WHO ARE NOT
MEMBERS OF THE COMMITTEE OR PARTICIPANTS AS IT SHALL DEEM NECESSARY OR
APPROPRIATE, PROVIDED, HOWEVER, THAT THE COMMITTEE MAY NOT ALLOCATE OR DELEGATE
ANY OF ITS AUTHORITY OR ADMINISTRATIVE RESPONSIBILITY HEREUNDER (AND NO SUCH
ATTEMPTED DELEGATION SHALL BE EFFECTIVE) IF SUCH ALLOCATION OR DELEGATION WOULD
CAUSE ANY BONUS PAYABLE UNDER THE PLAN NOT TO BE CONSIDERED "PERFORMANCE-BASED
COMPENSATION" WITHIN THE MEANING OF SECTION 162(M)(4)(C) OF THE CODE AND THE
1
TREASURY REGULATIONS ISSUED THEREUNDER, AND ANY SUCH ATTEMPTED DELEGATION SHALL
BE NULL AND VOID AB INITIO.
(D)
INDEMNIFICATION. THE COMPANY SHALL INDEMNIFY AND HOLD HARMLESS
EACH MEMBER OF THE COMMITTEE AND ANY PERSON TO WHOM ANY DUTY OR POWER RELATING
TO THE ADMINISTRATION OR INTERPRETATION OF THE PLAN IS PROPERLY DELEGATED FROM
AND AGAINST ANY LOSS, COST, LIABILITY (INCLUDING ANY SUM PAID IN SETTLEMENT OF A
CLAIM WITH THE APPROVAL OF THE BOARD), DAMAGE AND EXPENSE (INCLUDING REASONABLE
LEGAL AND OTHER EXPENSES INCIDENT THERETO) ARISING OUT OF OR INCURRED IN
CONNECTION WITH THE PLAN, UNLESS AND EXCEPT TO THE EXTENT ATTRIBUTABLE TO SUCH
PERSON'S FRAUD OR WILLFUL MISCONDUCT.
3.
PERFORMANCE PERIODS. THE PLAN SHALL OPERATE OVER A SERIES OF
FISCAL YEAR PERIODS, OR PORTIONS THEREOF TO THE EXTENT CONSISTENT WITH TREASURY
REGULATION SECTION 1.162-27(E)(2) (EACH, A "PERFORMANCE PERIOD"), AS DETERMINED
BY THE COMMITTEE. PERFORMANCE PERIODS UNDER THE PLAN MAY RUN CONSECUTIVELY OR
CONCURRENTLY.
4.
PARTICIPATION. PRIOR TO THE EARLIER OF (I) THE 90TH DAY AFTER THE
COMMENCEMENT OF A PERFORMANCE PERIOD, OR (II) THE DATE ON WHICH 25% OF THE
PERFORMANCE PERIOD HAS ELAPSED (OR BY SUCH OTHER DATE AS MAY BE REQUIRED OR
PERMITTED UNDER TREASURY REGULATION SECTION 1.162-27(E)(2)) (THE "ESTABLISHMENT
DATE"), THE COMMITTEE SHALL DESIGNATE THE PARTICIPANTS FOR SUCH PERFORMANCE
PERIOD. THE NAMES OF THE PARTICIPANTS SHALL BE SET FORTH IN THE WRITTEN RECORD
OF THE PROCEEDINGS IN WHICH SUCH DESIGNATION OCCURS. NO PARTICIPANT FOR ANY
PARTICULAR PERFORMANCE PERIOD SHALL BE ELIGIBLE TO RECEIVE ANY AMOUNT UNDER THE
LABRANCHE & CO INC. ANNUAL INCENTIVE PLAN (THE "ANNUAL INCENTIVE PLAN") FOR ANY
PORTION OF THE SAME PERFORMANCE PERIOD. THE COMMITTEE SHALL HAVE THE AUTHORITY
TO (1) REMOVE PARTICIPANTS FROM THE PLAN FOR A PERFORMANCE PERIOD AT ANY TIME
DURING SUCH PERFORMANCE PERIOD, AND (2) ADD PARTICIPANTS TO THE PLAN FOR A
PERFORMANCE PERIOD PRIOR TO THE ESTABLISHMENT DATE FOR SUCH PERFORMANCE PERIOD.
5.
BONUS AMOUNTS.
(A)
MAXIMUM INDIVIDUAL AWARD. EACH PARTICIPANT SHALL BE PAID A BONUS
AMOUNT FOR EACH PERFORMANCE PERIOD EQUAL TO 5% OF THE COMPANY'S "PRE-TAX INCOME"
(AS DEFINED BELOW) DURING SUCH PERFORMANCE PERIOD, LESS THE AMOUNT, IF ANY,
PREVIOUSLY PAID UNDER THE PLAN (IN CASH AND/OR EQUITY-BASED AWARDS) TO SUCH
PARTICIPANT WITH RESPECT TO ANY PRIOR PERFORMANCE PERIOD ENDING DURING THE SAME
FISCAL YEAR PERIOD CONCURRENTLY WHICH SUCH PERFORMANCE PERIOD ENDS.
(B)
MAXIMUM PLAN AWARD. IN NO EVENT SHALL THE AGGREGATE AMOUNT PAID
UNDER THE PLAN AND THE ANNUAL INCENTIVE PLAN WITH RESPECT TO ANY FISCAL YEAR OF
THE COMPANY EXCEED 30% OF THE COMPANY'S PRE-TAX INCOME FOR SUCH FISCAL YEAR.
(C)