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EXHIBIT 10.23
DRAFT 4/26/99
THE GOLDMAN SACHS 1999 STOCK INCENTIVE PLAN
1999 DISCRETIONARY RSU AWARD
This Award Agreement sets forth the terms and conditions of an Award
of restricted stock units ("RSUs") granted to you under The Goldman Sachs 1999
Stock Incentive Plan (the "Plan").
1. The Plan. This Award is made pursuant to the Plan, the terms of
which are incorporated in this Award Agreement. Capitalized terms used in this
Award Agreement which are not defined in this Award Agreement, or in the
attached Glossary of Terms, have the meanings as used or defined in the Plan.
2. Award. The number of RSUs subject to this Award is set forth in a
statement separately delivered to you. An RSU constitutes an unfunded and
unsecured promise of GS Inc. to deliver (or cause to be delivered) to you,
subject to the terms of this Award Agreement, a share of Common Stock (the
"Share") (or cash equal to the Fair Market Value thereof) on a Vesting Date as
provided herein. Until such delivery, you have only the rights of a general
unsecured creditor and no rights as a shareholder of GS Inc. THIS AWARD IS
SUBJECT TO ALL TERMS AND PROVISIONS OF THE PLAN AND THIS AWARD AGREEMENT,
INCLUDING, WITHOUT LIMITATION, THE ARBITRATION AND CHOICE OF FORUM PROVISIONS
SET FORTH IN PARAGRAPH 16. BY OPENING THE CUSTODY ACCOUNT REFERRED TO IN
PARAGRAPH 3(a), YOU WILL HAVE CONFIRMED YOUR ACCEPTANCE OF THE TERMS AND
CONDITIONS OF THIS AWARD AGREEMENT.
3. Vesting and Delivery.
(a) In General. Except as provided below in this Paragraph 3 and in
Paragraphs 4, 6, 7, 10 and 11, you shall vest in the RSUs and Shares shall be
delivered in equal installments (subject to rounding in the discretion of the
Committee to avoid the delivery of fractional Shares) on each Vesting Date. The
Firm may deliver cash in lieu of all or any portion of the Shares otherwise
deliverable on each such Vesting Date. Unless otherwise determined by the
Committee, or as otherwise provided in this Award Agreement, delivery of Shares
shall be effected by book-entry credit to a custody account (the "Custody
Account") maintained by you with The Chase Manhattan Bank or such successor
custodian as may be designated by GS Inc. No delivery of Shares shall be made
unless you have timely established the Custody Account. You shall be the
beneficial owner of any Shares properly credited to the Custody Account. You
shall have no right to any dividend or distribution with respect to such Shares
if the record date for such dividend or distribution is prior to the date the
Custody Account is properly credited with such Shares. Notwithstanding the
foregoing, if a Vesting Date occurs at a time when you are considered by GS Inc.
to be one of its "covered employees" within the meaning of Section 162(m) of the
Code, then, unless the Committee determines otherwise, delivery of Shares (or
cash) in respect of such Vesting Date shall automatically be deferred until the
first day of the first Window Period after you have ceased to be such a covered
employee.
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(b) Death. Notwithstanding any other provision of this Award
Agreement, if you die prior to the last Vesting Date, and provided your rights
in respect of any outstanding RSUs have not previously terminated, the Shares
(or cash in lieu of all or any portion thereof) corresponding to your
outstanding RSUs shall be delivered as soon as practicable thereafter to your
designated beneficiary (or, if none, your estate).
4. Termination of RSUs and Non-Delivery of Shares.
(a) Unless the Committee determines otherwise, and except as
provided in Paragraphs 6 and 7, your rights in respect of any outstanding RSUs
shall immediately terminate and no Shares (or cash) shall be delivered in
respect of such RSUs, if:
(i) at any time prior to the relevant Vesting Date:
(A) your Employment with the Firm is terminated for any reason, or
you are otherwise no longer actively employed with the Firm (except as
provided in Paragraphs 3(b) or 6); or
(B) any of the events that constitute Cause has occurred; or
(C) you attempt to have any dispute under this Award Agreement
resolved in any manner that is not provided for by Paragraph 16; or
(ii) you fail to certify to GS Inc., in accordance with procedures
established by the Committee, with respect to each relevant Vesting Date
that you have complied, or the Committee determines that you in fact have
failed as of the relevant Vesting Date to comply, with all the terms and
conditions of this Award Agreement. By accepting the delivery of Shares
(or cash) under this Award Agreement, you shall be deemed to have
represented and certified at such time that you have complied with all the
terms and conditions of this Award Agreement.
(b) Unless the Committee determines otherwise, if the Vesting Date
in respect of any outstanding RSUs occurs, and Shares (or cash) with respect to
such RSUs would be deliverable under the terms and conditions of this Award
Agreement, except that you have not complied with the conditions or your
obligations under Paragraphs 3(a) and 4(a)(ii), all of your rights with respect
to such RSUs shall terminate, and no Shares (or cash) shall be delivered, upon
the expiration of the fiscal year of GS Inc. in which such Vesting Date occurs.
5. Repayment. If, following the delivery of Shares (or cash) with
respect to any Vesting Date, the Committee determines that all terms and
conditions of this Award Agreement in respect of such delivery were not
satisfied, the Firm shall be entitled to receive, and you shall be obligated to
pay the Firm immediately upon demand therefor, the Fair Market Value of the
Shares (determined as of the relevant Vesting Date) and the amount of cash (to
the extent that cash was delivered in lieu of Shares) that were delivered with
respect to such Vesting
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Date and without reduction for any Shares (or cash delivered in lieu of all or
any portion thereof) applied to satisfy withholding tax or other obligations in
respect of such Shares (or cash).
6. Extended Absence and Retirement.
(a) Notwithstanding any other provision of this Award Agreement, if
your Employment with the Firm is terminated by reason of Extended Absence or
Retirement, and provided your rights with respect to any outstanding RSUs have
not previously terminated, the condition set forth in Paragraph 4(a)(i)(A) shall
be waived but all other conditions of this Award Agreement shall continue to
apply.
(b) Without limiting the application of Paragraphs 4(a)(i)(B) and
(C), Paragraph 4(a)(ii) and Paragraph 4(b), unless the Committee determines
otherwise, your rights in respect of any outstanding RSUs shall immediately
terminate and no Shares (or cash) shall be delivered in respect of such RSUs if,
following the termination of your Employment with the Firm by reason of Extended
Absence or Retirement:
(i) you (A) form, or acquire a 5% or greater equity ownership,
voting or profit participation interest in, any Competitive Enterprise, or
(B) associate (including, but not limited to, association as an officer,
employee, partner, director, consultant, agent or advisor) with any
Competitive Enterprise and in connection with such association engage in,
or directly or indirectly manage or supervise personnel engaged in, any
activity (1) which is similar or substantially related to any activity in
which you were engaged, in whole or in part, at the Firm, (2) for which
you had direct or indirect managerial or supervisory responsibility at the
Firm or (3) which calls for the application of the same or similar
specialized knowledge or skills as those utilized by you in your
activities with the Firm, at any time during the one-year period
immediately prior to termination of your Employment (or, in the case of an
action taken prior to termination of your Employment, during the one-year
period immediately prior to such action), and, in any such case,
irrespective of the purpose of the activity or whether the activity is or
was in furtherance of advisory, agency, proprietary or fiduciary business
of either the Firm or the Competitive Enterprise. (By way of example only,
this provision would preclude an "advisory" investment banker from joining
a leveraged-buyout firm, a research analyst from becoming a proprietary
trader or joining a hedge fund, or an information systems professional
from joining a management or other consulting firm and providing
information technology consulting services or advice to any Competitive
Enterprise.); or
(ii) you in any manner, directly or indirectly, (A) Solicit any
Client to transact business with a Competitive Enterprise or to reduce or
refrain from doing any business with the Firm or (B) interfere with or
damage (or attempt to interfere with or damage) any relationship between
the Firm and any such Client or (C) Solicit any person who is an employee
of the Firm to resign from the Firm or to apply for or accept employment
with any Competitive Enterprise.
7. Change in Control. Notwithstanding anything to the contrary in
this Award Agreement, in the event a Change in Control shall occur and within 18
months thereafter the Firm terminates your Employment without Cause or you
terminate Employment with the
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Firm for Good Reason, any outstanding RSUs with respect to which your rights
have not terminated shall vest and all Shares (or the Fair Market Value thereof
in cash) shall be delivered.
8. Dividend Equivalents. Prior to the delivery of Shares (or cash in
lieu thereof) pursuant to this Award Agreement, at or after the time of
distribution of any regular cash dividend paid by GS Inc. in respect of the
Common Stock, you shall be entitled to receive an amount in cash (less
applicable withholding) equal to such regular cash dividend payment that would
have been made in respect of the Shares not yet delivered, as if the Shares had
been actually delivered; provided, that no payment in respect of RSUs shall be
made if, prior to the time such payment is due, your rights with respect to such
RSUs have previously terminated under this Agreement.
9. Non-transferability; Beneficiary Designation. Except as may
otherwise be provided by the Committee, the limitations set forth in Section 3.4
of the Plan shall apply. Any assignment (as defined in Section 3.4 of the Plan)
in violation of the provisions of this Paragraph 9 shall be void. You may
designate, in accordance with procedures established by the Committee, a
beneficiary or beneficiaries to receive all or part of the amounts to be paid
under this Award Agreement in the event of your death. A designation of a
beneficiary may be replaced by a new designation or may be revoked by you at any
time in accordance with procedures established by the Committee. If you die
without having properly designated a beneficiary, any amounts payable upon your
death shall be distributed to your estate. If there is any question as to the
legal right of any beneficiary to receive payment of amounts under this Award
Agreement, the amounts in question may be paid to your estate, in which event
the Firm shall have no further liability to anyone with respect to such amounts.
A beneficiary or estate shall have no rights under this Award Agreement other
than the right, subject to the immediately preceding sentence, to receive such
amounts, if any, as may be payable under this Paragraph 9.
10. Withholding, Consents and Legends.
(a) The delivery of Shares is conditioned on your satisfaction of
any applicable withholding taxes (in accordance with Section 3.2 of the Plan,
provided that the Committee may determine not to apply the minimum withholding
rate specified in Section 3.2.2 of the Plan).
(b) Your rights in respect of the RSUs are conditioned on the
receipt to the full satisfaction of the Committee of any required consents (as
defined in Section 3.3 of the Plan) that the Committee may determine to be
necessary or advisable (including, without limitation, your consenting (i) to
the Firm's supplying to any third party recordkeeper of the Plan such personal
information as the Committee deems advisable to administer the Plan and (ii) to
deductions from your wages, or other arrangements satisfactory to the Committee,
to reimburse the Firm for advances made on your behalf to satisfy certain
withholding and other tax obligations in connection with this Award).
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(c) If you are or become a Managing Director, your rights in
respect of the RSUs are conditioned on your becoming a party to any
shareholders' agreement to which other similarly situated employees of the Firm
are a party.
(d) GS Inc. may affix to Certificates representing Shares issued
pursuant to this Award Agreement any legend that the Committee determines to be
necessary or advisable (including to reflect any restrictions to which you may
be subject under a separate agreement with GS Inc.). GS Inc. may advise the
transfer agent to place a stop order against any legended Shares.
11. Right of Offset. GS Inc. (and any of its affiliates or
subsidiaries) shall have the right to offset against the
obligation to deliver Shares (or cash) under this Award Agreement any
outstanding amounts (including, without limitation, travel and entertainment or
advance account balances, loans, or amounts repayable to the Firm pursuant to
tax equalization, housing, automobile or other employee programs) you then owe
to the Firm and any amounts the Committee otherwise deems appropriate pursuant
to any tax equalization policy or agreement.
12. No Rights to Continued Employment. Nothing in this Award
Agreement or the Plan shall be construed as giving you any right to continued
Employment by the Firm or affect any right which the Firm may have to terminate
or alter the terms and conditions of your Employment.
13. Successors and Assigns of GS Inc. The terms and conditions of
this Award Agreement shall be binding upon and shall inure to the benefit of GS
Inc. and its successors and assigns.
14. Committee Discretion. The Committee shall have full discretion
with respect to any actions to be taken or determinations to be made in
connection with this Award Agreement, and its determinations shall be final,
binding and conclusive.
15. Amendment. The Committee reserves the right at any time to amend
the terms and conditions set forth in this Award Agreement, and the Board may
amend the Plan in any respect; provided that, notwithstanding the foregoing and
Sections 1.3.2(f), 1.3.2(g) and Section 3.1 of the Plan, no such amendment shall
materially adversely affect your rights and obligations under this Award
Agreement without your consent (or the consent of your beneficiary or estate, if
such consent is obtained after your death), except that the Committee reserves
the right to accelerate the vesting and delivery of the Shares and in its
discretion provide that such Shares may not be transferable until the relevant
Vesting Dates (and that in respect of such Shares you may remain subject to the
repayment obligations of Paragraph 5 in the circumstances under which the Shares
would not have been delivered pursuant to Section 4 or 6). Any amendment of this
Award Agreement shall be in writing signed by the Chief Executive Officer of GS
Inc. or his or her designee.
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16. Arbitration; Choice of Forum. (a) Any dispute, controversy or
claim between the Firm and you, arising out of or relating to or concerning the
Plan or this Award Agreement, shall be finally settled by arbitration in New
York City before, and in accordance with the rules then obtaining of, the New
York Stock Exchange, Inc. (the "NYSE") or, if the NYSE declines to arbitrate the
matter, the American Arbitration Association (the "AAA") in accordance with the
commercial arbitration rules of the AAA. Prior to arbitration, all claims
maintained by you must first be submitted to the Committee in accordance with
claims procedures determined by the Committee. This paragraph is subject to the
provisions of clauses (b) and (c) below.
(b) THE FIRM AND YOU HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN THE CITY OF NEW YORK OVER
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO OR CONCERNING THE
PLAN OR THIS AWARD AGREEMENT THAT IS NOT OTHERWISE ARBITRATED OR RESOLVED
ACCORDING TO PARAGRAPH 16(a) OF THIS AWARD AGREEMENT. This includes
any suit, action or proceeding to compel arbitration or to enforce an
arbitration award. The Firm and you acknowledge that the forum designated by
this Paragraph 16(b) has a reasonable relation to the Plan, this Award
Agreement, and to your relationship with the Firm. Notwithstanding the
foregoing, nothing herein shall preclude the Firm from bringing any action or
proceeding in any other court for the purpose of enforcing the provisions of
this Paragraph 16.
(c) The agreement by you and the Firm as to forum is independent of
the law that may be applied in the action, and you and the Firm agree to such
forum even if the forum may under applicable law choose to apply non-forum law.
You and the Firm hereby waive, to the fullest extent permitted by applicable
law, any objection which you or the Firm now or hereafter may have to personal
jurisdiction or to the laying of venue of any such suit, action or proceeding in
any court referred to in Paragraph 16(b). You and the Firm undertake not to
commence any action arising out of or relating to or concerning this Award
Agreement in any forum other than a forum described in this Paragraph 16. You
and the Firm agree that, to the fullest extent permitted by applicable law, a
final and non-appealable judgment in any such suit, action or proceeding in any
such court shall be conclusive and binding upon you and the Firm.
(d) You irrevocably appoint the General Counsel of GS Inc. as your
agent for service of process in connection with any action or proceeding arising
out of or relating to or concerning this Award Agreement which is not arbitrated
pursuant to the provisions of Paragraph 16(a), who shall promptly advise you of
any such service of process.
(e) You hereby agree to keep confidential the existence of, and any
information concerning, a dispute described in this Paragraph 16, except that
you may disclose information concerning such dispute to the arbitrator or court
that is considering such dispute or to your legal counsel (provided that such
counsel agrees not to disclose any such information other than as necessary to
the prosecution or defense of the dispute).
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(f) You recognize and agree that prior to the grant of this Award
you have no right to any benefits hereunder. Accordingly, in consideration of
the receipt of this Award, you expressly waive any right to contest the amount
of this Award, terms of this Award Agreement, any determination, action or
omission hereunder or under the Plan by the Committee, GS Inc. or the Board, or
any amendment to the Plan or this Award Agreement (other than an amendment to
which your consent is expressly required by Paragraph 15).
17. Governing Law. THIS AWARD SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
18. Headings. The headings in this Award Agreement are for the
purpose of convenience only and are not intended to define or limit the
construction of the provisions hereof.
IN WITNESS WHEREOF, GS Inc. has caused this Award Agreement to be
duly executed and delivered as of __________, 1999.
THE GOLDMAN SACHS GROUP, INC.
By: ____________________________
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GLOSSARY OF TERMS
Solely for purposes of the 1999 Discretionary RSU Award Agreement and the
1999 Discretionary Option Award Agreement, granted under the Goldman Sachs
1999 Stock Incentive Plan (the "Plan"), the following terms shall have the
meanings set forth below. Capitalized terms not defined in this Glossary
of Terms shall have the meanings as used or defined in the applicable
Award Agreement or the Plan.
"CAUSE" means (i) your conviction, whether following trial or by
plea of guilty or nolo contendere (or similar plea), in a criminal
proceeding (A) on a misdemeanor charge involving fraud, false statements
or misleading omissions, wrongful taking, embezzlement, bribery, forgery,
counterfeiting or extortion, or (B) on a felony charge or (C) on an
equivalent charge to those in clauses (A) and (B) in jurisdictions which
do not use those designations; (ii) your engaging in any conduct which
constitutes an employment disqualification under applicable law (including
statutory disqualification as defined under the Exchange Act); (iii) your
willful or grossly negligent failure to perform your duties to the Firm;
(iv) your violation of any securities or commodities laws, any rules or
regulations issued pursuant to such laws, or the rules and regulations of
any securities or commodities exchange or association of which GS Inc. or
any of its subsidiaries or affiliates is a member; (v) your violation of
any Firm policy concerning hedging or confidential or proprietary
information, or your material violation of any other Firm policy as in
effect from time to time; (vi) your engaging in any act or making any
statement which impairs, impugns, denigrates, disparages or negatively
reflects upon the name, reputation or business interests of the Firm; or
(vii) your engaging in any conduct detrimental to the Firm. The
determination as to whether "Cause" has occurred shall be made by the
Committee in its sole discretion. The Committee shall also have the
authority in its sole discretion to waive the consequences under the Plan
or any Award Agreement of the existence or occurrence of any of the
events, acts or omissions constituting "Cause".
"CHANGE IN CONTROL" means the consummation of a merger,
consolidation, statutory share exchange or similar form of corporate
transaction involving GS Inc. (a "Reorganization") or sale or other
disposition of all or substantially all of GS Inc.'s assets to an entity
that is not an affiliate of GS Inc. (a "Sale"), that in each case requires
the approval of GS Inc.'s stockholders under the law of GS Inc.'s
jurisdiction of organization, whether for such Reorganization or Sale (or
the issuance of securities of GS Inc. in such Reorganization or Sale),
unless immediately following such Reorganization or Sale, either: (i) at
least 50% of the total voting power (in respect of the election of
directors, or similar officials in the case of an entity other than a
corporation) of (A) the entity resulting from such Reorganization, or the
entity which has acquired all or substantially all of the assets of GS
Inc. in a Sale (in either case, the "Surviving Entity"), or (B) if
applicable, the ultimate parent entity that directly or
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indirectly has beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act, as such Rule is in effect on the date of the
adoption of the Plan) of 50% or more of the total voting power (in respect
of the election of directors, or similar officials in the case of an
entity other than a corporation) of the Surviving Entity (the "Parent
Entity"), is represented by GS Inc.'s securities (the "GS Inc.
Securities") that were outstanding immediately prior to such
Reorganization or Sale (or, if applicable, is represented by shares into
which such GS Inc. Securities were converted pursuant to such
Reorganization or Sale) or (ii) at least 50% of the members of the board
of directors (or similar officials in the case of an entity other than a
corporation) of the Parent Entity (or, if there is no Parent Entity, the
Surviving Entity) following the consummation of the Reorganization or Sale
were, at the time of the Board's approval of the execution of the initial
agreement providing for such Reorganization or Sale, individuals (the
"Incumbent Directors") who either (1) were members of the Board on the
date of the Award or (2) became directors subsequent to the date of the
Award and whose election or nomination for election was approved by a vote
of at least two-thirds of the Incumbent Directors then on the Board
(either by a specific vote or by approval of GS Inc.'s proxy statement in
which such persons are named as a nominee for director).
"CLIENT" means any client or prospective client of the Firm to whom
you provided services, or for whom you transacted business, or whose
identity became known to you in connection with your relationship with or
employment by the Firm.
"COMPETITIVE ENTERPRISE" means a business enterprise that (i)
engages in any activity, or (ii) owns or controls a significant interest
in any entity that engages in any activity, that, in either case, competes
anywhere with any activity in which the Firm is engaged. The activities
covered by the previous sentence include, without limitation, financial
services such as investment banking, public or private finance, lending,
financial advisory services, private investing (for anyone other than you
and members of your family), merchant banking, asset or hedge fund
management, insurance or reinsurance underwriting or brokerage, property
management, or securities, futures, commodities, energy, derivatives or
currency brokerage, sales, lending, custody, clearance, settlement or
trading.
"EXTENDED ABSENCE" means you are unable to perform for six
continuous months, due to illness, injury or pregnancy-related
complications, substantially all the essential duties of your occupation,
as determined by the Committee.
"GOOD REASON" means (i) as determined by the Committee, a materially
adverse alteration in the your position or in the nature or status of your
responsibilities from those in effect immediately prior to the Change in
Control, or (ii) the Firm's requiring your principal place of Employment
to be located more than seventy-five (75) miles from the location where
you are principally Employed at the time of the Change in Control (except
for required travel on the Firm's business to an extent substantially
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consistent with your customary business travel obligations in the ordinary
course of business prior to the Change in Control).
"RETIREMENT" means termination of your Employment on or after the
date on which (i) you have attained age 55 with 5 years of service with
the Firm, or (ii) the sum of (I) your age and (II) 1.5 times your years of
service with the Firm, is equal to or greater than 80.
"SOLICIT" means any direct or indirect communication of any kind
whatsoever, regardless of by whom initiated, inviting, advising,
encouraging or requesting any person or entity, in any manner, to take or
refrain from taking any action.
"VESTING DATE" means the first day of each Window Period that begins
on or immediately follows each of the third, fourth and fifth
anniversaries of the consummation of the initial public offering of
Shares.
"WINDOW PERIOD" means a period designated by the Committee during
which employees of the Firm generally are permitted to purchase or sell
Shares.
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