Document:

EXHIBIT 10

Exhibit 10.2

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of July 27, 2006 (the "Effective Date"), by and among Westwood Holdings Group, Inc., a Delaware corporation (the "Company"), and Susan M. Byrne ("Executive").

RECITALS

WHEREAS, the Executive currently serves as Chairman and Chief Investment Officer of Westwood Holdings Group, Inc.;

WHEREAS, the Company desires to enter into an Executive Employment Agreement with the Executive;

NOW THEREFORE, the parties agree as follows:

	Term.  Subject to earlier termination as provided herein, the Company hereby agrees to continue Executive in its employ, and Executive hereby agrees to remain in the employ of the Company, commencing on the Effective Date and ending on April 30, 2012.  The term of Executive's employment as provided in this Section 1 shall be hereinafter referred to as the "Term."

2.    Duties.

(a)             Executive's Positions and Titles.  Executive's positions and titles shall be Chairman and Chief Investment Officer.

(b)            Executive's Duties.  The duties and responsibilities of Executive are and shall continue to be of an executive nature as shall be required by the Company in the conduct of its business and shall include the performance of such lawful and reasonable duties and responsibilities as the Board of Directors (the "Board") may from time to time assign to Executive not inconsistent with Executive's position(s) and shall include acting as primary investment officer, for the Company's business.  Executive recognizes that during the period of Executive's employment hereunder, Executive owes an undivided duty of loyalty to the Company, and Executive will use Executive's good faith efforts to promote and develop the business of the Company.  Recognizing and acknowledging that it is essential for the protection and enhancement of the name and business of the Company and the goodwill pertaining thereto, Executive shall perform her duties under this Agreement professionally, in accordance with the applicable laws, rules and regulations and such standards, policies and procedures established by Employer and the industry from time to time. Executive will not perform any duties for any other business without the prior written consent of the Compensation Committee, but may engage in charitable, civic or community activities, provided that such duties or activities do not materially interfere with the proper performance of Executive's duties under this Agreement.

(c)             Board Service.  Executive will be nominated for reelection as a member of the Board at each annual meeting of stockholders during the Term.  If so elected, Executive agrees that she will serve as a member of the Board.

3.               Compensation and Benefits.

(a)             Base Salary.  During the Term, Executive shall receive a base salary ("Base Salary"), paid in accordance with the normal payroll practices of the Company, at an annual rate of $750,000.00.  The Base Salary shall be reviewed from time to time in accordance with the Company's policies and practices, but no less frequently than once annually and may be increased, but not decreased, at any time and from time to time by action of the Board or the Compensation Committee. The term "Base Salary" shall include any such increases to the Base Salary from time to time.

(b)            Annual Incentive Plan and Discretionary Bonus Awards.  In addition to the Base Salary, Executive shall be eligible throughout the Term to receive awards of both performance-based and discretionary bonuses as a participant in the Company's Annual Incentive Plan and Discretionary Bonus Plan as approved by the Compensation Committee of the Board, and as amended from time to time.  

(c)             Long-Term Incentive Award.  In addition to the Base Salary and participation in the Annual Incentive Plan, Executive has received an award of 300,000 shares of restricted stock subject to performance vesting goals. 

(d)            Expenses.  During the Term, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by her in accordance with the policies and practices of the Company as in effect from time to time.

(e)             Vacation.  During the Term, Executive shall be entitled to paid vacation in accordance with the policies and practices of the Company as in effect from time to time with respect to senior executives employed by the Company, but in no event shall such vacation time be less than four (4) weeks per calendar year.

4.               Termination.

(a)             Disability.  Either Executive or the Company may terminate Executive's employment, after having established Executive's Disability, by giving notice of her or its intention to terminate Executive's employment. For purposes of this Agreement, Executive shall be deemed to have a "Disability" for purposes of this Agreement if Executive has any medically determinable physical or mental impairment that has lasted for a period of not less than six (6) months in any twelve (12) month period and that renders Executive unable to perform the duties required under the Agreement.  Such determination shall be made by written certification ("Certificate") of Executive's Disability by a physician jointly selected by the Company and the Executive; provided that if the Company and Executive cannot reach agreement on the physician, the Certification shall be by a panel of physicians consisting of one physician selected by the Company, one physician selected by the Executive and a third physician jointly selected by those two physicians.

(b)            Cause.
(i)              The Company may terminate Executive's employment at any time for Cause, if Cause as defined below exists.

(ii)            For purposes of this Agreement, "Cause" means with respect to Executive the occurrence of any of the following events:
(A)           Executive's conviction of any felony or other serious crimes;

(B)           Executive's material breach of any of the terms of the Agreement or any other written agreement or material Company policy to which Executive and the Company are parties or are bound, if such breach shall be willful and shall continue beyond a period of twenty (20) days immediately after written notice thereof by the Company to Executive;

(C)           Wrongful misappropriation by Executive of any money, assets, or other property of the Company or a client of the Company;

(D)           Willful actions or failures to act by the Executive which subject the Executive or the Company to censure by the Securities and Exchange Commission as described in and pursuant to Section 203(e) or 203(f) of the Investment Advisers Act of 1940 or Section 9(b) of the Investment Company Act of 1940 or to censure by a state securities administrator pursuant to applicable state securities laws or regulations;

(E)            Executive's commission of fraud or gross moral turpitude; or

(F)            Executive's continued willful failure to substantially perform Executive's duties under this Agreement after receipt of written notice thereof and an opportunity to so perform.

(iii)          Cause shall be determined by the affirmative vote of at least seventy five percent (75%) of the members of the Board (excluding the Executive, if a Board member, and excluding any member of the Board involved in events leading to the Board's consideration of terminating Executive for Cause).  Executive shall be given twenty (20) days written notice of the Board meeting at which Cause shall be decided (which notice shall be deemed to be notice of the existence of Cause if Cause is found to exist by the Board), and shall be given an opportunity prior to the vote on Cause to appear before the Board, with or without counsel, at Executive's election, to present arguments on her behalf.  The notice to Executive of the Board meeting shall include a description of the specific reasons for such consideration of Cause.  During the notice period described herein, the Company shall not be prevented or delayed in its ability to enforce the Restrictive Covenants contained herein.

(iv)          For purposes of this Section 4(b), no act or failure to act, on the part of Executive, shall be considered willful if it is done, or omitted to be done, by her in good faith and with a reasonable belief that her action or omission was in the best interests of the Company.

(c)             Good Reason.
(i)              Executive may terminate Executive's employment at any time for Good Reason, if:
(A)            (1) An event or condition occurs which constitutes any of (B) (1) through (B) (5) below; (2) Executive provides the Company with written notice that she intends to resign for Good Reason and such written notice includes (I) a designation of at least one of (B) (1) through (B) (5) below (the "Designated Section") and (II) specifically describes the events or conditions Executive is relying upon to satisfy the requirements of the Designated Section(s); (3) as of the twentieth day following the date notice is given by Executive to the Company, such events or conditions have not been corrected in all material respects; and (4) Executive's resignation is effective within ninety (90) days of the date Executive first has actual knowledge of the occurrence of the first event or condition upon which Executive relies upon to satisfy any of the Designated Section(s).

(B)            "Good Reason" shall mean the occurrence of any of the following without the express written consent of Executive:

(1)            any material breach by the Company of the Agreement (including any reduction in Executive's Base Salary);

(2)            any material adverse change in the status, position or responsibilities of Executive, including a change in Executive's reporting relationship so that she no longer reports to the Board or the removal from or failure to re-elect Executive as a member of the Board, or if the Company becomes a wholly-owned subsidiary of another company and the Executive serves only as an officer of the subsidiary company;

(3)            assignment of duties to Executive that are materially inconsistent with Executive's position and responsibilities described in this Agreement;

(4)            the failure of the Company to assign this Agreement to a successor to the Company or failure of a successor to the Company to explicitly assume and agree to be bound by this Agreement; or

(5)            requiring Executive to be principally based at any office or location more than twenty-five (25) miles from the current offices of the Company in Dallas, Texas.

In addition, following a Change of Control, Executive shall be considered to have "Good Reason" for termination if she voluntarily terminates her employment within the ninety-day period immediately following the date that is three (3) months following the Change of Control.  A "Change of Control" shall mean (i) a merger or consolidation of the Company with or into another corporation (other than a merger undertaken solely in order to reincorporate in another state) immediately following which the beneficial holders of the voting stock of the Company immediately prior to such transaction or series of transactions do not continue to hold 50% or more of the voting stock (based upon voting power) of the Company or (A) any entity that owns, directly or indirectly, the stock of the Company, (B) any entity with which the Company has merged, or (C) any entity that owns an entity with which the Company has merged; (ii) a dissolution of the Company, (iii) a transfer of all or substantially all of the assets of the Company in one transaction or a series of related transactions to one or more other persons or entities, (iv) a transaction or series of transactions that results in any entity, "Person" or "Group" (as defined below), becoming the beneficial owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company's then outstanding securities, or (v) during any period of two (2) consecutive years commencing on or after January 1, 2006, individuals who at the beginning of the period constituted the Company's Board of Directors cease for any reason to constitute at least a majority, unless the election of each director who was not a director at the beginning of the period has been approved in advance by directors representing at least two-thirds (2/3) of the directors then in office who were directors at the beginning of the period;  provided, however, that a "Change in Control" shall not be deemed to have occurred if the ownership of 50% or more of the combined voting power of the surviving corporation, asset transferee or Company (as the case may be), after giving effect to the transaction or series of transactions, is directly or indirectly held by (A) a trustee or other fiduciary under an employee benefit plan maintained by the Company, (B) one or more of the "executive officers" of the Company that held such positions prior to the transaction or series of transactions, or any entity, Person or Group under their control.  As used herein, "Person" and "Group" shall have the meanings set forth in Sections 13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as amended, and "executive officer" shall have the meaning set forth in Rule 3b-7 promulgated under such Act. 

(d)            Termination by Executive Without Good Reason.  Executive may, at any time without Good Reason, by at least thirty (30) days' prior notice, terminate this Agreement.

(e)             Termination by the Company without Cause.  The Company may terminate Executive's employment at any time without Cause.

(f)              Notice of Termination.  Any termination of Executive's employment by the Company for Disability or for or without Cause, or by Executive for Disability or for or without Good Reason, shall be communicated by a Notice of Termination to the other party hereto.  For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon; (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated; and (iii) specifies the Date of Termination (defined below); provided, such Notice of Termination may be conditional if coupled with a notice of the Board's consideration of "Cause" or Executive's intention to resign for "Good Reason," as the case may be, as provided above.

(g)             Date of Termination.  "Date of Termination" means the date Notice of Termination is given or any later date specified therein; provided, (i) any Notice of Termination pursuant to Section 4(a) shall be effective ninety (90) days after the date given, (ii) any Notice of Termination pursuant to Section 4(b) or Section 4(c) shall be effective not less than twenty (20) days after the date given, (iii) any Notice of Termination pursuant to Section 4(d) shall be effective not less than thirty (30) days after the date given, and (iv) in every other case any Notice of Termination shall be effective not more than fifteen (15) days after the date given. Executive's Date of Termination shall be the date of her death if applicable.

5.               Obligations of the Company upon Termination.  Executive's entitlements upon termination of employment are set forth below and the terms related to Executive's entitlement to severance and medical benefits post-employment are further summarized on Addendum A attached to this Agreement.  Except to the extent otherwise provided in this Agreement, all benefits, including stock option grants, restricted shares, and awards under the Long Term Incentive Programs, shall be subject to the terms and conditions of the plan or arrangement under which such benefits accrue, are granted or are awarded. For purposes of this Section 5, the term "Accrued Obligations" shall mean, as of the Date of Termination, (i) Executive's full Base Salary through the Date of Termination, at the rate in effect at the time Notice of Termination is given (disregarding any reduction constituting Good Reason), to the extent not theretofore paid, (ii) the amount of any bonus, cash or incentive compensation earned (and so certified by the Compensation Committee, if applicable) (and not forfeited hereunder) by Executive as of the Date of Termination to the extent not theretofore paid, and (iii) any vacation pay, expense reimbursements and other cash entitlements accrued by Executive as of the Date of Termination to the extent not theretofore paid.  For purposes of determining an Accrued Obligation under this Section 5, no discretionary compensation shall be deemed earned or accrued until it is specifically approved by the Board or the Compensation Committee in accordance with the applicable plan, program or policy.  Executive shall not be eligible under any severance plan or agreement of the Company except as set forth herein. 

(a)             Death.  If Executive's employment is terminated by reason of Executive's death, then this Agreement shall terminate without further obligations by the Company to Executive's legal representatives under this Agreement, except as set forth in this Section 5(a) or as contained in an applicable Company plan or program which takes effect at the date of her death, but in no event shall the Company's obligations be less than those provided by this Agreement:
(i)              Executive's Accrued Obligations not theretofore paid;

(ii)            from and after the Date of Termination, Executive's surviving spouse, other named beneficiaries or other legal representatives, as the case may be, shall be entitled to receive those benefits payable to them under the provisions of any plan or program described in Section 3 above;

(iii)          Executive's eligible dependents shall receive continuation of medical benefits upon the same terms as exist immediately prior to the termination of employment (or, if such benefits are not available, the value thereof in cash) for the twelve (12)-month period immediately following the Date of Termination, and at the end of such period, a COBRA qualifying event shall be deemed to occur; and

(iv)          all unexercised stock options and all unvested restricted shares, and other equity-incentive compensation awards theretofore granted to Executive shall be fully vested and exercisable in accordance with the terms of the applicable agreement and the Company's Stock Incentive Plan (as amended and restated from time to time).

(b)            Disability.  If Executive's employment is terminated by reason of Executive's Disability, then Executive shall be entitled to receive as of the Date of Termination:
(i)              Executive's Accrued Obligations not theretofore paid;

(ii)            disability benefits, if any, at least equal to those then provided by the Company to disabled executives and their families;

(iii)          Executive and Executive's eligible dependents shall be entitled to receive those benefits payable to them under the provisions of any applicable plan or program described in Section 3 and above and shall receive continuation of medical benefits upon the same terms as exist immediately prior to the termination of employment (or, if such benefits are not available, the value thereof in cash) for the twelve (12) month period immediately following the Date of Termination, and at the end of such period, a COBRA qualifying event shall be deemed to occur; and

(iv)          the Board may, in its sole discretion, if in the best interest of the Company and the Executive, determine that all or part of the Executive's unexercised stock options and unvested restricted shares, and other equity-incentive compensation awards become fully vested and exercisable.

(c)             With or Without Cause/Without Good Reason.  If Executive's employment is terminated with or without Cause by the Company or if Executive terminates Executive's employment without Good Reason, then the Company shall pay Executive all Accrued Obligations. Any vested stock options shall be exercisable in accordance with the provisions of the applicable agreement or award.  In addition: 
(i)              if the Company makes the election described in Section 5(f), then the Company shall pay to Executive an amount equal to the Executive's annual Base Salary at the rate in effect at the time the Notice of Termination is given, payable in monthly installments for a period of twelve (12) months commencing with the month following the Date of Termination, 

(ii)            Executive and Executive's eligible dependents shall receive continuation of medical benefits upon the same terms as exist immediately prior to the termination of employment (or, if such benefits are not available, the value thereof in cash) for the twelve (12) month period immediately following the Date of Termination, and at the end of such period, a COBRA qualifying event shall be deemed to occur; provided that, the amount of any monthly payments pursuant to Section 5(c)(i) above shall be reduced by the employee's portion of the cost of such benefits, which Executive would be required to pay if she were actually employed during such period, and 

(iii)          If Executive's employment is terminated by the Company with Cause or by Executive without Good Reason, all unvested stock options and all unvested restricted shares shall be forfeited.  If Executive's employment is terminated by the Company without Cause, all unvested stock options and all unvested restricted shares shall be fully vested and exercisable in accordance with the terms of the applicable agreement and the Company's Stock Incentive Plan (as amended and restated from time to time). 

(d)            For Good Reason.  If Executive terminates Executive's employment for Good Reason, then:
(i)              The Company shall pay to Executive the following amounts:
(A)           Executive's Accrued Obligations not theretofore paid; and

(B)           an amount equal to the Executive's annual Base Salary at the rate in effect at the time the Notice of Termination is given (disregarding any reduction constituting Good Reason), payable in monthly installments for a period of twelve (12) months commencing with the month following the Date of Termination.

(ii)            Executive and Executive's eligible dependents shall receive continuation of medical benefits upon the same terms as exist immediately prior to the termination of employment (or, if such benefits are not available, the value thereof in cash) for the twelve (12) month period immediately following the Date of Termination, and at the end of such period, a COBRA qualifying event shall be deemed to occur; provided that, the amount of any monthly payments pursuant to Section 5(d)(i)(B) above shall be reduced by the employee's portion of the cost of such benefits, which Executive would be required to pay if she were actually employed during such period; 

(iii)          all unvested stock options and all unvested restricted shares shall be fully vested and exercisable in accordance with the terms of the applicable agreement and the Company's Stock Incentive Plan (as amended and restated from time to time); and

(iv)          Executive and Executive's eligible dependents shall be entitled to receive those benefits payable to them under the provisions of any applicable plan or program described in Section 3.

(e)             Section 409A Protective Provision.  Executive and the Company agree that if Executive is determined to be a "specified employee" as such term is defined in Section 409A of the Code upon termination of her employment, certain payments to Executive under this Section 5 may be required to be postponed to comply with Section 409A.  Thus, Executive and the Company agree that, in such event, any payments that are so postponed will be paid to Executive on the first day of the calendar month following the end of the required postponement period.

(f)              Compliance with Non-Compete Covenants.  The parties intend that all of the restrictive covenants set forth in Section 10 shall apply in the event that (i) the Executive terminates her employment with Good Reason, or (ii) the Executive terminates her employment within the ninety-day period immediately following the date that is three (3) months following a Change of Control.  However, if the Company terminates Executive's employment with or without Cause or the Executive terminates her employment without Good Reason under Section 5(c) hereof, the Company shall have an option, exercisable no later than sixty (60) days following termination, whether the Executive shall be required to comply with the restrictive covenants set forth in Section 10(d) hereof (the "Non-Compete Covenants").  The Company shall notify Executive in writing no later than the expiration of the sixty-day period whether it elects to enforce the Non-Compete Covenants.  If the Non-Compete Covenants apply, Executive acknowledges and agrees that Executive's right to receive severance benefits under Sections 5(c) or (d) of this Agreement shall be contingent upon Executive's compliance with the Non-Compete Covenants.  If Executive fails to comply with the Non-Compete Covenants, then Executive shall not be entitled to any such severance benefits.  If the Company does not elect to enforce the Non-Compete Covenants, the Executive shall not be entitled to such severance benefits under Sections 5(c) or (d).

6.               Non-exclusivity of Rights.  Except as set forth in Section 5, nothing in this Agreement shall prevent or limit Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any stock option, restricted shares or other agreement with the Company or any of its affiliated companies. Except as otherwise provided herein, amounts and benefits which are vested benefits or which Executive is otherwise entitled to receive under any plan, program, agreement or arrangement of the Company at or subsequent to the Date of Termination shall be payable in accordance with such plan or program.

7.               No Set-Off; No Mitigation.  Except as provided herein, 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 circumstances, including any set-off, counterclaim, recoupment, defense or other right which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.

8.               Arbitration of Disputes.  Except as set forth in Section 11, any controversy or claim arising out of or related to (A) this Agreement, (B) the breach thereof or (C) Executive's employment with the Company or the termination of such employment shall be settled by arbitration in Dallas, Texas before a single arbitrator administered by the American Arbitration Association ("AAA") under its National Rules for the Resolution of Employment Disputes, effective as of January 1, 2004 (the "Employment Rules"), and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, Rule R-34 of the AAA's Commercial Arbitration Rules amended and restated as of July 1, 2003 (instead of Rule 27 of the Employment Rules), shall apply to interim measures. References herein to any arbitration rule(s) shall be construed as referring to such rule(s) as amended or renumbered from time to time and to any successor rules. References to the AAA include any successor organization.

9.               Entire Agreement.  Executive acknowledges and agrees that this Agreement includes the entire agreement and understanding between the parties and supersedes any prior agreements, written or oral, with respect to the subject matter hereof, including the termination of Executive's employment during the Term and all amounts to which Executive shall be entitled whether during the Term or thereafter and all restrictive covenants to which Executive may be subject. 

10.            Executive's Covenants.

(a)             Executive's Acknowledgment.  Executive agrees and acknowledges that in order to assure the Company that it will retain its value and that of the Business as a going concern, it is necessary that Executive not utilize special knowledge of the Business and its relationships with customers to compete with the Company. For purposes of this Agreement, "Business" means the provision of investment management, investment advisory, portfolio management, financial analysis, research or similar services relating to the investment of international or domestic equity or debt securities or other activities or services of the type provided by the Company or its affiliates to its clients on a worldwide basis including, without limitation, open-end and closed-end, registered and unregistered, investment companies ("Funds"), and the direct and indirect sale and/or distribution of equity interests in the Funds; and "Competing Activity" or "Competing Activities" means engaging in the Business. Executive further acknowledges that:
(i)              the Company is and will be engaged in the Business during the Term and thereafter;

(ii)            Executive will occupy a position of trust and confidence with the Company, and during the Term, Executive will become familiar with the Company's trade secrets and with other proprietary and Confidential Information concerning the Company and the Business;

(iii)          the agreements and covenants contained in this Section 10 are essential to protect the Company, the client relationships and the goodwill of the Business and compliance with such agreements and covenants will not impair Executive's ability to procure subsequent and comparable employment; and

(iv)          Executive's employment with the Company has special, unique and extraordinary value to the Company and the Company would be irreparably damaged if Executive were to provide services to any person or entity in violation of the provisions of this Agreement.

(b)            Confidential Information.  For purposes of this Agreement, "Confidential Information" shall mean trade secrets and other proprietary information concerning the products, processes or services of the Company or any of its affiliates, which information (i) has not been made generally available to the public, and is useful or of value to Company's current or anticipated business activities or of those of any affiliate or client of Company; or (ii) has been identified to Executive as confidential, either orally or in writing, including, but not limited to: computer programs; research and other statistical data and analyses; marketing, organizational or other research and development, or business plans; personnel information, including the identity of other Executives of the Company, their responsibilities, competence, abilities, and compensation; financial, accounting and similar records of Company, its affiliates and/or any Fund or account managed by the Company or its affiliates (such Funds or accounts referred to herein as "Company Funds"); current and prospective client lists and information on clients and their Executives; client investment objectives, the nature of their investment portfolios and contractual agreements with the Company or its affiliates; information concerning planned or pending investment products, acquisitions or divestitures; and information concerning the marketing and/or sale or distribution of equity interests in the Funds. Confidential Information shall not include information which: (a) is in or hereafter enters the public domain through no fault of Executive; (b) is obtained by Executive from a third party having the legal right to use and disclose the same; or (c) is in the possession of Executive prior to receipt from the Company (as evidenced by Executive's written records pre-dating the date of employment). All notes, reports, plans, published memoranda or other documents created, developed, generated or held by Executive during employment, concerning or related to the Company's or its affiliates business, and whether containing or relating to Confidential Information or not, and all tangible personal property of the Company or its affiliates entrusted to Executive or in Executive's direct or indirect possession or control, are the property of the Company, and will be promptly delivered to the Company and not thereafter used by Executive upon termination of Executive's employment for any reason whatsoever.

(c)             Non-Disclosure.  Executive agrees that during employment with the Company (including any employment following the Term) and at all times thereafter, Executive shall not reveal to any competitor or other person or entity (other than current employees of the Company) any Confidential Information that Executive obtains while performing services for the Company, except as may be required in Executive's reasonable judgment to fulfill her duties hereunder.

(d)            Non-Compete and Related Covenants.  If (i) the Executive terminates her employment with Good Reason, or (ii) the Company terminates the Executive's employment with or without Cause, or the Executive terminates without Good Reason, and in either case, the Company makes the election set forth in Section 5(f), or (iii) the Executive terminates her employment within the ninety-day period immediately following the date that is three (3) months following a Change of Control, then for a period of one year following the Date of Termination (such period the "Post-Termination Non-Compete Period"), Executive shall not engage in, or own or control any interest in, or act as an officer, director or employee of, or consultant, advisor or lender to any firm, corporation, institution, business or entity (each an "Entity") directly or indirectly engaged in the Business.  Further, during the Post-Termination Non-Compete Period, Executive shall not, directly or indirectly, on her behalf or another's behalf:
(i)              solicit the Company's or its affiliates' clients to provide, offer to provide, or provide to any such clients, services or products of the kind generally offered or provided by Company or its affiliates; or

(ii)            solicit, induce or encourage any person who is then in the employ of the Company to leave his or her employment, agency or office with Company, or employ or be employed with any such person or persons, for the purpose of providing or offering to provide, services or products of the kind generally offered by Company or its affiliates.

(iii)          Executive understands that Company's name, the name of any Funds and accounts managed by the Company (such proprietary Funds, accounts and any other client account managed by the Company, the "Company Accounts") and the investment performance of any Company Account are extremely valuable and are the result of the expenditure of substantial time, effort and resources by the Company.  Therefore, during the Post-Termination Non-Compete Period, Executive agrees that she will not, directly or indirectly, on her behalf or another's behalf:
(A)           refer to the Company, "Westwood," "Westwood Holdings Group," "Westwood Funds," or any other name used by the Company, any Company Account or the investment performance thereof, or Executive's prior association with the Company or its affiliates or any Company Account in any public filing or in any advertisement or marketing of any service or product which is a Competing Activity; or 

(B)           maintain a relationship of the type described herein with any Entity which refers to the Company, any Company Account or the investment performance thereof, or Executive's prior association with Company or any Company Account in any public filing or in any advertisement or marketing of any service or product which is a Competing Activity.

(iv)          Notwithstanding the foregoing, nothing in this paragraph (d) shall prohibit Executive or any other person or Entity from referring to information described in said paragraphs, provided such reference is not made in advertising or marketing in newspapers, magazines, trade journals or other public media, or direct advertising or marketing materials, and such information is limited to the extent that (i) such information is contained in any SEC filings previously made by the Company, or (ii) reference to such information is otherwise required by law. The Company and Executive agree that, based on applicable rules, regulations and court decisions in effect as of the date this Agreement is entered into, information relating to the investment performance of any Company Account is not information reference to which "is otherwise required by law" within the meaning of said clause (ii). In addition, this Section 10(d) shall not prohibit Executive from being a passive owner of not more than two percent (2%) of the outstanding shares of any class of securities of an Entity whose securities are publicly traded, so long as Executive does not have any active participation in the business of such Entity.  

(e)             Non-Exclusive Remedy for Restrictive Covenants.  Executive acknowledges and agrees that the covenants set forth in this Section 10 (collectively, the "Restrictive Covenants") are reasonable and necessary for the protection of the Company's business interests, that irreparable injury will result to the Company if Executive breaches any of the terms of the Restrictive Covenants, and that in the event of Executive's actual or threatened breach of any such Restrictive Covenants, the Company will have no adequate remedy at law. Executive accordingly agrees that in the event of any actual or threatened breach by him of any of the Restrictive Covenants, the Company shall be entitled to immediate temporary injunctive and other equitable relief, without the necessity of showing actual monetary damages or the posting of bond. Nothing contained herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of damages. The duration of a Restrictive Covenant shall be extended by such time during which such breach or threatened breach continues without cure by Executive.

11.            Indemnification and Insurance.

(a)             The Company agrees that Executive shall be indemnified to the extent otherwise provided in agreements between the Company and Executive and pursuant to the Company's Certificate of Incorporation and Bylaws. 

(b)            During the Term and thereafter for the duration of any statute of limitations or other period during which a claim might be successfully brought against Executive, Executive shall be covered to the same extent as directors by any directors' and officers' liability insurance policy maintained by the Company from time to time.

12.            Successors.

(a)             This Agreement is personal to Executive and, without the prior written consent of the Company, shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive's legal representatives.

(b)            This Agreement shall inure to the benefit of and be binding upon the Company and its successors. It shall not be assignable by the Company or its successors except in connection with the sale or other disposition of all or substantially all the assets or business of the Company. The Company shall require any successor to all or substantially all of the business or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance reasonably satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform if no such succession had taken place.

13.            Amendment; Waiver.  This Agreement may be amended, modified or changed only by a written instrument executed by Executive and the Company. No provision of this Agreement may be waived except by a writing executed and delivered by the party sought to be charged. Any such written waiver will be effective only with respect to the event or circumstance described therein and not with respect to any other event or circumstance, unless such waiver expressly provides to the contrary.

14.            Miscellaneous.

(a)             The provisions of Section 5 (Obligations of the Company upon Termination), Section 7 (No Set-Off; No Mitigation), Section 8 (Arbitration of Disputes), Section 10 (Executive's Covenants), Section 11 (Indemnification and Insurance), Section 12 (Successors), Section 13 (Amendment; Waiver) and this Section 14(a) shall survive the termination of Executive's employment with the Company for any reason, or the expiration of the Term of the Agreement pursuant to Section 1, and shall thereafter remain in full force and effect. 

(b)            In the event of any inconsistency between this Agreement and any other agreement, plan, program, policy or practice (collectively, "Other Provision") of the Company, the terms of this Agreement shall control unless such Other Provision provides otherwise by a specific reference to this Section 14(b).

(c)             This Agreement shall be governed by and construed in accordance with the laws of the State of Texas (except Section 11 which shall be governed by the laws of the State of Delaware), 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.

(d)            All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been duly given (i) the following business day after deposit from within the United States with a reputable express courier service (charges prepaid), (ii) three (3) days after mailing by certified or registered mail, return receipt requested and postage prepaid, or (iii) upon receipt in all other cases. Such notices, demands and other communications shall be sent to the addresses indicated below:
If to the Company:

Westwood Holdings Group, Inc.

200 Crescent Court, Suite 1200

Dallas,  TX  75201

Attention:  Chief Executive Officer

 
If to Executive:

 

Address per the Company records

 

or to such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party.

(e)             Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction.

(f)              All compensation payable to Executive from the Company shall be subject to all applicable withholding taxes, normal payroll withholding and any other amounts required by law to be withheld.

(g)             This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same Agreement.

(h)             The descriptive headings in this Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. The use of the word "including" in this Agreement shall be by way of example rather than by limitation.

(i)              The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction will be applied against any party hereto.  Neither Executive nor the Company shall be entitled to any presumption in connection with any determination made hereunder in connection with any arbitration, judicial or administrative proceeding relating to or arising under this Agreement.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Executive Employment Agreement as of the date and year first set forth above.

	

WESTWOOD HOLDINGS GROUP, INC.

By: /s/ Brian O. Casey

Brian O. Casey

Chief Executive Officer

EXECUTIVE

/s/ Susan M. Byrne

Susan M. Byrne

 

 

 

ADDENDUM A 

TO EXECUTIVE EMPLOYMENT AGREEMENT

 

	

EVENT
	

NON-COMPETE
	

SALARY
	

BENEFITS

	

Termination with or without Cause
	

Company elects to enforce non-compete
	

1 year
	

1 year

	

 
	

Company elects not to enforce non-compete
	

No
	

1 year

	

Resignation with Good Reason
	

Applies for one year
	

1 year
	

1 year

	

Resignation without Good Reason
	

Company elects to enforce non-compete
	

1 year
	

1 year

	

 
	

Company elects not to enforce non-compete
	

No
	

1 year

	

Termination following a Change of Control 
	

Applies for 1 year
	

1 year
	

1 yearExlService Holdings, Inc. 2003 India Stock Option Plan.

 Exhibit 10.16 
 ExlServices Holdings, Inc. 2003 India Employee Stock 
 Option Plan 
 (Effective as of April 30, 2003) 

 ExlService Holdings Inc. 2003 India Employee Stock Option Plan 
 Establishment and Purpose of Plan 
  

	1.	Plan Established. 

 The Company hereby adopts, as of
April 30, 2003 this Stock Option Plan (“the Plan”), pursuant to which the Optionees, may be granted Options to purchase shares of the Common Stock, provided that no Option granted under the Plan will be exercisable until a
majority of the shareholders of the Company approve the Plan and provided further that the Plan and any Options granted under it will terminate, if such shareholder approval is not received for the Plan within twelve (12) months after the date
first written above. 
  

	2.	Purpose of Plan. 

 This Plan is intended to provide
eligible employees of the Indian Subsidiary (defined hereunder) with the opportunity to acquire an ownership interest in the Company. 
 Definition and
Construction. 
  

	3.	Definitions. 

 Whenever used herein, the following
terms shall have their respective meanings set forth below, unless the context requires otherwise: 
  

	 	(a)	“Act” means the Indian Income Tax Act, 1961 as amended, and any applicable regulations or notifications promulgated thereunder. 

  

	 	(b)	“Board” means the board of directors of the Company. 

  

	 	(c)	“Committee” means the compensation committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the Board.

  

	 	(d)	“Common Stock” or “Shares” means Series B Common Stock of the Company having par value of US$ 0.001 per share. 

  

	 	(e)	“Company” means ExlService Holdings, Inc., a company incorporated under the laws of state of Delaware having its principal place of business at 350 Park Avenue,
10th Floor, New York, NY 10022, or any successor company thereto. 

  

	 	(f)	“Director” means a director of the Company. 

  

	 	(g)	“FEMA” means the Foreign Exchange Management Act, 1999 of the Republic of India, the rules and regulations thereunder and any amendments thereto.

  

	 	(h)	“Indian Subsidiary” means ExlService.com (India) Private Limited, a company incorporated under the laws of India and having its principal office at office at A 48
Section 58, Noida 9UP 201 301, India, as long as shares constituting fifty-one (51%) or more of the total voting power of all classes of shares of ExlService.com Private Limited is owned directly by the Company. 

 

	 	(i)	“Optionee” means any employee of the Indian Subsidiary eligible to receive Options under this Plan. 

  

	 	(j)	“Plan” means this ExlService Holdings, Inc 2003 India Employee Stock Option Plan. 

  

	 	(k)	“Promoter” means the person or persons who are in over-all control of the Company, who are instrumental in the formation of the Company or programme pursuant to
which the Shares were offered to the public, or the person or persons named in the offer document as promoter(s). 

  

 1 

	 	(l)	Provided that a director or officer of the Company, if he is acting as such only in his professional capacity will not be deemed to be a promoter. Where a promoter of the Company is
a body corporate, the promoters of that body corporate shall also be deemed to be promoters of the Company. 

  

	 	(m)	“Promoter Group” means an immediate relative of the Promoter (i.e. spouse of that person, or any parent, brother, sister or child of the person or of the spouse),
persons whose shareholding is aggregated for the purpose of disclosing in the offer document “shareholding of the promoter group”. 

  

	 	(n)	“RBI” means the Reserve Bank of India. 

  

	 	(o)	“Stock Option Agreements” means the agreements between the Company, the Indian Subsidiary and the Optionees which sets forth certain rights and obligations of the
parties thereto. 

  

	 	(p)	“Stock Purchase Agreement” means the agreement between the Company and each Optionee required to be executed by each Optionee as a pre condition to the exercise of
any Options per Section 8 hereof, which sets forth certain rights and obligations of the parties thereto. 

  

	4.	Administration - Grant of Options.  

  

	 	(a)	The Plan will be administered by the Board or a Committee thereof. 

  

	 	(b)	Subject to the express provisions of the Plan, the Board or the Committee will also have complete authority to interpret the Plan to determine the rights and obligations of
participants under the Plan, and to make all other determinations necessary or advisable in the administration of the Plan. 

 Shares-
Subject to Plan 
  

	5.	Maximum Number of Shares Issuable. 

 The maximum
aggregate number of Shares in respect to which Options may be granted under the Plan shall be approximately 3.68% of the total issued and paid Common Stock of the Company and shall consist of authorised but unissued or reacquired Shares. The maximum
aggregate number of Shares is subject, however, to increase or decrease pursuant to the provisions of Section 10. In relation to the employees of the Indian Subsidiary, subject to the provisions of the Plan, the Board shall, in its discretion,
determine the persons to whom Options will be granted under this Plan and all of the terms and conditions of such Options based on the eligibility criteria set out elsewhere in this Plan. The Board shall determine all questions of interpretation of
the Plan or of any Option, and such determinations shall be final and binding upon all persons having an interest in the Plan or such Options. 
  

	6.	Eligibility in relation to the Indian Subsidiary. 

 Options may be granted under this Plan only to persons who are employees, “resident” in India in accordance with the provisions of FEMA, excluding, however, any employee who is a Promoter or belongs to the Promoter Group or who is
a Director who either by himself or through his relative or through any body corporate, directly or indirectly, holds more than ten percent (10%) of the issued share capital of the Company. Eligibility in accordance with this section shall not
entitle any person to be granted an Option, or, having been granted an Option, to be granted an additional Option. The Board shall, based on the performance, potential for future contribution to the Company and the Indian Subsidiary, integrity,
number of employment years and any other factor as deemed fit by the Board, form the basis for determining the quantum for awarding the Options. 
  

 2 

 Terms and Conditions of Options 
  

	7.	Issuance of Options. 

 Pursuant to the terms and
conditions of the Plan and the Stock Option Agreements, the Company agrees to issue to Optionee the option (the “Options”) to purchase up to approximately • shares of the total issued and paid up Common Stock at the exercise
price (the “Exercise Price”) of US$0.23 per share. Subject to further terms and conditions of this Plan, Optionee’s right to purchase the Shares subject to the Options will vest or be deemed to have vested on the following
dates with respect to the following numbers of Shares: 
  

	 	i.	25% of the Options granted under the accompanying letter of grant of options shall vest at the end of the calendar year 2003; 

  

	 	ii.	25% of the Options granted under the accompanying letter of grant of options shall vest at the end of the calendar year 2004; 

  

	 	iii.	25% of the Options granted under the accompanying letter of grant of options shall vest at the end of the calendar year 2005; and 

  

	 	iv.	25% of the Options granted under the accompanying letter of grant shall vest at the end of the calendar year 2006; 

  

	8.	Exercise of Options. 

 The Options may be exercised
at any time, and from time to time, but only upon compliance with each of the following terms and conditions: 
  

	 	(a)	The Options may be exercised only as to Shares with respect to which Optionee’s rights have vested, pursuant to Section 7, at the time of exercise and for which no prior
exercise has been made. 

  

	 	(b)	The Options may be exercised only as to a whole number of Shares and within the applicable time period specified in Section 13. 

  

	 	(c)	The Company must have received written notice advising the Company of the irrevocable exercise of the Options (“Exercise Notice”) and specifying the number of whole
Shares then being purchased (the “Purchased Shares”). 

  

	 	(d)	The Company must have received payment in full in same day funds of the Exercise Price for the Purchased Shares. 

  

	 	(e)	The Company and the Optionee must have entered into the Stock Purchase Agreement. 

  

	9.	Record Ownership. 

 In the event that Optionee duly
exercises any Options pursuant to Section 8, Optionee will be deemed to have become the holder of record of the Purchased Shares (and the Purchased Shares will be deemed to have been issued) immediately prior to the close of business on the
third business day after the satisfaction of all conditions set forth in Section 8. 
  

	10.	Adjustments Upon Recapitalization. 

 The number of
Shares purchasable upon exercise of the Options and the Exercise Price will be subject to adjustment from time to time upon the occurrence of any of the following events and subject to the following terms and conditions: 
  

	 	(a)	Options granted under the Plan and any Stock Option Agreements and the maximum number of Shares subject to all Options stated in Section 5 shall be subject to adjustment or
substitution, as determined by the Board or the Committee in its sole discretion, as to the number, price or kind of a Share or other consideration subject to such Options or as otherwise determined by the Board or the Committee to be equitable
(i) in the event of changes in the outstanding stock or in the capital structure of the Company by reason of stock or extraordinary cash dividends, stock splits, reverse 

  

 3 

 stock splits, recapitalization, reorganizations, mergers, consolidations, combinations, exchanges, or
other relevant changes in capitalization occurring after the date of grant of any such Option or (ii) in the event of any change in applicable laws or any change in circumstances which results in or would result in any substantial dilution or
enlargement of the rights granted to, or available for, Optionees, or which otherwise warrants equitable adjustment because it interferes with the intended operation of the Plan. 
 Notwithstanding the above, in the event of any of the following: 
  

	 	(i)	The Company is merged or consolidated with another corporation or entity and, in connection therewith, consideration is received by shareholders of the Company in a form other than
stock or other equity interests of the surviving entity; 

  

	 	(ii)	All or substantially all of the assets of the Company are acquired by another person; 

  

	 	(iii)	The reorganization or liquidation of the Company; or 

  

	 	(iv)	The Company shall enter into a written agreement to undergo an event described in clauses (i), (ii) or (iii) above, 

 then the Board or the Committee may, in its discretion and upon at least 10 days advance notice to the affected persons, cancel any outstanding Options
and cause the holders thereof to be paid, in cash or securities, or any combination thereof, the value of such Options based upon the price per Share received or to be received by other shareholders of the Company in such event. The terms of this
Section 10 may be varied by Board or the Committee in any particular Stock Option Agreement. 
  

	 	(b)	To the extent that the forgoing adjustments relate to stock or securities of the Company, the adjustments will be made by the Board or a Committee thereof excluding the vote of
Optionee, if the Optionee is then a Director of the Company, and the Board’s determination will be final, binding and conclusive. 

  

	 	(c)	The provisions of this Section 10 are intended to be exclusive, and Optionee will have no other rights upon the occurrence of any of the events described in this
Section 10 except as expressly provided. 

  

	 	(d)	The grant of the Options will not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business
structure, or to merge, consolidate, dissolve or liquidate, or to sell or transfer all or any part of its business or assets. Nothing set forth in this Plan will operate or be deemed to limit or restrict in any manner the Company’s right to
sell or issue, or to require any adjustment as a result of any sale or issuance by the Company of, its Common Stock (or any other security) to any person or at any price, including, without limitation, any sale or issuance at a price per Share which
is less than that effectively payable by the Optionee under this Plan. 

  

	11.	Successors 

 The obligations of the Company under
the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets
and business of the Company. The Company agrees that it will make appropriate provisions for the preservation of the Optionee’s rights under the Plan in any agreement or plan which it may enter into or adopt to effect any such merger,
consolidation, reorganization or transfer of assets. 
  

	12.	Option Price. 

 The Exercise Price of the Shares
under each Option will be nominally less than the fair market value of the Shares on the date of the grant of the Option. If the Shares are trading on a recognized stock exchange, the “fair market value” will be the closing price as of the
date of exercise, or, if no trading occurred on that date, the closing price on the most recent business day on which trading occurred. If no public market exists for the Shares, the “fair market value” will be set by a good-faith
determination 
  

 4 

 of the Board or the Committee of the price at which the Shares subject to the Option would change hands
on the date of exercise between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of the relevant facts. 
  

	13.	Vesting, Option Period and Expiration. 

 Options
shall vest and become exercisable in such manner and on such date or dates determined by the Board or the Committee and shall expire after such period, not to exceed ten (10) years, as may be determined by Board or the Committee (the
“Option Period”); provided, however, that notwithstanding any vesting dates set by the Board or the Committee, the Board or the Committee may in its sole discretion accelerate the exercisability of any Option, which acceleration
shall not affect the terms and conditions of any such Option other than with respect to exercisability. If an Option is exercisable in installments, such installments or portions thereof which become exercisable shall remain exercisable until the
Option expires. Unless otherwise stated in the applicable Stock Option Agreement, if prior to the end of the Option Period, the Optionee ceases employment or service with the Company and its Affiliates for any reason (including death or disability),
the Option shall expire on the earlier of the last day of the Option Period or the date that is 90 days after the date of the Optionee’s termination of employment. In such event, the Option shall remain exercisable by the Optionee until its
expiration, only to the extent the Option was exercisable at the time of such termination of employment. 
  

	14.	Non-Transferability 

  

	 	(a)	Each Option shall be exercisable only by the Optionee during the Optionee’s lifetime, or, if permissible under applicable law, by the Optionee’s legal guardian or
representative. No Option may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by an Optionee otherwise than by will or by the laws of descent and distribution and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or the Indian Subsidiary; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale,
transfer or encumbrance. 

  

	 	(b)	Notwithstanding the foregoing, the Board or the Committee may, in a Stock Option Agreement, provide that Options may be transferred by an Optionee without consideration, subject to
such rules as the Board or the Committee may adopt consistent with any applicable Stock Option Agreement and applicable FEMA regulations to preserve the purposes of the Plan, to: 

  

	 	(i)	any person who is a “relative” of the Optionee, as defined in section 7(vii) of the Employee Stock Option Guidelines issued by the Ministry of Finance of the Government of
India (collectively, the “Immediate Family Members”); 

  

	 	(ii)	a trust solely for the benefit of the Optionee and his or her Immediate Family Members; 

  

	 	(iii)	a partnership or limited liability company whose only partners or shareholders are the Optionee and his or her Immediate Family Members; or 

  

	 	(iv)	any other transferee as may be approved either (a) by the Board or the Committee in its sole discretion, or (b) as provided in the applicable Stock Option Agreement;

 (each transferee described in clauses (i), (ii), (iii) and (iv) above is hereinafter referred to as a
“Permitted Transferee”); provided that the Optionee gives the Board or the Committee advance written notice describing the terms and conditions of such proposed transfer and the Board or the Committee notifies the Optionee in
writing that such a transfer would comply with the requirements of the Plan and any applicable Stock Option Agreement. 
  

	 	(c)	The terms of any Option transferred in accordance with the immediately preceding sentence shall apply to the Permitted Transferee and any reference in the Plan or in a Stock Option
Agreement to an Optionee shall be deemed to refer to the Permitted Transferee, except that (a) Permitted Transferees shall not be entitled to transfer any Options, other than by will or the laws of descent and distribution; (b) Permitted
Transferees shall not be entitled to exercise any transferred Options unless there shall be in effect a registration statement on an appropriate form covering the Shares 

  

 5 

 to be acquired pursuant to the exercise of such Option if the Board or the Committee determines,
consistent with any applicable Stock Option Agreement, that such a registration statement is necessary or appropriate, (c) the Board or the Committee or the Company shall not be required to provide any notice to a Permitted Transferee, whether
or not such notice is or would otherwise have been required to be given to the Optionee under the Plan or otherwise, and (d) the consequences of termination of the Optionee’s employment by, or services to, the Company or the Indian
Subsidiary under the terms of the Plan and the applicable Stock Option Agreement shall continue to be applied with respect to the Optionee, following which the Options shall be exercisable by the Permitted Transferee only to the extent, and for the
periods, specified in the Plan and the applicable Stock Option Agreement. 
  

	15.	Qualification of Plan. 

 It is intended that the
Option to be issued under this Plan will qualify as and be subject to exercise only to the extent that it does qualify for beneficial tax treatment under the Act. 
  

	16.	Applicable Law: Severability. 

 The Plan here
created will be construed, administered, and governed in all respects in accordance with the laws of the Republic of India. If any provision of this instrument will be held by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions of the Plan will continue to be fully effective. Notwithstanding what is stated above the restrictions prescribed under FEMA, as referred to in this Plan, would be read to include the amendments made to FEMA subsequent to the
effective date of this Plan and would deem to have always included such amendments. 
  

	17.	Shares Reserved. 

 The Company will at all times
during the term of the Plan reserve and keep available the number of Shares as will be sufficient to satisfy the requirements of the Plan. 
  

	18.	Stock Option Agreements 

 Options shall be evidenced
by Stock Option Agreements specifying the number of Shares covered thereby, in such form as the Board or the Committee shall from time to time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless
evidenced by a fully executed Stock Option Agreement. Stock Option Agreements may incorporate all or any of the terms of the Plan by reference. 
  

	19.	Interpretation. 

 In the event of any inconsistency
between the provisions of this Plan and the provisions of the Stock Option Agreements, the provisions of this Plan will prevail. 
  

	20.	Adoption by the Indian Subsidiary 

 This Plan shall
be extended to the Optionee only if the Board of Directors of the Indian Subsidiary accepts and adopts the Plan. All grants made under the Plan shall be deemed to have been made at the behest and on behalf of the Indian Subsidiary. The Indian
Subsidiary, in so far as the terms and conditions of the Plan apply to it, shall be bound by the terms and conditions thereof. 
  

	21.	Miscellaneous. 

 Titles and captions contained in
this Plan are inserted only as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Plan or the intent of any provision. 
  

 6 

 Basis of valuation of shares of the Company1
 
 [Note: The following are indicative and subject to what
is feasible in the current circumstances.] 
  

	1.	The basis of valuation of the Shares Company considered by the Board has been arrived based on a multiple of the total revenues of the Company for the year ended
•                    . 

  

	2.	The basis of valuation of the Share is arrived at by the Board after considering the following: 

  

	 	(i)	The Company was incorporated on                     

  

	 	(ii)	The annual accounts of the Company for the years ended • have been considered. 

  

	 	(iii)	The Company has a paid up capital of USD              comprising of
             shares. 

  

	 	(iv)	The Net Asset Value per Share of the Company based on the adopted accounts for the year ended •
                     is around USD              

 

	 	(v)	The performance and valuation on the stock markets of companies having similar scale, size and nature of operations as that of the Company as adjusted for various factors considered
appropriate by the Board. 

  

	 	(vi)	a good-faith determination of the Board or the Committee of the price at which the Shares subject to the Option would change hands on the date of exercise between a willing buyer
and a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of the relevant facts. 

 For and
on behalf of 
 ExlService Holding Inc. 
  

					
	Place:	 	Mr.	 	  

		 	Name:	 	
		 	Title:	 	[ Board Member]
	Dated:	 		 	

 NOTE: The basis of valuation of the stock with reference to the Company’s annual accounts for the [last
three2] [please put appropriate information] and a brief explanation as to how the basis has been arrived at is enclosed
herewith. This being the first year of the Company, no prior year financials can be used for determining the basis of valuation. 
  

	1	Please note that this basis for valuation does not need to be part of the plan, but would need to be filed along with the Plan with the Chief Commissioner of Income
Tax in India where ExlServices files its tax returns. 

	2	In the present case what ever is practicable. 

  

 7

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