Exhibit 10.1
Amended and Restated as of 4/3/01
LEHMAN BROTHERS HOLDINGS INC.
1994 MANAGEMENT OWNERSHIP PLAN
1. Purpose
The purpose of this Plan is to strengthen Lehman Brothers Holdings Inc.
(the "Company") by providing an incentive to its officers, employees,
consultants and directors and thereby encouraging them to devote their abilities
to increase shareholder value and to sustain excellence. It is intended that
this be achieved by extending to Eligible Individuals of the Company and its
subsidiaries an added long-term incentive for high levels of performance and
unusual efforts through the grant of Incentive Stock Options, Non-qualified
Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Units and Performance Shares (as each term is hereinafter
defined).
2. Administration
2.1 The Plan shall be administered by the Committee which shall hold
meetings at such times as may be necessary for the proper administration of the
Plan. The Committee shall keep minutes of its meetings. A quorum shall consist
of not less than three members of the Committee and a majority of a quorum may
authorize any action. Any decision or determination reduced to writing and
signed by a majority of all of the members shall be as fully effective as if
made by a majority vote at a meeting duly called and held. Each member of the
Committee shall be a Disinterested Director. No member of the Committee shall be
liable for any action, failure to act, determination or interpretation made in
good faith with respect to this Plan or any transaction hereunder. The Company
hereby agrees to indemnify each member of the Committee as permitted by
applicable law, for any liability incurred in connection with defending against,
responding to, negotiation for the settlement of or otherwise dealing with any
claim, cause of action or dispute of any kind arising in connection with any
actions in administering this Plan or in authorizing or denying authorization to
any transaction hereunder.
2.2 Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time to:
(a) determine those individuals to whom Options shall be
granted under the Plan and the number of Incentive Stock Options and/or
Non-qualified Stock Options to be granted to each Eligible Individual and to
prescribe the terms and conditions (which need not be identical) of each Option,
including the purchase price per Share subject to each Option, and make any
amendment or modification to any Agreement consistent with the terms of the
Plan; and
(b) select those Eligible Individuals to whom Awards shall be
granted under the Plan and to determine the number of Stock Appreciation Rights,
Performance Units, Performance Shares, and/or Shares of Restricted Stock or
Restricted Stock Units to be granted pursuant to each Award, the terms and
conditions of each Award, including the restrictions or performance criteria
relating to such Units or Shares, the maximum value of each Performance Unit and
Performance Share and make any amendment or modification to any Agreement
consistent with the terms of the Plan.
2.3 Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time:
(a) to construe and interpret the Plan and the Options and
Awards granted thereunder and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable to make the Plan fully effective;
(b) to determine the duration and purposes for leaves of
absence which may be granted to an Optionee or Grantee on an individual basis
without constituting a termination of employment or service for purposes of the
Plan; and
(c) to resolve all questions of interpretation arising under
or in connection with the administration of the Plan, to exercise its discretion
with respect to the powers and rights granted to it as set forth in the Plan,
and generally, to exercise such powers and to perform such acts as are deemed
necessary or advisable to promote the best interests of the Company with respect
to the Plan.
2.4 All decisions and determinations by the Committee in the exercise
of the powers conferred upon it under the Plan shall be final, binding and
conclusive upon the Company, its Subsidiaries, Eligible Individuals, Optionees,
Grantees and all other persons having any interest therein.
3. Stock Subject to the Plan
3.1 The maximum number of Shares that may be made the subject of
Options and Awards granted under the Plan (other than Restricted Stock Units to
be granted to Non-employee Directors pursuant to Section 9.4) is 16,500,000 for
all Eligible Individuals. The maximum number of Shares that may be made the
subject of Restricted Stock Units to be granted to Non-employee Directors
pursuant to Section 9.4 is 150,000. Upon a Change in Capitalization the maximum
number of Shares available on an aggregate and Eligible Individual basis shall
be adjusted in number and kind pursuant to Section 11. The Company shall reserve
for the purposes of the Plan, out of its authorized but unissued Shares or out
of Shares held in the Company's treasury, or partly out of each, such number of
Shares as shall be determined by the Board. The maximum number of Shares
available for Options Stock Appreciation Rights or other Awards that may be
granted to an Eligible Individual shall not exceed 1,650,000 over the life of
the Plan.
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3.2 Upon the granting of an Option or an Award, the number of Shares
available under Section 3.1 for the granting of further Options and Awards shall
be reduced as follows:
(a) In connection with the granting of an Option or an Award
(other than the granting of a Performance Unit denominated in dollars), the
number of Shares shall be reduced by the number of Shares in respect of which
the Option or Award is granted or denominated.
(b) Notwithstanding Section 3.2(a), the exercise of a Stock
Appreciation Right granted in tandem with an Option shall be treated, for
purposes of this Section 3, solely as though the Option had been exercised
through the purchase of Shares, with the result that the number of Shares shall
be reduced by the number of Shares so purchased. No other reduction in the
number of Shares shall be made on account of such Stock Appreciation Right
exercise.
(c) In connection with the granting of a Performance Unit
denominated in dollars, the number of Shares shall be reduced by an amount equal
to the quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.
3.3 Whenever any outstanding Option or Award or portion thereof
expires, is canceled or is otherwise terminated for any reason without having
been exercised or payment having been made in respect of the entire Option or
Award, the Shares allocable to the expired, canceled or otherwise terminated
portion of the Option or Award shall again be available for grant pursuant to
Options or Awards granted hereunder to the fullest extent permitted by Rule
16b-3 under the Exchange Act. In addition, during the period that any Options
and Awards remain outstanding under the Plan, the Committee may make good faith
adjustments upon a Change in Capitalization with respect to the number of Shares
attributable to such Options and Awards for purposes of calculating the maximum
number of Shares available for the granting of future Options and Awards under
the Plan, provided that following such adjustments the exemptions provided
pursuant to Rule 16b-3 under the Exchange Act, and the exceptions provided
pursuant to Section 162(m) of the Code, will not be adversely affected thereby.
4. Option Grants for Eligible Individuals
4.1 Authority of Committee. Subject to the provisions of the Plan, the
Committee shall have full and final authority to select those Eligible
Individuals who will receive Options, the terms and conditions of which shall be
set forth in an Agreement; provided, however, that no person shall receive any
Incentive Stock Options unless he or she is an employee of the Company, a Parent
or a Subsidiary at the time the Incentive Stock Option is granted.
4.2 Purchase Price. The purchase price or the manner in which the
purchase price is to be determined for Shares under each Option shall be
determined by the Committee and set forth in the Agreement; provided, however,
that the purchase price per Share under each Incentive Stock Option shall not be
less than 100% of the Fair Market Value of a Share on the date the Incentive
Stock Option is granted (110% in the case of an Incentive Stock Option
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granted to a Ten-Percent Stockholder) and the purchase price per Share
under each Non-qualified Stock Option shall not be less than 100% of the Fair
Market Value of a Share on the date the Non-qualified Stock Option is granted.
4.3 Maximum Duration. Options granted hereunder shall be for such term
as the Committee shall determine, provided that an Incentive Stock Option shall
not be exercisable after the expiration of ten (10) years from the date it is
granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder) and a Non-qualified Stock Option shall not be
exercisable after the expiration of ten (10) years from the date it is granted.
The Committee may, subsequent to the granting of any Option, extend the term
thereof but in no event shall the term as so extended exceed the maximum term
provided for in the preceding sentence.
4.4 Vesting. Each Option shall become exercisable in such installments
(which need not be equal) and at such times as may be designated by the
Committee and set forth in the Agreement. To the extent not exercised,
installments shall accumulate and be exercisable, in whole or in part, at any
time after becoming exercisable, but not later than the date the Option expires.
The Committee may accelerate the exercisability of any Option or portion thereof
at any time.
4.5 $100,000 Limitation. If the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by any Optionee during a calendar year (under all plans of the
Company and its Parents and Subsidiaries) exceeds $100,000, such Incentive Stock
Options shall be treated, to the extent of such excess, as Non-qualified Stock
Options. For purposes of the preceding sentence, the Fair Market Value of the
Shares shall be determined at the time the Incentive Stock Options covering such
Shares were granted.
5. Terms and Conditions Applicable to All Options
5.1 Method of Exercise. The exercise of an Option shall be made only by
a written notice delivered in person, by facsimile transmission or by mail to
the Secretary of the Company at the Company's principal executive office,
specifying the number of Shares to be purchased and accompanied by payment
therefor and otherwise in accordance with the Agreement pursuant to which the
Option was granted. The purchase price for any Shares purchased pursuant to the
exercise of an Option shall be paid in full upon such exercise by any one or a
combination of the following: (i) cash, (ii) transferring Shares to the Company
upon such terms and conditions as determined by the Committee or (iii)
transferring Awards to the Company if permitted by, and upon such terms and
conditions as determined by, the Committee. Notwithstanding the foregoing, the
Committee shall have discretion to determine at the time of grant of each Option
or at any later date (up to and including the date of exercise) the form of
payment acceptable in respect of the exercise of such Option. The written notice
pursuant to this Section 5.1 may also provide instructions from the Optionee to
the Company that upon receipt of the purchase price in cash from the Optionee's
broker or dealer, designated as such on the written notice, in payment for any
Shares purchased pursuant to the exercise of an Option, the Company shall issue
such
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Shares directly to the designated broker or dealer. Any Shares transferred
to the Company as payment of the purchase price under an Option shall be valued
at their Fair Market Value on the date of exercise of such Option. If requested
by the Committee, the Optionee shall deliver the Agreement evidencing the Option
to the Secretary of the Company who shall endorse thereon a notation of such
exercise and return such Agreement to the Optionee. No fractional Shares (or
cash in lieu thereof) shall be issued upon exercise of an Option and the number
of Shares that may be purchased upon exercise shall be rounded to the nearest
number of whole Shares.
5.2 Rights of Optionees. No Optionee shall be deemed for any purpose to
be the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Optionee and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.
5.3 Limited Rights. An Optionee may, in the discretion of the
Committee, have the right (a "Limited Right") to surrender the Option or any
portion thereof to the Company within 30 days following a Change in Control and
to receive from the Company in exchange therefor a cash payment in an amount
equal to (a) the number of unexercised Shares under the Option which are being
surrendered multiplied by (b) the excess of (i) the greater of (A) the highest
price per Share paid in connection with the Change in Control or (B) the highest
Fair Market Value per Share in the 90 day period preceding such Change in
Control, over (ii) the purchase price of the Option as set forth in the
Agreement.
6. Stock Appreciation Rights
6.1 Authority of Committee. The Committee may, in its discretion,
either alone or in connection with the grant of an Option, grant Stock
Appreciation Rights in accordance with the Plan and the terms and conditions of
which shall be set forth in an Agreement. If granted in connection with an
Option, a Stock Appreciation Right shall cover the same number of Shares covered
by the Option (or such lesser number of Shares as the Committee may determine)
and shall, except as provided in this Section 6.1, be subject to the same terms
and conditions as the related Option.
6.2 Time of Grant. A Stock Appreciation Right may be granted (i) at any
time if unrelated to an Option, or (ii) if related to an Option, either at the
time of grant, or at any time thereafter during the term of the Option.
6.3 Stock Appreciation Right Related to an Option.
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(a) Exercise. Subject to Section 6.7, a Stock Appreciation
Right granted in connection with an Option shall be exercisable at such time or
times and only to the extent that the related Option is exercisable, and will
not be transferable except to the extent the related Option may be transferable.
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(b) Amount Payable. Upon the exercise of a Stock Appreciation
Right related to an Option and subject to the provisions of Section 6.6, the
Grantee shall be entitled to receive an amount determined by multiplying (A) the
excess of the Fair Market Value of a Share on the date of exercise of such Stock
Appreciation Right over the per Share purchase price under the related Option,
by (B) the number of Shares as to which such Stock Appreciation Right is being
exercised. Notwithstanding the foregoing, the Committee may limit in any manner
the amount payable with respect to any Stock Appreciation Right by including
such a limit in the Agreement evidencing the Stock Appreciation Right at the
time it is granted.
(c) Treatment of Related Options and Stock Appreciation Rights
Upon Exercise. Upon the exercise of a Stock Appreciation Right granted in
connection with an Option, the Option shall be canceled to the extent of the
number of Shares as to which the Stock Appreciation Right is exercised, and upon
the exercise of an Option granted in connection with a Stock Appreciation Right
or the surrender of such Option pursuant to Section 6.5, the Stock Appreciation
Right shall be canceled to the extent of the number of Shares as to which the
Option is exercised or surrendered.
6.4 (a) Stock Appreciation Right Unrelated to an Option. The Committee
may grant to Eligible Individuals Stock Appreciation Rights unrelated to
Options. Stock Appreciation Rights unrelated to Options shall contain such terms
and conditions as to exercisability (subject to Section 6.7), vesting and
duration as the Committee shall determine, but in no event shall they have a
term of greater than ten (10) years. The Committee may accelerate the
exercisability of any Stock Appreciation Right at any time. Upon exercise of a
Stock Appreciation Right unrelated to an Option, the Grantee shall be entitled
to receive an amount determined by multiplying (A) the excess of the Fair Market
Value of a Share on the date of exercise of such Stock Appreciation Right over
the Fair Market Value of a Share on the date the Stock Appreciation Right was
granted, by (B) the number of Shares as to which the Stock Appreciation Right is
being exercised. Notwithstanding the foregoing, the Committee may limit in any
manner the amount payable with respect to any Stock Appreciation Right by
including such a limit in the Agreement evidencing the Stock Appreciation Right
at the time it is granted.
(b) Limited SAR Rights. A Grantee may, in the discretion of
the Committee, have the right (a "Limited SAR Right") to surrender the Stock
Appreciation Right or any portion thereof to the Company within 30 days
following a Change in Control and to receive from the Company in exchange
therefor a cash payment in an amount equal to (a) the number of Shares under the
Stock Appreciation Right which are being exercised, multiplied by (b) the excess
of (i) the greater of (A) the highest price per Share paid in connection with
the Change in Control or (B) the highest Fair Market Value per Share in the 90
day period preceding such Change in Control, over (ii) the Fair Market Value of
a Share on the date the Stock Appreciation Right was granted as set forth in the
Agreement.
6.5 Method of Exercise. Stock Appreciation Rights shall be exercised by
a Grantee only by a written notice delivered in person, by facsimile
transmission, or by mail to the Secretary of the Company at the Company's
principal executive office, specifying the number of Shares with respect to
which the Stock Appreciation Right is being exercised. If requested by the
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Committee, the Grantee shall deliver the Agreement evidencing the Stock
Appreciation Right being exercised and the Agreement evidencing any related
Option to the Secretary of the Company who shall endorse thereon a notation of
such exercise and return such Agreement to the Grantee.
6.6 Form of Payment. Payment of the amount determined under Sections
6.3(b) or 6.4 may be made in the discretion of the Committee, solely in whole
Shares in a number determined at their Fair Market Value on the date preceding
the date of exercise of the Stock Appreciation Right, or solely in cash, or in a
combination of cash and Shares. If the Committee decides to make full payment in
Shares and the amount payable results in a fractional Share, payment for the
fractional Share will be made in cash.
6.7 Restrictions. In the case of any Grantee who may be subject to
liability under Section 16(b) of the Exchange Act, no Stock Appreciation Right
may be exercised before the date six (6) months after the date it is granted.
7. Restricted Stock
7.1 Grant. The Committee may grant to Eligible Individuals Awards of
Restricted Stock, and may issue Shares of Restricted Stock in payment of vested
Performance Units (as hereinafter provided in Section 8.2), which shall be
evidenced by an Agreement between the Company and the Grantee. Each Agreement
shall contain such restrictions, terms and conditions as the Committee may, in
its discretion, determine and (without limiting the generality of the foregoing)
such Agreements may require that an appropriate legend be placed on Share
certificates. Awards of Restricted Stock shall be subject to the terms and
provisions set forth below in this Section 7.
7.2 Rights of Grantee. Shares of Restricted Stock granted pursuant to
an Award hereunder shall be issued in the name of the Grantee as soon as
reasonably practicable after the Award is granted provided that the Grantee has
executed an Agreement evidencing the Award, the appropriate blank stock powers
and, in the discretion of the Committee, an escrow agreement and any other
documents which the Committee may require as a condition to the issuance of such
Shares. If a Restricted Stock Award Agreement, appropriate blank stock powers
and such other documents which the Committee may require are not executed by the
Grantee within the time period prescribed by the Committee at the time the Award
is granted, the Award shall be null and void. At the discretion of the
Committee, Shares issued in connection with a Restricted Stock Award shall be
deposited together with the stock powers with an escrow agent (which may be the
Company) designated by the Committee. Unless the Committee determines otherwise
and as set forth in the Agreement, upon delivery of the Shares to the escrow
agent, the Grantee shall have all of the rights of a stockholder with respect to
such Shares, including the right to vote the Shares and to receive all dividends
or other distributions paid or made with respect to the Shares.
7.3 Non-transferability. Until any restrictions upon the Shares of
Restricted Stock Awarded to a Grantee shall have lapsed in the manner set forth
in Section 7.4, such Shares shall
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not be sold, transferred or otherwise disposed of and shall not be pledged
or otherwise hypothecated, nor shall they be delivered to the Grantee.
7.4 Lapse of Restrictions. Restrictions upon Shares of Restricted Stock
awarded hereunder shall lapse at such time or times on such terms and conditions
as the Committee may determine, which restrictions shall be set forth in the
Agreement evidencing the Award.
7.5 Treatment of Dividends. At the time the Award of Shares of
Restricted Stock is granted, the Committee may, in its discretion, determine
that the payment to the Grantee of dividends, or a specified portion thereof,
declared or paid on such Shares by the Company shall be, at the discretion of
the Committee, (i) paid in cash to the Grantee or (ii) deferred until the
lapsing of the restrictions imposed upon such Shares and held by the Company for
the account of the Grantee until such time. In the event that payment of
dividends is to be deferred, the Committee shall determine whether such
dividends are to be reinvested in shares of Stock (which shall be held as
additional Shares of Restricted Stock) or held in cash. If deferred dividends
are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends in respect of Shares of Restricted Stock (whether
held in cash or as additional Shares of Restricted Stock), together with
interest accrued thereon, if any, shall be made upon the lapsing of restrictions
imposed on the Shares in respect of which the deferred dividends were paid, and
any dividends deferred (together with any interest accrued thereon) in respect
of any Shares of Restricted Stock shall be forfeited upon the forfeiture of such
Shares.
7.6 Delivery of Shares. Upon the lapse of the restrictions on Shares of
Restricted Stock, the Committee shall cause a stock certificate to be delivered
to the Grantee with respect to such Shares, free of all restrictions hereunder.
Notwithstanding the preceding, the Committee may withhold sufficient Shares to
pay taxes.
8. Performance Awards
8.1 Performance Objectives. Performance objectives for Performance
Awards may be expressed in terms of (i) earnings per Share, (ii) pre-tax
profits, (iii) net earnings or net worth, (iv) absolute and/or relative return
on equity or assets, (v) any combination of the foregoing, or (vi) any other
standard or standards deemed appropriate by the Committee at the time the Award
is granted. Performance objectives may be in respect of the performance of the
Company and its Subsidiaries (which may be on a consolidated basis), a
Subsidiary or a Division. Performance objectives may be absolute and/or relative
and may be expressed in terms of a progression within a specified range. Prior
to the end of a Performance Cycle, with respect to any Eligible Individual the
deductibility of whose Performance Award will not, in the reasonable belief of
the Committee, be subject to Section 162(m) of the Code, the Committee may, in
its discretion, adjust the performance objectives to reflect a Change in
Capitalization, a change in the book tax rate of the Company or any Subsidiary
or any other event which may materially affect the performance of the Company, a
Subsidiary or a Division, including, but not limited to, market conditions or a
significant acquisition or disposition of assets or other property by the
Company,
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a Subsidiary or a Division. With respect to any Eligible Individual the
deductibility of whose compensation may, in the reasonable belief of the
Committee, be subject to Section 162(m) of the Code, the Committee shall
exercise the discretion conferred upon it in the preceding sentence in such
manner as shall be approved by the Company's auditors and will not result in
loss of deductibility under such Section 162(m). Notwithstanding the foregoing,
the Committee shall, in such manner as shall be approved by the Company's
auditors, adjust the performance objectives for all Grantees to whom Performance
Units have been granted to offset the impact of any change in the applicable
corporate tax rate under the Code.
8.2 Performance Units. The Committee, in its discretion, may grant
Awards of Performance Units to Eligible Individuals, the terms and conditions of
which shall be set forth in an Agreement between the Company and the Grantee.
Performance Units may be denominated in Shares or a specified dollar amount and,
contingent upon the attainment of specified performance objectives within the
Performance Cycle, represent the right to receive payment as provided in Section
8.2(b) of (i) in the case of Share-denominated Performance Units, the Fair
Market Value of a Share on the date the Performance Unit was granted, the date
the Performance Unit became vested or any other date specified by the Committee,
(ii) in the case of dollar-denominated Performance Units, the specified dollar
amount or (iii) a percentage (which may be more than 100%) of the amount
described in clause (i) or (ii) depending on the level of performance objective
attainment; provided, however, that the Committee may at the time a Performance
Unit is granted, specify a maximum amount payable in respect of a vested
Performance Unit. Each Agreement shall specify the number of the Performance
Units to which it relates, the performance objectives which must be satisfied in
order for the Performance Units to vest and the Performance Cycle within which
such objectives must be satisfied.
(a) Vesting and Forfeiture. A Grantee shall become vested with
respect to the Performance Units to the extent that the performance objectives
set forth in the Agreement are satisfied for the Performance Cycle.
(b) Payment of Awards. Payment to Grantees in respect of
vested Performance Units shall be made within sixty (60) days after the last day
of the Performance Cycle to which such Award relates unless the Agreement
evidencing the Award provides for the deferral of payment, in which event the
terms and conditions of the deferral shall be set forth in the Agreement. Such
payments may be made entirely in Shares valued at their Fair Market Value as of
the last day of the applicable Performance Cycle or such other date specified by
the Committee, entirely in cash, or in such combination of Shares and cash as
the Committee in its discretion shall determine at any time prior to such
payment; provided, however, that if the Committee in its discretion determines
to make such payment entirely or partially in Shares of Restricted Stock or
Restricted Stock Units, the Committee must determine the extent to which such
payment will be in Shares of Restricted Stock or Restricted Stock Units and the
terms of such Restricted Stock or Restricted Stock Units at the time the Award
is granted.
8.3 Performance Shares. The Committee, in its discretion, may grant
Awards of Performance Shares to Eligible Individuals, the terms and conditions
of which shall be set forth in an Agreement between the Company and the Grantee.
Performance Shares shall be
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denominated in Shares or Restricted Stock Units, as
determined by the Committee. Awards of Performance Shares shall be subject to
the following terms and provisions:
(a) Rights of Grantee. The Committee shall provide at the time
an Award of Performance Shares is made, the time or times at which the actual
Shares or Restricted Stock Units represented by such Award shall be issued in
the name of the Grantee, and the number of such Shares or Restricted Stock Units
so issuable at different levels of performance goal attainment.
(b) Non-transferability. Until any restrictions upon the
Performance Shares awarded to a Grantee shall have lapsed in the manner set
forth in Section 8.3(d) such Performance Shares shall not be sold, transferred
or otherwise disposed of and shall not be pledged or otherwise hypothecated, nor
shall they be delivered to the Grantee. The Committee may also impose such other
restrictions and conditions on the Performance Shares, if any, as it deems
appropriate.
(c) Treatment of Dividend Equivalents. At the time the Award
of Performance Shares is granted, the Committee may, in its discretion,
determine that the Grantee shall have the right to receive payments equivalent
in value to dividends or other distributions paid or made with respect to the
underlying Shares (which may include, in the case of Performance Shares
denominated in Restricted Stock Units, the Shares underlying such Restricted
Stock Units) ("Dividend Equivalents"). The payment to the Grantee of Dividend
Equivalents, or a specified portion thereof, shall be, at the discretion of the
Committee, (i) paid in cash to the Grantee or (ii) deferred until the lapsing of
the restrictions imposed upon such Performance Shares and held by the Company
for the account of the Grantee until such time. In the event that payment of
Dividend Equivalents is to be deferred, the Committee shall determine whether
such Dividend Equivalents are to be reinvested in shares of Stock (which shall
be held as additional Performance Shares) or held in cash. If deferred Dividend
Equivalents are to be held in cash, there may be credited at the end of each
year (or portion thereof) interest on the amount of the account at the beginning
of the year at a rate per annum as the Committee, in its discretion, may
determine. Payment of deferred Dividend Equivalents in respect of Performance
Shares (with interest accrued thereon, if any), shall be made upon the lapsing
of restrictions imposed on the Performance Shares in respect to which the
deferred Dividend Equivalents were paid, and any Dividend Equivalents deferred
(together with any interest accrued thereon) in respect of any Performance
Shares shall be forfeited upon the forfeiture of such Performance Shares.
(d) Delivery of Shares. Upon the satisfaction of the
performance goals on Performance Shares awarded hereunder, the Committee shall
cause a stock certificate to be delivered to the Grantee with respect to such
Performance Shares, free of all restrictions hereunder. Alternatively, if
specified in the Award Agreement, the Committee may determine that earned
Performance Shares be conveyed to a Grantee in the form of Restricted Stock
Units and/or an amount of cash sufficient to satisfy anticipated tax obligations
to be incurred in connection with such Shares.
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8.4 Non-transferability. No Performance Awards shall be
transferable by the Grantee otherwise than by will or the laws of descent
and distribution.
8.5 Modification. Subject to the terms of the Plan, the Committee may
modify outstanding Performance Awards; provided, however, that no modification
may be made with respect to Performance Awards held by Executive Officers (such
term is as defined in the Exchange Act). Notwithstanding the foregoing, no
modification of a Performance Award shall materially adversely alter or
materially impair any rights or obligations under the Agreement without the
Grantee's consent.
9. Restricted Stock Units
9.1 Grant. The Committee may grant to Eligible Individuals Awards of
Restricted Stock Units which shall be evidenced by an Agreement between the
Company and the Grantee. Each Agreement shall contain such restrictions, terms
and conditions as the Committee may, in its discretion, determine in accordance
with the following provisions of this Section 9. A Restricted Stock Unit shall
represent the right to receive one Share upon lapse of the conditions
established in the grant.
9.2 Lapse of Restrictions. Restrictions upon Restricted Stock Units
awarded hereunder shall lapse at such time or times and on such conditions as
the Committee may determine, which restrictions shall be set forth in the
Agreement evidencing the Award. Upon such lapse, all Shares represented by such
Restricted Stock Unit shall vest and be payable immediately.
9.3 Dividend Equivalents. At the time the Award of Restricted Stock
Units is granted, the Committee may, in its discretion, determine that the
payment to the Grantee of dividend equivalents declared or paid on Shares by the
Company shall be (i) deferred until the lapsing of the restrictions imposed on
such Restricted Stock Units and (ii) held by the Company for the account of the
Grantee until such time. In the event that the dividend equivalents are to be
deferred, the Committee shall determine whether such dividends are to be
reinvested in Shares (which shall be held as additional Restricted Stock Units)
or held in cash. If deferred dividends are to be held in cash, there may be
credited at the end of the year (or portion thereof) interest on the amount of
the account at the beginning of the year at a rate per annum as the Committee,
in its discretion, may determine. Payment of deferred dividends in respect of
Restricted Stock Units (whether held in cash or as additional Restricted Stock
Units), together with interest accrued thereon, if any, shall be made upon the
lapsing of restrictions imposed on the Restricted Stock Units in respect of
which the deferred dividends were paid, and any dividends deferred (together
with any interest accrued thereon) in respect of any Restricted Stock Units
shall be forfeited upon the forfeiture of such Restricted Stock Unit.
9.4 Units and Options for Non-employee Directors. Notwithstanding
anything to the contrary in the Plan, Restricted Stock Units and Options shall
be granted to Non-employee Directors of the Company in accordance with the
following provisions. Each Non-employee Director shall receive 2,500 Restricted
Stock Units on the day of the Company's annual meeting
11
for each year that the
Plan is in effect. At the election of each Non-employee Director, Options in an
amount equal to three times the number of Restricted Stock Units paid, may be
paid in place of the Restricted Stock Units. The Options shall have a ten year
term, an exercise price equal to Fair Market Value on the date of payment and
shall become exercisable in one-third increments on the first, second and third
anniversaries of the date of payment. Restricted Stock Units shall vest
immediately upon grant. As of each date a dividend or other distribution is paid
or made on Shares, each Non-employee Director holding Restricted Stock Units
shall be credited with a number of additional Restricted Stock Units equal to
the product of (A) the dividend or other distribution paid on one Share,
multiplied by (B) the number of Restricted Stock Units held by the Non-employee
Director, divided by (C) the closing price of one Share on the New York Stock
Exchange on such date. Such additional Restricted Stock Units shall vest
immediately. In the event a Non-employee Director's service terminates, all
Options shall become immediately exercisable and remain exercisable through
their scheduled term. Restricted Stock Units are payable in shares upon
termination of a Non-employee Director's service on the Board.
10. Effect of a Termination of Employment
The Agreement evidencing the grant of each Option and each Award shall
set forth the terms and conditions applicable to such Option or Award upon a
termination or change in the status of the employment of the Optionee or Grantee
by the Company, a Subsidiary or a Division (including a termination or change by
reason of the sale of a Subsidiary or a Division), as the Committee may, in its
discretion, determine at the time the Option or Award is granted or thereafter;
provided, however, that the Committee shall have no such discretion with respect
to Restricted Stock Units granted to Non-employee Directors pursuant to Section
9.4, the Agreements evidencing which shall contain the provisions regarding
termination described in such Section.
11. Adjustment Upon Changes in Capitalization
(a) In the event of a Change in Capitalization, the Committee
shall conclusively determine the appropriate adjustments, if any, to the (i)
maximum number and class of Shares or other stock or securities with respect to
which Options or Awards may be granted under the Plan or to any individual, and
(ii) the number and class of Shares or other stock or securities which are
subject to outstanding Options or Awards granted under the Plan, and the
purchase price therefor, if applicable; provided, however, that with respect to
Restricted Stock Units granted to Non-employee Directors pursuant to Section
9.4, any such adjustments shall be made only as necessary to maintain the
proportionate interest of each Non-employee Director in Shares and preserve,
without exceeding, the value of such Restricted Stock Units.
(b) Any such adjustment in the Shares or other stock or
securities subject to outstanding Incentive Stock Options (including any
adjustments in the purchase price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent otherwise permitted by Sections 422 and 424 of the Code.
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(c) If, by reason of a Change in Capitalization, a Grantee of
an Award shall be entitled to or an Optionee shall be entitled to exercise an
Option with respect to, new, additional or different shares of stock or
securities, such new, additional or different shares shall thereupon be subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Shares subject to the Award or Option, as the case may be
prior to such Change in Capitalization.
(d) The Committee shall apply this Section 11 in a manner
consistent with the preservation of the Company's tax deduction for the payment
or exercise of Awards under Section 162(m) of the Code.
12. Termination and Amendment of the Plan; Modification of Awards
-------------------------------------------------------------
(a) The Plan shall terminate on the day preceding the tenth
anniversary of the date of its adoption by the Board and no Option or Award may
be granted thereafter. The Board may sooner terminate the Plan and the Board may
at any time and from time to time amend, modify or suspend the Plan or any
Option or Award; provided, however, that:
(i) No such amendment, modification, suspension or termination shall
materially impair or materially adversely alter any Options or Awards
theretofore granted under the Plan, except with the consent of the Optionee
or Grantee, nor shall any amendment, modification, suspension or
termination deprive any Optionee or Grantee of any Shares which he or she
may have acquired through or as a result of the Plan; and
(ii) To the extent necessary to comply with Rule 16b-3 of the Exchange
Act and the rules and regulations promulgated thereunder, or to preserve
the Company's tax deduction for the payment or exercise of Awards under
Section 162(m) of the Code, no amendment shall be effective unless approved
by the stockholders of the Company in accordance with applicable law and
regulations.
(b) Notwithstanding the above, the Committee shall not have the right
to modify any outstanding Award to the extent such restriction is necessary
to preserve the Company's tax deduction for the payment or exercise of
Awards under Section 162(m) of the Code.
13. Non-Exclusivity of the Plan
The adoption of the Plan by the Board shall not be construed as
amending, modifying or rescinding any previously approved incentive arrangement
or as creating any limitations on the power of the Board to adopt such other
incentive arrangements as it may deem desirable, including, without limitation,
the granting of stock options otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.
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14. Limitation of Liability
As illustrative of the limitations of liability of the Company, but not
intended to be exhaustive thereof, nothing in the Plan shall be construed to:
(i) give any person any right to be granted an Option or Award other
than at the sole discretion of the Committee;
(ii) give any person any rights whatsoever with respect to Shares
except as specifically provided in the Plan;
(iii) limit in any way the right of the Company to terminate the
employment of any person at any time; or
(iv) be evidence of any agreement or understanding, expressed or
implied, that the Company will employ any person at any particular rate of
compensation or for any particular period of time.
15. Regulations and Other Approvals; Governing Law
15.1 Except as to matters of federal law, this Plan and the rights of
all persons claiming hereunder shall be construed and determined in accordance
with the laws of the State of Delaware without giving effect to conflicts of law
principles.
15.2 The obligation of the Company to sell or deliver Shares with
respect to Options and Awards granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.
15.3 The Plan is intended to comply with Rule 16b-3 promulgated under
the Exchange Act and the Committee shall interpret and administer the provisions
of the Plan or any Agreement in a manner consistent therewith. Any provisions
inconsistent with such Rule shall be inoperative and shall not affect the
validity of the Plan.
15.4 The Board may make such changes in the Plan or any Awards as may
be necessary or appropriate to comply with the rules and regulations of any
government authority, or to obtain for Eligible Individuals granted Incentive
Stock Options any tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder.
15.5 Each Option and Award is subject to the requirement that, if at
any time the Committee determines, in its discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.
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15.6 Notwithstanding anything contained in the Plan or any Agreement to
the contrary, in the event that the disposition of Shares acquired pursuant to
the Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended, and is not otherwise exempt from such
registration, such Shares shall be restricted against transfer to the extent
required by the Securities Act of 1933, as amended, and Rule 144 or other
regulations thereunder. The Committee may require any individual receiving
Shares pursuant to an Option or Award granted under the Plan, as a condition
precedent to receipt of such Shares, to represent and warrant to the Company in
writing that the Shares acquired by such individual are acquired without a view
to any distribution thereof and will not be sold or transferred other than
pursuant to an effective registration thereof under said Act or pursuant to an
exemption applicable under the Securities Act of 1933, as amended, or the rules
and regulations promulgated thereunder. The certificates evidencing any of such
Shares shall be appropriately amended to reflect their status as restricted
securities as aforesaid.
15.7 Awards granted under the Plan to persons which the Committee
reasonably believes may be subject to Section 162(m) of the Code will not be
exercisable, and compensation under the Plan will not be paid, unless and until
any necessary shareholder approvals shall have been obtained and the Committee
has certified as to the attainment of any applicable performance goals, in each
case to the extent required under said Section 162(m).
16. Miscellaneous
16.1 Multiple Agreements. The terms of each Option or Award may differ
from other Options or Awards granted under the Plan at the same time, or at some
other time. The Committee may also grant more than one Option or Award to a
given Eligible Individual during the term of the Plan in addition to Options or
Awards previously granted to that Eligible Individual.
16.2 Withholding of Taxes.
--------------------
(a) The Company shall have the right to deduct from any
distribution of cash to any Optionee or Grantee, an amount equal to the federal,
state and local income taxes and other amounts as may be required by law to be
withheld (the "Withholding Taxes") with respect to any Option or Award. If an
Optionee or Grantee is to experience a taxable event in connection with the
receipt of Shares pursuant to an Option exercise or payment of an Award, the
Optionee or Grantee shall pay the Withholding Taxes to the Company prior to the
issuance, or release from escrow, of such Shares. In satisfaction of the
obligation to pay Withholding Taxes to the Company, the Optionee or Grantee may
make a written election, which may be accepted or rejected in the discretion of
the Committee, to have withheld a portion of the Shares then issuable to him or
her having an aggregate Fair Market Value, on the date preceding the date of
such issuance, equal to the Withholding Taxes, provided that the Committee shall
accept such an election in respect of an Optionee subject to Section 16(b) of
the Exchange Act only if such election complies with Rule 16b-3 under the
Exchange Act.
15
(b) If an Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of any Share
or Shares issued to such Optionee pursuant to the exercise of an Incentive Stock
Option within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date of
transfer of such Share or Shares to the Optionee pursuant to such exercise, the
Optionee shall, within ten (10) days of such disposition, notify the Company
thereof, by delivery of written notice to the Company at its principal executive
office.
16.3 Non-transferability. No Option, Stock Appreciation Right,
Performance Unit denominated in Stock or Restricted Stock Unit granted hereunder
shall be transferable by the Optionee or Grantee to whom granted otherwise than
by will or the laws of descent and distribution or pursuant to a "qualified
domestic relations order," as defined by the Code or title I of ERISA, or the
rules thereunder, and an Award may be exercised during the lifetime of such
Optionee or Grantee only by the Optionee or Grantee, or his or her guardian or
legal representative. The terms of such Award shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee or Grantee.
16.4 Acceleration of Awards. The Committee may accelerate vesting,
exercisability or lapse of restrictions on all or any portion of any Award at
any time, other than with respect to:
(a) Awards of Restricted Stock Units to Non-employee Directors
pursuant to Section 9.4, vesting of which may be accelerated only under such
circumstances as will not cause such persons to fail to be "disinterested
persons," within the meaning of Rule 16b-3 under the Exchange Act; and
(b) Awards other than Options or Stock Appreciation Rights, to
the extent that such acceleration would jeopardize, under Section 162(m) of the
Code, the Company's tax deduction otherwise available for the payment or
exercise of the Awards.
17. Effective Date
The effective date of the Plan shall be the date of its adoption by the
Board, subject only to (i) the approval by the affirmative vote of the holders
of a majority of the securities of the Company present, or represented, and
entitled to vote at a meeting of stockholders duly held in accordance with the
applicable laws of the State of Delaware or (ii) subject to any other such means
of approval which shall satisfy the Exchange Act, within twelve (12) months of
such adoption.
18. Definitions
For purpose of the Plan:
18.1 "Agreement" means the written agreement between the Company and an
Optionee or Grantee or the written document furnished to an Optionee or Grantee
by the Company evidencing the grant of an Option or Award and setting forth the
terms and conditions thereof.
16
18.2 "Award" means a grant of Incentive Stock Options, Non-qualified
Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation
Rights, Performance Awards or any or all of them.
18.3 "Board" means the Board of Directors of the Company.
18.4 "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, spin-off, split-up,
issuance of warrants or rights or debentures, stock dividend, stock split or
reverse stock split, cash dividend, property dividend, combination or exchange
of shares, repurchase of shares, change in corporate structure or otherwise.
18.5 "Change in Control" shall mean the occurrence during the term of
the Plan of:
(a) An acquisition (other than directly from the Company) of
any voting securities of the Company (the "Voting Securities") by any "Person"
(as the term person is used for purposes of Section 13(d) or 14(d) of the
Exchange Act) immediately after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty
percent (30%) or more of the combined voting power of the Company's then
outstanding Voting Securities; provided, however, in determining whether a
Change in Control has occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control Acquisition"
shall mean an acquisition by (i) an employee benefit plan (or a trust forming a
part thereof or a trustee thereof acting solely in its capacity as trustee)
maintained by (A) the Company or (B) any corporation or other Person of which a
majority of its voting power or its voting equity securities or equity interest
is owned, directly or indirectly, by the Company (for purposes of this
definition, a "Subsidiary"), (ii) the Company or its Subsidiaries, or (iii) any
Person in connection with a "Non-Control Transaction" (as hereinafter defined).
(b) The individuals who, as of the effective date of the 1994
initial public trading in Company Shares, are members of the Board (the
"Incumbent Board"), ceasing for any reason to constitute at least two-thirds of
the members of the Board; provided, however, that if the election, or nomination
for election by the Company's common stockholders, of any new director was
approved by a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Plan, be considered as a member of the
Incumbent Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the 1934 Act or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a "Proxy Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or
17
(c) Approval by stockholders of the Company of:
(i) A merger, consolidation or reorganization
involving the Company, unless such merger, consolidation or
reorganization is a "Non-Control Transaction"; i.e., meets each of the
requirements described in (A), (B), and (C) below:
(A) the stockholders of the Company, immediately before such merger,
consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at least seventy
percent (70%) of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or consolidation
or reorganization (the "Surviving Corporation") in substantially the same
proportion as their ownership of the Voting Securities immediately before
such merger, consolidation or reorganization;
(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such
merger, consolidation or reorganization constitute at least two-thirds of
the members of the board of directors of the Surviving Corporation
immediately following the consummation of such merger, consolidation or
reorganization; and
(C) no Person other than the Company, any Subsidiary, any employee
benefit plan (or any trust forming a part thereof or a trustee thereof
acting solely in its capacity as trustee) maintained by the Company, the
Surviving Corporation, or any Subsidiary, or any Person who, immediately
prior to such merger, consolidation or reorganization had Beneficial
Ownership of thirty percent (30%) or more of the then outstanding Voting
Securities has Beneficial Ownership of thirty percent (30%) or more of the
combined voting power of the Surviving Corporation's then outstanding
voting securities immediately following the consummation of such merger,
consolidation or reorganization.
(ii) A complete liquidation or dissolution of the
Company; or
(iii) An agreement for the sale or other
disposition of all or substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Persons,
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Company,
and after such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.
18
18.6 "Code" means the Internal Revenue Code of 1986, as amended.
18.7 "Committee" means a committee consisting of at least three (3)
Disinterested Directors appointed by the Board to administer the Plan and to
perform the functions set forth herein. The authority of the Committee to
administer the Plan may be delegated to a subcommittee composed exclusively of
two or more individuals who are "outside directors", within the meaning of
Section 162(m) of the Code, and proposed or final Treasury Regulations issued
thereunder, to the extent required to satisfy the provisions of that Section;
provided, however, that at all times such subcommittee shall satisfy the
applicable requirements of Rule 16b-3 under the Exchange Act. References to the
Committee herein refer to such subcommittee to the extent of such a delegation.
18.8 "Company" means Lehman Brothers Holdings Inc.
18.9 "Disability" means a physical or mental infirmity which impairs
the Optionee's or Grantee's ability to perform substantially his or her duties
for a period of one hundred eighty (180) consecutive days.
18.10 "Disinterested Director" means a director of the Company who is
"disinterested" within the meaning of Rule 16b-3 under the Exchange Act.
18.11 "Dividend Equivalents" has the meaning ascribed to it in Section
8.3(c).
18.12 "Division" means any of the operating units or divisions of the
Company designated as a Division by the Committee.
18.13 "Eligible Individual" means any officer, salaried or commission
employee, consultant and Non-employee Director of the Company or a Subsidiary,
designated by the Committee as eligible to receive Awards subject to the
conditions set forth herein.
18.14 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
18.15 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
18.16 "Fair Market Value" on any date means the closing price of the
Shares on such date on the principal national securities exchange on which such
Shares are listed or admitted to trading (or, if such exchange is not open on
such date, the immediately preceding date on which such exchange is open), the
arithmetic mean of the per Share closing bid price and per Share closing asked
price on such date as quoted on the National Association of Securities Dealers
Automated Quotation System or such other market in which such prices are
regularly quoted, or, if there have been no published bid or asked quotations
with respect to Shares on such date, the Fair Market Value shall be the value
established by the Committee in good faith and, in the case of an Incentive
Stock Option, in accordance with Section 422 of the Code. Notwithstanding the
19
foregoing, for Awards and Options granted before the commencement of initial
1994 regular way public trading in Shares, Fair Market Value of the Shares means
the closing price on the first day on which initial 1994 regular way public
trading in the Shares commences.
18.17 "Grantee" means a person to whom an Award has been granted under
the Plan.
18.18 "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Committee as an
Incentive Stock Option.
18.19 "Non-employee Director" means a director of the Company who is
not an employee of the Company or any Subsidiary.
18.20 "Non-qualified Stock Option" means an Option which is not an
Incentive Stock Option.
18.21 "Option" means an Incentive Stock Option, a Non-qualified Stock
Option, or both of them, as the context requires.
18.22 "Optionee" means a person to whom an Option has been granted
under the Plan.
18.23 "Parent" means any corporation which is a parent corporation
(within the meaning of Section 424(e) of the Code) with respect to the Company.
18.24 "Performance Awards" means Performance Units, Performance Shares
or either or both of them.
18.25 "Performance Cycle" means the time period specified by the
Committee at the time a Performance Award is granted during which the
performance of the Company, a Subsidiary or a Division will be measured.
18.26 "Performance Shares" means Shares issued or transferred to an
Eligible Individual under Section 8.3 hereof.
18.27 "Performance Unit" means Performance Units granted to an Eligible
Individual under Section 8.2 hereof.
18.28 "Plan" means the Lehman Brothers Holdings Inc. 1994 Management
Ownership Plan.
18.29 "Restricted Stock" means Shares issued or transferred to an
Eligible Individual pursuant to Section 7 hereof.
18.30 "Restricted Stock Unit" means an Award granted to an Eligible
Individual to receive payment upon the lapse of all restrictions in the form of
Shares as provided for in Section 9 hereof.
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18.31 "Shares" means the common stock, par value $.10 per share, of
the Company.
18.32 "Stock Appreciation Right" means a right to receive all or some
portion of the increase in the value of the Shares as provided in Section 6
hereof.
18.33 "Subsidiary" means any corporation which is a subsidiary
corporation (within the meaning of Section 424(f) of the Code) with respect to
the Company.
18.34 "Successor Corporation" means a corporation, or a parent or
subsidiary thereof within the meaning of Section 424(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 424(a) of the
Code applies.
18.35 "Ten-Percent Stockholder" means an Eligible Individual, who, at
the time an Incentive Stock Option is to be granted to him or her, owns (within
the meaning of Section 422(b)(6) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, or of a Parent or a Subsidiary.
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