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Exhibit
10.74
February 11, 2008
Mr. John Halvey
234 Sunset Avenue
Ridgewood, New Jersey 07450
Dear John:
We are pleased to extend you
an offer of employment with NYSE Euronext, a Delaware corporation
(together with its successors and assigns, the “
Company ”), on the terms set forth in this letter
agreement (this “ Agreement ”), which upon
countersignature by you shall become a binding agreement between
you and the Company (each, a “ Party
”).
1. Employment;
Duties .
(a) As of March 3, 2008
(the “ Effective Date ”), the Company hereby
employs you, and you hereby accept employment, as an employee of
the Company for the duration of the “Term” (as defined
in Section 2 below).
(b) During the Term, you
shall (i) serve as a Group Executive Vice President and the
sole General Counsel of the Company and its Affiliates (as defined
in Section 12(a)); (ii) have all authorities, duties and
responsibilities customarily exercised by an individual serving in
those positions at an entity of the size and nature of the Company;
(iii) be assigned no duties or responsibilities that are
materially inconsistent with, or that materially impair your
ability to discharge, the foregoing duties and responsibilities;
and (iv) report directly to the Chief Executive Officer of the
Company (the “ CEO ”) and/or the Board of
Directors of the Company (the “Board”). During the
Term, your principal office, and principal place of employment,
shall be at the Company’s principal executive offices in New
York City, but you acknowledge and agree that the performance of
your duties hereunder may require significant business
travel.
(c) During the Term, you
shall devote substantially all of your business time, attention and
ability to the proper discharge of your duties hereunder and shall
not be employed in any other capacity without the prior written
consent of the CEO or the Board.
2. Term . The
Term shall commence as of the Effective Date and shall end on the
date of your termination of employment in accordance with
Section 5 of this Agreement.
3. Compensation and
Benefits .
(a) Base Salary
. During the Term, you shall receive a base salary (“
Base Salary ”) of no less than the amount set forth on
Appendix A , per annum , payable in
accordance
with the Company’s standard
payroll practices but no less frequently than monthly. Your Base
Salary shall be reviewed no less frequently than annually during
the Term for discretionary increase, effective January 1 of
the year of increase. After any such increase, the term “Base
Salary” as utilized in this Agreement shall thereafter refer
to the increased amount. Your Base Salary shall not be decreased
during the Term without your prior written consent.
(b) Annual Bonus
. During the Term, you shall be eligible to receive an annual
bonus with a target bonus opportunity of no less the amount set
forth on Appendix A per calendar year (the “ Target
Bonus ”). Your Target Bonus shall be reviewed no less
frequently than annually during the Term for discretionary increase
effective January 1 of the year of increase. After such
increase, the term “Target Bonus” shall thereafter
refer to the increased amount. Your annual bonus shall be paid in
cash, equity compensation awards or a combination thereof (provided
that the percentage of cash and equity, and the terms and
conditions thereof, shall be no less favorable to you than other
U.S. senior executives generally), subject to any valid deferral
election by you, no later than March 15 of the calendar year
following the year for which it is earned pursuant to the terms of
the Company’s annual incentive plan.
(c) Guaranteed
Bonus . Your guaranteed annual bonus for the 2008 calendar
year with respect to amounts payable under Section 3(b) shall
be no less than the amount set forth on Appendix A ,
without pro-ration or reduction for any other compensation
you receive from other sources (a “ Guaranteed Bonus
”) and shall be paid to you at the time annual bonuses are
paid to other executive officers of the Company for 2008 generally
(but no later than March 15, 2009). Notwithstanding
Section 3(b), at least 50% of your Guaranteed Bonus shall be
paid in cash, and no more than 50% of your Guaranteed Bonus shall
be awarded in the form of restricted stock units based on the
Company’s common stock (“ Restricted Stock Units
”) on terms and conditions that are no less favorable than
those contained in the Restricted Stock Unit Agreement attached
hereto as Exhibit A.
(d) Sign-On Award
. As of the Effective Date, you shall receive a number of
Restricted Stock Units with a value equal to the amount set forth
on Appendix A as your sign-on award (the “ Sign-On
Award ”) on the terms and conditions that are no less
favorable than those contained in the Restricted Stock Unit
Agreement attached hereto as Exhibit A. The number of shares
subject to the Sign-On Award shall be determined by dividing the
total value of the Sign-On Award by the Fair Market Value (as
defined in the 2006 Stock Incentive Plan) per share on the first
trading day prior to the Effective Date.
(e) Long Term Incentive
Awards . During the Term, you shall be eligible to receive
long term incentive compensation awards in amounts, in forms and on
terms and conditions no less favorable than those provided to other
U.S. senior executives of the Company generally; provided, that as
of no later than April 30, 2008, you shall receive a long-term
incentive award with a value on the date of grant equal to the
amount set forth on Appendix A and no later than
April 30, 2009, you shall receive a long-term incentive award
with a value on the date of grant no less than the amount set forth
on Appendix A .
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(f) Withholding
. The Company shall withhold all applicable Federal, state and
local taxes and other amounts as may be required by law or agreed
upon by the Parties with respect to compensation payable to you
pursuant to this Agreement.
(g) Vacation .
You shall be entitled during the Term to the number of weeks of
vacation per calendar year provided to U.S. senior executives of
the Company generally, but in no event fewer than four weeks’
vacation per calendar year.
(h) Employee
Benefits . During the Term, you will participate in all
employee benefit plans, programs and arrangements, expense
reimbursement arrangements, and all perquisites and fringe
benefits, that are generally available to U.S. senior executives of
the Company (the “ Company Arrangements ”), on
terms and conditions no less favorable to you than those applying
to other U.S. senior executives of the Company generally. The
Company shall also provide you with a Company-paid parking
space.
To assist you in understanding the tax
implications of this offer, we will pay on your behalf, fees
incurred to retain the services of tax advisors, to a maximum of
$15,000. In order to comply with Section 409A of the Internal
Revenue Code of 1986, as amended (the “ Code
”), (i) in no event shall the payments by the Company to
such advisors be made later than the end of the calendar year next
following the calendar year in which such fees and expenses were
incurred, provided, that you shall have submitted an invoice for
such fees and expenses at least 10 days before the end of the
calendar year next following the calendar year in which such fees
and expenses were incurred; and (ii) your right to have the
Company pay such fees may not be liquidated or exchanged for any
other benefit.
(i) D&O
Insurance . A directors’ and officers’
liability insurance policy (or policies) shall be kept in place,
during the Term and for six years thereafter, providing coverage
that is no less favorable to you in any respect (including, without
limitation, with respect to scope, exclusions, amounts and
deductibles) than the coverage then being provided to any other
present or former officer or director of the Company.
(j) I
ndemnification . The Company shall indemnify you
and advance expenses to you to the extent similarly situated U.S.
senior executives of the Company are indemnified and advanced
expenses in accordance with the Company’s bylaws as in
effect from time to time, and following termination of your
employment, you shall continue to be afforded such rights on terms
and conditions no less favorable than active U.S. senior executive
officers.
(k) Golden Parachute
Tax .
(i) If the aggregate of all
amounts and benefits due to you, under this Agreement or any other
plan, program, agreement or arrangement of the Company or any of
its Affiliates (or any payments, benefits or entitlements by any
entity that effectuates a related transaction), would constitute
“parachute payments” as such term is defined in and
under Section 280G of the Code (collectively, “
Change in Control Benefits ”), and would result in the
imposition of excise taxes pursuant to Section 4999 of the
Code, the Company will make an additional payment to you in an
amount (the “ Gross-Up Payment ”) such that,
after payment all
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taxes and any interest or penalties
imposed with respect to such taxes (including, without limitation,
federal, state, local income, employment, excise and other similar
taxes, but excluding any taxes imposed under Section 409A)
(the “ Parachute Tax ”) on both the Change in
Control Benefits and the Gross-Up Payment, you will be in the same
position as if no Parachute Tax had been imposed. Any Gross-Up
Payment shall be timely paid by the Company on your behalf directly
to the appropriate taxing authorities when due, but in all events
no later than the last day of the calendar year after the calendar
year in which the Parachute Tax shall be paid. The determinations
with respect to this Section 3(k)(i) shall be made by an
independent auditor (the “ Auditor ”) paid by
the Company. The Auditor shall be a nationally-recognized United
States public accounting firm chosen by the Company and approved by
you (which approval shall not be unreasonably withheld or delayed).
Notwithstanding the foregoing provisions of this
Section 3(k)(i), if it shall be determined that you are
entitled to the Gross-Up Payment, but that the Parachute Value (as
defined below) of all Change in Control Benefits does not exceed
110% of the Safe Harbor Amount (as defined below), then no Gross-Up
Payment shall be made to you and the amounts payable under this
Agreement shall be reduced so that the Parachute Value of all
Change in Control Benefits, in the aggregate, equals the Safe
Harbor Amount minus $5,000.00. The reduction of the amounts payable
hereunder which constitute Change in Control Benefits, if
applicable, shall be made by reducing the payments and benefits
under the following sections in the following order:
(i) Section 6(b)(iii), (ii) Section 6(b)(ii),
(iii) Section 6(b)(iv) and (iv) Section 6(b)(vii).
For purposes of reducing the Change in Control Benefits to the Safe
Harbor Amount minus $5,000, only amounts payable under this
Agreement (and no other payments) shall be reduced. If the
reduction of the amounts payable under this Agreement would not
result in a reduction of the Parachute Value of all Change in
Control Benefits to the Safe Harbor Amount minus $5,000, no amounts
payable under the Agreement or otherwise shall be reduced pursuant
to this Section 3(k)(i). The Company’s obligation to
make Gross-Up Payments under this Section 3(k) shall not be
conditioned upon your termination of employment.
(ii) It is possible that
after the determinations and selections made pursuant to
Section 3(k)(i) you will receive Change in Control Benefits
and Gross-Up Payments that are, in the aggregate, either more or
less than the limitations provided in Section 3(k)(i) above
(hereafter referred to as an “ Excess Payment ”
or “ Underpayment ”, respectively). If it is
established, pursuant to a final determination of a court or an
Internal Revenue Service proceeding that has been finally and
conclusively resolved, that an Excess Payment has been made, then
you shall refund the Excess Payment to the Company promptly on
demand, together with an additional payment in an amount equal to
the product obtained by multiplying the Excess Payment times the
applicable annual federal rate (as determined in and under
Section 1274(d) of the Code) times a fraction whose numerator
is the number of days elapsed from the date of your receipt of such
Excess Payment through the date of such refund and whose
denominator is 365. In the event that it is determined (x) by
arbitration under Section 8 below, (y) by a court of
competent jurisdiction, or (z) by the Auditor upon request by
you or the Company, that an Underpayment has occurred, the Company
shall pay an amount equal to the Underpayment to you within 10 days
of such determination together with an additional payment in an
amount equal to the product obtained by multiplying the
Underpayment times the applicable annual federal rate (as
determined in and under Section 1274(d) of the Code)
times a fraction whose numerator is the number of days
elapsed from the date of the Underpayment through the date of such
payment and whose denominator is 365.
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(iii) Any Gross-Up Payment,
as determined pursuant to this Section 3(k), shall be paid by
the Company and remitted to the relevant tax authorities when such
payment is due, provided that in no event shall such payment be
made later than the end of your taxable year next following your
taxable year in which the Parachute Tax on a Change in Control
Benefit are remitted to the Internal Revenue Service or any other
applicable taxing authority or, in the case of amounts relating to
a claim described in Section
3(k)(ii) that does not result in the remittance of any
federal, state, local and foreign income, excise, social security
and other taxes, the calendar year in which the claim is finally
settled or otherwise resolved.
(iv) Definitions . The
following terms shall have the following meanings for purposes of
this Section 3(k).
“ Parachute
Value ” of a Change in Control Benefit shall mean the
present value as of the date of the change of control for purposes
of Section 280G of the Code of the portion of such Change in
Control Benefit that constitutes a “parachute payment”
under Section 280G(b)(2) and its implementing regulations, as
determined by the Auditor for purposes of determining whether and
to what extent the Parachute Tax will apply to such Change in
Control Benefit.
The “ Safe Harbor
Amount ” means 2.99 times the Executive’s
“base amount,” within the meaning of Section
280G(b)(3) of the Code and its implementing
regulations.
(l) 409A
Compliance .
(i) Full Compliance .
It is the intent of the Parties that all compensation and benefits
payable or provided to you (whether under this Agreement or
otherwise) shall fully comply with the requirements of Code
Section 409A. Within the time period permitted by the
applicable Treasury Regulations, the Company may, subject to your
written approval (such approval not to be unreasonably withheld),
modify the Agreement, in the least restrictive manner necessary
without diminution of value, in order to cause the provisions of
the Agreement to comply with the requirements of Section 409A
of the Code, so as to avoid the imposition of taxes and penalties
on you pursuant to Section 409A of the Code.
(ii) Specified
Employee . Notwithstanding anything contained in this Agreement
to the contrary, if you are a “specified employee”
(determined in accordance with Code Section 409A and Treasury
Regulation Section 1.409-3(i)(2)) as of the Termination Date,
and if any payment, benefit or entitlement provided for in this
Agreement or otherwise both (i) constitutes a “deferral
of compensation” within the meaning of Code Section 409A
(“Nonqualified Deferred Compensation”) and
(ii) cannot be paid or provided in a manner otherwise provided
herein or otherwise without subjecting you to additional tax,
interest and/or penalties under Code Section 409A, then any
such payment, benefit or entitlement that is payable during the
first 6 months following the Termination Date shall be paid or
provided to you in a lump sum cash payment to be made on the
earlier of (x) your death or
(y) the first business day of the seventh calendar
month immediately following the month in which the Termination Date
occurs.
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4. Non-competition and
Non-solicitation . You agree that during your
employment with the Company and for the 12-month period of time
following the termination of your employment with the Company, you
will not, without the prior written consent of the CEO, directly or
indirectly:
(a) own, control, manage,
loan money to, represent, render any service or advice to or act as
an officer, director, employee, agent, representative, partner or
independent contractor of any securities exchange,
“ECN” or other such entity or similar direct seller of
market data in the financial services business, whose business
competes with the businesses of the Company or its majority-owned
subsidiaries, in North America or Europe as such businesses were
being conducted, or which the Company was actively planning to
enter, during your employment if the breach or alleged breach
occurs during your employment or on the date of your termination of
employment if the breach or alleged breach occurs thereafter
(“Competitive Activities”); provided, however, that
(i) the foregoing shall not prohibit you from passive
ownership of securities in any publicly traded company that is
engaged in any such business as long as you do not own more than
five percent (5%) or more of any class of the equity
securities of such company, and (ii) nothing in this
Agre
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