Document:

Exhibit
10.19

 

LEHMAN BROTHERS HOLDINGS INC.

EMPLOYEE INCENTIVE PLAN

As amended through November 8, 2007

 

SECTION 1
— PURPOSE

 

The purpose of the Lehman
Brothers Holdings Inc. Employee Incentive Plan (the “Plan”) is to strengthen
Lehman Brothers Holdings Inc. (the “Company”) by providing selected employees
of the Company with the opportunity to acquire a proprietary and vested
interest in the growth and performance of the Company, thus generating an
increased incentive to contribute to the Company’s future success and
prosperity, enhancing the value of the Company for the benefit of stockholders,
and enhancing the Company’s ability to attract and retain individuals of
exceptional talent.

 

The purposes of the Plan are to be achieved through
the grant of various types of stock-based awards.

 

SECTION 2
— DEFINITIONS

 

For
purposes of the Plan, the capitalized terms shall have the meanings ascribed to
them in Exhibit A hereof.

 

SECTION 3
— SHARES SUBJECT TO THE PLAN

 

(a)      Shares of Common Stock which may be issued
under the Plan may be either authorized and unissued shares of Common Stock or
authorized and issued shares of Common Stock held in the Company’s treasury, or
any combination thereof. Subject to adjustment as provided in Section 14,
the number of shares of Common Stock with respect to which Awards (whether
distributable in shares of Common Stock or in cash) may be granted under the
Plan shall be 246 million
shares. The maximum number of shares of Common Stock available for stock
options, stock appreciation rights or Other Stock-based Awards that may be
granted to a Participant during a calendar year shall not exceed two million.

 

(b)      Notwithstanding the last sentence of Section 3(a),
to the extent that the number of shares of Common Stock with respect to which
Awards may be granted under the Plan to an individual in any calendar year
exceeds the number of shares of Common Stock with respect to which Awards were
granted under the Plan during that calendar year, such excess shall be
available for grant under the Plan in succeeding calendar years.

 

(c)      In the event that any other Award subject
to repurchase or forfeiture rights is reacquired by the Company or if any Award
is canceled, terminates or expires unexercised (except with respect to a stock
option which terminates on the exercise of a stock appreciation right) for any
reason under the Plan, any Common Stock allocated in connection with such Award
shall thereafter again be available for grant pursuant to the Plan.

 

SECTION 4
— ELIGIBILITY

 

Selected
employees, officers, directors and consultants to the Company and its
Affiliates are eligible to be Participants in the Plan.

 

SECTION 5
— ADMINISTRATION

 

The
Plan shall be administered by the Committee, which shall have the power to
select those Participants who shall receive Awards and to determine the terms
of such Awards. As to the selection of, and the terms of Awards granted the
Committee may delegate any or all of its responsibilities to officers or
employees of the Company.

 

The
Committee’s authority hereunder shall include, without limitation, the
establishment of vesting schedules or exercisability in installments with
respect to Awards. The Committee may, in its sole discretion, accelerate or
waive vesting or exercise periods or the lapse of restrictions on all or any
portion of any Award, or extend the exercisability (including to extend or
provide for post-termination exercisability) of stock options or stock
appreciation rights; provided that such exercisability shall not extend past
ten years from the date of grant of any incentive stock options.

 

 

 

Subject
to the provisions of the Plan, the Committee shall be authorized to interpret
the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, to determine the terms and provisions of any agreements
entered into hereunder, and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in any
Award in the manner and to the extent it shall deem desirable to carry the Plan
or any such Award into effect. The determinations of the Committee in the
administration of the Plan, as described herein, shall be final and conclusive.

 

The
validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the
laws of the State of Delaware and applicable Federal law.

 

SECTION 6
— STOCK OPTIONS

 

(a)     Any stock options granted under the Plan
shall be in such form as the Committee may from time to time approve and shall
be subject to the terms and conditions provided herein and such additional
terms and conditions not inconsistent with the terms of the Plan as the
Committee shall deem desirable.

 

(b)     Stock options may be granted to any
Participant. Each grant of stock options shall specify whether the underlying
options are intended to be incentive stock options or non-incentive stock
options. In the case of incentive stock options, the terms and conditions of
such grants shall be subject to and comply with such requirements as may be
prescribed by Section 422(b) of the Code, as from time to time
amended, and any implementing regulations, including, but not limited to, the
requirement that such stock options are exercisable during the Participant’s
lifetime only by such Participant. The Committee shall establish the option
price at the time each stock option is granted, which price shall not be less
than 100 percent of the Fair Market Value of the Common Stock on the date of
grant.

 

(c)     No stock options may be exercisable later
than ten years after their date of grant. The option price of each share of
Common Stock as to which a stock option is exercised shall be paid in full at
the time of such exercise or as otherwise permitted by the Committee. Such
payment may be made at the sole discretion of the Committee, pursuant to and in
accordance with criteria and guidelines established by the Committee (which
criteria and guidelines may be different for executive officers and for other
Participants), as the same may be modified from time to time, (i) in cash
(in any form of currency acceptable to the Committee), (ii) by tender of
shares of Common Stock already owned by the Participant, valued at Fair Market
Value as of the date of exercise, (iii) if authorized by the Committee, by
withholding pursuant to the election of the Participant, which election is
subject to the disapproval of the Committee, from those shares that would
otherwise be obtained upon exercise of the option a number of shares having a
Fair Market Value equal to the option price, (iv) if authorized by the
Committee, and in combination with services rendered by the exercising
Participant, 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 the Company to, (a) sell shares of Common Stock
subject to the option and to deliver promptly to the Company 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 the Company the loan proceeds, at the time of exercise to pay the
option price, (v) by any combination of (i), (ii), (iii) or (iv) above
or (vi) by other means that the Committee deems appropriate.

 

(d)     A stock option holder may, in the
discretion of the Committee, have the right to surrender a stock option or any
portion thereof to the Company within 30 days following a Change in Control and
to receive from the Company in exchange therefor a cash payment in an amount
equal to (a) the number of unexercised shares of Common Stock under the
option which are being surrendered multiplied by (b) the excess of (i) the
greater of (A) the highest price per share of Common Stock paid in
connection with the Change in Control or (B) the highest Fair Market Value
per share of Common Stock in the 90-day period preceding such Change in
Control, over (ii) the purchase price of the option as set forth in the
underlying option agreement (the foregoing, a “Limited SAR”).

 

 

 

2

 

 

SECTION 7
— STOCK APPRECIATION RIGHTS

 

(a)     Stock appreciation rights may be granted
independent of any stock option or in conjunction with all or any part of any
stock option granted under the Plan, either at the same time as the stock
option is granted or at any later time during the term of the option. Stock
appreciation rights shall be subject to such terms and conditions as determined
by the Committee, not inconsistent with the provisions of the Plan.

 

(b)     Upon exercise, a stock appreciation right
shall entitle the Participant to receive from the Company an amount equal to
the excess of the Fair Market Value of a share of Common Stock on the date of
exercise of the stock appreciation right over the per share grant or option
price, as applicable (or such lesser amount as the Committee may determine at
the time of grant), multiplied by the number of shares of Common Stock with
respect to which the stock appreciation right is exercised. Upon the exercise
of a stock appreciation right granted in connection with a stock option, the
stock option shall be canceled to the extent of the number of shares as to
which the stock appreciation right is exercised, and upon the exercise of a
stock option granted in connection with a stock appreciation right or the
surrender of such stock option, the stock appreciation right shall be canceled
to the extent of the number of shares as to which the stock option is exercised
or surrendered. The Committee shall determine whether the stock appreciation
right shall be settled in cash, Common Stock or a combination of cash and
Common Stock.

 

(c)     A holder of a stock appreciation right may,
in the discretion of the Committee, have the right to surrender the stock
appreciation right or any portion thereof to the Company within 30 days
following a Change in Control and to receive from the Company in exchange
therefor a cash payment in an amount equal to (a) the number of shares of
Common Stock under the stock appreciation right which are being exercised,
multiplied by (b) the excess of (i) the greater of (A) the
highest price per share of Common Stock paid in connection with the Change in
Control or (B) the highest Fair Market Value per share of Common Stock in
the 90 day period preceding such Change in Control, over (ii) the per
share grant price of the stock appreciation right as set forth in the
underlying agreement.

 

SECTION 8
— OTHER STOCK-BASED AWARDS

 

(a)     Other Awards of Common Stock and Awards
that are valued in whole or in part by reference to, or otherwise based on, the
Fair Market Value of Common Stock (all such Awards being referred to herein as “Other
Stock-based Awards”), may be granted under the Plan in the discretion of the
Committee. Other Stock-based Awards shall be in such form as the Committee
shall determine, including without limitation, (i) the right to purchase
shares of Common Stock, (ii) shares of Common Stock subject to
restrictions on transfer until the completion of a specified period of service,
the occurrence of an event or the attainment of performance objectives, each as
specified by the Committee, and (iii) shares of Common Stock issuable upon
the completion of a specified period of service, the occurrence of an event or
the attainment of performance objectives, each as specified by the Committee.
Other Stock-based Awards may be granted alone or in addition to any other
Awards made under the Plan. All references in the preceding sentence to “specified
period of service,” in the case of Other Stock-based Awards which (i) are
not in lieu of cash compensation to employees generally, (ii) are not paid
to recruit a new employee in an amount of less than 5% of the total awards
available for grant under the Plan or (iii) are not subject to the
attainment of performance objectives, shall provide that vesting, restrictions
on transfer or some other comparable restriction which incents continued
performance of the recipient, will be for a period of not less than three years
(although vesting or lapsing may occur in tranches over the three years),
unless there is a Change in Control or the recipient retires, becomes disabled
or dies. Subject to the provisions of the Plan, the Committee shall have sole
and absolute discretion to determine to whom and when such Other Stock-based Awards
will be made, the number of shares of Common Stock to be awarded under (or
otherwise related to) such Other Stock-based Awards and all other terms and
conditions of such Awards. The Committee shall determine whether Other
Stock-based Awards shall be settled in cash, Common Stock or a combination of
cash and Common Stock.

 

(b)     With respect to any restricted stock units
granted under the Plan, the obligations of the Company or any Subsidiary are
limited solely to the delivery of shares of Common Stock on the date when such
shares of Common Stock are due to be delivered under each Agreement, and in no
event shall the Company or any Subsidiary become obligated to pay cash in
respect of such obligation (except that the Company or any Subsidiary may pay
to Participants amounts in cash in respect of a restricted stock unit equal to
cash dividends paid to a holder of shares of Common Stock, for fractional
shares or for any amounts payable in cash upon the occurrence of a Change in 

 

3

 

Control). 

 

SECTION 9
— DIVIDENDS, EQUIVALENTS AND VOTING RIGHTS

 

Awards
other than stock options and stock appreciation rights may, at the discretion
of the Committee, provide the Participant with dividends or dividend
equivalents and voting rights prior to either vesting or earnout.

 

SECTION 10
— AWARD AGREEMENTS

 

Each
Award under the Plan shall be evidenced by an agreement setting forth the terms
and conditions, not inconsistent with the provisions of the Plan, as determined
by the Committee, which shall apply to such Award.

 

SECTION 11
— WITHHOLDING

 

The
Company shall have the right to deduct from all amounts paid to any Participant
in cash (whether under this Plan or otherwise) any taxes required by law to be
withheld therefrom. In the case of payments of Awards in the form of Common
Stock, at the Committee’s discretion, the Participant may be required to pay to
the Company the amount of any taxes required to be withheld with respect to
such Common Stock, or, in lieu thereof, the Company shall have the right to
retain the number of shares of Common Stock the Fair Market Value of which
equals the amount required to be withheld. Without limiting the foregoing, the
Committee may, in its discretion and subject to such conditions as it shall
impose, permit share withholding to be done at the Participant’s election.

 

SECTION 12
— NON-TRANSFERABILITY

 

No
Award shall be assignable or transferable, and no right or interest of any
Participant in any Award shall be subject to any lien, obligation or liability
of the Participant, except by will, the laws of descent and distribution, or as
otherwise set forth in the Award agreement.

 

SECTION 13
— NO RIGHT TO EMPLOYMENT OR CONTINUED PARTICIPATION IN PLAN/NO RIGHTS AS
STOCKHOLDERS

 

(a)     No person shall have any claim or right to
the grant of an Award, and the grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
to be eligible for any subsequent Awards. Further, the Company expressly
reserves the right at any time to dismiss a Participant free from any liability
or any claim under the Plan, except as provided herein or in any agreement
entered into hereunder.

 

(b)     The grant of an Award shall not be
construed as giving a Participant the rights of a stockholder of Common Stock
unless and until shares of Common Stock have been issued to Participants
pursuant to Awards hereunder.

 

SECTION 14
— ADJUSTMENT OF AND CHANGES IN COMMON STOCK

 

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,
the Committee shall make a substitution or adjustment to the number or kind of
shares of Common Stock or other securities issued or reserved for issuance
pursuant to the Plan, and to outstanding Awards, as well as the option price or
other affected terms of such Awards as in its judgment shall be necessary to
preserve the Participant’s rights substantially proportionate to the rights
existing prior to such event.

 

Unless
otherwise provided in an award agreement, after a merger of one or more corporations
into the Company or after a consolidation of the Company and one or more
corporations (a “Merger Event”) in which the Company shall be the surviving or
resulting corporation, an Award holder shall, where applicable, at the same
cost, be entitled upon the exercise of an Award, to receive (subject to any
action required by stockholders) such securities of the surviving or resulting
corporation as shall be equivalent to the shares underlying such Award as
nearly as practicable to the nearest whole number and class of shares of stock
or other securities.

 

 

 

4

 

 

Unless
otherwise provided in an award agreement, if the Company enters into any
agreement with respect to any transaction which would, if consummated, result
in a Merger Event in which the Company will not be the surviving corporation,
the Committee in its sole discretion and without liability to any person shall
determine what actions shall be taken with respect to outstanding Awards, if
any, including, without limitation, the payment of a cash amount in exchange
for the cancellation of an Award or the requiring of the issuance of substitute
Awards that will substantially preserve the value, rights and benefits of any
affected Awards previously granted hereunder as of the date of the consummation
of the Merger Event.

 

SECTION 15
— AMENDMENT

 

The
Committee or the Board may amend, suspend or terminate the Plan or any portion
hereof at any time.

 

SECTION 16
— UNFUNDED STATUS OF PLAN

 

The
Plan is intended to constitute an “unfunded” plan for long-term incentive
compensation. With respect to any payments not yet made to a Participant,
including any Participant optionee, by the Company, nothing herein contained
shall give any Participant any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize
the creation of trusts or other arrangements to meet the obligations created
under the Plan to deliver Common Stock or payments in lieu thereof or with
respect to options, stock appreciation rights and other Awards under the Plan;
provided, however, that the existence of such trusts or other arrangements is
consistent with the unfunded status of the Plan.

 

SECTION 17
— EFFECTIVE DATE

 

This
Plan shall be effective on April 5, 1995. No Awards may be granted under
the Plan on or after April 30, 2006.

 

SECTION 18
— SECTION 409A

 

Notwithstanding
other provisions of the Plan or any Award agreements thereunder, no Award shall
be granted, deferred, accelerated, extended, paid out or modified under this
Plan in a manner that would result in the imposition of an additional tax under
Section 409A of the Code upon a Participant.  In the event that it is reasonably determined
by the Committee that, as a result of Section 409A of the Code, payments
or deliveries of shares in respect of any Award under the Plan may not be made
at the time contemplated by the terms of the Plan or the relevant Award
agreement, as the case may be, without causing the Participant holding such
Award to be subject to taxation under Section 409A of the Code, the
Company will make such payment or delivery of shares on the first day that
would not result in the Participant incurring any tax liability under Section 409A
of the Code.  In the case of a
Participant who is a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of
the Code), payments and/or deliveries of shares in respect of any Award subject
to Section 409A of the Code that are linked to the date of the Participant’s
separation from service shall not be made prior to the date which is six (6) months
after the date of such Participant’s separation from service from the Company
and its affiliates, determined in accordance with Section 409A of the Code
and the regulations promulgated thereunder. 
The Company shall use commercially reasonable
efforts to implement the provisions of this Section 18 in good faith; provided
that neither the Company, the Committee nor any of the Company’s employees,
directors or representatives shall have any liability to Participants with
respect to this Section 18.

 

 

 

5

 

 

EXHIBIT A

 

(a)   “Affiliate”
shall mean any entity designated by the Committee in which the Company pr an
Affiliate has an interest.

 

(b)   “Award”
shall mean any type of stock-based award granted pursuant to the Plan.

 

(c)   “Board”
shall mean the Board of Directors of the Company; provided, however, that any
action taken by a duly authorized committee of the Board within the scope of authority
delegated to such committee by the Board shall be considered an action of the
Board for purposes of this Plan.

 

(d)   “Change in
Control” shall mean the occurrence during the term of the Plan of:

 

a)   The
commencement (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934 (the “Exchange Act”)) of a tender offer for more than 20%
of the Company’s outstanding shares of capital stock having ordinary voting
power in the election of directors (the “Voting Securities”);

 

b)  An acquisition
(other than directly from the Company) of any voting securities of the Company
by any “Person” (as the term person is used for purposes of Section 13(d) or
14(d) of the Exchange Act) immediately after which such Person has “Beneficial
Ownership” (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the combined voting power of the Company’s then
outstanding Voting Securities; provided, however, in determining whether a
Change in Control has occurred, Voting Securities which are acquired in a “Non-Control
Acquisition” (as hereinafter defined) shall not constitute an acquisition which
would cause a Change in Control. A “Non-Control Acquisition” shall mean an
acquisition by (i) an employee benefit plan (or a trust forming a part
thereof or a trustee thereof acting solely in its capacity as trustee)
maintained by (A) the Company or (B) any corporation or other Person
of which a majority of its voting power or its voting equity securities or
equity interest is owned, directly or indirectly, by the Company (for purposes
of this definition, a “Subsidiary”), (ii) the Company or its Subsidiaries,
or (iii) any Person who files in connection with such acquisition a
Schedule 13D which expressly disclaims any intention to seek control of the
Company and does not expressly reserve the right to seek such control;
provided, however, that any amendment to such statement of intent which either
indicates an intention or reserves the right to seek control shall be deemed an
“acquisition” of the securities of the Company reported in such filing as
beneficially owned by such Person for purposes of this paragraph (b);

 

c)   The
individuals who, as of the effective date of the 1994 initial public trading in
Company shares, are members of the Board (the “Incumbent Board”), ceasing for
any reason to constitute at least a majority of the members of the Board;
provided, however, that if the election, or nomination for election by the
Company’s common stockholders, of any new director was approved by a vote of at
least two-thirds of the Incumbent Board, such new director shall, for purposes
of this Plan, be considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened “Election Contest” (as described in Rule 14a-11
promulgated under the Exchange Act or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a “Proxy
Contest”) including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest;

 

d)  Approval by
stockholders of the Company of:

 

(i)    A merger,
consolidation or reorganization involving the Company, unless such merger,
consolidation or reorganization is a “Non-Control Transaction”; i.e., meets
each of the requirements described in (A), (B) and (C) below:

 

(A)  the
stockholders of the Company, immediately before such merger, consolidation or
reorganization, own, directly or indirectly, immediately following such merger,
consolidation or reorganization, at least the Applicable Minimum Percentage (as defined below)  of the combined voting power of
the outstanding voting securities of the corporation resulting from such merger
or consolidation or reorganization (the “Surviving 

 

A-1

 

 

Corporation”) in
substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization;

 

(B)   the
individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement providing for such merger, consolidation or
reorganization constitute at least the
Applicable Minimum Proportion (as defined below) of the members of the
board of directors of the Surviving Corporation immediately following the
consummation of such merger, consolidation or reorganization; and

 

(C)   no Person
other than the Company, any Subsidiary, any employee benefit plan (or any trust
forming a part thereof or a trustee thereof acting solely in its capacity as
trustee) maintained by the Company, the Surviving Corporation, or any
Subsidiary, or any Person who, immediately prior to such merger, consolidation
or reorganization had Beneficial Ownership of 20% or more of the then
outstanding Voting Securities has Beneficial Ownership of 20% or more of the
combined voting power of the Surviving Corporation’s then outstanding voting
securities immediately following the consummation of such merger, consolidation
or reorganization;

 

(ii)   A complete
liquidation or dissolution of the Company; or

 

(iii)  An
agreement for the sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a Subsidiary); or

 

e)     An event
that would constitute a “Change in Control” within the meaning of Section 2(g) in
the Lehman Brothers Holdings Inc. 2005 Stock Incentive Plan.

 

With
respect to paragraph (d)(i) above, “Applicable Minimum Percentage” means (1) eighty
percent (80%) with respect to Awards made prior to November 14, 2000, and (2) fifty
percent (50%) with respect to Awards made on or after November 14, 2000;
and “Applicable Minimum Proportion” means (1) two-thirds with respect to
Awards made prior to November 14, 2000, and (2) a majority with
respect to Awards made on or after November 14, 2000.

 

Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject Person”) acquired Beneficial Ownership of more than
the permitted amount of the outstanding Voting Securities as a result of the
acquisition of Voting Securities by the Company which, by reducing the number
of Voting Securities outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Company, and thereafter such Beneficial
Owner acquires any additional Voting Securities which increases the percentage
of the then outstanding Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.

 

(e)   “Code”
shall mean the Internal Revenue Code of 1986, as from time to time amended.

 

(f)    “Committee”
shall mean the Compensation and Benefits Committee of the Company.

 

(g)   “Common
Stock” shall mean the common stock of the Company, $.10 par value.

 

(h)   “Company” shall mean Lehman Brothers Holdings
Inc. and, except as otherwise specified in this Plan in a particular context,
any successor thereto, whether by merger, consolidation, purchase of
substantially all its assets or otherwise.

 

(i)    “Fair
Market Value” on any date means the closing price of the shares on such date on
the principal national securities exchange on which such shares are listed or
admitted to trading (or, if such exchange is not open on such date, the
immediately preceding date on which such exchange is open), the arithmetic mean
of the per share closing bid price and per share closing asked price on such
date as quoted on the National Association of Securities Dealers Automated
Quotation System, or such other market in which such prices are regularly
quoted, or, if there have been no published bid or asked quotations with
respect to such shares on such date, the Fair Market Value shall be the value
established by the Committee in good faith and, in the case of an incentive
stock option, in accordance with Section 422 of the Code.

 

 

 

A-2

 

 

(j)    “Other
Stock-based Award” shall mean any of those Awards described in Section 8
hereof.

 

(k)   “Participant”
shall mean an employee, officer, director or consultant of the Company.

 

(l)    “Subsidiary”
shall mean any corporation which at the time qualifies as a subsidiary of the
Company under the definition of “subsidiary corporation” in Section 424(f) of
the Code, as amended from time to time.

 

 

 

 

 

 

A-3Exhibit
10.20

 

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.  Following
the occurrence of any Change in Control that constitutes a change in ownership
or effective control within the meaning of Section 409A(a)(2)(A)(v) of
the Code, you shall be immediately entitled to receive (i) in the same
form of consideration as that received by shareholders generally, the “undiscounted
market value” (at the time of grant) of the shares of Common Stock underlying
your outstanding Units (i.e., the fair market value of your Units determined on
the date of grant) (the “Preliminary Consideration”), and (ii) an
additional right to receive the excess, if any, of the price paid by an
acquirer over such “undiscounted market value” (such excess amount, the “Deferred
Consideration”), which right shall be deferred until the earlier of (X) two
years following such Change in Control or (Y) the end of the term of any
remaining restrictions (the “Deferred Period”), but your Units shall remain
otherwise subject to all issuance restrictions during the Deferred Period.  Following the occurrence of any Change in
Control that does not constitute a change in ownership or effective control
within the meaning of Section 409A(a)(2)(A)(v) of the Code, you shall
be entitled to receive both the Preliminary Consideration and the Deferred
Consideration (if any) upon your termination of service on the Board of
Directors of the Company.

 

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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]