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Exhibit
10.5
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT (this
“Agreement” ), made and entered into effective
as of January 1, 2007 (the “Effective Date”
), by and between The Nasdaq Stock Market, Inc. (the
“Company” ) and Robert Greifeld (the
“Executive” ).
WHEREAS, the Executive and
the Company entered into an Employment Agreement, dated as of
May 12, 2003 (the “Prior Agreement” );
and
WHEREAS, the Executive and
the Company desire to amend and restate the Prior Agreement in its
entirety.
NOW, THEREFORE, in
consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties hereby amend and
restate the Prior Agreement in its entirety and agree as
follows:
1. Term of Employment.
Subject to Section 8 below, the term of the Executive’s
employment under this Agreement shall commence on the Effective
Date and shall end on December 31, 2010 (the “Initial
Period” ); provided, however, that such term shall be
automatically extended for additional one-year periods (each, a
“Renewal Period” ) unless, not later than
180 days prior to the expiration of the Initial Period or a
Renewal Period, as applicable, either party hereto shall provide
written notice of its or his desire not to extend the term hereof
(a “Non-Renewal Notice” ) to the other party
hereto (the Initial Period, together with each Renewal Period then
in effect, shall be referred to hereinafter as the
“Employment Term” ).
2. Position
(a) Duties. The
Executive shall serve as the Company’s Chief Executive
Officer and President. In such position, the Executive shall have
such duties and authority as shall be determined from time to time
by the Board of Directors of the Company (the
“Board” ) and as shall be consistent with the
by-laws of the Company as in effect from time to time;
provided , however , that, at all times, the
Executive’s duties and responsibilities hereunder shall be
commensurate in all material respects with his status as the
senior-most officer of the Company. During the Employment Term, the
Executive shall devote his full time and best efforts to his duties
hereunder. The Executive shall report directly to the Board (or any
committee of the Board designated for this purpose). In addition,
the Executive agrees to continue to serve during the Employment
Term as a member of the Board to the extent he is periodically
elected or appointed to such position in accordance with the
by-laws of the Company and applicable law.
(b) Company Code of
Conduct. The Executive shall comply in all respects with the
NASD Code of Conduct as may be amended from time to time (the
“Code of Conduct” ), and the Executive hereby
acknowledges that he has received a copy of the Code of
Conduct.
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Pursuant to the Code of Conduct the
Executive shall be required to: (i) disclose to the Audit
Committee of the board of directors of the Nasdaq Stock Market,
Inc. (the “Audit Committee” ) the names of the
boards of directors, boards of advisors or boards of trustees on
which he currently serves and (ii) obtain prior approval from
the Audit Committee for service as a new director of any publicly
traded company, which approval shall not be unreasonably withheld.
The Executive agrees to accept the final Audit Committee decision
on the suitability of all present and future directorships as
binding. Subject to the foregoing, the Executive may, in accordance
with the Code of Conduct, (i) engage in personal activities
involving charitable, community, educational, religious or similar
organizations, (ii) manage his personal investments and
(iii) continue to serve as a member of the boards of
directors, boards of advisors or boards of trustees on which he is
serving on the Effective Date; provided, however, that, in each
case, such activities are in all respects consistent with
applicable law and are in accordance with Section 9
below.
3. Base Salary. During
the Employment Term, the Company shall pay the Executive a base
salary (the “Base Salary” ) at an annual rate of
$1,000,000. The Base Salary shall be payable in regular payroll
installments in accordance with the Company’s payroll
practices as in effect from time to time. The Management
Compensation Committee of the Board (the “Compensation
Committee” ) shall review the Base Salary at least
annually and may (but shall be under no obligation to) increase
(but not decrease) the Base Salary on the basis of such
review.
4. Annual
Bonus
(a) Annual Bonus. For
each calendar year during the Employment Term, the Executive shall
be eligible to participate in the Incentive Compensation Program of
the Company (the “Bonus Program” ) in accordance
with the terms and provisions of such Bonus Program as established
from time to time by the Compensation Committee and pursuant to
which the Executive will be eligible to earn an annual cash bonus
(the “Annual Bonus” ). The Company has made
available to the Executive a complete copy of the Bonus Program in
effect as of the Effective Date. Pursuant to the terms of the Bonus
Program, the Executive shall be eligible to earn, for each full
calendar year during the Employment Term, a target Annual Bonus
equal to 200% of Base Salary (the “Target Bonus”
) based upon the achievement of one or more performance goals
established for such year by the Compensation Committee. The
Executive shall have the opportunity to make suggestions to the
Compensation Committee prior to the determination of the
performance goals for the Bonus Program for each performance
period, but the Compensation Committee will have final power and
authority concerning the establishment at such goals.
(b) Timing and Deferral of
Annual Bonus. The Annual Bonus for each year shall be paid to
the Executive as soon as reasonably practicable following the end
of such year, but in no event later than March 15
th following the end of the calendar year to which
such Annual Bonus relates.
5. Equity
Compensation.
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(a) Options. As set
forth in the Prior Agreement, the Company granted to Executive in
2003 two options to purchase the Company’s common stock (the
“Options”), each of which covers one million shares, at
per share exercise prices of $5.28 per share and $6.30 per share,
which was 100% of fair market value of a share of the
Company’s common stock on the date of grant, as determined in
accordance with the methodology for calculating fair market value
as set forth in The Nasdaq Stock Market, Inc. Equity
Compensation Plan, which has been adopted by the Board and may from
time to time, be amended (the “Stock Plan” ).
The Options shall continue to be subject to the terms and
conditions of the respective option award agreements (the
“Option Agreements”) attached as Exhibits A and B to
the Prior Agreement.
The Company granted the
Executive an option on December 13, 2006 covering 960,000
shares of Company common stock (the “Option” )
with a per share exercise price equal to the fair market value of a
share of the Company’s common stock on the date of grant, as
determined in accordance with the methodology for calculating fair
market value set forth in the Stock Plan. The Option shall be
subject to a stock option agreement approved by the Compensation
Committee, the principal terms and conditions of which are set
forth on Exhibit A. The Option is intended to be the only grant of
stock options to the Executive by the Company during the Initial
Period.
(b) Restricted Stock.
As set forth in the Prior Agreement, the Company made three
separate grants of 100,000 restricted shares of the Company’s
common stock (the “Restricted Shares”) to the Executive
in 2003, 2004 and 2005. The Restricted Shares shall continue to be
subject to the terms and conditions of the applicable restricted
stock award agreements (the “Restricted Stock
Agreements”) the form of which are substantially similar to
Exhibit C to the Prior Agreement.
(c) Performance Share
Units. The Company will grant the Executive 80,000 performance
share units in the first half of 2007, subject to shareholder
approval. The Company shall further grant the Executive 80,000
performance share units annually no later than the first quarter of
each of calendar years 2008, 2009 and 2010. Performance share units
granted pursuant to this paragraph 5(c) (the “Performance
Share Units” ) shall vest under a three-year performance
period, and shall be subject to the Executive’s employment
with the Company on each grant date and subject to the attainment
of goals established by the Compensation Committee in consultation
with the Executive. Each grant of Performance Share Units shall be
subject to a performance share units agreement to be approved by
the Compensation Committee, the principal terms and conditions of
which are set forth on Exhibit B. Notwithstanding the foregoing,
the grant of Performance Share Units pursuant to this paragraph
5(c) shall be subject to shareholder approval of performance
related criteria and related amendments to the Stock Plan. The
Company intends to seek such shareholder approval in
2007.
6. Employee
Benefits.
(a) Generally. During
the Employment Term, the Company shall provide the Executive with
benefits on the same basis as benefits are generally made available
to other senior executives of the Company, including, without
limitation, medical, dental, vision, disability and life insurance,
financial and tax planning services and retirement benefits. The
Executive shall
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be entitled to four weeks of paid
vacation; provided, however, that, in the event the
Executive’s employment ends for any reason, the Executive
shall be paid only for unused vacation that accrued in the calendar
year his employment terminated and any unused vacation for any
prior year shall be forfeited.
(b) SERP Participation and
Provisions. The Executive shall continue to participate in the
Nasdaq Stock Market, Inc. Supplemental Executive Retirement
Plan (the “SERP” ). The Company reserves the
right to modify or terminate the SERP at any time. Notwithstanding
any term or condition contained in the SERP to the contrary, and
subject to the Company’s right to modify or terminate the
SERP at any time:
(i) Section 4.1 of the
SERP shall be applied as if the age and service requirements stated
therein were age 49 and four years of service rather than age 55
and ten years of service. Accordingly, the Executive shall be 100%
vested in his accrued SERP benefit upon the later of his attainment
of age 49 while employed and his completion of four years of
service.
(ii) Section 4.1 of the
SERP shall be applied as if the age and service requirements stated
therein were satisfied upon the Executive’s termination of
employment by the Company without Cause or by the Executive for
Good Reason pursuant to Section 8(b) below. Accordingly, under
such circumstances, the Executive shall be 100% vested in his SERP
benefit even if his employment terminates prior to his attaining
age 49 and having completed four years of service with the
Company.
(iii) The death benefit
provided in Section 5.1 of the SERP shall become payable if
the Executive dies before his SERP benefit commences, but after
having satisfied the requirements of Section 4.1 of the SERP
prior to modification by Section 6(b)(i) above (and, if
the foregoing conditions are satisfied, such death benefit will be
payable even if the Executive’s death occurs after he has
left employment with vested rights under the SERP, but before
payment of the SERP benefit commences).
(iv) Section 4.3 of the
SERP (relating to early retirement) shall be applied as if the
service requirement stated therein were five years of service
rather than ten years of service; provided that this special
rule shall not permit the Executive’s SERP benefit to start
earlier than age 55.
(v) The provisions of this
Section 6(b) shall not accelerate the rate at which the SERP
benefit accrues so that the amount of the accrued SERP benefit
shall be determined with reference to an accrual over a period of
3,650 days as provided in Section 4.2(a) of the
SERP.
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7. Business and Other
Expenses.
(a) Business Expenses.
During the Employment Term, the Company shall reimburse the
Executive for reasonable business expenses incurred by him in the
performance of his duties hereunder in accordance with the policy
established by the Compensation Committee. Accordingly, the Company
shall reimburse the Executive’s expenses associated with
business travel in accordance with such policy.
(b) Transportation and
Security. During the Employment Term, in accordance with the
directives of the Compensation Committee, the Company shall provide
the Executive with an automobile and driver during the business
week for personal and business use and at other times as required
for business purposes. The driver shall have security training if
the Executive and the Compensation Committee determine in good
faith that such security training is necessary or advisable for the
personal safety of the Executive or his family. The Company shall
conduct a security audit of up to two of the Executive’s
personal residences and, if necessary, install or upgrade the
Executive’s home security systems at a reasonable cost to the
Company not to exceed $50,000.
(c) Legal Fees. The
Company shall pay or reimburse the Executive for his reasonable
legal fees and related executive compensation consulting fees and
expenses incurred in connection with the negotiation and execution
of this Agreement upon presentation by the Executive of written
invoices or receipts setting forth in reasonable detail the basis
for such legal fees and expenses in an amount not to exceed
$50,000.
8. Termination.
Notwithstanding any other provision of this Agreement, subject to
the further provisions of this Section 8, the Company may
terminate the Executive’s employment or the Executive may
resign such employment for any reason or no stated reason at any
time, subject to the notice and other provisions set forth
below:
(a) Generally. In the
event of the termination of the Executive’s employment for
any reason, the Executive shall be entitled to receive payment of
(i) any unpaid Base Salary through the Date of Termination,
(ii) subject to Section 6(a) above, any accrued but
unpaid vacation through the Date of Termination (as defined below)
and (iii) any earned but unpaid Annual Bonus with respect to
the calendar year ended prior to the Date of Termination (the
“Base Obligations” ). In addition, in the event
of the Executive’s termination of employment, the applicable
provisions of each Option Agreement and Performance Share Unit
Agreement shall govern the treatment of the Options and the
Performance Share Units, respectively.
For purposes of this
Agreement, “Date of Termination” means
(i) in the event of a termination of the Executive’s
employment by the Company for Cause or by the Executive for Good
Reason, the date specified in a written notice of termination (or,
if not specified therein, the date of delivery of such notice), but
in no event earlier than the expiration of the cure periods set
forth in Section 8(b)(ii) or 8(b)(iii) below,
respectively; (ii) in the event of a termination of the
Executive’s employment by the Company without Cause, the date
specified in a written notice of termination (or if not specified
therein, the date of delivery of such notice); (iii) in the
event of a termination of the Executive’s employment by the
Executive without Good Reason,
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the date specified in a written notice
of termination, but in no event less than 60 days following
the date of delivery of such notice; (iv) in the event of a
termination of the Executive’s employment due to Permanent
Disability (as defined below), the date the Company terminates the
Executive’s employment following the certification of the
Executive’s Permanent Disability; (v) in the event of a
termination of Employment due to the Executive’s death, the
date of the Executive’s death; or (vi) in the event of a
termination of the Executive’s employment due to the delivery
of a Non-Renewal Notice, the date on which the Initial Period or a
Renewal Period expires, as applicable.
(b) Termination by the
Company Without Cause or by the Executive for Good
Reason.
(i) The Executive’s
employment hereunder may be terminated by the Company without Cause
or by the Executive for Good Reason. Upon the termination of the
Executive’s employment by the Company without Cause or by the
Executive for Good Reason, except as provided in Section 8(h)
below, the Executive shall be entitled to receive, in addition to
the Base Obligations, the following payments and benefits (the
“Severance Benefits” ):
(A) Severance Payment
. The Company shall pay the Executive an amount (the
“Severance Payment” ) equal to the sum of
(I) the Base Salary paid to the Executive with respect to the
calendar year immediately preceding the Executive’s Date of
Termination and (II) the Annual Bonus for the calendar year
immediately preceding the Executive’s Date of Termination,
payable in substantially equal monthly installments for the
twelve-month period following the Executive’s Date of
Termination (the “Severance Period”), or, if required
to avoid the imposition of tax, interest or penalties under
Section 409A of the Internal Revenue Code of 1986, as amended
(Section “409A”) beginning on the date that is six
months and one day after the date of the Executive’s
“separation from service”) within the meaning of 409A,
in which case the first payment shall include all amounts that
would have been paid on earlier payroll dates but for such
delay;
(B) SERP . The Company
shall provide the Executive the SERP benefit as set forth in
Section 6(b)(ii) above; and
(C) Health Care
Coverage . The Company shall provide the Executive with
continued health care coverage for the lesser of (I) twelve
months or (II) the period beginning with the Termination Date
and ending on the date that the Executive is eligible for coverage
under the health care plans of a subsequent employer, such coverage
to be conditioned upon the Executive (X) being covered by the
Company’s health care plans immediately prior to the Date of
Termination and (Y) paying his share of the applicable health
care premiums, deductibles and co-payments for such period of
coverage. The foregoing health care benefits are not intended to
limit or otherwise reduce any entitlements that Executive may have
under the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”).
Receipt of the Severance
Benefits by the Executive is subject to the execution by him of a
general release of claims substantially in the form attached as
Exhibit C (the “Release” ). All other
benefits, if any, due the Executive following termination pursuant
to this Section 8(b) shall
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be determined in accordance with the
plans, policies and practices of the Company; provided, however,
that the Executive shall not participate in any severance plan,
policy or program of the Company. The payments and other benefits
provided for in this Section 8(b) are payments and benefits to
which the Executive is not otherwise entitled, are given in
consideration for the Release and are in lieu of any severance
plan, policy or program of the Company or any of its subsidiaries
that may now or hereafter exist. The payments and benefits to be
provided pursuant to this Section 8(b)(i) shall constitute
liquidated damages and shall be deemed to satisfy and be in full
and final settlement of all obligations of the Company to the
Executive under this Agreement. The Executive acknowledges and
agrees that such amounts are fair and reasonable, and are his sole
and exclusive remedy, in lieu of all other remedies at law or in
equity, and with respect to the termination of his employment
hereunder. If, during the Severance Period, the Executive breaches
in any material respect any of his obligations under Section 9
or 10 below, the Company may, upon written notice to the Executive,
(x) terminate the Severance Period and cease to make any
further payments of the Severance Payment and (y) cease any
health care coverage continuation, except in each case as required
by applicable law.
(ii) For purposes of this
Agreement, “Cause” shall mean (A) the
Executive’s conviction of, or pleading nolo contendere to,
any crime, whether a felony or misdemeanor, involving the purchase
or sale of any security, mail or wire fraud, theft, embezzlement,
moral turpitude, or Company property (with the exception of minor
traffic violations or similar misdemeanors); (B) the
Executive’s repeated neglect of his duties to the Company; or
(C) the Executive’s willful misconduct in connection
with the performance of his duties or other material breach by the
Executive of this Agreement; provided, however, that the delivery
of a Non-Renewal Notice by the Executive shall not constitute Cause
for purposes of this Agreement; provided further that the Company
may not terminate the Executive’s employment for Cause unless
(x) the Company first gives the Executive written notice of
its intention to terminate and of the grounds for such termination
within 90 days following the date the Board is informed of
such grounds at a meeting of the Board and (y) the Executive
has not, within 30 days following receipt of such notice,
cured such Cause (if capable of cure) in a manner that is
reasonably satisfactory to the Board.
(iii) For purposes of this
Agreement, “Good Reason” shall mean the Company
(A) reducing the Executive’s position, duties, or
authority; (B) failing to secure the agreement of any
successor entity to the Company that the Executive shall continue
in his position without reduction in position, duties or authority;
or (C) committing any other material breach of this Agreement;
provided, however, that the delivery of a Non-Renewal Notice by the
Company shall not constitute Good Reason for purposes of this
Agreement; and provided further that the occurrence of a Change in
Control (as defined hereinbelow), following which the Company
continues to have its common stock publicly traded and the
Executive is offered continued employment as the principal
executive officer with substantially the same duties and authority
as he has hereunder of such publicly traded entity, shall not be
deemed to give rise to an event or condition constituting Good
Reason; and provided further that no event or condition shall
constitute Good Reason unless (x) the Executive gives the
Company a Notice of Termination specifying his objection to such
event or condition within 90 days following the occurrence of
such event or condition, (y) such event or condition is not
corrected, in all material respects, by the Company in a manner
that is reasonably satisfactory to the Executive within
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30 days following the
Company’s receipt of such notice and (z) the Executive
resigns from his employment with the Company not more than
30 days following the expiration of the 30-day period
described in the foregoing clause (y).
(c) Permanent
Disability.
(i) The Executive’s
employment hereunder may terminate due to his Permanent Disability.
Upon termination of the Executive’s employment due to
Permanent Disability, the Executive shall be entitled to receive,
in addition to the Base Obligations, subject to the execution of a
Release a pro rata Target Bonus with respect to the calendar year
in which the Date of Termination occurs payable in a lump sum
within 30 days following the Date of Termination. All other
benefits, if any, due the Executive following termination pursuant
to this Section 8(c) shall be determined in accordance with
the plans, policies and practices of the Company; provided ,
however , that the Executive shall not participate in any
other severance plan, policy or program of the Company.
(ii) For purposes of this
Agreement, “Permanent Disability” means the
inability of the Executive to perform substantially all of his
duties in the manner required by the Agreement, whether by reason
of illness or injury or otherwise (whether physical or mental)
incapacitating the Executive for a continuous period exceeding
120 days (or a period of six months in any twelve-month
period). Such Permanent Disability shall be certified by a
physician chosen by the Company and reasonably acceptable to the
Executive (if he is then able to exercise sound
judgment).
(d) Death. The
Executive’s employment hereunder shall terminate due to his
death. Upon termination of the Executive’s employment
hereunder due to death, the Executive’s estate shall be
entitled to receive, in addition to the Base Obligations a pro rata
Target Bonus with respect to the calendar year in which the Date of
Termination occurs, payable in a lump sum within 30 days
following the Date of Termination. All other benefits, if any, due
the Executive’s estate following termination pursuant to this
Section 8(d) shall be determined in accordance with the plans,
policies and practices of the Company.
(e) For Cause by the
Company or Without Good Reason by the Executive. The
Executive’s employment hereunder may be terminated by the
Company for Cause or by the Executive without Good Reason. Upon
termination of the Executive’s employment for Cause or
without Good Reason pursuant to this Section 8(e), the
Executive shall have no further rights to any compensation
(including any Annual Bonus) or any other benefits under this
Agreement other than the Base Obligations. All other benefits, if
any, due the Executive following the Executive’s termination
of employment pursuant to this Section 8(e) shall be
determined in accordance with the plans, policies and practices of
the Company; provided, however, that the Executive shall not
participate in any severance plan, policy, or program of the
Company.
(f) Non-Renewal of
Employment Term. The Executive’s employment hereunder may
be terminated by either the Executive or the Company by delivery of
a Non-Renewal Notice in accordance with the provisions of
Section 1 above. Upon termination of the Executive’s
employment pursuant to this Section 8(f), the Executive shall
have no further rights,
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other than those set forth in this
Section 8(f) and as provided pursuant to Section 5 and
Exhibits A and B hereto, to any compensation or benefits under this
Agreement. All other benefits, if any, due the Executive following
termination pursuant to this Section 8(f) shall be determined
in accordance with the plans, policies and practices of the
Company; provided, however, that the Executive shall not
participate in any severance plan, policy or program of the
Company.
(g) Termination in
Connection with Change in Control by the Company Without Cause or
by the Executive for Good Reason.
(i) If, within the period
beginning on a Change in Control and ending two (2) years
following such Change in Control, the Executive’s employment
is terminated by the Company without Cause or by the Executive for
Good Reason, the Executive shall be entitled to receive, in
addition to the Base Obligations, the following payments and
benefits (the “CIC Severance Benefits”
):
(A) CIC Severance Payment. On
the first day of the seventh (7th) month following the
Executive’s Date of Termination, the Company shall pay the
Executive a lump sum cash payment equal to the sum of (I) the
Base Salary paid to the Executive with respect to the calendar year
immediately preceding the Executive’s Date of Termination,
(II) the Annual Bonus for the calendar year immediately preceding
the Executive’s Date of Termination and (III) a pro
rata portion of the Target Bonus for the calendar year in which
Executive’s Date of Termination occurs, determined by
multiplying such Target Bonus by a fraction, the numerator of which
is the number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the
denominator of which is three hundred sixty-five.
(B) SERP . The Company
shall provide the Executive the SERP benefit as set forth in
Section 6(b)(ii) above; and
(C) Health and Welfare
Benefits . The Company shall provide the Executive with
continued health care coverage for the lesser of
(I) twenty-four months or (II) the period beginning with
the Termination Date and ending on the date that the Executive is
eligible for coverage under the health care plans of a subsequent
employer, such coverage to be conditioned upon the Executive
(X) being covered by the Company’s health care plans
immediately prior to the Date of Termination and (Y) paying
his share of the applicable health care premiums, deductibles and
co-payments for such period of coverage. The foregoing health care
benefits are not intended to limit or otherwise reduce any
entitlements that Executive may have under COBRA. In addition, the
Company shall continue to provide the Executive with the same level
of accident (AD&D) and life insurance benefits upon
substantially the same terms and conditions (including
contributions required by the Executive for such benefits) as
existed immediately prior to the Executive’s Date of
Termination (or, if more favorable to the Executive, as such
benefits and terms and conditions existed immediately prior to the
Change in Control)
(D) Additional
Reimbursement Payment . If, as provided in Exhibit D, Executive
is subject to the excise tax imposed by Section 4999 of the
Internal
9
Revenue Code, the Company shall make the
additional reimbursement payment provided for in
Exhibit D.
Receipt of the CIC Severance
Benefits by the Executive is subject to the execution by him of a
general release of claims substantially in the form attached as
Exhibit C (the “Release” ). All other
benefits, if any, due the Executive following termination pursuant
to this Section 8(g) shall be determined in accordance with
the plans, policies and practices of the Company; provided,
however, that the Executive shall not participate in any severance
plan, policy or program of the Company. The payments and other
benefits provided for in this Section 8(g) are payments and
benefits to which the Executive is not otherwise entitled, are
given in consideration for the Release and are in lieu of any
severance plan, policy or program of th
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