FORM OF 2003 YEAR-END OPTION AWARD AGREEMENT



 



EXHIBIT 10.9



THE GOLDMAN SACHS AMENDED AND RESTATED

STOCK INCENTIVE PLAN
 2003
YEAR-END OPTION AWARD



     This Award Agreement sets forth the terms and conditions of the 2003
year-end award (this “Award”) of Nonqualified Stock Options (“2003 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 2003 Year-End Options, (ii) the number of 2003 Year-End Options
and (iii) the Exercise Price of each 2003 Year-End Option. Until shares of
Common Stock (“Shares”) are delivered to you pursuant to Paragraph 7 after you
exercise your 2003 Year-End Options, you have no rights as a shareholder of GS
Inc. THIS AWARD IS CONDITIONED ON YOUR SIGNING THE RELATED SIGNATURE CARD AND
RETURNING IT TO GS INC. BY THE DATE SPECIFIED ON THE SIGNATURE CARD, 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 SIGNING AND RETURNING 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 2003 Year-End Options is
November 29, 2013 (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 2003 Year-End Options shall terminate.


     4.     Vesting.


     (a)  In General. Except as provided below in Paragraphs 4(b), 4(c) and
4(d), on each Vesting Date you shall become Vested in the number or percentage
of your then Outstanding 2003 Year-End Options as specified next to such
Vesting Date on the Award Statement (subject to rounding to avoid becoming
vested in fractional 2003 Year-End Options). While continued active Employment
is not required in order for your Outstanding Vested 2003 Year-End Options to
become exercisable, all other conditions of this Award Agreement shall continue
to apply to such Vested 2003 Year-End Options, and failure to meet such terms
and conditions may result in the termination of this Award.


     (b)  Death. Notwithstanding any other provision of this Award Agreement,
if you die prior to an applicable Vesting Date, 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, any such 2003 Year-End Options that were
Outstanding but that had not yet become Vested
immediately prior to your death shall become Vested, but all other
conditions of this Award Agreement thereafter shall apply to the representative
of your estate.


     (c)  Extended Absence, Retirement and Downsizing.


     (i)  Notwithstanding any other provision of this Award Agreement, but
subject to Paragraph 5(c), in the event of the termination of your Employment
by reason of Extended Absence or Retirement (determined as


 






 


described in Section 1.2.19 of the Plan), the condition set forth in Paragraph
5(a) shall be waived with respect to any 2003 Year-End Options that were
Outstanding but that had not yet become Vested immediately prior to such
termination of Employment (as a result of which such 2003 Year-End Options
shall become Vested), but all other conditions of this Award Agreement shall
continue to apply.


     (ii)  Notwithstanding any other provision of this Award Agreement and
subject to your executing such 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, if your Employment is terminated without Cause solely by
reason of a “downsizing,” the condition set forth in Paragraph 5(a) shall be
waived with respect to your 2003 Year-End Options that were Outstanding but
that had not yet become Vested immediately prior to such termination of
Employment (as a result of which such 2003 Year-End Options shall become
Vested), but all other conditions of this Award Agreement shall continue to
apply. Whether or not your Employment is terminated solely by reason of a
“downsizing” shall be determined by the Firm in its sole discretion. 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 be solely by reason of a “downsizing.”


     (d)  Change in Control. Notwithstanding any other provision of this Award
Agreement, if there is a Change in Control and your Employment terminates as
described in Paragraph 6(d), the condition set forth in Paragraph 5(a) shall be
waived with respect to any 2003 Year-End Options that were Outstanding but that
had not yet become Vested immediately prior to such termination of Employment
(as a result of which such 2003 Year-End Options shall become Vested), but all
other terms and conditions of this Award Agreement shall continue to apply.


     5.     Termination of 2003 Year-End Options Upon Certain Events.


     (a)  Unless the Committee determines otherwise, and except as provided in
Paragraphs 4(b), 4(c) and 4(d), if your Employment terminates for any reason
or you otherwise are no longer actively employed with the Firm, your 2003
Year-End Options that were Outstanding but had not yet become Vested
immediately prior to your termination of Employment immediately shall
terminate.


     (b)  Unless the Committee determines otherwise, all of your Outstanding
2003 Year-End Options (whether or not Vested) immediately shall terminate if at
any time prior to the date you exercise such 2003 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;


     (iii)  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, (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; or


     (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 2003 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 of the terms and conditions of the Plan and this Award
Agreement.


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     (c)  Without limiting the application of Paragraph 5(b), your Outstanding
2003 Year-End Options that become Vested in accordance with Paragraph 4(c)(i)
immediately shall terminate if, prior to the original Vesting Date with respect
to such 2003 Year-End Options, 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(c)
will not apply if your termination of Employment by reason of Extended Absence
or Retirement 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 Vested 2003 Year-End Options.


     (a)  In General. Only 2003 Year-End Options that are Outstanding and
Vested can be exercised. Outstanding Vested 2003 Year-End Options must be
exercised in accordance with procedures established by the Committee from time
to time but, subject to Paragraph 6(d), not earlier than the Initial Exercise
Date. The Initial Exercise Date for your 2003 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
the date listed as the Initial Exercise Date on the Award Statement 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 Vested 2003 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 2003
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 2003
Year-End Options, such Outstanding 2003 Year-End Options (i) shall be
exercisable by the representative of your estate in accordance with Paragraph
6(a) beginning on the later of (x) the Initial Exercise Date and (y) a 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(b) and
5(c), upon the termination of your Employment for any reason (other than death
or Cause), your then Outstanding Vested 2003 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, as provided in Paragraph 4(d), all of your 2003 Year-End
Options that were Outstanding but that had not yet become Vested immediately
prior to your termination of Employment, shall become Vested, and all of your
Outstanding Vested 2003 Year-End Options shall become exercisable and, unless
earlier terminated in accordance with the terms of this Award Agreement, shall
remain exercisable until the Expiration Date.


     7.     Delivery. 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 2003 Year-End Option, a Share shall be delivered by book-entry credit to
the Custody Account maintained by you. Notwithstanding the foregoing, if you
are or become considered by GS Inc. to be one of its “covered employees”


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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 2003
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 may otherwise be provided by the
Committee, 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.


     10.     Withholding, Consents, Transactions Involving Common Stock and Legends.


     (a)  The delivery of Shares upon exercise of your 2003 Year-End Options is
conditioned on your satisfaction of any applicable withholding taxes in
accordance with Section 3.2 of the Plan.


     (b)  If you are or become a Managing Director, your rights in respect of
your 2003 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 2003 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, and confidential or
proprietary information, and to effect sales of Shares delivered to you in
respect of your 2003 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 2003 Year-End Options or the sale of
Shares delivered to you hereunder.


     (f) 
GS Inc. may affix to Certificates representing Shares issued upon
exercise of your 2003 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.


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     11.     Right of Offset. The obligation to deliver Shares upon exercise of
your 2003 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.


     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: Henry M. Paulson, Jr.
	 	 	
Title: Chairman and Chief Executive Officer



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