possible
of the need for Employee’s cooperation.




          12. In the event of any breach by Employee of any provision of this Agreement, including,
without limitation, paragraphs 4, 6, 7 and 9 hereof, KBW shall be entitled to seek a decree of
specific performance and/or injunctive relief against Employee (without the necessity of proving
actual damages or posting a bond or other security). Such remedy, however, shall be cumulative and
non-exclusive and shall be in addition to any other remedy to which KBW may be entitled.




          13. If any portion of this Agreement is found to be illegal, void or unenforceable but such
portion would be enforceable if some part thereof were deleted or modified, then portion shall
apply with such deletion or modification as is necessary to make it enforceable to the fullest
extent permitted by law. If any such portion (other than the release in paragraph 5) cannot be
deleted or modified to be enforceable, such portion shall be deemed severed from this Agreement and
shall not affect the validity or enforceability of the remainder of this Agreement.




          14. This Agreement contains the entire understanding of the parties relating to the subject
matter hereof, and supersedes any and all previous agreements and plans, whether written or oral,
between Employee and KBW (excluding only any KBW savings and/or pension plan). This Agreement may
be modified only in a document signed by the parties and referring specifically hereto.




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          15. Since Employee’s execution of this Agreement waives and releases the Releasees from all
claims Employee may have, Employee should review this Agreement carefully and is advised to consult
with an attorney before signing it. Employee represents and warrants that Employee is fully
competent to enter into this Agreement and acknowledges that Employee has been afforded the
opportunity to review this Agreement for at least twenty-one (21) calendar days, that Employee has
consulted with, or had a reasonable opportunity to consult with, Employee’s attorney prior to
executing this Agreement, that Employee has read completely, and fully understands the terms of
this Agreement, and that Employee has signed this Agreement freely and voluntarily. Employee
agrees that any changes, whether material or not, to this Agreement will not restart the twenty-one
(21) calendar day period set forth above.




          Employee further acknowledges that Employee has the opportunity to revoke this Agreement
within seven (7) calendar days of signing it and that, if Employee revokes this Agreement, Employee
will not be entitled to the Severance Payment and other benefits provided in this Agreement (other
than those provided for in paragraph 1 above). Employee understands that if Employee does revoke
this Agreement, Employee must deliver written notice to Elise Johnson via email at
ejohnson@kbw.com AND via facsimile at 212-247-9479. To be effective, such revocation must
be received by Elise Runck no later than 11:59 p.m. (New York City time) on the seventh
(7th) calendar day following the execution by Employee of this Agreement.




          This Agreement was first provided to Employee on                     , [___]. To receive the
Severance Payment and other benefits described above, Employee must sign and return this Agreement
no later than                     , [___]. This Agreement should be returned to Elise Runck,
                    ,
Keefe, Bruyette & Woods, Inc.,
                    ,
                                         .




          PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. To
signify the parties’ agreement to the terms of this Agreement, the parties have executed this
Agreement on the date set forth opposite their signatures which appear below.



	 	 	 	 	 
	[EMPLOYEE’S NAME]

	 	KEEFE, BRUYETTE & WOODS, INC.	 	 
	 
	 	 	 	 
	 


	 	 

	 	 
	 
 

	 	 
By:	 	 
	Date:

	 	Date:	 	 
	 


	 	 


	 	 







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