On December 30, 2005, Archipelago Holdings, Inc. (“Archipelago”) entered into agreements with each of its executive officers (the “Agreements”) that accelerate certain payments and vesting that would have occurred in 2006 following certain terminations after the completion of the mergers (the “Mergers”) of Archipelago and the New York Stock Exchange, Inc. (the “NYSE”) (or, in the case of Joseph Lombard, who will not be continuing with the combined company, upon the sale of Wave Securities). The Agreements were entered into in 2005 in order to help ensure (i) the executive officers (other than Mr. Lombard) would remain with the combined company following the Mergers, (ii) compliance with Section 409A of the Internal Revenue Code (which governs the taxation of arrangements that provide for the deferral of compensation) and (iii) that certain significant tax related cost savings for the combined company are achieved. In addition, the Agreements will help harmonize the compensation structure applicable to Archipelago executives after the closing of the Mergers with the compensation structure currently applicable to the NYSE executives. The NYSE consented to the execution of these Agreements.
The Agreements provide that on December 30, 2005, each of the Archipelago executive officers will (1) receive a cash payment in lieu of the cash severance amount otherwise payable pursuant to the executive officer’s Employment Agreement or Change in Control Severance Agreement, as applicable, and (2) have their restricted stock units be fully vested in lieu of the accelerated vesting otherwise provided under such equity awards. In addition, the Agreements provide that immediately prior to the closing of the Mergers up to 75% of the unvested stock options held by each of the executive officers will vest.
Click here to view a chart listing the amounts provided by the Agreements.