Exhibit 10.1

20    RESTRICTED STOCK UNIT AWARD

AGREEMENT EVIDENCING A GRANT OF
RESTRICTED STOCK UNITS

 

1.     GRANT OF UNITS.   Pursuant to the Lehman Brothers Holdings Inc.
(“Holdings”) 2005 Stock Incentive Plan (the “Plan”), you are hereby granted, as
of                     , 20     (the “Date of Grant”), the number of Restricted
Stock Units (“Units”) for shares of Holdings’ common stock, par value $.10 per
share (the “Common Stock”), set forth on the award statement with your name on
it delivered to you herewith (which number of Units may be adjusted pursuant to
Paragraph 8 below).

2.     ADDITIONAL DOCUMENTS; DEFINITIONS.   You have been provided with a copy
of the Plan, which is incorporated in this instrument by reference and made a
part hereof, and a copy of the Plan prospectus.  The Plan and the prospectus
should be carefully examined.  In the event of any conflict or ambiguity between
this instrument and the Plan, the terms of the Plan shall govern.  All
capitalized terms not defined herein or on Annex A attached hereto shall have
the meaning ascribed to such terms under the Plan.

3.     VESTING.   Subject to Paragraph 4, Units awarded to you hereunder shall
become vested in accordance with the following vesting schedule:

•                       % of the Principal Units (     % of the total award)
shall become vested on                     , 20    .

•                       % of the Principal Units (     % of the total award)
shall become vested on                     , 20    .

•                  The remaining      % of the Principal Units (     % of the
total award) shall become vested on                     , 20    .

•                       % of the Discount Units (     % of the total award)
shall become vested on                     , 20    .

•                  The remaining      % of the Discount Units (     % of the
total award) shall become vested on                     , 20    .

4.     ENTITLEMENT TO RECEIVE COMMON STOCK.

(a)               General Rule.  Unless otherwise set forth herein, you shall
receive one share of Common Stock for each Unit that has become vested and which
you hold in accordance with the following maturity schedule:

•                       % of the Principal Units shall mature on
                    , 20    .

•                       % of the Principal Units shall mature on
                    , 20    .

 

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•                  The remaining      % of the Principal Units shall mature on
                    , 20    .

•                       % of the Discount Units shall mature on
                    , 20    .

•                  The remaining      % of the Discount Units shall mature on
                    , 20    .

                             (each, the “Maturity Date(s)”), provided that the
Units have not otherwise been terminated pursuant to the terms and conditions
hereof.  Unless otherwise provided herein, you shall be entitled to receive
freely transferable shares of Common Stock as soon as practicable after the
Maturity Date(s), but no later than December 31st of the year in which such
shares mature.

 

(b)               Effect of Detrimental Activity.  Notwithstanding any other
provision of this Agreement, if you engage in Detrimental Activity at any time
prior to the date on which delivery of shares of Common Stock in respect of your
Units is called for hereunder, all Units held by you, whether or not vested,
shall be terminated, forfeited, cancelled, and you shall have no further right
to any shares of Common Stock relating thereto.

 

(c)               Occurrence of Death, Disability While You Are Employed. 
Without limiting Paragraphs 4(b), 4(d)(ii), 7, 9, 14 and 15, in the event of the
occurrence of your death or Disability while you are employed with Holdings or
any Affiliate, all of your then outstanding Units held by you shall become
immediately vested and deliverable, and you shall, on the 30th day thereafter,
receive freely transferable shares of Common Stock.

 

(d)               Effect of Termination.  Without limiting Paragraph 9 hereof,
in the event of your Termination, the following rules shall apply:

 

(I)                        VOLUNTARY TERMINATION.  EXCEPT AS OTHERWISE PROVIDED
FOR IN PARAGRAPHS 4(D)(IV)  OR 9 HEREOF, IN THE EVENT OF YOUR VOLUNTARY
TERMINATION (I) YOU SHALL BE ENTITLED TO RECEIVE UPON THE MATURITY DATE(S)
FREELY TRANSFERABLE SHARES OF COMMON STOCK FOR ALL VESTED PRINCIPAL UNITS AND
(II) SHARES EQUAL TO      % OF THE DISCOUNT UNITS MULTIPLIED BY EACH FULL YEAR
OF YOUR EMPLOYMENT WITH HOLDINGS OR A SUBSIDIARY AFTER                     ,
20     AND BEFORE YOUR TERMINATION SHALL BECOME VESTED (TO THE EXTENT NOT
PREVIOUSLY VESTED) AND DELIVERABLE UPON THE MATURITY DATE(S); PROVIDED THAT, IN
THE CASE OF VOLUNTARY TERMINATION FOR SELECT GOVERNMENTAL SERVICE ALL UNITS
SHALL BECOME IMMEDIATELY VESTED AND SHALL BE CONVERTED TO COMMON STOCK AND BE
ISSUED TO YOU (X)       DAYS FOLLOWING THE TERMINATION DATE OR, IF EARLIER, THE
DATE(S) REQUIRED BY APPLICABLE LAW OR GOVERNMENTAL REGULATION AS A CONDITION FOR
YOUR SELECT GOVERNMENTAL SERVICE, IN EACH CASE, TO THE EXTENT PERMITTED UNDER
TREAS. REG. SECTION 1.409A-3(J)(4)(III) OR (Y) UPON THE MATURITY DATE(S) IN THE
EVENT THAT ACCELERATED DELIVERY IS NOT PERMITTED UNDER TREAS. REG. SECTION
1.409A-3(J)(4)(III).  ALL OTHER TERMS AND CONDITIONS OF THIS AGREEMENT AND THE
PLAN SHALL CONTINUE TO APPLY TO ANY SUCH VESTED UNITS.

 

(ii)                    Involuntary Termination with Cause.  In the event of
your involuntary Termination with Cause, all Units that have not been delivered,
whether or not

 

 

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vested, shall be terminated, forfeited and cancelled, and you shall have no
further right to any shares of Common Stock relating thereto.

 

(iii)                Involuntary Termination without Cause.  Except as otherwise
provided for in Paragraphs 4(c), 4(d)(iv) and 9, and subject to Paragraphs 4(b),
7, 14 and 15, in the event of your involuntary Termination without Cause, (i)
you shall be entitled to receive upon the Maturity Date(s) freely transferable
shares of Common Stock for all Principal Units and (ii) shares equal to      %
of the Discount Units multiplied by each full year of your employment with
Holdings or a Subsidiary after                     , 20     and before your
Termination shall become vested (to the extent not previously vested) and
deliverable upon the Maturity Date(s).  Your entitlement to receive freely
transferable shares of Common Stock for all Principal Units and any Discount
Units is expressly conditioned on your timely execution of a release in such
form as may be required by Holdings or any Subsidiary and in accordance with
Holdings’ (or Subsidiary’s) policies and procedures then in effect.  All other
terms and conditions of this Agreement and the Plan shall continue to apply to
any such vested Units.

 

(iv)                   Occurrence of Death or Disability following Termination. 
Without limiting the applicability of Paragraphs 4(c), 7, 9, 14 and 15 hereof
and notwithstanding the foregoing provisions of Paragraph 4(d)(i) and (iii) in
the event of your death or Disability following Termination, all outstanding
Units held by you that were vested at or by reason of your Termination shall at
that time become immediately deliverable and you shall, on the 30th day
thereafter, receive freely transferable shares of Common Stock.

 

Any shares of Common Stock that become deliverable pursuant to this Paragraph
4(d) (other than Paragraph 4(d)(iv)) shall be delivered to you as soon as
practicable after the Maturity Date(s), but no later than December 31st of the
year in which such Maturity Date occurs, subject to the application of
Paragraphs 4(b), 9, and 15.  Any remaining Units that are not deliverable
pursuant to the provisions of Paragraph 4(d) or otherwise under this Agreement
or the Plan shall be terminated, forfeited and be cancelled by Holdings, and you
shall have no further right to any shares of Common Stock relating thereto.

 

For purposes of this Agreement, Holdings and/or the Committee, as applicable,
shall determine in its sole discretion whether or not your Termination is
voluntary, involuntary, or with or without Cause, whether or not you have
engaged in Detrimental Activity, or whether or not you meet the definition of
Disability.

 

(e)               Affidavit.  You may be requested, from time to time after your
Termination, to complete and sign an affidavit with respect to Detrimental
Activity, which includes representations and authorizes Holdings to verify the
representations.  Any failure on your part to complete, sign and return the
affidavit as required may cause you to forfeit all Units held by you at that
time or, to repay to Holdings the full gross amounts or shares you received
under this Agreement as may be applicable.

 

 

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5.     DIVIDEND EQUIVALENTS.   With respect to each dividend or distribution
paid or made on Common Stock to holders of record on or after the Date of Grant
of your Units, with respect to each then outstanding Unit you then hold, you
shall be credited with a number of additional Units equal in value to such
dividend or distribution as of the date of such dividend or distribution,
subject to Paragraph 8.  Such additional Units shall vest and become deliverable
at the same time and subject to the same conditions as the Units to which they
correspond.

 

6.     LIMITATION ON OBLIGATIONS.   Holdings’ and any Subsidiary’s obligation
with respect to the Units granted hereunder is limited solely to the delivery to
you of shares of Common Stock on the date when such shares are due to be
delivered hereunder, and in no way shall Holdings or any Subsidiary become
obligated to pay cash in respect of such obligation.  If the date on which
shares of Common Stock with respect to Units are to be delivered to you falls on
a non-business or non-trading day, such shares shall be delivered on the
immediately succeeding trading day.  Whenever shares with respect to Units are
required to be delivered on the 30th day following a specific triggering event,
and such 30th day falls within the same tax year as the triggering event, the
delivery may be made earlier, at the discretion of Holdings.

 

7.     NON-ASSIGNMENT.   Units may not be sold, assigned, transferred, pledged,
hypothecated, or otherwise disposed of by you, except by will or the laws of
descent and distribution.  If you or anyone claiming under or through you
attempts to violate this Paragraph 7, such attempted violation shall be null and
void and without effect, and Holdings’ obligation to deliver any shares of
Common Stock hereunder shall terminate.

 

8.     EQUITABLE ADJUSTMENT.   In the event of a Change in Capitalization
occurring on or after the Date of Grant specified above and prior to the date
you receive shares with respect to the Units, the number and kind of shares of
Common Stock which may be delivered with respect to Units shall be adjusted so
as to reflect such change.

 

9.     CHANGE IN CONTROL.

 

(a)                      Vesting of Units Following a Change in Control. 
Following a Change in Control, except to the extent that (i) you are entitled to
earlier vesting pursuant to Paragraphs 3 and 4 or (ii) your Units are forfeited
pursuant to Paragraph 4 due to your engagement in Detrimental Activity,
Termination with Cause or voluntary Termination, all of your Units shall vest
upon the later of (x) 18 months following such Change in Control or (y) a date
determined by the Committee that is within 15 days of November 30 of the Fiscal
Year following the Fiscal Year in which the Change in Control occurs (such later
date, the “Change in Control Vesting Date”).  Additionally, all of your Units
(including Principal and Discount Units) shall become immediately vested in the
event of your involuntary Termination without Cause following the Change in
Control but prior to the Change in Control Vesting Date.

 

(b)                     Delivery of Common Stock Following a Change in Control. 
Following a Change in Control, except to the extent that (i) you are entitled to
receive earlier delivery of shares of Common Stock pursuant to Paragraph 4 or
(ii) your Units are forfeited pursuant to Paragraph 4 due to your engagement in
Detrimental Activity, Termination with Cause

 

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or voluntary Termination, you shall receive shares of Common Stock in respect of
your Units on the Change in Control Vesting Date; provided, however, that in the
event of your Termination for any reason other than due to death or Disability
following the Change in Control but prior to the Change in Control Vesting Date,
you shall receive shares of Common Stock in respect of your then vested Units
upon the earlier of (x) the last day of the fiscal quarter that ends after the
first anniversary of the date of your Termination or (y) the Change in Control
Vesting Date.

 

10.   AMENDMENT.   The terms of this Agreement may be amended from time to time
by the Committee in its sole discretion in any manner that it deems appropriate
(including, but not limited to, the acceleration provisions), including, without
limitation, in order to satisfy applicable requirements of Section 162(m) and
Section 409A of the Code, as amended from time to time (whether or not your
rights are adversely affected).

11.   BINDING ACTIONS.   Any action taken or decision made by the Committee or
its designees arising out of or in connection with the construction,
administration, interpretation or effect of the Plan or this Agreement shall lie
within its sole and absolute discretion, as the case may be, and shall be final,
conclusive and binding on you and all persons claiming under or through you.  By
accepting this grant or other benefit under the Plan, you and each person
claiming under or through you shall be conclusively deemed to have indicated
acceptance and ratification of, and consent to, any action taken under the Plan
by the Committee or its designees.

12.   NO RIGHT TO CONTINUED EMPLOYMENT.   The grant of Units shall not confer on
you any right to be retained in the employ of Holdings or a Subsidiary, or to
receive subsequent Units or other awards under the Plan.  The right of Holdings
or any Subsidiary to terminate your employment with it at any time or as
otherwise provided by any agreement between Holdings or any Subsidiary and you
is specifically reserved.

13.   APPLICABLE LAW.   The validity, construction, interpretation,
administration, and effect of the Plan, and of its rules and regulations, and
rights relating to the Plan and to this Agreement, shall be governed by the
substantive laws, but not the choice of law rules, of the State of Delaware.

14.   WITHHOLDING/DEDUCTIONS.   Holdings shall have the right to deduct
applicable taxes from all amounts payable to you arising as a result of the
grant, vesting or payment hereunder. It shall be a condition to the obligation
of Holdings to deliver shares of Common Stock hereunder (a) that you (or, in
event of your death, your estate or any person who acquires the right to this
award by bequest or inheritance or otherwise by reason of your death) pay to
Holdings or its designee, upon its demand, in accordance with the Plan, either
in the form of cash or freely transferable shares of Common Stock such amount as
may be required for the purpose of satisfying its obligation or the obligation
of any other person to withhold or satisfy any taxes required by law which are
incurred by reason of or are otherwise due as a result of the grant, vesting or
delivery of such shares of Common Stock, (b) that where determined necessary or
appropriate by the Firm in its sole discretion, the Firm may direct the sale of
any shares of Common Stock delivered in respect of any Units to satisfy any such
amounts in Paragraph 14(a) hereof and (c) that you (or, in the event of your
death, your estate or any person who acquires the right to this award by bequest
or inheritance or otherwise by reason of your death) provide

 

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Holdings with any forms, documents or other information reasonably required by
Holdings in connection with the grant or vesting of the Units or delivery of
shares of Common Stock hereunder.  If the amount requested for the purpose of
satisfying the withholding or other tax obligation is not paid, you hereby
direct Holdings to withhold shares of Common Stock and/or related dividend
equivalents and to otherwise sell shares of Common Stock delivered hereunder in
order to fulfill any such obligation.  Holdings shall further have the right to
deduct from all amounts remaining payable to you after satisfaction of the
minimum statutory withholding obligations described above, the amount of any
deficit, debt, tax obligation or other liability or obligation of any kind which
you may at that time have with respect to Holdings or any Subsidiary; provided,
however, that no such right to deduct or offset shall arise or otherwise be
deemed to arise until the date upon which shares of Common Stock are deliverable
hereunder.

 

15.   CODE SECTION 409A.   It is intended that none of the Units or payments
otherwise due hereunder shall be deferred, accelerated, extended, paid out or
modified in a manner that would result in the imposition upon you of an
additional tax under Section 409A of the Code; provided that neither Holdings
nor any of its employees or representatives shall have any liability to you with
respect to any such taxes.  In the event that it is reasonably determined by the
Committee that, as a result of Section 409A of the Code, payments hereunder may
not be made at the time contemplated by the terms of this Agreement or the Plan,
as the case may be, without causing you to be subject to taxation under Section
409A of the Code, Holdings will make such payment on the first day that would
not result in your incurring any tax liability under Section 409A of the Code.

 

 

 

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ANNEX A

 

DEFINITIONS

 

“Cause” means a material breach by a person of an employment contract between
the person and Holdings or any Subsidiary, failure by a person to devote
substantially all business time exclusively to the performance of his or her
duties for Holdings or any Subsidiary, willful misconduct, dishonesty related to
the business and affairs of Holdings or any Subsidiary, conviction of a felony
or of a misdemeanor constituting a statutory disqualification under U.S.
securities laws (or failure to contest prosecution for a felony or such a
misdemeanor), habitual or gross negligence in the performance of a person’s
duties, solicitation of employees of Holdings or any Subsidiary to work at
another company, improper use or disclosure of confidential information, the
violation of policies and practices adopted by Holdings or any Subsidiary
including, but not limited to the Code of Conduct, or a material violation of
the conflict of interest, proprietary information or business ethics policies of
Holdings or any Subsidiary, or such other circumstances as may be determined in
the sole discretion of the Committee.

 

“Change in Capitalization” means the occurrence of a circumstance described in
Section 14 of the Plan.

 

“Committee” means the Compensation and Benefits Committee.

 

“Detrimental Activity” means (i) using information received during a person’s
employment with Holdings or any of its Subsidiaries relating to the business
affairs of Holdings or any of its Subsidiaries, affiliates or clients, in breach
of such person’s undertaking to keep such information confidential; (ii)
directly or indirectly persuading or attempting to persuade, by any means, any
employee of Holdings or any of its Subsidiaries or affiliates to terminate
employment with any of the foregoing or to breach any of the terms of his or her
employment with the foregoing; (iii) directly or indirectly making any statement
that is, or could be, disparaging of Holdings, its Subsidiaries or affiliates,
or any of their affiliates (except as necessary to respond truthfully to any
inquiry from applicable regulatory authorities or to provide information
pursuant to legal process); or (iv) directly or indirectly engaging in any
activity that is, or could be, substantially injurious to the financial
condition, reputation, or goodwill of Holdings or its Subsidiaries or
affiliates, in each case as determined in the sole discretion of the Committee.

 

“Disability” means a disability under both the Holdings Long-Term Disability
Insurance Plan and the Social Security Act.

 

“Discount Units” means the number of Units (and any dividend equivalents related
thereto) related to      % of the total number of Units awarded.

 

“Principal Units” means the number of Units (and any dividend equivalents
related thereto) related to the undiscounted base portion of the award (     %
of the total number of Units awarded).

 

 

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“Select Governmental Service” means:

1.             Any elected office at the Federal or State executive or
legislative level;

2.                                       Any Executive branch position which is
either at the Cabinet level or which directly reports to a Cabinet official or
to the President;

3.                                       Ambassador or Consul General, or senior
policy making function reporting directly to Ambassador or Consul General;

4.                                       Executive officer of a self regulatory
organization, or Chairman, Commissioner or executive officer of a federal
regulatory agency, or senior policy official reporting directly to any such
individuals;

5.                                       Member of Board of Governors of any
Federal Reserve Bank, or any senior policy maker reporting directly to any such
individual; and

6.                                       Any position determined by the
Committee to involve duties or authority that are similar to those positions
described in any of items (1) through (5) above.

 

“Termination” means the end of your active service with Holdings or a
Subsidiary.  The reason for your Termination for purposes of this agreement
shall be as determined in the sole discretion of the Committee.

 

 

 

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