EXHIBIT 10.1
TERMS AND CONDITIONS OF CAP UNIT AWARD GRANTED TO YOU (THE "PARTICIPANT")UNDER
THE BEAR STEARNS COMPANIES INC. CAPITAL ACCUMULATION PLAN FOR SENIOR MANAGING
DIRECTORS
This document contains the Terms and Conditions applicable to an
award, with respect to Fiscal Year , of CAP Units made to the Participant
by the Compensation Committee (the "Committee") of The Bear Stearns Companies
Inc., a Delaware corporation (the "Company"), under The Bear Stearns Companies
Inc. Capital Accumulation Plan for Senior Managing Directors (the "Plan").
ARTICLE I
GRANT OF CAP UNITS
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Section 1.1 Grant of CAP Units.
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The Committee has granted to the Participant, with respect to Fiscal
Year , the number of units (the "Base Units") set forth as the "Fiscal
Year CAP Award" in a letter dated January { } from the Management &
Compensation Committee to the Participant (such Base Units, together with
related Earnings Units, Dividend Equivalents Units and/or Replacement Units as
described herein, are collectively referred to hereafter as the "CAP Units").
The number of CAP Units shall be subject to adjustment as provided in Section 8
of the Plan.
Section 1.2 Incorporation by Reference, Etc.
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The provisions of the Plan are hereby incorporated herein by
reference. These Terms and Conditions shall be construed in accordance with the
provisions of the Plan and except as otherwise expressly set forth herein, any
capitalized terms not otherwise defined in these Terms and Conditions shall have
the definitions set forth in the Plan. The Appropriate Committee shall have
final authority to interpret and construe the Plan and these Terms and
Conditions and to make any and all determinations thereunder, and its decision
shall be binding and conclusive upon the Participant and his or her legal
representative in respect of any questions arising under the Plan or these Terms
and Conditions. In the event of any inconsistency between these Terms and
Conditions and the terms of the Plan, the terms of the Plan shall govern.
ARTICLE II
TERMS AND CONDITIONS OF AWARD
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Section 2.1 Deferral Period; Restrictions on Transferability During
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Deferral Period.
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(a) The Deferral Period with respect to the CAP Units shall end on
, unless extended by the Participant in accordance with
procedures adopted by the Appropriate Committee and except as otherwise provided
herein.
(b) During the Deferral Period, the Participant shall not sell,
transfer, pledge, or otherwise encumber the CAP Units.
Section 2.2 Vesting of CAP Units.
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(a) Base Units
So long as the Participant is employed by the Company or any
subsidiary of the Company on the applicable vesting dates set forth below (each
such date, as well as the analogous date applicable to Earnings Units, as may be
extended pursuant to the last sentence of Section 2.2(a) (with respect to Base
Units) and the proviso in the third sentence of Section 2.2(b) (with respect to
Earnings Units) being referred to as the "Vesting Date"), the Base Units shall
become vested as follows:
Percentage of Base Units Vesting Date
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As provided in Sections 2.3 and 3.3 hereof, the Base Units may vest at an
earlier date or may continue to vest following Termination of Employment.
Notwithstanding the foregoing, if the Participant is suspended from employment
by the Company or a subsidiary of the Company or is on a personal leave of
absence (in each case with or without pay) in lieu of a suspension prior to the
applicable Vesting Date (determined after application of all such previous
suspensions or leaves of absence from employment following ),
then unless otherwise determined by the Appropriate Committee, each applicable
Vesting Date shall be extended by the number of days during which the
Participant was so suspended or on leave of absence from employment.
(b) Earnings Units.
Except as provided in Section 2.3 hereof, so long as the Participant
remains employed by the Company or any subsidiary of the Company, the
Participant shall be credited with additional units (the "Earnings Units")
relating to Base Units hereunder and attributable to Net Earnings Adjustments.
The Earnings Units shall be credited, in accordance with Section 5.10 of the
Plan, in the form of additional CAP Units. Subject to Section 2.3 hereof, the
Vesting Date applicable to all Earnings Units shall be ;
provided, however, if the Participant is suspended from employment by the
Company or a subsidiary of the Company or is on a personal leave of absence in
lieu of a suspension (in each case with or without pay) prior to such date
(determined after the application of all such previous suspensions from
employment or leaves of absence following ), then unless
otherwise determined by the Appropriate Committee, the Vesting Date applicable
to the Earnings Units shall be extended by the number of days during which the
Participant was so suspended from employment or on leave of absence. As provided
in Sections 2.3 and 3.3 hereof, the Earning Units may vest at an earlier date or
may continue to vest following Termination of Employment.
Section 2.3 Termination of Employment.
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(a) In the event of a Termination of Employment prior to a Vesting
Date applicable to any Base Units or Earnings Units, the following provisions
shall apply:
(i) Termination of Employment by the Company with Cause or Termination
of Employment by Participant Who Competes, etc., or Termination of
Employment following a suspension of employment or following a
personal leave of absence in lieu of a suspension (in each case with
or without pay) in circumstances in which the Participant does not
return to full time employment following such suspension or leave.
In the event of (x) a Termination of Employment by the Company with
Cause (as defined below), (y) a Termination of Employment by the
Participant in circumstances in which the Participant does not agree
to be subject to the provisions of Section 3.1, or (z) a Termination
of Employment following a suspension of employment or following a
personal leave of absence in lieu of a suspension (in each case with
or without pay) in circumstances in which the Participant does not
return to full time employment following such suspension or leave:
(1) all Base Units and Earnings Units with respect to which the
Vesting Date had not occurred as of the date of such Termination of
Employment shall not vest and shall be immediately cancelled for no
value;
(2) in lieu of Earnings Units credited to any Base Units in respect
of which the Vesting Date had occurred as of the date of such
Termination of Employment, Replacement Units shall be credited to
the Participant (as of the date of such Termination of Employment
and in accordance with Section 2.4 (a) hereof) in respect of such
Base Units;
(3) all Base Units with respect to which the Vesting Date had
occurred as of the date of such Termination of Employment, and all
Replacement Units credited pursuant to paragraph (2) above, shall
thereafter be credited with Dividend Equivalent Units (in accordance
with Section 2.4(b) hereof) until the cancellation or settlement of
such Base Units and Replacement Units, such Dividend Equivalent
Units to be subject to the same terms and conditions, including the
provisions of Article III hereof, as are applicable to the
underlying Base Units and Replacement Units;
(4) if, at any time during the period from the date of such
Termination of Employment through the date which is one hundred
eighty (180) days following the date of such Termination of
Employment, the Participant fails to comply with the
Non-Solicitation Requirement specified in Section 3.1(v) hereof,
then the Company at its election may seek an injunction, including
an injunction in aid of arbitration, to enforce the provisions of
Section 3.1(v) from any court of competent jurisdiction; and
(5) the Deferral Period applicable to all CAP Units which are not
cancelled shall be unaffected by such Termination of Employment.
(ii) Termination of Employment by the Company without Cause and without
Disability. In the event of a Termination of Employment by the
Company (other than due to Cause or Disability or under
circumstances described in clause (a)(i)(z) above) in circumstances
in which the Participant executes a release of any and all potential
claims against the Company and its subsidiaries in a form acceptable
to the Appropriate Committee (the "Release"):
(1) all outstanding Base Units and Earnings Units with respect to
which the Vesting Date had not occurred as of the date of such
Termination of Employment shall become fully vested on the earlier
of (x) the last applicable Vesting Date or (y) the date which is one
hundred eighty (180) days following the date of such Termination of
Employment (in either case, the "Accelerated Vesting Date"), but in
either such case such Base Units and Earnings Units shall vest if
and only if, at all times during the period commencing on the date
of such Termination of Employment through and including the
Accelerated Vesting Date (such period, the "Employee
Non-Solicitation Period"), the Participant, acting alone or with
others, directly or indirectly, whether as employee, employer,
consultant, advisor, or director, or as an owner, investor, partner,
stockholder or otherwise, does not solicit or hire any employee or
person who, within 90 days prior to the Participant's Termination of
Employment, was an employee of, or any consultant or independent
contractor to, the Company or any subsidiary or affiliate (the
"Employee Non-Solicitation Covenant");
(2) if the Participant complies with the Employee Non-Solicitation
Covenant at all times during the Employee Non-Solicitation Period,
then as of the last day of the month prior to the month in which
such Termination of Employment occurs, the Participant shall be
entitled to be credited with additional fully vested Earnings Units,
with respect to the Fiscal Year in which occurs such Termination of
Employment, such Earnings Units to be equal to the product of (A)
the number of Earnings Units with which the Participant would have
been credited had the Participant remained in the employ of the
Company until the end of such Fiscal Year, and (B) a fraction, the
numerator of which shall be the number of whole months in such
Fiscal Year prior to the month in which such Termination of
Employment occurs and the denominator of which shall be 12;
(3) if the Participant complies the Employee Non-Solicitation
Covenant at all times during the Employee Non-Solicitation Period,
then all Base Units and Earnings Units which are outstanding as of
the last day of the month prior to the month in which such
Termination of Employment occurs (after giving effect to the
crediting of additional Earnings Units under subparagraph (2) above)
shall thereafter be credited with fully vested Dividend Equivalent
Units (in accordance with Section 2.4(b) hereof) until the
settlement of such Base Units and Earnings Units;
(4) if, at any time during the period from the date of such
Termination of Employment through the date which is one hundred
eighty (180) days following the date of such Termination of
Employment, the Participant fails to comply with the Employee
Non-Solicitation Covenant, then the Company at its election may seek
an injunction, including an injunction in aid of arbitration, to
enforce the Employee Non-Solicitation Covenant from any court of
competent jurisdiction; and
(5) the Deferral Period applicable to all CAP Units which are not
cancelled shall end on the Accelerated Vesting Date.
If (A) the Participant fails to comply with the Employee Non-Solicitation
Covenant at any time during the Employee Non-Solicitation Period or (B) the
Participant does not execute the Release, then the Participant shall be treated
as having terminated employment under the provisions of Section 2.3(a)(i).
(iii) Termination of Employment by Participant (other than by reason of
Retirement) Who Does Not Compete, etc. In the event of a Termination
of Employment by the Participant (other than by reason of
Retirement) in circumstances in which such Participant is not then
suspended from employment and is not then on a personal leave of
absence (in each case with or without pay) in lieu of a suspension
and agrees to be subject to the provisions of Section 3.1:
(1) all Base Units with respect to which the Vesting Date had not
occurred as of the date of such Termination of Employment shall
continue to vest as if the Participant had remained in the
employment of the Company; provided, however, if, at any time during
the period from the date of such Termination of Employment through
the last applicable Vesting Date, the Participant fails to comply
with the provisions of Section 3.1, then all Base Units not
previously cancelled and with respect to which the Vesting Date had
not occurred as of the initial date of such failure to comply with
the provisions of Section 3.1 shall not vest and shall be
immediately cancelled for no value;
(2) all Earnings Units with respect to which the Vesting Date had
not occurred as of the date of such Termination of Employment shall
not vest and shall be immediately cancelled for no value;
(3) in lieu of Earnings Units cancelled hereunder, Replacement Units
shall be credited to the Participant (as of the date of such
Termination of Employment and in accordance with Section 2.4(a)
hereof) in respect of outstanding Base Units;
(4) all Base Units which are not cancelled and any Replacement Units
credited pursuant to paragraph (3) above shall thereafter be
credited with Dividend Equivalent Units (in accordance with Section
2.4(b)) until the cancellation or settlement of such Base Units and
Replacement Units, such Dividend Equivalent Units to be subject to
the same terms and conditions, including the provisions of Article
III hereof, as are applicable to the underlying Base Units and
Replacement Units;
(5) if, at any time during the period from the date of such
Termination of Employment through the date which is one hundred
eighty (180) days following the date of such Termination of
Employment, the Participant fails to comply with the
Non-Solicitation Requirement specified in Section 3.1(v) hereof,
then the Company at its election may seek an injunction, including
an injunction in aid of arbitration, to enforce the provisions of
Section 3.1(v) from any court of competent jurisdiction; and
(6) the Deferral Period applicable to all CAP Units which are not
cancelled shall be unaffected by such Termination of Employment.
(iv) Termination of Employment as a result of Death. In the event of a
Termination of Employment as a result of death:
(1) the Participant shall become fully vested in all Base Units and
Earnings Units (including any Earnings Units credited in respect of
the Fiscal Year in which occurs such Termination of Employment, as
if the Participant had remained in the employ of the Company until
the end of such Fiscal Year); and
(2) the Deferral Period with respect to all Base Units and Earnings
Units shall end as of the last day of the Fiscal Year in which such
Termination of Employment occurs and the Company, in settlement of
such units, shall, as promptly as practicable following the end of
such Fiscal Year, make delivery to the Participant's beneficiaries
or estate of shares of Common Stock equal to the aggregate number of
such units.
(v) Termination of Employment as a result of Disability or Retirement.
In the event of a Termination of Employment by the Company due to
Disability or a Termination of Employment by the Participant due to
Retirement (other than with respect to a Participant who is
suspended from employment or is on a personal leave of absence in
lieu of a suspension (in each case with or without pay) immediately
prior to the date of such Termination of Employment), in either case
in circumstances in which the Participant agrees to be subject to
the provisions of Section 3.1:
(1) all then outstanding Base Units and Earnings Units with respect
to which the Vesting Date had not occurred as of the date of such
Termination of Employment shall continue to vest as if the
Participant had remained in the employment of the Company; provided,
however, if, at any time during the period from the date of such
Termination of Employment through the last applicable Vesting Date,
the Participant fails to comply with provisions of Section 3.1, or,
in the case of a Termination of Employment due to Retirement,
commences employment with or provides services to any entity,
person, business or organization (other than an entity or an
organization described in section 501(c)(3) of the Code or any
political organization, including candidacy for public office or
other activities pre-approved by the Appropriate Committee) or fails
to comply with provisions of Section 3.1, then (x) all Base Units
and Earnings Units not previously cancelled and with respect to
which the Vesting Date had not occurred as of the initial date of
such failure to comply with the provisions of Section 3.1 or the
initial time at which the Participant commences employment shall be
immediately cancelled for no value and (y) in lieu of any Earnings
Units (and related Dividend Equivalent Units) which are cancelled by
reason of the Participant's failure to comply with Section 3.1 or
commencement of employment shall be immediately cancelled for no
value, Replacement Units shall be credited (in accordance with
Section 2.4(a) hereof and as of the date of such failure or
commencement of employment) in respect of the Base Units which have
not been cancelled or settled;
(2) as of the last day of the month prior to the month in which such
Termination of Employment occurs, the Participant shall be entitled
to be credited with additional Earnings Units with respect to the
Fiscal Year in which occurs such Termination of Employment, such
Earnings Units to be equal to the product of (A) the number of
Earnings Units with which the Participant would have been credited
had the Participant remained in the employ of the Company until the
end of such Fiscal Year, and (B) a fraction, the numerator of which
shall be the number of whole months in such Fiscal Year prior to the
month in which such Termination of Employment occurs and the
denominator of which shall be 12; and such additional Earnings Units
shall be subject to the same terms and conditions, including the
provisions of Article III hereof, as are applicable to Earnings
Units generally;
(3) all Base Units and Earnings Units which are outstanding as of
the last day of the month prior to the month in which such
Termination of Employment occurs (after giving effect to the
crediting of additional Earnings Units under subparagraph (2) above)
shall thereafter be credited with Dividend Equivalent Units (in
accordance with Section 2.4(b) hereof) until the cancellation or
settlement of such Base Units and Earnings Units, such Dividend
Equivalent Units to be subject to the same terms and conditions,
including the provisions of Article III hereof, as are applicable to
the underlying Base Units or Earnings Units, as the case may be;
(4) if, at any time during the period from the date of such
Termination of Employment through the date which is one hundred
eighty (180) days following the date of such Termination of
Employment, the Participant fails to comply with the
Non-Solicitation Requirement specified in Section 3.1(v) hereof,
then the Company at its election may seek an injunction, including
an injunction in aid of arbitration, to enforce the provisions of
Section 3.1(v) from any court of competent jurisdiction; and
(5) the Deferral Period applicable to all CAP Units which are not
cancelled shall be unaffected by such Termination of Employment,
except that a Participant can elect (under rules prescribed by the
Appropriate Committee) to have the Deferral Period end (but only
with respect to those Base Units and related Dividend Equivalent
Units for which the Vesting Date had occurred prior to the date of
such Termination of Employment) on or after the last applicable
Vesting Date and to have the Company deliver shares of Common Stock,
in accordance with the Plan and these Terms and Conditions, in
settlement of all such CAP Units.
(b) In the event of a Termination of Employment following the last
applicable Vesting Date, but prior to the end of the Deferral Period, the
following provisions shall apply:
(i) as of the last day of the month prior to the month in which such
Termination of Employment (other than by reason of death) occurs,
the Participant shall be entitled to be credited with additional
fully vested Earnings Units with respect to the Fiscal Year in which
occurs such Termination of Employment, such Earnings Units to be
equal to the product of (A) the number of Earnings Units with which
the Participant would have been credited had the Participant
remained in the employ of the Company until the end of such Fiscal
Year, and (B) a fraction, the numerator of which shall be the number
of whole months in such Fiscal Year prior to the month in which such
Termination of Employment occurs (less any number of whole months
during which the Participant was suspended from employment or was on
a personal leave of absence in lieu of a suspension (in each case
with or without pay)) and the denominator of which shall be 12; and
such additional Earnings Units shall be subject to the same terms
and conditions, including the provisions of Article III hereof, as
are applicable to the Earnings Units generally;
(ii) in the event of a Termination of Employment (other than by reason of
death), all Base Units and Earnings Units which are outstanding as
of the last day of the month prior to the month in which such
Termination of Employment occurs (after giving effect to the
crediting of additional Earnings Units under subparagraph (i) above)
shall thereafter be credited with fully vested Dividend Equivalent
Units (in accordance with Section 2.4(b) hereof) until the
cancellation or settlement of such Base Units and Earnings Units,
such Dividend Equivalent Units to be subject to the same terms and
conditions, including the provisions of Article III hereof, as are
applicable to the underlying Base Units or Earnings Units as the
case may be;
(iii) the Deferral Period applicable to all CAP Units shall be unaffected
by such Termination of Employment (other than by reason of death),
except that (1) a Participant can elect (but only in the event of a
Termination of Employment by reason of Retirement or Disability and
under rules prescribed by the Appropriate Committee) to have the
Deferral Period end with respect to all CAP Units and to have the
Company deliver shares of Common Stock, in accordance with the Plan
and these Terms and Conditions, in settlement of all such CAP Units
and (2) in the event of a Termination of Employment by the Company
(other than due to Cause or Disability), the Deferral Period
applicable to all CAP Units shall end on the date of Termination of
Employment;
(iv) in the event such Termination of Employment is by reason of death,
the Deferral Period with respect to all Base Units and Earnings
Units shall end as of the last day of the Fiscal Year in which
occurs such Termination of Employment; the Participant shall be
entitled to be credited with additional fully vested Earnings Units
in respect of the Fiscal Year in which occurs such Termination of
Employment, as if the Participant had remained in the employ of the
Company until the end of such Fiscal Year; and the Company, in
settlement of all CAP Units, shall, as promptly as practicable
following the end of such Fiscal Year, make delivery to the
Participant's beneficiaries or estate of shares of Common Stock
equal to the aggregate number of such units;
(v) if, at any time during the period from the date of any Termination
of Employment (except a Termination of Employment by the Company
other than due to Cause or Disability) through the date which is one
hundred eighty (180) days following the date of such Termination of
Employment, the Employee fails to comply with the Non-Solicitation
Requirement specified in Section 3.1(v) hereof, the Company at its
election may seek an injunction, including an injunction in aid of
arbitration, to enforce the provisions of Section 3.1(v) from any
court of competent jurisdiction; and
(vi) if, at any time during the period from the date of any Termination
of Employment by the Company (other than due to Cause or Disability)
through the date which is one hundred eighty (180) days following
the date of such Termination of Employment, the Employee fails to
comply with the Employee Non-Solicitation Covenant, the Company at
its election may seek an injunction, including an injunction in aid
of arbitration, to enforce the Employee Non-Solicitation Covenant
from any court of competent jurisdiction.
(c) For purposes of these Terms and Conditions:
"Cause" means the occurrence of any of the following as reasonably
determined by the Appropriate Committee: (1) any act or omission which
constitutes, or a series of acts or omissions when taken together which
constitute, a material breach by the Participant of the terms of any employment
agreement or other written document setting forth terms of employment, (2)
notice to the Company or the Participant that the Participant is the subject or
target of, or will or may become the subject or target of, any governmental or
regulatory investigation relating to any acts or omissions in connection with
the Participant's securities trading activity or employment with the Company,
(3) any act or omission which constitutes conduct which has resulted in (i) a
notification to an exchange or regulator by the Company or one of its
subsidiaries or affiliates reporting such conduct, or (ii) a governmental or
regulatory investigation related to conduct, (4) the filing of an indictment or
a charge, or the notice to the Company or the Participant that an indictment or
charge will or may be filed alleging the Participant's commission of a felony or
commission of any crime that would constitute (i) any felony or (ii) a lesser
crime or offense relating to any acts or omissions in connection with the
Participant's employment with the Company which would result in a statutory
disqualification of the Participant, (5) the filing of an administrative charge
or the notice to the Company or the Participant that a charge will or may be
filed against the Participant by a regulatory agency in connection with the
Participant's employment activities, (6) the Participant's violation of a
material policy of the Company, (7) the Participant's violation of a specific
lawful direction from a person to whom the Participant reports within the scope
of Participant's employment, (8) the Participant's engagement in a dishonest or
wrongful act involving fraud, misrepresentation or moral turpitude causing
damage or potential damage to the Company or any subsidiaries or affiliates, (9)
the Participant's willful failure to perform a substantial part of his or her
duties, (10) the Participant's breach of any fiduciary duty or duty of loyalty,
(11) any conduct by Participant which violates any federal or state securities
law or other applicable regulation governing the conduct of the Participant and
of the business of the Company or any subsidiary or affiliate in which the
Participant is employed, (12) the issuance of any consent decree, cease and
desist or similar order against the Participant by a governmental or regulatory
agency or entity relating to violations or alleged violations of any federal or
state securities law or other applicable regulation governing the conduct of the
business of the Company or any subsidiary or affiliate, or (13) the
Participant's unauthorized disclosure of any confidential or proprietary
information of the Company or any subsidiary or affiliate or the unauthorized
disclosure of any confidential information of a client of the Company or any
subsidiary or affiliate.
"Disability" means the complete and permanent inability of the
Participant to perform his or her duties due to physical or mental incapacity,
all as determined by the Appropriate Committee upon the basis of such evidence,
including independent medical reports and data, as the Appropriate Committee
deems necessary or appropriate.
"Retirement" means Termination of Employment by the Participant,
upon a delivery of the Notice of Termination, if, as of the date of such
Termination of Employment, the Participant had attained the age of forty-five
(45) and had completed a minimum of ten (10) continuous years of service with
the Company and its subsidiaries. For purposes of this definition, "Retirement"
will generally mean that the Participant is not working at all, except for
certain charitable or not-for-profit endeavors. For purposes of this definition,
"Notice of Termination" means a written Notice of Termination delivered to the
Company at least thirty (30) days prior to the Participant's Retirement (unless
a lesser period is permitted by Appropriate Committee) advising the Company of
the Participant's intention to terminate employment and specifying the date of
termination, certifying that the Participant will not be employed by or provide
services to any entity other than a charitable or non-profit organization (and,
if accepting employment or providing services to any such organization,
identifying the organization by name and describing the position, duties and/or
relationships with such entity), and agreeing to provide other information
regarding the Participant's reasons for termination and subsequent business
activity upon request of the Company.
"Termination of Employment" means the event by which the Participant
ceases to be employed by the Company or any subsidiary of the Company and,
immediately thereafter, is not employed by or providing substantial services to
any of the Company or a subsidiary of the Company. Neither (x) a transfer of the
Participant from the Company to a subsidiary or other affiliate of the Company,
or vice versa, or from one subsidiary or affiliate of the Company to another,
nor (y) a duly authorized leave of absence (other than in connection with a
suspension), agreed to in writing by the Participant, shall be deemed a
Termination of Employment.
Section 2.4 Replacement Units; Dividend Equivalent Units.
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(a) In those circumstances described in the applicable provisions of
Section 2.3 hereof, there shall be credited, as of the applicable date set forth
in such provisions, a number of Units ("Replacement Units") equal to (x) the
number of Base Units which are not cancelled as of such applicable date,
multiplied by (y) the aggregate amount of cash dividends paid per share of
Common Stock (and the aggregate fair market value of any property paid per share
of Common Stock, in the case of non-cash dividends) from
through such applicable date, divided by (z) the Fair Market Value (as of such
applicable date) of a share of Common Stock. Any Replacement Units shall be
subject to the same terms and conditions, including the vesting provisions
hereof and the provisions of Article III hereof, as are applicable to the
underlying Base Units.
(b) In accordance with Sections 2.3 and 3.3 hereof, additional units
("Dividend Equivalent Units") shall be credited on outstanding CAP Units until
cancellation or settlement of such CAP Units, as follows:
(i) Cash Dividends. If the Company declares and pays a cash dividend on
Common Stock, then a number of additional Dividend Equivalent Units
shall be credited to the Participant as of the payment date for such
dividend equal to (A) the number of CAP Units credited to the
Employee as of the record date for such dividend, multiplied by (B)
the amount of cash actually paid as a dividend on each share of
Common Stock at such payment date, divided by (C) the Fair Market
Value of a share of Common Stock at the ex-dividend date.
(ii) Non-Stock Dividends. If the Company declares and pays a dividend on
Common Stock in the form of property other than shares of Common
Stock, then a number of additional Dividend Equivalent Units shall
be credited to the Employee as of the payment date for such dividend
equal to (A) the number of CAP Units credited to the Participant as
of the record date for such dividend, multiplied by (B) the fair
market value of any such property actually paid as a dividend on
each share of Common Stock at such payment date, divided by (C) the
Fair Market Value of a share of Common Stock at the ex-dividend
date.
(c) Modifications to Dividend Equivalents. Other provisions of this
Section 2.4 notwithstanding, the Appropriate Committee may modify the manner of
payment or crediting of Replacement Units or Dividend Equivalent Units.
ARTICLE III
ADDITIONAL CONDITIONS
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Section 3.1 Requirements Relating to Non-Competition, Confidentiality,
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Non-Disparagement, Cooperation, and Non-Solicitation. As a
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condition to the Participant's Termination of Employment being
treated under the provisions of Section 2.3(a)(iii) or 2.3(a)(v)
hereof, as applicable:
(i) Non-Competition Requirement: The Participant, acting alone or with
others, directly or indirectly, shall not engage, either as
employee, employer, consultant, advisor, or director, or as an
owner, investor, partner, or stockholder unless the Participant's
interest is insubstantial, in any business in an area or region in
which the Company or any subsidiary or affiliate conducts business
at the date the event occurs, which is directly in competition with
a business then conducted by the Company or a subsidiary or
affiliate and which is similar or substantially related to the
business in which the Participant was engaged, in whole or in part,
while employed by the Company or a subsidiary or affiliate. For this
purpose, an entity shall be deemed to be in competition with the
Company or a subsidiary or affiliate if such entity's business
involves (A) the sale or trading of securities, futures,
commodities, off-exchange products or other similar products on
behalf of others (whether customers are individuals or
institutions), (B) proprietary trading, including risk arbitrage,
(C) asset management, (D) investment banking and other financial
advisory services, (E) banking and insurance products offered by the
Company and its affiliates or under development to be offered by the
Company or its affiliates, including but not limited to, bankruptcy,
debt and credit products, or (F) proprietary analysis and research
relating to any of the foregoing. The Committee shall, in its
discretion, determine which lines of business the Company or any
subsidiary or affiliate conducts on any particular date and which
third parties may reasonably be deemed to be in competition with the
Company or any subsidiary or affiliate. For purposes of this Section
3.1(i), the Participant's interest as a stockholder is insubstantial
if it represents beneficial ownership of less than one percent of
the outstanding class of stock, and the Participant's interest as an
owner, investor, or partner is insubstantial if it represents
ownership, as determined by the Committee in its discretion, of less
than one percent of the outstanding equity of the entity;
(ii) Confidentiality Requirement: The Participant shall not take,
disclose, use, sell, or otherwise transfer, except in the course of
employment with the Company or any subsidiary or affiliate, any
confidential or proprietary information of the Company or any
subsidiary or affiliate, including but not limited to information
regarding current and potential customers, clients, counterparts,
organization, employees, finances and financial results, methods of
operation, transactions and investments, financial analysis and
structuring, price, rates and other similar data, so long as such
information has not otherwise been disclosed to the public or is not
otherwise in the public domain, except as required by law or
pursuant to legal process; and the Participant shall return to the
Company, promptly following his or her termination of employment or,
if a demand for such return has been made, at any other time, any
information, documents, materials, data, inventions, manuals,
contracts, computer programs or device containing information
relating to the Company or any subsidiary or affiliate, and each of
their customers, clients and counterparts, which came into the
Participant's possession or control in connection with his or her
employment;
(iii) Non-Disparagement Requirement: The Participant shall not make
statements or representations, otherwise communicate, directly or
indirectly, in writing, orally, or otherwise, or take any action
which may, directly, or indirectly, disparage or be damaging to the
Company or any if its subsidiaries or affiliates or their respective
former or current officers, directors, employees, advisors,
businesses or reputations, except as required by law or pursuant to
the legal process;
(iv) Cooperation Requirement: The Participant shall cooperate with the
Company and any subsidiary or affiliate by making himself or herself
available to testify on behalf of the Company or such subsidiary or
affiliate in any action, suit or proceeding, whether civil,
criminal, administrative, regulatory or investigative, and otherwise
shall assist the Company and any subsidiary or affiliate in any
action, suit, or proceeding and in preparation of any action, suit,
or proceeding by providing information and meeting and consulting
with members of management of, other representatives of, or counsel
to, the Company or such subsidiary or affiliate, as reasonably
requested; and
(v) Non-Solicitation Requirement: The Participant, acting alone or with
others, directly or indirectly, whether as employee, employer,
consultant, advisor, or director, or as an owner, investor, partner,
stockholder or otherwise (A) shall not solicit or induce any client
or customer of the Company for whom the Participant has rendered
services while employed by the Company to curtail, cancel, not
renew, or not continue his or her or its business with the Company
or any subsidiary or affiliate, and (B) shall not solicit or hire
any employee or person who, within 90 days prior to the
Participant's Termination of Employment, was an employee of, or a
consultant or independent contractor to, the Company or a subsidiary
or affiliate.
Section 3.2 Committee Discretion.
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The Appropriate Committee may, in its discretion, waive in whole or
in part the provisions of Sections 2.3 or 3.5, but no such waiver shall be
effective unless evidenced by a writing signed by a duly authorized officer of
the Company.
Section 3.3 Change in Control.
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Notwithstanding anything herein to the contrary, if within one year
following the occurrence of a Change in Control (x) there occurs a Termination
of Employment by the Company (other than for Cause or Disability) or (y) there
occurs a Termination of Employment by the Participant for "Good Reason" (as
defined below), then (1) all outstanding CAP Units (including any Earnings Units
credited in respect of the Fiscal Year in which occurs such Termination of
Employment, as if the Participant had remained in the employ of the Company
until the end of such Fiscal Year) shall become fully vested, (2) all CAP Units
described in clause (1) above shall thereafter be credited with Dividend
Equivalent Units (as provided for in Section 2.4(b)) until the cancellation or
settlement of all such CAP units, and (3) unless otherwise determined by the
Appropriate Committee, the Deferral Period with respect to all then outstanding
CAP Units shall be unaffected by such vesting.
For purposes of these Terms and Conditions, "Good Reason" shall mean:
(A) any material diminution in Participant's authority, duties or
responsibilities (including reporting relationships) from that which
existed immediately prior to the Change in Control;
(B) a reduction of more than ten percent (10%) in the Participant's base
compensation from that which existed immediately prior to the Change
in Control; or
(C) the relocation of the Participant's principal place of employment to
a location more than fifty (50) miles from the Participant's
principal place of employment immediately prior to the Change in
Control.
Section 3.4 Delivery of Shares.
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Except as otherwise provided hereunder, as soon as practicable
following the end of the Deferral Period, the Company shall, in accordance with
the procedures set forth in the Plan and in settlement of all then outstanding
CAP Units (including, in the event the Participant has remained in the employ of
the Company through the end of the Deferral Period, any additional Earnings
Units in respect of the Fiscal Year in which the Deferral Period ends), make
delivery of shares of Common Stock equal to the aggregate number of such CAP
Units. In the event of the Participant's death following a Termination of
Employment, but prior to the end of the Deferral Period, the Company shall, in
accordance with the procedures set forth in the Plan and in settlement of all
then outstanding CAP Units, make delivery of shares of Common Stock equal to the
aggregate number of such CAP Units to such Participant's transferee,
beneficiaries or estate (as applicable) as promptly as practicable following the
death of such Participant.
Section 3.5 Release.
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Notwithstanding anything to the contrary herein, as a condition
precedent to the delivery of any Common Stock with respect to any CAP Units,
the Participant or the Participant's beneficiaries or estate (as applicable)
shall execute a release of any and all potential claims related to such units
in a form acceptable to the Appropriate Committee.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Bound by the Plan and the Terms and Conditions.
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The Participant agrees to be bound by all of the provisions of the
Plan and these Terms and Conditions.
Section 4.2 Successors.
-----------
These Terms and Conditions shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and of the Participant and
the beneficiaries, executors, administrators, heirs and successors of the
Participant.
Section 4.3 Invalid Provision.
------------------
In the event that any provision or portion of these Terms and
Conditions shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of these Terms and Conditions shall
be unaffected thereby, and any affected provision shall be construed and
interpreted to apply to the fullest extent that it could apply without being
invalid or unenforceable. These Terms and Conditions, as so construed and
interpreted, shall remain in full force and effect to the fullest extent
permitted by law.
Section 4.4 No Right to Employment.
-----------------------
The granting of the CAP Units shall not constitute or be evidence of
any agreement or understanding, express or implied, that Participant has a right
to continue as an officer or employee of the Company or a subsidiary for any
period of time, or at any particular rate of compensation. These Terms and
Conditions, including the provisions of the Plan, shall not in any way alter
Participant's employment at will status with the Company or any subsidiary.
Section 4.5 Entire Agreement.
-----------------
These Terms and Conditions and the Plan contain the entire agreement
and understanding of the parties hereto with respect to the subject matter
contained herein and therein and supersede all prior communications,
representations and negotiations in respect thereto.
Section 4.6 Dispute Resolution.
-------------------
Except with respect to the Company's right to seek injunctive relief
as set forth in Section 2.3, any dispute arising out of or relating to the Plan
or these Terms and Conditions shall be resolved by final and binding arbitration
before the National Association of Securities Dealers or the New York Stock
Exchange, in accordance with applicable arbitration rules then in effect. Any
such arbitration shall occur in the City of New York. The parties hereto consent
to the jurisdiction of the state and federal courts of New York, located in the
City of New York, for any action arising out of or relating to the enforcement
of this arbitration provision and for any other relief permitted under these
Terms and Conditions.
Section 4.7 Governing Law.
--------------
These Terms and Conditions and the rights of the Participant
hereunder shall be construed and determined in accordance with the laws of the
State of New York, without giving effect to principles of conflicts of laws, and
applicable provisions of federal law.
Section 4.8 Headings.
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The headings of the Sections hereof are provided for convenience
only and are not to serve as a basis for interpretation or construction of these
Terms and Conditions.