Document:

EX-10.1  AMENDED AND RESTATED STOCK INCENTIVE PLAN

 

Exhibit 10.1

The Goldman Sachs

Amended and Restated Stock Incentive
Plan

ARTICLE I

GENERAL

1.1 Purpose

     
The purpose of The Goldman Sachs Amended and
Restated Stock Incentive Plan is to attract, retain and motivate
officers, directors, employees (including prospective
employees), consultants and others who may perform services for
the Firm (as hereinafter defined), to compensate them for their
contributions to the long-term growth and profits of the Firm
and to encourage them to acquire a proprietary interest in the
success of the Firm.

     
The amendments made to The Goldman Sachs 1999
Stock Incentive Plan pursuant to this amendment and restatement
shall affect only Awards granted on or after the “Effective
Date” (as hereinafter defined). Awards granted prior to the
Effective Date shall be governed by the terms of the 1999 SIP
and Award Agreements as in effect prior to the Effective Date.
The terms of this Plan are not intended to affect the
interpretation of the terms of the 1999 SIP as they existed
prior to the Effective Date.

1.2 Definitions of Certain Terms

     
Unless otherwise specified in an applicable Award
Agreement, the terms listed below shall have the following
meanings for purposes of the Plan, any Award Agreement and any
standardized terms and conditions that may be adopted from time
to time by the Committee.

     
1.2.1 “Award” means an
award made pursuant to the Plan.

     
1.2.2 “Award Agreement”
means the written document or documents by which each Award is
evidenced, including any Award Statement.

     
1.2.3 “Award Statement”
means a written statement that reflects certain Award terms.

     
1.2.4 “Board” means the
Board of Directors of GS Inc.

     
1.2.5 “Business Day”
means any day other than a Saturday, a Sunday or a day on which
banking institutions in New York City are authorized or
obligated by federal law or executive order to be closed.

     
1.2.6 “Cause” means
(a) the Grantee’s conviction, whether following trial
or by plea of guilty or nolo contendere (or similar
plea), in a criminal proceeding (i) on a misdemeanor charge
involving fraud, false statements or misleading omissions,
wrongful taking, embezzlement, bribery, forgery, counterfeiting
or extortion, or (ii) on a felony charge, or (iii) on
an equivalent charge to those in clauses (i) and
(ii) in jurisdictions which do not use those designations,
(b) the Grantee’s engaging in any conduct which
constitutes an employment disqualification under applicable law
(including statutory disqualification as defined under the
Exchange Act), (c) the Grantee’s willful failure to
perform the Grantee’s duties to the Firm, (d) the
Grantee’s violation of any securities or commodities laws,
any rules or regulations issued pursuant to such laws, or the
rules and regulations of any securities or commodities exchange
or association of which the Firm is a member, (e) the
Grantee’s violation of any Firm policy concerning hedging
or pledging or confidential or proprietary information, or the
Grantee’s material violation of any other Firm policy as in
effect from time to time, (f) the Grantee’s engaging
in any act or making any

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statement which impairs, impugns, denigrates,
disparages or negatively reflects upon the name, reputation or
business interests of the Firm or (g) the Grantee’s
engaging in any conduct detrimental to the Firm. The
determination as to whether Cause has occurred shall be made by
the Committee in its sole discretion and, in such case, the
Committee also may, but shall not be required to, specify the
date such Cause occurred (including by determining that a prior
termination of Employment was for Cause). Any rights the Firm
may have hereunder and in any Award Agreement in respect of the
events giving rise to Cause shall be in addition to the rights
the Firm have under any other agreement with a Grantee or at law
or in equity.

     
1.2.7 “Certificate” means
a stock certificate (or other appropriate document or evidence
of ownership) representing shares of Common Stock.

     
1.2.8 “Change in Control”
means the consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction
involving GS Inc. (a “Reorganization”) or sale or
other disposition of all or substantially all of GS Inc.’s
assets to an entity that is not an affiliate of GS Inc. (a
“Sale”), that in each case requires the approval of GS
Inc.’s stockholders under the law of GS Inc.’s
jurisdiction of organization, whether for such Reorganization or
Sale (or the issuance of securities of GS Inc. in such
Reorganization or Sale), unless immediately following such
Reorganization or Sale, either: (a) at least 50% of the
total voting power (in respect of the election of directors, or
similar officials in the case of an entity other than a
corporation) of (i) the entity resulting from such
Reorganization, or the entity which has acquired all or
substantially all of the assets of GS Inc. in a Sale (in either
case, the “Surviving Entity”), or (ii) if
applicable, the ultimate parent entity that directly or
indirectly has beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act, as such Rule is in
effect on the date of the adoption of the 1999 SIP) of 50% or
more of the total voting power (in respect of the election of
directors, or similar officials in the case of an entity other
than a corporation) of the Surviving Entity (the “Parent
Entity”) is represented by GS Inc.’s securities (the
“GS Inc. Securities”) that were outstanding
immediately prior to such Reorganization or Sale (or, if
applicable, is represented by shares into which such GS Inc.
Securities were converted pursuant to such Reorganization or
Sale) or (b) at least 50% of the members of the board of
directors (or similar officials in the case of an entity other
than a corporation) of the Parent Entity (or, if there is no
Parent Entity, the Surviving Entity) following the consummation
of the Reorganization or Sale were, at the time of the
Board’s approval of the execution of the initial agreement
providing for such Reorganization or Sale, individuals (the
“Incumbent Directors”) who either (i) were
members of the Board on the Effective Date or (ii) became
directors subsequent to the Effective Date and whose election or
nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either
by a specific vote or by approval of GS Inc.’s proxy
statement in which such persons are named as nominees for
director).

     
1.2.9 “Client” means any
client or prospective client of the Firm to whom the Grantee
provided services, or for whom the Grantee transacted business,
or whose identity became known to the Grantee in connection with
the Grantee’s relationship with or employment by the Firm.

     
1.2.10 “Code” means the
Internal Revenue Code of 1986, as amended from time to time, and
the applicable rulings and regulations thereunder.

     
1.2.11 “Committee” means
the committee appointed by the Board to administer the Plan
pursuant to Section 1.3 and, to the extent the Board
determines it is appropriate for the compensation realized from
Awards under the Plan to be considered “performance
based” compensation under Section 162(m) of the Code,
shall be a committee or subcommittee of the Board composed of
two or more members, each of whom is an “outside
director” within the meaning of Code Section 162(m),
and which, to the extent the Board determines it is appropriate
for Awards under the Plan to qualify for the exemption available
under

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Rule 16b-3(d)(1) or Rule 16b-3(e)
promulgated under the Exchange Act, shall be a committee or
subcommittee of the Board composed of two or more members, each
of whom is a “non-employee director” within the
meaning of Rule 16b-3. Unless otherwise determined by the
Board, the Committee shall be the Compensation Committee of the
Board.

     
1.2.12 “Common Stock”
means common stock of GS Inc., par value $0.01 per share.

     
1.2.13 “Competitive
Enterprise” means a business enterprise that
(a) engages in any activity, (b) owns or controls a
significant interest in or (c) is owned by, or a
significant interest in which is owned or controlled by, any
entity that engages in any activity, that, in any case, competes
anywhere with any activity in which the Firm is engaged. The
activities covered by this definition include, without
limitation, financial services such as investment banking,
public or private finance, lending, financial advisory services,
private investing (for anyone other than the Grantee and members
of the Grantee’s family), merchant banking, asset or hedge
fund management, insurance or reinsurance underwriting or
brokerage, property management, or securities, futures,
commodities, energy, derivatives or currency brokerage, sales,
lending, custody, clearance, settlement or trading.

     
1.2.14 “Custody Account”
means the custody account maintained by a Grantee with The Chase
Manhattan Bank or such successor custodian as may be designated
by GS Inc.

     
1.2.15 “Date of Grant”
means the date specified in the Grantee’s Award Agreement
as the date of grant of the Award.

     
1.2.16 “Delivery Date”
means each date specified in the Grantee’s Award Agreement
as a delivery date, provided, unless the Committee
determines otherwise, such date is during a Window Period or, if
such date is not during a Window Period, the first trading day
of the first Window Period beginning after such date.

     
1.2.17 “Dividend Equivalent
Right” means a dividend equivalent right granted
under the Plan, which represents an unfunded and unsecured
promise to pay to the Grantee amounts equal to all or any
portion of the regular cash dividends that would be paid on
shares of Common Stock covered by an Award if such shares had
been delivered pursuant to an Award.

     
1.2.18 “Effective Date”
means the date this Plan is approved by the stockholders of GS
Inc. pursuant to Section 3.15 hereof.

     
1.2.19 “Employment” means
the Grantee’s performance of services for the Firm, as
determined by the Committee. The terms “employ” and
“employed” shall have their correlative meanings. The
Committee in its sole discretion may determine (a) whether
and when a Grantee’s leave of absence results in a
termination of Employment (for this purpose, unless the
Committee determines otherwise, a Grantee shall be treated as
terminating Employment with the Firm upon the occurrence of an
Extended Absence), (b) whether and when a change in a
Grantee’s association with the Firm results in a
termination of Employment and (c) the impact, if any, of
any such leave of absence or change in association on Awards
theretofore made. Unless expressly provided otherwise, any
references in the Plan or any Award Agreement to a
Grantee’s Employment being terminated shall include both
voluntary and involuntary terminations.

     
1.2.20 “Exchange Act”
means the Securities Exchange Act of 1934, as amended from time
to time, and the applicable rules and regulations thereunder.

     
1.2.21 “Exercise Price”
means (i) in the case of Options, the price specified in
the Grantee’s Award Agreement as the price-per-share of
Common Stock at which such share can be purchased pursuant to
the Option or (ii) in the case of SARs, the price specified
in the Grantee’s Award Agreement as the reference
price-per-share of Common Stock used to calculate the amount
payable to the Grantee.

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1.2.22 “Expiration Date”
means the date specified in the Grantee’s Award Agreement
as the final expiration date of the Award.

     
1.2.23 “Extended Absence”
means the Grantee’s inability to perform for six
(6) continuous months, due to illness, injury or
pregnancy-related complications, substantially all the essential
duties of the Grantee’s occupation, as determined by the
Committee.

     
1.2.24 “Fair Market
Value” means, with respect to a share of Common
Stock on any day, the fair market value as determined in
accordance with a valuation methodology approved by the
Committee.

     
1.2.25 “Firm” means GS
Inc. and its subsidiaries and affiliates.

     
1.2.26 “Good Reason”
means, in connection with a termination of employment by a
Grantee following a Change in Control, (a) as determined by
the Committee, a materially adverse alteration in the
Grantee’s position or in the nature or status of the
Grantee’s responsibilities from those in effect immediately
prior to the Change in Control or (b) the Firm’s
requiring the Grantee’s principal place of Employment to be
located more than seventy-five (75) miles from the location
where the Grantee is principally Employed at the time of the
Change in Control (except for required travel on the Firm’s
business to an extent substantially consistent with the
Grantee’s customary business travel obligations in the
ordinary course of business prior to the Change in Control).

     
1.2.27 “Grantee” means a
person who receives an Award.

     
1.2.28 “GS Inc.” means
The Goldman Sachs Group, Inc., and any successor thereto.

     
1.2.29 “Incentive Stock
Option” means an option to purchase shares of
Common Stock that is intended to qualify for special federal
income tax treatment pursuant to Sections 421 and 422 of
the Code, as now constituted or subsequently amended, or
pursuant to a successor provision of the Code, and which is so
designated in the applicable Option Award Agreement.

     
1.2.30 “Initial Exercise
Date” means, with respect to an Option or an SAR,
the date specified in the Grantee’s Award Agreement as the
initial date on which such Award may be exercised,
provided, unless the Committee determines otherwise, such
date is during a Window Period or, if such date is not during a
Window Period, the first trading day of the first Window Period
beginning after such date.

     
1.2.31 “1999 SIP” means
The Goldman Sachs 1999 Stock Incentive Plan, as in effect prior
to the Effective Date.

     
1.2.32 “Nonqualified Stock
Option” means an option to purchase shares of
Common Stock that is not an Incentive Stock Option.

     
1.2.33 “Option” means an
Incentive Stock Option or a Nonqualified Stock Option or both,
as the context requires.

     
1.2.34 “Outstanding”
means any Award to the extent it has not been forfeited,
cancelled, terminated, exercised or with respect to which the
shares of Common Stock underlying the Award have not been
previously delivered or other payments made.

     
1.2.35 “Plan” means The
Goldman Sachs Amended and Restated Stock Incentive Plan, as
described herein and as hereafter amended from time to time.

     
1.2.36 “RSU” means a
restricted stock unit Award granted under the Plan, which
represents an unfunded and unsecured promise to deliver shares
of Common Stock in accordance with the terms of the RSU Award
Agreement.

     
1.2.37 “RSU Shares” means
shares of Common Stock that underlie an RSU.

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1.2.38 “Restricted Share”
means a share of Common Stock delivered under the Plan that is
subject to certain transfer restrictions, forfeiture provisions
and/or other terms and conditions specified herein and in the
Restricted Share Award Agreement.

     
1.2.39 “Retirement” means
termination of the Grantee’s Employment (other than for
Cause) on or after the Date of Grant at a time when (a) the
sum of the Grantee’s age plus years of service with the
Firm (as determined by the Committee in its sole discretion)
equals or exceeds 55 and (b) the Grantee has completed at
least five (5) years of service with the Firm (as
determined by the Committee in its sole discretion).

     
1.2.40 “SAR” means a
stock appreciation right granted under the Plan, which
represents an unfunded and unsecured promise to deliver shares
of Common Stock, cash or other property equal in value to the
excess of the Fair Market Value per share of Common Stock over
the Exercise Price per share of the SAR, subject to the terms of
the SAR Award Agreement.

     
1.2.41 “SIP
Administrator” means each person designated by the
Committee as a “SIP Administrator” with the authority
to perform day-to-day administrative functions for the Plan.

     
1.2.42 “Solicit”
means any direct or indirect communication of any kind
whatsoever, regardless of by whom initiated, inviting, advising,
encouraging or requesting any person or entity, in any manner,
to take or refrain from taking any action.

     
1.2.43 “Vested”
means, with respect to an Award, the portion of the Award that
is not subject to a condition that the Grantee remain actively
employed by the Firm in order for the Award to remain
Outstanding. The fact that an Award becomes Vested shall not
mean or otherwise indicate that the Grantee has an unconditional
or nonforfeitable right to such Award, and such Award shall
remain subject to such terms, conditions and forfeiture
provisions as may be provided for in the Plan or in the Award
Agreement.

     
1.2.44 “Vesting
Date” means each date specified in the
Grantee’s Award Agreement as a date on which part or all of
an Award becomes Vested.

     
1.2.45 “Window
Period” means a period designated by the Firm
during which all employees of the Firm are permitted to purchase
or sell shares of Common Stock (provided that, if the Grantee is
a member of a designated group of employees who are subject to
different restrictions, the Window Period may be a period
designated by the Firm during which an employee of the Firm in
such designated group is permitted to purchase or sell shares of
Common Stock).

1.3 Administration

     
1.3.1 Subject to Sections 1.3.3 and
1.3.4, the Plan shall be administered by the Committee.

     
1.3.2 The Committee shall have complete
control over the administration of the Plan and shall have the
authority in its sole discretion to (a) exercise all of the
powers granted to it under the Plan, (b) construe,
interpret and implement the Plan and all Award Agreements,
(c) prescribe, amend and rescind rules and regulations
relating to the Plan, including rules governing its own
operations, (d) make all determinations necessary or
advisable in administering the Plan, (e) correct any
defect, supply any omission and reconcile any inconsistency in
the Plan, (f) amend the Plan to reflect changes in
applicable law (whether or not the rights of the Grantee of any
Award are adversely affected, unless otherwise provided in such
Grantee’s Award Agreement), (g) grant Awards and
determine who shall receive Awards, when such Awards shall be
granted and the terms of such Awards, including setting forth
provisions with regard to termination of Employment, such as
termination of Employment for Cause or due to death, Extended
Absence, or Retirement, (h) unless otherwise provided in an
Award Agreement, amend any outstanding Award Agreement in any
respect, whether or not the rights of the Grantee of such Award
are adversely affected, including, without limitation, to
(1) accelerate the

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time or times at which the Award becomes Vested,
unrestricted or may be exercised (and, in connection with such
acceleration, the Committee may provide that any shares of
Common Stock acquired pursuant to such Award shall be Restricted
Shares, which are subject to vesting, transfer, forfeiture or
repayment provisions similar to those in the Grantee’s
underlying Award), (2) accelerate the time or times at
which shares of Common Stock are delivered under the Award (and,
without limitation on the Committee’s rights, in connection
with such acceleration, the Committee may provide that any
shares of Common Stock delivered pursuant to such Award shall be
Restricted Shares, which are subject to vesting, transfer,
forfeiture or repayment provisions similar to those in the
Grantee’s underlying Award), (3) waive or amend any
goals, restrictions or conditions set forth in such Award
Agreement, or impose new goals, restrictions and conditions or
(4) reflect a change in the Grantee’s circumstances
(e.g., a change to part-time employment status or a change in
position, duties or responsibilities) and (i) determine at
any time whether, to what extent and under what circumstances
and method or methods (1) Awards may be (A) settled in
cash, shares of Common Stock, other securities, other Awards or
other property (in which event, the Committee may specify what
other effects such settlement will have on the Grantee’s
Award, including the effect on any repayment provisions under
the Plan or Award Agreement), (B) exercised or
(C) canceled, forfeited or suspended, (2) shares of
Common Stock, other securities, other Awards or other property
and other amounts payable with respect to an Award may be
deferred either automatically or at the election of the Grantee
thereof or of the Committee, (3) to the extent permitted
under applicable law, loans (whether or not secured by Common
Stock) may be extended by the Firm with respect to any Awards,
(4) Awards may be settled by GS Inc., any of its
subsidiaries or affiliates or any of its or their designees and
(5) the Exercise Price for any Option (other than an
Incentive Stock Option, unless the Committee determines that
such an Option shall no longer constitute an Incentive Stock
Option) or SAR may be reset.

     
1.3.3 Actions of the Committee may be taken
by the vote of a majority of its members present at a meeting
(which may be held telephonically). Any action may be taken by a
written instrument signed by a majority of the Committee
members, and action so taken shall be fully as effective as if
it had been taken by a vote at a meeting. The determination of
the Committee on all matters relating to the Plan or any Award
Agreement shall be final, binding and conclusive. The Committee
may allocate among its members and delegate to any person who is
not a member of the Committee or to any administrative group
within the Firm, including the SIP Administrators or any of
them, any of its powers, responsibilities or duties. In
delegating its authority, the Committee shall consider the
extent to which any delegation may cause Awards to fail to be
deductible under Section 162(m) of the Code or to fail to
meet the requirements of Rule 16(b)-3(d)(1) or
Rule 16(b)-3(e) under the Exchange Act.

     
1.3.4 Notwithstanding anything to the
contrary contained herein, the Board may, in its sole
discretion, at any time and from time to time, grant Awards or
administer the Plan. In any such case, the Board shall have all
of the authority and responsibility granted to the Committee
herein.

     
1.3.5 No Liability

     
No member of the Board or the Committee or any
employee of the Firm (each such person, a “Covered
Person”) shall have any liability to any person (including
any Grantee) for any action taken or omitted to be taken or any
determination made in good faith with respect to the Plan or any
Award. Each Covered Person shall be indemnified and held
harmless by GS Inc. against and from (a) any loss, cost,
liability or expense (including attorneys’ fees) that may
be imposed upon or incurred by such Covered Person in connection
with or resulting from any action, suit or proceeding to which
such Covered Person may be a party or in which such Covered
Person may be involved by reason of any action taken or omitted
to be taken under the Plan or any Award Agreement and
(b) any and all amounts paid by such Covered Person, with
GS Inc.’s approval, in settlement thereof, or paid by such
Covered Person in satisfaction of any judgment in any such
action, suit or proceeding against such Covered Person,
provided that GS

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Inc. shall have the right, at its own expense, to
assume and defend any such action, suit or proceeding and, once
GS Inc. gives notice of its intent to assume the defense, GS
Inc. shall have sole control over such defense with counsel of
GS Inc.’s choice. The foregoing right of indemnification
shall not be available to a Covered Person to the extent that a
court of competent jurisdiction in a final judgment or other
final adjudication, in either case not subject to further
appeal, determines that the acts or omissions of such Covered
Person giving rise to the indemnification claim resulted from
such Covered Person’s bad faith, fraud or willful criminal
act or omission. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which
Covered Persons may be entitled under GS Inc.’s Amended and
Restated Certificate of Incorporation or Amended and Restated
Bylaws, as a matter of law, or otherwise, or any other power
that GS Inc. may have to indemnify such persons or hold them
harmless.

1.4 Persons Eligible for Awards

     
Awards under the Plan may be made to such
officers, directors, employees (including prospective
employees), consultants and other individuals who may perform
services for the Firm, as the Committee may select.

 

		
	1.5 	
    Types of Awards Under Plan

     
Awards may be made under the Plan in the form of
(a) Options, (b) SARs, (c) Restricted Shares,
(d) RSUs, (e) Dividend Equivalent Rights and
(f) other equity-based or equity-related Awards that the
Committee determines are consistent with the purpose of the Plan
and the interests of the Firm. No Incentive Stock Option (other
than an Incentive Stock Option that may be assumed or issued by
GS Inc. in connection with a transaction to which
Section 424(a) of the Code applies) may be granted to a
person who is not eligible to receive an Incentive Stock Option
under the Code.

 

		
	1.6 	
    Shares Available for Awards

     
1.6.1 Total Shares Available.
Subject to adjustment pursuant to Section 1.6.2, the total
number of shares of Common Stock which may be delivered pursuant
to Awards granted under the Plan on or after the Effective Date
shall not exceed two hundred and fifty million shares
(250,000,000) and pursuant to Awards granted in the fiscal year
beginning November 29, 2008 and each fiscal year thereafter
until the expiration of the Plan shall not exceed five
percent (5%) of the issued and outstanding shares of Common
Stock, determined as of the last day of the immediately
preceding fiscal year, increased by the number of shares
available for Awards in previous fiscal years but not then
covered by Awards granted in such years. No further Awards shall
be granted pursuant to the 1999 Plan. If, on or after the
Effective Date, any Award that was granted on or after the
Effective Date is forfeited or otherwise terminates or is
canceled without the delivery of shares of Common Stock, shares
of Common Stock are surrendered or withheld from any Award to
satisfy any obligation of the Grantee (including Federal, state
or foreign taxes) or shares of Common Stock owned by a Grantee
are tendered to pay the exercise price of any Award granted
under the Plan, then the shares covered by such forfeited,
terminated or canceled Award or which are equal to the number of
shares surrendered, withheld or tendered shall again become
available to be delivered pursuant to Awards granted under this
Plan. Notwithstanding the foregoing, but subject to adjustment
as provided in Section 1.6.2, no more than one hundred
million (100,000,000) shares of Common Stock that can be
delivered under the Plan shall be deliverable pursuant to the
exercise of Incentive Stock Options. The maximum number of
shares of Common Stock with respect to which Options or SARs may
be granted to an individual Grantee (i) in GS Inc.’s
fiscal year ending in 2003 shall equal 2,500,000 shares of
Common Stock and (ii) in each subsequent fiscal year shall
equal 105% of the maximum number for the preceding fiscal year.
Any shares of Common Stock (a) delivered by GS Inc.,
(b) with

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respect to which Awards are made hereunder and
(c) with respect to which the Firm becomes obligated to
make Awards, in each case through the assumption of, or in
substitution for, outstanding awards previously granted by an
acquired entity, shall not count against the shares of Common
Stock available to be delivered pursuant to Awards under this
Plan. Shares of Common Stock that may be delivered pursuant to
Awards may be authorized but unissued Common Stock or authorized
and issued Common Stock held in GS Inc.’s treasury or
otherwise acquired for the purposes of the Plan.

     
1.6.2 Adjustments. The
Committee shall have the authority (but not the obligation) to
adjust the number of shares of Common Stock authorized pursuant
to Section 1.6.1 and to adjust (including, without
limitation, by payment of cash) the terms of any Outstanding
Awards (including, without limitation, the number of shares of
Common Stock covered by each Outstanding Award, the type of
property to which the Award relates and the exercise or strike
price of any Award), in such manner as it deems appropriate to
prevent the enlargement or dilution of rights, or otherwise as
it deems appropriate, for any increase or decrease in the number
of issued shares of Common Stock (or issuance of shares of stock
other than shares of Common Stock) resulting from a
recapitalization, stock split, reverse stock split, stock
dividend, spinoff, splitup, combination, reclassification or
exchange of shares of Common Stock, merger, consolidation,
rights offering, separation, reorganization or any other change
in corporate structure or event the Committee determines in its
sole discretion affects the capitalization of GS Inc., including
any extraordinary dividend or distribution. After any adjustment
made pursuant to this Section 1.6.2, the number of shares
of Common Stock subject to each Outstanding Award shall be
rounded up or down to the nearest whole number as determined by
the Committee.

     
1.6.3 Except as provided in this
Section 1.6 or under the terms of any applicable Award
Agreement, there shall be no limit on the number or the value of
shares of Common Stock that may be subject to Awards to any
individual under the Plan.

     
1.6.4 There shall be no limit on the amount
of cash, securities (other than shares of Common Stock as
provided in Section 1.6.1, as adjusted by 1.6.2) or
other property that may be delivered pursuant to any Award.

ARTICLE II

AWARDS UNDER THE PLAN

 

		
	2.1 	
    Agreements Evidencing Awards

     
Each Award granted under the Plan shall be
evidenced by an Award Agreement, which shall contain such
provisions and conditions as the Committee deems appropriate
(and which may incorporate by reference some or all of the
provisions of the Plan). The Committee may grant Awards in
tandem with or in substitution for any other Award or Awards
granted under this Plan or any award granted under any other
plan of the Firm. By accepting an Award pursuant to the Plan, a
Grantee thereby agrees that the Award shall be subject to all of
the terms and provisions of the Plan and the applicable Award
Agreement.

2.2 No Rights as a Shareholder

     
No Grantee (or other person having rights
pursuant to an Award) shall have any of the rights of a
shareholder of GS Inc. with respect to shares of Common Stock
subject to an Award until the delivery of such shares. Except as
otherwise provided in Section 1.6.2, no adjustments shall
be made for dividends or distributions on (whether ordinary or
extraordinary, and whether in cash, Common Stock, other
securities or other property), or other events relating to,
shares of Common Stock subject to an Award for which the record
date is prior to the date such shares are delivered.

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2.3 Options

     
2.3.1 Grant. The Committee may
grant Awards of Options in such amounts and subject to such
terms and conditions as the Committee may determine (and may
include a grant of Dividend Equivalent Rights under
Section 2.8 in connection with such Option grants).

     
2.3.2 Exercise. Options that
are not Vested or that are not Outstanding may not be exercised.
Outstanding Vested Options may be exercised in accordance with
procedures established by the Committee (but, subject to the
applicable Award Agreement, may not be exercised earlier than
the Initial Exercise Date). The Committee may from time to time
prescribe periods during which Outstanding Vested Options shall
not be exercisable.

     
2.3.3 Payment of Exercise
Price. Any acceptance by the Committee of a
Grantee’s written notice of exercise of a Vested Option
shall be conditioned upon payment for the shares of Common Stock
being purchased. Such payment may be made in cash or by such
other methods as the Committee may from time to time prescribe.

     
2.3.4 Delivery of Shares.
Unless otherwise determined by the Committee, or as otherwise
provided in the applicable Award Agreement, and except as
provided in Sections 3.3, 3.4, 3.11 and 3.17.1, and
subject to Section 3.2, upon receipt of payment of the full
Exercise Price (or upon satisfaction of procedures adopted by
the Committee in connection with a “cashless” exercise
method adopted by it) for shares of Common Stock subject to an
Outstanding Vested Option, delivery of such shares of Common
Stock shall be effected by book-entry credit to the
Grantee’s Custody Account. The Grantee shall be the
beneficial owner and record holder of such shares of Common
Stock properly credited to the Custody Account. No delivery of
such shares of Common Stock shall be made to a Grantee unless
the Grantee has timely returned all required documentation
specified in the Grantee’s Award Agreement or as otherwise
required by the Committee or the SIP Administrator.

     
2.3.5 Repayment if Conditions Not
Met. If the Committee determines that all terms and
conditions of the Plan and a Grantee’s Option Award
Agreement in respect of exercised Options were not satisfied,
then the Grantee shall be obligated to pay the Firm immediately
upon demand therefor, an amount equal to the excess of the Fair
Market Value (determined at the time of exercise) of the shares
of Common Stock that were delivered in respect of such exercised
Options over the Exercise Price paid therefor, without reduction
for any shares of Common Stock applied to satisfy withholding
tax or other obligations in respect of such shares.

2.4 SARs

     
2.4.1 Grant. The Committee may
grant Awards of SARs in such amounts and subject to such terms
and conditions as the Committee may determine (and may include a
grant of Dividend Equivalent Rights under Section 2.8 in
connection with such SAR grants).

     
2.4.2 Exercise. SARs that are
not Vested or that are not Outstanding may not be exercised.
Outstanding Vested SARs may be exercised in accordance with
procedures established by the Committee (but, subject to the
applicable Award Agreement, may not be exercised earlier than
the Initial Exercise Date). The Committee may from time to time
prescribe periods during which Outstanding Vested SARs shall not
be exercisable.

     
2.4.3 Delivery of Shares.
Unless otherwise determined by the Committee, or as otherwise
provided in the applicable Award Agreement, and except as
provided in Sections 3.3, 3.4, 3.11 and 3.17.1, and
subject to Section 3.2, upon exercise of an Outstanding
Vested SAR for which payment will be made partly or entirely in
shares of Common Stock, delivery of shares of Common Stock (and
cash in respect of fractional shares), with a Fair Market Value
(on the exercise date) equal to (i) the excess of
(a) the Fair Market Value of a share of Common Stock (on
the exercise date) over (b) the Exercise Price of such SAR
multiplied by (ii) the number of SARs exercised, shall be
effected by book-entry credit to the Grantee’s Custody
Account. The

9

 

Grantee shall be the beneficial owner and record
holder of such shares of Common Stock properly credited to the
Custody Account on such date of delivery. No delivery of such
shares of Common Stock shall be made to a Grantee unless the
Grantee has timely returned all required documentation specified
in the Grantee’s Award Agreement or as otherwise required
by the Committee or the SIP Administrator.

     
2.4.4 Repayment if Conditions Not
Met. If the Committee determines that all terms and
conditions of the Plan and a Grantee’s SAR Award Agreement
in respect of exercised SARs were not satisfied, then the
Grantee shall be obligated to pay the Firm immediately upon
demand therefor, an amount equal to the excess of the Fair
Market Value (determined at the time of exercise) of the shares
of Common Stock subject to the exercised SARs over the Exercise
Price therefor, without reduction for any amount applied to
satisfy withholding tax or other obligations in respect of such
SARs.

2.5 Restricted Shares

     
2.5.1 Grant. The Committee may
grant or offer for sale Awards of Restricted Shares in such
amounts and subject to such terms and conditions as the
Committee may determine. Upon the issuance of such shares in the
name of the Grantee, the Grantee shall have the rights of a
shareholder with respect to the Restricted Shares and shall
become the record holder of such shares, subject to the
provisions of the Plan and any restrictions and conditions as
the Committee may include in the applicable Award Agreement. In
the event that a Certificate is issued in respect of Restricted
Shares, such Certificate may be registered in the name of the
Grantee but shall be held by a custodian (which may be GS Inc.
or one of its affiliates) until the time the restrictions lapse.

     
2.5.2 Repayment if Conditions Not
Met. If the Committee determines that all terms and
conditions of the Plan and a Grantee’s Restricted Share
Award Agreement in respect of Restricted Shares which have
become Vested were not satisfied, then the Grantee shall be
obligated to pay the Firm immediately upon demand therefor, an
amount equal to the Fair Market Value (determined at the time
such shares became Vested) of such Restricted Shares, without
reduction for any amount applied to satisfy withholding tax or
other obligations in respect of such Restricted Shares.

2.6 RSUs

     
2.6.1 Grant. The Committee may
grant Awards of RSUs in such amounts and subject to such terms
and conditions as the Committee may determine. A Grantee of an
RSU has only the rights of a general unsecured creditor of GS
Inc. until delivery of shares of Common Stock, cash or other
securities or property is made as specified in the applicable
Award Agreement.

     
2.6.2 Delivery of Shares.
Unless otherwise determined by the Committee, or as otherwise
provided in the applicable Award Agreement, and except as
provided in Sections 3.3, 3.4, 3.11 and 3.17.3, and
subject to Section 3.2, on each Delivery Date the number or
percentage of RSU Shares specified in the Grantee’s Award
Agreement with respect to the Grantee’s then Outstanding
Vested RSUs (which amount may be rounded to avoid fractional RSU
Shares) shall be delivered. Unless otherwise determined by the
Committee, or as otherwise provided in the applicable Award
Agreement, delivery of RSU Shares shall be effected by
book-entry credit to the Grantee’s Custody Account. The
Grantee shall be the beneficial owner and record holder of any
RSU Shares properly credited to the Grantee’s Custody
Account. No delivery of shares of Common Stock underlying a
Grantee’s RSUs shall be made unless the Grantee has timely
returned all required documentation specified in the
Grantee’s Award Agreement or as otherwise determined by the
Committee or the SIP Administrator.

     
2.6.3 Repayment if Conditions Not
Met. If the Committee determines that all terms and
conditions of the Plan and a Grantee’s RSU Award Agreement
in respect of the delivery of

10

 

shares underlying such RSUs were not satisfied,
then the Grantee shall be obligated to pay the Firm immediately
upon demand therefor, an amount equal to the Fair Market Value
(determined at the time of delivery) of the shares of Common
Stock delivered with respect to such Delivery Date, without
reduction for any shares applied to satisfy withholding tax or
other obligations in respect of such shares of Common Stock.

2.7 Other Stock-Based Awards

     
The Committee may grant other types of
equity-based or equity-related Awards (including the grant or
offer for sale of unrestricted shares of Common Stock) in such
amounts and subject to such terms and conditions as the
Committee shall determine. Such Awards may entail the transfer
of actual shares of Common Stock to Plan participants, or
payment in cash or otherwise of amounts based on the value of
shares of Common Stock, and may include, without limitation,
Awards designed to comply with or take advantage of the
applicable local laws of jurisdictions other than the United
States.

 

		
	2.8 	
    Dividend Equivalent Rights

     
2.8.1 Grant. The Committee may
grant, either alone or in connection with any other Award, a
Dividend Equivalent Right.

     
2.8.2 Payment. The Committee
shall determine whether payments in connection with a Dividend
Equivalent Right shall be made in cash, in shares of Common
Stock or in another form, whether they shall be conditioned upon
the exercise of any Award to which they relate, the time or
times at which they shall be made and such other terms and
conditions as the Committee shall deem appropriate.

     
2.8.3 Certain Section 162(m) Related
Conditions. No Dividend Equivalent Right shall be
conditioned on the exercise of any Option or SAR, if and to the
extent such Dividend Equivalent Right would cause the
compensation payable to a “covered employee” as a
result of the related Option or SAR not to constitute
performance-based compensation under Section 162(m)(4)(C)
of the Code.

 

		
	2.9 	
    Adoption of Standardized Award Terms and
    Conditions

     
The Committee may, in its discretion, adopt
standardized terms and conditions that, unless and to the extent
a Grantee’s Award Agreement expressly provides otherwise,
shall apply to such Awards as may be determined by the Committee
in its discretion. Any such standardized terms and conditions
shall have the same force and effect as if expressly
incorporated into the Plan and each applicable Award Agreement.

ARTICLE III

MISCELLANEOUS

 

		
	3.1 	
    Amendment of the Plan or Award
    Agreement

     
3.1.1 Unless otherwise provided in the Plan or in
an Award Agreement, the Board may from time to time suspend,
discontinue, revise or amend the Plan in any respect whatsoever,
including in any manner that adversely affects the rights,
duties or obligations of any Grantee of an Award.

     
3.1.2 Unless otherwise determined by the Board,
shareholder approval of any suspension, discontinuance, revision
or amendment shall be obtained only to the extent necessary to
comply with any applicable law, rule or regulation; provided,
however, if and to the extent the Board determines that it
is appropriate for Awards granted under the Plan to constitute
performance-based compensation within the meaning of
Section 162(m)(4)(C) of the Code, no amendment

11

 

that would require stockholder approval in order
for amounts paid pursuant to the Plan to constitute
performance-based compensation within the meaning of
Section 162(m)(4)(C) of the Code shall be effective without
the approval of the stockholders of GS Inc. as required by
Section 162(m) of the Code and the regulations thereunder
and, if and to the extent the Board determines it is appropriate
for the Plan to comply with the provisions of Section 422
of the Code, no amendment that would require stockholder
approval under Section 422 of the Code shall be effective
without the approval of the stockholders of GS Inc.

 

		
	3.2 	
    Tax Withholding

     
3.2.1 As a condition to the delivery of any
shares of Common Stock, other property or cash pursuant to any
Award or the lifting or lapse of restrictions on any Award, or
in connection with any other event that gives rise to a federal
or other governmental tax withholding obligation on the part of
the Firm relating to an Award (including, without limitation,
FICA tax), (a) the Firm may deduct or withhold (or cause to
be deducted or withheld) from any payment or distribution to the
Grantee, whether or not pursuant to the Plan, (b) the
Committee shall be entitled to require that the Grantee remit
cash to the Firm (through payroll deduction or otherwise) or
(c) the Firm may enter into any other suitable arrangements
to withhold, in each case in an amount sufficient in the opinion
of the Firm to satisfy such withholding obligation.

     
3.2.2 If the event giving rise to the withholding
obligation involves a transfer of shares of Common Stock, then,
at the discretion of the Committee, the Grantee may satisfy the
withholding obligation described under Section 3.2.1 by electing
to have GS Inc. withhold shares of Common Stock (which
withholding, unless otherwise provided in the applicable Award
Agreement, will be at a rate not in excess of the statutory
minimum rate) or by tendering previously owned shares of Common
Stock, in each case having a Fair Market Value equal to the
amount of tax to be withheld (or by any other mechanism as may
be required or appropriate to conform with local tax and other
rules). For this purpose, Fair Market Value shall be determined
as of the date on which the amount of tax to be withheld is
determined (and GS Inc. may cause any fractional share amount to
be settled in cash).

 

		
	3.3 	
    Required Consents and Legends

     
3.3.1 If the Committee shall at any time
determine that any consent (as hereinafter defined) is necessary
or desirable as a condition of, or in connection with, the
granting of any Award, the delivery of shares of Common Stock or
the delivery of any cash, securities or other property under the
Plan, or the taking of any other action thereunder (each such
action being hereinafter referred to as a “plan
action”), then such plan action shall not be taken, in
whole or in part, unless and until such consent shall have been
effected or obtained to the full satisfaction of the Committee.
The Committee may direct that any Certificate evidencing shares
delivered pursuant to the Plan shall bear a legend setting forth
such restrictions on transferability as the Committee may
determine to be necessary or desirable, and may advise the
transfer agent to place a stop order against any legended shares.

     
3.3.2 By accepting an Award, each Grantee shall
have expressly provided consent to the items described in
Section 3.3.3(d) hereof.

     
3.3.3 The term “consent” as used herein
with respect to any plan action includes (a) any and all
listings, registrations or qualifications in respect thereof
upon any securities exchange or under any federal, state or
local law, or law, rule or regulation of a jurisdiction outside
the United States, (b) any and all written agreements and
representations by the Grantee with respect to the disposition
of shares, or with respect to any other matter, which the
Committee may deem necessary or desirable to comply with the
terms of any such listing, registration or qualification or to
obtain an exemption from the requirement that any such listing,
qualification or registration be made, (c) any and all
other consents, clearances and approvals in respect of a plan
action by

12

 

any governmental or other regulatory body or any
stock exchange or self-regulatory agency, (d) any and all
consents by the Grantee to (i) the Firm’s supplying to
any third party recordkeeper of the Plan such personal
information as the Committee deems advisable to administer the
Plan, (ii) the Firm’s deducting amounts from the
Grantee’s wages, or another arrangement satisfactory to the
Committee, to reimburse the Firm for advances made on the
Grantee’s behalf to satisfy certain withholding and other
tax obligations in connection with an Award and (iii) the
Firm’s imposing sales and transfer procedures and
restrictions and hedging restrictions on shares of Common Stock
delivered under the Plan and (e) any and all consents or
authorizations required to comply with, or required to be
obtained under, applicable local law or otherwise required by
the Committee. Nothing herein shall require GS Inc. to
list, register or qualify the shares of Common Stock on any
securities exchange.

 

		
	3.4 	
    Right of Offset

     
The Firm shall have the right to offset against
its obligation to deliver shares of Common Stock (or other
property or cash) under the Plan or any Award Agreement any
outstanding amounts (including, without limitation, travel and
entertainment or advance account balances, loans, repayment
obligations under any Awards, or amounts repayable to the Firm
pursuant to tax equalization, housing, automobile or other
employee programs) the Grantee then owes to the Firm and any
amounts the Committee otherwise deems appropriate pursuant to
any tax equalization policy or agreement.

 

		
	3.5 	
    Nonassignability

     
Except to the extent otherwise expressly provided
in the applicable Award Agreement, no Award (or any rights and
obligations thereunder) granted to any person under the Plan may
be sold, exchanged, transferred, assigned, pledged,
hypothecated, fractionalized, hedged or otherwise disposed of
(including through the use of any cash-settled instrument),
whether voluntarily or involuntarily, other than by will or by
the laws of descent and distribution, and all such Awards (and
any rights thereunder) shall be exercisable during the life of
the Grantee only by the Grantee or the Grantee’s legal
representative. Notwithstanding the preceding sentence, the
Committee may permit, under such terms and conditions that it
deems appropriate in its sole discretion, a Grantee to transfer
any Award to any person or entity that the Committee so
determines. Any sale, exchange, transfer, assignment, pledge,
hypothecation, fractionalization, hedge or other disposition in
violation of the provisions of this Section 3.5 shall be
void. All of the terms and conditions of this Plan and the Award
Agreements shall be binding upon any permitted successors and
assigns.

 

		
	3.6 	
    Requirement of Consent and Notification of
    Election Under Section 83(b) of the Code or Similar Provision

     
No election under Section 83(b) of the Code
(to include in gross income in the year of transfer the amounts
specified in Code Section 83(b)) or under a similar
provision of the law of a jurisdiction outside the United States
may be made unless expressly permitted by the terms of the Award
Agreement or by action of the Committee in writing prior to the
making of such election. If a Grantee of an Award, in connection
with the acquisition of shares of Common Stock under the Plan or
otherwise, is expressly permitted under the terms of the Award
Agreement or by such Committee action to make any such election
and the Grantee makes the election, the Grantee shall notify the
Committee of such election within ten (10) days of filing
notice of the election with the Internal Revenue Service or
other governmental authority, in addition to any filing and
notification required pursuant to regulations issued under Code
Section 83(b) or other applicable provision.

13

 

 

		
	3.7 	
    Requirement of Notification Upon Disqualifying
    Disposition Under Section 421(b) of the Code

     
If any Grantee shall make any disposition of
shares of Common Stock delivered pursuant to the exercise of an
Incentive Stock Option under the circumstances described in
Section 421(b) of the Code (relating to certain
disqualifying dispositions), such Grantee shall notify
GS Inc. of such disposition within ten (10) days
thereof.

 

		
	3.8 	
    Change in Control

     
3.8.1 The Committee may provide in any Award
Agreement for provisions relating to a Change in Control,
including, without limitation, the acceleration of the
exercisability of, or the lapse of restrictions or deemed
satisfaction of goals with respect to, any Outstanding Awards.

     
3.8.2 Unless otherwise provided in the applicable
Award Agreement and except as otherwise determined by the
Committee, in the event of a merger, consolidation, mandatory
share exchange or other similar business combination of
GS Inc. with or into any other entity (“successor
entity”) or any transaction in which another person or
entity acquires all of the issued and outstanding Common Stock
of GS Inc., or all or substantially all of the assets of
GS Inc., Outstanding Awards may be assumed or a
substantially equivalent Award may be substituted by such
successor entity or a parent or subsidiary of such successor
entity, and such an assumption or substitution shall not be
deemed to violate this Plan or any provision of any Award
Agreement.

 

		
	3.9 	
    Other Conditions to Awards

     
Unless the Committee determines otherwise, the
Grantee’s rights in respect of all of his or her
Outstanding Awards (whether or not Vested) shall immediately
terminate and such Awards shall cease to be Outstanding if:
(a) the Grantee attempts to have any dispute under the Plan
or his or her Award Agreement resolved in any manner that is not
provided for by Section 3.17, (b) the Grantee in any
manner, directly or indirectly, (1) Solicits any Client to
transact business with a Competitive Enterprise or to reduce or
refrain from doing any business with the Firm or
(2) interferes with or damages (or attempts to interfere
with or damage) any relationship between the Firm and any Client
or (3) Solicits 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, (c) the Grantee fails to
certify to GS Inc., in accordance with procedures
established by the Committee, that the Grantee has complied, or
the Committee determines that the Grantee in fact has failed to
comply, with all the terms and conditions of the Plan or Award
Agreement or (d) any event constituting Cause occurs with
respect to the Grantee. By exercising any Option or SAR or by
accepting delivery of shares of Common Stock or any other
payment under this Plan, the Grantee shall be deemed to have
represented and certified at such time that the Grantee has
complied with all the terms and conditions of the Plan and the
Award Agreement.

 

		
	3.10 	
    Right of Discharge Reserved

     
Neither the grant of an Award nor any provision
in the Plan or in any Award Agreement shall confer upon any
Grantee the right to continued Employment by the Firm or affect
any right that the Firm may have to terminate or alter the terms
and conditions of the Grantee’s Employment.

 

		
	3.11 	
    Nature and Form of Payments

     
3.11.1 Any and all grants of Awards and
deliveries of shares of Common Stock, cash or other property
under the Plan shall be in consideration of services performed
or to be performed for the Firm by the Grantee. Awards under the
Plan may, in the sole discretion of the Committee, be made in
substitution in whole or in part for cash or other compensation
otherwise payable to an Employee. Without limitation on
Section 1.3 hereof, unless otherwise specifically provided
in

14

 

an Award Agreement or by applicable law, the
Committee shall be permitted with respect to any or all Awards
to exercise all of the rights described in Section 1.3.2(h)
and 1.3.2(i). Deliveries of shares of Common Stock may be
rounded to avoid fractional shares. In addition, the Firm may
pay cash in lieu of fractional shares.

     
3.11.2 All grants of Awards and deliveries of
shares of Common Stock, cash or other property under the Plan
shall constitute a special discretionary incentive payment to
the Grantee and shall not be required to be taken into account
in computing the amount of salary or compensation of the Grantee
for the purpose of determining any contributions to or any
benefits under any pension, retirement, profit-sharing, bonus,
life insurance, severance or other benefit plan of the Firm or
under any agreement with the Grantee, unless the Firm
specifically provides otherwise.

 

		
	3.12 	
    Non-Uniform Determinations

     
None of Committee’s determinations under the
Plan and Award Agreements need to be uniform and any such
determinations may be made by it selectively among persons who
receive, or are eligible to receive, Awards under the Plan
(whether or not such persons are similarly situated). Without
limiting the generality of the foregoing, the Committee shall be
entitled, among other things, to make non-uniform and selective
determinations under Award Agreements, and to enter into
non-uniform and selective Award Agreements, as to (a) the
persons to receive Awards, (b) the terms and provisions of
Awards, (c) whether a Grantee’s Employment has been
terminated for purposes of the Plan and (d) any adjustments
to be made to Awards pursuant to Section 1.6.2 or otherwise.

 

		
	3.13 	
    Other Payments or Awards

     
Nothing contained in the Plan shall be deemed in
any way to limit or restrict the Firm from making any award or
payment to any person under any other plan, arrangement or
understanding, whether now existing or hereafter in effect.

 

		
	3.14 	
    Plan Headings; References to Laws, Rules or
    Regulations

     
The headings in this Plan are for the purpose of
convenience only, and are not intended to define or limit the
construction of the provisions hereof.

     
Any reference in this Plan to any law, rule or
regulation shall be deemed to include any amendments, revisions
or successor provisions to such law, rule or regulation.

 

		
	3.15 	
    Date of Adoption and Term of Plan; Shareholder
    Approval Required

     
The 1999 SIP was originally adopted by the Board
on April 30, 1999 and was amended and restated by the Board
on January 16, 2003. The adoption of the Plan as amended
and restated on January 16, 2003 is expressly conditioned
on the approval of the stockholders of GS Inc. at its annual
meeting on April 1, 2003 in accordance with Treasury
Regulation §1.162-27(e)(4), Section 422 of the Code,
the rules of the New York Stock Exchange and other applicable
law. If the Plan is not so approved, then the 1999 SIP shall
remain in full force and effect without regard to the amendments
adopted on January 16, 2003. Unless sooner terminated by
the Board, the Plan shall terminate on the tenth anniversary of
the Effective Date. The Board reserves the right to terminate
the Plan at any time. All Awards made under the Plan prior to
the termination of the Plan shall remain in effect until such
Awards have been satisfied or terminated in accordance with the
terms and provisions of the Plan and the applicable Award
Agreements.

15

 

 

		
	3.16 	
    Governing Law

     
All rights and obligations under the Plan and
each Award Agreement 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.

 

		
	3.17 	
    Arbitration

     
3.17.1 Unless otherwise specified in an
applicable Award Agreement, it shall be a condition of each
Award that any dispute, controversy or claim between the Firm
and a Grantee, arising out of or relating to or concerning the
Plan or applicable Award Agreement, shall be finally settled by
arbitration in New York City before, and in accordance with the
rules then obtaining of, the New York Stock Exchange, Inc. (the
“NYSE”) or, if the NYSE declines to arbitrate the
matter in New York City (or if the matter otherwise is not
arbitrable by it), the American Arbitration Association (the
“AAA”) in accordance with the commercial arbitration
rules of the AAA. Prior to arbitration, all claims maintained by
the Grantee must first be submitted to the Committee in
accordance with claims procedures determined by the Committee.
This Section is subject to the provisions of
Sections 3.17.2 and 3.17.3 below.

     
3.17.2 Unless otherwise specified in an
applicable Award Agreement, it shall be a condition of each
Award that the Firm and the Grantee irrevocably submit to the
exclusive jurisdiction of any state or federal court located in
the city of New York over any suit, action or proceeding arising
out of or relating to or concerning the Plan or the Award that
is not otherwise arbitrated or resolved according to
Section 3.17.1. This includes any suit, action or
proceeding to compel arbitration or to enforce an arbitration
award. By accepting an Award, the Grantee acknowledges that the
forum designated by this Section 3.17.2 has a reasonable
relation to the Plan, any applicable Award and to the
Grantee’s relationship with the Firm. Notwithstanding the
foregoing, nothing herein shall preclude the Firm from bringing
any suit, action or proceeding in any other court for the
purpose of enforcing the provisions of this Section 3.17 or
otherwise.

     
3.17.3 Unless otherwise specified in an
applicable Award Agreement, the agreement by the Grantee and the
Firm as to forum is independent of the law that may be applied
in the suit, action or proceeding and the Grantee and the Firm
agree to such forum even if the forum may under applicable law
choose to apply non-forum law. By accepting an Award,
(a) the Grantee waives, to the fullest extent permitted by
applicable law, any objection which the Grantee may have to
personal jurisdiction or to the laying of venue of any such
suit, action or proceeding in any court referred to in
Section 3.17.2, (b) the Grantee undertakes not to
commence any action arising out of or relating to or concerning
any Award in any forum other than a forum described in
Section 3.17 and (c) the Grantee agrees that, to the
fullest extent permitted by applicable law, a final and
non-appealable judgment in any such suit, action or proceeding
in any such court shall be conclusive and binding upon the
Grantee and the Firm.

     
3.17.4 Unless otherwise specified in an
applicable Award Agreement, by accepting an Award, the Grantee
irrevocably appoints each General Counsel of GS Inc. as his
or her agent for service of process in connection with any suit,
action or proceeding arising out of or relating to or concerning
this Plan or any Award which is not arbitrated pursuant to the
provisions of Section 3.17.1, who shall promptly advise the
Grantee of any such service of process.

     
3.17.5 Unless otherwise specified in an
applicable Award Agreement, by accepting an Award, the Grantee
agrees to keep confidential the existence of, and any
information concerning, a dispute, controversy or claim
described in this Section 3.17, except that the Grantee may
disclose information concerning such dispute, controversy or
claim to the arbitrator or court that is considering such
dispute, controversy or claim or to his or her legal counsel
(provided that such counsel agrees not to disclose any such
information other than as necessary to the prosecution or
defense of the dispute, controversy or claim).

16

 

 

		
	3.18 	
    Severability; Entire Agreement

     
If any of the provisions of this Plan or any
Award Agreement is finally held to be invalid, illegal or
unenforceable (whether in whole or in part), such provision
shall be deemed modified to the extent, but only to the extent,
of such invalidity, illegality or unenforceability and the
remaining provisions shall not be affected thereby; provided
that, if any of such provisions is finally held to be
invalid, illegal or unenforceable because it exceeds the maximum
scope determined to be acceptable to permit such provision to be
enforceable, such provision shall be deemed to be modified to
the minimum extent necessary to modify such scope in order to
make such provision enforceable hereunder. By accepting an
Award, the Grantee acknowledges that the Plan and any Award
Agreements contain the entire agreement of the parties with
respect to the subject matter thereof and supersede all prior
agreements, promises, covenants, arrangements, communications,
representations and warranties between them, whether written or
oral with respect to the subject matter thereof.

 

		
	3.19 	
    Waiver of Claims

     
By accepting an Award, the Grantee recognizes and
agrees that prior to being selected by the Committee to receive
an Award he or she has no right to any benefits under such
Award. Accordingly, in consideration of the Grantee’s
receipt of any Award, he or she expressly waives any right to
contest the amount of any Award, the terms of any Award
Agreement, any determination, action or omission hereunder or
under any Award Agreement by the Committee, the SIP
Administrator, GS Inc. or the Board or any amendment to the
Plan or any Award Agreement (other than an amendment to this
Plan or an Award Agreement to which his or her consent is
expressly required by the express terms of an Award Agreement),
and the Grantee expressly waives any claim related in any way to
any Award including any claim based upon any promissory estoppel
or other theory in connection with any Award and the
Grantee’s employment with the Firm.

 

		
	3.20 	
    No Third Party Beneficiaries

     
Except as expressly provided in an Award
Agreement, neither the Plan nor any Award Agreement shall confer
on any person other than the Firm and the Grantee of the Award
any rights or remedies thereunder; provided that the
exculpation and indemnification provisions of Section 1.3.5
shall inure to the benefit of a Covered Person’s estate,
beneficiaries and legatees.

 

		
	3.21 	
    Limitations Imposed by Section 162(m) of
    the Code

     
Notwithstanding any other provision hereunder,
prior to a Change in Control, if and to the extent that the
Committee determines GS Inc.’s federal tax deduction
in respect of a particular Grantee’s Award may be limited
as a result of Section 162(m) of the Code, the Committee
may take the following actions:

     
3.21.1 With respect to such Grantee’s
Options, SARs and Dividend Equivalent Rights, the Committee may
delay the payment in respect of such Options, SARs and Dividend
Equivalent Rights until a date that is within 30 Business
Days after the earlier to occur of (i) the date that
compensation paid to the Grantee is no longer subject to the
deduction limitation under Section 162(m) of the Code and
(ii) the occurrence of a Change in Control. In the event
that a Grantee exercises an Option or SAR or would receive a
payment in respect of a dividend equivalent right at a time when
the Grantee is a “covered employee” and the Committee
determines to delay the payment in respect of any such Award,
the Committee shall credit cash, or, in the case of an amount
payable in Common Stock, the Fair Market Value of the Common
Stock, payable to the Grantee to a book account. The Grantee
shall have no rights in respect of such book account, and the
amount credited thereto shall be subject to the transfer
restrictions in Section 3.5. The Committee may credit
additional amounts to such book account as it may

17

 

determine in its sole discretion. Any book
account created hereunder shall represent only an unfunded
unsecured promise to pay the amount credited thereto to the
Grantee in the future.

     
3.21.2 With respect to such Grantee’s
Restricted Shares, the Committee may require the Grantee to
surrender to the Committee any certificates and agreements with
respect to such Restricted Shares in order to cancel the Awards
of Restricted Shares. In exchange for such cancellation, the
Committee shall credit the Fair Market Value of the Restricted
Shares subject to such Awards to a book account. The amount
credited to the book account shall be paid to the Grantee within
30 Business Days after the earlier to occur of (i) the
date that compensation paid to the Grantee is no longer subject
to the deduction limitation under Section 162(m) of the
Code and (ii) the occurrence of a Change in Control. The
Grantee shall have no rights in respect of such book account,
and the amount credited thereto shall be subject to the transfer
restrictions in Section 3.5. The Committee may credit
additional amounts to such book account as it may determine in
its sole discretion. Any book account created hereunder shall
represent only an unfunded unsecured promise to pay the amount
credited thereto to the Grantee in the future.

     
3.21.3 With respect to such Grantee’s RSUs,
the Committee may elect to delay delivery of such
RSU Shares until a date that is within 30 Business
Days after the earlier to occur of (i) the date that
compensation paid to the Grantee is no longer subject to the
deduction limitation under Section 162(m) of the Code and
(ii) the occurrence of a Change in Control.

 

		
	3.22 	
    Certain Limitations on Transactions Involving
    Common Stock; Fees and Commissions

     
3.22.1 Each Grantee shall be subject to, and
acceptance of an Award shall constitute an agreement to be
subject to the Firm’s policies in effect from time to time
concerning trading in Common Stock, hedging or pledging and
confidential or proprietary information. In addition, with
respect to any shares of Common Stock delivered to any Grantee
in respect of an Award, sales of such Common Stock shall be
effected in accordance such rules and procedures as may be
adopted from time to time with respect to sales of such shares
of Common Stock (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).

     
3.22.2 Each Grantee may be required to pay any
brokerage costs or other fees or expenses associated with any
Award, including without limitation, in connection with the sale
of any shares of Common Stock delivered in respect of any Award
or the exercise of an Option or SAR.

 

		
	3.23 	
    Deliveries

     
Deliveries of shares of Common Stock, cash or
other property under the Plan shall be made to the Grantee
reasonably promptly after the Delivery Date or any other date
such delivery is called for, but in no case more than thirty
(30) Business Days after such date.

 

		
	3.24 	
    Successors and Assigns of
    GS Inc.

     
The terms of this Plan shall be binding upon and
inure to the benefit of GS Inc. and its successors and
assigns.

18

 

     
IN WITNESS WHEREOF, and as evidence of the
adoption by GS Inc. of this amended and restated Plan effective as of
January 16, 2003, subject to approval by GS Inc. shareholders at the
April 2003 annual meeting, it has caused the same to be signed by its
duly authorized officer this 16th day of January, 2003.

	 	 	 	 	 	 
	 	THE GOLDMAN SACHS GROUP, INC.
	 
		By:	 	/s/ Esta E. Stecher
	 	 	 	

				Name:		Esta E. Stecher
				Title:		Executive Vice President and General Counsel

19EX-10.2  RESTRICTED PARTNER COMPENSATION PLAN

 

Exhibit 10.2

The Goldman Sachs

Restricted Partner Compensation Plan

     
Section 1. Purposes.
The purpose of the Goldman Sachs Restricted Partner Compensation
Plan (the “Plan”) is to attract, retain and
motivate selected employees of The Goldman Sachs Group, Inc.
(“GS Inc.”) and its subsidiaries and affiliates
(together with GS Inc., and their and its successors, the
“Firm”) who are executive officers of
GS Inc. or members of the Firm’s Management Committee
(and any successor or successors thereto) in order to promote
the Firm’s long-term growth and profitability. It is also
intended that all Bonuses (as defined in Section 5(a))
payable under the Plan be considered “performance-based
compensation” within the meaning of
Section 162(m)(4)(C) of the Internal Revenue Code of 1986,
as amended (the “Code”), and the regulations
thereunder, and the Plan shall be interpreted accordingly.

     
Section 2. Administration.

     
(a) Subject to
Section 2(d), the Plan shall be administered by a committee
(the “Committee”) appointed by the Board of
Directors of GS Inc. (the “Board”), whose
members shall serve at the pleasure of the Board. The Committee
at all times shall be composed of at least two directors of
GS Inc., each of whom is an “outside director”
within the meaning of Section 162(m) of the Code and
Treasury Regulation Section 1.162-27(e)(3) and a
“non-employee director” within the meaning of
Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended. Unless otherwise determined by the Board, the
Committee shall be the Compensation Committee of the Board.

     
(b) The
Committee shall have complete control over the administration of
the Plan, and shall have the authority in its sole and absolute
discretion to: (i) exercise all of the powers granted to it
under the Plan; (ii) construe, interpret and implement the
Plan and each Contract Period Schedule (as defined in
Section 4(a)); (iii) prescribe, amend and rescind
rules and regulations relating to the Plan, including rules and
regulations governing its own operations; (iv) make all
determinations necessary or advisable in administering the Plan
(including, without limitation, calculating the size of the
Bonus payable to each Participant (as defined in
Section 4(a))); (v) correct any defect, supply any
omission and reconcile any inconsistency in the Plan and any
Contract Period Schedule; and (vi) amend the Plan and any
Contract Period Schedule to reflect changes in or
interpretations of applicable law, rules or regulations.

     
(c) The
determination of the Committee on all matters relating to the
Plan and any amounts payable thereunder shall be final, binding
and conclusive on all parties.

     
(d) Notwithstanding
anything to the contrary contained herein, the Committee may
allocate among its members and may delegate some or all of its
authority or administrative responsibility to such individual or
individuals who are not members of the Committee as it shall
deem necessary or appropriate; provided, however, the
Committee may not delegate any of its authority or
administrative responsibility hereunder (and no such attempted
delegation shall be effective) if such delegation would cause
any Bonus payable under the Plan not to be considered
performance-based compensation within the meaning of
Section 162(m)(4)(C) of the Code and the regulations
thereunder, and any such attempted delegation shall be void
ab initio.

     
(e) No member
of the Board or the Committee or any employee of the Firm (each
such person a “Covered Person”) shall have any
liability to any person (including, without limitation, any
Participant) for any action taken or omitted to be taken or any
determination made in good faith with respect to the Plan or any
Bonus. Each Covered Person shall be indemnified and held
harmless by GS Inc. against and from any loss, cost,
liability or expense (including attorneys’ fees) that may
be imposed upon or incurred by such Covered Person in connection
with or resulting from any action, suit or proceeding to which
such Covered Person may be a party or in

1

 

which such Covered Person may be involved by
reason of any action taken or omitted to be taken under the Plan
or in connection with any Contract Period Schedule and against
and from any and all amounts paid by such Covered Person, with
GS Inc.’s approval, in settlement thereof, or paid by
such Covered Person in satisfaction of any judgment in any such
action, suit or proceeding against such Covered Person, provided
that GS Inc. shall have the right, at its own expense, to
assume and defend any such action, suit or proceeding and, once
GS Inc. gives notice of its intent to assume the defense,
GS Inc. shall have sole control over such defense with
counsel of GS Inc.’s choice. The foregoing right of
indemnification shall not be available to a Covered Person to
the extent that a court of competent jurisdiction in a final
judgment or other final adjudication, in either case, not
subject to further appeal, determines that the acts or omissions
of such Covered Person giving rise to the indemnification claim
resulted from such Covered Person’s bad faith, fraud or
willful criminal act or omission. The foregoing right of
indemnification shall not be exclusive of any other rights of
indemnification to which Covered Persons may be entitled under
GS Inc.’s Amended and Restated Certificate of
Incorporation or Amended and Restated Bylaws, as a matter of
law, or otherwise, or any other power that GS Inc. may have
to indemnify such persons or hold them harmless.

     
Section 3. Contract
Period. The Plan shall operate for
successive periods (each a “Contract Period”).
The first Contract Period shall commence on November 30,
2002 and shall terminate on November 28, 2003. Thereafter,
each Contract Period shall be one full fiscal year and/or
portions of fiscal years to the extent consistent with Treasury
Regulation Section 1.162-27(e)(2), as determined by
the Committee.

     
Section 4. Participation;
Contract Period Schedule.

     
(a) Prior to
the earlier of (i) the last day of GS Inc.’s
first fiscal quarter in a Contract Period or (ii) the 90th
day after the beginning of the Contract Period, or otherwise in
a manner not inconsistent with Treasury
Regulation Section 1.162-27(e)(2) (the
“Establishment Date”), the Committee shall
designate those individuals who shall participate in the Plan
for each Contract Period (the “Participants”).
The names of the Participants shall be set forth on a schedule
(the “Contract Period Schedule”). No individual
who is a Participant shall, at the same time, be a participant
in The Goldman Sachs Partner Compensation Plan.

     
(b) Unless
otherwise provided in the Contract Period Schedule and except as
provided below, the Committee shall have the authority at any
time (i) during the Contract Period to remove Participants
from the Plan for that Contract Period and (ii) prior to
the Establishment Date to add Participants to the Plan for a
particular Contract Period. The Committee shall amend the
Contract Period Schedule to reflect an individual’s
addition to, or removal from, the Plan.

     
Section 5. Bonus
Amounts.

     
(a) Each
Participant shall be paid a bonus amount equal to 1% of the
Firm’s “Pre-Tax Pre-PCP Earnings” (as
defined in Section 5(c)) with respect to each Contract
Period, provided, however, in no event shall such bonus
amount for any Participant in any Contract Period exceed
$35 million. Notwithstanding anything to the contrary in
this Plan, the Committee may, in its sole discretion, reduce the
bonus amount for any Participant for a particular Contract
Period at any time prior to the payment of bonuses to
Participants pursuant to Section 6 (a Participant’s
bonus amount for each Contract Period, as so reduced, the
“Bonus”).

     
(b) If a
Participant’s employment with the Firm terminates for any
reason before the end of a Contract Period, unless otherwise
provided in the Contract Period Schedule, the Committee shall
have the discretion to determine whether (i) such
Participant shall be entitled to any Bonus at all,
(ii) such Participant’s Bonus shall be reduced on a
pro-rata basis to reflect the portion of such Contract
Period the Participant was employed by the Firm or (iii) to
make such other arrangements as the Committee deems appropriate
in connection with the termination of such Participant’s
employment.

2

 

     
(c) For
purposes of this Section 5, “Pre-Tax Pre-PCP
Earnings” shall mean the Firm’s operating income
before taxes as reported in its audited consolidated financial
statements for the relevant fiscal year, adjusted to eliminate,
with respect to such fiscal year: (i) amounts expensed
(A) under each of the Goldman Sachs Partner Compensation
Plan and this Plan (and any successor or predecessor plan) or
(B) as a result of the amortization of equity-based awards
granted to any individual at any time while a participant in the
Goldman Sachs Partner Compensation Plan or this Plan (or any
successor or predecessor plan), if and to the extent such
equity-based awards were determined by reference to a bonus
under either such plan; (ii) amounts expensed as a result
of the amortization of grants of equity-based awards granted
(A) in connection with GS Inc.’s initial public
offering or (B) in connection with any acquisition;
(iii) losses related to the impairment of goodwill and
other intangible assets; (iv) restructuring expenses;
(v) gains or losses on disposal of assets or segments of
the previously separate companies of a business combination
within two years of the date of such combination;
(vi) gains or losses on the extinguishment of debt;
(vii) gains on the restructuring of debt or other
liabilities; (viii) gains or losses that are the direct
result of a major casualty or natural disaster; (ix) losses
resulting from any newly-enacted law, regulation or judicial
order; and (x) other expenses, losses, income or gains that
are separately disclosed and are unusual in nature or infrequent
in occurrence. The above adjustments to Pre-Tax Pre-PCP Earnings
shall be computed in accordance with GAAP. Following the
completion of each Contract Period, the Committee shall certify
in writing the Firm’s Pre-Tax Pre-PCP Earnings for such
Contract Period.

     
Section 6. Payment of Bonus
Amount; Voluntary Deferral. 
Unless otherwise provided in the Contract Period Schedule, each
Participant’s Bonus shall be payable by such
Participant’s Participating Employer (as defined in
Section 7(k)), or in the case of a Participant employed by
more than one Participating Employer, by each such employer as
determined by the Committee. The Bonus shall be payable in the
discretion of the Committee in cash and/or an equity-based award
of equivalent value (provided that in determining the number of
GS Inc. restricted stock units, restricted shares of
GS Inc. common stock or unrestricted shares of GS Inc.
common stock that is equivalent to a dollar amount, that dollar
amount shall be divided by the average of the closing prices of
GS Inc. common stock over the last 10 trading days in the
applicable fiscal year (with fractional shares being rounded to
the nearest whole share). The cash portion of the Bonus shall be
paid at such time as bonuses are generally paid by the
Participating Employer(s) for the relevant fiscal year in
U.S. dollars or, if the Participant is located outside the
United States, in U.S. dollars or local currency (as
determined by the Committee) based upon such conversion rates as
the Committee determines are appropriate (and the payments made
under this Plan may, at the Committee’s discretion, be
subject to tax equalization or similar policies). Subject to
approval by the Committee and to any requirements imposed by the
Committee in connection with such approval, each Participant may
be entitled to defer receipt, under the terms and conditions of
any applicable deferred compensation plan of the Firm, of part
or all of any payments otherwise due under this Plan. Any
equity-based award shall be subject to such terms and conditions
(including vesting requirements) as the Committee and the
administrative committee of the plan under which such
equity-based Award is granted may determine.

     
Section 7. General
Provisions.

     
(a) Amendment, Termination,
etc. Unless otherwise provided in
the Contract Period Schedule, (i) the Board reserves the
right at any time and from time to time to modify, alter, amend,
suspend, discontinue or terminate the Plan and any Contract
Period Schedule in any respect whatsoever, including in any
manner that adversely affects the rights of Participants, and
(ii) the Committee may amend the Contract Period Schedule
in any manner it determines. No Participant shall have any
rights to payment of any amounts under this Plan unless and
until the Committee determines the amount of such
Participant’s Bonus, that such Bonus shall be paid and the
method and timing of its payment. If and to the extent the Board
determines that the Bonuses under the Plan should constitute
performance-based compensation within the meaning

3

 

of Section 162(m)(4)(C) of the Code, no
amendment that would require stockholder approval in order for
Bonuses paid pursuant to the Plan to constitute
performance-based compensation within the meaning of
Section 162(m)(4)(C) of the Code shall be effective without
the approval of the stockholders of GS Inc. as required by
Section 162(m) of the Code and the regulations thereunder.

     
(b) Nonassignability.
No rights of any Participant (or of any beneficiary pursuant to
this Section 7(b)) under the Plan may be sold, exchanged,
transferred, assigned, pledged, hypothecated or otherwise
disposed of (including through the use of any cash-settled
instrument), either voluntarily or involuntarily by operation of
law, other than by will or by the laws of descent and
distribution. Any sale, exchange, transfer, assignment, pledge,
hypothecation or other disposition in violation of the
provisions of this Section 7(b) shall be void. In the event
of a Participant’s death, any amounts payable under the
Plan shall be paid in accordance with the Plan and the Contract
Period Schedule to a Participant’s estate. A
Participant’s estate shall have no rights under the Plan or
any Contract Period Schedule other than the right, subject to
the immediately preceding sentence, to receive such amounts, if
any, as may be payable under this Section 7(b), and all of
the terms of this Plan and the Contract Period Schedule shall be
binding upon any such Participant’s estate.

     
(c) Plan Creates No Employment
Rights. Nothing in the Plan or any
Contract Period Schedule shall confer upon any Participant the
right to continue in the employ of the Firm for the Contract
Period or thereafter or affect any right which the Firm may have
to terminate such employment.

     
(d) Arbitration.
Any dispute, controversy or claim
between the Firm and any Participant arising out of or relating
to or concerning the provisions of the Plan or any Contract
Period Schedule shall be finally settled by arbitration in New
York City before, and in accordance with, the rules then
obtaining of the New York Stock Exchange, Inc.
(“NYSE”) or, if the NYSE declines to arbitrate
the matter in New York City, the American Arbitration
Association (the “AAA”) in accordance with the
commercial arbitration rules of the AAA. Prior to arbitration,
all disputes, controversies or claims maintained by any
Participant must first be submitted to the Committee in
accordance with claim procedures determined by the Committee in
its sole discretion. This Section is subject to the provisions
of Section 7(e).

     
(e) Choice of Forum.

     
(1) The Firm and each Participant, as a
condition to such Participant’s participation in the Plan,
hereby irrevocably submit to the exclusive jurisdiction of any
state or federal court located in the City of New York over any
suit, action or proceeding arising out of or relating to or
concerning the Plan or any Contract Period Schedule that is not
otherwise arbitrated or resolved according to the provisions of
Section 7(d). This includes any suit, action or
proceeding to compel arbitration or to enforce an arbitration
award. The Firm and each Participant, as a condition to such
Participant’s participation in the Plan, acknowledge that
the forum designated by this Section 7(e) has a reasonable
relation to the Plan, the Contract Period Schedule and to the
relationship between such Participant and the Firm.
Notwithstanding the foregoing, nothing herein shall preclude the
Firm from bringing any action or proceeding in any other court
for the purpose of enforcing the provisions of
Sections 7(d) and 7(e).

     
(2) The agreement by the Firm and each
Participant as to forum is independent of the law that may be
applied in the action, and the Firm and each Participant, as a
condition to such Participant’s participation in the Plan
(i) agree to such forum even if the forum may under
applicable law choose to apply non-forum law, (ii) hereby
waive, to the fullest extent permitted by applicable law, any
objection which the Firm or such Participant now or hereafter
may have to personal jurisdiction or to the laying of venue of
any such suit, action or proceeding in any court referred to in
Section 7(e)(1), (iii) undertake not to commence any
action arising out of or relating to or concerning this Plan or
any Contract Period Schedule in any forum other than the

4

 

forum described in this Section 7(e) and
(iv) agree that, to the fullest extent permitted by
applicable law, a final and non-appealable judgment in any such
suit, action or proceeding in any such court shall be conclusive
and binding upon the Firm and each Participant.

     
(3) Each Participant, as a condition to such
Participant’s participation in the Plan, hereby irrevocably
appoints the General Counsel of GS Inc. as such
Participant’s agent for service of process in connection
with any action, suit or proceeding arising out of or relating
to or concerning the Plan or any Contract Period Schedule which
is not arbitrated pursuant to the provisions of
Section 7(d), who shall promptly advise such Participant of
any such service of process.

     
(4) Each Participant, as a condition to such
Participant’s participation in the Plan, agrees to keep
confidential the existence of, and any information concerning, a
dispute, controversy or claim described in Sections 7(d) or
7(e), except that a Participant may disclose information
concerning such dispute, controversy or claim to the arbitrator
or court that is considering such dispute, controversy or claim
or to such Participant’s legal counsel (provided that such
counsel agrees not to disclose any such information other than
as necessary to the prosecution or defense of the dispute,
controversy or claim).

     
(5) Each Participant recognizes and agrees
that prior to being selected by the Committee to participate in
the Plan such Participant has no rights hereunder. Accordingly,
in consideration of a Participant’s selection to
participate in the Plan, each Participant expressly waives any
right to contest the amount of any Bonus payable hereunder, the
terms of the Plan or any Contract Period Schedule, any
determination, action or omission hereunder by the Committee,
GS Inc. or the Board, or any amendment to the Plan or
Contract Period Schedule. By accepting the payment of any Bonus,
each Participant agrees to be bound by the terms of this Plan
and any Contract Period Schedule.

     
(f) Governing Law. All rights and
obligations under the Plan and any Contract Period Schedule
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.

     
(g) Tax
Withholding. In connection with
any payments to a Participant or other event under the Plan that
gives rise to a federal, state, local or other tax withholding
obligation relating to the Plan (including, without limitation,
FICA tax), (i) the Firm may deduct or withhold (or cause to
be deducted or withheld) from any payment or distribution to
such Participant whether or not pursuant to the Plan or
(ii) the Committee shall be entitled to require that such
Participant remit cash (through payroll deduction or otherwise),
in each case in an amount sufficient in the opinion of the Firm
to satisfy such withholding obligation.

     
(h) Right of
Offset. The Firm shall have the
right to offset against the obligation to pay a Bonus to any
Participant, any outstanding amounts (including, without
limitation, travel and entertainment or advance account
balances, loans or amounts repayable to the Firm pursuant to tax
equalization, housing, automobile or other employee programs)
such Participant then owes to the Firm and any amounts the
Committee otherwise deems appropriate pursuant to any tax
equalization policy or agreement.

     
(i) Severability; Entire
Agreement. If any of the
provisions of this Plan or any Contract Period Schedule is
finally held to be invalid, illegal or unenforceable (whether in
whole or in part), such provision shall be deemed modified to
the extent, but only to the extent, of such invalidity,
illegality or unenforceability and the remaining provisions
shall not be affected thereby. Neither this Plan nor any
Contract Period Schedule shall supersede any other agreement,
written or oral, pertaining to the matters covered herein,
except to the extent of any inconsistency between this Plan (or
a Contract Period Schedule) and any prior agreement, in which
case this Plan (and the Contract Period Schedule) shall prevail.

5

 

     
(j) No Third Party
Beneficiaries. Neither the Plan
nor any Contract Period Schedule shall confer on any person
other than the Firm and any Participant any rights or remedies
hereunder.

     
(k) Participating
Employers. Each subsidiary or
affiliate of GS Inc. that employs a Participant shall adopt
this Plan by executing Schedule A (a “Participating
Employer”). Except for purposes of determining the
amount of each Participant’s Bonus, this Plan shall be
treated as a separate plan maintained by each Participating
Employer and the obligation to pay the Bonus to each Participant
shall be the sole liability of the Participating Employer(s) by
which the Participant is employed, and neither GS Inc. nor
any other Participating Employer shall have any liability with
respect to such amounts.

     
(l) Successors and
Assigns. The terms of this Plan
and each Contract Period Schedule shall be binding upon and
inure to the benefit of GS Inc., each Participating
Employer and their successors and assigns and each permitted
successor or assign of each Participant as provided in
Section 7(b).

     
(m) Plan
Headings. The headings in this
Plan are for the purpose of convenience only and are not
intended to define or limit the construction of the provisions
hereof.

     
(n) Construction.
In the construction of this Plan, the singular shall include the
plural, and vice versa, in all cases where such meanings would
be appropriate.

     
(o) Plan Subject to Stockholder
Approval. The Plan is adopted
subject to the approval of the stockholders of GS Inc. at
GS Inc.’s 2003 Annual Meeting in accordance with
Section 162(m)(4)(C) of the Code and Treasury Regulation
Section 1.162-27(e)(4), and no Bonus shall be payable
hereunder absent such stockholder approval.

6

 

     IN
WITNESS WHEREOF, and as evidence of the
adoption of this Plan effective as of November 30, 2002, by GS
Inc., it has caused the same to be signed by its duly authorized
officer this 16th day of January, 2003.

	 	 	 	 	 	 
	 	THE GOLDMAN SACHS GROUP, INC.
	 
		By:	 	/s/ Esta E. Stecher
	 	 	 	

				Name:		Esta E. Stecher
				Title:		Executive Vice President and General Counsel

7

 

Schedule A

     As evidenced by the duly authorized
signature below, the undersigned entity hereby adopts and elects to
participate in The Goldman Sachs Restricted Partner Compensation Plan,
as such Plan may be amended from time to time, and appoints The
Goldman Sachs Group, Inc. as its agent to do all things necessary to
effect such participation.

	 	 	 	 	 	 
	 	[Name of Entity]
	 
		By:	 	 
	 	 	 	

				Name:		 
				Title:		 

Date:               
                  

8

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