EXHIBIT 10.10
JEFFERIES GROUP, INC.
2003 INCENTIVE COMPENSATION PLAN
RESTRICTED STOCK UNITS AGREEMENT
This Restricted Stock Units Agreement (the "Agreement") confirms the grant on
_____________ (the "Grant Date") by Jefferies Group, Inc., a Delaware
corporation (the "Company"), to _______________ ("Employee") of Restricted Stock
Units (the "Units"), including rights to Dividend Equivalents as specified
herein, as follows:
Number granted: _________ Units
How Units Vest: __ % of the Units, if not previously forfeited, will
vest on each of _____, provided that Employee continues
to be employed by the Company or a subsidiary on each
vesting date (each, a "Stated Vesting Date"). In
addition, if not previously forfeited, the Units will
become vested upon the occurrence of certain events
relating to Termination of Employment to the extent
provided in Section 4 of the Terms and Conditions of
Restricted Stock Units attached hereto (the "Terms and
Conditions"). The terms "vest" and "vesting" mean that
the Units have become non-forfeitable, except for
forfeitures specified under Section 7.4 of the Plan. If
Employee has a Termination of Employment prior to the
Stated Vesting Date and the Units are not otherwise
deemed vested by that date, the Units will be
immediately forfeited except as otherwise provided in
Section 4 of the Terms and Conditions.
Settlement: Settlement of vested Units will occur on
__________________, 200__, or at such earlier time, at
or after vesting, as Employee has had a Termination of
Employment, except settlement shall be deferred in
certain cases if so elected by Employee in accordance
with Section 8(a) of the Terms and Conditions, and Units
that become vested after Termination of Employment shall
be settled at the later of vesting or such deferral date
as Employee may have elected in accordance with Section
8(a) of the Terms and Conditions. Units granted
hereunder will be settled by delivery of one Share for
each Unit being settled (together with any cash or
Shares resulting from Dividend Equivalents).
The Units are subject to the terms and conditions of the 2003 Incentive
Compensation Plan (the "Plan"), and this Agreement, including the Terms and
Conditions of Restricted Stock Units attached hereto. The number of Units, the
kind of shares deliverable in settlement of Units, and other terms relating to
the Units are subject to adjustment in accordance with Section 5 of the Terms
and Conditions and Section 5.3 of the Plan.
Employee acknowledges and agrees that (i) Units are nontransferable,
except as provided in Section 3 of the Terms and Conditions and Section 9.2 of
the Plan, (ii) Units, and certain amounts of gain realized upon settlement of
Units, are subject to forfeiture in the event Employee fails to meet applicable
requirements relating to non-competition, confidentiality, and related matters
with respect to the Company and its subsidiaries and affiliates (together,
"Group," and each entity included in Group being a "Group Entity"), as set forth
in Section 7 of the Terms and Conditions and Section 7.4 of the Plan, (iii)
Units are
subject to forfeiture upon Employee's Termination of Employment in certain
circumstances and, following certain Terminations of Employment, failure of
Employee to comply with non-competition and related conditions set forth in
Section 4(d)(iii) prior to vesting, as specified in Section 4 of the Terms and
Conditions, and (iv) sales of shares delivered in settlement of Units will be
subject to the Company's policies regulating trading by employees.
IN WITNESS WHEREOF, JEFFERIES GROUP, INC. has caused this Agreement to be
executed by its officer thereunto duly authorized, and Employee has duly
executed this Agreement, by which each has agreed to the terms of this
Agreement.
Employee JEFFERIES GROUP, INC.
_________________________ By:____________________
[Employee Name]
TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS
The following Terms and Conditions apply to the Units granted to Employee
by JEFFERIES GROUP, INC. (the "Company"), and Units (if any) resulting from
Dividend Equivalents, as specified in the Restricted Stock Units Agreement (of
which these Terms and Conditions form a part). Certain terms of the Units,
including the number of Units granted, vesting date(s) and settlement date, are
set forth on the preceding pages.
1. GENERAL. The Units are granted to Employee under the Company's 2003
Incentive Compensation Plan (the "Plan"). A copy of the Plan and information
regarding the Plan, including documents that constitute the "Prospectus" for the
Plan under the Securities Act of 1933, can be viewed and printed out from the
Company's secure Intranet website, www.corp.jefco.com (go to People Services,
then to Plan Documents). All of the applicable terms, conditions and other
provisions of the Plan are incorporated by reference herein. Capitalized terms
used in this Agreement but not defined herein shall have the same meanings as in
the Plan. If there is any conflict between the provisions of this document and
mandatory provisions of the Plan, the provisions of the Plan govern, otherwise,
the terms of this document shall prevail. By accepting the grant of the Units,
Employee agrees to be bound by all of the terms and provisions of the Plan (as
presently in effect or later amended), the rules and regulations under the Plan
adopted from time to time, and the decisions and determinations of the Company's
Compensation Committee (the "Committee") made from time to time, provided that
no such Plan amendment, rule or regulation or Committee decision or
determination shall materially and adversely affect the rights of the Employee
with respect to the Units.
2. ACCOUNT FOR EMPLOYEE. The Company shall maintain a bookkeeping account
for Employee (the "Account") reflecting the number of Units then credited to
Employee hereunder as a result of such grant of Units and any crediting of
additional Units to Employee pursuant to payments equivalent to dividends paid
on Common Stock under Section 5 hereof ("Dividend Equivalents").
3. NONTRANSFERABILITY. Until Units are settled in accordance with the
terms of this Agreement, Employee may not sell, transfer, assign, pledge, margin
or otherwise encumber or dispose of Units or any rights hereunder to any third
party other than by will or the laws of descent and distribution, except for
transfers to a Beneficiary or as otherwise permitted and subject to the
conditions under Section 9.2 of the Plan.
4. TERMINATION PROVISIONS. The following provisions will govern the
vesting and forfeiture of the Units in the event of Employee's Termination of
Employment and/or occurrence of a post-termination Forfeiture Event (as defined
below), unless otherwise determined by the Committee (subject to Section 9(a)
hereof):
(a) Death or Disability. In the event of Employee's Termination of
Employment due to death or Disability (as defined below), all Units then
outstanding, if not previously vested, will immediately vest, and all
Units will be settled in accordance with the settlement terms set out on
the Cover Page hereof, giving effect to any valid deferral election of
Employee then in effect. The foregoing notwithstanding, any distribution
resulting from a Disability that does not constitute an "unforeseeable
emergency" under Section 409A(a)(2)(B)(ii) of the Internal Revenue Code
(the "Code") which would be made to a "specified employee" as defined
under Code Section 409A(a)(2)(B)(i) shall be made six months after the
date of Termination of Employment.
(b) Retirement or Involuntary Termination by the Company not for
Cause. In the event of Employee's Retirement or an involuntary Termination
of Employment by the Company
not for Cause, Units not previously vested shall not then be forfeited
provided that Employee executes a settlement agreement and release in such
form as may be requested by the Company, but thereafter such Units shall
be forfeited if there occurs a Forfeiture Event prior to the earlier of
the Stated Vesting Date for such Units or Employee's death. Upon such a
Termination of Employment, the then-outstanding Units that are vested at
the date of Termination and that become vested thereafter will be settled
in accordance with the settlement terms set out on the Cover Page hereof,
giving effect to any valid deferral election of Employee then in effect.
(c) Termination by Employee for any Reason or by the Company for
Cause. In the event of Employee's Termination of Employment by Employee
for any reason (other than due to Retirement) or by the Company for Cause,
the portion of the then-outstanding Units not vested at the date of
Termination will be forfeited, and the portion of the then-outstanding
Units that is vested and non-forfeitable at the date of Termination will
be settled on the Settlement Date specified on the cover page hereof,
except that any valid deferral election of Employee shall be given effect.
(d) Certain Definitions. The following definitions apply for
purposes of this Agreement, whether or not Employee has an employment
agreement or other agreement with a Group Entity contain the same or
similar defined terms:
(i) "Cause" means Employee's:
Neglect, failure or refusal to timely perform the duties
of Employee's employment (other than by reason of a
physical or mental illness or impairment), or Employee's
gross negligence in the performance of his or her
duties;
Material breach of any agreements, covenants and
representations made in any employment agreement or
other agreement with the Company or any of its
subsidiaries or affiliates or violation of internal
policies or procedures as are in effect as of the date
such action is taken, including but not limited to the
Company's Code of Ethics and Standards of Employee
Conduct, as amended from time to time;
Violation of any law, rule, regulation or by-law of any
governmental authority (state, federal or foreign), any
securities exchange or association or other regulatory
or self-regulatory body or agency applicable to
Employee, the Company, its subsidiaries or affiliates or
any material general policy or directive of the Company,
its subsidiaries or affiliates;
Conviction of, or plea of guilty or nolo contendere to,
a crime involving moral turpitude, dishonesty, fraud or
unethical business conduct, or any felony of any nature
whatsoever;
Giving or accepting undisclosed material commissions or
other payments in cash or in kind in connection with the
affairs of the clients of the Company, its subsidiaries
or affiliates;
Failure to obtain or maintain any registration, license
or other authorization or approval that Employee is
required to maintain or that the
Company, its subsidiaries or affiliates reasonably
believes is required in order for Employee to perform
his or her duties, provided, however, that Employee
shall be given written notice of any such registration,
license or other authorization or approval that he or
she is required to obtain and a reasonable period of
time to obtain such registration, license, or other
authorization or approval;
Willful failure to execute a directive of the board of
directors of the Company or any of its subsidiaries or
affiliates, the Executive Committee of any of the
Company's subsidiaries or affiliates, or Employee's
supervisor (unless such directive would result in the
commission of an act which is illegal or unethical) or
commission of an act against the directive of such
Board, such Executive Committee or Employee's
supervisor; or
Substantial negotiations concerning or acceptance of
employment with a competitor of the Company or any of
its subsidiaries or affiliates prior to Employee's
Termination of Employment.
(ii) "Disability" means that Employee has commenced receipt of
long-term disability benefits under the Company's long-term
disability policy as in effect at the date of Employee's termination
of employment.
(iii) A "Forfeiture Event" means and shall be deemed to have
occurred if, at any time after the grant of the Units including
following Employee's Termination of Employment, Employee shall have
failed to comply with any of the following conditions. Without the
consent in writing of the Board, Employee will not, at any time
prior to an applicable Stated Vesting Date, acting alone or in
conjunction with others, directly or indirectly (A) render services
for any organization or engage (either as owner, investor, partner,
stockholder, employer, employee, consultant, advisor, or director)
directly or indirectly, in any business which is or becomes
competitive with the Company, its subsidiaries or affiliates; (B)
induce any customer or client of or investor (excluding anyone who
is an investor solely as a holder of Common Stock of the Company) in
the Company, its subsidiaries or affiliates with whom Employee has
had contacts or relationships, directly or indirectly, during and
within the scope of his employment with the Company or any of its
subsidiaries or affiliates, to curtail, limit, or cancel their
business with the Company, its subsidiaries or affiliates; (C)
induce, or attempt to influence, any employee of the Company, its
subsidiaries or affiliates to terminate employment; (D) solicit,
hire or retain as an employee or independent contractor, or assist
any third party in the solicitation, hire, or retention as an
employee or independent contractor, any person who during the
previous 12 months was an employee of the Company or any of its
subsidiaries or affiliates; or (E) otherwise fail to comply with the
conditions set forth in Section 7.4(a), (b) and (c) of the Plan.
However, following Termination Employee shall be free to purchase
stock or other securities of an organization or business so long as
it is listed upon a recognized securities exchange or traded
over-the-counter and such investment does not represent a greater
than five percent equity interest in the organization or business.
(iv) "Pro Rata Portion" means, for each tranche of Units, a
fraction the numerator of which is the number of days that have
elapsed from the Grant Date to the date of Employee's Termination of
Employment and the denominator of which is the
number of days from the Grant Date to the Stated Vesting Date for
that tranche. A "tranche" is that portion of Units that have a
unique Stated Vesting Date.
(v) "Retirement" means retirement after attaining the age at
which an Employee's age plus his years of service equals 60,
provided, however, that Employee has provided a minimum of five
years of service to the Company, its subsidiaries or affiliates. For
this purpose, years of service shall be credited for each twelve
month period beginning on the date of Employee's commencement of
employment with the Company and on each anniversary thereof during
which the Employee was in active employment with the Company.
(vi) "Termination of Employment" means the event by which
Employee ceases to be employed by a Group Entity and immediately
thereafter is not employed by any other Group Entity.
5. DIVIDEND EQUIVALENTS AND ADJUSTMENTS.
(a) Dividend Equivalents. Subject to Section 5(d), Dividend
Equivalents will be credited on Units (other than Units that, at the
relevant record date, previously have been settled or forfeited) and
deemed reinvested in additional Units, to the extent and in the manner as
follows:
(i) Cash Dividends. If the Company declares and pays a
dividend or distribution on Shares in the form of cash, then a
number of additional Units shall be credited to Employee's Account
as of the last day of the calendar quarter in which such dividend or
distribution was paid equal to the number of Units credited to the
Account as of the record date for such dividend or distribution
multiplied by cash amount of the dividend or distribution paid on
each outstanding share of Common Stock at such payment date, divided
by the Fair Market Value of a share of Common Stock at the date of
such crediting; provided, however, that in the case of an
extraordinary cash dividend or distribution the Company may provide
for such crediting at the dividend or distribution payment date
instead of the last day of the calendar quarter.
(ii) Non-Common Stock Dividends. If the Company declares and
pays a dividend or distribution on Common Stock in the form of
property other than shares of Common Stock, then a number of
additional Units shall be credited to Employee's Account as of the
payment date for such dividend or distribution equal to the number
of Units credited to the Account as of the record date for such
dividend or distribution multiplied by the Fair Market Value of such
property actually paid as a dividend or distribution on each
outstanding share of Common Stock at such payment date, divided by
the Fair Market Value of a share of Common Stock at such payment
date.
(iii) Common Stock Dividends and Splits. If the Company
declares and pays a dividend or distribution on Common Stock in the
form of additional shares of Common Stock, or there occurs a forward
split of Common Stock, then a number of additional Units shall be
credited to Employee's Account as of the payment date for such
dividend or distribution or forward split equal to the number of
Units credited to the Account as of the record date for such
dividend or distribution or split multiplied by the number of
additional shares of Common Stock actually paid as a dividend or
distribution or issued in such split in respect of each outstanding
share of Common Stock.
(b) Adjustments. The number of Units credited to Employee's Account
shall be appropriately adjusted, in order to prevent dilution or
enlargement of Employee's rights with respect to Units or to reflect any
changes in the number of outstanding shares of Common Stock resulting from
any event referred to in Section 5.3 of the Plan, taking into account any
Units credited to Employee in connection with such event under Section
5(a) hereof, and any performance conditions relating to the Units may be
likewise adjusted in the discretion of the Committee.
(c) Risk of Forfeiture and Settlement of Units Resulting from
Dividend Equivalents and Adjustments. Units which directly or indirectly
result from Dividend Equivalents on or adjustments to a Unit granted
hereunder and which do not result from a dividend or distribution on
Shares in the form of cash, shall be subject to the same risk of
forfeiture (including additional forfeiture terms of Section 7.4 of the
Plan) as applies to the granted Unit and, if not forfeited, will be
settled at the same time as the granted Unit. Units which directly or
indirectly result from Dividend Equivalents on or adjustments to a Unit
granted hereunder and which result from an ordinary dividend or
distribution on Shares in the form of cash, shall not be subject to
forfeiture and will be settled at the same time as the granted Unit (or if
the granted Unit is forfeited, then at the time the granted Unit would
have been settled if it were not forfeited). Units which directly or
indirectly result from Dividend Equivalents on or adjustments to a Unit
granted hereunder and which result from an extraordinary dividend or
distribution on Shares in the form of cash, shall, unless otherwise
determined by the Company at the time of such extraordinary dividend or
distribution, be subject to the same risk of forfeiture (including
additional forfeiture terms of Section 7.4 of the Plan) as applies to the
granted Unit and, if not forfeited, will be settled at the same time as
the granted Unit.
(d) Changes to Manner of Crediting Dividend Equivalents. The
provisions of Section 5(a) notwithstanding, the Company may vary the
manner and timing of crediting dividend equivalents for administrative
convenience, including, for example, by crediting cash dividend
equivalents rather than additional Units.
6. ADDITIONAL FORFEITURE PROVISIONS. Employee agrees that, by signing this
Agreement and accepting the grant of the Units, the forfeiture conditions set
forth in Section 7.4 of the Plan shall apply to all Units hereunder and to gains
realized upon the settlement of the Units.
7. EMPLOYEE REPRESENTATIONS AND WARRANTIES AND RELEASE. As a condition to
any non-forfeiture of the Units at or after Termination of Employment and to any
settlement of the Units, the Company may require Employee (i) to make any
representation or warranty to the Company as may be required under any
applicable law or regulation, to make a representation and warranty that no
Forfeiture Event has occurred or is contemplated, and that otherwise the
requirements of Section 7.4(d) of the Plan and Section 7 above have been met,
and (ii) to execute a release of claims against the Company arising before the
date of such release, in such form as may be specified by the Company.
8. OTHER TERMS RELATING TO UNITS.
(a) Deferral of Settlement; Compliance with Code Section 409A.
Settlement of any Unit, which otherwise would occur at the Settlement
Date, will be deferred in certain cases if and to the extent Employee is
permitted to participate in the Stock Option Gain and Stock Award Deferral
Program or otherwise permitted to defer the Units and Employee makes a
valid deferral election relating to the Units. Deferrals, whether elective
or mandatory under the terms of this Agreement, shall comply with
requirements under Code Section 409A. Deferrals will be subject to such
other restrictions and terms as may be specified by the Company prior to
deferral. It is
understood that Code Section 409A and regulations thereunder may require
any elective deferral to comply with Section 409A(a)(4)(C). Other
provisions of this Agreement notwithstanding, under U.S. federal income
tax laws and Treasury Regulations (including proposed regulations) as
presently in effect or hereafter implemented, (i) if the timing of any
distribution in settlement of Units would result in Employee's
constructive receipt of income relating to the Units prior to such
distribution, the date of distribution will be the earliest date after the
specified date of distribution that distribution can be effected without
resulting in such constructive receipt (or, if delayed distribution would
not avoid such constructive receipt, distribution will be accelerated to
the date that would avoid such constructive receipt, but in no event will
distribution occur before the vesting date); and (ii) any rights of
Employee or retained authority of the Company with respect to Units
hereunder shall be automatically modified and limited to the extent
necessary so that Employee will not be deemed to be in constructive
receipt of income relating to the Units prior to the distribution and so
that Employee shall not be subject to any penalty under Code Section 409A.
(b) Fractional Units and Shares. The number of Units credited to
Employee's Account shall include fractional Units calculated to at least
three decimal places, unless otherwise determined by the Committee. Unless
settlement is effected through a broker or agent that can accommodate
fractional shares (without requiring issuance of a fractional share by the
Company), upon settlement of the Units Employee shall be paid, in cash, an
amount equal to the value of any fractional share that would have
otherwise been deliverable in settlement of such Units.
(c) Tax Withholding. Employee shall make arrangements satisfactory
to the Company, or, in the absence of such arrangements, a Group Entity
may deduct from any payment to be made to Employee any amount necessary,
to satisfy requirements of federal, state, local, or foreign tax law to
withhold taxes or other amounts with respect to the lapse of the risk of
forfeiture (including FICA due upon such lapse) or the settlement of the
Units. Unless Employee has made separate arrangements satisfactory to the
Company, the Company may elect to withhold shares deliverable in
settlement of the Units having a fair market value (as determined by the
Committee) equal to the amount of such tax liability required to be
withheld in connection with the settlement of the Units, but the Company
shall not be obligated to withhold such Shares.
(d) Statements. An individual statement of Employee's Account will
be issued to Employee at such times as may be determined by the Company.
Such a statement shall reflect the number of Units credited to Employee's
Account, transactions therein during the period covered by the statement,
and other information deemed relevant by the Committee. Such a statement
may be combined with or include information regarding other plans and
compensatory arrangements for employees. Employee's statements shall be
deemed a part of this Agreement, and shall evidence the Company's
obligations in respect of Units, including the number of Units credited as
a result of Dividend Equivalents (if any). Any statement containing an
error shall not, however, represent a binding obligation to the extent of
such error, notwithstanding the inclusion of such statement as part of
this Agreement.
9. MISCELLANEOUS.
(a) Binding Agreement; Written Amendments. This Agreement shall be
binding upon the heirs, executors, administrators, and successors of the
parties. This Agreement and the Plan, and any deferral election separately
filed with the Company relating to this Award, constitute the entire
agreement between the parties with respect to the Units, and supersede any
prior agreements or documents with respect thereto. No amendment,
alteration, suspension, discontinuation, or termination of this Agreement
which may impose any additional obligation upon the Company or
materially impair the rights of Employee with respect to the Units shall
be valid unless in each instance such amendment, alteration, suspension,
discontinuation, or termination is expressed in a written instrument duly
executed in the name and on behalf of the Company and by Employee.
(b) No Promise of Employment. The Units and the granting thereof
shall not constitute or be evidence of any agreement or understanding,
express or implied, that Employee has a right to continue as an officer or
employee of the Company for any period of time, or at any particular rate
of compensation.
(c) Unfunded Plan. Any provision for distribution in settlement of
Employee's Account hereunder shall be by means of bookkeeping entries on
the books of the Company and shall not create in Employee or any
Beneficiary any right to, or claim against any, specific assets of the
Company, nor result in the creation of any trust or escrow account for
Employee. With respect to any entitlement of Employee or any Beneficiary
to any distribution hereunder, Employee or such Beneficiary shall be a
general creditor of the Company.
(d) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO CONFLICTS OF LAWS PRINCIPLES.
(e) Legal Compliance. Employee agrees to take any action the
Company reasonably deems necessary in order to comply with federal and
state laws, or the rules and regulations of the New York Stock Exchange,
the NASD, or any other stock exchange, or any other obligation of the
Company or Employee relating to the Units or this Agreement.
(f) Notices. Any notice to be given the Company under this Agreement
shall be addressed to the Company at 520 Madison Avenue, 12th Floor, New
York, NY 10022, attention: Corporate Secretary, and any notice to the
Employee shall be addressed to the Employee at Employee's address as then
appearing in the records of the Company.