Document:

Exhibit 10.2

 

200   STOCK OPTION AWARD

 

AGREEMENT EVIDENCING A GRANT OF A

NON-QUALIFIED STOCK OPTION

 

1.                    GRANT OF OPTION.  Pursuant to the Lehman Brothers Holdings Inc.
(“Holdings”) 1996 Management Ownership Plan (the “Plan”), you are hereby
granted, as of                     ,
200  , a nonqualified stock option to purchase the number of common
shares (par value $0.10 per share) of Holdings (“Shares”) set forth on the
award statement delivered to you herewith (the “Award Statement”) (which number
of Shares may be adjusted pursuant to Paragraph 6 below) with an exercise price
of $         per Share as specified in
the Award Statement (the “Option Exercise Price”).

 

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

 

3.                    EXERCISABILITY.  Subject to the provisions of this Agreement
and the applicable provisions of the Plan, you may exercise this option as
follows:

 

(a)                No
part of this option may be exercised after                     ,
200   (the “Expiration Date”).

 

(b)                You
may first exercise this option on the later of (i)                           
or (ii) any date on which the Fair Market Value of a Share exceeds $        ,
but this option will first become exercisable in any event no later than                     ,
regardless of the Fair Market Value of a Share.

 

This option may not be exercised for a
fraction of a Share.

 

4.                    CONDITIONS TO EXERCISE.  This option may not be exercised unless all
of the following conditions are met:

 

(a)     Legal
counsel for Holdings must be satisfied at the time of exercise that the
issuance of Shares upon exercise will be in compliance with the Securities Act
of 1933, as amended, and applicable U.S. federal, state, local and foreign
laws;

 

(b)     You
(or your permitted transferee under paragraph 5) must pay at the time of
exercise the full option price for the Shares being acquired hereunder, by (i)
paying in United States dollars by cash (which may be in the form of a
certified check), (ii) subject to Holdings’ prior consent, tendering Shares
owned by you which have a Fair Market Value on the day of exercise equal to the
full purchase price for the Shares being acquired, (iii) subject to Holdings’
prior consent, by delivery of a properly executed

 

 

exercise
notice together with irrevocable instructions to a securities broker (or, in
the case of pledges, lender) approved by Holdings to (a) sell shares of Common
Stock subject to the option and to deliver promptly to Holdings a portion of
the proceeds of such sale transaction on behalf of the exercising Participant
to pay the option price, or (b) pledge shares of Common Stock subject to the
option to a margin account maintained with such broker or lender, as security
for a loan, and such broker or lender, pursuant to irrevocable instructions,
delivers to Holdings loan proceeds at the time of exercise to pay the option
price, or (iv) by any combination of (i), (ii) or (iii) above; and

 

(c)     You
must, unless otherwise provided below, at all times during the period beginning
with                     ,
200   and ending on the date of such exercise, (x) have been employed
by Holdings or a Subsidiary thereof or (y) not have engaged in Detrimental
Activity.

 

(i)                       Termination
before                 
    , 200   .  In the event of your Termination for any
reason before                     ,
200  , this option shall be forfeited and canceled.

 

(ii)                   Voluntary
Termination with Competitive Activity. 
In the event of your voluntary Termination with Competitive Activity on
or after                     ,
200  , this option shall be forfeited and canceled.

 

(iii)               Voluntary
Termination without Competitive Activity.  In the event of your voluntary Termination
without Competitive Activity on or after                     ,
200  , you will be permitted to exercise this option, to the extent
not previously exercised, subject to the approval of the Committee, until the
Expiration Date, provided you enter into an agreement not engage in Competitive
Activity or Detrimental Activity during that period of time.  If you do not enter into such an agreement,
or if you engage in Competitive Activity, this option, to the extent not
previously exercised, shall expire immediately.

 

(iv)                  Involuntary
Termination with Cause.  In the
event of your involuntary Termination with Cause, this option, to the extent
not previously exercised, shall be forfeited and canceled immediately.

 

(v)                      Involuntary
Termination without Cause.  In
the event of your involuntary Termination without Cause on or after                     ,
200  , you will be permitted to exercise this option, to the extent
not previously exercised, until the Expiration Date, subject to the approval of
the Committee, provided you do not engage in Detrimental Activity during that
period of time.  If you engage in
Detrimental Activity, the portion of this option, to the extent not previously
exercised, shall expire immediately.

 

(vi)                  Termination
Due to Death; Disability.  In the
event of the occurrence on or after                     ,
200   of your death or Disability, you (or in the event of your
death, your estate or any person who acquires the right to exercise this option
by bequest or inheritance or otherwise by reason of your

 

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death) will be permitted to exercise this option, to the extent not
previously exercised, until the Expiration Date.

 

Any remaining portion of this
option, which is not exercisable pursuant to the provisions of this
subparagraph 4(c), shall be canceled by Holdings.

 

5.                    NON-ASSIGNMENT.  This option may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of by you, except (a)
by will or the laws of descent and distribution or (b) to members of your
immediate family or to a trust or such other instrument as may be established
for the direct benefit of a member of your immediate family and is exercisable
during your lifetime only by you or such permitted transferee.  If you or anyone claiming under or through
you attempts to violate this Paragraph 5, such attempted violation shall be
null and void and without effect, and Holdings’ obligations hereunder shall
terminate.

 

6.                    EQUITABLE ADJUSTMENTS.  In the event of a Change in Capitalization
occurring after the date of grant of this option and prior to the exercise of
the option in full, the number and kind of shares of Common Stock for which
this option may then be exercised and the option price shall be adjusted so as
to reflect such change.

 

7.                    CHANGE IN CONTROL.  Upon the occurrence of a Change in Control
without the prior approval of the majority of the independent members of the
Incumbent Board, all options awarded hereunder will be exercisable in full;
provided however, that if the Change in Control occurs with the prior approval
of a majority of the independent members of the Incumbent Board, one-half of
the options awarded hereunder that are then not exercisable shall become
immediately exercisable and remain exercisable through                     ,
200  , and the remaining one-half of such options, or the difference
in value between the exercise price and the highest price paid by the acquiring
entity in such Change in Control (in such form of consideration as is received
by shareholders generally) for the remaining one-half of such options, shall
become exercisable or be paid, as appropriate, upon the earliest to occur of
(a) two years following such Change in Control, (b) the date such options would
become exercisable by their terms or (c) your involuntary termination without
Cause, provided however, that if such Change in Control occurs within one year
after this grant date, and such Change in Control will be effected by a merger
involving the issuance of equity shares to Holdings’ stockholders, then the
foregoing provisions of this paragraph will not apply and the Committee shall
have total discretion as to the impact of such an event on options granted
hereunder which are not then exercisable.

 

8.                    AMENDMENT.  The terms of this Agreement may be amended
from time to time by the Committee in its sole discretion in any manner that it
deems appropriate (including, but not limited to, the acceleration provisions),
provided, however, that no such amendment shall, without your consent, diminish
your rights under this Agreement.

 

9.                    BINDING ACTIONS.  Any action taken or decision made by the
Committee or its delegates arising out of or in connection with the
construction, administration, interpretation or effect of the Plan or this
Agreement shall lie within its sole and absolute discretion, as the case may
be, and shall be final, conclusive and binding on you and all persons

 

3

 

claiming under or through
you.  By accepting this grant or other
benefit under the Plan, you and each person claiming under or through you shall
be conclusively deemed to have indicated acceptance and ratification of, and
consent to, any action taken under the Plan by the Committee or its designees.

 

10.             NO RIGHT TO CONTINUED EMPLOYMENT.  Neither the grant nor the exercise of the
option shall confer on you any right to be retained in the employ of Holdings
or its subsidiaries, or to receive subsequent options or other awards under the
Plan.  The right of Holdings or any
subsidiary to terminate your employment with it at any time or as otherwise
provided by any agreement between Holdings or any subsidiary and you is
specifically reserved.

 

11.             NO RIGHTS OF A STOCKHOLDER.  Neither you nor your permitted transferee
under Paragraph 5 shall have any of the rights of a stockholder with respect to
Shares subject to the option except to the extent that such Shares of Common
Stock shall have been issued to you or such transferee upon the exercise of the
option.

 

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

 

13.             WITHHOLDING.  Holdings shall have the right to deduct
applicable taxes from all amounts payable to you.  It shall be a condition to the obligation of
Holdings to issue Shares upon exercise of an option hereunder (a) that you (or
in the event of your death, your estate or any person who acquires the right to
exercise this option by bequest or inheritance or otherwise by reason of your
death) pay to Holdings or its designee upon its demand in accordance with the
Plan, either in the form of cash or Shares (including Shares otherwise issuable
pursuant to exercise this option) such amount as may be required by law for the
purpose of satisfying its obligation or the obligation of any other person to
withhold any taxes required by law which are incurred by reason of the exercise
of the option and (b) that you or your permitted transferee under Paragraph 5
provide Holdings with any forms, documents or other information reasonably
required in connection with the grant. 
If the amount requested for the purpose of satisfying the withholding
obligation is not paid, Holdings may refuse to furnish Shares upon exercise of
the option.  Holdings shall further have
the right to deduct from all amounts remaining payable to you after
satisfaction of the minimum statutory withholding obligations described above,
the amount of any deficit, debt, tax obligation or other liability or obligation
of any kind which you may at that time have with respect to Holdings or any
subsidiary.

 

4

 

ANNEX A

 

DEFINITIONS

 

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

 

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

 

“Committee” means
the Compensation and Benefits Committee of the Incumbent Board (see definition
of Change in Control in the Plan).

 

“Competitive Activity”
means involvement (whether as an employee, proprietor, consultant or otherwise)
with any person or entity (including any company and its affiliates) engaged in
any business activity which is materially competitive with any business carried
on by Holdings or any of its Subsidiaries or affiliates on the date of
termination of a person’s employment with Holdings or any of its Subsidiaries,
as determined in the sole discretion of the Committee.

 

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

 

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

 

“Termination” means
the end of employment with Holdings or any Subsidiary.  The date of Termination and the reason for
Termination are as determined in the sole discretion of the Committee.Exhibit 10.3

 

LEHMAN BROTHERS HOLDINGS INC.

 

AGREEMENT EVIDENCING A GRANT OF

RESTRICTED STOCK UNITS

 

TO

 

	
  Number of Restricted Stock Units

  	
   

  	
  Date of Grant

  
	
   

  	
   

  	
   

  
	
                   Restricted
  Stock Units

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

1)              Grant of Units.  Pursuant
to the Lehman Brothers Holdings Inc. Employee Incentive Plan (the “Plan”),
Lehman Brothers Holdings Inc. (the “Company”) hereby grants you, as of the Date
of Grant specified above, the number of Restricted Stock Units (“Units”)
specified above (which number of Units may be adjusted pursuant to Paragraph 9
below) subject to the terms and conditions set forth herein and in the
Plan.  A Unit represents the right to
receive one share of common stock (par value $0.10 per share) of the Company (“Common
Stock”).

 

2)              Additional Documents; Definitions. 
Enclosed you will find a copy of the Plan which is
incorporated in this instrument by reference and made a part hereof, and a copy
of the Plan prospectus.  The Plan and the
prospectus should be carefully examined. 
All capitalized terms not defined herein shall have the meaning ascribed
to such terms under the Plan.

 

3)              Vesting.  The Units
awarded to you hereunder shall vest immediately upon the Date of Grant.

 

4)              Termination of Service.  
Units are payable in shares of Common Stock upon termination of your
service on the Board of Directors of the Company.  Delivery of Common Stock hereunder shall be
made on, or as soon as practicable after such termination of service.

 

5)              Dividend Equivalents. 
As of each date a dividend or other distribution is paid or made on
Common Stock to holders of record on and after the Date of Grant specified
above, you shall be credited with a number of additional Units equal to the
product of (i) the amount of such dividend or distribution paid on one share of
Common Stock, multiplied by (ii) the number of Units then held by you, divided
by the (iii) closing price of one share of Common Stock on the New York Stock
Exchange on such date.  Such additional
Units shall vest immediately.

 

6)              Limitation on Obligations.  The Company’s obligation with respect to the
Units granted hereunder is limited solely to the delivery to you of shares of
Common Stock on the date when such shares are due to be delivered hereunder,
and in no way shall the Company

 

 

become obligated to pay cash in respect of such
obligation (except for cash paid pursuant to Paragraph 8 below).

 

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

 

8)              Change in Control. 
Except as set forth below, upon the occurrence of a Hostile Change in
Control, the sales restrictions shall lapse and shares of Common Stock shall be
issued.  Except as set forth below, upon
the occurrence of a Friendly Change in Control, you shall receive in the same
form of consideration as that received by shareholders generally, the
undiscounted market value (at the time of grant) for your Units, and the excess
of the price paid by an acquirer over such undiscounted market value shall be
deferred for the shorter of two years from the date of the Friendly Change in
Control or the term of any remaining restrictions (the “Deferred Period”), but
your Units shall remain otherwise subject to all issuance restrictions during
the Deferred Period.  Neither of the
foregoing shall be effective to the extent you have tender or voting rights
over shares of Common Stock held in trust with respect to any Units, in which
case you would only be issued Common Stock or receive such undiscounted market
value in the same form of consideration as that received by shareholders
generally (and after the Deferred Period, the excess price) in respect of such
Units upon successful completion of a Change in Control.  “Hostile Change in Control” means the
occurrence of a Change in Control, without the prior approval of a majority of
the independent members of the Incumbent Board. 
“Friendly Change in Control” means any Change in Control which is not a
Hostile Change in Control.

 

9)              Equitable Adjustment.  In
the event of any change in the outstanding shares of Common Stock by reason of
any Common Stock dividend or split, recapitalization, merger, consolidation,
spin-off, combination or exchange of shares or other corporate exchange, or any
distribution to stockholders of Common Stock other than regular cash dividends,
occurring after the Date of Grant specified above, the number and kind of
shares of Common Stock which may be issued with respect to Units shall be
adjusted so as to reflect such change; provided that with respect to Units
granted to you, any adjustments shall be made only as necessary to maintain your
proportionate interest in shares of Common Stock and preserve, without
exceeding, the value of such Units.

 

10)        Treatment in Bankruptcy. 
All of your claims arising from, in connection with or in any way
relating to any failure of the Company to deliver to you shares of Common Stock
on the date when such shares are due to be delivered under this Agreement in
satisfaction of each Unit granted to you shall be deemed, in the event of a
bankruptcy of the Company, to be claims for damages arising from the purchase
or sale of Common Stock, within the meaning of section 510(b) of the U.S.
Bankruptcy Code  and shall have in such
bankruptcy the same priority as, and no greater priority than, common stock
interests in the Company.

 

 

11)        Amendment.  The terms
of this Agreement may be amended from time to time by the Board in its sole
discretion in any manner that it deems appropriate (including, but not limited
to, the acceleration provisions).

 

12)        No Right to Continued Service.  The grant of Units shall not confer on you
any right to be retained in the service of the Company, or to receive
subsequent Units or other Awards under the Plan.  The right of the Company to terminate your
service with it at any time or as otherwise provided by any agreement between the
Company and you is specifically reserved.

 

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

 

14)        Withholding.  The
Company shall have the right to deduct from all amounts payable to you in cash,
any taxes required by law to be withheld therefrom.  It shall be a condition to the obligation of
the Company to issue shares of Common Stock hereunder (a) that you (or, in the
event of your death, your beneficiary or any person acting on behalf of your
estate) pay to the Company or its designee, upon its demand, in accordance with
the Plan, such amount as may be required for the purpose of satisfying its
obligation or the obligation of any other person to withhold withholding taxes
incurred by reason of the  issuance of
such shares of Common Stock and (b) that you (or, in the event of your death,
your beneficiary or any person acting on behalf of your estate) provide the
Company with any forms, documents or other information reasonably required by
the Company in connection with the grant. 
If the amount requested for the purpose of satisfying the withholding
obligation is not paid, the Company may refuse to issue shares of Common Stock.

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