THE GOLDMAN SACHS AMENDED AND RESTATED STOCK INCENTIVE PLAN ___ YEAR-END OPTION AWARD
EXHIBIT 10.40
THE XXXXXXX XXXXX AMENDED AND RESTATED
STOCK INCENTIVE PLAN
___ YEAR-END OPTION AWARD
STOCK INCENTIVE PLAN
___ YEAR-END OPTION AWARD
This Award Agreement sets forth the terms and conditions of the Year-End award (this
“Award”) of Nonqualified Stock Options (“Year-End Options”) granted to you under The Xxxxxxx Xxxxx
Amended and Restated Stock Incentive Plan (the “Plan”).
1. The Plan. This Award is made pursuant to the Plan, the terms of which are
incorporated in this Award Agreement. Capitalized terms used in this Award Agreement that are not
defined in this Award Agreement have the meanings as used or defined in the Plan. References in
this Award Agreement to any specific Plan provision shall not be construed as limiting the
applicability of any other Plan provision.
2. Award. The Award Statement delivered to you sets forth (i) the Date of Grant of
the Year-End Options, (ii) the number of Year-End Options and (iii) the Exercise Price of each
Year-End Option. Until shares of Common Stock (“Shares”) are delivered to you pursuant to
Paragraph 7 after you exercise your Year-End Options, you have no rights as a shareholder of GS
Inc. This Award is conditioned on your executing the related signature card and returning it
to the address designated on the signature card and/or by the method designated on the signature
card by the date specified, and is subject to all terms, conditions and provisions of the Plan and
this Award Agreement, including, without limitation, the arbitration and choice of forum provisions
set forth in Paragraph 13. By executing the related signature card (which, among other
things, opens the custody account referred to in paragraph 7 if you have not done so already), you
will have confirmed your acceptance of all of the terms and conditions of this Award
Agreement.
3. Expiration Date. The Expiration Date for your Year-End Options is ___ (in New
York). Notwithstanding anything to the contrary in this Award Agreement, but subject to
earlier termination as provided in this Award Agreement or otherwise in accordance with the Plan,
on the Expiration Date all of your then Outstanding Year-End Options shall terminate.
4. Vesting. All of your Year-End Options shall be Vested on the Date of Grant. While
your Year-End Options are Vested, and therefore your continued active Employment is not required in
order for your Outstanding Year-End Options to become exercisable, all other terms and conditions
of this Award Agreement shall continue to apply to such Year-End Options, and failure to meet such
terms and conditions may result in the termination of this Award (as a result of which no Shares
subject to any such Year-End Options would be delivered).
5. Termination of Year-End Options Upon Certain Events.
(a) Unless the Committee determines otherwise, your rights in respect of all of your
Outstanding Year-End Options immediately shall terminate, such Year-End Options shall cease to be
Outstanding, and no Shares shall be delivered in respect thereof, if at any time prior to the date
you exercise such Year-End Options:
(i) you attempt to have any dispute under the Plan or this Award Agreement resolved in any
manner that is not provided for by Paragraph 13 or Section 3.17 of the Plan;
(ii) any event that constitutes Cause has occurred;
(iii) (A) you in any manner, directly or indirectly, (1) Solicit any Client to transact
business with a Competitive Enterprise or to reduce or refrain from doing any business with the
Firm, (2) interfere with or damage (or attempt to interfere with or damage) any relationship
between the Firm and any Client, (3) Solicit any person who is an employee of the Firm to resign
from the Firm or to apply for or accept employment with any Competitive Enterprise or (4) on behalf
of yourself or any person or Competitive Enterprise hire, or participate in the hiring, of any
Selected Firm Personnel or identify, or participate in the identification of, Selected Firm
Personnel for potential hiring whether as an employee or consultant or otherwise, or (B) Selected
Firm Personnel are Solicited, hired or accepted into partnership, membership or similar status (1)
by a Competitive Enterprise that you form, that bears your name, in which you are a partner, member
or have similar status, or in which you possess or control greater than a de minimis equity
ownership, voting or profit participation or (2) by any Competitive Enterprise where you have, or
are intended to have, direct or indirect managerial or supervisory responsibility for such Selected
Firm Personnel;
(iv) you fail to certify to GS Inc., in accordance with procedures established by the
Committee, that you have complied, or the Committee determines that you in fact have failed to
comply, with all the terms and conditions of the Plan and this Award Agreement. By exercising any
Year-End Option under this Award Agreement, or by accepting the delivery of Shares under this Award
Agreement, you shall be deemed to have represented and certified at such time that you have
complied with all the terms and conditions of the Plan and this Award Agreement;
(v) the Committee determines that you failed to meet, in any respect, any obligation you may
have under any agreement between you and the Firm, or any agreement entered into in connection with
your Employment with the Firm, including, without limitation, the Firm’s notice period requirement
applicable to you, any offer letter, employment agreement or any shareholders’ agreement to which
other similarly situated employees of the Firm are a party; or
(vi) as a result of any action brought by you, it is determined that any of the terms or
conditions for exercise of your Year-End Options or delivery of Shares in respect thereto are
invalid.
For purposes of the foregoing, the term “Selected Firm Personnel” means: (i) any Firm employee or
consultant (A) with whom you personally worked while employed by the Firm, or (B) who at any time
during the year immediately preceding your termination of Employment with the Firm, worked in the
same division in which you worked; and (ii) any Managing Director of the Firm.
(b) percent of the number of Year-End Options that are granted to you as part of this
Award that are Outstanding immediately shall terminate, and such Outstanding Year-End Options shall
cease to be Outstanding if, prior to the earlier of or the date on which your Year-End
Options become exercisable following a Change in Control in accordance with Paragraph 6(d) hereof,
you (i) form, or acquire a 5% or greater equity ownership, voting or profit participation interest
in, any Competitive Enterprise, or (ii) associate in any capacity (including, but not limited to,
association as an officer, employee, partner, director, consultant, agent or advisor) with any
Competitive Enterprise. Notwithstanding the foregoing, unless otherwise determined by the
Committee in its discretion, this Paragraph 5(b) will not apply if your termination of Employment
is characterized by the Firm as “involuntary” or by “mutual agreement” other than for Cause and if
you execute such a general waiver and release of claims and an agreement to pay any associated tax
liability, both as may be prescribed by the Firm or its designee. No termination of Employment
initiated by you, including any termination claimed to be a “constructive termination” or the like
or a termination for good reason, will constitute an “involuntary” termination of Employment or a
termination of Employment by “mutual agreement.”
6. Exercisability of Year-End Options.
(a) In General. Only Year-End Options that are Outstanding can be exercised.
Outstanding Year-End Options must be exercised subject to Paragraph 6(e) and in accordance with
procedures established by
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the Committee from time to time but, subject to Paragraphs 6(b), 6(d) and 10(g), not earlier
than the Initial Exercise Date. The Initial Exercise Date for your Year-End Options shall be a
date specified by the Committee that is not more than thirty (30) Business Days after the date
listed on the Award Statement as the Initial Exercise Date, if that date is during a Window Period
or, if the date listed on the Award Statement is not during a Window Period, on a date specified by
the Committee that is not more than 30 Business Days after the first Trading Day of the first
Window Period that begins thereafter. For this purpose, a “Trading Day” is a day on which Shares
trade regular way on the New York Stock Exchange. The Committee may from time to time prescribe
periods during which the Year-End Options shall not be exercisable. In addition, the exercise
procedures established by the Committee may require you to take specific steps in order to exercise
your Year-End Options within a minimum time prior to the effective date of exercise.
(b) Death. Notwithstanding any other provision of this Award Agreement, if you die
and, at the time of your death, you have any Outstanding Year-End Options, the Transfer
Restrictions described in Paragraph 6(e) with respect to any Year-End Options and any Shares
delivered in respect thereto shall be removed, and such Outstanding Year-End Options (i) shall be
exercisable by the representative of your estate or, to the extent you specifically bequeath any of
your Outstanding Year-End Options under your will in accordance with such procedures, if any, as
may be adopted by the Committee to an organization described in Sections 501(c)(3) and 2055(a) of
the Code (or such other similar charitable organization as may be approved by the Committee) (a
“Charitable Beneficiary”), by the Charitable Beneficiary, in either case in accordance with
Paragraph 6(a) beginning on the date that is as soon as practicable after the date of death and
after such documentation as may be requested by the Committee is provided to the Committee and (ii)
unless earlier terminated in accordance with the terms of this Award Agreement, shall remain
exercisable until the Expiration Date.
(c) Other Terminations of Employment. Subject to Paragraphs 5(a) and 5(b), upon the
termination of your Employment for any reason (other than death or Cause), but subject to
Paragraphs 6(d) and 10(g), your then Outstanding Year-End Options shall be exercisable in
accordance with Paragraph 6(a) beginning on the Initial Exercise Date and, unless earlier
terminated in accordance with the terms of this Award Agreement, shall remain exercisable until the
Expiration Date.
(d) Change in Control. Notwithstanding anything to the contrary in this Award
Agreement, if a Change in Control shall occur, and within 18 months thereafter the Firm terminates
your Employment without Cause or you terminate your Employment for Good Reason, all of your
Year-End Options that were Outstanding shall become exercisable and, unless earlier terminated in
accordance with the terms of this Award Agreement, shall remain exercisable until the Expiration
Date and the Transfer Restrictions described in Paragraph 6(e) with respect to any Year-End Options
and any Shares delivered in respect thereto shall be removed.
(e) Transfer Restrictions on Shares after Exercise. Subject to Paragraphs 6(b), 6(d)
and 10(g), notwithstanding any other provision of this Award Agreement, (i) (A) no sale, exchange,
transfer, assignment, pledge, hypothecation, fractionalization, hedge or other disposition of
(including through the use of any cash-settled instrument) any Shares acquired in connection with
the exercise of your Year-End Options, whether voluntarily or involuntarily by you; and (B) no
exercise of any Year-End Options involving the sale of Shares acquired in respect of such exercise
(the restrictions in clauses (i)(A) and (i)(B) of this Paragraph 6(e) being referred to
collectively as the “Transfer Restrictions”) may be effected before the second anniversary of the
Initial Exercise Date (the “Transferability Date”), and any purported sale, exchange, transfer,
assignment, pledge, hypothecation, fractionalization, hedge, other disposition or exercise in
violation of the Transfer Restrictions shall be void; and (ii) if and to the extent Shares subject
to your Year-End Options are certificated, the certificates representing such Shares, shall bear a
legend specifying that such Shares are subject to the restrictions described in this Paragraph 6(e)
and GS Inc. shall advise its transfer agent to place a stop order against the transfer of such
Shares in violation of such Transfer Restrictions. Any Shares acquired in connection with any
exercise of your Year-End Options prior to the Transferability Date shall be held in the Custody
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Account or other account designated by the Firm. Within 30 Business Days after the
Transferability Date (or any other date for which removal of the Transfer Restrictions is called
for), GS Inc. shall take, or shall cause to be taken, such steps as may be necessary to remove the
Transfer Restrictions.
7. Delivery. Subject to Section 6(e), unless otherwise determined by the Committee,
or as otherwise provided in this Award Agreement, including, without limitation, Paragraphs 10 and
11, after receipt of payment of the Exercise Price in respect of a Year-End Option, a Share shall
be delivered by book-entry credit to your Custody Account or to a brokerage account, as approved or
required by the Firm, and until the Transferability Date, shall be subject to the Transfer
Restrictions. Notwithstanding the foregoing, if you are or become considered by GS Inc. to be one
of its “covered employees” within the meaning of Section 162(m) of the Code, then you shall be
subject to the provisions of Section 3.21.1 of the Plan, as a result of which delivery of your
Shares may be delayed. In accordance with Section 1.3.2(h) of the Plan, in the discretion of the
Committee, in lieu of all or any portion of the Shares otherwise deliverable upon the exercise of
all or any portion of your Year-End Options, the Firm may deliver cash, other securities, other
Awards or other property, and all references in this Award Agreement to deliveries of Shares shall
include such deliveries of cash, other securities, other Awards or other property.
8. Repayment. The provisions of Section 2.3.5 of the Plan (which requires Award
recipients to repay to the Firm amounts delivered to them if the Committee determines that all
terms and conditions of this Award Agreement in respect of such exercise were not satisfied) shall
apply to this Award.
9. Non-transferability. Except as otherwise may be provided in this Paragraph or as
otherwise may be provided by the Committee, and without limiting any permitted transfer in
accordance with Paragraph 10(g), the limitations on transferability set forth in Section 3.5 of the
Plan shall apply to this Award. Any purported transfer or assignment in violation of the
provisions of this Paragraph 9 or Section 3.5 of the Plan shall be void. The Committee may adopt
procedures pursuant to which some or all recipients of Year-End Options may transfer some or all of
their Year-End Options through a gift for no consideration to any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, any
person sharing the recipient’s household (other than a tenant or employee), a trust in which these
persons have more than 50% of the beneficial interest, and any other entity in which these persons
(or the recipient) own more than 50% of the voting interests.
10. Certain Additional Terms, Conditions and Agreements.
(a) The delivery of Shares is conditioned on your satisfaction of any applicable withholding
taxes in accordance with Section 3.2 of the Plan. To the extent permitted by applicable law, the
Firm, in its sole discretion, may require you to provide amounts equal to all or a portion of any
Federal, State, local, foreign or other tax obligations imposed on you or the Firm in connection
with the grant, vesting or delivery of this Award by requiring you to choose between remitting such
amount (i) in cash (or through payroll deduction or otherwise) or (ii) in the form of proceeds from
the Firm’s executing a sale of Shares delivered to you pursuant to this Award. In addition, if you
are an individual with separate employment contracts (at any time during and/or after the Firm’s
fiscal year), the Firm may, in its sole discretion, require you to provide for a reserve in an
amount the Firm determines is advisable or necessary in connection with any actual, anticipated or
potential tax consequences related to your separate employment contracts by requiring you to choose
between remitting such amount (i) in cash (or through payroll deduction or otherwise) or (ii) in
the form of proceeds from the Firm’s executing a sale of Shares delivered to you pursuant to this
Award (or any other Outstanding Awards under the Plan). In no event, however, shall any choice you
may have under the preceding two sentences determine, or give you any discretion to affect, the
timing of the delivery of Shares or the timing of payment of tax obligations.
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(b) If you are or become a Managing Director, your rights in respect of your Year-End Options
are conditioned on your becoming a party to any shareholders’ agreement to which other similarly
situated employees of the Firm are a party.
(c) Your rights in respect of your Year-End Options are conditioned on the receipt to the full
satisfaction of the Committee of any required consents (as described in Section 3.3 of the Plan)
that the Committee may determine to be necessary or advisable.
(d) You understand and agree, in accordance with Section 3.3 of the Plan, by accepting this
Award, you have expressly consented to all of the items listed in Section 3.3.3(d) of the Plan,
which are incorporated herein by reference.
(e) You understand and agree, in accordance with Section 3.22 of the Plan, by accepting this
Award you have agreed to be subject to the Firm’s policies in effect from time to time concerning
trading in Shares, hedging or pledging Shares and equity-based compensation or other awards
(including, without limitation, the Firm’s “Policies With Respect to Transactions Involving GS
Shares, Equity Awards and GS Options by Persons Affiliated with GS Inc.”), and confidential or
proprietary information, and to effect sales of Shares delivered to you in respect of your Year-End
Options in accordance with such rules and procedures as may be adopted from time to time with
respect to sales of such Shares (which may include, without limitation, restrictions relating to
the timing of sale requests, the manner in which sales are executed, pricing method, consolidation
or aggregation of orders and volume limits determined by the Firm). In addition, you understand
and agree that you shall be responsible for all brokerage costs and other fees or expenses
associated with your Award, including without limitation, such brokerage costs or other fees or
expenses in connection with the exercise of your Year-End Options or the sale of Shares delivered
to you hereunder.
(f) Without limiting the application of Paragraph 6(e), GS Inc. may affix to Certificates
representing Shares issued pursuant to this Award Agreement upon exercise of your Year-End Options
any legend that the Committee determines to be necessary or advisable (including to reflect any
restrictions to which you may be subject under a separate agreement with GS Inc.). GS Inc. may
advise the transfer agent to place a stop order against any legended Xxxxxx.
(g) Without limiting the application of Paragraph 5(a), if:
(i) your Employment with the Firm terminates solely because you resigned to accept employment
at any U.S. Federal, state or local government, any non-U.S. government, any supranational or
international organization, any self-regulatory organization, or any agency or instrumentality of
any such government or organization, or any other employer determined by the Committee, and as a
result of such employment your continued holding of your Year-End Options would result in an actual
or perceived conflict of interest (“Conflicted Employment”); or
(ii) following your termination of Employment other than described in Paragraph 10(g)(i), you
notify the Firm that you have accepted or intend to accept Conflicted Employment at a time when you
continue to hold Outstanding Year-End Options;
then, in the cases of Paragraph 10(g)(i) and 10(g)(ii) above, at the sole discretion of the Firm,
(a) such Outstanding Year-End Options shall be cancelled and as soon as practicable after the
Committee has received satisfactory documentation relating to your Conflicted Employment (the
“Release Date”) you shall receive a payment equal to the excess (if any) of (x) the Fair Market
Value of a Share on the Business Day immediately prior to the Release Date multiplied by the number
of your Year-End Options that were Outstanding immediately prior to such cancellation over (y) the
Exercise Price multiplied by the number of such Outstanding Year-End Options; (b) both the Initial
Exercise Date and Transferability Date shall become the Release Date or (c) if and to the extent
provided in any procedures adopted by the Committee, you may be permitted to transfer
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your Outstanding Year-End Options for value to a party or parties acceptable to the Firm (which may
include the Firm). Notwithstanding anything else herein, the actions described in this Paragraph
10(g) shall be permitted only at such time and if and to the extent as would not result in the
imposition of any additional tax to you under Section 409A of the Code (which governs the taxation
of certain deferred compensation).
11. Right of Offset. The obligation to deliver Shares under this Award Agreement upon
exercise of your Year-End Options is subject to Section 3.4 of the Plan, which provides for the
Firm’s right to offset against such obligation any outstanding amounts you owe to the Firm and any
amounts the Committee deems appropriate pursuant to any tax equalization policy or agreement.
12. Amendment. The Committee reserves the right at any time to amend the terms and
conditions set forth in this Award Agreement, and the Board may amend the Plan in any respect;
provided that, notwithstanding the foregoing and Sections 1.3.2(f), 1.3.2(g) and 3.1 of the Plan,
no such amendment shall materially adversely affect your rights and obligations under this Award
Agreement without your consent; and provided further that the Committee expressly reserves its
rights to amend the Award Agreement and the Plan as described in
Sections 1.3.2(h)(1), (2) and (4)
of the Plan. Any amendment of this Award Agreement shall be in writing signed by an authorized
member of the Committee or a person or persons designated by the Committee.
13. Arbitration; Choice of Forum. BY ACCEPTING THIS AWARD, YOU UNDERSTAND AND AGREE
THAT THE ARBITRATION AND CHOICE OF FORUM PROVISIONS SET FORTH IN SECTION 3.17 OF THE PLAN, WHICH
ARE EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND WHICH, AMONG OTHER THINGS, PROVIDE THAT ANY
DISPUTE, CONTROVERSY OR CLAIM BETWEEN THE FIRM AND YOU ARISING OUT OF OR RELATING TO OR CONCERNING
THE PLAN OR THIS AWARD AGREEMENT SHALL BE FINALLY SETTLED BY ARBITRATION IN NEW YORK CITY, PURSUANT
TO THE TERMS MORE FULLY SET FORTH IN SECTION 3.17 OF THE PLAN, SHALL APPLY.
14. Governing Law. THIS AWARD SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
15. Headings. The headings in this Award Agreement are for the purpose of convenience
only and are not intended to define or limit the construction of the provisions hereof.
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IN WITNESS WHEREOF, GS Inc. has caused this Award Agreement to be duly executed and delivered
as of the Date of Xxxxx.
| THE XXXXXXX XXXXX GROUP, INC. | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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