EXHIBIT 10.40

THE GOLDMAN SACHS AMENDED AND RESTATED
STOCK INCENTIVE PLAN
___ YEAR-END OPTION AWARD
     This Award Agreement sets forth the terms and conditions of the     
Year-End award (this “Award”) of Nonqualified Stock Options (“Year-End Options”)
granted to you under The Goldman Sachs Amended and Restated Stock Incentive Plan
(the “Plan”).
     1. The Plan. This Award is made pursuant to the Plan, the terms of which
are incorporated in this Award Agreement. Capitalized terms used in this Award
Agreement that are not defined in this Award Agreement have the meanings as used
or defined in the Plan. References in this Award Agreement to any specific Plan
provision shall not be construed as limiting the applicability of any other Plan
provision.
     2. Award. The Award Statement delivered to you sets forth (i) the Date of
Grant of the Year-End Options, (ii) the number of Year-End Options and (iii) the
Exercise Price of each Year-End Option. Until shares of Common Stock (“Shares”)
are delivered to you pursuant to Paragraph 7 after you exercise your Year-End
Options, you have no rights as a shareholder of GS Inc. This Award is
conditioned on your executing the related signature card and returning it to the
address designated on the signature card and/or by the method designated on the
signature card by the date specified, and is subject to all terms, conditions
and provisions of the Plan and this Award Agreement, including, without
limitation, the arbitration and choice of forum provisions set forth in
Paragraph 13. By executing the related signature card (which, among other
things, opens the custody account referred to in paragraph 7 if you have not
done so already), you will have confirmed your acceptance of all of the terms
and conditions of this Award Agreement.
     3. Expiration Date. The Expiration Date for your Year-End Options is ___
(in New York). Notwithstanding anything to the contrary in this Award Agreement,
but subject to earlier termination as provided in this Award Agreement or
otherwise in accordance with the Plan, on the Expiration Date all of your then
Outstanding Year-End Options shall terminate.
     4. Vesting. All of your Year-End Options shall be Vested on the Date of
Grant. While your Year-End Options are Vested, and therefore your continued
active Employment is not required in order for your Outstanding Year-End Options
to become exercisable, all other terms and conditions of this Award Agreement
shall continue to apply to such Year-End Options, and failure to meet such terms
and conditions may result in the termination of this Award (as a result of which
no Shares subject to any such Year-End Options would be delivered).
     5. Termination of Year-End Options Upon Certain Events.
     (a) Unless the Committee determines otherwise, your rights in respect of
all of your Outstanding Year-End Options immediately shall terminate, such
Year-End Options shall cease to be Outstanding, and no Shares shall be delivered
in respect thereof, if at any time prior to the date you exercise such Year-End
Options:
     (i) you attempt to have any dispute under the Plan or this Award Agreement
resolved in any manner that is not provided for by Paragraph 13 or Section 3.17
of the Plan;
     (ii) any event that constitutes Cause has occurred;

 

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     (iii) (A) you in any manner, directly or indirectly, (1) Solicit any Client
to transact business with a Competitive Enterprise or to reduce or refrain from
doing any business with the Firm, (2) interfere with or damage (or attempt to
interfere with or damage) any relationship between the Firm and any Client,
(3) Solicit any person who is an employee of the Firm to resign from the Firm or
to apply for or accept employment with any Competitive Enterprise or (4) on
behalf of yourself or any person or Competitive Enterprise hire, or participate
in the hiring, of any Selected Firm Personnel or identify, or participate in the
identification of, Selected Firm Personnel for potential hiring whether as an
employee or consultant or otherwise, or (B) Selected Firm Personnel are
Solicited, hired or accepted into partnership, membership or similar status (1)
by a Competitive Enterprise that you form, that bears your name, in which you
are a partner, member or have similar status, or in which you possess or control
greater than a de minimis equity ownership, voting or profit participation or
(2) by any Competitive Enterprise where you have, or are intended to have,
direct or indirect managerial or supervisory responsibility for such Selected
Firm Personnel;
     (iv) you fail to certify to GS Inc., in accordance with procedures
established by the Committee, that you have complied, or the Committee
determines that you in fact have failed to comply, with all the terms and
conditions of the Plan and this Award Agreement. By exercising any Year-End
Option under this Award Agreement, or by accepting the delivery of Shares under
this Award Agreement, you shall be deemed to have represented and certified at
such time that you have complied with all the terms and conditions of the Plan
and this Award Agreement;
     (v) the Committee determines that you failed to meet, in any respect, any
obligation you may have under any agreement between you and the Firm, or any
agreement entered into in connection with your Employment with the Firm,
including, without limitation, the Firm’s notice period requirement applicable
to you, any offer letter, employment agreement or any shareholders’ agreement to
which other similarly situated employees of the Firm are a party; or
     (vi) as a result of any action brought by you, it is determined that any of
the terms or conditions for exercise of your Year-End Options or delivery of
Shares in respect thereto are invalid.
For purposes of the foregoing, the term “Selected Firm Personnel” means: (i) any
Firm employee or consultant (A) with whom you personally worked while employed
by the Firm, or (B) who at any time during the year immediately preceding your
termination of Employment with the Firm, worked in the same division in which
you worked; and (ii) any Managing Director of the Firm.
     (b)       percent of the number of Year-End Options that are granted to you
as part of this Award that are Outstanding immediately shall terminate, and such
Outstanding Year-End Options shall cease to be Outstanding if, prior to the
earlier of       or the date on which your Year-End Options become exercisable
following a Change in Control in accordance with Paragraph 6(d) hereof, you
(i) form, or acquire a 5% or greater equity ownership, voting or profit
participation interest in, any Competitive Enterprise, or (ii) associate in any
capacity (including, but not limited to, association as an officer, employee,
partner, director, consultant, agent or advisor) with any Competitive
Enterprise. Notwithstanding the foregoing, unless otherwise determined by the
Committee in its discretion, this Paragraph 5(b) will not apply if your
termination of Employment is characterized by the Firm as “involuntary” or by
“mutual agreement” other than for Cause and if you execute such a general waiver
and release of claims and an agreement to pay any associated tax liability, both
as may be prescribed by the Firm or its designee. No termination of Employment
initiated by you, including any termination claimed to be a “constructive
termination” or the like or a termination for good reason, will constitute an
“involuntary” termination of Employment or a termination of Employment by
“mutual agreement.”
     6. Exercisability of Year-End Options.
     (a) In General. Only Year-End Options that are Outstanding can be
exercised. Outstanding Year-End Options must be exercised subject to Paragraph
6(e) and in accordance with procedures established by

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the Committee from time to time but, subject to Paragraphs 6(b), 6(d) and 10(g),
not earlier than the Initial Exercise Date. The Initial Exercise Date for your
Year-End Options shall be a date specified by the Committee that is not more
than thirty (30) Business Days after the date listed on the Award Statement as
the Initial Exercise Date, if that date is during a Window Period or, if the
date listed on the Award Statement is not during a Window Period, on a date
specified by the Committee that is not more than 30 Business Days after the
first Trading Day of the first Window Period that begins thereafter. For this
purpose, a “Trading Day” is a day on which Shares trade regular way on the New
York Stock Exchange. The Committee may from time to time prescribe periods
during which the Year-End Options shall not be exercisable. In addition, the
exercise procedures established by the Committee may require you to take
specific steps in order to exercise your Year-End Options within a minimum time
prior to the effective date of exercise.
     (b) Death. Notwithstanding any other provision of this Award Agreement, if
you die and, at the time of your death, you have any Outstanding Year-End
Options, the Transfer Restrictions described in Paragraph 6(e) with respect to
any Year-End Options and any Shares delivered in respect thereto shall be
removed, and such Outstanding Year-End Options (i) shall be exercisable by the
representative of your estate or, to the extent you specifically bequeath any of
your Outstanding Year-End Options under your will in accordance with such
procedures, if any, as may be adopted by the Committee to an organization
described in Sections 501(c)(3) and 2055(a) of the Code (or such other similar
charitable organization as may be approved by the Committee) (a “Charitable
Beneficiary”), by the Charitable Beneficiary, in either case in accordance with
Paragraph 6(a) beginning on the date that is as soon as practicable after the
date of death and after such documentation as may be requested by the Committee
is provided to the Committee and (ii) unless earlier terminated in accordance
with the terms of this Award Agreement, shall remain exercisable until the
Expiration Date.
     (c) Other Terminations of Employment. Subject to Paragraphs 5(a) and 5(b),
upon the termination of your Employment for any reason (other than death or
Cause), but subject to Paragraphs 6(d) and 10(g), your then Outstanding Year-End
Options shall be exercisable in accordance with Paragraph 6(a) beginning on the
Initial Exercise Date and, unless earlier terminated in accordance with the
terms of this Award Agreement, shall remain exercisable until the Expiration
Date.
     (d) Change in Control. Notwithstanding anything to the contrary in this
Award Agreement, if a Change in Control shall occur, and within 18 months
thereafter the Firm terminates your Employment without Cause or you terminate
your Employment for Good Reason, all of your Year-End Options that were
Outstanding shall become exercisable and, unless earlier terminated in
accordance with the terms of this Award Agreement, shall remain exercisable
until the Expiration Date and the Transfer Restrictions described in Paragraph
6(e) with respect to any Year-End Options and any Shares delivered in respect
thereto shall be removed.
     (e) Transfer Restrictions on Shares after Exercise. Subject to Paragraphs
6(b), 6(d) and 10(g), notwithstanding any other provision of this Award
Agreement, (i) (A) no sale, exchange, transfer, assignment, pledge,
hypothecation, fractionalization, hedge or other disposition of (including
through the use of any cash-settled instrument) any Shares acquired in
connection with the exercise of your Year-End Options, whether voluntarily or
involuntarily by you; and (B) no exercise of any Year-End Options involving the
sale of Shares acquired in respect of such exercise (the restrictions in clauses
(i)(A) and (i)(B) of this Paragraph 6(e) being referred to collectively as the
“Transfer Restrictions”) may be effected before the second anniversary of the
Initial Exercise Date (the “Transferability Date”), and any purported sale,
exchange, transfer, assignment, pledge, hypothecation, fractionalization, hedge,
other disposition or exercise in violation of the Transfer Restrictions shall be
void; and (ii) if and to the extent Shares subject to your Year-End Options are
certificated, the certificates representing such Shares, shall bear a legend
specifying that such Shares are subject to the restrictions described in this
Paragraph 6(e) and GS Inc. shall advise its transfer agent to place a stop order
against the transfer of such Shares in violation of such Transfer Restrictions.
Any Shares acquired in connection with any exercise of your Year-End Options
prior to the Transferability Date shall be held in the Custody

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Account or other account designated by the Firm. Within 30 Business Days after
the Transferability Date (or any other date for which removal of the Transfer
Restrictions is called for), GS Inc. shall take, or shall cause to be taken,
such steps as may be necessary to remove the Transfer Restrictions.
     7. Delivery. Subject to Section 6(e), unless otherwise determined by the
Committee, or as otherwise provided in this Award Agreement, including, without
limitation, Paragraphs 10 and 11, after receipt of payment of the Exercise Price
in respect of a Year-End Option, a Share shall be delivered by book-entry credit
to your Custody Account or to a brokerage account, as approved or required by
the Firm, and until the Transferability Date, shall be subject to the Transfer
Restrictions. Notwithstanding the foregoing, if you are or become considered by
GS Inc. to be one of its “covered employees” within the meaning of Section
162(m) of the Code, then you shall be subject to the provisions of
Section 3.21.1 of the Plan, as a result of which delivery of your Shares may be
delayed. In accordance with Section 1.3.2(h) of the Plan, in the discretion of
the Committee, in lieu of all or any portion of the Shares otherwise deliverable
upon the exercise of all or any portion of your Year-End Options, the Firm may
deliver cash, other securities, other Awards or other property, and all
references in this Award Agreement to deliveries of Shares shall include such
deliveries of cash, other securities, other Awards or other property.
     8. Repayment. The provisions of Section 2.3.5 of the Plan (which requires
Award recipients to repay to the Firm amounts delivered to them if the Committee
determines that all terms and conditions of this Award Agreement in respect of
such exercise were not satisfied) shall apply to this Award.
     9. Non-transferability. Except as otherwise may be provided in this
Paragraph or as otherwise may be provided by the Committee, and without limiting
any permitted transfer in accordance with Paragraph 10(g), the limitations on
transferability set forth in Section 3.5 of the Plan shall apply to this Award.
Any purported transfer or assignment in violation of the provisions of this
Paragraph 9 or Section 3.5 of the Plan shall be void. The Committee may adopt
procedures pursuant to which some or all recipients of Year-End Options may
transfer some or all of their Year-End Options through a gift for no
consideration to any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive
relationships, any person sharing the recipient’s household (other than a tenant
or employee), a trust in which these persons have more than 50% of the
beneficial interest, and any other entity in which these persons (or the
recipient) own more than 50% of the voting interests.
     10. Certain Additional Terms, Conditions and Agreements.
     (a) The delivery of Shares is conditioned on your satisfaction of any
applicable withholding taxes in accordance with Section 3.2 of the Plan. To the
extent permitted by applicable law, the Firm, in its sole discretion, may
require you to provide amounts equal to all or a portion of any Federal, State,
local, foreign or other tax obligations imposed on you or the Firm in connection
with the grant, vesting or delivery of this Award by requiring you to choose
between remitting such amount (i) in cash (or through payroll deduction or
otherwise) or (ii) in the form of proceeds from the Firm’s executing a sale of
Shares delivered to you pursuant to this Award. In addition, if you are an
individual with separate employment contracts (at any time during and/or after
the Firm’s       fiscal year), the Firm may, in its sole discretion, require you
to provide for a reserve in an amount the Firm determines is advisable or
necessary in connection with any actual, anticipated or potential tax
consequences related to your separate employment contracts by requiring you to
choose between remitting such amount (i) in cash (or through payroll deduction
or otherwise) or (ii) in the form of proceeds from the Firm’s executing a sale
of Shares delivered to you pursuant to this Award (or any other Outstanding
Awards under the Plan). In no event, however, shall any choice you may have
under the preceding two sentences determine, or give you any discretion to
affect, the timing of the delivery of Shares or the timing of payment of tax
obligations.

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     (b) If you are or become a Managing Director, your rights in respect of
your Year-End Options are conditioned on your becoming a party to any
shareholders’ agreement to which other similarly situated employees of the Firm
are a party.
     (c) Your rights in respect of your Year-End Options are conditioned on the
receipt to the full satisfaction of the Committee of any required consents (as
described in Section 3.3 of the Plan) that the Committee may determine to be
necessary or advisable.
     (d) You understand and agree, in accordance with Section 3.3 of the Plan,
by accepting this Award, you have expressly consented to all of the items listed
in Section 3.3.3(d) of the Plan, which are incorporated herein by reference.
     (e) You understand and agree, in accordance with Section 3.22 of the Plan,
by accepting this Award you have agreed to be subject to the Firm’s policies in
effect from time to time concerning trading in Shares, hedging or pledging
Shares and equity-based compensation or other awards (including, without
limitation, the Firm’s “Policies With Respect to Transactions Involving GS
Shares, Equity Awards and GS Options by Persons Affiliated with GS Inc.”), and
confidential or proprietary information, and to effect sales of Shares delivered
to you in respect of your Year-End Options in accordance with such rules and
procedures as may be adopted from time to time with respect to sales of such
Shares (which may include, without limitation, restrictions relating to the
timing of sale requests, the manner in which sales are executed, pricing method,
consolidation or aggregation of orders and volume limits determined by the
Firm). In addition, you understand and agree that you shall be responsible for
all brokerage costs and other fees or expenses associated with your Award,
including without limitation, such brokerage costs or other fees or expenses in
connection with the exercise of your Year-End Options or the sale of Shares
delivered to you hereunder.
     (f) Without limiting the application of Paragraph 6(e), GS Inc. may affix
to Certificates representing Shares issued pursuant to this Award Agreement upon
exercise of your Year-End Options any legend that the Committee determines to be
necessary or advisable (including to reflect any restrictions to which you may
be subject under a separate agreement with GS Inc.). GS Inc. may advise the
transfer agent to place a stop order against any legended Shares.
     (g) Without limiting the application of Paragraph 5(a), if:
          (i) your Employment with the Firm terminates solely because you
resigned to accept employment at any U.S. Federal, state or local government,
any non-U.S. government, any supranational or international organization, any
self-regulatory organization, or any agency or instrumentality of any such
government or organization, or any other employer determined by the Committee,
and as a result of such employment your continued holding of your Year-End
Options would result in an actual or perceived conflict of interest (“Conflicted
Employment”); or
          (ii) following your termination of Employment other than described in
Paragraph 10(g)(i), you notify the Firm that you have accepted or intend to
accept Conflicted Employment at a time when you continue to hold Outstanding
Year-End Options;
then, in the cases of Paragraph 10(g)(i) and 10(g)(ii) above, at the sole
discretion of the Firm, (a) such Outstanding Year-End Options shall be cancelled
and as soon as practicable after the Committee has received satisfactory
documentation relating to your Conflicted Employment (the “Release Date”) you
shall receive a payment equal to the excess (if any) of (x) the Fair Market
Value of a Share on the Business Day immediately prior to the Release Date
multiplied by the number of your Year-End Options that were Outstanding
immediately prior to such cancellation over (y) the Exercise Price multiplied by
the number of such Outstanding Year-End Options; (b) both the Initial Exercise
Date and Transferability Date shall become the Release Date or (c) if and to the
extent provided in any procedures adopted by the Committee, you may be permitted
to transfer

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your Outstanding Year-End Options for value to a party or parties acceptable to
the Firm (which may include the Firm). Notwithstanding anything else herein, the
actions described in this Paragraph 10(g) shall be permitted only at such time
and if and to the extent as would not result in the imposition of any additional
tax to you under Section 409A of the Code (which governs the taxation of certain
deferred compensation).
     11. Right of Offset. The obligation to deliver Shares under this Award
Agreement upon exercise of your Year-End Options is subject to Section 3.4 of
the Plan, which provides for the Firm’s right to offset against such obligation
any outstanding amounts you owe to the Firm and any amounts the Committee deems
appropriate pursuant to any tax equalization policy or agreement.
     12. Amendment. The Committee reserves the right at any time to amend the
terms and conditions set forth in this Award Agreement, and the Board may amend
the Plan in any respect; provided that, notwithstanding the foregoing and
Sections 1.3.2(f), 1.3.2(g) and 3.1 of the Plan, no such amendment shall
materially adversely affect your rights and obligations under this Award
Agreement without your consent; and provided further that the Committee
expressly reserves its rights to amend the Award Agreement and the Plan as
described in Sections 1.3.2(h)(1), (2) and (4) of the Plan. Any amendment of
this Award Agreement shall be in writing signed by an authorized member of the
Committee or a person or persons designated by the Committee.
     13. Arbitration; Choice of Forum. BY ACCEPTING THIS AWARD, YOU UNDERSTAND
AND AGREE THAT THE ARBITRATION AND CHOICE OF FORUM PROVISIONS SET FORTH IN
SECTION 3.17 OF THE PLAN, WHICH ARE EXPRESSLY INCORPORATED HEREIN BY REFERENCE
AND WHICH, AMONG OTHER THINGS, PROVIDE THAT ANY DISPUTE, CONTROVERSY OR CLAIM
BETWEEN THE FIRM AND YOU ARISING OUT OF OR RELATING TO OR CONCERNING THE PLAN OR
THIS AWARD AGREEMENT SHALL BE FINALLY SETTLED BY ARBITRATION IN NEW YORK CITY,
PURSUANT TO THE TERMS MORE FULLY SET FORTH IN SECTION 3.17 OF THE PLAN, SHALL
APPLY.
     14. Governing Law. THIS AWARD SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
     15. Headings. The headings in this Award Agreement are for the purpose of
convenience only and are not intended to define or limit the construction of the
provisions hereof.

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     IN WITNESS WHEREOF, GS Inc. has caused this Award Agreement to be duly
executed and delivered as of the Date of Grant.

              THE GOLDMAN SACHS GROUP, INC.
 
       
 
  By:    
 
  Name:    
 
  Title:    

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