Business Glossary

agreement between a brokerage firm and one of its employees spelling out the firm's rights when it purchases a New York Stock Exchange membership for the employee. Only individuals can be members of the NYSE, and it is common practice for a firm to finance the purchase of a membership, or seat , by one of its employees. The NYSE-approved ABC Agreement contains the following provisions regarding the future disposition of the seat: (1) The employee may retain the membership and buy another seat for an individual designated by the firm. (2) The employee may sell the seat and give the proceeds to the firm. (3) The employee may transfer the seat to another employee of the firm.