Employment Agreement - National Association of Securities Dealers Inc., NASDAQ Stock Market Inc. and Frank G. Zarb
July 22, 2001
H. Furlong Baldwin
Chairman of The Nasdaq Stock Market, Inc.
Management Compensation Committee
Mercantile Bankshares Corporation
2 Hopkins Plaza
Baltimore, MD 21201
Todd Robinson
Chairman of the National Association of Securities Dealers, Inc.
Management Compensation Committee
Chairman and CEO
LPL Financial Services
155 Federal Street
Boston, MA 02110
Dear Messers. Baldwin and Robinson:
The attachment summarizes the previously agreed to terms of my
employment contract with the National Association of Securities Dealers,
Inc. and The Nasdaq Stock Market, Inc., as amended, for (i) the period
beginning on the date I relinquish my position and duties pursuant to
paragraph 1(b) of my employment agreement and ending February 23, 2002, and
(ii) the period beginning February 24, 2002 and ending February 23, 2007.
In addition, although my employment agreement currently provides that I am
entitled to the following benefits, it is no longer necessary that I
receive them and I therefore relinquish my rights to them: (i) a T1-line
telephone system connected to the telephone system of The Nasdaq Stock
Market, Inc. and maintenance thereof, (ii) an efficiency apartment in the
Washington, D.C. metropolitan area, and (iii) a personal bodyguard for my
wife and I. If during the period beginning February 24, 2002 and ending
February 23, 2007, I provide consulting services during any 12-month period
for more than 50 hours to either the National Association of Securities
Dealers, Inc. or The Nasdaq Stock Market, Inc., I will be paid for each such
hour or portion thereof at the rate of $2,000 per hour.
Please sign below to indicate that you agree that my relationship with the
National Association of Securities Dealers, Inc. and The Nasdaq Stock
Market, Inc. will be in accordance with the terms summarized here and in
the attachment.
Sincerely,
/s/ Frank G. Zarb
Frank G. Zarb
/s/ H. Furlong Baldwin 7/24/01 /s/ Todd Robinson 7/26/01
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H. Furlong Baldwin Date Todd Robinson Date
Attachment
The Period Beginning on the Date Zarb Relinquishes his Position and
Duties Pursuant to Paragraph 1(b) of his Employment Agreement and Ending
February 23,2002
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Position: Zarb will be an employee, and not an officer, of
the National Association of Securities Dealers,
Inc. (the "Association") and The Nasdaq Stock
Market, Inc. (the "Nasdaq"), but will serve as a
senior advisor (employee) to the Association and
the Nasdaq and will continue to serve as
Chairman of Nasdaq-Europe and as a member of the
Board of Directors of Nasdaq-Japan.
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Salary and Bonus: Zarb will be paid salary and bonus as
provided in his employment agreement with the
Association and the Nasdaq, as amended (the
"Employment Agreement").
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SERP: Zarb will continue to accrue benefits under the
SERP as provided in the Employment Agreement.
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Reimbursement: Zarb will be reimbursed for each of the expenses
provided in the Employment Agreement including,
but not limited to, the following:
(i) all expenses incurred in moving from his
interim residence in New York to a permanent
residence in New York (the Association will
purchase the interim residence for an amount
equal to 100% of its fair market value as
determined in accordance with customary
appraisal and timing standards for such
transaction by one or more appraisers approved
by the Association and reasonably acceptable to
Zarb)(1),
(ii) the cost of installing and maintaining two
telephone lines in each of Zarb's New York and
Florida residences,
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(1) The Zarbs expect to move into their permanent residence by
October 1, 2002.
(iii) the cost for surveillance of Zarb's
personal residences and/or such other reasonable
methods of security as required by Zarb and
(iv) the cost for an appropriate corporate apartment
in the borough of Manhattan.(2)
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Automobile: Zarb will be entitled to the use of an
automobile as provided by the Employment
Agreement.
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Health: Zarb will be entitled to participate in health
plans or arrangements as provided by the
Employment Agreement.
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Office: Zarb will be entitled to appropriate office and
secretarial services.
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Stock Options and Zarb will be entitled to exercise all stock options
Restricted Stock: in accordance with the provisions in the Employment
Agreement. Also, all restrictions on any restricted
stock awarded to Zarb by the Nasdaq will lapse in
accordance with the provisions in the Employment
Agreement.
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(2) The Zarbs are doing a search for a permanent apartment in New York
and will vacate the corporate apartment no later than October, 2002.
The Period Beginning February 24, 2002 and ending February 23,2007
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Position: Zarb will serve as a consultant to the Association
and the Nasdaq.
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Consulting Fee: Zarb will receive an annual consulting fee as
provided by the Employment Agreement
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SERP: Zarb will receive the benefits pursuant to the
SERP as provided by the Employment Agreement.
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Reimbursement: Zarb will be reimbursed for each of the expenses
provided in the Employment Agreement including,
but not limited to, the following;
(i) to the extent Zarb has not previously moved
to his permanent residence in New York, all
expenses incurred in moving from his interim
residence in New York to a permanent residence
in New York (the Association will purchase the
interim residence for an amount equal to 100% of
its fair market value as determined in
accordance with customary appraisal and timing
standards for such transaction by one or more
appraisers approved by the Association and
reasonably acceptable to Zarb)(3),
(ii) the cost of maintaining two telephone lines
in each of Zarb's New York and Florida
residences,
(iii) to the extent the Association or the
Nasdaq has not previously reimbursed Zarb for
the cost of installing a home security system in
Zarb's New York permanent residence, the cost of
installing and maintaining a home security
system in Zarb's New York permanent residence,
(iv) the continued use of the corporate
apartment in Manhattan (until October, 2002),
and
(v) surveillance of Zarb's personal residences
and/or such other reasonable methods of security
as requested by Zarb.
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(3) The Zarbs expect to move into their permanent residence by
October 1, 2002.
Automobile: Zarb will be entitled to the use of an
automobile as provided in the Employment
Agreement.
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Health: Zarb will be entitled to health benefits as
provided in the Employment Agreement
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Office: Zarb will be entitled to appropriate office and
secretarial services as provided in the
Employment Agreement.
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Indemnification: Zarb will be indemnified by the Association and
the Nasdaq as provided in the Employment
Agreement.