diff --git "a/gs_10k_2021.txt" "b/gs_10k_2021.txt" new file mode 100644--- /dev/null +++ "b/gs_10k_2021.txt" @@ -0,0 +1,36859 @@ +PART I + +Item 1. Business + +Introduction + +Goldman Sachs is a leading global financial institution that delivers a broad +range of financial services across investment banking, securities, investment +management and consumer banking to a large and diversified client base that +includes corporations, financial institutions, governments and individuals. +Our purpose is to advance sustainable economic growth and financial +opportunity. Our goal, reflected in our + +One Goldman Sachs + +initiative, is to deliver the full range of our services and expertise to +support our clients in a more accessible, comprehensive and efficient manner, +across businesses and product areas. + +When we use the terms “Goldman Sachs,” “we,” “us” and “our,” we mean The +Goldman Sachs Group, Inc. (Group Inc. or parent company), a Delaware +corporation, and its consolidated subsidiaries. When we use the term “our +subsidiaries,” we mean the consolidated subsidiaries of Group Inc. References +to “this + +Form 10-K” + +are to our Annual Report on + +Form 10-K + +for the year ended December 31, 2021. All references to 2021, 2020 and 2019 +refer to our years ended, or the dates, as the context requires, December 31, +2021, December 31, 2020 and December 31, 2019, respectively. + +Group Inc. is a bank holding company (BHC) and a financial holding company +(FHC) regulated by the Board of Governors of the Federal Reserve System (FRB). +Our U.S. depository institution subsidiary, Goldman Sachs Bank USA (GS Bank +USA), is a New York State-chartered bank. + +Our Business Segments + +We report our activities in four business segments: Investment Banking, Global +Markets, Asset Management, and Consumer & Wealth Management. Investment +Banking generates revenues from financial advisory, underwriting and corporate +lending activities. Global Markets consists of Fixed Income, Currency and +Commodities (FICC) and Equities, and generates revenues from intermediation +and financing activities. Asset Management generates revenues from management +and other fees, incentive fees, equity investments, and lending and debt +investments. Consumer & Wealth Management consists of Wealth management and +Consumer banking, and generates revenues from management and other fees, +incentive fees, private banking and lending, and consumer-oriented activities. + +The chart below presents our four business segments and their revenue sources. + +Investment Banking + +Investment Banking serves public and private sector clients around the world. +We provide financial advisory services, help companies raise capital to +strengthen and grow their businesses and provide financing to corporate +clients. We seek to develop and maintain long-term relationships with a +diverse global group of institutional clients, including corporations, +governments, states and municipalities. Our goal is to deliver to our +institutional clients all of our resources in a seamless fashion, with +investment banking serving as the main initial point of contact. + +Investment Banking generates revenues from the following: + +Financial advisory. + +We have been a leader for many years in providing financial advisory services, +including strategic advisory assignments with respect to mergers and +acquisitions, divestitures, corporate defense activities, restructurings and +spin-offs. In particular, we help clients execute large, complex transactions +for which we provide multiple services, including cross-border structuring +expertise. We also assist our clients in managing their asset and liability +exposures and their capital. + +Underwriting. + +We help companies raise capital to fund their businesses. As a financial +intermediary, our job is to match the capital of our investing clients, who +aim to grow the savings of millions of people, with the needs of our public +and private sector clients, who need financing to generate growth, create jobs +and deliver products and services. Our underwriting activities include public +offerings and private placements, including local and cross-border +transactions and acquisition financing, of a wide range of securities and +other financial instruments, including loans. Underwriting consists of the +following: + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Equity underwriting + +We underwrite common and preferred stock and convertible and exchangeable +securities. We regularly receive mandates for large, complex transactions and +have held a leading position in worldwide public common stock offerings and +worldwide initial public offerings for many years. + +Debt underwriting + +We underwrite and originate various types of debt instruments, including +investment-grade and high-yield debt, bank and bridge loans, including in +connection with acquisition financing, and emerging- and growth-market debt, +which may be issued by, among others, corporate, sovereign, municipal and +agency issuers. In addition, we underwrite and originate structured +securities, which include mortgage-related securities and other asset-backed +securities. + +Corporate lending. + +We lend to corporate clients, including through relationship lending, middle- +market lending and acquisition financing. The hedges related to this lending +and financing activity are reported as part of our corporate lending activity. + +We also provide transaction banking services, including to certain of our +corporate and financial institution clients. Transaction banking revenues +include net interest income attributed to transaction banking deposits. + +Global Markets + +Global Markets serves our clients who buy and sell financial products, raise +funding and manage risk. We do this by acting as a market maker and offering +market expertise on a global basis. Global Markets makes markets and +facilitates client transactions in fixed income, equity, currency and +commodity products. In addition, we make markets in, and clear client +transactions on, major stock, options and futures exchanges worldwide. + +As a market maker, we provide prices to clients globally across thousands of +products in all major asset classes and markets. At times, we take the other +side of transactions ourselves if a buyer or seller is not readily available, +and at other times we connect our clients to other parties who want to +transact. Our willingness to make markets, commit capital and take risk in a +broad range of products is crucial to our client relationships. Market makers +provide liquidity and play a critical role in price discovery, which +contributes to the overall efficiency of the capital markets. In connection +with our market-making activities, we maintain (i) market-making positions, +typically for a short period of time, in response to, or in anticipation of, +client demand, and (ii) positions to actively manage our risk exposures that +arise from these market-making activities (collectively, inventory). + +Our clients are institutions that are primarily professional market +participants, including investment entities whose ultimate clients include +individual investors investing for their retirement, buying insurance or +saving surplus cash. + +We execute a high volume of transactions for our clients in large, highly +liquid markets (such as markets for U.S. Treasury securities, stocks and +certain agency mortgage pass-through securities). We also execute transactions +for our clients in less liquid markets (such as + +mid-cap + +corporate bonds, emerging market currencies and certain + +non-agency + +mortgage-backed securities) for spreads and fees that are generally somewhat +larger than those charged in more liquid markets. Additionally, we structure +and execute transactions involving customized or tailor-made products that +address our clients’ risk exposures, investment objectives or other complex +needs (such as a jet fuel hedge for an airline), as well as derivative +transactions related to client advisory and underwriting activities. + +Through our global sales force, we maintain relationships with our clients, +receiving orders and distributing investment research, trading ideas, market +information and analysis. Much of this connectivity between us and our clients +is maintained on technology platforms, including + +Marquee + +, and operates globally where markets are open for trading. + +Marquee + +provides institutional investors with market intelligence, risk analytics, +proprietary datasets and trade execution across multiple asset classes. + +Global Markets and our other businesses are supported by our Global Investment +Research division, which, as of December 2021, provided fundamental research +on approximately 3,000 companies worldwide and approximately 50 national +economies, as well as on industries, currencies and commodities. + +Global Markets activities are organized by asset class and include both “cash” +and “derivative” instruments. “Cash” refers to trading the underlying +instrument (such as a stock, bond or barrel of oil). “Derivative” refers to +instruments that derive their value from underlying asset prices, indices, +reference rates and other inputs, or a combination of these factors (such as +an option, which is the right or obligation to buy or sell a certain bond, +stock or other asset on a specified date in the future at a certain price, or +an interest rate swap, which is the agreement to convert a fixed rate of +interest into a floating rate or vice versa). + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Global Markets consists of FICC and Equities. + +FICC. + +FICC generates revenues from intermediation and financing activities. + +FICC intermediation. + +Includes client execution activities related to making markets in both cash +and derivative instruments, as detailed below. + +Interest Rate Products. + +Government bonds (including inflation-linked securities) across maturities, +other government-backed securities, and interest rate swaps, options and other +derivatives. + +Credit Products. + +Investment-grade and high-yield corporate securities, credit derivatives, +exchange-traded funds (ETFs), bank and bridge loans, municipal securities, +emerging market and distressed debt, and trade claims. + +Mortgages. + +Commercial mortgage-related securities, loans and derivatives, residential +mortgage-related securities, loans and derivatives (including U.S. government +agency-issued collateralized mortgage obligations and other securities and +loans), and other asset-backed securities, loans and derivatives. + +Currencies. + +Currency options, spot/forwards and other derivatives on + +G-10 + +currencies and emerging-market products. + +Commodities. + +Commodity derivatives and, to a lesser extent, physical commodities, involving +crude oil and petroleum products, natural gas, agricultural, base, precious +and other metals, electricity, including renewable power, environmental +products and other commodity products. + +FICC financing. + +Includes providing financing to our clients through warehouse loans backed by +mortgages (including residential and commercial mortgage loans), corporate +loans and consumer loans (including auto loans and private student loans). We +also provide financing to clients through structured credit, asset-backed +lending, and through securities purchased under agreements to resell (resale +agreements). + +Equities. + +Equities generates revenues from intermediation and financing activities. + +Equities intermediation. + +We make markets in equity securities and equity-related products, including +ETFs, convertible securities, options, futures and + +over-the-counter + +(OTC) derivative instruments. As a principal, we facilitate client +transactions by providing liquidity to our clients, including by transacting +in large blocks of stocks or derivatives, requiring the commitment of our +capital. + +We also structure and make markets in derivatives on indices, industry +sectors, financial measures and individual company stocks. We develop +strategies and provide information about portfolio hedging and restructuring +and asset allocation transactions for our clients. We also work with our +clients to create specially tailored instruments to enable sophisticated +investors to establish or liquidate investment positions or undertake hedging +strategies. We are one of the leading participants in the trading and +development of equity derivative instruments. + +Our exchange-based market-making activities include making markets in stocks +and ETFs, futures and options on major exchanges worldwide. + +We generate commissions and fees from executing and clearing institutional +client transactions on major stock, options and futures exchanges worldwide, +as well as OTC transactions. We provide our clients with access to a broad +spectrum of equity execution services, including electronic + +“low-touch” + +access and more complex “high-touch” execution through both traditional and +electronic platforms, including + +Marquee + +Equities financing + +Includes prime brokerage and other equities financing activities, including +securities lending, margin lending and swaps. + +We earn fees by providing clearing, settlement and custody services globally. +In addition, we provide our hedge fund and other clients with a technology +platform and reporting that enables them to monitor their security portfolios +and manage risk exposures. + +We provide services that principally involve borrowing and lending securities +to cover institutional clients’ short sales and borrowing securities to cover +our short sales and to make deliveries into the market. In addition, we are an +active participant in + +broker-to-broker + +securities lending and third-party agency lending activities. + +We provide financing to our clients for their securities trading activities +through margin loans that are collateralized by securities, cash or other +acceptable collateral. We earn a spread equal to the difference between the +amount we pay for funds and the amount we receive from our client. + +We execute swap transactions to provide our clients with exposure to +securities and indices. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Asset Management + +Asset Management provides investment services to help clients preserve and +grow their financial assets. We provide these services to our institutional +clients, as well as investors who primarily access our products through a +network of third-party distributors around the world. + +We manage client assets across a broad range of investment strategies and +asset classes, including equity, fixed income and alternative investments. +Alternative investments primarily includes hedge funds, credit funds, private +equity, real estate, currencies, commodities and asset allocation strategies. +Our investment offerings include those managed on a fiduciary basis by our +portfolio managers, as well as those managed by third-party managers. We offer +our investment solutions in a variety of structures, including separately +managed accounts, mutual funds, private partnerships and other commingled +vehicles. + +We also provide customized investment advisory solutions designed to address +our clients’ investment needs. These solutions begin with identifying clients’ +objectives and continue through portfolio construction, ongoing asset +allocation and risk management and investment realization. We draw from a +variety of third-party managers, as well as our proprietary offerings, to +implement solutions for clients. + +Asset Management generates revenues from the following: + +Management and other fees. + +The majority of revenues in management and other fees consists of asset-based +fees on client assets that we manage. The fees that we charge vary by asset +class, distribution channel and the types of services provided, and are +affected by investment performance, as well as asset inflows and redemptions. + +Incentive fees. + +In certain circumstances, we also receive incentive fees based on a percentage +of a fund’s or a separately managed account’s return, or when the return +exceeds a specified benchmark or other performance targets. Such fees include +overrides, which consist of the increased share of the income and gains +derived primarily from our private equity and credit funds when the return on +a fund’s investments over the life of the fund exceeds certain threshold +returns. + +Equity investments. + +Our alternative investing activities relate to public and private equity +investments in corporate, real estate and infrastructure entities. We also +make investments through consolidated investment entities, substantially all +of which are engaged in real estate investment activities. + +Lending and debt investments. + +We invest in corporate debt and provide financing for real estate and other +assets. These activities include investments in mezzanine debt, senior debt +and distressed debt securities. + +Consumer & Wealth Management + +Consumer & Wealth Management helps clients achieve their individual financial +goals by providing a broad range of wealth advisory and banking services, +including financial planning, investment management, deposit-taking and +lending. Services are offered through our global network of advisors and via +our digital platforms. + +Wealth Management. + +Wealth management + +provides tailored wealth advisory services to clients across the wealth +spectrum. We operate globally serving individuals, families, family offices, +and foundations and endowments. Our relationships are established directly or +introduced through corporations that sponsor financial wellness programs for +their employees. + +We offer personalized financial planning inclusive of income and liability +management, compensation and benefits analysis, trust and estate structuring, +tax optimization, philanthropic giving, and asset protection. We also provide +customized investment advisory solutions, and offer structuring and execution +capabilities in security and derivative products across all major global +markets. We leverage a broad, open-architecture investment platform and our +global execution capabilities to help clients achieve their investment goals. +In addition, we offer clients a full range of private banking services, +including a variety of deposit alternatives and loans that our clients use to +finance investments in both financial and nonfinancial assets, bridge cash +flow timing gaps or provide liquidity and flexibility for other needs. + +Wealth management generates revenues from the following: + +Management and other fees. + +Includes fees related to managing assets, providing investing and wealth +advisory solutions, providing financial planning and counseling services via +Ayco Personal Financial Management, and executing brokerage transactions for +wealth management clients. + +Incentive fees. + +In certain circumstances, we also receive incentive fees from wealth +management clients based on a percentage of a fund’s return, or when the +return exceeds a specified benchmark or other performance targets. Such fees +include overrides, which consist of the increased share of the income and +gains derived primarily from our private equity and credit funds when the +return on a fund’s investments over the life of the fund exceeds certain +threshold returns. + +Private banking and lending. + +Includes net interest income allocated to deposit-taking and net interest +income earned on lending activities for wealth management clients. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Consumer Banking. + +Our Consumer banking business issues unsecured loans, through our digital +platform, + +Marcus by Goldman Sachs + +(Marcus), + +and credit cards, to finance the purchases of goods or services. We also +accept deposits (including savings and time deposits) through Marcus, in GS +Bank USA and Goldman Sachs International Bank (GSIB). Additionally, we provide +investing services through + +Marcus Invest + +to U.S. customers. + +Consumer banking revenues consist of net interest income earned on unsecured +loans issued to consumers through Marcus and credit card lending activities, +and net interest income attributed to consumer deposits. + +Business Continuity and Information Security + +Business continuity and information security, including cyber security, are +high priorities for us. Their importance has been highlighted by (i) the +coronavirus + +(COVID-19) + +pandemic and the work-from-home arrangements implemented by companies +worldwide in response, including us, (ii) numerous highly publicized events in +recent years, including cyber attacks against financial institutions, +governmental agencies, large consumer-based companies, software and +information technology service providers and other organizations, some of +which have resulted in the unauthorized access to or disclosure of personal +information and other sensitive or confidential information, the theft and +destruction of corporate information and requests for ransom payments, and +(iii) extreme weather events. + +Our Business Continuity & Technology Resilience Program has been developed to +provide reasonable assurance of business continuity in the event of +disruptions at our critical facilities or of our systems, and to comply with +regulatory requirements, including those of FINRA. Because we are a BHC, our +Business Continuity & Technology Resilience Program is also subject to review +by the FRB. The key elements of the program are crisis management, business +continuity, technology resilience, business recovery, assurance and +verification, and process improvement. In the area of information security, we +have developed and implemented a framework of principles, policies and +technology designed to protect the information provided to us by our clients +and our own information from cyber attacks and other misappropriation, +corruption or loss. Safeguards are designed to maintain the confidentiality, +integrity and availability of information. For further information about the +Business Continuity Planning strategy we have implemented in response to the + +COVID-19 + +pandemic, see “Management’s Discussion and Analysis of Financial Condition and +Results of Operations — Regulatory and Other Matters — Impact of + +COVID-19 + +Pandemic” in Part II, Item 7 of this + +Form 10-K. + +Human Capital Management + +Our people are our greatest asset. We believe that a major strength and +principal reason for our success is the quality, dedication, determination and +collaboration of our people, which enables us to serve our clients, generate +long-term value for our shareholders and contribute to the broader community. +We invest heavily in developing and supporting our people throughout their +careers, and we strive to maintain a work environment that fosters +professionalism, excellence, high standards of business ethics, diversity, +teamwork and cooperation among our employees worldwide. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Diversity and Inclusion + +The strength of our culture, our ability to execute our strategy, and our +relationships with clients all depend on a diverse workforce and an inclusive +work environment that encourages a wide range of perspectives. We believe that +diversity at all levels of our organization, from entry-level analysts to +senior management, as well as the Board of Directors of Group Inc. (Board), +which as of December 2021, was approximately 62% diverse by race, gender or +sexual orientation, is essential to our sustainability. Our management team +works closely with our Global Inclusion and Diversity Committee to continue to +increase diversity of our global workforce at all levels. In addition, we have +global and regional Inclusion and Diversity Committees which promote an +environment that values different perspectives, challenges conventional +thinking and maximizes the potential of all our people. + +We believe that increased diversity, including diversity of experience, gender +identity, race, ethnicity, sexual orientation, disability and veteran status, +in addition to being a social imperative, is vital to our commercial success +through the creativity that it fosters. For this reason, we have established a +comprehensive action plan with aspirational diversity hiring goals which are +set forth below and are focused on cultivating an inclusive environment for +all our colleagues. + +Diverse leadership is crucial to our long-term success and to driving +innovation, and we have implemented and expanded outreach and career +advancement programs for rising diverse executive talent. For example, we are +focused on providing diverse vice presidents the necessary coaching, +sponsorship and advocacy to support their career trajectories and strengthen +their leadership platforms, including through programs, such as our Vice +President Career Investment Initiative focused on high-performing Black and +Hispanic/Latinx VPs in the Americas and EMEA. Many other career development +initiatives are aimed at fostering diverse talent at the analyst and associate +level, including the Black Analyst and Associate Initiative, the +Hispanic/Latinx Analyst Initiative and the Women’s Career Strategies +Initiative. We have also established Inclusion Networks and Interest Forums +that are open to all professionals at Goldman Sachs to promote and advance +connectivity, understanding, inclusion and diversity. + +Progress Toward Aspirational Goals. + +Reflecting our efforts to increase diversity, the composition of our most +recent partnership class was 27% women professionals, 17% Asian professionals, +7% Black professionals and 5% Hispanic/Latinx professionals. The composition +of our most recent managing director class was 30% women professionals, 28% +Asian professionals, 5% Black professionals and 5% Hispanic/Latinx +professionals. + +We have also set forth the following aspirational goals: + +We aim for analyst and associate hiring (which accounts for over 70% of our +annual hiring) to achieve representation of 50% women professionals, 11% Black +professionals and 14% Hispanic/Latinx professionals in the Americas, and 9% +Black professionals in the U.K. In 2021, our analyst and associate hires +included 45% women professionals, 11% Black professionals and 15% +Hispanic/Latinx professionals in the Americas, and 14% Black professionals in +the U.K. + +We aim for women professionals to represent 40% of our vice presidents +globally by 2025 and 30% of senior talent (vice presidents and above) in the +U.K. by 2023, while also endeavoring for women employees to comprise 50% of +all of our employees globally over time. As of December 2021, women +professionals represented 32% of our vice president population globally and +31% of senior talent (vice presidents and above) in the U.K., and women +employees represented 41% of all of our employees globally. + +We aim for Black professionals to represent 7% of our vice president +population in the Americas and in the U.K., and for Hispanic/Latinx +professionals to represent 9% of our vice president population in the +Americas, both by 2025. As of December 2021, Black professionals represented +4% of our vice president population in the Americas and 4% in the U.K., and +Hispanic/Latinx professionals represented 6% of our vice president population +in the Americas. + +We aim to double the number of campus hires in the U.S. recruited from +Historically Black Colleges and Universities (HBCUs) by 2025 relative to 2020. + +The metrics above are based on self-identification. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Talent Development and Retention + +We seek to help our people achieve their full potential by investing in them +and supporting a culture of continuous development. Our goals are to maximize +individual capabilities, increase commercial effectiveness and innovation, +reinforce our culture, expand professional opportunities, and help our people +contribute positively to their communities. + +Instilling our culture in all employees is a continuous process, in which +training plays an important part. We offer our employees the opportunity to +participate in ongoing educational offerings and periodic seminars through +Goldman Sachs University. To accelerate their integration into the firm and +our culture, new hires have the opportunity to receive training before they +start working and orientation programs with an emphasis on culture and +networking, and nearly all employees participate in at least one training +event each year. For our more senior employees, we provide guidance and +training on how to manage people and projects effectively, exhibit strong +leadership and exemplify our culture. We are also focused on developing a high +performing, diverse leadership pipeline and career planning for our next +generation of leaders. We maintain a variety of programs aimed at employees’ +professional growth and support throughout their careers and as they evolve +into leaders, including initiatives, such as our Vice President and Managing +Director Leadership Acceleration Initiatives. + +Enhancing our people’s experience of internal mobility is a key focus, as we +believe that this will inspire employees, help retain top talent and create +diverse experiences to build future leaders. + +Another important part of instilling our culture is our employee performance +review process. Employees are reviewed by supervisors, + +co-workers + +and employees whom they supervise in a + +360-degree + +review process that is integral to our team approach and includes an +evaluation of an employee’s performance with respect to risk management, +protecting our reputation, adherence to our code of conduct, compliance, and +diversity and inclusion principles. Our approach to evaluating employee +performance centers on providing robust, timely and actionable feedback that +facilitates professional development. We have directed our managers, as +leaders at the firm, to take an active coaching role with their teams. We have +also implemented “The Three Conversations at GS” through which managers +establish goals with their team members at the start of the year, check in + +mid-year + +on progress and then close out the year with a conversation on performance +against goals. + +We believe that our people value opportunities to contribute to their +communities and that these opportunities enhance their job satisfaction. We +also believe that being able to volunteer together with colleagues and +participate in community organizations working on local service projects +strengthens our people’s bond with us. Community TeamWorks, our signature +volunteering initiative, enables our people to participate in high-impact, +team-based volunteer opportunities, including projects coordinated with +hundreds of nonprofit partner organizations worldwide. During 2021, our people +volunteered approximately 80,000 hours of service globally through Community +TeamWorks, with approximately 15,000 employees partnering with approximately +370 nonprofit organizations on approximately 800 community projects. To +respond to the interest of our people in helping with the response to the + +COVID-19 + +pandemic, we have developed a series of opportunities to support vulnerable +populations remotely, including small business owners, students and the +elderly. + +Wellness + +We recognize that for our people to be successful in the workplace they need +support in their personal, as well as their professional lives. We have +created a strong support framework for wellness, which is intended to enable +employees to better balance their roles at work and their responsibilities at +home. In addition to providing 20 weeks of parental leave for all employees, +we provide other benefits to support the wellness of our employees, including +family care leave, bereavement leave and, for longer-tenured employees, an +unpaid sabbatical leave. We also continue to advance our resilience programs, +offering our people a range of counseling, coaching, medical advisory and +personal wellness services. We have increased the availability of these +resources during the + +COVID-19 + +pandemic, and we have continued to evolve and strengthen virtual offerings +with the aim of maintaining the physical and mental well-being of our +employees, enhancing their effectiveness and cohesiveness and providing them +with greater opportunities to access support. + +We also introduced a + +COVID-19 + +10-day + +family leave policy, available to our people globally to care for family +members due to + +COVID-19 + +related illness or meet childcare needs, including homeschooling. We remain +focused on facilitating the safe return of our employees to our offices, as +circumstances permit, and employees in a number of our locations around the +world have returned to the office to varying degrees. Given that the situation +regarding the + +COVID-19 + +pandemic varies geographically, our approach to transitioning back to the +office is tailored to each location, and it evolves based on the specific +conditions and requirements of each location. We have comprehensive protocols +in place, including regular testing, and we will continue to be guided by a +people-first approach as circumstances evolve. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +In addition, to support the financial wellness of our employees, we offer a +variety of resources that help them manage their personal financial health and +decision-making, including financial education series, live and + +on-demand + +webinars, articles and interactive digital tools. + +Global Reach and Strategic Locations + +As a firm with a global client base, we take a strategic approach to +attracting, developing and managing a global workforce. Our clients are +located worldwide and we are an active participant in financial markets around +the world. As of December 2021, we had headcount of 43,900, offices in over 35 +countries and 52% of our headcount was based in the Americas, 18% in EMEA and +30% in Asia. Our employees come from over 180 countries and speak more than +110 languages as of December 2021. + +In addition to maintaining offices in major financial centers around the +world, we have established key strategic locations, including in Bengaluru, +Salt Lake City, Dallas, Singapore and Warsaw. We continue to evaluate the +expanded use of strategic locations, including cities in which we do not +currently have a presence. + +As of December 2021, 40% of our employees were working in one of these key +strategic locations. We believe our investment in these strategic locations +enables us to build centers of excellence around specific capabilities that +support our business initiatives. + +Sustainability + +We have a long-standing commitment to sustainability. Our two priorities in +this area are helping clients across industries facilitate and thrive in a + +low-carbon + +economy (Climate Transition) and leveraging our capabilities to advance +economic empowerment (Inclusive Growth). + +We have established a Sustainable Finance Group, which serves as the +centralized group that drives climate strategy and sustainability efforts +across our firm, including commercial efforts alongside our businesses to +advance Climate Transition and Inclusive Growth. In 2020, we created a new +role, Global Head of Sustainability and Inclusive Growth, which, like our + +One Goldman Sachs + +initiative, is intended to facilitate the application of our full capabilities +across both Climate Transition and Inclusive Growth. Each of our segments has +launched a Sustainability Council. These councils focus on identifying key +Environmental, Social and Governance (ESG) priorities for the segment, +developing sustainability-related capabilities and delivering sustainability- +focused solutions to clients in a holistic way. + +Our activities relating to sustainability present both financial and +nonfinancial risks, and we have processes for managing these risks, similar to +the other risks we face. We have integrated oversight of climate-related risks +into our risk management governance structure, from senior management to our +Board and its committees, including the Risk and Public Responsibilities +Committees. The Risk Committee of the Board oversees firmwide financial and +nonfinancial risks, which include climate risk, and, as part of its oversight, +receives updates on our risk management approach to climate risk. The Public +Responsibilities Committee of the Board assists the Board in its oversight of +our firmwide sustainability strategy and sustainability risks affecting us, +including with respect to climate change. As part of its oversight, the Public +Responsibilities Committee receives periodic updates on our sustainability +strategy, and also periodically reviews our governance and related policies +and processes for sustainability and climate change-related risks. We have +also implemented an Environmental Policy Framework to guide our overall +approach to sustainability issues. We apply this Framework when evaluating +transactions for environmental and social risks and impacts. Our employees +also receive training with respect to environmental and social risks, +including for sectors and industries that we believe have higher potential for +these risks. See “Management’s Discussion and Analysis of Financial Condition +and Results of Operations — Risk Management — Overview and Structure of Risk +Management — Climate Risk Management” in Part II, Item 7 of this + +Form 10-K + +for further information about our climate risk management. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +As a leading financial institution, we acknowledge the importance of Climate +Transition for our business. In February 2021, we launched our inaugural +sustainability bond of $800 million, which is aligned with our sustainable +finance framework for future issuances and funds a range of + +on-balance + +sheet sustainable finance activity. In addition, we are working with various +external groups to develop methods, metrics and frameworks for the financial +sector, with an aim to support greater consistency, comparability and utility +in approaches to measuring the financial sector’s contribution to Climate +Transition initiatives. We believe we can advance sustainability by partnering +with our clients across our businesses, including by developing new +sustainability-linked financing solutions, offering strategic advice, or +coinvesting alongside our clients in clean energy companies. We have announced +a target to deploy $750 billion in sustainable financing, investing and +advisory activity by the beginning of 2030. As of December 2021, we achieved +approximately 40% of that goal, with the majority dedicated to Climate +Transition. In addition, we have announced our commitment to align our +financing activities with a + +net-zero-by-2050 + +pathway. In that context, we have set an initial set of targets for 2030 +focused on three sectors — power, oil and gas, and auto manufacturing — where +we believe we can have the most significant impact and we see an opportunity +to proactively engage our clients, investors, advocacy groups and multi- +stakeholder organizations, deploy capital required for transition, and invest +in new commercial solutions to drive decarbonization in the real economy. +Carbon neutrality is also a priority for the operation of our firm and our +supply chain. In 2015, we achieved carbon neutrality in our operations and +business travel, ahead of our 2020 goal announced in 2009. We have expanded +our operational carbon commitment to include our supply chain, targeting + +net-zero + +carbon emissions by 2030. + +In addition to Climate Transition, our approach to sustainability also centers +on Inclusive Growth and advancing economic empowerment and financial +opportunity for all. We have sponsored initiatives, such as + +One + +Million Black Women, + +Launch With GS, our Urban Investment Group, 10,000 Women and 10,000 Small +Businesses + +. An overarching theme of our sustainability strategy is promoting diversity +and inclusion as an imperative for us, as well as our clients and their +boards. These efforts are further strengthened by strategic partnerships that +we have established in areas where we have identified gaps, or believe we are +able to drive even greater impact through collaboration. We also believe our +ability to achieve our sustainability objectives is critically dependent on +the strengths and talents of our people, and we recognize that our people are +able to maximize their impact by collaborating in a diverse and inclusive work +environment. See “Business — Human Capital Management” for information about +our human capital management goals, programs and policies. + +Competition + +The financial services industry and all of our businesses are intensely +competitive, and we expect them to remain so. Our competitors are other +entities that provide investment banking (including transaction banking), +market-making, investment management services, commercial and/or consumer +lending, deposit-taking and other banking products and services, as well as +those entities that make investments in securities, commodities, derivatives, +real estate, loans and other financial assets. These entities include brokers +and dealers, investment banking firms, commercial banks, credit card issuers, +insurance companies, investment advisers, mutual funds, hedge funds, private +equity funds, merchant banks, consumer finance companies and financial +technology and other internet-based companies. We compete with some entities +globally and with others on a regional, product or niche basis. We compete +based on a number of factors, including transaction execution, client +experience, products and services, innovation, reputation and price. + +We have faced, and expect to continue to face, pressure to retain market share +by committing capital to businesses or transactions on terms that offer +returns that may not be commensurate with their risks. In particular, +corporate clients seek such commitments (such as agreements to participate in +their loan facilities) from financial services firms in connection with +investment banking and other assignments. + +Consolidation and convergence have significantly increased the capital base +and geographic reach of some of our competitors, and have also hastened the +globalization of the securities and other financial services markets. As a +result, we have had to commit capital to support our international operations +and to execute large global transactions. To capitalize on some of our most +significant opportunities, we will have to compete successfully with financial +institutions that are larger and have more capital and that may have a +stronger local presence and longer operating history outside the U.S. + +We also compete with smaller institutions that offer more targeted services, +such as independent advisory firms. Some clients may perceive these firms to +be less susceptible to potential conflicts of interest than we are, and, as +described below, our ability to effectively compete with them could be +affected by regulations and limitations on activities that apply to us but may +not apply to them. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +A number of our businesses are subject to intense price competition. Efforts +by our competitors to gain market share have resulted in pricing pressure in +our investment banking, market-making, consumer, wealth management and asset +management businesses. For example, the increasing volume of trades executed +electronically, through the internet and through alternative trading systems, +has increased the pressure on trading commissions, in that commissions for +electronic trading are generally lower than those for + +non-electronic + +trading. It appears that this trend toward + +low-commission + +trading will continue. Price competition has also led to compression in the +difference between the price at which a market participant is willing to sell +an instrument and the price at which another market participant is willing to +buy it (i.e., bid/offer spread), which has affected our market-making +businesses. The increasing prevalence of passive investment strategies that +typically have lower fees than other strategies we offer has affected the +competitive and pricing dynamics for our asset management products and +services. In addition, we believe that we will continue to experience +competitive pressures in these and other areas in the future as some of our +competitors seek to obtain market share by further reducing prices, and as we +enter into or expand our presence in markets that may rely more heavily on +electronic trading and execution. We and other banks also compete for deposits +on the basis of the rates we offer. Increases in short-term interest rates are +expected to result in more intense competition in deposit pricing. + +We also compete on the basis of the types of financial products and client +experiences that we and our competitors offer. In some circumstances, our +competitors may offer financial products that we do not offer and that our +clients may prefer, or our competitors may develop technology platforms that +provide a better client experience. + +The provisions of the U.S. Dodd-Frank Wall Street Reform and Consumer +Protection Act (Dodd-Frank Act), the requirements promulgated by the Basel +Committee on Banking Supervision (Basel Committee) and other financial +regulations could affect our competitive position to the extent that +limitations on activities, increased fees and compliance costs or other +regulatory requirements do not apply, or do not apply equally, to all of our +competitors or are not implemented uniformly across different jurisdictions. +For example, the provisions of the Dodd-Frank Act that prohibit proprietary +trading and restrict investments in certain hedge and private equity funds +differentiate between U.S.-based and + +non-U.S.-based + +banking organizations and give + +non-U.S.-based + +banking organizations greater flexibility to trade outside of the U.S. and to +form and invest in funds outside the U.S. + +Likewise, the obligations with respect to derivative transactions under Title +VII of the Dodd-Frank Act depend, in part, on the location of the +counterparties to the transaction. The impact of regulatory developments on +our competitive position has depended and will continue to depend to a large +extent on the manner in which the required rulemaking and regulatory guidance +evolve, the extent of international convergence, and the development of market +practice and structures under the evolving regulatory regimes, as described +further in “Regulation” below. + +We also face intense competition in attracting and retaining qualified +employees. Our ability to continue to compete effectively has depended and +will continue to depend upon our ability to attract new employees, retain and +motivate our existing employees and to continue to compensate employees +competitively amid intense public and regulatory scrutiny on the compensation +practices of large financial institutions. Our pay practices and those of +certain of our competitors are subject to review by, and the standards of, the +FRB and other regulators inside and outside the U.S., including the Prudential +Regulation Authority (PRA) and the Financial Conduct Authority (FCA) in the +U.K. We also compete for employees with institutions whose pay practices are +not subject to regulatory oversight. See “Regulation — Compensation Practices” +and “Risk Factors — Competition — Our businesses may be adversely affected if +we are unable to hire and retain qualified employees” in Part I, Item 1A of +this + +Form 10-K + +for further information about such regulation. + +Regulation + +As a participant in the global financial services industry, we are subject to +extensive regulation and supervision worldwide. The regulatory regimes +applicable to our operations worldwide have been, and continue to be, subject +to significant changes. The Basel Committee is the primary global standard +setter for prudential bank regulation; however, its standards do not become +effective in a jurisdiction until the relevant regulators have adopted rules +to implement its standards. The implications of these regulations for our +businesses depend to a large extent on their implementation by the relevant +regulators globally, and the market practices and structures that develop. + +New regulations have been adopted or are being considered by regulators and +policy makers worldwide, as described below. The effects of any changes to the +regulations affecting our businesses, including as a result of the proposals +described below, are uncertain and will not be known until such changes are +finalized and market practices and structures develop under the revised +regulations. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Our principal subsidiaries operating in the U.S. include GS Bank USA, Goldman +Sachs & Co. LLC (GS&Co.), J. Aron & Company LLC (J. Aron) and Goldman Sachs +Asset Management, L.P. Our principal subsidiaries operating in Europe include +Goldman Sachs International (GSI), GSIB and Goldman Sachs Asset Management +International (GSAMI), which are incorporated and headquartered in the U.K., +and Goldman Sachs Bank Europe SE (GSBE), which is incorporated and +headquartered in Germany. Our principal subsidiaries operating in Asia include +Goldman Sachs Japan Co., Ltd. (GSJCL). + +As a result of the U.K.’s withdrawal from the E.U. (Brexit), we have +strengthened the capabilities of our E.U. operating subsidiaries, particularly +GSBE, and have moved certain activities there. For example, we have moved a +number of relationships with clients of our Investment Banking, Global Markets +and Wealth Management businesses from GSI and GSIB to GSBE, and clients of our +Asset Management business from GSAMI to GSBE; established access for GSBE to +exchanges, clearing houses and depositories and other market infrastructure in +the E.U.; established branches of GSBE in several E.U. member states and in +the U.K.; and strengthened the capital, personnel and other resources at GSBE. + +Banking Supervision and Regulation + +Group Inc. is a BHC under the U.S. Bank Holding Company Act of 1956 (BHC Act) +and an FHC under amendments to the BHC Act effected by the U.S. Gramm-Leach- +Bliley Act of 1999 (GLB Act), and is subject to supervision and examination by +the FRB, which is our primary regulator. + +The FRB’s rating system for large financial institutions is aligned with its +supervisory program and is comprised of component ratings for capital planning +and positions, liquidity risk management and positions, and governance and +controls. + +Under the system of “functional regulation” established under the BHC Act, the +primary regulators of our U.S. + +non-bank + +subsidiaries directly regulate the activities of those subsidiaries, with the +FRB exercising a supervisory role. Such “functionally regulated” subsidiaries +include broker-dealers and security-based swap dealers registered with the +SEC, such as our principal U.S. broker-dealer, GS&Co., entities registered +with or regulated by the CFTC with respect to futures-related and swaps- +related activities and investment advisers registered with the SEC with +respect to their investment advisory activities. + +Our principal U.S. bank subsidiary, GS Bank USA, is supervised and regulated +by the FRB, the FDIC, the New York State Department of Financial Services +(NYDFS) and the Consumer Financial Protection Bureau (CFPB). GS Bank USA also +has a London branch, which is regulated by the FCA and PRA, and a Tokyo +branch, which is regulated by the Japan Financial Services Agency. We conduct +a number of our activities partially or entirely through GS Bank USA and its +subsidiaries, including: corporate loans (including leveraged lending) and +transaction banking; consumer loans (including installment and credit card +loans); small business loans (including installment, lines of credit and +credit cards); wealth management loans (including mortgages); interest rate, +credit, currency and other derivatives; deposit-taking; and agency lending. + +Our E.U. subsidiaries are subject to various E.U. regulations, as well as +national laws, including those implementing European directives. GSBE is +directly supervised by the European Central Bank (ECB) and additionally by +BaFin and Deutsche Bundesbank in the context of the E.U. Single Supervisory +Mechanism (SSM). GSBE’s London branch is regulated by the FCA. GSBE engages in +certain activities primarily in the E.U., including underwriting and market +making in debt and equity securities and derivatives, investment, asset and +wealth management services, deposit-taking, lending (including securities +lending), and financial advisory services and is a primary dealer for +government bonds issued by E.U. sovereigns. On July 1, 2021, GSBE became a +subsidiary of GS Bank USA. As a foreign bank subsidiary of GS Bank USA, GSBE +is subject to limits on the nature and scope of its activities under the FRB’s +Regulation K, including limits on its underwriting and market making in equity +securities based on GSBE’s and/or GS Bank USA’s capital. + +Goldman Sachs Paris Inc. et Cie (GSPIC) is an investment firm regulated by the +French Prudential Supervision and Resolution Authority and the Financial +Markets Authority. GSPIC’s activities include certain activities that GSBE is +prevented from undertaking. GSPIC applied in October 2021 to become a credit +institution. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Our principal subsidiaries in the U.K. include GSI, a U.K. broker-dealer and a +designated investment firm, and GSIB, a U.K. bank. Both GSI and GSIB are +regulated by the PRA and the FCA. As an investment firm, GSI is subject to +prudential requirements applicable to banks, including capital and liquidity +requirements. GSI provides broker-dealer services in and from the U.K. and is +registered with the CFTC as a swap dealer and with the SEC as a securities- +based swap dealer. GSIB engages in lending (including securities lending) and +deposit-taking activities and is a primary dealer for U.K. government bonds. +GSI and GSIB maintain branches outside of the U.K. and are subject to the laws +and regulations of the jurisdictions where they are located. + +Capital and Liquidity Requirements. + +We and GS Bank USA are subject to regulatory risk-based capital and leverage +requirements that are calculated in accordance with the regulations of the FRB +(Capital Framework). The Capital Framework is largely based on the Basel +Committee’s framework for strengthening the regulation, supervision and risk +management of banks (Basel III) and also implements certain provisions of the +Dodd-Frank Act. Under the U.S. federal bank regulatory agencies’ tailoring +framework, we and GS Bank USA are subject to “Category I” standards because we +have been designated as a global systemically important bank + +(G-SIB). + +Accordingly, we and GS Bank USA are “Advanced approach” banking organizations. +Under the Capital Framework, we and GS Bank USA must meet specific regulatory +capital requirements that involve quantitative measures of assets, liabilities +and certain + +off-balance + +sheet items. The sufficiency of our capital levels is also subject to +qualitative judgments by regulators. We and GS Bank USA are also subject to +liquidity requirements established by the U.S. federal bank regulatory +agencies. + +GSBE is subject to capital and liquidity requirements prescribed in the E.U. +Capital Requirements Regulation, as amended (CRR), and the E.U. Capital +Requirements Directive, as amended (CRD), which are largely based on Basel +III. + +The most recent previous amendments to the CRR and CRD (respectively, CRR II +and CRD V) include changes to the market risk, counterparty credit risk, large +exposures and leverage ratio frameworks. These changes have been applicable in +the E.U. since June 2021. + +GSI and GSIB are subject to the U.K. capital and liquidity frameworks, which +are also largely based on Basel III and remain predominantly aligned with the +E.U. capital and liquidity frameworks. Amendments similar to CRR II and CRD V +became applicable in the U.K. on January 1, 2022. Requirements established by +E.U. and U.K. authorities are therefore similar to those applicable to GS Bank +USA and us. + +Risk-Based Capital Ratios. + +As Advanced approach banking organizations, we and GS Bank USA calculate risk- +based capital ratios in accordance with both the Standardized and Advanced +Capital Rules. Both the Advanced Capital Rules and the Standardized Capital +Rules include minimum risk-based capital requirements and additional capital +conservation buffer requirements that must be satisfied solely with Common +Equity Tier 1 (CET1) capital. Failure to satisfy a buffer requirement in full +would result in constraints on capital distributions and discretionary +executive compensation. The severity of the constraints would depend on the +amount of the shortfall and the organization’s “eligible retained income,” +defined as the greater of (i) net income for the four preceding quarters, net +of distributions and associated tax effects not reflected in net income; and +(ii) the average of net income over the preceding four quarters. For Group +Inc., the capital conservation buffer requirements consist of a 2.5% buffer +(under the Advanced Capital Rules), a stress capital buffer (SCB) (under the +Standardized Capital Rules), and both a countercyclical buffer and the + +G-SIB + +surcharge (under both Capital Rules). For GS Bank USA, the capital +conservation buffer requirements consist of a 2.5% buffer and the +countercyclical capital buffer. + +The SCB is based on the results of the Federal Reserve’s supervisory stress +tests and our planned common stock dividends and is likely to change over time +based on the results of the annual supervisory stress tests. See “Stress Tests +and Capital Planning” below. The countercyclical capital buffer is designed to +counteract systemic vulnerabilities and currently applies only to banking +organizations subject to Category I, II or III standards, including us and GS +Bank USA. Several other national supervisors also require countercyclical +capital buffers. The + +G-SIB + +surcharge and countercyclical capital buffer applicable to us may change in +the future including due to additional guidance from our regulators and/or +positional changes. As a result, the minimum capital ratios to which we are +subject are likely to change over time. + +The U.S. federal bank regulatory agencies have a rule that implements the +Basel Committee’s standardized approach for measuring counterparty credit risk +exposures in connection with derivative contracts + +(SA-CCR). + +Under the rule, “Advanced approach” banking organizations are required to use + +SA-CCR + +for calculating their standardized risk-weighted assets (RWAs) and, with some +adjustments, for purposes of determining their supplementary leverage ratios +(SLRs) discussed below. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +The capital requirements applicable to GSBE, GSI and GSIB include both minimum +requirements and buffers. See “Management’s Discussion and Analysis of +Financial Condition and Results of Operations — Capital Management and +Regulatory Capital” in Part II, Item 7 of this + +Form 10-K + +and Note 20 to the consolidated financial statements in Part II, Item 8 of +this + +Form 10-K + +for information about our capital ratios and those of GS Bank USA, GSBE, GSI +and GSIB. + +The Basel Committee standards include guidelines for calculating incremental +capital ratio requirements for banking institutions that are systemically +significant from a domestic but not global perspective + +(D-SIBs). + +Depending on how these guidelines are implemented by national regulators, they +may apply, among others, to certain subsidiaries of + +G-SIBs. + +These guidelines are in addition to the framework for + +G-SIBs, + +but are more principles-based. The CRD and CRR provide that institutions that +are systemically important at the E.U. or member state level, known as other +systemically important institutions + +(O-SIIs), + +may be subject to additional capital ratio requirements, according to their +degree of systemic importance + +(O-SII + +buffers). In 2021, BaFin identified GSBE as an + +O-SII + +in Germany and set an + +O-SII + +buffer, applicable from January 1, 2022. + +In the U.K., the PRA has identified Goldman Sachs Group UK Limited (GSG UK), +the parent company of GSI and GSIB, as an + +O-SII + +but has not applied an + +O-SII + +buffer. + +The Basel Committee has finalized revisions to the framework for calculating +capital requirements for market risk as part of its Fundamental Review of the +Trading Book (FRTB). These revisions are expected to increase market risk +capital requirements for most banking organizations and large broker-dealers +subject to bank capital requirements. The revised framework, among other +things, revises the standardized and internal model-based approaches used to +calculate market risk requirements and clarifies the scope of positions +subject to market risk capital requirements. The Basel Committee framework +contemplates that national regulators implement the revised framework by +January 1, 2023. The U.S. federal bank regulatory agencies have not yet +proposed rules implementing the revised framework. Under the CRR, E.U. +financial institutions commenced reporting their market risk calculations +under the revised framework in the third quarter of 2021. U.K. authorities +have not yet proposed rules to implement this framework. + +The Basel Committee published standards that it described as the finalization +of the Basel III post-crisis regulatory reforms (Basel III Revisions). These +standards set a floor on internally modeled capital requirements at a +percentage of the capital requirements under the standardized approach. They +also revise the Basel Committee’s standardized and internal model-based +approaches for credit risk, provide a new standardized approach for +operational risk capital and revise the frameworks for credit valuation +adjustment (CVA) risk. The Basel Committee framework contemplates that +national regulators implement these standards by January 1, 2023, and that the +new floor be phased in through January 1, 2028. In July 2020, the Basel +Committee finalized further revisions to the framework for CVA risk, which are +intended to align that framework with the market risk framework. + +The U.S. federal bank regulatory authorities have not yet proposed rules +implementing the Basel III Revisions for purposes of their risk-based capital +ratios. The European Commission proposed rules to implement the Basel III +Revisions in October 2021. The proposed E.U. rules contemplate amendments to +the CRR and the CRD, referred to as CRR III and CRD VI, to take effect in +January 2025. The U.K. authorities have not yet released a proposal on the +Basel III Revisions. + +The Basel Committee has also published an updated securitization framework and +a revised + +G-SIB + +assessment methodology, but the U.S. federal bank regulatory agencies have not +yet proposed rules implementing them. The updated securitization framework has +been implemented in the E.U. and U.K. + +Leverage Ratios. + +Under the Capital Framework, we and GS Bank USA are subject to Tier 1 leverage +ratios and SLRs established by the FRB. As a + +G-SIB, + +the SLR requirements applicable to us include both a minimum requirement and a +buffer requirement, which operates in the same manner as the risk-based buffer +requirements described above. In April 2018, the FRB and the OCC issued a +proposed rule which would (i) replace the current 2% SLR buffer for + +G-SIBs, + +including us, with a buffer equal to 50% of their + +G-SIB + +surcharge and (ii) revise the 6% SLR requirement for Category I banks, such as +GS Bank USA, to be “well capitalized” with a requirement equal to 3% plus 50% +of their parent’s + +G-SIB + +surcharge. This proposal, together with the adopted rule requiring use of + +SA-CCR + +for purposes of calculating the SLR, would implement certain of the revisions +to the leverage ratio framework published by the Basel Committee in December + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +GSBE and certain of our U.K. entities, including GSI and GSIB, are also +subject to requirements relating to leverage ratios, which are generally based +on the Basel Committee leverage ratio standards. + +See “Management’s Discussion and Analysis of Financial Condition and Results +of Operations — Capital Management and Regulatory Capital” in Part II, Item 7 +of this + +Form 10-K + +and Note 20 to the consolidated financial statements in Part II, Item 8 of +this + +Form 10-K + +for information about our and GS Bank USA’s Tier 1 leverage ratios and SLRs, +and GSI’s leverage ratio. + +Liquidity Ratios. + +The Basel Committee’s framework for liquidity risk measurement, standards and +monitoring requires banking organizations to measure their liquidity against +two specific liquidity tests: the Liquidity Coverage Ratio (LCR) and the Net +Stable Funding Ratio (NSFR). + +The LCR rule issued by the U.S. federal bank regulatory agencies and +applicable to both us and GS Bank USA is generally consistent with the Basel +Committee’s framework and is designed to ensure that a banking organization +maintains an adequate level of unencumbered, high-quality liquid assets equal +to or greater than the expected net cash outflows under an acute short-term +liquidity stress scenario. We and GS Bank USA are required to maintain a +minimum LCR of 100%. See “Available Information” below and “Management’s +Discussion and Analysis of Financial Condition and Results of Operations — +Capital Management and Regulatory Capital” in Part II, Item 7 of this + +Form 10-K + +for information about our average daily LCR. + +GSBE is subject to the LCR rule issued by the European Commission, and GSI and +GSIB are subject to the U.K. prudential framework’s LCR rules. These rules are +generally consistent with the Basel Committee’s framework. + +The NSFR is designed to promote medium- and long-term stable funding of the +assets and + +off-balance + +sheet activities of banking organizations over a + +one-year + +time horizon. The Basel Committee’s NSFR framework requires banking +organizations to maintain a minimum NSFR of 100%. + +The U.S. federal bank regulatory agencies issued a final rule, which became +effective in July 2021, implementing the NSFR for large U.S. banking +organizations, including us and GS Bank USA. We will be required to publicly +disclose our quarterly average daily NSFR semiannually beginning in 2023. The +CRR implemented the NSFR for certain E.U. financial institutions, including +GSBE, which became effective in June 2021. The NSFR requirement implemented in +the U.K. became effective in January 2022 and is applicable to both GSI and +GSIB. + +The FRB’s enhanced prudential standards require BHCs with $100 billion or more +in total consolidated assets to comply with enhanced liquidity and overall +risk management standards, which include maintaining a level of highly liquid +assets based on projected funding needs for 30 days, and increased involvement +by boards of directors in liquidity and overall risk management. Although the +liquidity requirement under these rules has some similarities to the LCR, it +is a separate requirement. GSBE also has its own liquidity planning process, +which incorporates internally designed stress tests and those required under +German regulatory requirements and the ECB Guide to Internal Liquidity +Adequacy Assessment Process (ILAAP). GSI and GSIB have their own liquidity +planning processes, which incorporate internally designed stress tests +developed in accordance with the guidelines of the PRA’s ILAAP. + +See “Management’s Discussion and Analysis of Financial Condition and Results +of Operations — Risk Management — Overview and Structure of Risk Management” +and “— Liquidity Risk Management” in Part II, Item 7 of this + +Form 10-K + +for information about the LCR and NSFR, as well as our risk management +practices and liquidity. + +Stress Tests and Capital Planning. + +The FRB’s Comprehensive Capital Analysis and Review (CCAR) is designed to +ensure that large BHCs, including us, have sufficient capital to permit +continued operations during times of economic and financial stress. As +required by the FRB, we perform an annual capital stress test and incorporate +the results into an annual capital plan, which we submit to the FRB for +review. See “Management’s Discussion and Analysis of Financial Condition and +Results of Operations — Risk Management — Overview and Structure of Risk +Management — Capital Risk Management” in Part II, Item 7 of this + +Form 10-K + +for further information about our annual capital plan. As described in +“Available Information” below, summary results of the annual stress test are +published on our website. + +As part of the CCAR process, the FRB evaluates our plan to make capital +distributions across a range of macroeconomic and company-specific +assumptions, based on our and the FRB’s own stress tests. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +The FRB’s rule applicable to BHCs with $100 billion or more in total +consolidated assets, including us, replaced the static 2.5% component of the +capital conservation buffer required under the Standardized Capital Rules with +the SCB. The SCB reflects stressed losses estimated under the supervisory +severely adverse scenario of the CCAR stress tests, as calculated by the FRB, +and includes four quarters of planned common stock dividends. The SCB, which +is subject to a 2.5% floor, is generally effective on October 1 of each year +and remains in effect until October 1 of the following year, unless it is +reset in connection with the resubmission of a capital plan. See “Available +Information” below and “Management’s Discussion and Analysis of Financial +Condition and Results of Operations — Capital Management and Regulatory +Capital” in Part II, Item 7 of this + +Form 10-K + +for information about our SCB requirement. + +The final rule implementing the SCB requires a BHC to receive the FRB’s +approval for any dividend, stock repurchase or other capital distribution, +other than a capital distribution on a newly issued capital instrument, if the +BHC is required to resubmit its capital plan. + +U.S. depository institutions with total consolidated assets of $250 billion or +more that are subsidiaries of U.S. + +G-SIBs + +are required to submit annual + +company-run + +stress test results to the FRB. As a result of recent growth in its balance +sheet, GS Bank USA will be required to submit its annual stress test results +in 2022. GSBE also has its own capital and stress testing process, which +incorporates internally designed stress tests and those required under German +regulatory requirements and the ECB Guide to Internal Capital Adequacy +Assessment Process (ICAAP). In addition, GSI and GSIB have their own capital +planning and stress testing processes, which incorporate internally designed +stress tests developed in accordance with the PRA’s ICAAP guidelines. + +U.S. federal and state laws impose limitations on the payment of dividends by +U.S. depository institutions, such as GS Bank USA. In general, the amount of +dividends that may be paid by GS Bank USA is limited to the lesser of the +amounts calculated under a recent earnings test and an undivided profits test. +Under the recent earnings test, a dividend may not be paid if the total of all +dividends declared by the entity in any calendar year is in excess of the +current year’s net income combined with the retained net income of the two +preceding years, unless the entity obtains regulatory approval. Under the +undivided profits test, a dividend may not be paid in excess of the entity’s +undivided profits (generally, accumulated net profits that have not been paid +out as dividends or transferred to surplus), unless the entity receives +regulatory and stockholder approval. As a result of dividend payments from GS +Bank USA to Group Inc. in connection with the acquisition of GSBE in July +2021, GS Bank USA cannot currently declare any dividends without regulatory +approval. + +The applicable U.S. banking regulators have authority to prohibit or limit the +payment of dividends if, in the banking regulator’s opinion, payment of a +dividend would constitute an unsafe or unsound practice in light of the +financial condition of the banking organization. + +Source of Strength. + +The Dodd-Frank Act requires BHCs to act as a source of strength to their U.S. +bank subsidiaries and to commit capital and financial resources to support +those subsidiaries. This support may be required by the FRB at times when BHCs +might otherwise determine not to provide it. Capital loans by a BHC to a U.S. +subsidiary bank are subordinate in right of payment to deposits and to certain +other indebtedness of the subsidiary bank. In addition, if a BHC commits to a +U.S. federal banking agency that it will maintain the capital of its bank +subsidiary, whether in response to the FRB’s invoking its + +source-of-strength + +authority or in response to other regulatory measures, that commitment will be +assumed by the bankruptcy trustee for the BHC and the bank will be entitled to +priority payment in respect of that commitment, ahead of other creditors of +the BHC. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Transactions Between Affiliates. + +Transactions between GS Bank USA or its subsidiaries, including GSBE, and +Group Inc. or its other subsidiaries and affiliates are subject to +restrictions under the Federal Reserve Act and regulations issued by the FRB. +These laws and regulations generally limit the types and amounts of +transactions (such as loans and other credit extensions, including credit +exposure arising from resale agreements, securities borrowing and derivative +transactions, from GS Bank USA or its subsidiaries to Group Inc. or its other +subsidiaries and affiliates and purchases of assets by GS Bank USA or its +subsidiaries from Group Inc. or its other subsidiaries and affiliates) that +may take place and generally require those transactions, to the extent +permitted, to be on market terms or better to GS Bank USA or its subsidiaries. +These laws and regulations generally do not apply to transactions between GS +Bank USA and its subsidiaries. Similarly, German regulatory requirements +provide that certain transactions between GSBE and GS Bank USA or its other +affiliates, including Group Inc., must be on market terms and are subject to +special internal approval requirements. PRA rules provide similar requirements +for transactions between GSI and GSIB and their respective affiliates. + +The BHC Act prohibits the FRB from requiring a payment by a BHC subsidiary to +a depository institution if the functional regulator of that subsidiary +objects to the payment. In that case, the FRB could instead require the +divestiture of the depository institution and impose operating restrictions +pending the divestiture. + +Resolution and Recovery Plans. + +We are required by the FRB and the FDIC to submit a periodic plan for our +rapid and orderly resolution in the event of material financial distress or +failure (resolution plan). If these regulators jointly determine that an +institution has failed to remediate identified shortcomings in its resolution +plan or that its resolution plan, after any permitted resubmission, is not +credible or would not facilitate an orderly resolution under the U.S. +Bankruptcy Code, they may jointly impose more stringent capital, leverage or +liquidity requirements or restrictions on growth, activities or operations, or +may jointly order the institution to divest assets or operations, in order to +facilitate orderly resolution in the event of failure. The FRB and FDIC have a +rule requiring U.S. + +G-SIBs + +to submit resolution plans on a + +two-year + +cycle (alternating between full and targeted submissions). We submitted our +2021 resolution plan, which was a targeted submission, in June 2021. Our next +required submission is a full submission by July 1, 2023. See “Risk Factors — +The application of Group Inc.’s proposed resolution strategy could result in +greater losses for Group Inc.’s security holders” in Part I, Item 1A of this + +Form 10-K + +and “Available Information” in Part I, Item 1 of this + +Form 10-K + +for further information about our resolution plan. + +We are also required by the FRB to submit, on a periodic basis, a global +recovery plan that outlines the steps that we could take to reduce risk, +maintain sufficient liquidity and conserve capital in times of prolonged +stress. Certain of our subsidiaries are also subject to similar recovery plan +requirements. + +The FDIC has issued a rule requiring each insured depository institution (IDI) +with $50 billion or more in assets, such as GS Bank USA, to provide a +resolution plan. Our resolution plan for GS Bank USA must, among other things, +demonstrate that it is adequately protected from risks arising from our other +entities. GS Bank USA’s most recent resolution plan was submitted in June +2018. In January 2021, the FDIC announced its intention to require resolution +plan submissions for IDIs with $100 billion or more in assets, including GS +Bank USA. In June 2021, the FDIC issued guidance for those resolution plans. +This guidance splits covered IDIs into two groups for purposes of the timing +of resolution plan submissions, and GS Bank USA is in the second group with a +later submission date. + +The U.S. federal bank regulatory agencies have adopted rules imposing +restrictions on qualified financial contracts (QFCs) entered into by + +G-SIBs. + +The rules are intended to facilitate the orderly resolution of a failed + +G-SIB + +by limiting the ability of the + +G-SIB + +to enter into a QFC unless (i) the counterparty waives certain default rights +in such contract arising upon the entry of the + +G-SIB + +or one of its affiliates into resolution, (ii) the contract does not contain +enumerated prohibitions on the transfer of such contract and/or any related +credit enhancement, and (iii) the counterparty agrees that the contract will +be subject to the special resolution regimes set forth in the Dodd-Frank Act +orderly liquidation authority (OLA) and the Federal Deposit Insurance Act of +1950 (FDIA), described below. GS Bank USA has achieved compliance by adhering +to the International Swaps and Derivatives Association Universal Resolution +Stay Protocol (ISDA Universal Protocol) and International Swaps and +Derivatives Association 2018 U.S. Resolution Stay Protocol (U.S. ISDA +Protocol) described below. + +Certain of our subsidiaries also adhere to these protocols. The ISDA Universal +Protocol imposes a stay on certain cross-default and early termination rights +within standard ISDA derivative contracts and securities financing +transactions between adhering parties in the event that one of them is subject +to resolution in its home jurisdiction, including a resolution under OLA or +the FDIA in the U.S. The U.S. ISDA Protocol, which was based on the ISDA +Universal Protocol, was created to allow market participants to comply with +the final QFC rules adopted by the federal bank regulatory agencies. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +The E.U. Bank Recovery and Resolution Directive (BRRD), as amended by the BRRD +II, establishes a framework for the recovery and resolution of financial +institutions in the E.U., such as GSBE. The BRRD provides national supervisory +authorities with tools and powers to + +pre-emptively + +address potential financial crises in order to promote financial stability and +minimize taxpayers’ exposure to losses. The BRRD requires E.U. member states +to grant certain resolution powers to national and, where relevant, E.U. +resolution authorities, including the power to impose a temporary stay and to +recapitalize a failing entity by writing down its unsecured debt or converting +its unsecured debt into equity. Financial institutions in the E.U. must +provide that contracts governed by + +non-E.U. + +law recognize those temporary stay and + +bail-in + +powers unless doing so would be impracticable. GSBE is under the direct +authority of the Single Resolution Board for resolution planning. Regulatory +authorities in the E.U. may require financial institutions in the E.U., +including subsidiaries of + +non-E.U. + +groups, to submit recovery plans and to assist the relevant resolution +authority in constructing resolution plans for the E.U. entities. GSBE’s +primary regulator with respect to recovery planning is the ECB, and it is also +regulated by BaFin and Deutsche Bundesbank. + +The U.K. Special Resolution Regime confers substantially the same powers on +the Bank of England, as the U.K. resolution authority, and substantially the +same requirements on U.K. financial institutions. Further, certain U.K. +financial institutions, including GSI and GSIB, are required to meet the Bank +of England’s expectations contained in the U.K. Resolution Assessment +Framework, including with respect to loss absorbency, contractual stays, +operational continuity and funding in resolution. They are also required by +the PRA to submit solvent wind-down plans on how they could be wound down in a +stressed environment. The PRA is also the regulatory authority in the U.K. +that supervises recovery planning, and GSI and GSIB are each required to +submit recovery plans to the PRA. + +Total Loss-Absorbing Capacity (TLAC). + +The FRB has issued a rule addressing U.S. implementation of the Financial +Stability Board’s (FSB’s) TLAC principles and term sheet on minimum TLAC +requirements for + +G-SIBs. + +The rule (i) establishes minimum TLAC requirements; (ii) establishes minimum +requirements for “eligible long-term debt” (i.e., debt that is unsecured, has +a maturity of at least one year from issuance and satisfies certain additional +criteria); (iii) prohibits certain parent company transactions; and (iv) caps +the amount of parent company liabilities that are not eligible long-term debt. + +The rule also prohibits a BHC that has been designated as a U.S. + +G-SIB + +from (i) guaranteeing subsidiaries’ liabilities that are subject to early +termination provisions if the BHC enters into an insolvency or receivership +proceeding, subject to an exception for guarantees permitted by rules of the +U.S. federal banking agencies imposing restrictions on QFCs; (ii) incurring +liabilities guaranteed by subsidiaries; (iii) issuing short-term debt to third +parties; or (iv) entering into derivatives and certain other financial +contracts with external counterparties. + +Additionally, the rule caps, at 5% of the value of the parent company’s +eligible TLAC, the amount of unsecured + +non-contingent + +third-party liabilities that are not eligible long-term debt that could rank +equally with or junior to eligible long-term debt. + +The FRB, the OCC and the FDIC issued a final rule, effective April 1, 2021, +requiring “Advanced approach” banking organizations, such as us, to deduct +from their own regulatory capital certain investments above thresholds in +unsecured debt instruments issued by + +G-SIBs, + +including those issued for purposes of satisfying TLAC requirements. + +The CRR and the BRRD are designed to, among other things, implement the FSB’s +minimum TLAC requirement for + +G-SIBs. + +For example, the CRR requires E.U. subsidiaries of a + +non-E.U. + +G-SIB + +to meet internal TLAC requirements if they exceed the threshold of 5% of the + +G-SIB’s + +RWAs, operating income or leverage exposure. GSBE does not currently exceed +these thresholds. Under the U.K. financial services regime, GSG UK exceeds the +applicable thresholds and therefore, it is subject to internal TLAC +requirements. + +The CRD requires a + +non-E.U. + +group with more than €40 billion of assets in the E.U., such as us, to +establish an E.U. intermediate holding company (E.U. IHC) by December 30, 2023 +if it has, as in our case, two or more of certain types of E.U. financial +institution subsidiaries, including broker-dealers and banks. A + +non-E.U. + +group may have two E.U. IHCs if a request for a second is approved. The CRR +requires E.U. IHCs to satisfy capital and liquidity requirements, a minimum +requirement for own funds and eligible liabilities (MREL), and certain other +prudential requirements at a consolidated level. The U.K. has not implemented +the requirement for an IHC; however, the PRA has introduced a requirement to +approve or exempt certain U.K. financial holding companies, including GSG UK, +which became effective in January 2022. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +The BRRD II and the U.K. resolution regime subject institutions to an MREL, +which is generally consistent with the FSB’s TLAC standard. In June 2018, the +Bank of England published a statement of policy on internal MREL, which +requires a material U.K. subsidiary of an overseas banking group, such as GSI, +to meet a minimum internal MREL requirement to facilitate the transfer of +losses to its resolution entity, which for GSI is Group Inc. The transitional +minimum internal MREL requirement became fully effective on January 1, 2022. +In order to comply with the MREL statement of policy, we have provided the +Bank of England the right to exercise + +bail-in + +triggers over certain intercompany regulatory capital and senior debt +instruments issued by GSI. These triggers enable the Bank of England to write +down such instruments or convert such instruments to equity. The triggers can +be exercised by the Bank of England if it determines that GSI has reached the +point of + +non-viability + +and the FRB and the FDIC have not objected to the + +bail-in + +or if Group Inc. enters bankruptcy or similar proceedings. + +Insolvency of a BHC or IDI. + +The Dodd-Frank Act created a resolution regime, OLA, for BHCs and their +affiliates that are systemically important. Under OLA, the FDIC may be +appointed as receiver for the systemically important institution and its +failed + +non-bank + +subsidiaries if, upon the recommendation of applicable regulators, the U.S. +Secretary of the Treasury determines, among other things, that the institution +is in default or in danger of default, that the institution’s failure would +have serious adverse effects on the U.S. financial system and that resolution +under OLA would avoid or mitigate those effects. + +If the FDIC is appointed as receiver under OLA, then the powers of the +receiver, and the rights and obligations of creditors and other parties who +have dealt with the institution, would be determined under OLA, and not under +the bankruptcy or insolvency law that would otherwise apply. The powers of the +receiver under OLA are generally based on the powers of the FDIC as receiver +for depository institutions under the FDIA, described below. + +Substantial differences in the rights of creditors exist between OLA and the +U.S. Bankruptcy Code, including the right of the FDIC under OLA to disregard +the strict priority of creditor claims in some circumstances, the use of an +administrative claims procedure to determine creditors’ claims (as opposed to +the judicial procedure utilized in bankruptcy proceedings), and the right of +the FDIC to transfer claims to a “bridge” entity. In addition, OLA limits the +ability of creditors to enforce certain contractual cross-defaults against +affiliates of the institution in receivership. The FDIC has issued a notice +that it would likely resolve a failed FHC by transferring its assets to a +“bridge” holding company under its “single point of entry” or “SPOE” strategy +pursuant to OLA. + +Under the FDIA, if the FDIC is appointed as conservator or receiver for an IDI +such as GS Bank USA, upon its insolvency or in certain other events, the FDIC +has broad powers, including the power: + +To transfer any of the IDI’s assets and liabilities to a new obligor, +including a newly formed “bridge” bank, without the approval of the depository +institution’s creditors; + +To enforce the IDI’s contracts pursuant to their terms without regard to any +provisions triggered by the appointment of the FDIC in that capacity; or + +To repudiate or disaffirm any contract or lease to which the IDI is a party, +the performance of which is determined by the FDIC to be burdensome and the +repudiation or disaffirmance of which is determined by the FDIC to promote the +orderly administration of the IDI. + +In addition, the claims of holders of domestic deposit liabilities and certain +claims for administrative expenses against an IDI would be afforded a priority +over other general unsecured claims, including deposits at + +non-U.S. + +branches and claims of debtholders of the IDI, in the “liquidation or other +resolution” of such an institution by any receiver. As a result, whether or +not the FDIC ever sought to repudiate any debt obligations of GS Bank USA, the +debtholders (other than depositors at U.S. branches) would be treated +differently from, and could receive, if anything, substantially less than, the +depositors at U.S. branches of GS Bank USA. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Deposit Insurance. + +Deposits at GS Bank USA have the benefit of FDIC insurance up to the +applicable limits. The FDIC’s Deposit Insurance Fund is funded by assessments +on IDIs. GS Bank USA’s assessment (subject to adjustment by the FDIC) is +currently based on its average total consolidated assets less its average +tangible equity during the assessment period, its supervisory ratings and +specified forward-looking financial measures used to calculate the assessment +rate. The deposits of GSBE are covered by the German statutory deposit +protection program to the extent provided by law. In addition, GSBE has +elected to participate in the German voluntary deposit protection program +which provides insurance for certain eligible deposits not covered by the +German statutory deposit program. Deposits at GSIB are covered by the U.K. +Financial Services Compensation Scheme up to the applicable limits. + +Prompt Corrective Action. + +The U.S. Federal Deposit Insurance Corporation Improvement Act of 1991 +(FDICIA) requires the U.S. federal bank regulatory agencies to take “prompt +corrective action” in respect of depository institutions that do not meet +specified capital requirements. FDICIA establishes five capital categories for +FDIC-insured banks, such as GS Bank USA: well-capitalized, adequately +capitalized, undercapitalized, significantly undercapitalized and critically +undercapitalized. + +An institution may be downgraded to, or deemed to be in, a capital category +that is lower than is indicated by its capital ratios if it is determined to +be in an unsafe or unsound condition or if it receives an unsatisfactory +examination rating with respect to certain matters. FDICIA imposes +progressively more restrictive constraints on operations, management and +capital distributions, as the capital category of an institution declines. +Failure to meet the capital requirements could also require a depository +institution to raise capital. Ultimately, critically undercapitalized +institutions are subject to the appointment of a receiver or conservator, as +described in “Insolvency of an IDI or a BHC” above. + +The prompt corrective action regulations do not apply to BHCs. However, the +FRB is authorized to take appropriate action at the BHC level, based upon the +undercapitalized status of the BHC’s depository institution subsidiaries. In +certain instances, relating to an undercapitalized depository institution +subsidiary, the BHC would be required to guarantee the performance of the +undercapitalized subsidiary’s capital restoration plan and might be liable for +civil money damages for failure to fulfill its commitments on that guarantee. +Furthermore, in the event of the bankruptcy of the BHC, the guarantee would +take priority over the BHC’s general unsecured creditors, as described in +“Source of Strength” above. + +Volcker Rule and Other Restrictions on Activities. + +As a BHC, we are subject to limitations on the types of business activities in +which we may engage. + +Volcker Rule. + +The Volcker Rule prohibits “proprietary trading,” but permits activities such +as underwriting, market making and risk-mitigation hedging, requires an +extensive compliance program and includes additional reporting and record- +keeping requirements. + +In addition, the Volcker Rule limits the sponsorship of, and investment in, +“covered funds” (as defined in the rule) by banking entities, including us. It +also limits certain types of transactions between us and our sponsored and +advised funds, similar to the limitations on transactions between depository +institutions and their affiliates. Covered funds include our private equity +funds, certain of our credit and real estate funds, our hedge funds and +certain other investment structures. The limitation on investments in covered +funds requires us to limit our investment in each such fund to 3% or less of +the fund’s net asset value, and to limit our aggregate investment in all such +funds to 3% or less of our Tier 1 capital. + +The FRB has extended the conformance period to July 2022 for our investments +in, and relationships with, certain legacy “illiquid funds” (as defined in the +Volcker Rule) that were in place prior to December 2013. See Note 8 to the +consolidated financial statements in Part II, Item 8 of this + +Form 10-K + +for further information about our investments in such funds. + +Other Restrictions. + +FHCs generally can engage in a broader range of financial and related +activities than are otherwise permissible for BHCs as long as they continue to +meet the eligibility requirements for FHCs. The broader range of permissible +activities for FHCs includes underwriting, dealing and making markets in +securities and making investments in + +non-FHCs + +(merchant banking activities). In addition, certain FHCs, including us, are +permitted to engage in certain commodities activities in the U.S. that may +otherwise be impermissible for BHCs, so long as the assets held pursuant to +these activities do not equal 5% or more of their consolidated assets. + +The FRB, however, has the authority to limit an FHC’s ability to conduct +activities that would otherwise be permissible, and will likely do so if the +FHC does not satisfactorily meet certain requirements of the FRB. For example, +if an FHC or any of its U.S. depository institution subsidiaries ceases to +maintain its status as well-capitalized or well-managed, the FRB may impose +corrective capital and/or managerial requirements, as well as additional +limitations or conditions. If the deficiencies persist, the FHC may be +required to divest its U.S. depository institution subsidiaries or to cease +engaging in activities other than the business of banking and certain closely +related activities. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +If any IDI subsidiary of an FHC fails to maintain at least a “satisfactory” +rating under the Community Reinvestment Act, the FHC would be subject to +restrictions on certain new activities and acquisitions. + +In addition, we are required to obtain prior FRB approval before certain +acquisitions and before engaging in certain banking and other financial +activities both within and outside the U.S. + +The FRB issued a proposed rule in September 2016 which, if adopted, would +impose new requirements on the physical commodity activities and certain +merchant banking activities of FHCs, including, among other things, additional +capital requirements, stringent quantitative limits on permissible physical +trading activity, and new public reporting requirements. At that time, the FRB +recommended that Congress repeal authorities for FHCs to engage in merchant +banking activities and for certain FHCs to engage in certain otherwise +impermissible commodities activities. + +U.S. + +G-SIBs, + +like us, are also required to comply with a rule regarding single counterparty +credit limits, which imposes more stringent requirements for credit exposures +among major financial institutions. The Dodd-Frank Act also requires the FRB +to implement early remediation requirements, which were proposed in 2011 but +not finalized. + +The New York State banking law imposes lending limits (which take into account +credit exposure from derivative transactions) and other requirements that +could impact the manner and scope of GS Bank USA’s activities. + +The U.S. federal bank regulatory agencies have issued guidance that focuses on +transaction structures and risk management frameworks and that outlines high- +level principles for + +safe-and-sound + +leveraged lending, including underwriting standards, valuation and stress +testing. This guidance has, among other things, limited the percentage amount +of debt that can be included in certain transactions. + +As a German credit institution, GSBE will become subject to Volcker Rule-type +prohibitions under German banking law and regulations once its financial +assets exceed certain thresholds. Prohibited activities will then include +proprietary trading, certain types of high-frequency trading and certain types +of lending and guarantee businesses with defined prohibited counterparties, +such as hedge funds and other highly leveraged funds, unless an exclusion or +an exemption applies. See “Volcker Rule” above for further information. + +U.K. banks that have over £25 billion of core retail deposits are required to +separate their retail banking services from their investment and international +banking activities, commonly known as “ring-fencing.” GSIB is not currently +subject to the ring-fencing requirement, and if it were to become subject to +it, GSIB would need to make significant operational and structural changes. + +Broker-Dealer and Securities Regulation + +Our broker-dealer subsidiaries are subject to regulations that cover all +aspects of the securities business, including sales methods, trade practices, +the use and safekeeping of clients’ funds and securities, capital structure, +record-keeping, the financing of clients’ purchases, and the conduct of +directors, officers and employees. In the U.S., the SEC is the federal agency +responsible for the administration of the federal securities laws. GS&Co. is +registered as a broker-dealer, a securities-based swap dealer, a municipal +advisor and an investment adviser with the SEC and as a broker-dealer in all +50 states and the District of Columbia. U.S. self-regulatory organizations, +such as FINRA and the NYSE, adopt rules that apply to, and examine, broker- +dealers such as GS&Co. + +U.S. state securities and other U.S. regulators also have regulatory or +oversight authority over GS&Co. For a description of net capital requirements +applicable to GS&Co., see “Management’s Discussion and Analysis of Financial +Condition and Results of Operations — Capital Management and Regulatory +Capital — U.S. Regulated Broker-Dealer Subsidiaries” in Part II, Item 7 of +this + +Form 10-K. + +The SEC issued a proposed rule in November 2021 which, if adopted, would +require lenders of securities to provide the material terms of securities +lending transactions to a registered national securities association, such as +FINRA. + +In Europe, we provide broker-dealer services, including through GSBE (which is +a credit institution), GSPIC and GSI, that are subject to oversight by +European and national regulators. These services are regulated in accordance +with E.U., U.K. and national laws and regulations. These laws require, among +other things, compliance with certain capital adequacy and liquidity +standards, customer protection requirements and market conduct and trade +reporting rules. Certain of our European subsidiaries are also regulated by +the securities, derivatives and commodities exchanges of which they are +members. + +GSJCL, our regulated Japanese broker-dealer, is subject to capital +requirements imposed by Japan’s Financial Services Agency. GSJCL is also +regulated by the Tokyo Stock Exchange, the Bank of Japan and the Ministry of +Finance, among others. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +The Securities and Futures Commission in Hong Kong, the China Securities +Regulatory Commission, the Reserve Bank of India, the Securities and Exchange +Board of India, + +the Australian Securities and Investments Commission, the Australian +Securities Exchange, the Monetary Authority of Singapore, the Korean Financial +Supervisory Service and the Central Bank of Brazil, among others, regulate +various of our subsidiaries and also have capital standards and other +requirements comparable to the rules of the U.S. regulators. + +Our exchange-based market-making activities are subject to extensive +regulation by a number of securities exchanges. As a market maker on +exchanges, we are required to maintain orderly markets in the securities to +which we are assigned. + +In the E.U. and the U.K., the European Markets in Financial Instruments +Directive (MiFID II) includes extensive market structure reforms, such as the +establishment of new trading venue categories for the purposes of discharging +the obligation to trade OTC derivatives on a trading platform and enhanced + +pre- + +and post-trade transparency covering a wider range of financial instruments. +In equities, MiFID II introduced volume caps on + +non-transparent + +liquidity trading for trading venues, limited the use of broker-dealer +crossing networks and created a new regime for systematic internalizers, which +are investment firms that execute client transactions outside a trading venue. +Additional control requirements were introduced for algorithmic trading, high +frequency trading and direct electronic access. Commodities trading firms are +required to calculate their positions and adhere to specific position limits. +Other reforms include enhanced transaction reporting, the publication of best +execution data by investment firms and trading venues, transparency on costs +and charges of service to investors, changes to the way investment managers +can pay for the receipt of investment research, rules limiting the payment and +receipt of soft commissions and other forms of inducements, and mandatory +unbundling for broker-dealers between execution and other major services. + +The SEC requires broker-dealers to act in the best interest of their +customers. Additionally, SEC rules require broker-dealers to provide a +standardized, short-form disclosure highlighting services offered, applicable +standards of conduct, fees and costs, the differences between brokerage and +advisory services, and any conflicts of interest. Several states have adopted +or proposed adopting uniform fiduciary duty standards applicable to broker- +dealers. + +The SEC, FINRA and regulators in various + +non-U.S. + +jurisdictions have imposed both conduct-based and disclosure-based +requirements with respect to research reports and research analysts and may +impose additional regulations. + +GS&Co., GS Bank USA and other U.S. subsidiaries are also subject to rules +adopted by U.S. federal agencies pursuant to the Dodd-Frank Act that require +any person who organizes or initiates certain asset-backed securities +transactions to retain a portion (generally, at least five percent) of any +credit risk that the person conveys to a third party. For certain +securitization transactions, retention by third-party purchasers may satisfy +this requirement. Certain of our + +non-U.S. + +subsidiaries, including GSI, are subject to risk retention requirements in +connection with securitization activities. + +Swaps, Derivatives and Commodities Regulation + +The commodity futures, commodity options and swaps industry in the U.S. is +subject to regulation under the U.S. Commodity Exchange Act (CEA). The CFTC is +the U.S. federal agency charged with the administration of the CEA. In +addition, the SEC is the U.S. federal agency charged with the regulation of +security-based swaps. The rules and regulations of various self-regulatory +organizations, such as the Chicago Mercantile Exchange, other futures +exchanges and the National Futures Association, also govern commodity futures, +commodity options and swaps activities. + +The terms “swaps” and “security-based swaps” include a wide variety of +derivative instruments in addition to those conventionally referred to as +swaps (including certain forward contracts and options), and relate to a wide +variety of underlying assets or obligations, including currencies, +commodities, interest or other monetary rates, yields, indices, securities, +credit events, loans and other financial obligations. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +CFTC rules require registration of swap dealers, mandatory clearing and +execution of interest rate and credit default swaps and real-time public +reporting and adherence to business conduct standards for all + +in-scope + +swaps. A number of these requirements, particularly those regarding +recordkeeping and reporting, also apply to transactions that do not involve a +registered swap dealer. GS&Co. and other subsidiaries, including GS Bank USA, +GSBE, GSI and J. Aron, are registered with the CFTC as swap dealers. CFTC +rules establishing capital requirements for swap dealers that are not subject +to the capital rules of a prudential regulator, such as the FRB, became +effective in October 2021. The CFTC has also adopted financial reporting +requirements for covered swap entities and amended existing capital rules for +CFTC-registered futures commission merchants to provide explicit capital +requirements for proprietary positions in swaps and security-based swaps that +are not cleared by a clearing organization. Certain of our registered swap +dealers, including J. Aron, are subject to the CFTC’s capital requirements. + +Our affiliates registered as swap dealers are subject to the margin rules +issued by the CFTC (in the case of our + +non-bank + +swap dealers) and the FRB (in the case of GS Bank USA and GSBE). The rules for +variation margin have become effective, and those for initial margin are in +the process of being phased in through September 2022, depending on certain +activity levels of the swap dealer and the relevant counterparty. Inter- +affiliate transactions under the CFTC and FRB margin rules are generally +exempt from initial margin requirements. + +SEC rules govern the registration and regulation of security-based swap +dealers. Security-based swaps are defined as swaps on single securities, +single loans or narrow-based baskets or indices of securities. The SEC has +adopted a number of rules for security-based swap dealers, including (i) +capital, margin and segregation requirements; (ii) record-keeping, financial +reporting and notification requirements; (iii) business conduct standards; +(iv) regulatory and public trade reporting; and (v) the application of risk +mitigation techniques to uncleared portfolios of security-based swaps. The +compliance date for these SEC rules, as well as SEC rules addressing +registration requirements and business conduct standards, was generally +October 2021. In the fourth quarter of 2021, certain of our subsidiaries, +including GS&Co., registered with the SEC as security-based swap dealers and +became subject to the SEC’s regulations regarding security-based swaps. The +SEC has recently proposed additional regulations regarding security-based +swaps that would, among other things, require public reporting of large +positions in security-based swaps. + +The CFTC and the SEC have adopted rules relating to cross-border regulation of +swaps, securities-based swaps, business conduct and registration requirements. +The CFTC and the SEC have entered into agreements with certain + +non-U.S. + +regulators regarding the cross-border regulation of derivatives and the mutual +recognition of cross-border execution facilities and clearing houses, and have +approved substituted compliance with certain + +non-U.S. + +regulations related to certain business conduct requirements and margin rules. +The U.S. prudential regulators have not yet made a determination with respect +to substituted compliance for transactions subject to + +non-U.S. + +margin rules. + +Similar types of regulation have been proposed or adopted in jurisdictions +outside the U.S., including in the E.U. and Japan. Under the European Market +Infrastructure Regulation (EMIR), for example, the E.U. and the U.K. have +established regulatory requirements relating to portfolio reconciliation and +reporting, clearing certain OTC derivatives and margining for uncleared +derivatives activities. In addition, under the European Markets in Financial +Instruments Directive and Regulation, transactions in certain types of +derivatives are required to be executed on regulated platforms or exchanges. + +The CFTC has adopted rules that limit the size of positions in physical +commodity derivatives that can be held by any entity, or any group of +affiliates or other parties trading under common ownership or control. Swap +dealers may currently claim an exemption from the position limits for the bona +fide hedging of swap-related risks, but this exemption will be eliminated in +2023. The CFTC position limits apply to futures on physical commodities and +options on such futures, and these limits apply to both physically and cash +settled positions. In addition, in 2023, the position limit rules will become +applicable to swaps that are economically equivalent to such futures and +options. The position limit rules initially impose limits in the spot month +only (i.e., during the delivery period for the physical commodities, which is +typically a period of several days). CFTC spot and non- spot month limits will +continue to apply to futures on certain legacy agricultural commodities, and +it is possible that + +non-spot + +month limits will at some point be adopted for other categories of +commodities. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +J. Aron is authorized by the U.S. Federal Energy Regulatory Commission (FERC) +to sell wholesale physical power at market-based rates. As a FERC-authorized +power marketer, J. Aron is subject to regulation under the U.S. Federal Power +Act and FERC regulations and to the oversight of FERC. As a result of our +investing activities, Group Inc. is also an “exempt holding company” under the +U.S. Public Utility Holding Company Act of 2005 and applicable FERC rules. + +In addition, as a result of our power-related and commodities activities, we +are subject to energy, environmental and other governmental laws and +regulations, as described in “Risk Factors — Our commodities activities, +particularly our physical commodities activities, subject us to extensive +regulation and involve certain potential risks, including environmental, +reputational and other risks, that may expose us to significant liabilities +and costs” in Part I, Item 1A of this + +Form 10-K. + +GS&Co. is registered with the CFTC as a futures commission merchant, and +several of our subsidiaries, including GS&Co., are registered with the CFTC +and act as commodity pool operators and commodity trading advisors. Goldman +Sachs Financial Markets, L.P. is registered with the SEC as an OTC derivatives +dealer. + +Asset Management and Wealth Management Regulation + +Our asset management and wealth management businesses are subject to extensive +oversight by regulators around the world relating to, among other things, the +fair treatment of clients, safeguarding of client assets, offerings of funds, +marketing activities, transactions among affiliates and our management of +client funds. + +Interpretations issued by the SEC clarify the SEC’s views of the existing +fiduciary duty owed by investment advisers to their clients. Additionally, SEC +rules require investment advisers to provide a standardized, short-form +disclosure highlighting services offered, applicable standards of conduct, +fees and costs, the differences between brokerage and advisory services, and +any conflicts of interest. Several states have adopted or proposed adopting +uniform fiduciary duty standards applicable to advisers. + +Certain of our European subsidiaries, including GSBE in the E.U. and GSAMI in +the U.K., are subject to MiFID II and/or related regulations (including the +U.K. legislation making such regulations part of U.K. law), which govern the +approval, organizational, marketing and reporting requirements of U.K. or +E.U.-based investment managers and the ability of investment fund managers +located outside the E.U. or the U.K. to access those markets. Our asset +management business in the U.K. and the E.U. significantly depends on our +ability to delegate parts of our activities to other affiliates. + +On January 1, 2022, GSAMI became subject to a new prudential regime for U.K. +investment firms, the Investment Firms Prudential Regime (IFPR), which governs +the prudential requirements for U.K. investment firms prudentially regulated +by the FCA. + +Consumer Regulation + +Our U.S. consumer-oriented activities are subject to supervision and +regulation by the CFPB with respect to federal consumer protection laws, +including laws relating to fair lending and the prohibition of unfair, +deceptive or abusive acts or practices in connection with the offer, sale or +provision of consumer financial products and services. Our consumer-oriented +activities are also subject to various state and local consumer protection +laws, rules and regulations, which, among other things, impose obligations +relating to marketing, origination, servicing and collections activities in +our consumer businesses. Many of these laws, rules and regulations also apply +to our small business lending activities, which are also subject to +supervision and regulation by federal and state regulators. In addition, our +U.K. consumer deposit-taking activities are subject to consumer protection +regulations. + +Compensation Practices + +Our compensation practices are subject to oversight by the FRB and, with +respect to some of our subsidiaries and employees, by other regulatory bodies +worldwide. + +The FSB has released standards for implementation by local regulators that are +designed to encourage sound compensation practices at banks and other +financial companies. The U.S. federal bank regulatory agencies have also +provided guidance designed to ensure that incentive compensation arrangements +at banking organizations take into account risk and are consistent with safe +and sound practices. The guidance sets forth the following three key +principles with respect to incentive compensation arrangements: (i) the +arrangements should provide employees with incentives that appropriately +balance risk and financial results in a manner that does not encourage +employees to expose their organizations to imprudent risk; (ii) the +arrangements should be compatible with effective controls and risk management; +and (iii) the arrangements should be supported by strong corporate governance. +The guidance provides that supervisory findings with respect to incentive +compensation will be incorporated, as appropriate, into the organization’s +supervisory ratings, which can affect its ability to make acquisitions or +perform other actions. The guidance also notes that enforcement actions may be +taken against a banking organization if its incentive compensation +arrangements or related risk management, control or governance processes pose +a risk to the organization’s safety and soundness. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +The Dodd-Frank Act requires U.S. financial regulators, including the FRB and +SEC, to adopt rules on incentive-based payment arrangements at specified +regulated entities having at least $1 billion in total assets. The U.S. +financial regulators proposed revised rules in 2016, which have not been +finalized. + +The NYDFS’ guidance emphasizes that any incentive compensation arrangements +tied to employee performance indicators at banking institutions regulated by +the NYDFS, including GS Bank USA, must be subject to effective risk +management, oversight and control. + +In the E.U., certain provisions in the CRR and CRD are designed to meet the +FSB’s compensation standards. These provisions limit the ratio of variable to +fixed compensation of all employees at GSBE and of certain employees at our +other operating subsidiaries in the E.U., including those employees identified +as having a material impact on the risk profile of regulated entities. CRR II +and CRD V amended certain aspects of these rules, including, by increasing +minimum variable compensation deferral periods. Substantially similar +requirements apply in the U.K. in relation to GSI and GSIB. + +The E.U. has also introduced rules regulating compensation for certain persons +providing services to certain investment funds. + +Anti-Money Laundering and Anti-Bribery Rules and Regulations + +The U.S. Bank Secrecy Act, as amended (BSA), including by the USA PATRIOT Act +of 2001, contains anti-money laundering and financial transparency laws and +authorizes or mandates the promulgation of various regulations applicable to +financial institutions, including standards for verifying client +identification at account opening, and obligations to monitor client +transactions and report suspicious activities. Through these and other +provisions, the BSA seeks, among other things, to promote the identification +of parties that may be involved in terrorism, money laundering or other +suspicious activities. + +The Anti-Money Laundering Act of 2020 (AMLA), which amends the BSA, was +enacted in January 2021. The AMLA is intended to comprehensively reform and +modernize U.S. anti-money laundering laws. Among other things, the AMLA +codifies a risk-based approach to anti-money laundering compliance for +financial institutions; requires the U.S. Department of the Treasury to +promulgate priorities for anti-money laundering and countering the financing +of terrorism policy; requires the development of standards by the U.S. +Department of the Treasury for testing technology and internal processes for +BSA compliance; expands enforcement- and investigation-related authority, +including a significant expansion in the available sanctions for certain BSA +violations; and expands BSA whistleblower incentives and protections. Many of +the statutory provisions in the AMLA will require additional rulemakings, +reports and other measures, and the impact of the AMLA will depend on, among +other things, rulemaking and implementation guidance. In June 2021, the +Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department +of Treasury, issued the priorities for anti-money laundering and countering +the financing of terrorism policy, as required under the AMLA. The priorities +include: corruption, cybercrime, terrorist financing, fraud, transnational +crime, drug trafficking, human trafficking and proliferation financing. + +We are subject to other laws and regulations worldwide relating to anti-money +laundering and financial transparency, including the E.U. Anti-Money +Laundering Directives. In addition, we are subject to the U.S. Foreign Corrupt +Practices Act (FCPA), the U.K. Bribery Act and other laws and regulations +worldwide regarding corrupt and illegal payments, or providing anything of +value, for the benefit of government officials and others. The scope of the +types of payments or other benefits covered by these laws is very broad. These +laws and regulations include requirements relating to the identification of +clients, monitoring for and reporting suspicious transactions, monitoring +direct and indirect payments to politically exposed persons, providing +information to regulatory authorities and law enforcement agencies, and +sharing information with other financial institutions. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Privacy and Cyber Security Regulation + +Our businesses are subject to numerous laws and regulations relating to the +privacy of information regarding clients, employees and others. These include +the GLB Act, the E.U.’s General Data Protection Regulation (GDPR), the U.K.’s +Data Protection Act 2018, the Japanese Personal Information Protection Act, +the Personal Information Protection Law of the People’s Republic of China +(PIPL), the Hong Kong Personal Data (Privacy) Ordinance, and the California +Consumer Privacy Act of 2018 (CCPA). The GDPR has heightened our privacy +compliance obligations, impacted certain of our businesses’ collection, +processing and retention of personal data and imposed strict standards for +reporting data breaches. The GDPR also provides for significant penalties for + +non-compliance. + +In addition, the CCPA imposes compliance obligations with regard to the +collection, use and disclosure of personal information. The CCPA was amended +in 2020 by the California Privacy Rights Act (CPRA), which, among other +things, will expand the scope of data subject to the CCPA when the CPRA +becomes effective on January 1, 2023. In addition, several other states and + +non-U.S. + +jurisdictions have enacted, or are proposing, privacy and data protection laws +similar to the GDPR and the CCPA. The PIPL, which went into effect on November +1, 2021, limits the legal bases for processing personal information, contains +heightened notice and consent requirements for the handling of certain types +of personal information and imposes special cross-border data transfer rules +under certain circumstances. + +The NYDFS also requires financial institutions regulated by the NYDFS, +including GS Bank USA, to, among other things, (i) establish and maintain a +cyber security program designed to ensure the confidentiality, integrity and +availability of their information systems; (ii) implement and maintain a +written cyber security policy setting forth policies and procedures for the +protection of their information systems and nonpublic information; and (iii) +designate a Chief Information Security Officer. + +In November 2021, the U.S. federal bank regulatory agencies adopted a rule +regarding notification requirements for banking organizations related to +significant computer-security incidents. Under the final rule, a BHC or state +member bank, such as Group Inc. or GS Bank USA, is required to notify its +primary regulator within 36 hours of incidents that have materially disrupted +or degraded, or are reasonably likely to materially disrupt or degrade, the +banking organization’s ability to deliver services to a material portion of +its customer base, jeopardize the viability of key operations of the banking +organization, or pose a threat to the financial stability of the United +States. The rule is effective April 1, 2022, with compliance required by May + +Information about our Executive Officers + +Set forth below are the name, age, present title, principal occupation and +certain biographical information for the executive officers who have been +appointed by, and serve at the pleasure of, Group Inc.’s Board. + +Philip R. Berlinski, 45 + +Mr. Berlinski has been Global Treasurer since October 2021; he also serves as +Chief Executive Officer of Goldman Sachs Bank USA. He had previously served as +Chief Operating Officer of Global Equities from May 2019. Prior to that, he +was + +Co-Head + +of Global Equities Trading and Execution Services from September 2016 to May + +Denis P. Coleman III, 48 + +Mr. Coleman has been Chief Financial Officer since January 2022. He had +previously served as Deputy Chief Financial Officer from September 2021 and, +prior to that, + +Co-Head + +of the Global Financing Group from June 2018 to September 2021. From 2016 to +June 2018, he was Head of the EMEA Financing Group, and from 2009 to 2016 he +was Head of EMEA Credit Finance in London. + +Sheara J. Fredman, 46 + +Ms. Fredman has been Controller and Chief Accounting Officer since November +2019. She had previously served as Head of Regulatory Controllers from +September 2017 and, prior to that, she had served as Global Product +Controller. + +Brian J. Lee, 55 + +Mr. Lee has been Chief Risk Officer since November 2019. He had previously +served as Controller and Chief Accounting Officer from March 2017 and, prior +to that, he had served as Deputy Controller from 2014. + +Ericka T. Leslie, 51 + +Ms. Leslie has been Chief Administrative Officer since February 18, 2022. She +had previously served as Global Head of Operations and Platform Engineering +for the Global Markets Division from March 2020, as Global Head of Operations +for the Securities Division from January 2019 and as Head of Global Operations +for the Commodities business from September 2008. + +John F.W. Rogers, 65 + +Mr. Rogers has been an Executive Vice President since April 2011 and Chief of +Staff and Secretary to the Board since December 2001. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Kathryn H. Ruemmler, 50 + +Ms. Ruemmler has been the Chief Legal Officer, General Counsel and Secretary +since March 2021, and was previously Global Head of Regulatory Affairs from +April 2020. From June 2014 to April 2020, Ms. Ruemmler was a Litigation +Partner at Latham & Watkins LLP, a global law firm, where she was Global Chair +of the White Collar Defense and Investigations practice. + +David Solomon, 60 + +Mr. Solomon has been Chairman of the Board since January 2019 and Chief +Executive Officer and a director since October 2018. He had previously served +as President and Chief or Co-Chief Operating Officer from January 2017 and + +Co-Head + +of the Investment Banking Division from July 2006 to December 2016. + +John E. Waldron, 52 + +Mr. Waldron has been President and Chief Operating Officer since October 2018. +He had previously served as + +Co-Head + +of the Investment Banking Division from December 2014. Prior to that he was +Global Head of Investment Banking Services/Client Coverage for the Investment +Banking Division and had oversight of the Investment Banking Services +Leadership Group, and from 2007 to 2009 was Global + +Co-Head + +of the Financial Sponsors Group. + +Available Information + +Our internet address is + +www.goldmansachs.com + +and the investor relations section of our website is located at + +www.goldmansachs.com/investor-relations + +, where we make available, free of charge, our annual reports on + +Form 10-K, + +quarterly reports on + +Form 10-Q + +and current reports on + +Form 8-K + +and amendments to those reports filed or furnished pursuant to Section 13(a) +or 15(d) of the Exchange Act, as well as proxy statements, as soon as +reasonably practicable after we electronically file such material with, or +furnish it to, the SEC. Also posted on our website, and available in print +upon request of any shareholder to our Investor Relations Department (Investor +Relations), are our certificate of incorporation and + +by-laws, + +charters for our Audit, Risk, Compensation, Corporate Governance and +Nominating, and Public Responsibilities Committees, our Policy Regarding +Director Independence Determinations, our Policy on Reporting of Concerns +Regarding Accounting and Other Matters, our Corporate Governance Guidelines +and our Code of Business Conduct and Ethics governing our directors, officers +and employees. Within the time period required by the SEC, we will post on our +website any amendment to the Code of Business Conduct and Ethics and any +waiver applicable to any executive officer, director or senior financial +officer. + +Our website also includes information about (i) purchases and sales of our +equity securities by our executive officers and directors; (ii) disclosure +relating to certain + +non-GAAP + +financial measures (as defined in the SEC’s Regulation G) that we may make +public orally, telephonically, by webcast, by broadcast or by other means; +(iii) DFAST results; (iv) the public portion of our resolution plan +submission; (v) our Pillar 3 disclosure; (vi) our average daily LCR; (vii) our +People Strategy Report; (viii) our Sustainability Report; and (ix) our Task +Force on Climate-Related Financial Disclosures (TCFD) Report. + +Investor Relations can be contacted at The Goldman Sachs Group, Inc., 200 West +Street, 29th Floor, New York, New York 10282, Attn: Investor Relations, +telephone: + +e-mail: + +gs-investor-relations@gs.com + +. We use the following, as well as other social media channels, to disclose +public information to investors, the media and others: + +Our website ( + +www.goldmansachs.com + +Our Twitter account ( + +twitter.com/GoldmanSachs + +); and + +Our Instagram account ( + +instagram.com/GoldmanSachs + +Our officers may use similar social media channels to disclose public +information. It is possible that certain information we or our officers post +on our website and on social media could be deemed material, and we encourage +investors, the media and others interested in Goldman Sachs to review the +business and financial information we or our officers post on our website and +on the social media channels identified above. The information on our website +and those social media channels is not incorporated by reference into this + +Form 10-K. + +Forward-Looking Statements + +We have included in this + +Form 10-K, + +and our management may make, statements that may constitute “forward-looking +statements” within the meaning of the safe harbor provisions of the U.S. +Private Securities Litigation Reform Act of 1995. Forward-looking statements +are not historical facts or statements of current conditions, but instead +represent only our beliefs regarding future events, many of which, by their +nature, are inherently uncertain and outside our control. + +By identifying these statements for you in this manner, we are alerting you to +the possibility that our actual results, financial condition, liquidity and +capital actions may differ, possibly materially, from the anticipated results, +financial condition, liquidity and capital actions in these forward-looking +statements. Important factors that could cause our results, financial +condition, liquidity and capital actions to differ from those in these +statements include, among others, those described below and in “Risk Factors” +in Part I, Item 1A of this + +Form 10-K. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +These statements may relate to, among other things, (i) our future plans and +results, including our target ROE, ROTE, efficiency ratio, CET1 capital ratio +and firmwide assets under supervision (AUS) inflows, and how they can be +achieved, (ii) trends in or growth opportunities for our businesses, including +the timing, costs, profitability, benefits and other aspects of business and +strategic initiatives and their impact on our efficiency ratio, (iii) our +level of future compensation expense, including as a percentage of both +operating expenses and revenues net of provision for credit losses, (iv) our +investment banking transaction backlog and future results, (v) our expected +interest income and interest expense, (vi) our expense savings and strategic +locations initiatives, (vii) expenses we may incur, including future +litigation expense and expenses from investing in our consumer and transaction +banking businesses, (viii) the projected growth of our deposits and other +funding, asset liability management and funding strategies and related +interest expense savings, (ix) our business initiatives, including transaction +banking and new consumer financial products, (x) our planned 2022 benchmark +debt issuances, (xi) the amount, composition and location of global core +liquid assets (GCLA) we expect to hold, (xii) our credit exposures, (xiii) our +expected provisions for credit losses, (xiv) the adequacy of our allowance for +credit losses, (xv) the projected growth of our consumer lending and credit +card businesses, (xvi) the objectives and effectiveness of our business +continuity plan (BCP), information security program, risk management and +liquidity policies, (xvii) our resolution plan and strategy and their +implications for stakeholders, (xviii) the design and effectiveness of our +resolution capital and liquidity models and triggers and alerts framework, +(xix) the results of stress tests, the effect of changes to regulations, and +our future status, activities or reporting under banking and financial +regulation, (xx) our expected tax rate, (xxi) the future state of our +liquidity and regulatory capital ratios, and our prospective capital +distributions (including dividends and repurchases), (xxii) our expected SCB +and + +G-SIB + +surcharge, (xxiii) legal proceedings, governmental investigations or other +contingencies, (xxiv) the asset recovery guarantee and our remediation +activities related to our 1Malaysia Development Berhad (1MDB) settlements, +(xxv) the replacement of IBORs and our transition to alternative risk-free +reference rates, (xxvi) the impact of the + +COVID-19 + +pandemic on our business, results, financial position and liquidity, (xxvii) +the effectiveness of our management of our human capital, including our +diversity goals, (xxviii) our sustainability and carbon neutrality targets and +goals, (xxix) our plans for our people to return to our offices, (xxx) future +inflation and (xxxi) our completed, announced and prospective acquisitions, +including our completed acquisition of the General Motors + +co-branded + +credit card portfolio and our announced acquisitions of NN Investment Partners +and GreenSky. + +Statements about our target return on average common shareholders’ equity +(ROE), return on average tangible common shareholders’ equity (ROTE), +efficiency ratio and expense savings, and how they can be achieved, are based +on our current expectations regarding our business prospects and are subject +to the risk that we may be unable to achieve our targets due to, among other +things, changes in our business mix, lower profitability of new business +initiatives, increases in technology and other costs to launch and bring new +business initiatives to scale, and increases in liquidity requirements. + +Statements about our target ROE, ROTE and CET1 capital ratio, and how they can +be achieved, are based on our current expectations regarding the capital +requirements applicable to us and are subject to the risk that our actual +capital requirements may be higher than currently anticipated because of, +among other factors, changes in the regulatory capital requirements applicable +to us resulting from changes in regulations or the interpretation or +application of existing regulations or changes in the nature and composition +of our activities. Statements about our firmwide AUS inflows targets are based +on our current expectations regarding our fundraising prospects and are +subject to the risk that actual inflows may be lower than expected due to, +among other factors, competition from other asset managers, changes in +investment preferences and changes in economic or market conditions. + +Statements about the timing, costs, profitability, benefits and other aspects +of business and expense savings initiatives, the level and composition of more +durable revenues and increases in market share are based on our current +expectations regarding our ability to implement these initiatives and actual +results may differ, possibly materially, from current expectations due to, +among other things, a delay in the timing of these initiatives, increased +competition and an inability to reduce expenses and grow businesses with +durable revenues. + +Statements about the level of future compensation expense, including as a +percentage of both operating expenses and revenues net of provision for credit +losses, and our efficiency ratio as our platform business initiatives reach +scale are subject to the risks that the compensation and other costs to +operate our businesses, including platform initiatives, may be greater than +currently expected. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Statements about our investment banking transaction backlog and future results +are subject to the risk that such transactions may be modified or may not be +completed at all and related net revenues may not be realized or may be +materially less than expected. Important factors that could have such a result +include, for underwriting transactions, a decline or weakness in general +economic conditions, an outbreak of hostilities, volatility in the securities +markets or an adverse development with respect to the issuer of the securities +and, for financial advisory transactions, a decline in the securities markets, +an inability to obtain adequate financing, an adverse development with respect +to a party to the transaction or a failure to obtain a required regulatory +approval. For information about other important factors that could adversely +affect our investment banking transactions, see “Risk Factors” in Part I, Item +1A of this + +Form 10-K. + +Statements about the projected growth of our deposits and other funding, asset +liability management and funding strategies and related interest expense +savings, and our consumer lending and credit card businesses, are subject to +the risk that actual growth and savings may differ, possibly materially, from +that currently anticipated due to, among other things, changes in interest +rates and competition from other similar products. + +Statements about planned 2022 benchmark debt issuances and the amount, +composition and location of GCLA we expect to hold are subject to the risk +that actual issuances and GCLA levels may differ, possibly materially, from +that currently expected due to changes in market conditions, business +opportunities or our funding and projected liquidity needs. + +Statements about our expected provisions for credit losses are subject to the +risk that actual credit losses may differ and our expectations may change, +possibly materially, from that currently anticipated due to, among other +things, changes to the composition of our loan portfolio and changes in the +economic environment in future periods and our forecasts of future economic +conditions, as well as changes in our models, policies and other management +judgments. + +Statements about our future effective income tax rate are subject to the risk +that it may differ from the anticipated rate indicated in such statements, +possibly materially, due to, among other things, changes in the tax rates +applicable to us, changes in our earnings mix, our profitability and entities +in which we generate profits, the assumptions we have made in forecasting our +expected tax rate, the interpretation or application of existing tax statutes +and regulations, as well as any corporate tax legislation that may be enacted +or any guidance that may be issued by the U.S. Internal Revenue Service. + +Statements about the future state of our liquidity and regulatory capital +ratios (including our SCB and + +G-SIB + +surcharge), and our prospective capital distributions (including dividends and +repurchases), are subject to the risk that our actual liquidity, regulatory +capital ratios and capital distributions may differ, possibly materially, from +what is currently expected due to, among other things, the need to use capital +to support clients, increased regulatory requirements resulting from changes +in regulations or the interpretation or application of existing regulations, +results of applicable supervisory stress tests and changes to the composition +of our balance sheet. + +Statements about the risk exposure related to the asset recovery guarantee +provided to the Government of Malaysia are subject to the risk that the actual +value of, or credit received for, assets and proceeds from assets seized and +returned to the Government of Malaysia may be less than currently anticipated. +Statements about the progress or the status of remediation activities relating +to 1MDB are based on our expectations regarding our current remediation plans. +Accordingly, our ability to complete the remediation activities may change, +possibly materially, from what is currently expected. + +Statements about our objectives in management of our human capital, including +our diversity goals, are based on our current expectations and are subject to +the risk that we may not achieve these objectives and goals due to, among +other things, competition in recruiting and attracting diverse candidates and +unsuccessful efforts in retaining diverse employees. + +Statements about our sustainability and carbon neutrality targets and goals +are based on our current expectations and are subject to the risk that we may +not achieve these targets and goals due to, among other things, global socio- +demographic and economic trends, energy prices, lack of technological +innovations, climate-related conditions and weather events, legislative and +regulatory changes, and other unforeseen events or conditions. + +Statements about our plans for our people to return to our offices are based +on our current expectations and that return may be delayed due to, among other +factors, future events that are unpredictable, including the course of the + +COVID-19 + +pandemic, responses of governmental authorities, the emergence of new variants +of + +COVID-19 + +and the effectiveness of vaccines over the long term and against new variants. + +Statements about future inflation are subject to the risk that actual +inflation may differ, possibly materially, due to, among other things, changes +in economic growth, unemployment or consumer demand. + +Statements about our announced acquisitions of NN Investment Partners and +GreenSky are subject to the risk that the transaction may not close on the +timeline contemplated or at all, including due to a failure to obtain +requisite regulatory approval. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Item 1A. Risk Factors + +We face a variety of risks that are substantial and inherent in our +businesses. + +The following is a summary of some of the more important factors that could +affect our businesses: + +Market + +Our businesses have been and may in the future be adversely affected by +conditions in the global financial markets and broader economic conditions. + +Our businesses have been and may in the future be adversely affected by +declining asset values, particularly where we have net “long” positions, +receive fees based on the value of assets managed, or receive or post +collateral. + +Our market-making activities have been and may in the future be affected by +changes in the levels of market volatility. + +Our investment banking, client intermediation, asset management and wealth +management businesses have been adversely affected and may in the future be +adversely affected by market uncertainty or lack of confidence among investors +and CEOs due to declines in economic activity and other unfavorable economic, +geopolitical or market conditions. + +Our asset management and wealth management businesses have been and may in the +future be adversely affected by the poor investment performance of our +investment products or a client preference for products other than those which +we offer or for products that generate lower fees. + +Liquidity + +Our liquidity, profitability and businesses may be adversely affected by an +inability to access the debt capital markets or to sell assets. + +Our businesses have been and may in the future be adversely affected by +disruptions or lack of liquidity in the credit markets, including reduced +access to credit and higher costs of obtaining credit. + +Reductions in our credit ratings or an increase in our credit spreads may +adversely affect our liquidity and cost of funding. + +Group Inc. is a holding company and its liquidity depends on payments from its +subsidiaries, many of which are subject to legal, regulatory and other +restrictions on providing funds or assets to Group Inc. + +Credit + +Our businesses, profitability and liquidity may be adversely affected by +deterioration in the credit quality of or defaults by third parties. + +Concentration of risk increases the potential for significant losses in our +market-making, underwriting, investing and financing activities. + +Derivative transactions and delayed documentation or settlements may expose us +to credit risk, unexpected risks and potential losses. + +Operational + +A failure in our operational systems or infrastructure, or those of third +parties, as well as human error, malfeasance or other misconduct, could impair +our liquidity, disrupt our businesses, result in the disclosure of +confidential information, damage our reputation and cause losses. + +A failure to protect our computer systems, networks and information, and our +clients’ information, against cyber attacks and similar threats could impair +our ability to conduct our businesses, result in the disclosure, theft or +destruction of confidential information, damage our reputation and cause +losses. + +We may incur losses as a result of ineffective risk management processes and +strategies. + +We may incur losses as a result of unforeseen or catastrophic events, +including pandemics, terrorist attacks, extreme weather events or other +natural disasters. + +Climate change could disrupt our businesses and adversely affect client +activity levels and the creditworthiness of our clients and counterparties, +and our efforts to address concerns relating to climate change could result in +damage to our reputation. + +Legal and Regulatory + +Our businesses and those of our clients are subject to extensive and pervasive +regulation around the world. + +A failure to appropriately identify and address potential conflicts of +interest could adversely affect our businesses. + +We may be adversely affected by increased governmental and regulatory scrutiny +or negative publicity. + +Substantial civil or criminal liability or significant regulatory action +against us could have material adverse financial effects or cause us +significant reputational harm, which in turn could seriously harm our business +prospects. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +In conducting our businesses around the world, we are subject to political, +legal, regulatory and other risks that are inherent in operating in many +countries. + +The application of regulatory strategies and requirements in the U.S. and + +non-U.S. + +jurisdictions to facilitate the orderly resolution of large financial +institutions could create greater risk of loss for Group Inc.’s security +holders. + +The application of Group Inc.’s proposed resolution strategy could result in +greater losses for Group Inc.’s security holders. + +Our commodities activities, particularly our physical commodities activities, +subject us to extensive regulation and involve certain potential risks, +including environmental, reputational and other risks that may expose us to +significant liabilities and costs. + +Competition + +Our results have been and may in the future be adversely affected by the +composition of our client base. + +The financial services industry is highly competitive. + +The growth of electronic trading and the introduction of new products and +technologies, including trading technologies and cryptocurrencies, has +increased competition. + +Our businesses would be adversely affected if we are unable to hire and retain +qualified employees. + +Market Developments and General Business Environment + +Our businesses, financial condition, liquidity and results of operations have +been and may in the future be adversely affected by the + +COVID-19 + +pandemic. + +Certain of our businesses, our funding instruments and financial products may +be adversely affected by changes in or the discontinuance of Interbank Offered +Rates (IBORs), in particular LIBOR. + +Certain of our businesses and our funding instruments may be adversely +affected by changes in other reference rates, currencies, indexes, baskets or +ETFs to which products we offer or funding that we raise are linked. + +We face enhanced risks as new business initiatives and acquisitions lead us to +engage in new activities, operate in new locations, transact with a broader +array of clients and counterparties and expose us to new asset classes and new +markets. + +We may not be able to fully realize the expected benefits or synergies from +acquisitions in the time frames we expect, or at all. + +The following are detailed descriptions of our Risk Factors summarized above: + +Market + +Our businesses have been and may in the future be adversely affected by +conditions in the global financial markets and broader economic conditions. + +Many of our businesses, by their nature, do not produce predictable earnings, +and all of our businesses are materially affected by conditions in the global +financial markets and economic conditions generally, both directly and through +their impact on client activity levels and creditworthiness. These conditions +can change suddenly and negatively. + +Our financial performance is highly dependent on the environment in which our +businesses operate. A favorable business environment is generally +characterized by, among other factors, high global gross domestic product +growth, regulatory and market conditions that result in transparent, liquid +and efficient capital markets, low inflation, business, consumer and investor +confidence, stable geopolitical conditions and strong business earnings. + +Unfavorable or uncertain economic and market conditions can be caused by: low +levels of or declines in economic growth, business activity or investor, +business or consumer confidence; changes in consumer spending or borrowing +patterns; pandemics; limitations on the availability or increases in the cost +of credit and capital; illiquid markets; increases in inflation, interest +rates, exchange rate or basic commodity price volatility or default rates; +concerns about sovereign defaults; uncertainty concerning fiscal or monetary +policy, government shutdowns, debt ceilings or funding; the extent of and +uncertainty about potential increases in tax rates and other regulatory +changes; limitations on international trade and travel; laws and regulations +that limit trading in, or the issuance of, securities of issuers outside their +domestic markets; outbreaks of domestic or international tensions or +hostilities, terrorism, nuclear proliferation, cyber security threats or +attacks and other forms of disruption to or curtailment of global +communication, energy transmission or transportation networks or other +geopolitical instability or uncertainty; corporate, political or other +scandals that reduce investor confidence in capital markets; extreme weather +events or other natural disasters; or a combination of these or other factors. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +The financial services industry and the securities and other financial markets +have been materially and adversely affected in the past by significant +declines in the values of nearly all asset classes, by a serious lack of +liquidity and by high levels of borrower defaults. In addition, concerns about +the + +COVID-19 + +pandemic, European sovereign debt risk and its impact on the European banking +system, limitations on international trade, and potential or actual changes in +interest rates, inflation and other market conditions, have, at times, +negatively impacted the levels of client activity. + +General uncertainty about economic, political and market activities, and the +scope, timing and impact of regulatory reform, as well as weak consumer, +investor and CEO confidence resulting in large part from such uncertainty, has +in the past negatively impacted client activity, which can adversely affect +many of our businesses. Periods of low volatility and periods of high +volatility combined with a lack of liquidity, have at times had an unfavorable +impact on our market-making businesses. + +Financial institution returns may be negatively impacted by increased funding +costs due in part to the lack of perceived government support of such +institutions in the event of future financial crises relative to financial +institutions in countries in which governmental support is maintained. In +addition, liquidity in the financial markets has also been negatively impacted +as market participants and market practices and structures continue to adjust +to evolving regulatory frameworks. + +Our businesses have been and may in the future be adversely affected by +declining asset values, particularly where we have net “long” positions, +receive fees based on the value of assets managed, or receive or post +collateral. + +Many of our businesses have net “long” positions in debt securities, loans, +derivatives, mortgages, equities (including private equity and real estate) +and most other asset classes. These include positions we take when we act as a +principal to facilitate our clients’ activities, including our exchange-based +market-making activities, or commit large amounts of capital to maintain +positions in interest rate and credit products, as well as through our +currencies, commodities, equities and mortgage-related activities. In +addition, we invest in similar asset classes. Substantially all of our +investing and market-making positions and a portion of our loans are + +marked-to-market + +on a daily or other periodic basis and declines in asset values directly and +promptly impact our earnings, unless we have effectively “hedged” our +exposures to those declines. + +In certain circumstances (particularly in the case of credit products, +including leveraged loans, and private equities or other securities that are +not freely tradable or lack established and liquid trading markets), it may +not be possible or economic to hedge our exposures and to the extent that we +do so the hedge may be ineffective or may greatly reduce our ability to profit +from increases in the values of the assets. Sudden declines and significant +volatility in the prices of assets have in the past and may in the future +substantially curtail or eliminate the trading markets for certain assets, +which may make it difficult to sell, hedge or value such assets. The inability +to sell or effectively hedge assets reduces our ability to limit losses in +such positions and the difficulty in valuing assets may negatively affect our +capital, liquidity or leverage ratios, increase our funding costs and +generally require us to maintain additional capital. + +In our exchange-based market-making activities, we are obligated by stock +exchange rules to maintain an orderly market, including by purchasing +securities in a declining market. In markets where asset values are declining +and in volatile markets, this results in losses and an increased need for +liquidity. + +We receive asset-based management fees based on the value of our clients’ +portfolios or investment in funds managed by us and, in some cases, we also +receive incentive fees based on increases in the value of such investments. +Declines in asset values would ordinarily reduce the value of our clients’ +portfolios or fund assets, which in turn would typically reduce the fees we +earn for managing such assets. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +We post collateral to support our obligations and receive collateral that +supports the obligations of our clients and counterparties. When the value of +the assets posted as collateral or the credit ratings of the party posting +collateral decline, the party posting the collateral may need to provide +additional collateral or, if possible, reduce its trading position. An example +of such a situation is a “margin call” in connection with a brokerage account. +Therefore, declines in the value of asset classes used as collateral mean that +either the cost of funding positions is increased or the size of positions is +decreased. If we are the party providing collateral, this can increase our +costs and reduce our profitability and if we are the party receiving +collateral, this can also reduce our profitability by reducing the level of +business done with our clients and counterparties. + +In addition, volatile or less liquid markets increase the difficulty of +valuing assets, which can lead to costly and time-consuming disputes over +asset values and the level of required collateral, as well as increased credit +risk to the recipient of the collateral due to delays in receiving adequate +collateral. In cases where we foreclose on collateral, sudden declines in the +value or liquidity of the collateral has in the past and may in the future, +despite credit monitoring, over-collateralization, the ability to call for +additional collateral or the ability to force repayment of the underlying +obligation, result in significant losses to us, especially where there is a +single type of collateral supporting the obligation. In addition, we have been +and may in the future be subject to claims that the foreclosure was not +permitted under the legal documents, was conducted in an improper manner or +caused a client or counterparty to go out of business. + +Our market-making activities have been and may in the future be affected by +changes in the levels of market volatility. + +Certain of our market-making activities depend on market volatility to provide +trading and arbitrage opportunities to our clients, and decreases in +volatility have reduced and may in the future reduce these opportunities and +the level of client activity associated with them and adversely affect the +results of these activities. Increased volatility, while it can increase +trading volumes and spreads, also increases risk as measured by + +Value-at-Risk + +(VaR) and may expose us to increased risks in connection with our market- +making activities or cause us to reduce our inventory in order to avoid +increasing our VaR. Limiting the size of our market-making positions can +adversely affect our profitability. In periods when volatility is increasing, +but asset values are declining significantly, it may not be possible to sell +assets at all or it may only be possible to do so at steep discounts. In those +circumstances we may be forced to either take on additional risk or to realize +losses in order to decrease our VaR. In addition, increases in volatility +increase the level of our RWAs, which increases our capital requirements. + +Our investment banking, client intermediation, asset management and wealth +management businesses have been adversely affected and may in the future be +adversely affected by market uncertainty or lack of confidence among investors +and CEOs due to declines in economic activity and other unfavorable economic, +geopolitical or market conditions. + +Our investment banking business has been and may in the future be adversely +affected by market conditions. Poor economic conditions and other uncertain +geopolitical conditions may adversely affect and have in the past adversely +affected investor and CEO confidence, resulting in significant industry-wide +declines in the size and number of underwritings and of financial advisory +transactions, which would likely have an adverse effect on our revenues and +our profit margins. In particular, because a significant portion of our +investment banking revenues is derived from our participation in large +transactions, a decline in the number of large transactions has in the past +and would in the future adversely affect our investment banking business. +Similarly, in recent years, cross-border initial public offerings and other +securities offerings have accounted for a significant proportion of new +issuance activity. Legislative, regulatory or other changes that limit trading +in, or the issuance of, securities outside the issuers’ domestic markets have +in the past and would in the future adversely affect our underwriting +business. + +In certain circumstances, market uncertainty or general declines in market or +economic activity may adversely affect our client intermediation businesses by +decreasing levels of overall activity or by decreasing volatility, but at +other times market uncertainty and even declining economic activity may result +in higher trading volumes or higher spreads or both. + +Market uncertainty, volatility and adverse economic conditions, as well as +declines in asset values, may cause our clients to transfer their assets out +of our funds + +or other products or their brokerage accounts and result in reduced net +revenues, principally in our asset management and wealth management +businesses. Even if clients do not withdraw their funds, they may invest them +in products that generate less fee income. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Our asset management and wealth management businesses have been and may in the +future be adversely affected by the poor investment performance of our +investment products or a client preference for products other than those which +we offer or for products that generate lower fees. + +Poor investment returns in our asset management and wealth management +businesses, due to either general market conditions or underperformance +(relative to our competitors or to benchmarks) by funds or accounts that we +manage or investment products that we design or sell, affects our ability to +retain existing assets and to attract new clients or additional assets from +existing clients. This could affect the management and incentive fees that we +earn on AUS or the commissions and net spreads that we earn for selling other +investment products, such as structured notes or derivatives. To the extent +that our clients choose to invest in products that we do not currently offer, +we will suffer outflows and a loss of management fees. Further, if, due to +changes in investor sentiment or the relative performance of certain asset +classes or otherwise, clients continue to invest in products that generate +lower fees (e.g., passively managed or fixed income products), our average +effective management fee would continue to decline and our asset management +and wealth management businesses could be adversely affected. + +Liquidity + +Our liquidity, profitability and businesses may be adversely affected by an +inability to access the debt capital markets or to sell assets. + +Liquidity is essential to our businesses. It is of critical importance to us, +as most of the failures of financial institutions have occurred in large part +due to insufficient liquidity. Our liquidity may be impaired by an inability +to access secured and/or unsecured debt markets, an inability to raise or +retain deposits, an inability to access funds from our subsidiaries or +otherwise allocate liquidity optimally, an inability to sell assets or redeem +our investments, lack of timely settlement of transactions, unusual deposit +outflows, or other unforeseen outflows of cash or collateral, such as in March +2020, when corporate clients drew on revolving credit facilities in response +to the + +COVID-19 + +pandemic. This situation may arise due to circumstances that we may be unable +to control, such as a general market or economic disruption or an operational +problem that affects third parties or us, or even by the perception among +market participants that we, or other market participants, are experiencing +greater liquidity risk. + +We employ structured products to benefit our clients and hedge our own risks. +The financial instruments that we hold and the contracts to which we are a +party are often complex, and these complex structured products often do not +have readily available markets to access in times of liquidity stress. Our +investing and financing activities may lead to situations where the holdings +from these activities represent a significant portion of specific markets, +which could restrict liquidity for our positions. + +Further, our ability to sell assets may be impaired if there is not generally +a liquid market for such assets, as well as in circumstances where other +market participants are seeking to sell similar otherwise generally liquid +assets at the same time, as is likely to occur in a liquidity or other market +crisis or in response to changes to rules or regulations. For example, +recently an investment management firm with large positions with several +financial institutions defaulted, resulting in rapidly declining prices in the +securities underlying those positions. In addition, clearinghouses, exchanges +and other financial institutions with which we interact may exercise + +set-off + +rights or the right to require additional collateral, including in difficult +market conditions, which could further impair our liquidity. + +Regulatory changes relating to liquidity may also negatively impact our +results of operations and competitive position. Numerous regulations have been +adopted to introduce more stringent liquidity requirements for large financial +institutions. These regulations address, among other matters, liquidity stress +testing, minimum liquidity requirements, wholesale funding, limitations on the +issuance of short-term debt and structured notes, deductions for holdings of +TLAC and prohibitions on parent guarantees that are subject to certain cross- +defaults. New and prospective liquidity-related regulations may overlap with, +and be impacted by, other regulatory changes, including rules relating to +minimum long-term debt requirements and TLAC, guidance on the treatment of +brokered deposits and the capital, leverage and resolution and recovery +frameworks applicable to large financial institutions. Given the overlap and +complex interactions among these new and prospective regulations, they may +have unintended cumulative effects, and their full impact will remain +uncertain, while regulatory reforms are being adopted and market practices +develop. In addition, our need to manage our operations in light of certain +regulatory requirements when applicable thresholds are met has in the past +limited and may in the future limit our ability to raise deposits in GSIB or +other funding, which could adversely affect our liquidity or ability to +respond efficiently to liquidity stress. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Our businesses have been and may in the future be adversely affected by +disruptions or lack of liquidity in the credit markets, including reduced +access to credit and higher costs of obtaining credit. + +Widening credit spreads, as well as significant declines in the availability +of credit, have in the past adversely affected our ability to borrow on a +secured and unsecured basis and may do so in the future. We fund ourselves on +an unsecured basis by issuing long-term debt and commercial paper, by raising +deposits at our bank subsidiaries, by issuing hybrid financial instruments and +by obtaining loans or lines of credit from commercial or other banking +entities. We seek to finance many of our assets on a secured basis. Any +disruptions in the credit markets may make it harder and more expensive to +obtain funding for our businesses. If our available funding is limited or we +are forced to fund our operations at a higher cost, these conditions may +require us to curtail our business activities and increase our cost of +funding, both of which could reduce our profitability, particularly in our +businesses that involve investing, lending and market making. + +Our clients engaging in mergers, acquisitions and other types of strategic +transactions often rely on access to the secured and unsecured credit markets +to finance their transactions. A lack of available credit or an increased cost +of credit can adversely affect the size, volume and timing of our clients’ +merger and acquisition transactions, particularly large transactions, and +adversely affect our financial advisory and underwriting businesses. + +Our credit businesses have been and may in the future be negatively affected +by a lack of liquidity in credit markets. A lack of liquidity reduces price +transparency, increases price volatility and decreases transaction volumes and +size, all of which can increase transaction risk or decrease the profitability +of these businesses. + +Reductions in our credit ratings or an increase in our credit spreads may +adversely affect our liquidity and cost of funding. + +Our credit ratings are important to our liquidity. A reduction in our credit +ratings could adversely affect our liquidity and competitive position, +increase our borrowing costs, limit our access to the capital markets or +trigger our obligations under certain provisions in some of our trading and +collateralized financing contracts. Under these provisions, counterparties +could be permitted to terminate contracts with us or require us to post +additional collateral. Termination of our trading and collateralized financing +contracts could cause us to sustain losses and impair our liquidity by +requiring us to find other sources of financing or to make significant cash +payments or securities movements. + +As of December 2021, our counterparties could have called for additional +collateral or termination payments related to our net derivative liabilities +under bilateral agreements in an aggregate amount of $345 million in the event +of a + +one-notch + +downgrade of our credit ratings and $1.54 billion in the event of a + +two-notch + +downgrade of our credit ratings. A downgrade by any one rating agency, +depending on the agency’s relative ratings of us at the time of the downgrade, +may have an impact which is comparable to the impact of a downgrade by all +rating agencies. For further information about our credit ratings, see +“Management’s Discussion and Analysis of Financial Condition and Results of +Operations — Risk Management — Liquidity Risk Management — Credit Ratings” in +Part II, Item 7 of this + +Form 10-K. + +Our cost of obtaining long-term unsecured funding is directly related to our +credit spreads (the amount in excess of the interest rate of benchmark +securities that we need to pay). Increases in our credit spreads can +significantly increase our cost of this funding. Changes in credit spreads are +continuous, market-driven, and subject at times to unpredictable and highly +volatile movements. Our credit spreads are also influenced by market +perceptions of our creditworthiness and movements in the costs to purchasers +of credit default swaps referenced to our long-term debt. The market for +credit default swaps has proven to be extremely volatile and at times has +lacked a high degree of transparency or liquidity. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Group Inc. is a holding company and its liquidity depends on payments and +loans from its subsidiaries, many of which are subject to legal, regulatory +and other restrictions on providing funds or assets to Group Inc. + +Group Inc. is a holding company and, therefore, depends on dividends, +distributions, loans and other payments from its subsidiaries to fund share +repurchases and dividend payments and to fund payments on its obligations, +including debt obligations. Many of our subsidiaries, including our broker- +dealer and bank subsidiaries, are subject to laws that restrict dividend +payments or authorize regulatory bodies to block or reduce the flow of funds +from those subsidiaries to Group Inc. + +In addition, our broker-dealer and bank subsidiaries are subject to +restrictions on their ability to lend or transact with affiliates and to +minimum regulatory capital and other requirements, as well as restrictions on +their ability to use funds deposited with them in brokerage or bank accounts +to fund their businesses. Additional restrictions on related-party +transactions, increased capital and liquidity requirements and additional +limitations on the use of funds on deposit in bank or brokerage accounts, as +well as lower earnings, can reduce the amount of funds available to meet the +obligations of Group Inc., including under the FRB’s source of strength +requirement, and even require Group Inc. to provide additional funding to such +subsidiaries. Restrictions or regulatory action of that kind could impede +access to funds that Group Inc. needs to make payments on its obligations, +including debt obligations, or dividend payments. In addition, Group Inc.’s +right to participate in a distribution of assets upon a subsidiary’s +liquidation or reorganization is subject to the prior claims of the +subsidiary’s creditors. + +There has been a trend towards increased regulation and supervision of our +subsidiaries by the governments and regulators in the countries in which those +subsidiaries are located or do business. Concerns about protecting clients and +creditors of financial institutions that are controlled by persons or entities +located outside of the country in which such entities are located or do +business have caused or may cause a number of governments and regulators to +take additional steps to “ring fence” or require internal total loss-absorbing +capacity (which may also be subject to + +“bail-in” + +powers, as described below) at those entities in order to protect clients and +creditors of those entities in the event of financial difficulties involving +those entities. The result has been and may continue to be additional +limitations on our ability to efficiently move capital and liquidity among our +affiliated entities, or to Group Inc., including in times of liquidity stress, +thereby increasing the overall level of capital and liquidity required by us +on a consolidated basis. + +Furthermore, Group Inc. has guaranteed the payment obligations of certain of +its subsidiaries, including GS&Co. and GS Bank USA, subject to certain +exceptions. In addition, Group Inc. guarantees many of the obligations of its +other consolidated subsidiaries on a + +transaction-by-transaction + +basis, as negotiated with counterparties. These guarantees may require Group +Inc. to provide substantial funds or assets to its subsidiaries or their +creditors or counterparties at a time when Group Inc. is in need of liquidity +to fund its own obligations. + +The requirements for us and certain of our subsidiaries to develop and submit +recovery and resolution plans to regulators, and the incorporation of feedback +received from regulators, may require us to increase capital or liquidity +levels or issue additional long-term debt at Group Inc. or particular +subsidiaries or otherwise incur additional or duplicative operational or other +costs at multiple entities, and may reduce our ability to provide Group Inc. +guarantees of the obligations of our subsidiaries or raise debt at Group Inc. +Resolution planning may also impair our ability to structure our intercompany +and external activities in a manner that we may otherwise deem most +operationally efficient. Furthermore, arrangements to facilitate our +resolution planning may cause us to be subject to additional taxes. Any such +limitations or requirements would be in addition to the legal and regulatory +restrictions described above on our ability to engage in capital actions or +make intercompany dividends or payments. + +See “Business — Regulation” in Part I, Item 1 of this + +Form 10-K + +for further information about regulatory restrictions. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Credit + +Our businesses, profitability and liquidity may be adversely affected by +deterioration in the credit quality of or defaults by third parties. + +We are exposed to the risk that third parties that owe us money, securities or +other assets will not perform their obligations. These parties may default on +their obligations to us due to bankruptcy, lack of liquidity, operational +failure or other reasons. A failure of a significant market participant, or +even concerns about a default by such an institution, could lead to +significant liquidity problems, losses or defaults by other institutions, +which in turn could adversely affect us. + +We are also subject to the risk that our rights against third parties may not +be enforceable in all circumstances. In addition, deterioration in the credit +quality of third parties whose securities or obligations we hold, including a +deterioration in the value of collateral posted by third parties to secure +their obligations to us under derivative contracts and loan agreements, could +result in losses and/or adversely affect our ability to rehypothecate or +otherwise use those securities or obligations for liquidity purposes. + +A significant downgrade in the credit ratings of our counterparties could also +have a negative impact on our results. While in many cases we are permitted to +require additional collateral from counterparties that experience financial +difficulty, disputes may arise as to the amount of collateral we are entitled +to receive and the value of pledged assets. The termination of contracts and +the foreclosure on collateral may subject us to claims for the improper +exercise of our rights. Default rates, downgrades and disputes with +counterparties as to the valuation of collateral typically increase +significantly in times of market stress, increased volatility and illiquidity. + +As part of our clearing and prime brokerage activities, we finance our +clients’ positions, and we could be held responsible for the defaults or +misconduct of our clients. Although we have limits and regularly review credit +exposures to specific clients and counterparties and to specific industries, +countries and regions that we believe may present credit concerns, default +risk may arise from events or circumstances that are difficult to detect or +foresee. + +Concentration of risk increases the potential for significant losses in our +market-making, underwriting, investing and financing activities. + +Concentration of risk increases the potential for significant losses in our +market-making, underwriting, investing and financing activities. The number +and size of these transactions has affected and may in the future affect our +results of operations in a given period. Moreover, because of concentrated +risk, we may suffer losses even when economic and market conditions are +generally favorable for our competitors. Disruptions in the credit markets can +make it difficult to hedge these credit exposures effectively or economically. +In addition, we extend large commitments as part of our credit origination +activities. + +Rules adopted under the Dodd-Frank Act, and similar rules adopted in other +jurisdictions, require issuers of certain asset-backed securities and any +person who organizes and initiates certain asset-backed securities +transactions to retain economic exposure to the asset, which has affected the +cost of and structures used in connection with these securitization +activities. Our inability to reduce our credit risk by selling, syndicating or +securitizing these positions, including during periods of market stress, could +negatively affect our results of operations due to a decrease in the fair +value of the positions, including due to the insolvency or bankruptcy of +borrowers, as well as the loss of revenues associated with selling such +securities or loans. + +In the ordinary course of business, we may be subject to a concentration of +credit risk to a particular counterparty, borrower, issuer (including +sovereign issuers) or geographic area or group of related countries, such as +the E.U., and a failure or downgrade of, or default by, such entity could +negatively impact our businesses, perhaps materially, and the systems by which +we set limits and monitor the level of our credit exposure to individual +entities, industries, countries and regions may not function as we have +anticipated. Regulatory reform, including the Dodd-Frank Act, has led to +increased centralization of trading activity through particular clearing +houses, central agents or exchanges, which has significantly increased our +concentration of risk with respect to these entities. While our activities +expose us to many different industries, counterparties and countries, we +routinely execute a high volume of transactions with counterparties engaged in +financial services activities, including brokers and dealers, commercial +banks, clearing houses, exchanges and investment funds. This has resulted in +significant credit concentration with respect to these counterparties. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Derivative transactions and delayed documentation or settlements may expose us +to credit risk, unexpected risks and potential losses. + +We are party to a large number of derivative transactions, including credit +derivatives. Many of these derivative instruments are individually negotiated +and + +non-standardized, + +which can make exiting, transferring or settling positions difficult. Many +credit derivatives require that we deliver to the counterparty the underlying +security, loan or other obligation in order to receive payment. In a number of +cases, we do not hold the underlying security, loan or other obligation and +may not be able to obtain the underlying security, loan or other obligation. +This could cause us to forfeit the payments due to us under these contracts or +result in settlement delays with the attendant credit and operational risk, as +well as increased costs to us. + +Derivative transactions may also involve the risk that documentation has not +been properly executed, that executed agreements may not be enforceable +against the counterparty, or that obligations under such agreements may not be +able to be “netted��� against other obligations with such counterparty. In +addition, counterparties may claim that such transactions were not appropriate +or authorized. + +As a signatory to the ISDA Universal Protocol or U.S. ISDA Protocol (ISDA +Protocols) and being subject to the FRB’s and FDIC’s rules on QFCs and similar +rules in other jurisdictions, we may not be able to exercise remedies against +counterparties and, as this new regime has not yet been tested, we may suffer +risks or losses that we would not have expected to suffer if we could +immediately close out transactions upon a termination event. The ISDA +Protocols and these rules and regulations extend to repurchase agreements and +other instruments that are not derivative contracts. + +Derivative contracts and other transactions, including secondary bank loan +purchases and sales, entered into with third parties are not always confirmed +by the counterparties or settled on a timely basis. While the transaction +remains unconfirmed or during any delay in settlement, we are subject to +heightened credit and operational risk and in the event of a default may find +it more difficult to enforce our rights. + +In addition, as new complex derivative products are created, covering a wider +array of underlying credit and other instruments, disputes about the terms of +the underlying contracts could arise, which could impair our ability to +effectively manage our risk exposures from these products and subject us to +increased costs. The provisions of the Dodd-Frank Act requiring central +clearing of credit derivatives and other OTC derivatives, or a market shift +toward standardized derivatives, could reduce the risk associated with these +transactions, but under certain circumstances could also limit our ability to +develop derivatives that best suit the needs of our clients and to hedge our +own risks, and could adversely affect our profitability and has increased our +credit exposure to central clearing platforms. + +Operational + +A failure in our operational systems or infrastructure, or those of third +parties, as well as human error, malfeasance or other misconduct, could impair +our liquidity, disrupt our businesses, result in the disclosure of +confidential information, damage our reputation and cause losses. + +Our businesses are highly dependent on our ability to process and monitor, on +a daily basis, a very large number of transactions, many of which are highly +complex and occur at high volumes and frequencies, across numerous and diverse +markets in many currencies. These transactions, as well as the information +technology services we provide to clients, often must adhere to client- +specific guidelines, as well as legal and regulatory standards. + +Many rules and regulations worldwide govern our obligations to execute +transactions and report such transactions and other information to regulators, +exchanges and investors. Compliance with these legal and reporting +requirements can be challenging, and we have been and may in the future be +subject to regulatory fines and penalties for failing to follow these rules or +to report timely, accurate and complete information in accordance with these +rules. As such requirements expand, compliance with these rules and +regulations has become more challenging. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +As our client base, including through our consumer businesses, and our +geographical reach expand and the volume, speed, frequency and complexity of +transactions, especially electronic transactions (as well as the requirements +to report such transactions on a real-time basis to clients, regulators and +exchanges) increase, developing and maintaining our operational systems and +infrastructure becomes more challenging, and the risk of systems or human +error in connection with such transactions increases, as well as the potential +consequences of such errors due to the speed and volume of transactions +involved and the potential difficulty associated with discovering errors +quickly enough to limit the resulting consequences. Such risks are exacerbated +in times of increased volatility. As with other similarly situated +institutions, we utilize credit underwriting models in connection with our +businesses, including our consumer-oriented activities. Allegations, whether +or not accurate, that the ultimate underwriting decisions do not treat +consumers or clients fairly, or comply with the applicable law or regulation, +can result in negative publicity, reputational damage and governmental and +regulatory scrutiny, investigations and enforcement actions. + +Our financial, accounting, data processing or other operational systems and +facilities may fail to operate properly or become disabled as a result of +events that are wholly or partially beyond our control, such as a spike in +transaction volume, adversely affecting our ability to process these +transactions or provide these services. We must continuously update these +systems to support our operations and growth and to respond to changes in +regulations and markets, and invest heavily in systemic controls and training +to pursue our objective of ensuring that such transactions do not violate +applicable rules and regulations or, due to errors in processing such +transactions, adversely affect markets, our clients and counterparties or us. +Enhancements and updates to systems, as well as the requisite training, +including in connection with the integration of new businesses, entail +significant costs and create risks associated with implementing new systems +and integrating them with existing ones. + +The use of computing devices and phones is critical to the work done by our +employees and the operation of our systems and businesses and those of our +clients and our third-party service providers and vendors. Their importance +has continued to increase, in particular in light of work-from-home +arrangements implemented in response to the + +COVID-19 + +pandemic. Computers and computer networks are subject to various risks, +including, among others, cyber attacks, inherent technological defects, system +failures and human error. For example, fundamental security flaws in computer +chips found in many types of these computing devices and phones have been +reported in the past and may be discovered in the future. Cloud technologies +are also critical to the operation of our systems and platforms and our +reliance on cloud technologies is growing. Service disruptions have resulted, +and may result in the future, in delays in accessing, or the loss of, data +that is important to our businesses and may hinder our clients’ access to our +platforms. During 2021, there were a number of widely publicized cases of +outages in connection with access to cloud computing providers. Addressing +these and similar issues could be costly and affect the performance of these +businesses and systems. Operational risks may be incurred in applying fixes +and there may still be residual security risks. + +Additionally, although the prevalence and scope of applications of distributed +ledger technology and similar technologies is growing, the technology is also +nascent and may be vulnerable to cyber attacks or have other inherent +weaknesses. We are exposed to risks, and may become exposed to additional +risks, related to distributed ledger technology, including through our +facilitation of clients’ activities involving financial products that use +distributed ledger technology, such as blockchain or cryptocurrencies, our +investments in companies that seek to develop platforms based on distributed +ledger technology, the use of distributed ledger technology by third-party +vendors, clients, counterparties, clearing houses and other financial +intermediaries, and the receipt of cryptocurrencies or other digital assets as +collateral. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notwithstanding the proliferation of technology and technology-based risk and +control systems, our businesses ultimately rely on people as our greatest +resource, and, from time to time, they have in the past and may in the future +make mistakes or engage in violations of applicable policies, laws, rules or +procedures that are not always caught immediately by our technological +processes or by our controls and other procedures, which are intended to +prevent and detect such errors or violations. These have in the past and may +in the future include calculation errors, mistakes in addressing emails, +errors in software or model development or implementation, or simple errors in +judgment, as well as intentional efforts to ignore or circumvent applicable +policies, laws, rules or procedures. Human errors, malfeasance and other +misconduct, including the intentional misuse of client information in +connection with insider trading or for other purposes, even if promptly +discovered and remediated, has in the past and may in the future result in +reputational damage and losses and liabilities for us. + +In addition, we face the risk of operational failure or significant +operational delay, termination or capacity constraints of any of the clearing +agents, exchanges, clearing houses or other financial intermediaries we use to +facilitate our securities and derivatives transactions, and as our +interconnectivity with our clients grows, we increasingly face the risk of +operational failure or significant operational delay with respect to our +clients’ systems. + +There has been significant consolidation among clearing agents, exchanges and +clearing houses and an increasing number of derivative transactions are +cleared on exchanges, which has increased our exposure to operational failure +or significant operational delay, termination or capacity constraints of the +particular financial intermediaries that we use and could affect our ability +to find adequate and cost-effective alternatives in the event of any such +failure, delay, termination or constraint. Industry consolidation, whether +among market participants or financial intermediaries, increases the risk of +operational failure or significant operational delay as disparate complex +systems need to be integrated, often on an accelerated basis. + +The interconnectivity of multiple financial institutions with central agents, +exchanges and clearing houses, and the increased centrality of these entities, +increases the risk that an operational failure at one institution or entity +may cause an industry-wide operational failure that could materially impact +our ability to conduct business. Interconnectivity of financial institutions +with other companies through, among other things, application programming +interfaces or APIs presents similar risks. Any such failure, termination or +constraint could adversely affect our ability to effect transactions, service +our clients, manage our exposure to risk or expand our businesses or result in +financial loss or liability to our clients, impairment of our liquidity, +disruption of our businesses, regulatory intervention or reputational damage. + +Despite our resiliency plans and facilities, our ability to conduct business +may be adversely impacted by a disruption in the infrastructure that supports +our businesses and the communities where we are located. This may include a +disruption involving electrical, satellite, undersea cable or other +communications, internet, transportation or other facilities used by us, our +employees or third parties with which we conduct business, including cloud +service providers. These disruptions may occur as a result of events that +affect only our buildings or systems or those of such third parties, or as a +result of events with a broader impact globally, regionally or in the cities +where those buildings or systems are located, including, but not limited to, +natural disasters, war, civil unrest, terrorism, economic or political +developments, pandemics and weather events. + +In addition, although we seek to diversify our third-party vendors to increase +our resiliency, we are also exposed to the risk that a disruption or other +information technology event at a common service provider to our vendors could +impede their ability to provide products or services to us, including in +connection with our new business initiatives. We may not be able to +effectively monitor or mitigate operational risks relating to our vendors’ use +of common service providers. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Aside from work-from-home arrangements during the + +COVID-19 + +pandemic, nearly all of our employees in our primary locations, including the +New York metropolitan area, London, Bengaluru, Hong Kong, Tokyo and Salt Lake +City, work in close proximity to one another, in one or more buildings. +Notwithstanding our efforts to maintain business continuity, given that our +headquarters and the largest concentration of our employees are in the New +York metropolitan area, and our two principal office buildings in the New York +area both are located on the waterfront of the Hudson River, depending on the +intensity and longevity of the event, a catastrophic event impacting our New +York metropolitan area offices, including a terrorist attack, extreme weather +event or other hostile or catastrophic event, could negatively affect our +business. If a disruption occurs in one location and our employees in that +location are unable to occupy our offices or communicate with or travel to +other locations or successfully work remotely, our ability to service and +interact with our clients may suffer, and we may not be able to successfully +implement contingency plans that depend on communication, work-from-home +arrangements or travel. + +A failure to protect our computer systems, networks and information, and our +clients’ information, against cyber attacks and similar threats could impair +our ability to conduct our businesses, result in the disclosure, theft or +destruction of confidential information, damage our reputation and cause +losses. + +Our operations rely on the secure processing, storage and transmission of +confidential and other information in our computer systems and networks and +those of our vendors. There have been a number of highly publicized cases +involving financial services companies, consumer-based companies, software and +information technology service providers, governmental agencies and other +organizations reporting the unauthorized access or disclosure of client, +customer or other confidential information in recent years, as well as cyber +attacks involving the dissemination, theft and destruction of corporate +information or other assets, as a result of failure to follow procedures by +employees or contractors or as a result of actions by third parties, including +actions by foreign governments. There have also been several highly publicized +cases where hackers have requested “ransom” payments in exchange for not +disclosing customer information or for restoring access to information or +systems. + +We are regularly the target of attempted cyber attacks, including + +denial-of-service + +attacks, and must continuously monitor and develop our systems to protect the +integrity and functionality of our technology infrastructure and access to and +the security of our data. We have faced an increasing number of attempted +cyber attacks as we expand our mobile- and other internet-based products and +services, as well as our usage of mobile and cloud technologies, and as we +provide more of these services to a greater number of individual consumers. +The increasing migration of our communication from devices we provide to +employee-owned devices presents additional risks of cyber attacks, as do work- +from-home arrangements such as those implemented in response to the + +COVID-19 + +pandemic. In addition, due to our interconnectivity with third-party vendors +(and their respective service providers), central agents, exchanges, clearing +houses and other financial institutions, we could be adversely impacted if any +of them is subject to a successful cyber attack or other information security +event. These impacts could include the loss of access to information or +services from the third party subject to the cyber attack or other information +security event, which could, in turn, interrupt certain of our businesses. + +Despite our efforts to ensure the integrity of our systems and information, we +may not be able to anticipate, detect or implement effective preventive +measures against all cyber threats, especially because the techniques used are +increasingly sophisticated, change frequently and are often not recognized +until launched. Cyber attacks can originate from a variety of sources, +including third parties who are affiliated with or sponsored by foreign +governments or are involved with organized crime or terrorist organizations. +Third parties may also attempt to place individuals in our offices or induce +employees, clients or other users of our systems to disclose sensitive +information or provide access to our data or that of our clients, and these +types of risks may be difficult to detect or prevent. + +Although we take protective measures proactively and endeavor to modify them +as circumstances warrant, our computer systems, software and networks may be +vulnerable to unauthorized access, misuse, computer viruses or other malicious +code, cyber attacks on our vendors and other events that could have a security +impact. Risks relating to cyber attacks on our vendors have been increasing +given the greater frequency and severity in recent years of supply chain +attacks affecting software and information technology service providers. Due +to the complexity and interconnectedness of our systems, the process of +enhancing our protective measures can itself create a risk of systems +disruptions and security issues. In addition, protective measures that we +employ to compartmentalize our data may reduce our visibility into, and +adversely affect our ability to respond to, cyber threats and issues with our +systems. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +If one or more of such events occur, this potentially could jeopardize our or +our clients’ or counterparties’ confidential and other information processed, +stored in, or transmitted through our computer systems and networks, or +otherwise cause interruptions or malfunctions in our operations or those of +our clients, counterparties or third parties, which could impact their ability +to transact with us or otherwise result in legal or regulatory action, +significant losses or reputational damage. In addition, such an event could +persist for an extended period of time before being detected, and, following +detection, it could take considerable time for us to obtain full and reliable +information about the extent, amount and type of information compromised. +During the course of an investigation, we may not know the full impact of the +event and how to remediate it, and actions, decisions and mistakes that are +taken or made may further increase the negative effects of the event on our +business, results of operations and reputation. + +We have expended, and expect to continue to expend, significant resources on +an ongoing basis to modify our protective measures and to investigate and +remediate vulnerabilities or other exposures, but these measures may be +ineffective and we may be subject to legal or regulatory action, as well as +financial losses that are either not insured against or not fully covered +through any insurance maintained by us. + +Our clients’ confidential information may also be at risk from the compromise +of clients’ personal electronic devices or as a result of a data security +breach at an unrelated company. Losses due to unauthorized account activity +could harm our reputation and may have adverse effects on our business, +financial condition and results of operations. + +The increased use of mobile and cloud technologies can heighten these and +other operational risks, as can work-from-home arrangements. Certain aspects +of the security of such technologies are unpredictable or beyond our control, +and the failure by mobile technology and cloud service providers to adequately +safeguard their systems and prevent cyber attacks could disrupt our operations +and result in misappropriation, corruption or loss of confidential and other +information. In addition, there is a risk that encryption and other protective +measures, despite their sophistication, may be defeated, particularly to the +extent that new computing technologies vastly increase the speed and computing +power available. + +We routinely transmit and receive personal, confidential and proprietary +information by email and other electronic means. We have discussed and worked +with clients, vendors, service providers, counterparties and other third +parties to develop secure transmission capabilities and protect against cyber +attacks, but we do not have, and may be unable to put in place, secure +capabilities with all of our clients, vendors, service providers, +counterparties and other third parties and we may not be able to ensure that +these third parties have appropriate controls in place to protect the +confidentiality of the information. An interception, misuse or mishandling of +personal, confidential or proprietary information being sent to or received +from a client, vendor, service provider, counterparty or other third party +could result in legal liability, regulatory action and reputational harm. + +We may incur losses as a result of ineffective risk management processes and +strategies. + +We seek to monitor and control our risk exposure through a risk and control +framework encompassing a variety of separate but complementary financial, +credit, operational, compliance and legal reporting systems, internal +controls, management review processes and other mechanisms. Our risk +management process seeks to balance our ability to profit from market-making, +investing or lending positions, and underwriting activities, with our exposure +to potential losses. While we employ a broad and diversified set of risk +monitoring and risk mitigation techniques, those techniques and the judgments +that accompany their application cannot anticipate every economic and +financial outcome or the specifics and timing of such outcomes. Thus, in the +course of our activities, we have incurred and may in the future incur losses. +Market conditions in recent years have involved unprecedented dislocations and +highlight the limitations inherent in using historical data to manage risk. + +The models that we use to assess and control our risk exposures reflect +assumptions about the degrees of correlation or lack thereof among prices of +various asset classes or other market indicators. In times of market stress or +other unforeseen circumstances, previously uncorrelated indicators may become +correlated, or conversely previously correlated indicators may move in +different directions. These types of market movements have at times limited +the effectiveness of our hedging strategies and have caused us to incur +significant losses, and they may do so in the future. These changes in +correlation have been and may in the future be exacerbated where other market +participants are using risk or trading models with assumptions or algorithms +that are similar to ours. In these and other cases, it may be difficult to +reduce our risk positions due to the activity of other market participants or +widespread market dislocations, including circumstances where asset values are +declining significantly or no market exists for certain assets. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +In addition, the use of models in connection with risk management and numerous +other critical activities presents risks that such models may be ineffective, +either because of poor design, ineffective testing, or improper or flawed +inputs, as well as unpermitted access to such models resulting in unapproved +or malicious changes to the model or its inputs. + +To the extent that we have positions through our market-making or origination +activities or we make investments directly through our investing activities, +including private equity, that do not have an established liquid trading +market or are otherwise subject to restrictions on sale or hedging, we may not +be able to reduce our positions and therefore reduce our risk associated with +those positions. In addition, to the extent permitted by applicable law and +regulation, we invest our own capital in private equity, credit, real estate +and hedge funds that we manage and limitations on our ability to withdraw some +or all of our investments in these funds, whether for legal, reputational or +other reasons, may make it more difficult for us to control the risk exposures +relating to these investments. + +Prudent risk management, as well as regulatory restrictions, may cause us to +limit our exposure to counterparties, geographic areas or markets, which may +limit our business opportunities and increase the cost of our funding or +hedging activities. + +As we have expanded and intend to continue to expand the product and +geographic scope of our offerings of credit products to consumers, we are +presented with different credit risks and must expand and adapt our credit +risk monitoring and mitigation activities to account for these business +activities. A failure to adequately assess and control such risk exposures +could result in losses to us. + +For further information about our risk management policies and procedures, see +“Management’s Discussion and Analysis of Financial Condition and Results of +Operations — Risk Management” in Part II, Item 7 of this + +Form 10-K. + +We may incur losses as a result of unforeseen or catastrophic events, +including pandemics, terrorist attacks, extreme weather events or other +natural disasters. + +The occurrence of unforeseen or catastrophic events, including pandemics, such +as + +COVID-19, + +or other widespread health emergencies (or concerns over the possibility of +such an emergency), terrorist attacks, extreme weather events, solar events or +other natural disasters, could create economic and financial disruptions, and +could lead to operational difficulties (including travel limitations and +limitations on occupancy in our offices) that could impair our ability to +manage our businesses. + +Climate change could disrupt our businesses and adversely affect client +activity levels and the creditworthiness of our clients and counterparties, +and our efforts to address concerns relating to climate change could result in +damage to our reputation. + +Climate change may cause extreme weather events that disrupt operations at one +or more of our primary locations, which may negatively affect our ability to +service and interact with our clients, adversely affect the value of our +investments, including our real estate investments, and reduce the +availability or increase the cost of insurance. Climate change and the +transition to a less carbon-dependent economy may also have a negative impact +on the operations or financial condition of our clients and counterparties, +which may decrease revenues from those clients and counterparties and increase +the credit risk associated with loans and other credit exposures to those +clients and counterparties. In addition, climate change may impact the broader +economy. + +We are also exposed to risks resulting from changes in public policy, laws and +regulations, or market and public perceptions and preferences in connection +with the transition to a less carbon-dependent economy. These changes could +adversely affect our business, results of operations and reputation. For +example, our reputation and client relationships may be damaged as a result of +our involvement, or our clients’ involvement, in certain industries or +projects associated with causing or exacerbating climate change, as well as +any decisions we make to continue to conduct or change our activities in +response to considerations relating to climate change. If we are unable to +achieve our objectives relating to climate change or our response to climate +change is perceived to be ineffective or insufficient, our business, +reputation and efforts to recruit and retain employees may suffer. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +New regulations or guidance relating to climate change, as well as the +perspectives of regulators, shareholders, employees and other stakeholders +regarding climate change, may affect whether and on what terms and conditions +we engage in certain activities or offer certain products. Federal and state, +and + +non-U.S. + +banking regulators and supervisory authorities, shareholders and other +stakeholders have increasingly viewed financial institutions as playing an +important role in helping to address risks related to climate change, both +directly and with respect to their clients, which may result in financial +institutions coming under increased requirements and expectations regarding +the disclosure and management of their climate risks and related lending, +investment and advisory activities. We also may become subject to new or +heightened regulatory requirements relating to climate change, such as +requirements relating to operational resiliency or stress testing for various +climate stress scenarios. Any such new or heightened requirements could result +in increased regulatory, compliance or other costs or higher capital +requirements. The risks associated with, and the perspective of regulators, +shareholders, employees and other stakeholders regarding, climate change are +continuing to evolve rapidly, which can make it difficult to assess the +ultimate impact on us of climate change-related risks and uncertainties, and +we expect that climate change-related risks will increase over time. + +Legal and Regulatory + +Our businesses and those of our clients are subject to extensive and pervasive +regulation around the world. + +As a participant in the financial services industry and a systemically +important financial institution, we are subject to extensive regulation in +jurisdictions around the world. We face the risk of significant intervention +by law enforcement, regulatory and taxing authorities, as well as private +litigation, in all jurisdictions in which we conduct our businesses. In many +cases, our activities have been and may continue to be subject to overlapping +and divergent regulation in different jurisdictions. Among other things, as a +result of law enforcement authorities, regulators or private parties +challenging our compliance with existing laws and regulations, we or our +employees have been, and could be, fined, criminally charged or sanctioned; +prohibited from engaging in some of our business activities; subjected to +limitations or conditions on our business activities, including higher capital +requirements; or subjected to new or substantially higher taxes or other +governmental charges in connection with the conduct of our businesses or with +respect to our employees. These limitations or conditions may limit our +business activities and negatively impact our profitability. + +In addition to the impact on the scope and profitability of our business +activities, + +day-to-day + +compliance with existing laws and regulations has involved and will continue +to involve significant amounts of time, including that of our senior leaders +and that of a large number of dedicated compliance and other reporting and +operational personnel, all of which may negatively impact our profitability. + +Our revenues and profitability and those of our competitors have been and will +continue to be impacted by requirements relating to capital, additional loss- +absorbing capacity, leverage, minimum liquidity and long-term funding levels, +requirements related to resolution and recovery planning, derivatives clearing +and margin rules and levels of regulatory oversight, as well as limitations on +which and, if permitted, how certain business activities may be carried out by +financial institutions. The laws and regulations that apply to our businesses +are often complex and, in many cases, we must make interpretive decisions +regarding the application of those laws and regulations to our business +activities. Changes in interpretations, whether in response to regulatory +guidance, industry conventions, our own reassessments or otherwise, could +adversely affect our businesses, results of operations or ability to satisfy +applicable regulatory requirements, such as capital or liquidity requirements. + +If there are new laws or regulations or changes in the interpretation or +enforcement of existing laws or regulations applicable to our businesses or +those of our clients, including capital, liquidity, leverage, long-term debt, +total loss-absorbing capacity and margin requirements, restrictions on +leveraged lending or other business practices, reporting requirements, +requirements relating to recovery and resolution planning, tax burdens and +compensation restrictions, that are imposed on a limited subset of financial +institutions (whether based on size, method of funding, activities, geography +or other criteria), compliance with these new laws or regulations, or changes +in the enforcement of existing laws or regulations, could adversely affect our +ability to compete effectively with other institutions that are not affected +in the same way. In addition, regulation imposed on financial institutions or +market participants generally, such as taxes on stock transfers and other +financial transactions, could adversely impact levels of market activity more +broadly, and thus impact our businesses. Changes to laws or regulations, such +as tax laws, could also have a disproportionate impact on us, based on the way +those laws or regulations are applied to financial services and financial +firms or due to our corporate structure. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +These developments could impact our profitability in the affected +jurisdictions, or even make it uneconomic for us to continue to conduct all or +certain of our businesses in those jurisdictions, or could cause us to incur +significant costs associated with changing our business practices, +restructuring our businesses, moving all or certain of our businesses and our +employees to other locations or complying with applicable capital +requirements, including reducing dividends or share repurchases, liquidating +assets or raising capital in a manner that adversely increases our funding +costs or otherwise adversely affects our shareholders and creditors. + +U.S. and + +non-U.S. + +regulatory developments, in particular the Dodd-Frank Act and Basel III, have +significantly altered the regulatory framework within which we operate and +have adversely affected and may in the future adversely affect our +profitability. Among the aspects of the Dodd-Frank Act that have affected or +may in the future affect our businesses are: increased capital, liquidity and +reporting requirements; limitations on activities in which we may engage; +increased regulation of and restrictions on OTC derivatives markets and +transactions; limitations on incentive compensation; limitations on affiliate +transactions; requirements to reorganize or limit activities in connection +with recovery and resolution planning; increased deposit insurance +assessments; and increased standards of care for broker-dealers and investment +advisers in dealing with clients. The implementation of higher capital +requirements, more stringent requirements relating to liquidity, long-term +debt and total loss-absorbing capacity and the prohibition on proprietary +trading and the sponsorship of, or investment in, covered funds by the Volcker +Rule may continue to adversely affect our profitability and competitive +position, particularly if these requirements do not apply equally to our +competitors or are not implemented uniformly across jurisdictions. We may also +become subject to higher and more stringent capital and other regulatory +requirements as a result of the implementation of Basel Committee standards, +including the new credit and operational risk capital standards published in +December 2017 and the new market risk capital standard published in January + +As described in “Business — Regulation — Banking Supervision and Regulation” +in Part I, Item 1 of this + +Form 10-K, + +the SCB has replaced the capital conservation buffer under the Standardized +Capital Rules and resulted in higher Standardized capital ratio requirements. +Failure to comply with these requirements could limit our ability to, among +other things, repurchase shares, pay dividends and make certain discretionary +compensation payments. In addition, if, as in 2020, we are required to +resubmit our capital plan, we generally may not make capital distributions, +such as share repurchases or dividends, without the prior approval of the FRB. +Dividends and repurchases are also subject to oversight by the FRB, which can +result in limitations. Limitations on our ability to make capital +distributions could, among other things, prevent us from returning capital to +our shareholders and impact our return on equity. Additionally, as a + +G-SIB, + +we are subject to the + +G-SIB + +surcharge. Our + +G-SIB + +surcharge is updated annually based on financial data from the prior year. +Expansion of our businesses, growth in our balance sheet and increased +reliance on short-term wholesale funding have resulted in increases and in the +future may result in further increases in our + +G-SIB + +surcharge and a corresponding increase in our capital requirements. + +We are also subject to laws and regulations, such as the GDPR and the +California Consumer Privacy Act, relating to the privacy of the information of +clients, employees or others, and any failure to comply with these laws and +regulations could expose us to liability and/or reputational damage. As new +privacy-related laws and regulations are implemented, the time and resources +needed for us to comply with such laws and regulations, as well as our +potential liability for + +non-compliance + +and reporting obligations in the case of data breaches, may significantly +increase. + +In addition, our businesses are increasingly subject to laws and regulations +relating to surveillance, encryption and data + +on-shoring + +in the jurisdictions in which we operate. Compliance with these laws and +regulations may require us to change our policies, procedures and technology +for information security, which could, among other things, make us more +vulnerable to cyber attacks and misappropriation, corruption or loss of +information or technology. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +We have entered into consumer-oriented deposit-taking, lending and credit card +businesses, and we expect to expand the product and geographic scope of our +offerings. Entering into these businesses subjects us to numerous additional +regulations in the jurisdictions in which these businesses operate. Not only +are these regulations extensive, but they involve types of regulations and +supervision, as well as regulatory compliance risks, that have not +historically applied to us. The level of regulatory scrutiny and the scope of +regulations affecting financial interactions with consumers is often much +greater than that associated with doing business with institutions and + +high-net-worth + +individuals. Complying with these regulations is time-consuming, costly and +presents new and increased risks. + +Increasingly, regulators and courts have sought to hold financial institutions +liable for the misconduct of their clients where they have determined that the +financial institution should have detected that the client was engaged in +wrongdoing, even though the financial institution had no direct knowledge of +the activities engaged in by its client. Regulators and courts have also +increasingly found liability as a “control person” for activities of entities +in which financial institutions or funds controlled by financial institutions +have an investment, but which they do not actively manage. In addition, +regulators and courts continue to seek to establish “fiduciary” obligations to +counterparties to which no such duty had been assumed to exist. To the extent +that such efforts are successful, the cost of, and liabilities associated +with, engaging in brokerage, clearing, market-making, prime brokerage, +investing and other similar activities could increase significantly. To the +extent that we have fiduciary obligations in connection with acting as a +financial adviser or investment adviser or in other roles for individual, +institutional, sovereign or investment fund clients, any breach, or even an +alleged breach, of such obligations could have materially negative legal, +regulatory and reputational consequences. + +For information about the extensive regulation to which our businesses are +subject, see “Business — Regulation” in Part I, Item 1 of this + +Form 10-K. + +A failure to appropriately identify and address potential conflicts of +interest could adversely affect our businesses. + +Due to the broad scope of our businesses and our client base, we regularly +address potential conflicts of interest, including situations where our +services to a particular client or our own investments or other interests +conflict, or are perceived to conflict, with the interests of that client or +another client, as well as situations where one or more of our businesses have +access to material + +non-public + +information that may not be shared with our other businesses and situations +where we may be a creditor of an entity with which we also have an advisory or +other relationship. + +In addition, our status as a BHC subjects us to heightened regulation and +increased regulatory scrutiny by the FRB with respect to transactions between +GS Bank USA and its subsidiaries and entities that are or could be viewed as +affiliates of ours and, under the Volcker Rule, transactions between us and +covered funds. + +We have extensive procedures and controls that are designed to identify and +address conflicts of interest, including those designed to prevent the +improper sharing of information among our businesses. However, appropriately +identifying and dealing with conflicts of interest is complex and difficult, +and our reputation, which is one of our most important assets, could be +damaged and the willingness of clients to enter into transactions with us may +be adversely affected if we fail, or appear to fail, to identify, disclose and +deal appropriately with conflicts of interest. In addition, potential or +perceived conflicts could give rise to litigation or regulatory enforcement +actions. Additionally, our + +One Goldman Sachs + +initiative aims to increase collaboration among our businesses, which may +increase the potential for actual or perceived conflicts of interest and +improper information sharing. + +We may be adversely affected by increased governmental and regulatory scrutiny +or negative publicity. + +Governmental scrutiny from regulators, legislative bodies and law enforcement +agencies with respect to matters relating to compensation, our business +practices, our past actions and other matters remains at high levels. +Political and public sentiment regarding financial institutions has in the +past and may in the future result in a significant amount of adverse press +coverage, as well as adverse statements or charges by regulators or other +government officials. Press coverage and other public statements that assert +some form of wrongdoing (including, in some cases, press coverage and public +statements that do not directly involve us) often result in some type of +investigation by regulators, legislators and law enforcement officials or in +lawsuits. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Responding to these investigations and lawsuits, regardless of the ultimate +outcome of the proceeding, is time-consuming and expensive and can divert the +time and effort of our senior management from our business. Penalties and +fines sought by regulatory authorities have increased substantially and +certain regulators have been more likely in recent years to commence +enforcement actions or to support legislation targeted at the financial +services industry. Governmental authorities may also be more likely to pursue +criminal or other actions, including seeking admissions of wrongdoing or +guilty pleas, in connection with the resolution of an inquiry or investigation +to the extent a company is viewed as having previously engaged in criminal, +regulatory or other misconduct. Adverse publicity, governmental scrutiny and +legal and enforcement proceedings can also have a negative impact on our +reputation and on the morale and performance of our employees, which could +adversely affect our businesses and results of operations. + +The financial services industry generally and our businesses in particular +have been subject to negative publicity. Our reputation and businesses may be +adversely affected by negative publicity or information regarding our +businesses and personnel, whether or not accurate or true, that may be posted +on social media or other internet forums or published by news organizations. +Postings on these types of forums may also adversely impact risk positions of +our clients and other parties that owe us money, securities or other assets +and increase the chance that they will not perform their obligations to us or +reduce the revenues we receive from their use of our services. The speed and +pervasiveness with which information can be disseminated through these +channels, in particular social media, may magnify risks relating to negative +publicity. + +Substantial civil or criminal liability or significant regulatory action +against us could have material adverse financial effects or cause us +significant reputational harm, which in turn could seriously harm our business +prospects. + +We face significant legal risks in our businesses, and the volume of claims +and amount of damages and penalties claimed in litigation and regulatory +proceedings against financial institutions remain high. See Notes 18 and 27 to +the consolidated financial statements in Part II, Item 8 of this + +Form 10-K + +for information about certain of our legal and regulatory proceedings and +investigations. We have seen legal claims by consumers and clients increase in +a market downturn and employment-related claims increase following periods in +which we have reduced our headcount. Additionally, governmental entities have +been plaintiffs and are parties in certain of our legal proceedings, and we +may face future civil or criminal actions or claims by the same or other +governmental entities, as well as + +follow-on + +civil litigation that is often commenced after regulatory settlements. + +Significant settlements by several large financial institutions, including, in +some cases, us, with governmental entities have been publicly announced. The +trend of large settlements with governmental entities may adversely affect the +outcomes for other financial institutions in similar actions, especially where +governmental officials have announced that the large settlements will be used +as the basis or a template for other settlements. The uncertain regulatory +enforcement environment makes it difficult to estimate probable losses, which +can lead to substantial disparities between legal reserves and subsequent +actual settlements or penalties. + +Claims of collusion or anti-competitive conduct have become more common. Civil +cases have been brought against financial institutions (including us) alleging + +bid-rigging, + +group boycotts or other anti-competitive practices. Antitrust laws generally +provide for joint and several liability and treble damages. These claims have +resulted in significant settlements in the past and may do so in the future. + +We are subject to laws and regulations worldwide, including the FCPA and the +U.K. Bribery Act, relating to corrupt and illegal payments to, and hiring +practices with regard to, government officials and others. Violation of these +or similar laws and regulations have in the past resulted in and could in the +future result in significant monetary penalties. Such violations could also +result in severe restrictions on our activities and damage to our reputation. + +Certain law enforcement authorities have recently required admissions of +wrongdoing, and, in some cases, criminal pleas, as part of the resolutions of +matters brought against financial institutions or their employees. See for +example, “1MDB-Related Matters” in Note 27 to the consolidated financial +statements in Part II, Item 8 of this + +Form 10-K. + +Any such resolution of a criminal matter involving us or our employees could +lead to increased exposure to civil litigation, could adversely affect our +reputation, could result in penalties or limitations on our ability to conduct +our activities generally or in certain circumstances and could have other +negative effects. Further, as a result of the 1MDB settlement, we are no +longer a “well-known seasoned issuer,” which places limitations on the manner +in which we can market our securities. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +In conducting our businesses around the world, we are subject to political, +legal, regulatory and other risks that are inherent in operating in many +countries. + +In conducting our businesses and supporting our global operations, we are +subject to risks of possible nationalization, expropriation, price controls, +capital controls, exchange controls, communications and other content +restrictions, and other restrictive governmental actions. For example, +sanctions have been imposed by the U.S. and the E.U. on certain individuals +and companies in Russia and Venezuela. In many countries, the laws and +regulations applicable to the securities and financial services industries and +many of the transactions in which we are involved are uncertain and evolving, +and it may be difficult for us to determine the exact requirements of local +laws in every market. We have been in some cases subject to divergent and +conflicting laws and regulations across markets, and we are increasingly +subject to the risk that the jurisdictions in which we operate may implement +laws and regulations that directly conflict with those of another +jurisdiction. Any determination by local regulators that we have not acted in +compliance with the application of local laws in a particular market or our +failure to develop effective working relationships with local regulators could +have a significant and negative effect not only on our businesses in that +market, but also on our reputation generally. Further, in some jurisdictions a +failure, or alleged failure, to comply with laws and regulations has subjected +and may in the future subject us and our personnel not only to civil actions, +but also criminal actions and other sanctions. We are also subject to the +enhanced risk that transactions we structure might not be legally enforceable +in all cases. + +While business and other practices throughout the world differ, our principal +entities are subject in their operations worldwide to rules and regulations +relating to corrupt and illegal payments, hiring practices and money +laundering, as well as laws relating to doing business with certain +individuals, groups and countries, such as the FCPA, the BSA and the U.K. +Bribery Act. While we have invested and continue to invest significant +resources in training and in compliance monitoring, the geographical diversity +of our operations, employees, clients and consumers, as well as the vendors +and other third parties that we deal with, greatly increases the risk that we +may be found in violation of such rules or regulations and any such violation +could subject us to significant penalties or adversely affect our reputation. +See for example, “1MDB-Related Matters” in Note 27 to the consolidated +financial statements in Part II, Item 8 of this + +Form 10-K. + +In addition, there have been a number of highly publicized cases around the +world, involving actual or alleged fraud or other misconduct by employees in +the financial services industry, and we have had and may in the future have +employee misconduct. This misconduct has included and may also in the future +include intentional efforts to ignore or circumvent applicable policies, rules +or procedures or misappropriation of funds and the theft of proprietary +information, including proprietary software. It is not always possible to +deter or prevent employee misconduct and the precautions we take to prevent +and detect this activity have not been and may not be effective in all cases, +as reflected by the settlements relating to 1MDB. + +The application of regulatory strategies and requirements in the U.S. and + +non-U.S. + +jurisdictions to facilitate the orderly resolution of large financial +institutions could create greater risk of loss for Group Inc.’s security +holders. + +As described in “Business — Regulation — Banking Supervision and Regulation — +Insolvency of an IDI or a BHC,” if the FDIC is appointed as receiver under +OLA, the rights of Group Inc.’s creditors would be determined under OLA, and +substantial differences exist in the rights of creditors between OLA and the +U.S. Bankruptcy Code, including the right of the FDIC under OLA to disregard +the strict priority of creditor claims in some circumstances, which could have +a material adverse effect on our debtholders. + +The FDIC has announced that a single point of entry strategy may be a +desirable strategy under OLA to resolve a large financial institution in a +manner that would, among other things, impose losses on shareholders, +debtholders and other creditors of the + +top-tier + +BHC (in our case, Group Inc.), while the BHC’s subsidiaries may continue to +operate. It is possible that the application of the single point of entry +strategy under OLA, in which Group Inc. would be the only entity to enter +resolution proceedings (and its material broker-dealer, bank and other +operating entities would not enter resolution proceedings), would result in +greater losses to Group Inc.’s security holders (including holders of our +fixed rate, floating rate and indexed debt securities), than the losses that +would result from the application of a bankruptcy proceeding or a different +resolution strategy, such as a multiple point of entry resolution strategy for +Group Inc. and certain of its material subsidiaries. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Assuming Group Inc. entered resolution proceedings and that support from Group +Inc. or other available resources to its subsidiaries was sufficient to enable +the subsidiaries to remain solvent, losses at the subsidiary level would be +transferred to Group Inc. and ultimately borne by Group Inc.’s security +holders, third-party creditors of Group Inc.’s subsidiaries would receive full +recoveries on their claims, and Group Inc.’s security holders (including our +shareholders, debtholders and other unsecured creditors) could face +significant and possibly complete losses. In that case, Group Inc.’s security +holders would face losses while the third-party creditors of Group Inc.’s +subsidiaries would incur no losses because the subsidiaries would continue to +operate and would not enter resolution or bankruptcy proceedings. In addition, +holders of Group Inc.’s eligible long-term debt and holders of Group Inc.’s +other debt securities could face losses ahead of its other similarly situated +creditors in a resolution under OLA if the FDIC exercised its right, described +above, to disregard the priority of creditor claims. + +OLA also provides the FDIC with authority to cause creditors and shareholders +of the financial company in receivership to bear losses before taxpayers are +exposed to such losses, and amounts owed to the U.S. government would +generally receive a statutory payment priority over the claims of private +creditors, including senior creditors. + +In addition, under OLA, claims of creditors (including debtholders) could be +satisfied through the issuance of equity or other securities in a bridge +entity to which Group Inc.’s assets are transferred. If such a + +securities-for-claims + +exchange were implemented, there can be no assurance that the value of the +securities of the bridge entity would be sufficient to repay or satisfy all or +any part of the creditor claims for which the securities were exchanged. While +the FDIC has issued regulations to implement OLA, not all aspects of how the +FDIC might exercise this authority are known and additional rulemaking is +possible. + +In addition, certain jurisdictions, including the U.K. and the E.U., have +implemented resolution regimes to provide resolution authorities with the +ability to recapitalize a failing entity by writing down its unsecured debt or +converting its unsecured debt into equity. Such + +“bail-in” + +powers are intended to enable the recapitalization of a failing institution by +allocating losses to its shareholders and unsecured debtholders. For example, +the Bank of England requires a certain amount of intercompany funding that we +provide to our material U.K. subsidiaries to contain a contractual trigger to +expressly permit the Bank of England to exercise such + +“bail-in” + +powers in certain circumstances. If the intercompany funding we provide to our +subsidiaries is “bailed in,” Group Inc.’s claims on its subsidiaries would be +subordinated to the claims of the subsidiaries’ third-party creditors or +written down. U.S. regulators are considering and + +non-U.S. + +authorities have adopted requirements that certain subsidiaries of large +financial institutions maintain minimum amounts of total loss-absorbing +capacity that would pass losses up from the subsidiaries to the + +top-tier + +BHC and, ultimately, to security holders of the + +top-tier + +BHC in the event of failure. + +The application of Group Inc.’s proposed resolution strategy could result in +greater losses for Group Inc.’s security holders. + +In our resolution plan, Group Inc. would be resolved under the U.S. Bankruptcy +Code. The strategy described in our resolution plan is a variant of the single +point of entry strategy: Group Inc. and Goldman Sachs Funding LLC (Funding +IHC), a wholly-owned, direct subsidiary of Group Inc., would recapitalize and +provide liquidity to certain major subsidiaries, including through the +forgiveness of intercompany indebtedness, the extension of the maturities of +intercompany indebtedness and the extension of additional intercompany loans. +If this strategy were successful, creditors of some or all of Group Inc.’s +major subsidiaries would receive full recoveries on their claims, while Group +Inc.’s security holders could face significant and possibly complete losses. + +To facilitate the execution of our resolution plan, we formed Funding IHC. In +exchange for an unsecured subordinated funding note and equity interest, Group +Inc. transferred certain intercompany receivables and substantially all of its +GCLA to Funding IHC, and agreed to transfer additional GCLA above prescribed +thresholds. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +We also put in place a Capital and Liquidity Support Agreement (CLSA) among +Group Inc., Funding IHC and our major subsidiaries. Under the CLSA, Funding +IHC has provided Group Inc. with a committed line of credit that allows Group +Inc. to draw sufficient funds to meet its cash needs during the ordinary +course of business. In addition, if our financial resources deteriorate so +severely that resolution may be imminent, (i) the committed line of credit +will automatically terminate and the unsecured subordinated funding note will +automatically be forgiven, (ii) all intercompany receivables owed by the major +subsidiaries to Group Inc. will be transferred to Funding IHC or their +maturities will be extended to five years, (iii) Group Inc. will be obligated +to transfer substantially all of its remaining intercompany receivables and +GCLA (other than an amount to fund anticipated bankruptcy expenses) to Funding +IHC, and (iv) Funding IHC will be obligated to provide capital and liquidity +support to the major subsidiaries. Group Inc.’s and Funding IHC’s obligations +under the CLSA are secured pursuant to a related security agreement. Such +actions would materially and adversely affect Group Inc.’s liquidity. As a +result, during a period of severe stress, Group Inc. might commence bankruptcy +proceedings at an earlier time than it otherwise would if the CLSA and related +security agreement had not been implemented. + +If Group Inc.’s proposed resolution strategy were successful, Group Inc.’s +security holders could face losses while the third-party creditors of Group +Inc.’s major subsidiaries would incur no losses because those subsidiaries +would continue to operate and not enter resolution or bankruptcy proceedings. +As part of the strategy, Group Inc. could also seek to elevate the priority of +its guarantee obligations relating to its major subsidiaries’ derivative +contracts or transfer them to another entity so that cross-default and early +termination rights would be stayed under the ISDA Protocols, as applicable, +which would result in holders of Group Inc.’s eligible long-term debt and +holders of Group Inc.’s other debt securities incurring losses ahead of the +beneficiaries of those guarantee obligations. It is also possible that holders +of Group Inc.’s eligible long-term debt and other debt securities could incur +losses ahead of other similarly situated creditors of Group Inc.’s major +subsidiaries. + +If Group Inc.’s proposed resolution strategy were not successful, Group Inc.’s +financial condition would be adversely impacted and Group Inc.’s security +holders, including debtholders, may as a consequence be in a worse position +than if the strategy had not been implemented. In all cases, any payments to +debtholders are dependent on our ability to make such payments and are +therefore subject to our credit risk. + +As a result of our recovery and resolution planning processes, including +incorporating feedback from our regulators, we may incur increased +operational, funding or other costs and face limitations on our ability to +structure our internal organization or engage in internal or external +activities in a manner that we may otherwise deem most operationally +efficient. + +Our commodities activities, particularly our physical commodities activities, +subject us to extensive regulation and involve certain potential risks, +including environmental, reputational and other risks that may expose us to +significant liabilities and costs. + +As part of our commodities business, we purchase and sell certain physical +commodities, arrange for their storage and transport, and engage in market +making of commodities. The commodities involved in these activities may +include crude oil, refined oil products, natural gas, liquefied natural gas, +electric power, agricultural products, metals (base and precious), minerals +(including unenriched uranium), emission credits, coal, freight and related +products and indices. + +We make investments in and finance entities that engage in the production, +storage and transportation of numerous commodities, including many of the +commodities referenced above. + +These activities subject us and/or the entities in which we invest to +extensive and evolving federal, state and local energy, environmental, +antitrust and other governmental laws and regulations worldwide, including +environmental laws and regulations relating to, among others, air quality, +water quality, waste management, transportation of hazardous substances, +natural resources, site remediation and health and safety. Additionally, +rising climate change concerns have led to additional regulation that could +increase the operating costs and adversely affect the profitability of certain +of our investments. + +There may be substantial costs in complying with current or future laws and +regulations relating to our commodities-related activities and investments. +Compliance with these laws and regulations could require significant +commitments of capital toward environmental monitoring, renovation of storage +facilities or transport vessels, payment of emission fees and carbon or other +taxes, and application for, and holding of, permits and licenses. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Commodities involved in our intermediation activities and investments are also +subject to the risk of unforeseen or catastrophic events, which are likely to +be outside of our control, including those arising from the breakdown or +failure of transport vessels, storage facilities or other equipment or +processes or other mechanical malfunctions, fires, leaks, spills or release of +hazardous substances, performance below expected levels of output or +efficiency, terrorist attacks, extreme weather events or other natural +disasters or other hostile or catastrophic events. In addition, we rely on +third-party suppliers or service providers to perform their contractual +obligations and any failure on their part, including the failure to obtain raw +materials at reasonable prices or to safely transport or store commodities, +could expose us to costs or losses. Also, while we seek to insure against +potential risks, we may not be able to obtain insurance to cover some of these +risks and the insurance that we have may be inadequate to cover our losses. + +The occurrence of any of such events may prevent us from performing under our +agreements with clients, may impair our operations or financial results and +may result in litigation, regulatory action, negative publicity or other +reputational harm. + +We may also be required to divest or discontinue certain of these activities +for regulatory or legal reasons or due to the transition to a less carbon- +dependent economy in response to climate change. + +Competition + +Our results have been and may in the future be adversely affected by the +composition of our client base. + +Our client base is not the same as that of our major competitors. Our +businesses may have a higher or lower percentage of clients in certain +industries or markets than some or all of our competitors. Therefore, +unfavorable industry developments or market conditions affecting certain +industries or markets have resulted in the past and may result in the future +in our businesses underperforming relative to similar businesses of a +competitor if our businesses have a higher concentration of clients in such +industries or markets. For example, our market-making businesses have a higher +percentage of clients with actively managed assets than some of our +competitors and such clients have in the past and may in the future be +disproportionately affected by low volatility. + +Correspondingly, favorable or simply less adverse developments or market +conditions involving industries or markets in a business where we have a lower +concentration of clients in such industry or market have also resulted in the +past and may result in the future in our underperforming relative to a similar +business of a competitor that has a higher concentration of clients in such +industry or market. For example, we have a smaller corporate client base in +our market-making businesses than some of our peers and therefore those +competitors may benefit more from increased activity by corporate clients. +Similarly, we have not historically engaged in retail equities intermediation +to the same extent as other financial institutions, which has in the past and +could in the future adversely affect our market share in equities execution. + +The financial services industry is highly competitive. + +The financial services industry and all of our businesses are intensely +competitive, and we expect them to remain so. We compete on the basis of a +number of factors, including transaction execution, our products and services, +innovation, reputation, creditworthiness and price. There has been substantial +consolidation and convergence among companies in the financial services +industry. This has hastened the globalization of the securities and other +financial services markets. As a result, we have had to commit capital to +support our international operations and to execute large global transactions. +To the extent we expand into new business areas and new geographic regions, we +will face competitors with more experience and more established relationships +with clients, regulators and industry participants in the relevant market, +which could adversely affect our ability to expand. + +Governments and regulators have adopted regulations, imposed taxes, adopted +compensation restrictions or otherwise put forward various proposals that have +impacted or may impact our ability to conduct certain of our businesses in a +cost-effective manner or at all in certain or all jurisdictions, including +proposals relating to restrictions on the type of activities in which +financial institutions are permitted to engage. These or other similar rules, +many of which do not apply to all our U.S. or + +non-U.S. + +competitors, could impact our ability to compete effectively. + +Pricing and other competitive pressures in our businesses have continued to +increase, particularly in situations where some of our competitors may seek to +increase market share by reducing prices. For example, in connection with +investment banking and other assignments, in response to competitive pressure +we have experienced, we have extended and priced credit at levels that may not +always fully compensate us for the risks we take. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +The financial services industry is highly interrelated in that a significant +volume of transactions occur among a limited number of members of that +industry. Many transactions are syndicated to other financial institutions and +financial institutions are often counterparties in transactions. This has led +to claims by other market participants and regulators that such institutions +have colluded in order to manipulate markets or market prices, including +allegations that antitrust laws have been violated. While we have extensive +procedures and controls that are designed to identify and prevent such +activities, allegations of such activities, particularly by regulators, can +have a negative reputational impact and can subject us to large fines and +settlements, and potentially significant penalties, including treble damages. + +The growth of electronic trading and the introduction of new products and +technologies, including trading technologies and cryptocurrencies, has +increased competition. + +Technology is fundamental to our business and our industry. The growth of +electronic trading and the introduction of new technologies is changing our +businesses and presenting us with new challenges. Securities, futures and +options transactions are increasingly occurring electronically, both on our +own systems and through other alternative trading systems, and it appears that +the trend toward alternative trading systems will continue. Some of these +alternative trading systems compete with us, particularly our exchange-based +market-making activities, and we may experience continued competitive +pressures in these and other areas. In addition, the increased use by our +clients of + +low-cost + +electronic trading systems and direct electronic access to trading markets +could cause a reduction in commissions and spreads. As our clients +increasingly use our systems to trade directly in the markets, we may incur +liabilities as a result of their use of our order routing and execution +infrastructure. + +We have invested significant resources into the development of electronic +trading systems and expect to continue to do so, but there is no assurance +that the revenues generated by these systems will yield an adequate return, +particularly given the generally lower commissions arising from electronic +trades. + +In addition, the emergence, adoption and evolution of new technologies, +including distributed ledgers, such as cryptocurrencies and blockchain, have +required us to invest resources to adapt our existing products and services, +and we expect to continue to make such investments, which could be material. +The adoption and evolution of such new technologies may also increase our +compliance and regulatory costs. Further, technologies, such as +cryptocurrencies, that do not require intermediation could also significantly +disrupt payments processing and other financial services. Regulatory +limitations on our involvement in products and platforms involving +technologies such as cryptocurrencies may not apply equally or in some cases +at all to certain of our competitors. We may not be as timely or successful in +developing or integrating, or even able to develop or integrate, new products +and technologies, such as cryptocurrencies, into our existing products and +services, adapting to changes in consumer preferences or achieving market +acceptance of our products and services, any of which could affect our ability +to attract or retain clients, cause us to lose market share or result in +service disruptions and in turn reduce our revenues or otherwise adversely +affect us. + +Our businesses would be adversely affected if we are unable to hire and retain +qualified employees. + +Our performance is largely dependent on the talents and efforts of highly +skilled people; therefore, our continued ability to compete effectively in our +businesses, to manage our businesses effectively and to expand into new +businesses and geographic areas depends on our ability to attract new talented +and diverse employees and to retain and motivate our existing employees. +Factors that affect our ability to attract and retain such employees include +the level and composition of our compensation and benefits, and our reputation +as a successful business with a culture of fairly hiring, training and +promoting qualified employees. As a significant portion of the compensation +that we pay to our employees is in the form of + +year-end + +discretionary compensation, a significant portion of which is in the form of +deferred equity-related awards, declines in our profitability, or in the +outlook for our future profitability, as well as regulatory limitations on +compensation levels and terms, can negatively impact our ability to hire and +retain highly qualified employees. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Competition from within the financial services industry and from businesses +outside the financial services industry, including the technology industry, +for qualified employees has often been intense. We have experienced increased +competition in hiring and retaining employees to address the demands of, +expanding consumer-oriented businesses and our technology initiatives. This is +also the case in emerging and growth markets, where we are often competing for +qualified employees with entities that have a significantly greater presence +or more extensive experience in the region. + +Changes in law or regulation in jurisdictions in which our operations are +located that affect taxes on our employees’ income, or the amount or +composition of compensation, may also adversely affect our ability to hire and +retain qualified employees in those jurisdictions. + +As described further in “Business — Regulation — Compensation Practices” in +Part I, Item 1 of this + +Form 10-K, + +our compensation practices are subject to review by, and the standards of, the +FRB. As a large global financial and banking institution, we are subject to +limitations on compensation practices (which may or may not affect the +companies with which we compete for talent) by the FRB, the PRA, the FCA, the +FDIC and other regulators worldwide. These limitations have shaped our +compensation practices, which has in some cases adversely affected our ability +to attract and retain talented employees, in particular in relation to +companies not subject to these limitations, and future legislation or +regulation may have similar adverse effects. + +Our operating expenses and efficiency ratio depend, in part, on our overall +headcount and the proportion of our employees located in strategic locations. +Our future human capital resource requirements and the benefits provided by +strategic locations are uncertain, and we may not realize the benefits we +anticipate. + +Market Developments and General Business Environment + +Our businesses, financial condition, liquidity and results of operations have +been and may in the future be adversely affected by the + +COVID-19 + +pandemic. + +The + +COVID-19 + +pandemic created economic and financial disruptions that have in the past +adversely affected and may in the future adversely affect our business, +financial condition, liquidity and results of operations. The extent to which +the + +COVID-19 + +pandemic will negatively affect our businesses, financial condition, liquidity +and results of operations will depend on future developments, including the +emergence of new variants of + +COVID-19 + +and the effectiveness of vaccines and treatments over the long term and +against new variants, which are highly uncertain and cannot be predicted. + +While financial markets have rebounded from the significant declines that +occurred early in the pandemic and global economic conditions generally +improved in 2021, certain of the circumstances that arose or became more +pronounced after the onset of the + +COVID-19 + +pandemic persisted in 2021, including (i) relatively weak consumer confidence; +(ii) low levels of the federal funds rate and yields on U.S. Treasury +securities which, at times, were near zero; (iii) ongoing heightened credit +risk with regard to industries that have been most severely impacted by the +pandemic, including, at times, oil and gas, gaming and lodging, and airlines; +(iv) significant interest at times by investors in liquidity products, which +generate lower fees, relative to risk assets, resulting in these products +comprising a higher share of AUS as compared to the + +pre-pandemic + +composition; (v) higher cyber security, information security and operational +risks; and (vi) interruptions in the supply chain that have adversely affected +many businesses and have contributed to higher rates of inflation. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Depending on the duration and severity of the pandemic going forward, as well +as the effects of the pandemic on consumer and corporate confidence, the +conditions noted above could continue for an extended period and other adverse +developments may occur or reoccur, including (i) a repeat, or worse, of the +decline in the valuation of equity, fixed-income and commodity markets that +occurred at the outset of the pandemic; (ii) market dislocations that may make +hedging strategies less effective or ineffective; (iii) a reduction in fees on +AUS due to declines in the valuation of assets or a protracted trend toward +asset classes that generate lower fees; (iv) disruption in the new issuance +markets for debt and equity, leading to a decline in underwriting volumes; (v) +declines in completed mergers and acquisitions; (vi) a deterioration in the +liquidity profile of corporate borrowers, resulting in additional draws on +credit lines; (vii) defaults by consumers or corporate clients on loans; +(viii) changes in consumer spending or borrowing patterns; and (ix) greater +challenges in valuing derivative positions and associated collateral, leading +to significant increases in collateral calls and valuation disputes. + +The effects of the + +COVID-19 + +pandemic on economic and market conditions have in the past and may in the +future also increase demands on our liquidity as we meet client needs. +Likewise, these adverse developments have in the past and may in the future +affect our capital and leverage ratios. The effects of the + +COVID-19 + +pandemic and FRB requirements have in the past limited and may in the future +limit capital distributions. + +Governmental authorities worldwide have taken increased measures to stabilize +the markets and support economic growth. The continued success of these +measures is unknown and they may not be sufficient to address future market +dislocations or avert severe and prolonged reductions in economic activity. + +Certain of our businesses, our funding instruments and financial products may +be adversely affected by changes in or the discontinuance of Interbank Offered +Rates (IBORs), in particular LIBOR. + +The FCA and the administrator of LIBOR have announced that the publication of +the most commonly used USD LIBOR settings will cease to be provided or cease +to be representative after June 30, 2023. The publication of all other LIBOR +settings ceased to be provided or ceased to be representative as of December +31, 2021. The U.S. federal banking agencies had also issued guidance strongly +encouraging banking organizations to cease using the USD LIBOR as a reference +rate in new contracts by December 31, 2021 at the latest. As the transition +from LIBOR is ongoing, there continues to be substantial uncertainty as to the +ultimate effect of the transition on the financial markets for LIBOR-linked +financial instruments. Similar developments have occurred with respect to +other IBORs. + +Uncertainty regarding IBORs and the taking of discretionary actions or +negotiation or implementation of fallback provisions could result in pricing +volatility, loss of market share in certain products, adverse tax or +accounting impacts, compliance, legal and operational costs and risks +associated with client disclosures, as well as systems disruption, model +disruption and other business continuity issues. In addition, uncertainty +relating to IBORs could result in increased capital requirements for us given +potential low transaction volumes, a lack of liquidity or limited +observability for exposures linked to IBORs or any emerging successor rates +and operational incidents associated with changes in and the discontinuance of +IBORs. + +The language in our contracts and financial instruments that define IBORs, in +particular LIBOR, have developed over time and have various events that +trigger when a successor rate to the designated rate would be selected. Once a +trigger is satisfied, contracts and financial instruments often give the +calculation agent (which may be us) discretion over the successor rate or +benchmark to be selected. As a result, for the most commonly used USD LIBOR +settings, there continues to be considerable uncertainty as to how the +financial services industry will address the discontinuance of designated +rates in contracts and financial instruments or such designated rates ceasing +to be acceptable reference rates. This uncertainty could ultimately result in +client disputes and litigation surrounding the proper interpretation of our +IBOR-based contracts and financial instruments. For LIBOR settings that ceased +to be provided or ceased to be representative as of December 2021, +discretionary actions taken in connection with the implementation of fallback +provisions could also result in client disputes and litigation particularly +for derivatives and other synthetic instruments. Although we have adhered to +the ISDA IBOR Fallbacks Protocol, the protocol is applicable to derivatives +when both parties adhere to the protocol or otherwise agree for it to apply to +their derivatives. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Further, the discontinuation of an IBOR, changes in an IBOR or changes in +market acceptance of any IBOR as a reference rate may also adversely affect +the yield on loans or securities held by us, amounts paid on securities we +have issued, amounts received and paid on derivative instruments we have +entered into, the value of such loans, securities or derivative instruments, +the trading market for securities, the terms of new loans being made using +different or modified reference rates, our ability to effectively use +derivative instruments to manage risk, or the availability or cost of our +floating-rate funding and our exposure to fluctuations in interest rates. + +Certain of our businesses and our funding instruments may be adversely +affected by changes in other reference rates, currencies, indexes, baskets or +ETFs to which products we offer or funding that we raise are linked. + +Many of the products that we own or that we offer, such as structured notes, +warrants, swaps or security-based swaps, pay interest or determine the +principal amount to be paid at maturity or in the event of default by +reference to rates or by reference to an index, currency, basket, ETF or other +financial metric (the underlier). In the event that the composition of the +underlier is significantly changed, by reference to rules governing such +underlier or otherwise, the underlier ceases to exist (for example, in the +event that a country withdraws from the Euro or links its currency to or +delinks its currency from another currency or benchmark, an index or ETF +sponsor materially alters the composition of an index or ETF, or stocks in a +basket are delisted or become impermissible to be included in the index or +ETF), the underlier ceases to be recognized as an acceptable market benchmark +or there are legal or regulatory constraints on linking a financial instrument +to the underlier, we may experience adverse effects consistent with those +described above for IBORs. + +We face enhanced risks as new business initiatives and acquisitions lead us to +engage in new activities, operate in new locations, transact with a broader +array of clients and counterparties and expose us to new asset classes and new +markets. + +A number of our recent and planned business initiatives and expansions of +existing businesses, including through acquisitions and partnership +arrangements, may bring us into contact, directly or indirectly, with +individuals and entities that are not within our traditional client and +counterparty base, expose us to new asset classes and new markets, and present +us with integration challenges. For example, we continue to transact business +and invest in new regions, including a wide range of emerging and growth +markets, and we expect this trend to continue. Various emerging and growth +market countries have experienced severe economic and financial disruptions, +including significant devaluations of their currencies, defaults or threatened +defaults on sovereign debt, capital and currency exchange controls, and low or +negative growth rates in their economies. The possible effects of any of these +conditions include an adverse impact on our businesses and increased +volatility in financial markets generally. + +Furthermore, in a number of our businesses, including where we make markets, +invest and lend, we own interests in, or otherwise become affiliated with the +ownership and operation of, public services, such as airports, toll roads and +shipping ports, as well as physical commodities and commodities infrastructure +components, both within and outside the U.S. + +We have increased and intend to further increase our consumer-oriented +deposit-taking and lending activities. For example, we now issue credit cards +to consumers and through our pending acquisition of GreenSky, we intend to +expand our offering of + +point-of-sale + +financing. To the extent we engage in those and other consumer-oriented +activities, we have faced, and would continue to face, additional compliance, +legal and regulatory risk, increased reputational risk and increased +operational risk due to, among other things, higher transaction volumes and +significantly increased retention and transmission of consumer and client +information. Acquisitions and new products can also expose us to new or +different types of risks. For example, providing + +point-of-sale + +financing through GreenSky will also subject us to risks relating to retaining +and attracting merchants and servicing loans for other banks, as well as +potential liability for remediation costs if merchants fail to fulfill their +obligations to consumers. We are also subject to additional legal +requirements, including with respect to suitability and consumer protection +(for example, Regulation Best Interest, fair lending laws and regulations and +privacy laws and regulations). Further, identity fraud may increase and credit +reporting practices may change in a manner that makes it more difficult for +financial institutions, such as us, to evaluate the creditworthiness of +consumers. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +We have increased and intend to further increase our transaction banking +activities. As a result, we expect to face additional compliance, legal and +regulatory risk, including with respect to know-your-customer, anti-money +laundering and reporting requirements and prohibitions on transfers of +property belonging to countries, entities and individuals subject to sanctions +by U.S. or other governmental authorities. + +New business initiatives expose us to new and enhanced risks, including risks +associated with dealing with governmental entities, reputational concerns +arising from dealing with different types of clients, business partners, +counterparties and investors, greater regulatory scrutiny of these activities, +increased credit-related, market, sovereign and operational risks, risks +arising from accidents or acts of terrorism, and reputational concerns with +the manner in which certain assets are being operated or held or in which we +interact with these clients, business partners, counterparties and investors. +Legal, regulatory and reputational risks may also exist in connection with +activities and transactions involving new products or markets where there is +regulatory uncertainty or where there are different or conflicting regulations +depending on the regulator or the jurisdiction involved, particularly where +transactions in such products may involve multiple jurisdictions. + +We have developed and pursued new business and strategic initiatives, +including acquisitions, and expect to continue to do so. If and to the extent +we are unable to successfully execute those initiatives, we may incur +unanticipated costs and losses, and face other adverse consequences, such as +negative reputational effects. In addition, the actual effects of pursuing +those initiatives may differ, possibly materially, from the benefits that we +expect to realize from them, such as generating additional revenues, achieving +expense savings, reducing operational risk exposures or using capital and +funding more efficiently. Engaging in new activities exposes us to a variety +of risks, including that we may be unable to successfully develop new, +competitive, efficient and effective systems and processes, and hire and +retain the necessary personnel. Due to our lack of historical experience with +unsecured consumer lending, our loan loss assumptions may prove to be +incorrect and we may incur losses significantly above those which we +originally anticipated in entering the business or in expanding the product +offerings for the business. + +In recent years, we have invested, and may continue to invest, more in +businesses that we expect will generate a higher level of more consistent +revenues. In order to develop and be able to offer consumer financial products +that compete effectively, we have made and expect to continue to make +significant investments in technology and human capital resources in +connection with our consumer-oriented activities. Such investments and +acquisitions may not be successful or have returns similar to our other +businesses. + +We may not be able to fully realize the expected benefits or synergies from +acquisitions in the time frames we expect, or at all. + +We have been engaging in selective acquisitions and expect to continue to do +so in the future and these acquisitions may, individually or in the aggregate, +be material to us. Any future acquisitions could involve the issuance of +common stock and/or the payment of cash as consideration. The success of our +acquisitions will depend, in part, on our ability to integrate the acquired +businesses and realize anticipated synergies, cost savings and growth +opportunities. We may face numerous risks and uncertainties in combining and +integrating the relevant businesses and systems, including the need to combine +or separate accounting and data processing systems and management controls and +to integrate relationships with clients, counterparties, regulators and others +in connection with acquisitions. Integration of acquired businesses is + +time-consuming + +and could disrupt our ongoing businesses, produce unforeseen regulatory or +operating difficulties, cause us to incur incremental expenses or require +incremental financial, management and other resources. It is also possible +that an acquisition, once announced, may not close due to the failure to +satisfy applicable closing conditions, such as the receipt of necessary +shareholder or regulatory approvals. + +There is no assurance that any of our acquisitions will be successfully +integrated or yield all of the expected positive benefits and synergies in the +time frames that we expect, or at all. If we are not able to integrate our +acquisitions successfully, our results of operations, financial condition and +cash flows could be adversely affected. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Item 1B. Unresolved Staff Comments + +There are no material unresolved written comments that were received from the +SEC staff 180 days or more before the end of our fiscal year relating to our +periodic or current reports under the Exchange Act. + +Item 2. Properties + +In the U.S. and elsewhere in the Americas, we have offices consisting of +approximately 6.6 million square feet of leased and owned space. Our principal +executive offices are located at 200 West Street, New York, New York and +consist of approximately 2.1 million square feet. The building is located on a +parcel leased from Battery Park City Authority pursuant to a ground lease. +Under the lease, Battery Park City Authority holds title to all improvements, +including the office building, subject to our right of exclusive possession +and use until June 2069, the expiration date of the lease. Under the terms of +the ground lease, we made a lump sum ground rent payment in June 2007 of $161 +million for rent through the term of the lease. + +In Europe, the Middle East and Africa, we have offices consisting of +approximately 1.6 million square feet of leased and owned space. Our European +headquarters is located in London at Plumtree Court, consisting of +approximately 826,000 square feet under a lease which can be terminated in + +In Asia, Australia and New Zealand, we have offices consisting of +approximately 2.6 million square feet, including our offices in India, and +regional headquarters in Tokyo and Hong Kong. In India, we have offices with +approximately 1.6 million square feet, the majority of which have leases that +will expire in 2028. + +In the preceding paragraphs, square footage figures are provided only for +properties that are used in the operation of our businesses. We regularly +evaluate our space capacity in relation to current and projected headcount. We +may incur exit costs in the future if we (i) reduce our space capacity or (ii) +commit to, or occupy, new properties in locations in which we operate and +dispose of existing space that had been held for potential growth. These costs +may be material to our operating results in a given period. + +Item 3. Legal Proceedings + +We are involved in a number of judicial, regulatory and arbitration +proceedings concerning matters arising in connection with the conduct of our +businesses. Many of these proceedings are in early stages, and many of these +cases seek an indeterminate amount of damages. We have estimated the upper end +of the range of reasonably possible aggregate loss for matters where we have +been able to estimate a range and we believe, based on currently available +information, that the results of matters where we have not been able to +estimate a range of reasonably possible loss, in the aggregate, will not have +a material adverse effect on our financial condition, but may be material to +our operating results in a given period. Given the range of litigation and +investigations presently under way, our litigation expenses may remain high. +See “Management’s Discussion and Analysis of Financial Condition and Results +of Operations — Use of Estimates” in Part II, Item 7 of this + +Form 10-K. + +See Notes 18 and 27 to the consolidated financial statements in Part II, Item +8 of this + +Form 10-K + +for information about our reasonably possible aggregate loss estimate and +judicial, regulatory and legal proceedings. + +Item 4. Mine Safety Disclosures + +Not applicable. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +PART II + +Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and +Issuer Purchases of Equity Securities + +The principal market on which our common stock is traded is the NYSE under the +symbol “GS.” Information relating to the performance of our common stock from +December 31, 2016 through December 31, 2021 is set forth in “Supplemental +Financial Information — Common Stock Performance” in Part II, Item 8 of this + +Form 10-K. + +As of February 11, 2022, there were 5,963 holders of record of our common +stock. + +The table below presents purchases made by or on behalf of Group Inc. or any +“affiliated purchaser” (as defined in + +Rule 10b-18(a)(3) + +under the Exchange Act) of our common stock during the fourth quarter of 2021. + +Since March 2000, our Board has approved a repurchase program authorizing +repurchases of up to 605 million shares of our common stock. The repurchase +program is effected primarily through regular open-market purchases (which may +include repurchase plans designed to comply with + +Rule 10b5-1 + +and accelerated share repurchases), the amounts and timing of which are +determined primarily by our current and projected capital position, but which +may also be influenced by general market conditions and the prevailing price +and trading volumes of our common stock. The repurchase program has no set +expiration or termination date. + +Information relating to compensation plans under which our equity securities +are authorized for issuance is presented in Part III, Item 12 of this + +Form 10-K. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Item 7. Management’s Discussion and Analysis of Financial Condition and +Results of Operations + +Introduction + +The Goldman Sachs Group, Inc. (Group Inc. or parent company), a Delaware +corporation, together with its consolidated subsidiaries, is a leading global +financial institution that delivers a broad range of financial services across +investment banking, securities, investment management and consumer banking to +a large and diversified client base that includes corporations, financial +institutions, governments and individuals. Founded in 1869, we are +headquartered in New York and maintain offices in all major financial centers +around the world. We report our activities in four business segments: +Investment Banking, Global Markets, Asset Management, and Consumer & Wealth +Management. See “Results of Operations” for further information about our +business segments. + +When we use the terms “we,” “us” and “our,” we mean Group Inc. and its +consolidated subsidiaries. When we use the term “our subsidiaries,” we mean +the consolidated subsidiaries of Group Inc. References to “this + +Form 10-K” + +are to our Annual Report on + +Form 10-K + +for the year ended December 31, 2021. All references to “the consolidated +financial statements” or “Supplemental Financial Information” are to Part II, +Item 8 of this + +Form 10-K. + +All references to 2021, 2020 and 2019 refer to our years ended, or the dates, +as the context requires, December 31, 2021, December 31, 2020 and December 31, +2019, respectively. Any reference to a future year refers to a year ending on +December 31 of that year. + +Group Inc. is a bank holding company (BHC) and a financial holding company +regulated by the Board of Governors of the Federal Reserve System (FRB). + +In this discussion and analysis of our financial condition and results of +operations, we have included information that may constitute “forward-looking +statements” within the meaning of the safe harbor provisions of the U.S. +Private Securities Litigation Reform Act of 1995. Forward-looking statements +are not historical facts or statements of current conditions, but instead +represent only our beliefs regarding future events, many of which, by their +nature, are inherently uncertain and outside our control. + +By identifying these statements for you in this manner, we are alerting you to +the possibility that our actual results, financial condition, liquidity and +capital actions may differ, possibly materially, from the anticipated results, +financial condition, liquidity and capital actions in these forward-looking +statements. Important factors that could cause our results, financial +condition, liquidity and capital actions to differ from those in these +statements include, among others, those described in “Risk Factors” in Part I, +Item 1A of this + +Form 10-K + +and “Forward-Looking Statements” in Part I, Item 1 of this + +Form 10-K. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +These statements may relate to, among other things, (i) our future plans and +results, including our target ROE, ROTE, efficiency ratio, Common Equity Tier +1 (CET1) capital ratio and firmwide assets under supervision (AUS) inflows, +and how they can be achieved, (ii) trends in or growth opportunities for our +businesses, including the timing, costs, profitability, benefits and other +aspects of business and strategic initiatives and their impact on our +efficiency ratio, (iii) our level of future compensation expense, including as +a percentage of both operating expenses and revenues net of provision for +credit losses, (iv) our investment banking transaction backlog and future +results, (v) our expected interest income and interest expense, (vi) our +expense savings and strategic locations initiatives, (vii) expenses we may +incur, including future litigation expense and expenses from investing in our +consumer and transaction banking businesses, (viii) the projected growth of +our deposits and other funding, asset liability management and funding +strategies and related interest expense savings, (ix) our business +initiatives, including transaction banking and new consumer financial +products, (x) our planned 2022 benchmark debt issuances, (xi) the amount, +composition and location of global core liquid assets (GCLA) we expect to +hold, (xii) our credit exposures, (xiii) our expected provisions for credit +losses, (xiv) the adequacy of our allowance for credit losses, (xv) the +projected growth of our consumer lending and credit card businesses, (xvi) the +objectives and effectiveness of our Business Continuity Planning (BCP) +strategy, information security program, risk management and liquidity +policies, (xvii) our resolution plan and strategy and their implications for +stakeholders, (xviii) the design and effectiveness of our resolution capital +and liquidity models and triggers and alerts framework, (xix) the results of +stress tests, the effect of changes to regulations, and our future status, +activities or reporting under banking and financial regulation, (xx) our +expected tax rate, (xxi) the future state of our liquidity and regulatory +capital ratios, and our prospective capital distributions (including dividends +and repurchases), (xxii) our expected SCB and + +G-SIB + +surcharge, (xxiii) legal proceedings, governmental investigations or other +contingencies, (xxiv) the asset recovery guarantee and our remediation +activities related to our 1Malaysia Development Berhad (1MDB) settlements, +(xxv) the replacement of IBORs and our transition to alternative risk-free +reference rates, (xxvi) the impact of the coronavirus + +(COVID-19) + +pandemic on our business, results, financial position and liquidity, (xxvii) +the effectiveness of our management of our human capital, including our +diversity goals, (xxviii) our sustainability and carbon neutrality targets and +goals, (xxix) our plans for our people to return to our offices, (xxx) future +inflation and (xxxi) our completed, announced and prospective acquisitions, +including our completed acquisition of the General Motors + +co-branded + +credit card portfolio and our announced acquisitions of NN Investment Partners +and GreenSky, Inc. (GreenSky). + +Executive Overview + +We generated net earnings of $21.64 billion for 2021, significantly higher +compared with $9.46 billion for 2020. Diluted earnings per common share (EPS) +was $59.45 for 2021, significantly higher compared with $24.74 for 2020. +Return on average common shareholders’ equity (ROE) was 23.0% for 2021, +compared with 11.1% for 2020. Book value per common share was $284.39 as of +December 2021, 20.4% higher compared with December 2020. + +During 2020, we recorded net provisions for litigation and regulatory +proceedings of $3.42 billion, which reduced diluted EPS by $9.51 and reduced +ROE by 3.9 percentage points. + +Net revenues were $59.34 billion for 2021, 33% higher than 2020, reflecting +higher net revenues across all segments, including significant increases in +Asset Management, Investment Banking and Consumer & Wealth Management. Net +revenues in Asset Management primarily reflected significantly higher net +revenues in Equity investments and Lending and debt investments, net revenues +in Investment Banking primarily reflected significantly higher net revenues in +Financial advisory and Underwriting, and net revenues in Consumer & Wealth +Management reflected growth in both Wealth management and Consumer banking net +revenues. Net revenues in Global Markets were slightly higher, reflecting +significantly higher net revenues in Equities, partially offset by lower net +revenues in Fixed Income, Currency and Commodities (FICC) compared with a +strong prior year. + +Provision for credit losses was $357 million for 2021, compared with $3.10 +billion for 2020. 2021 included provisions related to portfolio growth +(primarily in credit cards, including provisions related to the commitment to +acquire the General Motors + +co-branded + +credit card portfolio), largely offset by reserve reductions on wholesale and +consumer loans reflecting continued improvement in the broader economic +environment. This followed challenging conditions in the prior year as a +result of the impact of the + +COVID-19 + +pandemic, which contributed to significant provisions in 2020. + +Operating expenses were $31.94 billion for 2021, 10% higher than 2020, +primarily reflecting significantly higher compensation and benefits expenses +(reflecting strong performance). In addition, technology expenses and +professional fees were significantly higher and transaction based expenses +were higher. These increases were partially offset by significantly lower net +provisions for litigation and regulatory proceedings and lower expenses +related to consolidated investments (including impairments). Our efficiency +ratio (total operating expenses divided by total net revenues) for 2021 was +53.8%, compared with 65.0% for 2020. In 2020, net provisions for litigation +and regulatory proceedings increased our efficiency ratio by 7.6 percentage +points. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +During 2021, we returned $7.49 billion of capital to common shareholders, +including $5.20 billion of common share repurchases and $2.29 billion of +common stock dividends. As of December 2021, our CET1 capital ratio was 14.2% +under the Standardized Capital Rules and 14.9% under the Advanced Capital +Rules. See Note 20 to the consolidated financial statements for further +information about our capital ratios. + +We announced two strategic acquisitions during 2021, the pending acquisitions +of NN Investment Partners in our Asset Management business and GreenSky in our +Consumer banking business. We expect these acquisitions to accelerate our +strategy to drive more durable returns. The acquisition of NN Investment +Partners is expected to close in the second quarter of 2022, and the +acquisition of GreenSky is expected to close in the first quarter of 2022. + +In the first quarter of 2022, we announced that over the medium-term +(approximately 3 years), our target is to achieve (i) ROE within a range of +14% to 16%, (ii) return on average tangible common shareholders’ equity (ROTE) +within a range of 15% to 17% and (iii) an efficiency ratio of approximately +60%. In addition, we announced that our target is to maintain capital ratios +equal to the regulatory requirements plus a buffer of 50 to 100 basis points. + +Business Environment + +In 2021, the global economy continued to recover from the impact of the + +COVID-19 + +pandemic, as the distribution of vaccines helped facilitate an increase in +global economic activity. Economic activity continued to benefit from ongoing +fiscal stimulus from governments and continued accommodative monetary policy +from global central banks. In the second half of the year, the growth in +economic activity and demand for goods and services, alongside supply chain +complications, contributed to inflationary pressures. Late in the year, the +surge in Omicron cases sparked renewed concerns globally, contributing to +increased market volatility and increased pressures on labor supply. This may +result in a negative impact on economic activity. + +Despite broad improvements in the overall economy since the initial impact of +the + +COVID-19 + +pandemic, uncertainty remains on the pace of the recovery going forward, +reflecting concerns about virus resurgence from the Omicron variant and other +possible variants and related concerns regarding vaccine distribution, +efficacy and hesitancy, as well as concerns relating to inflation, supply +chain complications and geopolitical risks. See “Results of Operations — +Segment Assets and Operating Results — Segment Operating Results” for further +information about the operating environment for each of our business segments. + +Critical Accounting Policies + +Fair Value + +Fair Value Hierarchy. + +Trading assets and liabilities, certain investments and loans, and certain +other financial assets and liabilities, are included in our consolidated +balance sheets at fair value (i.e., + +marked-to-market), + +with related gains or losses generally recognized in our consolidated +statements of earnings. The use of fair value to measure financial instruments +is fundamental to our risk management practices and is our most critical +accounting policy. + +The fair value of a financial instrument is the amount that would be received +to sell an asset or paid to transfer a liability in an orderly transaction +between market participants at the measurement date. We measure certain +financial assets and liabilities as a portfolio (i.e., based on its net +exposure to market and/or credit risks). In determining fair value, the +hierarchy under U.S. generally accepted accounting principles (U.S. GAAP) +gives (i) the highest priority to unadjusted quoted prices in active markets +for identical, unrestricted assets or liabilities (level 1 inputs), (ii) the +next priority to inputs other than level 1 inputs that are observable, either +directly or indirectly (level 2 inputs), and (iii) the lowest priority to +inputs that cannot be observed in market activity (level 3 inputs). In +evaluating the significance of a valuation input, we consider, among other +factors, a portfolio’s net risk exposure to that input. Assets and liabilities +are classified in their entirety based on the lowest level of input that is +significant to their fair value measurement. + +The fair values for substantially all of our financial assets and liabilities +are based on observable prices and inputs and are classified in levels 1 and 2 +of the fair value hierarchy. Certain level 2 and level 3 financial assets and +liabilities may require appropriate valuation adjustments that a market +participant would require to arrive at fair value for factors, such as +counterparty and our credit quality, funding risk, transfer restrictions, +liquidity and bid/offer spreads. + +Instruments classified in level 3 of the fair value hierarchy are those which +require one or more significant inputs that are not observable. Level 3 +financial assets represented 1.6% as of December 2021 and 2.3% as of December +2020, of our total assets. See Notes 4 through 10 to the consolidated +financial statements for further information about level 3 financial assets, +including changes in level 3 financial assets and related fair value +measurements. Absent evidence to the contrary, instruments classified in level +3 of the fair value hierarchy are initially valued at transaction price, which +is considered to be the best initial estimate of fair value. Subsequent to the +transaction date, we use other methodologies to determine fair value, which +vary based on the type of instrument. Estimating the fair value of level 3 +financial instruments requires judgments to be made. These judgments include: + +Determining the appropriate valuation methodology and/or model for each type +of level 3 financial instrument; + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Determining model inputs based on an evaluation of all relevant empirical +market data, including prices evidenced by market transactions, interest +rates, credit spreads, volatilities and correlations; and + +Determining appropriate valuation adjustments, including those related to +illiquidity or counterparty credit quality. + +Regardless of the methodology, valuation inputs and assumptions are only +changed when corroborated by substantive evidence. + +Controls Over Valuation of Financial Instruments. + +Market makers and investment professionals in our revenue-producing units are +responsible for pricing our financial instruments. Our control infrastructure +is independent of the revenue-producing units and is fundamental to ensuring +that all of our financial instruments are appropriately valued at market- +clearing levels. In the event that there is a difference of opinion in +situations where estimating the fair value of financial instruments requires +judgment (e.g., calibration to market comparables or trade comparison, as +described below), the final valuation decision is made by senior managers in +independent risk oversight and control functions. This independent price +verification is critical to ensuring that our financial instruments are +properly valued. + +Price Verification. + +All financial instruments at fair value classified in levels 1, 2 and 3 of the +fair value hierarchy are subject to our independent price verification +process. The objective of price verification is to have an informed and +independent opinion with regard to the valuation of financial instruments +under review. Instruments that have one or more significant inputs which +cannot be corroborated by external market data are classified in level 3 of +the fair value hierarchy. Price verification strategies utilized by our +independent risk oversight and control functions include: + +Trade Comparison. + +Analysis of trade data (both internal and external, where available) is used +to determine the most relevant pricing inputs and valuations. + +External Price Comparison. + +Valuations and prices are compared to pricing data obtained from third parties +(e.g., brokers or dealers, IHS Markit, Bloomberg, IDC, TRACE). Data obtained +from various sources is compared to ensure consistency and validity. When +broker or dealer quotations or third-party pricing vendors are used for +valuation or price verification, greater priority is generally given to +executable quotations. + +Calibration to Market Comparables. + +Market-based transactions are used to corroborate the valuation of positions +with similar characteristics, risks and components. + +Relative Value Analyses. + +Market-based transactions are analyzed to determine the similarity, measured +in terms of risk, liquidity and return, of one instrument relative to another +or, for a given instrument, of one maturity relative to another. + +Collateral Analyses. + +Margin calls on derivatives are analyzed to determine implied values, which +are used to corroborate our valuations. + +Execution of Trades. + +Where appropriate, market-making desks are instructed to execute trades in +order to provide evidence of market-clearing levels. + +Backtesting. + +Valuations are corroborated by comparison to values realized upon sales. + +See Note 4 to the consolidated financial statements for further information +about fair value measurements. + +Review of Net Revenues. + +Independent risk oversight and control functions ensure adherence to our +pricing policy through a combination of daily procedures, including the +explanation and attribution of net revenues based on the underlying factors. +Through this process, we independently validate net revenues, identify and +resolve potential fair value or trade booking issues on a timely basis and +seek to ensure that risks are being properly categorized and quantified. + +Review of Valuation Models. + +Our independent model risk management group (Model Risk), consisting of +quantitative professionals who are separate from model developers, performs an +independent model review and validation process of our valuation models. New +or changed models are reviewed and approved prior to implementation. Models +are reviewed annually to assess the impact of any changes in the product or +market and any market developments in pricing theories. See “Risk Management — + +Model Risk Management” for further information about the review and validation +of our valuation models. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Allowance for Credit Losses + +We estimate and record an allowance for credit losses related to our loans +held for investment that are accounted for at amortized cost. To determine the +allowance for credit losses, we classify our loans accounted for at amortized +cost into wholesale and consumer portfolios. These portfolios represent the +level at which we have developed and documented our methodology to determine +the allowance for credit losses. The allowance for credit losses is measured +on a collective basis for loans that exhibit similar risk characteristics +using a modeled approach and asset-specific basis for loans that do not share +similar risk characteristics. + +The allowance for credit losses takes into account the weighted average of a +range of forecasts of future economic conditions over the expected life of the +loans and lending commitments. The expected life of each loan or lending +commitment is determined based on the contractual term adjusted for extension +options or demand features, or is modeled in the case of revolving credit card +loans. The forecasts include baseline, favorable and adverse economic +scenarios over a three-year period. For loans with expected lives beyond three +years, the model reverts to historical loss information based on a + +non-linear + +modeled approach. We apply judgment in weighting individual scenarios each +quarter based on a variety of factors, including our internally derived +economic outlook, market consensus, recent macroeconomic conditions and +industry trends. The forecasted economic scenarios consider a number of risk +factors relevant to the wholesale and consumer portfolios. Risk factors for +wholesale loans include internal credit ratings, industry default and loss +data, expected life, macroeconomic indicators (e.g., unemployment rates and +GDP), the borrower’s capacity to meet its financial obligations, the +borrower’s country of risk and industry, loan seniority and collateral type. +In addition, for loans backed by real estate, risk factors include + +loan-to-value + +ratio, debt service ratio and home price index. Risk factors for installment +and credit card loans include Fair Isaac Corporation (FICO) credit scores, +delinquency status, loan vintage and macroeconomic indicators. + +The allowance for credit losses also includes qualitative components which +allow management to reflect the uncertain nature of economic forecasting, +capture uncertainty regarding model inputs, and account for model imprecision +and concentration risk. + +Our estimate of credit losses entails judgment about collectability at the +reporting dates, and there are uncertainties inherent in those judgments. The +allowance for credit losses is subject to a governance process that involves +review and approval by senior management within our independent risk oversight +and control functions. Personnel within our independent risk oversight and +control functions are responsible for forecasting the economic variables that +underlie the economic scenarios that are used in the modeling of expected +credit losses. While we use the best information available to determine this +estimate, future adjustments to the allowance may be necessary based on, among +other things, changes in the economic environment or variances between actual +results and the original assumptions used. Loans are charged off against the +allowance for loan losses when deemed to be uncollectible. + +We also record an allowance for credit losses on lending commitments which are +held for investment that are accounted for at amortized cost. Such allowance +is determined using the same methodology as the allowance for loan losses, +while also taking into consideration the probability of drawdowns or funding, +and whether such commitments are cancellable by us. + +To estimate the potential impact of an adverse macroeconomic environment on +our allowance for credit losses, we, among other things, compared the expected +credit losses under the weighted average forecast used in the calculation of +allowance for credit losses as of December 2021 (which was primarily weighted +towards the baseline economic scenario) to the expected credit losses under a +100% weighted adverse economic scenario. The adverse macroeconomic model +assumes an emergence of new vaccine-resistant strains of + +COVID-19 + +resulting in a resurgence of infections, an economic contraction, high +inflation rates in the initial quarters, gradually climbing unemployment +rates, decline in GDP growth rates and dislocations in the economy due to +shortages in the supply of some goods and services. A 100% weighting to the +adverse economic scenario would have resulted in an approximate $1.3 billion +increase in our allowance for credit losses as of December 2021. This +hypothetical increase does not take into consideration any potential +adjustments to qualitative reserves. The forecasts of macroeconomic conditions +are inherently uncertain and do not take into account any other offsetting or +correlated effects. The actual credit loss in an adverse macroeconomic +environment may differ significantly from this estimate. See Note 9 to the +consolidated financial statements for further information about the allowance +for credit losses. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Use of Estimates + +U.S. GAAP requires us to make certain estimates and assumptions. In addition +to the estimates we make in connection with fair value measurements and the +allowance for credit losses on loans and lending commitments held for +investment and accounted for at amortized cost, the use of estimates and +assumptions is also important in determining the accounting for goodwill and +identifiable intangible assets, provisions for losses that may arise from +litigation and regulatory proceedings (including governmental investigations), +and accounting for income taxes. + +Goodwill is assessed for impairment annually in the fourth quarter or more +frequently if events occur or circumstances change that indicate an impairment +may exist. When assessing goodwill for impairment, first, a qualitative +assessment can be made to determine whether it is more likely than not that +the estimated fair value of a reporting unit is less than its estimated +carrying value. If the results of the qualitative assessment are not +conclusive, a quantitative goodwill test is performed. Alternatively, a +quantitative goodwill test can be performed without performing a qualitative +assessment. Estimating the fair value of our reporting units requires +judgment. Critical inputs to the fair value estimates include projected +earnings and allocated equity. There is inherent uncertainty in the projected +earnings. The estimated carrying value of each reporting unit reflects an +allocation of total shareholders’ equity and represents the estimated amount +of total shareholders’ equity required to support the activities of the +reporting unit under currently applicable regulatory capital requirements. See +Note 12 to the consolidated financial statements for further information about +goodwill. If we experience a prolonged or severe period of weakness in the +business environment, financial markets, our performance or our common stock +price, or additional increases in capital requirements, our goodwill could be +impaired in the future. + +Identifiable intangible assets are tested for impairment when events or +changes in circumstances suggest that an asset’s or asset group’s carrying +value may not be fully recoverable. Judgment is required to evaluate whether +indications of potential impairment have occurred, and to test intangible +assets for impairment, if required. An impairment is recognized if the +estimated undiscounted cash flows relating to the asset or asset group is less +than the corresponding carrying value. See Note 12 to the consolidated +financial statements for further information about identifiable intangible +assets. + +We also estimate and provide for potential losses that may arise out of +litigation and regulatory proceedings to the extent that such losses are +probable and can be reasonably estimated. In addition, we estimate the upper +end of the range of reasonably possible aggregate loss in excess of the +related reserves for litigation and regulatory proceedings where we believe +the risk of loss is more than slight. See Notes 18 and 27 to the consolidated +financial statements for information about certain judicial, litigation and +regulatory proceedings. Significant judgment is required in making these +estimates and our final liabilities may ultimately be materially different. +Our total estimated liability in respect of litigation and regulatory +proceedings is determined on a + +case-by-case + +basis and represents an estimate of probable losses after considering, among +other factors, the progress of each case, proceeding or investigation, our +experience and the experience of others in similar cases, proceedings or +investigations, and the opinions and views of legal counsel. + +In accounting for income taxes, we recognize tax positions in the financial +statements only when it is more likely than not that the position will be +sustained on examination by the relevant taxing authority based on the +technical merits of the position. As of December 2021, our net liability for +unrecognized tax benefits was $1.16 billion. We use estimates to recognize +current and deferred income taxes in the U.S. federal, state and local and + +non-U.S. + +jurisdictions in which we operate. The income tax laws in these jurisdictions +are complex and can be subject to different interpretations between taxpayers +and taxing authorities. Disputes may arise over these interpretations and can +be settled by audit, administrative appeals or judicial proceedings. Our +interpretations are reevaluated quarterly based on guidance currently +available, tax examination experience and the opinions of legal counsel, among +other factors. We recognize deferred taxes based on the amount that will more +likely than not be realized in the future based on enacted income tax laws. As +of December 2021, we had $6.32 billion of deferred tax assets with a related +valuation allowance of $895 million. Our estimate for deferred taxes includes +estimates for future taxable earnings, including the level and character of +those earnings, and various tax planning strategies. See Note 24 to the +consolidated financial statements for further information about income taxes. + +Recent Accounting Developments + +See Note 3 to the consolidated financial statements for information about +Recent Accounting Developments. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Results of Operations + +The composition of our net revenues has varied over time as financial markets +and the scope of our operations have changed. The composition of net revenues +can also vary over the shorter term due to fluctuations in U.S. and global +economic and market conditions. See “Risk Factors” in Part I, Item 1A of this + +Form 10-K + +for further information about the impact of economic and market conditions on +our results of operations. For a discussion of our 2020 financial results +compared with 2019, see Part II, Item 7 “Management’s Discussion and Analysis +of Financial Condition and Results of Operations” in our Annual Report on + +Form 10-K + +for the year ended December 31, 2020. + +Financial Overview + +The table below presents an overview of our financial results and selected +financial ratios. + +In the table above: + +Net earnings to common represents net earnings applicable to common +shareholders, which is calculated as net earnings less preferred stock +dividends. + +Average equity to average assets is calculated by dividing average total +shareholders’ equity by average total assets. + +Dividend payout ratio is calculated by dividing dividends declared per common +share by diluted EPS. + +ROE is calculated by dividing net earnings to common by average monthly common +shareholders’ equity. Tangible common shareholders’ equity is calculated as +total shareholders’ equity less preferred stock, goodwill and identifiable +intangible assets. ROTE is calculated by dividing net earnings to common by +average monthly tangible common shareholders’ equity. We believe that tangible +common shareholders’ equity is meaningful because it is a measure that we and +investors use to assess capital adequacy and that ROTE is meaningful because +it measures the performance of businesses consistently, whether they were +acquired or developed internally. Tangible common shareholders’ equity and +ROTE are + +non-GAAP + +measures and may not be comparable to similar + +non-GAAP + +measures used by other companies. Return on average shareholders’ equity is +calculated by dividing net earnings by average monthly shareholders’ equity. + +The table below presents our average equity and the reconciliation of average +common shareholders’ equity to average tangible common shareholders’ equity. + +Net Revenues + +The table below presents our net revenues by line item. + +In the table above: + +Investment banking consists of revenues (excluding net interest) from +financial advisory and underwriting assignments. These activities are included +in our Investment Banking segment. + +Investment management consists of revenues (excluding net interest) from +providing asset management services across all major asset classes to a +diverse set of asset management clients (included in our Asset Management +segment), as well as asset management services, wealth advisory services and +certain transaction services for wealth management clients (included in our +Consumer & Wealth Management segment). + +Commissions and fees consists of revenues from executing and clearing client +transactions on major stock, options and futures exchanges worldwide, as well +as + +over-the-counter + +(OTC) transactions. These activities are included in our Global Markets and +Consumer & Wealth Management segments. + +Market making consists of revenues (excluding net interest) from client +execution activities related to making markets in interest rate products, +credit products, mortgages, currencies, commodities and equity products. These +activities are included in our Global Markets segment. + +Other principal transactions consists of revenues (excluding net interest) +from our equity investing activities, including revenues related to our +consolidated investments (included in our Asset Management segment), and +lending activities (included across our four segments). + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Operating Environment. + +During 2021, a general recovery of the global economy, continued monetary and +fiscal support from central banks and governments and accelerating vaccine +distribution provided a favorable market backdrop. These factors contributed +to generally higher global equity prices and tighter credit spreads compared +with the end of 2020. In addition, market-making activities reflected strong +client activity levels, although activity declined from a very strong prior +year which reflected heightened volatility and significant market dislocations +as a result of the + +COVID-19 + +pandemic, and investment banking activity levels across mergers and +acquisitions and underwriting were elevated. + +If concerns about the economic outlook, including those on inflation and +supply chain issues, grow or the ongoing efforts to mitigate the impact of the + +COVID-19 + +pandemic are ineffective (including due to new variants or complications with +vaccine distribution, efficacy and hesitancy), it may lead to a decline in +global equity markets, a decline in investment banking activity levels, and a +continued decline in market-making activity levels, and net revenues and the +provision for credit losses would likely be negatively impacted. See “Segment +Assets and Operating Results — Segment Operating Results” for information +about the operating environment and material trends and uncertainties that may +impact our results of operations. + +2021 versus 2020. + +Net revenues in the consolidated statements of earnings were $59.34 billion +for 2021, 33% higher than 2020, reflecting significantly higher other +principal transactions revenues, investment banking revenues and net interest +income, and higher investment management revenues. + +Non-Interest + +Revenues. + +Investment banking revenues in the consolidated statements of earnings were +$14.17 billion for 2021, 55% higher than 2020, due to significantly higher +revenues in financial advisory, reflecting a significant increase in completed +mergers and acquisitions volumes, in equity underwriting, primarily driven by +strong industry-wide initial public offerings activity, and in debt +underwriting, primarily reflecting elevated industry-wide leveraged finance +activity. + +Investment management revenues in the consolidated statements of earnings were +$8.06 billion for 2021, 16% higher than 2020, primarily due to higher +management and other fees, reflecting the impact of higher average AUS, +partially offset by higher fee waivers on money market funds. In addition, +incentive fees were significantly higher, primarily driven by harvesting. + +Commissions and fees in the consolidated statements of earnings were $3.62 +billion for 2021, slightly higher than 2020. + +Market making revenues in the consolidated statements of earnings were $15.35 +billion for 2021, essentially unchanged compared with 2020, as significantly +lower revenues in interest rate products and credit products were largely +offset by significantly higher revenues in equity products (primarily in +derivatives) and commodities, and improved results in mortgages. + +Other principal transactions revenues in the consolidated statements of +earnings were $11.67 billion for 2021, compared with $4.65 billion for 2020, +primarily reflecting significantly higher net gains from investments in +private equities and in debt instruments, partially offset by net losses from +investments in public equities compared with significant net gains in 2020. + +Net Interest Income. + +Net interest income in the consolidated statements of earnings was $6.47 +billion for 2021, 36% higher than 2020, reflecting a decrease in interest +expense, partially offset by a decrease in interest income. The decrease in +interest expense is primarily related to other interest-bearing liabilities, +deposits and long-term borrowings, each reflecting the impact of lower +interest rates. The decrease in interest income primarily related to +collateralized agreements and trading assets, both reflecting the impact of +lower interest rates, partially offset by the impact of higher average +balances for loans. See “Supplemental Financial Information — Statistical +Disclosures — Distribution of Assets, Liabilities and Shareholders’ Equity” +for further information about our sources of net interest income. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Provision for Credit Losses + +Provision for credit losses consists of provision for credit losses on loans +and lending commitments held for investment and accounted for at amortized +cost. See Note 9 to the consolidated financial statements for further +information about the provision for credit losses. + +The table below presents our provision for credit losses. + +2021 versus 2020. + +Provision for credit losses in the consolidated statements of earnings was +$357 million for 2021, compared with $3.10 billion for 2020. 2021 included +provisions related to portfolio growth (primarily in credit cards, including +approximately $185 million of provisions related to the commitment to acquire +the General Motors + +co-branded + +credit card portfolio), largely offset by reserve reductions on wholesale and +consumer loans reflecting continued improvement in the broader economic +environment. This followed challenging conditions in the prior year as a +result of the + +COVID-19 + +pandemic, which contributed to significant provisions in 2020. + +Operating Expenses + +Our operating expenses are primarily influenced by compensation, headcount and +levels of business activity. Compensation and benefits includes salaries, + +year-end + +discretionary compensation, amortization of equity awards and other items such +as benefits. Discretionary compensation is significantly impacted by, among +other factors, the level of net revenues net of provision for credit losses, +overall financial performance, prevailing labor markets, business mix, the +structure of our share-based compensation programs and the external +environment. + +The table below presents our operating expenses by line item and headcount. + +2021 versus 2020. + +Operating expenses in the consolidated statements of earnings were $31.94 +billion for 2021, 10% higher than 2020. Our efficiency ratio for 2021 was +53.8%, compared with 65.0% for 2020. In 2020, net provisions for litigation +and regulatory proceedings increased our efficiency ratio by 7.6 percentage +points. + +The increase in operating expenses compared with 2020 primarily reflected +significantly higher compensation and benefits expenses (reflecting strong +performance). In addition, technology expenses and professional fees were +significantly higher and transaction based expenses were higher. These +increases were partially offset by significantly lower net provisions for +litigation and regulatory proceedings and lower expenses related to +consolidated investments (including impairments). + +Net provisions for litigation and regulatory proceedings for 2021 were $534 +million compared with $3.42 billion for 2020. + +Charitable contributions to Goldman Sachs Gives were approximately $250 +million for 2021. + +As of December 2021, headcount increased 8% compared with December 2020, +reflecting investments in new business initiatives and an increase in +technology professionals. + +Provision for Taxes + +The effective income tax rate for 2021 was 20.0%, down from the full year +income tax rate of 24.2% for 2020, primarily due to a decrease in provisions +for + +non-deductible + +litigation, partially offset by a decrease in the impact of tax benefits in +2021 compared with 2020. + +In March 2021, the American Rescue Plan Act of 2021 (Rescue Plan) was signed +into law. The Rescue Plan is a $1.9 trillion stimulus package enacted to help +address the economic and health impacts of the + +COVID-19 + +pandemic. The Rescue Plan includes a repeal of a provision under which U.S. +affiliated groups could elect a worldwide allocation of interest expense for +foreign tax credit limitation purposes for one year beginning in January 2021. +Additionally, beginning in 2027, the limitation on corporate tax deductions +for compensation payable to the CEO, CFO and the top three highest paid +employees will be expanded to include the next five highest paid employees. +The legislation did not have a material impact on our 2021 annual effective +tax rate and is not expected to have a material impact on our 2022 annual +effective tax rate. + +In April 2021, the New York State (NYS) FY 2022 budget was enacted. The +legislation temporarily increased the NYS corporate income tax rate from 6.5% +to 7.25% for calendar years 2021 through 2023. The legislation did not have a +material impact on our 2021 annual effective tax rate and is not expected to +have a material impact on our 2022 annual effective tax rate. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The U.K. Finance Act 2021 was enacted in June 2021 and includes a six percent +increase in the corporate income tax rate effective from April 2023. During +2021, U.K. deferred tax assets and liabilities were remeasured and a deferred +tax benefit of approximately $100 million was recognized. The Finance (No. 2) +Bill + +issued in November 2021, includes a five percent reduction in the U.K. bank +surcharge tax rate, effective from April 2023. The bank surcharge is currently +applicable to certain of our U.K. subsidiaries and branches, including Goldman +Sachs International (GSI) and Goldman Sachs International Bank (GSIB). +Following Royal Assent, the associated impact of any change to the bank +surcharge on U.K. deferred tax assets and liabilities could have a material +impact on our effective tax rate, depending on the operating results for the +quarter during which this legislation is enacted. + +We expect our tax rate for 2022 to be between 20% and 21%, excluding the +impact of income tax benefits on employee share-based awards and any potential +changes in current income tax rates. + +Segment Assets and Operating Results + +Segment Assets. + +The table below presents assets by segment. + +The allocation process for segment assets is based on the activities of these +segments. The allocation of assets includes allocation of GCLA (which consists +of unencumbered, highly liquid securities and cash), which is generally +included within cash and cash equivalents, collateralized agreements and +trading assets on our balance sheet. Due to the integrated nature of these +segments, estimates and judgments are made in allocating these assets. See +“Risk Management — Liquidity Risk Management” for further information about +our GCLA. + +Segment Operating Results. + +The table below presents our segment operating results. + +Net revenues in our segments include allocations of interest income and +expense to specific positions in relation to the cash generated by, or funding +requirements of, such positions. See Note 25 to the consolidated financial +statements for further information about our business segments. + +The allocation of common shareholders’ equity and preferred stock dividends to +each segment is based on the estimated amount of equity required to support +the activities of the segment under relevant regulatory capital requirements. +Net earnings for each segment is calculated by applying the firmwide tax rate +to each segment’s + +pre-tax + +earnings. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Effective January 1, 2021, the attributed equity among our segments was +updated to reflect the results of our 2020 Comprehensive Capital Analysis and +Review (CCAR) process. See “Capital Management and Regulatory Capital — +Capital Management” for information about the impact of these updates on the +allocation of attributed equity among our segments as of the beginning of the +first quarter of 2021. The average common equity balances above incorporate +such impact, as well as the changes in the size and composition of assets held +in each of our segments that occurred during 2021. See “Capital Management and +Regulatory Capital — Capital Management” for information about our 2021 CCAR +process and our updated SCB, which became effective on October 1, 2021. + +Compensation and benefits expenses within our segments reflect, among other +factors, our overall performance, as well as the performance of individual +businesses. Consequently, + +pre-tax + +margins in one segment of our business may be significantly affected by the +performance of our other business segments. A description of segment operating +results follows. + +Investment Banking + +Investment Banking generates revenues from the following: + +Financial advisory. + +Includes strategic advisory assignments with respect to mergers and +acquisitions, divestitures, corporate defense activities, restructurings and +spin-offs. + +Underwriting. + +Includes public offerings and private placements, including local and cross- +border transactions and acquisition financing, of a wide range of securities +and other financial instruments, including loans. + +Corporate lending. + +Includes lending to corporate clients, including through relationship lending, +middle-market lending and acquisition financing. We also provide transaction +banking services to certain of our corporate clients. + +The table below presents our Investment Banking assets. + +The table below presents our Investment Banking operating results. + +The table below presents our financial advisory and underwriting transaction +volumes. + +In the table above: + +Volumes are per Dealogic. + +Announced and completed mergers and acquisitions volumes are based on full +credit to each of the advisors in a transaction. Equity and equity-related +offerings and debt offerings are based on full credit for single book managers +and equal credit for joint book managers. Transaction volumes may not be +indicative of net revenues in a given period. In addition, transaction volumes +for prior periods may vary from amounts previously reported due to the +subsequent withdrawal or a change in the value of a transaction. + +Equity and equity-related offerings includes Rule 144A and public common stock +offerings, convertible offerings and rights offerings. + +Debt offerings includes + +non-convertible + +preferred stock, mortgage-backed securities, asset-backed securities and +taxable municipal debt. Includes publicly registered and Rule 144A issues and +excludes leveraged loans. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Operating Environment. + +During 2021, Investment Banking operated in an environment characterized by +strong industry-wide activity. In mergers and acquisitions, industry-wide +completed and announced volumes were at high levels, reflecting supportive +market conditions and strong CEO confidence. In underwriting, industry-wide +activity levels reflected continued strength in equity underwriting volumes, +including strong initial public offerings activity, and solid debt +underwriting volumes, including elevated leveraged finance activity. + +In the future, if market and economic conditions deteriorate, and industry- +wide mergers and acquisitions volumes decline, or if industry-wide equity and +debt underwriting volumes decline, or credit spreads related to hedges on our +relationship lending portfolio tighten further, net revenues in Investment +Banking would likely be negatively impacted. In addition, a deterioration in +the creditworthiness of borrowers would negatively impact the provision for +credit losses. + +2021 versus 2020. + +Net revenues in Investment Banking were $14.88 billion for 2021, 58% higher +than 2020, primarily reflecting significantly higher net revenues in Financial +advisory and Underwriting. + +The increase in Financial advisory net revenues reflected a significant +increase in completed mergers and acquisitions volumes. The increase in +Underwriting net revenues was due to significantly higher net revenues in both +Equity underwriting, primarily driven by strong industry-wide initial public +offerings activity, and Debt underwriting, primarily reflecting elevated +industry-wide leveraged finance activity. Corporate lending net revenues were +significantly higher, primarily reflecting net gains from lending activities +compared with net losses in the prior year, and significantly higher net +interest income. + +Provision for credit losses was a net benefit of $298 million for 2021, +compared with net provisions of $1.62 billion for 2020, primarily due to +reserve reductions in the current year reflecting continued improvement in the +broader economic environment following challenging conditions in 2020 +resulting from the + +COVID-19 + +pandemic. + +Operating expenses were $6.71 billion for 2021, 9% higher than 2020, due to +significantly higher compensation and benefits expenses (reflecting strong +performance), partially offset by significantly lower net provisions for +litigation and regulatory proceedings. + +Pre-tax + +earnings were $8.47 billion for 2021, compared with $1.67 billion for 2020. +ROE was 64.8% for 2021, compared with 10.5% for 2020 (which included the +impact of net provisions for litigation and regulatory proceedings that +reduced ROE by 11.5 percentage points). + +As of December 2021, our investment banking transaction backlog increased +significantly compared with December 2020, due to significantly higher +estimated net revenues from potential financial advisory transactions and +potential debt underwriting transactions (particularly from leveraged finance +transactions), and higher estimated net revenues from potential equity +underwriting transactions. + +Our backlog represents an estimate of our net revenues from future +transactions where we believe that future revenue realization is more likely +than not. We believe changes in our backlog may be a useful indicator of +client activity levels which, over the long term, impact our net revenues. +However, the time frame for completion and corresponding revenue recognition +of transactions in our backlog varies based on the nature of the assignment, +as certain transactions may remain in our backlog for longer periods of time. +In addition, our backlog is subject to certain limitations, such as +assumptions about the likelihood that individual client transactions will +occur in the future. Transactions may be cancelled or modified, and +transactions not included in the estimate may also occur. + +Global Markets + +Our Global Markets segment consists of: + +FICC. + +FICC generates revenues from intermediation and financing activities. + +FICC intermediation. + +Includes client execution activities related to making markets in both cash +and derivative instruments, as detailed below. + +Interest Rate Products. + +Government bonds (including inflation-linked securities) across maturities, +other government-backed securities, and interest rate swaps, options and other +derivatives. + +Credit Products. + +Investment-grade and high-yield corporate securities, credit derivatives, +exchange-traded funds (ETFs), bank and bridge loans, municipal securities, +emerging market and distressed debt, and trade claims. + +Mortgages. + +Commercial mortgage-related securities, loans and derivatives, residential +mortgage-related securities, loans and derivatives (including U.S. government +agency-issued collateralized mortgage obligations and other securities and +loans), and other asset-backed securities, loans and derivatives. + +Currencies. + +Currency options, spot/forwards and other derivatives on + +G-10 + +currencies and emerging-market products. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Commodities. + +Commodity derivatives and, to a lesser extent, physical commodities, involving +crude oil and petroleum products, natural gas, agricultural, base, precious +and other metals, electricity, including renewable power, environmental +products and other commodity products. + +For further information about market-making activities, see “Market-Making +Activities” below. + +FICC financing. + +Includes providing financing to our clients through warehouse loans backed by +mortgages (including residential and commercial mortgage loans), corporate +loans and consumer loans (including auto loans and private student loans). We +also provide financing to clients through structured credit, asset-backed +lending, and through securities purchased under agreements to resell (resale +agreements). + +Equities. + +Equities generates revenues from intermediation and financing activities. + +Equities intermediation. + +We make markets in equity securities and equity-related products, including +ETFs, convertible securities, options, futures and OTC derivative instruments. +We also structure and make markets in derivatives on indices, industry +sectors, financial measures and individual company stocks. Our exchange-based +market-making activities include making markets in stocks and ETFs, futures +and options on major exchanges worldwide. In addition, we generate commissions +and fees from executing and clearing institutional client transactions on +major stock, options and futures exchanges worldwide, as well as OTC +transactions. For further information about market-making activities, see +“Market-Making Activities” below. + +Equities financing. + +Includes prime brokerage and other equities financing activities, including +securities lending, margin lending and swaps. We earn fees by providing +clearing, settlement and custody services globally. We provide services that +principally involve borrowing and lending securities to cover institutional +clients’ short sales and borrowing securities to cover our short sales and to +make deliveries into the market. In addition, we are an active participant in + +broker-to-broker + +securities lending and third-party agency lending activities. We provide +financing to our clients for their securities trading activities through +margin loans that are collateralized by securities, cash or other acceptable +collateral. In addition, we execute swap transactions to provide our clients +with exposure to securities and indices. + +Market-Making Activities + +As a market maker, we facilitate transactions in both liquid and less liquid +markets, primarily for institutional clients, such as corporations, financial +institutions, investment funds and governments, to assist clients in meeting +their investment objectives and in managing their risks. In this role, we seek +to earn the difference between the price at which a market participant is +willing to sell an instrument to us and the price at which another market +participant is willing to buy it from us, and vice versa (i.e., bid/offer +spread). In addition, we maintain (i) market-making positions, typically for a +short period of time, in response to, or in anticipation of, client demand, +and (ii) positions to actively manage our risk exposures that arise from these +market-making activities (collectively, inventory). Our inventory is recorded +in trading assets (long positions) or trading liabilities (short positions) in +our consolidated balance sheets. + +Our results are influenced by a combination of interconnected drivers, +including (i) client activity levels and transactional bid/offer spreads +(collectively, client activity), and (ii) changes in the fair value of our +inventory and interest income and interest expense related to the holding, +hedging and funding of our inventory (collectively, market-making inventory +changes). Due to the integrated nature of our market-making activities, +disaggregation of net revenues into client activity and market-making +inventory changes is judgmental and has inherent complexities and limitations. + +The amount and composition of our net revenues vary over time as these drivers +are impacted by multiple interrelated factors affecting economic and market +conditions, including volatility and liquidity in the market, changes in +interest rates, currency exchange rates, credit spreads, equity prices and +commodity prices, investor confidence, and other macroeconomic concerns and +uncertainties. + +In general, assuming all other market-making conditions remain constant, +increases in client activity levels or bid/offer spreads tend to result in +increases in net revenues, and decreases tend to have the opposite effect. +However, changes in market-making conditions can materially impact client +activity levels and bid/offer spreads, as well as the fair value of our +inventory. For example, a decrease in liquidity in the market could have the +impact of (i) increasing our bid/offer spread, (ii) decreasing investor +confidence and thereby decreasing client activity levels, and (iii) widening +of credit spreads on our inventory positions. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The table below presents our Global Markets assets. + +The table below presents our Global Markets operating results. + +The table below presents our Global Markets net revenues by line item in the +consolidated statements of earnings. + +In the table above: + +The difference between commissions and fees and those in the consolidated +statements of earnings represents commissions and fees included in our +Consumer & Wealth Management segment. + +See “Net Revenues” for information about market making revenues, commissions +and fees, other principal transactions revenues and net interest income. See +Note 25 to the consolidated financial statements for net interest income by +segment. + +The primary driver of net revenues for FICC intermediation was client +activity. + +Operating Environment. + +During 2021, Global Markets operated in an environment characterized by +continued economic recovery and continued monetary and fiscal support from +central banks and governments, which contributed to strong client activity +levels, although activity declined from a very strong prior year which +reflected heightened volatility and significant market dislocations as a +result of the + +COVID-19 + +pandemic. In addition, global equity prices were generally higher compared +with the end of 2020, as the S&P 500 Index increased by 27% and the MSCI World +Index increased by 17%. Market volatility continued to moderate from elevated +levels last year, as the average daily VIX was 33% lower than 2020. If +macroeconomic conditions lead to a continued decline in activity levels or +continued decline in volatility, net revenues in Global Markets would likely +be negatively impacted. + +2021 versus 2020. + +Net revenues in Global Markets were $22.08 billion for 2021, 4% higher than + +Net revenues in FICC were $10.58 billion, 9% lower than 2020, due to lower net +revenues in FICC intermediation, reflecting significantly lower net revenues +in interest rate products and credit products and slightly lower net revenues +in currencies, partially offset by significantly higher net revenues in +mortgages and higher net revenues in commodities. Net revenues in FICC +financing were significantly higher, reflecting significantly higher net +revenues from mortgage lending, partially offset by significantly lower net +revenues from resale agreements. + +The decrease in FICC intermediation net revenues reflected strong but +significantly lower client activity compared with very strong activity levels +in the prior year due to high volatility amid the + +COVID-19 + +pandemic. This was partially offset by the impact of improved market-making +conditions on our inventory compared with challenging conditions in the prior +year. The following provides information about our FICC intermediation net +revenues by business, compared with 2020 results: + +Net revenues in interest rate products primarily reflected lower client +activity. + +Net revenues in credit products and currencies reflected lower client +activity, partially offset by the impact of improved market-making conditions +on our inventory. + +Net revenues in mortgages reflected the impact of improved market-making +conditions on our inventory. + +Net revenues in commodities primarily reflected higher client activity. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Net revenues in Equities were $11.49 billion, 20% higher than 2020, due to +significantly higher net revenues in Equities financing, primarily reflecting +increased activity (including higher average client balances), and higher net +revenues in Equities intermediation, across both derivatives and cash +products. + +Provision for credit losses was $45 million for 2021, compared with $274 +million for 2020, primarily reflecting reserve reductions in the current year +due to continued improvement in the broader economic environment following +challenging conditions in 2020 resulting from the + +COVID-19 + +pandemic, partially offset by portfolio growth. + +Operating expenses were $12.97 billion for 2021, essentially unchanged +compared with 2020, as higher compensation and benefits expenses (reflecting +strong performance) and higher transaction based expenses were offset by +significantly lower net provisions for litigation and regulatory proceedings. + +Pre-tax + +earnings were $9.06 billion, 12% higher than 2020. ROE was 15.3% for 2021, +compared with 14.1% for 2020 (which included the impact of net provisions for +litigation and regulatory proceedings that reduced ROE by 4.0 percentage +points). + +Asset Management + +We manage client assets across a broad range of investment strategies and +asset classes for a diverse set of institutional clients and a network of +third-party distributors around the world, including equity, fixed income and +alternative investments. We provide investment solutions including those +managed on a fiduciary basis by our portfolio managers, as well as those +managed by third-party managers. We offer our investment solutions in a +variety of structures, including separately managed accounts, mutual funds, +private partnerships and other commingled vehicles. These solutions begin with +identifying clients’ objectives and continue through portfolio construction, +ongoing asset allocation and risk management and investment realization. + +In addition to managing client assets, we invest in alternative investments +across a range of asset classes that seek to deliver long-term accretive risk- +adjusted returns. Our investing activities, which are typically longer term, +include investments in corporate equity, credit, real estate and +infrastructure assets. + +Asset Management generates revenues from the following: + +Management and other fees. + +The majority of revenues in management and other fees consists + +of asset-based fees on client assets that we manage. For further information +about AUS, see “Assets Under Supervision” below. The fees that we charge vary +by asset class, distribution channel and the types of services provided, and +are affected by investment performance, as well as asset inflows and +redemptions. + +Incentive fees. + +In certain circumstances, we also receive incentive fees based on a percentage +of a fund’s or a separately managed account’s return, or when the return +exceeds a specified benchmark or other performance targets. Such fees include +overrides, which consist of the increased share of the income and gains +derived primarily from our private equity and credit funds when the return on +a fund’s investments over the life of the fund exceeds certain threshold +returns. + +Equity investments. + +Our alternative investing activities relate to public and private equity +investments in corporate, real estate and infrastructure entities. We also +make investments through consolidated investment entities (CIEs), +substantially all of which are engaged in real estate investment activities. + +Lending and debt investments. + +We invest in corporate debt and provide financing for real estate and other +assets. These activities include investments in mezzanine debt, senior debt +and distressed debt securities. + +The table below presents our Asset Management assets. + +The table below presents our Asset Management operating results. + +The table below presents our Equity investments net revenues by equity type +and asset class. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The table below presents details about our Lending and debt investments net +revenues. + +Operating Environment. + +During 2021, the operating environment for Asset Management improved, as +global equity prices were generally higher and credit spreads tightened, amid +economic recovery and continued support from central banks and governments +globally. If optimism about the economic outlook declines or the ongoing +efforts to mitigate the impact of the + +COVID-19 + +pandemic are ineffective, it may lead to a decline in asset prices, widening +of credit spreads, and investors transitioning to asset classes that typically +generate lower fees or investors withdrawing their assets, and net revenues in +Asset Management would likely be negatively impacted. + +2021 versus 2020. + +Net revenues in Asset Management were $14.92 billion for 2021, 87% higher than +2020, primarily reflecting significantly higher net revenues in Equity +investments and Lending and debt investments. + +The increase in Equity investments net revenues reflected significantly higher +net gains from investments in private equities, driven by company-specific +events and improved corporate performance compared with 2020, partially offset +by net losses from investments in public equities compared with significant +net gains in the prior year. + +The increase in Lending and debt investments net revenues reflected net gains +from investments in debt instruments compared with net losses in the prior +year, and significantly higher net interest income. + +Incentive fees were higher, primarily driven by harvesting, and Management and +other fees were slightly higher, reflecting the impact of higher average +assets under supervision, partially offset by higher fee waivers on money +market funds. + +Provision for credit losses was $18 million for 2021, compared with $442 +million for 2020, primarily due to reserve reductions in the current year +reflecting continued improvement in the broader economic environment following +challenging conditions in 2020 resulting from the + +COVID-19 + +pandemic. + +Operating expenses were $5.97 billion for 2021, 16% higher than 2020, +primarily due to significantly higher compensation and benefits expenses +(reflecting strong performance), partially offset by lower expenses related to +consolidated investments (including impairments). + +Pre-tax + +earnings were $8.93 billion for 2021, compared with $2.40 billion for 2020. +ROE was 28.0% for 2021, compared with 8.5% for 2020. + +Consumer & Wealth Management + +Consumer & Wealth Management helps clients achieve their individual financial +goals by providing a broad range of wealth advisory and banking services, +including financial planning, investment management, deposit-taking and +lending. Services are offered through our global network of advisors and via +our digital platforms. + +Wealth Management. + +Wealth management provides tailored wealth advisory services to clients across +the wealth spectrum. We operate globally serving individuals, families, family +offices, and foundations and endowments. Our relationships are established +directly or introduced through corporations that sponsor financial wellness +programs for their employees. + +We offer personalized financial planning inclusive of income and liability +management, compensation and benefits analysis, trust and estate structuring, +tax optimization, philanthropic giving, and asset protection. We also provide +customized investment advisory solutions, and offer structuring and execution +capabilities in security and derivative products across all major global +markets. We leverage a broad, open-architecture investment platform and our +global execution capabilities to help clients achieve their investment goals. +In addition, we offer clients a full range of private banking services, +including a variety of deposit alternatives and loans that our clients use to +finance investments in both financial and nonfinancial assets, bridge cash +flow timing gaps or provide liquidity and flexibility for other needs. + +Wealth management generates revenues from the following: + +Management and other fees. + +Includes fees related to managing assets, providing investing and wealth +advisory solutions, providing financial planning and counseling services via +Ayco Personal Financial Management, and executing brokerage transactions for +wealth management clients. + +Incentive fees. + +In certain circumstances, we also receive incentive fees from wealth +management clients based on a percentage of a fund’s return, or when the +return exceeds a specified benchmark or other performance targets. Such fees +include overrides, which consist of the increased share of the income and +gains derived primarily from our private equity and credit funds when the +return on a fund’s investments over the life of the fund exceeds certain +threshold returns. + +Private banking and lending. + +Includes net interest income allocated to deposit-taking and net interest +income earned on lending activities for wealth management clients. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Consumer Banking. + +Our Consumer banking business issues unsecured loans, through our digital +platform, + +Marcus by Goldman Sachs + +(Marcus), + +and credit cards, to finance the purchases of goods or services. We also +accept deposits (including savings and time deposits) through Marcus, in +Goldman Sachs Bank USA (GS Bank USA) and GSIB. Additionally, we provide +investing services through + +Marcus Invest + +to U.S. customers. + +Consumer banking revenues consist of net interest income earned on unsecured +loans issued to consumers through Marcus and credit card lending activities, +and net interest income attributed to consumer deposits. + +The table below presents our Consumer & Wealth Management assets. + +The table below presents our Consumer & Wealth Management operating results. + +Operating Environment. + +During 2021, improved market and economic conditions contributed to a more +favorable backdrop for consumer banking and wealth management activities. +Global equity prices were generally higher and, in the U.S., unemployment +decreased and consumer spending increased compared with 2020, aided by +optimism about the economic recovery and continued support from central banks +and governments globally. If optimism about the economic outlook declines or +the ongoing efforts to mitigate the impact of the + +COVID-19 + +pandemic are ineffective, it may lead to a decline in asset prices, investors +favoring asset classes that typically generate lower fees, investors +withdrawing their assets and consumers withdrawing their deposits or +deterioration in consumer credit, net revenues and the provision for credit +losses in Consumer & Wealth Management would likely be negatively impacted. + +2021 versus 2020. + +Net revenues in Consumer & Wealth Management were $7.47 billion for 2021, 25% +higher than 2020. + +Net revenues in Wealth management were $5.98 billion, 25% higher than 2020, +due to significantly higher Management and other fees, primarily reflecting +the impact of higher average assets under supervision, and significantly +higher net revenues in Private banking and lending, primarily reflecting +higher loan balances. In addition, Incentive fees were higher, primarily due +to harvesting. + +Net revenues in Consumer banking were $1.49 billion, 23% higher than 2020, +reflecting higher credit card and deposit balances. + +Provision for credit losses was $592 million for 2021, 22% lower than 2020, +primarily due to reserve reductions in the current year reflecting continued +improvement in the broader economic environment following challenging +conditions in 2020, partially offset by growth in credit card balances, +including approximately $185 million of provisions related to the commitment +to acquire the General Motors + +co-branded + +credit card portfolio. + +Operating expenses were $6.29 billion for 2021, 28% higher than 2020, +primarily reflecting significantly higher compensation and benefits expenses +(reflecting strong performance). + +Pre-tax + +earnings were $584 million for 2021, 73% higher than 2020. ROE was 4.0% for +2021, compared with 2.7% for 2020. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Assets Under Supervision + +AUS includes our institutional clients’ assets and assets sourced through +third-party distributors (both included in our Asset Management segment), as +well as + +high-net-worth + +clients’ assets (included in our Consumer & Wealth Management segment), where +we earn a fee for managing assets on a discretionary basis. This includes net +assets in our mutual funds, hedge funds, credit funds, private equity funds, +real estate funds, and separately managed accounts for institutional and +individual investors. AUS also includes client assets invested with third- +party managers, private bank deposits and advisory relationships where we earn +a fee for advisory and other services, but do not have investment discretion. +AUS does not include the self-directed brokerage assets of our clients. + +The table below presents information about our firmwide + +period-end + +AUS by segment, asset class, distribution channel, region and vehicle. + +In the table above: + +Liquidity products includes money market funds and private bank deposits. + +EMEA represents Europe, Middle East and Africa. + +The table below presents changes in our AUS. + +In the table above, total AUS net inflows/(outflows) for 2019 included $71 +billion of inflows (substantially all in equity and fixed income assets) in +connection with the acquisitions of Standard & Poor’s Investment Advisory +Services (SPIAS), GS Personal Financial Management and Rocaton Investment +Advisors (Rocaton). SPIAS and Rocaton were included in the Asset Management +segment and GS Personal Financial Management was included in the Consumer & +Wealth Management segment. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The table below presents information about our average monthly firmwide AUS by +segment and asset class. + +In addition to our AUS, we have discretion over alternative investments where +we currently do not earn management fees + +(non-fee-earning + +alternative assets). + +We earn management fees on client assets that we manage and also receive +incentive fees based on a percentage of a fund’s or a separately managed +account’s return, or when the return exceeds a specified benchmark or other +performance targets. These incentive fees are recognized when it is probable +that a significant reversal of such fees will not occur. Our estimated +unrecognized incentive fees were $3.39 billion as of December 2021 and $1.79 +billion as of December 2020. Such amounts are based on the completion of the +funds’ financial statements, which is generally one quarter in arrears. These +fees will be recognized, assuming no decline in fair value, if and when it is +probable that a significant reversal of such fees will not occur, which is +generally when such fees are no longer subject to fluctuations in the market +value of the assets. + +Our firmwide management and other fees were $7.57 billion for 2021, $6.67 +billion for 2020 and $6.08 billion for 2019. In the first quarter of 2022, we +announced that our target is to achieve management and other fees of more than +$10 billion (including more than $2 billion from alternative AUS) in 2024. + +The table below presents our average effective management fee (which excludes + +non-asset-based + +fees) earned on our firmwide AUS. + +The table below presents details about our monthly average AUS for alternative +investments and the average effective management fee we earned on such assets. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The table below presents information about our + +period-end + +AUS for alternative investments, + +non-fee-earning + +alternative investments and total alternative investments. + +In the table above: + +Corporate equity primarily includes private equity. + +Non-fee-earning + +alternative investments primarily includes investments that we hold on our +balance sheet, our unfunded commitments, unfunded commitments of our clients +(where we do not charge fees on commitments), credit facilities collateralized +by fund assets and employee funds. Our calculation of + +non-fee-earning + +alternative investments may not be comparable to similar calculations used by +other companies. + +In the beginning of 2020, we announced a strategic objective of growing our +third-party alternatives business, and established a target of achieving gross +inflows of $150 billion for alternative investments by the end of 2024. In the +first quarter of 2022, we increased that target to $225 billion by the end of + +The table below presents information about third-party commitments raised in +our alternatives business during 2020 and 2021. + +$ in billions + +As of + +December 2021 + +Included in AUS + +Included in + +non-fee-earning + +alternative assets + +Third-party commitments raised + +In the table above, commitments included in + +non-fee-earning + +alternative investments included approximately $29 billion which will begin to +earn fees (and become AUS), if and when the commitments are drawn and assets +are invested. + +The table below presents information about alternative investments in our +Asset Management segment that we hold on our balance sheet. + +Loans and Debt Securities. + +The table below presents the concentration of loans and debt securities within +our alternative investments by accounting classification, region and industry. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Equity Securities. + +The table below presents the concentration of equity securities within our +alternative investments by region and industry. + +In the table above: + +Equity securities included $15 billion as of December 2021 and $17 billion as +of December 2020 of private equity positions, and $4 billion as of December +2021 and $3 billion as of December 2020 of public equity positions that +converted from private equity upon the initial public offerings of the +underlying companies. + +The table below presents the concentration of equity securities within our +alternative investments by vintage. + +As we continue to grow our third-party alternatives business, we remain +focused on our strategic objective to reduce the capital intensity of the +Asset Management segment by reducing our + +on-balance + +sheet equity investments. + +The table below presents the rollforward of our equity securities within our +alternative investments from the beginning of 2020 through the end of 2021. + +$ in billions + +Total Equity + +Beginning balance + +Additions + +Dispositions + +Mark-ups + +Ending balance + +CIE Investments and Other. + +CIE investments and other included assets held by CIEs of $14 billion as of +December 2021 and $19 billion as of December 2020, which were funded with +liabilities of approximately $7 billion as of December 2021 and $10 billion as +of December 2020. Substantially all such liabilities were nonrecourse, thereby +reducing our equity at risk. + +The table below presents the concentration of CIE assets, net of financings, +within our alternative investments by region and asset class. + +The table below presents the concentration of CIE assets, net of financings, +within our alternative investments by vintage. + +Geographic Data + +See Note 25 to the consolidated financial statements for a summary of our +total net revenues, + +pre-tax + +earnings and net earnings by geographic region. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Balance Sheet and Funding Sources + +Balance Sheet Management + +One of our risk management disciplines is our ability to manage the size and +composition of our balance sheet. While our asset base changes due to client +activity, market fluctuations and business opportunities, the size and +composition of our balance sheet also reflects factors, including (i) our +overall risk tolerance, (ii) the amount of capital we hold and (iii) our +funding profile, among other factors. See “Capital Management and Regulatory +Capital — Capital Management” for information about our capital management +process. + +Although our balance sheet fluctuates on a + +day-to-day + +basis, our total assets at + +quarter-end + +and + +year-end + +dates are generally not materially different from those occurring within our +reporting periods. + +In order to ensure appropriate risk management, we seek to maintain a +sufficiently liquid balance sheet and have processes in place to dynamically +manage our assets and liabilities, which include (i) balance sheet planning, +(ii) balance sheet limits, (iii) monitoring of key metrics and (iv) scenario +analyses. + +Balance Sheet Planning. + +We prepare a balance sheet plan that combines our projected total assets and +composition of assets with our expected funding sources over a three-year time +horizon. This plan is reviewed quarterly and may be adjusted in response to +changing business needs or market conditions. The objectives of this planning +process are: + +To develop our balance sheet projections, taking into account the general +state of the financial markets and expected business activity levels, as well +as regulatory requirements; + +To allow Treasury and our independent risk oversight and control functions to +objectively evaluate balance sheet limit requests from our revenue-producing +units in the context of our overall balance sheet constraints, including our +liability profile and capital levels, and key metrics; and + +To inform the target amount, tenor and type of funding to raise, based on our +projected assets and contractual maturities. + +Treasury and our independent risk oversight and control functions, along with +our revenue-producing units, review current and prior period information and +expectations for the year to prepare our balance sheet plan. The specific +information reviewed includes asset and liability size and composition, limit +utilization, risk and performance measures, and capital usage. + +Our consolidated balance sheet plan, including our balance sheets by business, +funding projections and projected key metrics, is reviewed and approved by the +Firmwide Asset Liability Committee and the Risk Governance Committee. See +“Risk Management — Overview and Structure of Risk Management” for an overview +of our risk management structure. + +Balance Sheet Limits. + +The Firmwide Asset Liability Committee and the Risk Governance Committee have +the responsibility to review and approve balance sheet limits. These limits +are set at levels which are close to actual operating levels, rather than at +levels which reflect our maximum risk appetite, in order to ensure prompt +escalation and discussion among our revenue-producing units, Treasury and our +independent risk oversight and control functions on a routine basis. Requests +for changes in limits are evaluated after giving consideration to their impact +on our key metrics. Compliance with limits is monitored by our revenue- +producing units and Treasury, as well as our independent risk oversight and +control functions. + +Monitoring of Key Metrics. + +We monitor key balance sheet metrics both by business and on a consolidated +basis, including asset and liability size and composition, limit utilization +and risk measures. We attribute assets to businesses and review and analyze +movements resulting from new business activity, as well as market +fluctuations. + +Scenario Analyses. + +We conduct various scenario analyses, including as part of CCAR and U.S. Dodd- +Frank Wall Street Reform and Consumer Protection Act Stress Tests (DFAST), as +well as our resolution and recovery planning. See “Capital Management and +Regulatory Capital — Capital Management” for further information about these +scenario analyses. These scenarios cover short- and long-term time horizons +using various macroeconomic and firm-specific assumptions, based on a range of +economic scenarios. We use these analyses to assist us in developing our +longer-term balance sheet management strategy, including the level and +composition of assets, funding and capital. Additionally, these analyses help +us develop approaches for maintaining appropriate funding, liquidity and +capital across a variety of situations, including a severely stressed +environment. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Balance Sheet Analysis and Metrics + +As of December 2021, total assets in our consolidated balance sheets were +$1.46 trillion, an increase of $300.96 billion from December 2020, primarily +reflecting increases in collateralized agreements of $134.25 billion +(primarily reflecting the impact of our and our clients’ activities), cash and +cash equivalents of $105.19 billion (primarily reflecting our activity), loans +of $42.45 billion (reflecting increases across the portfolio), and customer +and other receivables of $39.34 billion (primarily reflecting client +activity). + +As of December 2021, total liabilities in our consolidated balance sheets were +$1.35 trillion, an increase of $286.97 billion from December 2020, primarily +reflecting increases in deposits of $104.27 billion (reflecting increases +across channels), customer and other payables of $61.27 billion (primarily +reflecting client activity), collateralized financings of $56.99 billion +(primarily reflecting the impact of our and our clients’ activities), +unsecured borrowings of $34.70 billion (primarily driven by new issuances +partially offset by maturities), and trading liabilities of $27.70 billion +(primarily reflecting the impact of our and our clients’ activities in +government obligations, and corporate and other debt obligations, partially +offset by the impact of interest rates, currency and commodity price movements +on derivative instruments). + +Our total securities sold under agreements to repurchase (repurchase +agreements), accounted for as collateralized financings, were $165.88 billion +as of December 2021 and $126.57 billion as of December 2020, which were 3% +higher as of December 2021 and 24% higher as of December 2020 than the average +daily amount of repurchase agreements over the respective quarters, and 14% +higher as of December 2021 and 31% higher as of December 2020 than the average +daily amount of repurchase agreements over the respective years. As of +December 2021, the increase in our repurchase agreements relative to the +average daily amount of repurchase agreements during the quarter and year +resulted from higher levels of our and our clients’ activities at the end of +the period. + +The level of our repurchase agreements fluctuates between and within periods, +primarily due to providing clients with access to highly liquid collateral, +such as certain government and agency obligations, through collateralized +financing activities. + +The table below presents information about our balance sheet and leverage +ratios. + +In the table above: + +The leverage ratio equals total assets divided by total shareholders’ equity +and measures the proportion of equity and debt we use to finance assets. This +ratio is different from the leverage ratios included in Note 20 to the +consolidated financial statements. + +The + +debt-to-equity + +ratio equals unsecured long-term borrowings divided by total shareholders’ +equity. + +The table below presents information about our shareholders’ equity and book +value per common share, including the reconciliation of common shareholders’ +equity to tangible common shareholders’ equity. + +In the table above: + +Tangible common shareholders’ equity is calculated as total shareholders’ +equity less preferred stock, goodwill and identifiable intangible assets. We +believe that tangible common shareholders’ equity is meaningful because it is +a measure that we and investors use to assess capital adequacy. Tangible +common shareholders’ equity is a + +non-GAAP + +measure and may not be comparable to similar + +non-GAAP + +measures used by other companies. + +Book value per common share and tangible book value per common share are based +on common shares outstanding and restricted stock units granted to employees +with no future service requirements and not subject to performance or market +conditions (collectively, basic shares) of 348.9 million as of December 2021 +and 358.8 million as of December 2020. We believe that tangible book value per +common share (tangible common shareholders’ equity divided by basic shares) is +meaningful because it is a measure that we and investors use to assess capital +adequacy. Tangible book value per common share is a + +non-GAAP + +measure and may not be comparable to similar + +non-GAAP + +measures used by other companies. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Funding Sources + +Our primary sources of funding are deposits, collateralized financings, +unsecured short- and long-term borrowings, and shareholders’ equity. We seek +to maintain broad and diversified funding sources globally across products, +programs, markets, currencies and creditors to avoid funding concentrations. + +The table below presents information about our funding sources. + +Our funding is primarily raised in U.S. dollar, Euro, British pound and +Japanese yen. We generally distribute our funding products through our own +sales force and third-party distributors to a large, diverse creditor base in +a variety of markets in the Americas, Europe and Asia. We believe that our +relationships with our creditors are critical to our liquidity. Our creditors +include banks, governments, securities lenders, corporations, pension funds, +insurance companies, mutual funds and individuals. We have imposed various +internal guidelines to monitor creditor concentration across our funding +programs. + +Deposits. + +Our deposits provide us with a diversified source of funding and reduce our +reliance on wholesale funding. We raise deposits, including savings, demand +and time deposits, from private bank clients, consumers, transaction banking +clients, other institutional clients, and through internal and third-party +broker-dealers. Substantially all of our deposits are raised through GS Bank +USA and GSIB. See Note 13 to the consolidated financial statements for further +information about our deposits, including a maturity profile of our time +deposits. + +Secured Funding. + +We fund a significant amount of inventory and a portion of investments on a +secured basis. Secured funding includes collateralized financings in the +consolidated balance sheets. See Note 11 to the consolidated financial +statements for further information about our collateralized financings, +including its maturity profile. We may also pledge our inventory and +investments as collateral for securities borrowed under a securities lending +agreement. We also use our own inventory and investments to cover transactions +in which we or our clients have sold securities that have not yet been +purchased. Secured funding is less sensitive to changes in our credit quality +than unsecured funding, due to our posting of collateral to our lenders. +Nonetheless, we analyze the refinancing risk of our secured funding +activities, taking into account trade tenors, maturity profiles, counterparty +concentrations, collateral eligibility and counterparty rollover +probabilities. We seek to mitigate our refinancing risk by executing term +trades with staggered maturities, diversifying counterparties, raising excess +secured funding and + +pre-funding + +residual risk through our GCLA. + +We seek to raise secured funding with a term appropriate for the liquidity of +the assets that are being financed, and we seek longer maturities for secured +funding collateralized by asset classes that may be harder to fund on a +secured basis, especially during times of market stress. Our secured funding, +excluding funding collateralized by liquid government and agency obligations, +is primarily executed for tenors of one month or greater and is primarily +executed through term repurchase agreements and securities loaned contracts. + +Assets that may be harder to fund on a secured basis during times of market +stress include certain financial instruments in the following categories: +mortgage and other asset-backed loans and securities, + +non-investment-grade + +corporate debt securities, equity securities and emerging market securities. + +We also raise financing through other types of collateralized financings, such +as secured loans and notes. GS Bank USA has access to funding from the Federal +Home Loan Bank. Our outstanding borrowings against the Federal Home Loan Bank +were $100 million as of December 2021 and we had no outstanding borrowings as +of December 2020. Additionally, we have access to funding through the Federal +Reserve discount window. However, we do not rely on this funding in our +liquidity planning and stress testing. + +Unsecured Short-Term Borrowings. + +A significant portion of our unsecured short-term borrowings was originally +long-term debt that is scheduled to mature within one year of the reporting +date. We use unsecured short-term borrowings, including U.S. and + +non-U.S. + +hybrid financial instruments and commercial paper, to finance liquid assets +and for other cash management purposes. In accordance with regulatory +requirements, Group Inc. does not issue debt with an original maturity of less +than one year, other than to its subsidiaries. See Note 14 to the consolidated +financial statements for further information about our unsecured short-term +borrowings. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Unsecured Long-Term Borrowings. + +Unsecured long-term borrowings, including structured notes, are raised through +syndicated U.S. registered offerings, U.S. registered and Rule 144A medium- +term note programs, offshore medium-term note offerings and other debt +offerings. We issue in different tenors, currencies and products to maximize +the diversification of our investor base. + +The table below presents our quarterly unsecured long-term borrowings maturity +profile. + +The weighted average maturity of our unsecured long-term borrowings as of +December 2021 was approximately seven years. To mitigate refinancing risk, we +seek to limit the principal amount of debt maturing over the course of any +monthly, quarterly or annual time horizon. We enter into interest rate swaps +to convert a portion of our unsecured long-term borrowings into floating-rate +obligations to manage our exposure to interest rates. See Note 14 to the +consolidated financial statements for further information about our unsecured +long-term borrowings. We issued approximately $60 billion of benchmark debt +during 2021 to support the growth in our total assets amid client demand and +attractive return opportunities. We intend to issue significantly less +benchmark debt in 2022 compared to our benchmark debt issuance in 2021, though +actual issuances may differ due to business needs and market opportunities. + +Shareholders’ Equity. + +Shareholders’ equity is a stable and perpetual source of funding. See Note 19 +to the consolidated financial statements for further information about our +shareholders’ equity. + +Capital Management and Regulatory Capital + +Capital adequacy is of critical importance to us. We have in place a +comprehensive capital management policy that provides a framework, defines +objectives and establishes guidelines to assist us in maintaining the +appropriate level and composition of capital in both + +business-as-usual + +and stressed conditions. + +Capital Management + +We determine the appropriate amount and composition of our capital by +considering multiple factors, including our current and future regulatory +capital requirements, the results of our capital planning and stress testing +process, the results of resolution capital models and other factors, such as +rating agency guidelines, subsidiary capital requirements, the business +environment and conditions in the financial markets. + +We manage our capital requirements and the levels of our capital usage +principally by setting limits on the balance sheet and/or limits on risk, in +each case at both the firmwide and business levels. + +We principally manage the level and composition of our capital through +issuances and repurchases of our common stock. + +We may issue, redeem or repurchase our preferred stock, junior subordinated +debt issued to trusts and other subordinated debt or other forms of capital as +business conditions warrant. Prior to such redemptions or repurchases, we must +receive approval from the FRB. See Notes 14 and 19 to the consolidated +financial statements for further information about our preferred stock, junior +subordinated debt issued to trusts and other subordinated debt. + +Capital Planning and Stress Testing Process. + +As part of capital planning, we project sources and uses of capital given a +range of business environments, including stressed conditions. Our stress +testing process is designed to identify and measure material risks associated +with our business activities, including market risk, credit risk, operational +risk and liquidity risk, as well as our ability to generate revenues. + +Our capital planning process incorporates an internal capital adequacy +assessment with the objective of ensuring that we are appropriately +capitalized relative to the risks in our businesses. We incorporate stress +scenarios into our capital planning process with a goal of holding sufficient +capital to ensure we remain adequately capitalized after experiencing a severe +stress event. Our assessment of capital adequacy is viewed in tandem with our +assessment of liquidity adequacy and is integrated into our overall risk +management structure, governance and policy framework. + +Our stress tests incorporate our internally designed stress scenarios, +including our internally developed severely adverse scenario, and those +required by the FRB, and are designed to capture our specific vulnerabilities +and risks. We provide further information about our stress test processes and +a summary of the results on our website as described in “Business — Available +Information” in Part I, Item 1 of this + +Form 10-K. + +As required by the FRB’s CCAR rules, we submit an annual capital plan for +review by the FRB. The purpose of the FRB’s review is to ensure that we have a +robust, forward-looking capital planning process that accounts for our unique +risks and that permits continued operation during times of economic and +financial stress. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The FRB evaluates us based, in part, on whether we have the capital necessary +to continue operating under the baseline and severely adverse scenarios +provided by the FRB and those developed internally. This evaluation also takes +into account our process for identifying risk, our controls and governance for +capital planning, and our guidelines for making capital planning decisions. In +addition, the FRB evaluates our plan to make capital distributions (i.e., +dividend payments and repurchases or redemptions of stock, subordinated debt +or other capital securities) and issue capital, across the range of +macroeconomic scenarios and firm-specific assumptions. The FRB determines the +SCB applicable to us based on its own annual stress test. The SCB under the +Standardized approach is calculated as (i) the difference between our starting +and minimum projected CET1 capital ratios under the supervisory severely +adverse scenario and (ii) our planned common stock dividends for each of the +fourth through seventh quarters of the planning horizon, expressed as a +percentage of risk-weighted assets (RWAs). + +We submitted our 2021 CCAR capital plan in April 2021 and published a summary +of our annual DFAST results in June 2021. See “Business — Available +Information” in Part I, Item 1 of this + +Form 10-K. + +Based on our 2021 CCAR submission, the FRB reduced our SCB from 6.6% to 6.4%, +resulting in a Standardized CET1 capital ratio requirement of 13.4% for the +period from October 1, 2021 through September 30, 2022. See “Share Repurchase +Program” for further information about common stock repurchases and dividends. + +GS Bank USA has its own capital planning process and, starting in 2022, will +be required to submit its annual stress test results to the FRB. GSI, GSIB and +Goldman Sachs Bank Europe SE (GSBE) also have their own capital planning and +stress testing processes, which incorporate internally designed stress tests +developed in accordance with the guidelines of their respective regulators. + +Contingency Capital Plan. + +As part of our comprehensive capital management policy, we maintain a +contingency capital plan. Our contingency capital plan provides a framework +for analyzing and responding to a perceived or actual capital deficiency, +including, but not limited to, identification of drivers of a capital +deficiency, as well as mitigants and potential actions. It outlines the +appropriate communication procedures to follow during a crisis period, +including internal dissemination of information, as well as timely +communication with external stakeholders. + +Capital Attribution. + +We assess each of our businesses’ capital usage based on our internal +assessment of risks, which incorporates an attribution of our relevant +regulatory capital requirements. These regulatory capital requirements are +allocated using our attributed equity framework, which takes into +consideration our most binding capital constraints. Our most binding capital +constraint is based on the results of the FRB’s annual stress test, which +includes the Standardized risk-based capital and leverage ratios. + +We review and make any necessary adjustments to our attributed equity in +January each year, to reflect, among other things, the results of our latest +CCAR process, as well as projected changes in our balance sheet. On January 1, +2021, our allocation of attributed equity changed (relative to the allocation +as of December 2020) as follows: attributed equity increased by approximately +$3.7 billion for Asset Management and approximately $0.7 billion for Consumer +& Wealth Management, while attributed equity decreased by approximately $2.3 +billion for Global Markets and approximately $2.1 billion for Investment +Banking. On January 1, 2022, our allocation of attributed equity changed +(relative to the allocation as of December 2021) as follows: attributed equity +increased by approximately $1.0 billion for Consumer & Wealth Management and +approximately $0.5 billion for Investment Banking, while attributed equity +decreased by approximately $0.8 billion for Global Markets and approximately +$0.7 billion for Asset Management. See “Segment Assets and Operating Results — +Segment Operating Results” for information about our average quarterly +attributed equity by segment. + +Share Repurchase Program. + +We use our share repurchase program to help maintain the appropriate level of +common equity. The repurchase program is effected primarily through regular +open-market purchases (which may include repurchase plans designed to comply +with + +Rule 10b5-1 + +and accelerated share repurchases), the amounts and timing of which are +determined primarily by our current and projected capital position and our +capital plan submitted to the FRB as part of CCAR. The amounts and timing of +the repurchases may also be influenced by general market conditions and the +prevailing price and trading volumes of our common stock. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +In the third quarter of 2021, the Board of Directors of Group Inc. (Board) +approved an increase in our common stock dividend from $1.25 to $2.00 per +share. During the fourth quarter of 2021, we returned a total of $1.20 billion +to shareholders, including common stock repurchases of $500 million and +approximately $700 million in common stock dividends. We currently expect our +common stock repurchases in the first quarter of 2022 to be at or around the +levels of common stock repurchases in the fourth quarter of 2021. Consistent +with our capital management philosophy, we will continue prioritizing +deployment of capital for our clients where returns are attractive and return +any excess capital to shareholders through dividends and share repurchases. + +As of December 2021, the remaining share authorization under our existing +repurchase program was 34.4 million shares. See “Market for Registrant’s +Common Equity, Related Stockholder Matters and Issuer Purchases of Equity +Securities” in Part II, Item 5 of this + +Form 10-K + +and Note 19 to the consolidated financial statements for further information +about our share repurchase program, and see above for information about our +capital planning and stress testing process. + +Resolution Capital Models. + +In connection with our resolution planning efforts, we have established a +Resolution Capital Adequacy and Positioning framework, which is designed to +ensure that our major subsidiaries (GS Bank USA, Goldman Sachs & Co. LLC +(GS&Co.), GSI, GSIB, GSBE, Goldman Sachs Japan Co., Ltd. (GSJCL), Goldman +Sachs Asset Management, L.P. and Goldman Sachs Asset Management International) +have access to sufficient loss-absorbing capacity (in the form of equity, +subordinated debt and unsecured senior debt) so that they are able to wind- +down following a Group Inc. bankruptcy filing in accordance with our preferred +resolution strategy. + +In addition, we have established a triggers and alerts framework, which is +designed to provide the Board with information needed to make an informed +decision on whether and when to commence bankruptcy proceedings for Group Inc. + +Rating Agency Guidelines + +The credit rating agencies assign credit ratings to the obligations of Group +Inc., which directly issues or guarantees substantially all of our senior +unsecured debt obligations. GS&Co. and GSI have been assigned long- and short- +term issuer ratings by certain credit rating agencies. GS Bank USA, GSIB and +GSBE have also been assigned long- and short-term issuer ratings, as well as +ratings on their long- and short-term bank deposits. In addition, credit +rating agencies have assigned ratings to debt obligations of certain other +subsidiaries of Group Inc. + +The level and composition of our capital are among the many factors considered +in determining our credit ratings. Each agency has its own definition of +eligible capital and methodology for evaluating capital adequacy, and +assessments are generally based on a combination of factors rather than a +single calculation. See “Risk Management — Liquidity Risk Management — Credit +Ratings” for further information about credit ratings of Group Inc., GS Bank +USA, GSIB, GSBE, GS&Co. and GSI. + +Consolidated Regulatory Capital + +We are subject to consolidated regulatory capital requirements which are +calculated in accordance with the regulations of the FRB (Capital Framework). +Under the Capital Framework, we are an “Advanced approach” banking +organization and have been designated as a global systemically important bank + +(G-SIB). + +The capital requirements calculated under the Capital Framework include the +capital conservation buffer requirements, which are comprised of a 2.5% buffer +(under the Advanced Capital Rules), the SCB (under the Standardized Capital +Rules), a countercyclical capital buffer (under both Capital Rules) and the + +G-SIB + +surcharge (under both Capital Rules). Our + +G-SIB + +surcharge is 2.5% for 2021 and 2022 and 3.0% for 2023. Based on financial data +for 2021, we are above the threshold for the 3.5% + +G-SIB + +surcharge. The earliest this surcharge could be effective is January 2024. The + +G-SIB + +surcharge and countercyclical capital buffer in the future may differ due to +additional guidance from our regulators and/or positional changes, and our SCB +is likely to change from year to year based on the results of the annual +supervisory stress tests. Our target is to maintain capital ratios equal to +the regulatory requirements plus a buffer of 50 to 100 basis points. + +See Note 20 to the consolidated financial statements for further information +about our risk-based capital ratios and leverage ratios, and the Capital +Framework. + +Total Loss-Absorbing Capacity (TLAC) + +We are also subject to the FRB’s TLAC and related requirements. Failure to +comply with the TLAC and related requirements would result in restrictions +being imposed by the FRB and could limit our ability to repurchase shares, pay +dividends and make certain discretionary compensation payments. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The table below presents TLAC and external long-term debt requirements. + +In the table above: + +The TLAC to leverage exposure requirement includes (i) the 7.5% minimum and +(ii) the 2.0% leverage exposure buffer. + +The external long-term debt to RWAs requirement includes (i) the 6% minimum +and (ii) the 2.5% + +G-SIB + +surcharge (Method 2). + +The external long-term debt to total leverage exposure is the 4.5% minimum. + +The table below presents information about our TLAC and external long-term +debt ratios. + +In the table above: + +TLAC includes common and preferred stock, and eligible long-term debt issued +by Group Inc. Eligible long-term debt represents unsecured debt, which has a +remaining maturity of at least one year and satisfies additional requirements. + +External long-term debt consists of eligible long-term debt subject to a +haircut if it is due to be paid between one and two years. + +RWAs represent Standardized RWAs as of December 2021 and Advanced RWAs as of +December 2020. In accordance with the TLAC rules, the higher of Advanced or +Standardized RWAs are used in the calculation of TLAC and external long-term +debt ratios and applicable requirements. + +Leverage exposure consists of average adjusted total assets and certain + +off-balance + +sheet exposures. Leverage exposure for the three months ended December 2020 +excluded average holdings of U.S. Treasury securities and average deposits at +the Federal Reserve + +as permitted by the FRB under a temporary amendment. This temporary amendment +had the effect of increasing the TLAC to leverage exposure ratio and the +external long-term debt to leverage ratio. The impact of this temporary +amendment was an increase to the TLAC to leverage exposure ratio of 2.4 +percentage points and the external long-term debt to leverage exposure ratio +of 1.3 percentage points for the three months ended December 2020. The +amendment permitting this exclusion expired on April 1, 2021. + +See “Business — Regulation” in Part I, Item 1 of this + +Form 10-K + +for further information about TLAC. + +Subsidiary Capital Requirements + +Many of our subsidiaries, including our bank and broker-dealer subsidiaries, +are subject to separate regulation and capital requirements of the +jurisdictions in which they operate. + +Bank Subsidiaries. + +GS Bank USA is our primary U.S. banking subsidiary and GSIB and GSBE are our +primary + +non-U.S. + +banking subsidiaries. These entities are subject to regulatory capital +requirements. See Note 20 to the consolidated financial statements for further +information about the regulatory capital requirements of our bank +subsidiaries. + +U.S. Regulated Broker-Dealer Subsidiaries. + +GS&Co. is our primary U.S. regulated broker-dealer subsidiary and is subject +to regulatory capital requirements, including those imposed by the SEC and the +Financial Industry Regulatory Authority, Inc. In addition, GS&Co. is a +registered futures commission merchant and a registered swap dealer with the +CFTC, and therefore is subject to regulatory capital requirements imposed by +the CFTC, the Chicago Mercantile Exchange and the National Futures +Association. Beginning in the fourth quarter of 2021, GS&Co. also became a +registered security-based swap dealer with the SEC, and therefore became +subject to capital requirements for security-based swap dealers which became +effective in October 2021. + +Rule 15c3-1 + +of the SEC and Rules 1.17 and Part 23 Subpart E of the CFTC specify uniform +minimum net capital requirements, as defined, for their registrants, and also +effectively require that a significant part of the registrants’ assets be kept +in relatively liquid form. GS&Co. has elected to calculate its minimum capital +requirements in accordance with the “Alternative Net Capital Requirement” as +permitted by + +Rule 15c3-1 + +of the SEC. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +GS&Co. had regulatory net capital, as defined by + +Rule 15c3-1, + +of $22.18 billion as of December 2021 and $22.38 billion as of December 2020, +which exceeded the amount required by $17.74 billion as of December 2021 and +$18.45 billion as of December 2020. In addition to its alternative minimum net +capital requirements, GS&Co. is also required to hold tentative net capital in +excess of $5 billion and net capital in excess of $1 billion in accordance +with + +Rule 15c3-1. + +GS&Co. is also required to notify the SEC in the event that its tentative net +capital is less than $6 billion. As of both December 2021 and December 2020, +GS&Co. had tentative net capital and net capital in excess of both the minimum +and the notification requirements. + +Non-U.S. + +Regulated Broker-Dealer Subsidiaries. + +Our principal + +non-U.S. + +regulated broker-dealer subsidiaries include GSI and GSJCL. + +GSI, our U.K. broker-dealer, is regulated by the Prudential Regulation +Authority (PRA) and the Financial Conduct Authority (FCA). + +GSI is subject to the U.K. capital framework, which is predominantly aligned +with the E.U. capital framework prescribed in the amended E.U. Capital +Requirements Directive (CRD) and the E.U. Capital Requirements Regulation +(CRR). These capital regulations are largely based on the Basel Committee on +Banking Supervision’s (Basel Committee) capital framework for strengthening +international capital standards (Basel III). + +The table below presents GSI’s risk-based capital requirements. + +In the table above, the risk-based capital requirements incorporate capital +guidance received from the PRA and could change in the future. + +The table below presents information about GSI’s risk-based capital ratios. + +In the table above, the risk-based capital ratios as of December 2021 +reflected GSI’s profits after foreseeable charges for the three months ended +December 2021 (which will not be finalized until verification by GSI’s +external auditors and approval by GSI’s Board of Directors for inclusion in +risk-based capital). These profits contributed approximately 16 basis points +to the CET1 capital ratio. + +GSI is also subject to the leverage ratio framework established by the PRA. +This framework sets the minimum leverage ratio requirement at 3.25% that will +apply to GSI from January 1, 2023. GSI had a leverage ratio of 4.2% as of +December 2021 and 4.7% as of December 2020. The leverage ratio as of December +2021 reflected GSI’s profits after foreseeable charges for the three months +ended December 2021 (which will not be finalized until verification by GSI’s +external auditors and approval by GSI’s Board of Directors for inclusion in +risk-based capital). These profits contributed approximately 7 basis points to +the leverage ratio. + +GSI is a registered swap dealer with the CFTC and, beginning in the fourth +quarter of 2021, also became a registered security-based swap dealer with the +SEC. As of December 2021, GSI was subject to and in compliance with applicable +capital requirements for swap dealers and security-based swap dealers. + +GSI is also subject to a minimum requirement for own funds and eligible +liabilities issued to affiliates. This requirement is subject to a +transitional period which began to phase in from January 2019 and became fully +effective beginning in January 2022. As of both December 2021 and December +2020, GSI was in compliance with this requirement. + +GSJCL, our Japanese broker-dealer, is regulated by Japan’s Financial Services +Agency. GSJCL and certain other + +non-U.S. + +subsidiaries are also subject to capital requirements promulgated by +authorities of the countries in which they operate. As of both December 2021 +and December 2020, these subsidiaries were in compliance with their local +capital requirements. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Regulatory and Other Matters + +Regulatory Matters + +Our businesses are subject to extensive regulation and supervision worldwide. +Regulations have been adopted or are being considered by regulators and policy +makers worldwide. Given that many of the new and proposed rules are highly +complex, the full impact of regulatory reform will not be known until the +rules are implemented and market practices develop under the final +regulations. + +See “Business — Regulation” in Part I, Item 1 of this + +Form 10-K + +for further information about the laws, rules and regulations and proposed +laws, rules and regulations that apply to us and our operations. + +Other Matters + +Replacement of Interbank Offered Rates (IBORs), including LIBOR. + +On January 1, 2022, the publication of all EUR, CHF, JPY and GBP LIBOR + +(non-USD + +LIBOR) settings along with certain USD LIBOR settings ceased. The publication +of the most commonly used USD LIBOR settings will cease after June 2023. The +FCA has allowed the publication and use of synthetic rates for certain GBP and +JPY LIBOR settings in legacy GBP or JPY LIBOR-based derivative contracts +through December 2022. The U.S. federal banking agencies’ guidance strongly +encourages banking organizations to cease using USD LIBOR. + +The International Swaps and Derivatives Association (ISDA) 2020 IBOR Fallbacks +Protocol (IBOR Protocol) has provided derivatives market participants with +amended fallbacks for legacy and new derivative contracts to mitigate legal or +economic uncertainty. Both counterparties have to adhere to the IBOR Protocol +or engage in bilateral amendments for the terms to be effective for derivative +contracts. ISDA confirmed that the FCA’s formal announcement in March 2021 +fixed the spread adjustment for all LIBOR rates and that fallbacks will +automatically occur for outstanding derivative contracts that incorporate the +relevant terms. In April 2021, the State of New York approved legislation +intended to minimize legal and economic uncertainty for contracts that are +governed by New York law and have no fallback provisions or have fallback +provisions that are based on USD LIBOR by providing a statutory framework to +replace USD LIBOR with a benchmark rate based on the Secured Overnight +Financing Rate (SOFR). + +We have facilitated an orderly transition from + +non-USD + +LIBORs to alternative risk-free reference rates for us and our clients and +continue to make progress on our transition program as it relates to USD +LIBOR. + +Our + +non-USD + +LIBOR risk exposure was substantially all in connection with derivative +contracts. As of December 2021, substantially all of our + +non-USD + +LIBOR-based derivative contracts were with central clearing counterparties or +exchanges which had incorporated fallbacks consistent with the IBOR Protocol +in their rulebooks or were under bilateral agreements subject to the IBOR +Protocol. The remainder were converted to synthetic rates as permitted by the +FCA. The notional amount of derivatives converted to synthetic rates was not +material. + +Our risk exposure to USD LIBOR is primarily in connection with our derivative +contracts and to a lesser extent our unsecured debt, preferred stock and loan +portfolio. As of December 2021, the notional amount of our USD LIBOR-based +derivative contracts was approximately $10.0 trillion, of which approximately +$5.5 trillion will mature after June 2023 based on their contractual terms. A +majority of such derivative contracts are with counterparties under bilateral +agreements subject to the IBOR Protocol, or with central clearing +counterparties or exchanges which have incorporated fallbacks consistent with +the IBOR Protocol in their rulebooks and have announced that they plan to +convert USD LIBOR contracts to alternative risk-free reference rates. Our +benchmark unsecured debt and preferred stock with USD LIBOR exposure was +approximately $34.5 billion as of December 2021, of which $29.4 billion will +contractually mature after June 2023 or is perpetual and has no stated +maturity date. A large portion of such debt and preferred stock represents our + +fixed-to-floating + +rate instruments, currently in the fixed-rate period, with call options before +the LIBOR exposure begins. We continue to monitor industry and legislative +developments as they relate to unsecured debt and preferred stock and will +take actions designed to facilitate an orderly transition. In addition, we are +also engaging with our clients in order to remediate our loan agreements +through bilateral amendments. + +We have also issued debt and deposits linked to SOFR and Sterling Overnight +Index Average (SONIA) and executed SOFR- and SONIA-based derivative contracts +to make markets and facilitate client activities. When appropriate, we +continue to execute transactions in the market to reduce our USD LIBOR +exposures arising from hedges to our fixed-rate debt issuances and replace +them with alternative risk-free reference rate exposures. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Our LIBOR transition program continues to make progress with a focus on: + +Evaluating and monitoring the impacts of USD LIBOR settings across our +businesses, including transactions and products; + +Ensuring that legacy financial instruments and contracts that continue to be +impacted by the transition already contain appropriate fallback language or +are being amended, either through bilateral negotiation or using industry-wide +tools, such as protocols; + +Enhancements to infrastructure (for example, models and systems) to prepare +for a smooth transition from USD LIBOR to alternative risk-free reference +rates; + +Ensuring operational readiness to offer and support various alternative risk- +free reference rate products; + +Active participation in central bank and sector working groups, including +responding to industry consultations; and + +Client education and communication. + +Impact of + +COVID-19 + +Pandemic. + +Infection rates in many parts of the world spiked toward the end of 2021 and +into early 2022, as the highly transmissible Omicron variant emerged in the +fourth quarter and spread rapidly, while the Delta variant also remained a +concern. The surge of infections has led to a renewed emphasis globally on +safety measures and restrictions, as well as a greater sense of urgency +regarding the distribution of vaccines and vaccine boosters, and has created a +greater degree of uncertainty regarding the prospects for economic growth in + +We have continued to successfully execute on our BCP strategy since initially +activating it in the first quarter of 2020 in response to the emergence of the + +COVID-19 + +pandemic. Our priority has been to safeguard our employees and to seek to +ensure continuity of business operations on behalf of our clients. Our +business continuity response to the + +COVID-19 + +pandemic is managed by a central team, which is led by our chief +administrative officer and chief medical officer, and includes senior +management within Risk and the chief operating officers across all regions and +businesses. We remain focused on ensuring that our employees are able to +safely work from our offices, where circumstances permit. During 2021, we made +substantial progress in facilitating the safe return of employees to our +offices and employees in a number of our locations around the world returned +to the office to varying degrees. Given that the situation regarding + +COVID-19 + +is fluid and varies geographically, our approach to transitioning back to the +office is flexible and evolves as the specific conditions and requirements of +each location change. For instance, in light of the rapid spread of the +Omicron variant late in 2021, we took the step of having the vast majority of +employees in the U.S., the U.K. and in some of our other locations work +remotely at the outset of 2022. + +Our systems and infrastructure have been robust throughout the + +COVID-19 + +pandemic, enabling us to conduct our activities without disruption. +Communication throughout our organization has remained active during the +pandemic and our risk management processes have continued to operate in a +rigorous and disciplined manner. + +We maintained high liquidity levels during 2021, as our GCLA averaged $335 +billion for the year. We have continued to access our traditional funding +sources in the normal course and service our debt and other obligations on a +timely basis. See “Balance Sheet and Funding Sources” and “Risk Management — +Liquidity Risk Management” for further information. + +Accounting estimates, particularly those made in connection with determining +the allowance for credit losses and the fair value of certain level 3 assets, +are sensitive to assumptions regarding future economic conditions. Predicting +the trajectory of the economic recovery is highly judgmental given the +uncertainty as to how the pandemic will evolve, as it will largely depend on +the duration of the Omicron wave, the possible emergence of other variants and +further progress in the distribution of vaccines and vaccine boosters. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +In general, the market backdrop continued to be constructive during 2021 and +activity levels remained solid. Volatility increased toward the end of the +year as a result of the spike in infections, while accelerating inflation, +driven by supply chain disruptions and labor shortages, and more moderated +growth expectations, were key macroeconomic considerations heading into 2022. +We continued to deploy our balance sheet to intermediate risk and to support +the needs of clients. We have maintained our proactive approach to managing +market risk levels, which entails ongoing review and monitoring of exposures +and focusing on ways to mitigate risk. As the economic recovery progressed in +2021, credit risk continued to abate from the low point of the pandemic. +However, we continue to closely monitor those industries that have been most +severely challenged by the pandemic. + +While the global economy continued on the path to recovery during 2021, it is +vulnerable to the risk that the Omicron variant, or other possible variants, +could impede the recovery going forward by precipitating adverse economic +consequences, such as a softening in consumer and business confidence and +spending, a worsening of supply chain constraints, and an intensification of +inflationary pressures. If the future effects of the pandemic were to lead to +a sustained period of economic weakness, our businesses would be negatively +impacted. This would have a negative impact on factors that are important to +our operating performance, such as the level of client activity, +creditworthiness of counterparties and borrowers, and the amount of our AUS. +We will continue to closely monitor the rollout of vaccines across regions, as +well as the impact of new variants of the virus, and will take further +actions, as necessary, in order to best serve the interests of our employees, +clients and counterparties. For further information about the risks associated +with the + +COVID-19 + +pandemic, see “Risk Factors” in Part I, Item 1A of this + +Form 10-K. + +Off-Balance + +Sheet Arrangements + +In the ordinary course of business, we enter into various types of + +off-balance + +sheet arrangements. Our involvement in these arrangements can take many +different forms, including: + +Purchasing or retaining residual and other interests in special purpose +entities, such as mortgage-backed and other asset-backed securitization +vehicles; + +Holding senior and subordinated debt, interests in limited and general +partnerships, and preferred and common stock in other nonconsolidated +vehicles; + +Entering into interest rate, foreign currency, equity, commodity and credit +derivatives, including total return swaps; and + +Providing guarantees, indemnifications, commitments, letters of credit and +representations and warranties. + +We enter into these arrangements for a variety of business purposes, including +securitizations. The securitization vehicles that purchase mortgages, +corporate bonds and other types of financial assets are critical to the +functioning of several significant investor markets, including the mortgage- +backed and other asset-backed securities markets, since they offer investors +access to specific cash flows and risks created through the securitization +process. + +We also enter into these arrangements to underwrite client securitization +transactions; provide secondary market liquidity; make investments in +performing and nonperforming debt, distressed loans, power-related assets, +equity securities, real estate and other assets; and provide investors with +credit-linked and asset-repackaged notes. + +The table below presents where information about our various + +off-balance + +sheet arrangements may be found in this + +Form 10-K. + +In addition, see Note 3 to the consolidated financial statements for +information about our consolidation policies. + +Off-Balance + +Sheet Arrangement + +Disclosure in + +Form 10-K + +Variable interests and other obligations, including contingent obligations, +arising from variable interests in nonconsolidated variable interest entities +(VIEs) + +See Note 17 to the consolidated financial statements. + +Guarantees, and lending and other commitments + +See Note 18 to the consolidated financial statements. + +Derivatives + +See “Risk Management — Credit Risk Management — Credit Exposures — OTC +Derivatives” and Notes 4, 5, 7 and 18 to the consolidated financial +statements. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Risk Management + +Risks are inherent in our businesses and include liquidity, market, credit, +operational, model, legal, compliance, conduct, regulatory and reputational +risks. Our risks include the risks across our risk categories, regions or +global businesses, as well as those which have uncertain outcomes and have the +potential to materially impact our financial results, our liquidity and our +reputation. For further information about our risk management processes, see +“Overview and Structure of Risk Management,” and for information about our +areas of risk, see “Liquidity Risk Management,” “Market Risk Management,” +“Credit Risk Management,” “Operational Risk Management” and “Model Risk +Management” and “Risk Factors” in Part I, Item 1A of this + +Form 10-K. + +Overview and Structure of Risk Management + +Overview + +We believe that effective risk management is critical to our success. +Accordingly, we have established an enterprise risk management framework that +employs a comprehensive, integrated approach to risk management, and is +designed to enable comprehensive risk management processes through which we +identify, assess, monitor and manage the risks we assume in conducting our +activities. Our risk management structure is built around three core +components: governance, processes and people. + +Governance. + +Risk management governance starts with the Board, which both directly and +through its committees, including its Risk Committee, oversees our risk +management policies and practices implemented through the enterprise risk +management framework. The Board is also responsible for the annual review and +approval of our risk appetite statement. The risk appetite statement describes +the levels and types of risk we are willing to accept or to avoid, in order to +achieve our objectives included in our strategic business plan, while +remaining in compliance with regulatory requirements. The Board reviews our +strategic business plan and is ultimately responsible for overseeing and +providing direction about our strategy and risk appetite. + +The Board receives regular briefings on firmwide risks, including liquidity +risk, market risk, credit risk, operational risk and model risk, from our +independent risk oversight and control functions, including the chief risk +officer, and on compliance risk and conduct risk from Compliance, on legal and +regulatory enforcement matters from the chief legal officer, and on other +matters impacting our reputation from the chair of our Firmwide Client and +Business Standards Committee and our Firmwide Reputational Risk Committee. The +chief risk officer reports to our chief executive officer and to the Risk +Committee of the Board. As part of the review of the firmwide risk portfolio, +the chief risk officer regularly advises the Risk Committee of the Board of +relevant risk metrics and material exposures, including risk limits and +thresholds established in our risk appetite statement. + +The implementation of our risk governance structure and core risk management +processes are overseen by Enterprise Risk, which reports to our chief risk +officer, and is responsible for ensuring that our enterprise risk management +framework provides the Board, our risk committees and senior management with a +consistent and integrated approach to managing our various risks in a manner +consistent with our risk appetite. + +Our revenue-producing units, as well as Treasury, Engineering, Human Capital +Management, Operations, and Corporate and Workplace Solutions, are considered +our first line of defense. They are accountable for the outcomes of our risk- +generating activities, as well as for assessing and managing those risks +within our risk appetite. + +Our independent risk oversight and control functions are considered our second +line of defense and provide independent assessment, oversight and challenge of +the risks taken by our first line of defense, as well as lead and participate +in risk committees. Independent risk oversight and control functions include +Compliance, Conflicts Resolution, Controllers, Legal, Risk and Tax. + +Internal Audit is considered our third line of defense, and our director of +Internal Audit reports to the Audit Committee of the Board and +administratively to our chief executive officer. Internal Audit includes +professionals with a broad range of audit and industry experience, including +risk management expertise. Internal Audit is responsible for independently +assessing and validating the effectiveness of key controls, including those +within the risk management framework, and providing timely reporting to the +Audit Committee of the Board, senior management and regulators. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The three lines of defense structure promotes the accountability of first line +risk takers, provides a framework for effective challenge by the second line +and empowers independent review from the third line. + +Processes. + +We maintain various processes that are critical components of our risk +management framework, including (i) risk identification and assessment, (ii) +risk appetite, limit and threshold setting, (iii) risk reporting and +monitoring, and (iv) risk decision-making. + +Risk Identification and Assessment. + +We believe that the identification and assessment of our risks is a critical +step in providing our Board and senior management transparency and insight +into the range and materiality of our risks. We have a comprehensive data +collection process, including firmwide policies and procedures that require +all employees to report and escalate risk events. Our approach for risk +identification and assessment is comprehensive across all risk types, is +dynamic and forward-looking to reflect and adapt to our changing risk profile +and business environment, leverages subject matter expertise, and allows for +prioritization of our most critical risks. + +To effectively assess our risks, we maintain a daily discipline of marking +substantially all of our inventory to current market levels. We carry our +inventory at fair value, with changes in valuation reflected immediately in +our risk management systems and in net revenues. We do so because we believe +this discipline is one of the most effective tools for assessing and managing +risk and that it provides transparent and realistic insight into our inventory +exposures. + +An important part of our risk management process is firmwide stress testing. +It allows us to quantify our exposure to tail risks, highlight potential loss +concentrations, undertake risk/reward analysis, and assess and mitigate our +risk positions. Firmwide stress tests are performed on a regular basis and are +designed to ensure a comprehensive analysis of our vulnerabilities and +idiosyncratic risks combining financial and nonfinancial risks, including, but +not limited to, credit, market, liquidity and funding, operational and +compliance, strategic, systemic and emerging risks into a single combined +scenario. We also perform ad hoc stress tests in anticipation of market events +or conditions. Stress tests are also used to assess capital adequacy as part +of our capital planning and stress testing process. See “Capital Management +and Regulatory Capital — Capital Management” for further information. + +Risk Appetite, Limit and Threshold Setting. + +We apply a rigorous framework of limits and thresholds to control and monitor +risk across transactions, products, businesses and markets. The Board, +directly or indirectly through its Risk Committee, approves limits and +thresholds included in our risk appetite statement at firmwide, business and +product levels. In addition, the Firmwide Enterprise Risk Committee is +responsible for approving our risk limits framework, subject to the overall +limits approved by the Risk Committee of the Board, and monitoring these +limits. + +The Risk Governance Committee is responsible for approving limits at firmwide, +business and product levels. Certain limits may be set at levels that will +require periodic adjustment, rather than at levels that reflect our maximum +risk appetite. This fosters an ongoing dialogue about risk among our first and +second lines of defense, committees and senior management, as well as rapid +escalation of + +risk-related + +matters. Additionally, through delegated authority from the Risk Governance +Committee, Market Risk sets limits at certain product and desk levels, and +Credit Risk sets limits for individual counterparties, counterparties and +their subsidiaries, industries and countries. Limits are reviewed regularly +and amended on a permanent or temporary basis to reflect changing market +conditions, business conditions or risk tolerance. + +Risk Reporting and Monitoring. + +Effective risk reporting and risk decision-making depends on our ability to +get the right information to the right people at the right time. As such, we +focus on the rigor and effectiveness of our risk systems, with the objective +of ensuring that our risk management technology systems provide us with +complete, accurate and timely information. Our risk reporting and monitoring +processes are designed to take into account information about both existing +and emerging risks, thereby enabling our risk committees and senior management +to perform their responsibilities with the appropriate level of insight into +risk exposures. Furthermore, our limit and threshold breach processes provide +means for timely escalation. We evaluate changes in our risk profile and our +businesses, including changes in business mix or jurisdictions in which we +operate, by monitoring risk factors at a firmwide level. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Risk Decision-Making. + +Our governance structure provides the protocol and responsibility for + +decision-making + +on risk management issues and ensures implementation of those decisions. We +make extensive use of risk committees that meet regularly and serve as an +important means to facilitate and foster ongoing discussions to manage and +mitigate risks. + +We maintain strong and proactive communication about risk and we have a +culture of collaboration in decision-making among our first and second lines +of defense, committees and senior management. While our first line of defense +is responsible for management of their risk, we dedicate extensive resources +to our second line of defense in order to ensure a strong oversight structure +and an appropriate segregation of duties. We regularly reinforce our strong +culture of escalation and accountability across all functions. + +People. + +Even the best technology serves only as a tool for helping to make informed +decisions in real time about the risks we are taking. Ultimately, effective +risk management requires our people to interpret our risk data on an ongoing +and timely basis and adjust risk positions accordingly. The experience of our +professionals, and their understanding of the nuances and limitations of each +risk measure, guides us in assessing exposures and maintaining them within +prudent levels. + +We reinforce a culture of effective risk management, consistent with our risk +appetite, in our training and development programs, as well as in the way we +evaluate performance, and recognize and reward our people. Our training and +development programs, including certain sessions led by our most senior +leaders, are focused on the importance of risk management, client +relationships and reputational excellence. As part of our performance review +process, we assess reputational excellence, including how an employee +exercises good risk management and reputational judgment, and adheres to our +code of conduct and compliance policies. Our review and reward processes are +designed to communicate and reinforce to our professionals the link between +behavior and how people are recognized, the need to focus on our clients and +our reputation, and the need to always act in accordance with our highest +standards. + +Structure + +Ultimate oversight of risk is the responsibility of our Board. The Board +oversees risk both directly and through its committees, including its Risk +Committee. We have a series of committees with specific risk management +mandates that have oversight or decision-making responsibilities for risk +management activities. Committee membership generally consists of senior +managers from both our first and second lines of defense. We have established +procedures for these committees to ensure that appropriate information +barriers are in place. Our primary risk committees, most of which also have +additional + +sub-committees, + +councils or working groups, are described below. In addition to these +committees, we have other risk committees that provide oversight for different +businesses, activities, products, regions and entities. All of our committees +have responsibility for considering the impact on our reputation of the +transactions and activities that they oversee. + +Membership of our risk committees is reviewed regularly and updated to reflect +changes in the responsibilities of the committee members. Accordingly, the +length of time that members serve on the respective committees varies as +determined by the committee chairs and based on the responsibilities of the +members. + +The chart below presents an overview of our risk management governance +structure. + +Management Committee. + +The Management Committee oversees our global activities. It provides this +oversight directly and through authority delegated to committees it has +established. This committee consists of our most senior leaders, and is +chaired by our chief executive officer. Most members of the Management +Committee are also members of other committees. The following are the +committees that are principally involved in firmwide risk management. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Firmwide Enterprise Risk Committee. + +The Firmwide Enterprise Risk Committee is responsible for overseeing all of +our financial and nonfinancial risks. As part of such oversight, the committee +is responsible for the ongoing review, approval and monitoring of our +enterprise risk management framework, as well as our risk limits framework. +This committee is + +co-chaired + +by our chief financial officer and our chief risk officer, who are appointed +as chairs by our chief executive officer, and reports to the Management +Committee. The following are the primary committees or councils that report to +the Firmwide Enterprise Risk Committee: + +Firmwide Risk Council. + +The Firmwide Risk Council is responsible for the ongoing monitoring of +relevant financial risks and related risk limits at the firmwide, business and +product levels. This council is + +co-chaired + +by the chairs of the Firmwide Enterprise Risk Committee. + +Firmwide New Activity Committee. + +The Firmwide New Activity Committee is responsible for reviewing new +activities and for establishing a process to identify and review previously +approved activities that are significant and that have changed in complexity +and/or structure or present different reputational and suitability concerns +over time to consider whether these activities remain appropriate. This +committee is + +co-chaired + +by the controller and chief accounting officer, and our chief administrative +officer, who are appointed as chairs by the chairs of the Firmwide Enterprise +Risk Committee. + +Firmwide Operational Risk and Resilience Committee. + +The Firmwide Operational Risk and Resilience Committee is responsible for +overseeing operational risk, and for ensuring our business and operational +resilience. To assist the Firmwide Operational Risk and Resilience Committee +in carrying out its mandate, other risk committees with dedicated oversight +for technology-related risks, including cyber security matters, report into +the Firmwide Operational Risk and Resilience Committee. This committee is + +co-chaired + +by our chief administrative officer and the head of Operational Risk, who are +appointed as chairs by the chairs of the Firmwide Enterprise Risk Committee. + +Firmwide Conduct Committee. + +The Firmwide Conduct Committee is responsible for the ongoing approval and +monitoring of the frameworks and policies which govern our conduct risks. +Conduct risk is the risk that our people fail to act in a manner consistent +with our Business Principles and related core values, policies or codes, or +applicable laws or regulations, thereby falling short in fulfilling their +responsibilities to us, our clients, colleagues, other market participants or +the broader community. This committee is chaired by our chief legal officer, +who is appointed as chair by the chairs of the Firmwide Enterprise Risk +Committee. + +Risk Governance Committee. + +The Risk Governance Committee (through delegated authority from the Firmwide +Enterprise Risk Committee) is responsible for the ongoing approval and +monitoring of risk frameworks, policies and parameters related to our core +risk management processes, as well as limits, at firmwide, business and +product levels. In addition, this committee reviews the results of stress +tests and scenario analyses. To assist the Risk Governance Committee in +carrying out its mandate, a number of other risk committees with dedicated +oversight for stress testing, model risks and Volcker Rule compliance report +into the Risk Governance Committee. This committee is chaired by our chief +risk officer, who is appointed as chair by the chairs of the Firmwide +Enterprise Risk Committee. + +Firmwide Client and Business Standards Committee. + +The Firmwide Client and Business Standards Committee is responsible for +overseeing relationships with our clients, client service and experience, and +related business standards, as well as client-related reputational matters. +This committee is chaired by our president and chief operating officer, who is +appointed as chair by the chief executive officer, and reports to the +Management Committee. This committee periodically provides updates to, and +receives guidance from, the Public Responsibilities Committee of the Board. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The following committees report jointly to the Firmwide Enterprise Risk +Committee and the Firmwide Client and Business Standards Committee: + +Firmwide Reputational Risk Committee. + +The Firmwide Reputational Risk Committee is responsible for assessing +reputational risks arising from transactions that have been identified as +having potential heightened reputational risk pursuant to the criteria +established by the Firmwide Reputational Risk Committee and as determined by +committee leadership. This committee is chaired by our president and chief +operating officer, who is appointed as chair by the chief executive officer, +and the vice-chairs are our chief legal officer and the former chair of +Conflicts Resolution (now a senior advisor to the firm), who are appointed as +vice-chairs by the chair of the Firmwide Reputational Risk Committee. This +committee periodically provides updates to, and receives guidance from, the +Public Responsibilities Committee of the Board. + +Firmwide Suitability Committee. + +The Firmwide Suitability Committee is responsible for setting standards and +policies for product, transaction and client suitability and providing a forum +for consistency across functions, regions and products on suitability +assessments. This committee also reviews suitability matters escalated from +other committees. This committee is + +co-chaired + +by our chief compliance officer, and a + +co-head + +of EMEA FICC sales, who are appointed as chairs by the chair of the Firmwide +Client and Business Standards Committee. + +Firmwide Investment Policy Committee. + +The Firmwide Investment Policy Committee periodically reviews our investing +and lending activities on a portfolio basis, including review of risk +management and controls, and sets business standards and policies for these +types of investments. This committee is + +co-chaired + +by a + +co-head + +of our Asset Management Division, a + +co-head + +of our Global Markets Division and our chief risk officer, who are appointed +as chairs by our president and chief operating officer and our chief financial +officer. + +Firmwide Capital Committee. + +The Firmwide Capital Committee provides approval and oversight of debt-related +transactions, including principal commitments of our capital. This committee +aims to ensure that business, reputational and suitability standards for +underwritings and capital commitments are maintained on a global basis. This +committee is + +co-chaired + +by the head of Credit Risk and the head of Americas Leveraged Finance, who are +appointed as chairs by the chairs of the Firmwide Enterprise Risk Committee. + +Firmwide Commitments Committee. + +The Firmwide Commitments Committee reviews our underwriting and distribution +activities with respect to equity and equity-related product offerings, and +sets and maintains policies and procedures designed to ensure that legal, +reputational, regulatory and business standards are maintained on a global +basis. In addition to reviewing specific transactions, this committee +periodically conducts general strategic reviews of sectors and products and +establishes policies in connection with transaction practices. This committee +is + +co-chaired + +by the chief underwriting officer for EMEA, the chief equity underwriting +officer for the Americas, a + +co-chairman + +of the Global Financial Institutions Group and a + +co-head + +of the Industrials Group in our Investment Banking Division, who are appointed +as chairs by the chair of the Firmwide Client and Business Standards +Committee. + +Firmwide Asset Liability Committee. + +The Firmwide Asset Liability Committee reviews and approves the strategic +direction for our financial resources, including capital, liquidity, funding +and balance sheet. This committee has oversight responsibility for asset +liability management, including interest rate and currency risk, funds +transfer pricing, capital allocation and incentives, and credit ratings. This +committee makes recommendations as to any adjustments to asset liability +management and financial resource allocation in light of current events, +risks, exposures, and regulatory requirements and approves related policies. +This committee is + +co-chaired + +by our chief financial officer and our global treasurer, who are appointed as +chairs by our chief executive officer, and reports to the Management +Committee. + +Conflicts Management + +Conflicts of interest and our approach to dealing with them are fundamental to +our client relationships, our reputation and our long-term success. The term +“conflict of interest” does not have a universally accepted meaning, and +conflicts can arise in many forms within a business or between businesses. The +responsibility for identifying potential conflicts, as well as complying with +our policies and procedures, is shared by all of our employees. + +We have a multilayered approach to resolving conflicts and addressing +reputational risk. Our senior management oversees policies related to +conflicts resolution and, in conjunction with Conflicts Resolution, Legal and +Compliance, the Firmwide Client and Business Standards Committee, and other +internal committees, formulates policies, standards and principles, and +assists in making judgments regarding the appropriate resolution of particular +conflicts. Resolving potential conflicts necessarily depends on the facts and +circumstances of a particular situation and the application of experienced and +informed judgment. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +As a general matter, Conflicts Resolution reviews financing and advisory +assignments in Investment Banking and certain of our investing, lending and +other activities. In addition, we have various transaction oversight +committees, such as the Firmwide Capital, Commitments and Suitability +Committees and other committees that also review new underwritings, loans, +investments and structured products. These groups and committees work with +internal and external counsel and Compliance to evaluate and address any +actual or potential conflicts. The head of Conflicts Resolution reports to our +chief legal officer, who reports to our chief executive officer. + +We regularly assess our policies and procedures that address conflicts of +interest in an effort to conduct our business in accordance with the highest +ethical standards and in compliance with all applicable laws, rules and +regulations. + +Climate Risk Management + +We categorize climate risk into physical risk and transition risk. Physical +risk is the risk that asset values may decline or operations may be disrupted +as a result of changes in the climate, while transition risk is the risk that +asset values may decline because of changes in climate policies or changes in +the underlying economy due to decarbonization. + +As a global financial institution, climate-related risks manifest in different +ways across our businesses and we have continued to make significant +enhancements to our climate risk management framework, including steps to +further integrate climate into our broader risk management processes. We have +integrated oversight of climate-related risks into our risk management +governance structure, from senior management to our Board and its committees, +including the Risk and Public Responsibilities Committees. The Risk Committee +of the Board oversees firmwide financial and nonfinancial risks, which include +climate risk, and, as part of its oversight, receives updates on our risk +management approach to climate risk, including our approaches towards scenario +analysis and integration into existing risk management processes. The Public +Responsibilities Committee of the Board assists the Board in its oversight of +our firmwide sustainability strategy and sustainability issues affecting us, +including with respect to climate change. As part of its oversight, the Public +Responsibilities Committee receives periodic updates on our sustainability +strategy, and also periodically reviews our governance and related policies +and processes for sustainability and climate change-related risks. Senior +management within Risk is responsible for the development of our climate risk +program. + +We have begun incorporating climate risk into our credit evaluation and +underwriting processes for select industries. Climate risk factors are now +evaluated as part of transaction due diligence for select loan commitments. + +See “Business — Sustainability” in Part I, Item 1 and “Risk Factors” in Part +I, Item 1A of this + +Form 10-K + +for information about our sustainability initiatives, including in relation to +climate transition. + +Compliance Risk Management + +Compliance risk is the risk of legal or regulatory sanctions, material +financial loss or damage to our reputation arising from our failure to comply +with the requirements of applicable laws, rules and regulations, and our +internal policies and procedures. Compliance risk is inherent in all +activities through which we conduct our businesses. Our Compliance Risk +Management Program, administered by Compliance, assesses our compliance, +regulatory and reputational risk; monitors for compliance with new or amended +laws, rules and regulations; designs and implements controls, policies, +procedures and training; conducts independent testing; investigates, surveils +and monitors for compliance risks and breaches; and leads our responses to +regulatory examinations, audits and inquiries. We monitor and review business +practices to assess whether they meet or exceed minimum regulatory and legal +standards in all markets and jurisdictions in which we conduct business. + +Capital Risk Management + +Capital risk is the risk that our capital is insufficient to support our +business activities under normal and stressed market conditions or we face +capital reductions or RWA increases, including from new or revised rules or +changes in interpretations of existing rules, and are therefore unable to meet +our internal capital targets or external regulatory capital requirements. +Capital adequacy is of critical importance to us. Accordingly, we have in +place a comprehensive capital management policy that provides a framework, +defines objectives and establishes guidelines to maintain an appropriate level +and composition of capital in both + +business-as-usual + +and stressed conditions. Our capital management framework is designed to +provide us with the information needed to comprehensively manage risk, and +develop and apply projected stress scenarios that capture idiosyncratic +vulnerabilities with a goal of holding sufficient capital to remain adequately +capitalized even after experiencing a severe stress event. See “Capital +Management and Regulatory Capital” for further information about our capital +management process. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +We have established a comprehensive governance structure to manage and oversee +our + +day-to-day + +capital management activities and compliance with capital rules and related +policies. Our capital management activities are overseen by the Board and its +committees. The Board is responsible for approving our annual capital plan and +the Risk Committee of the Board approves our capital management policy. In +addition, committees and members of senior management are responsible for the +ongoing monitoring of our capital adequacy and evaluate current and future +regulatory capital requirements, review the results of our capital planning +and stress tests processes, and the results of our capital models, review our +contingency capital plan, key capital adequacy metrics, including regulatory +capital ratios, as well as capital plan metrics, such as the payout ratio, +outcomes and findings of calculation testing, and monitor capital risk limits +and breaches. + +Our process for managing capital risk also includes independent review +functions in Risk that, among other things, assess regulatory capital policies +and related interpretations, escalate certain interpretations to senior +management and/or the appropriate risk committee, and perform calculation +testing to corroborate alignment with applicable capital rules. + +Liquidity Risk Management + +Overview + +Liquidity risk is the risk that we will be unable to fund ourselves or meet +our liquidity needs in the event of firm-specific, broader industry or market +liquidity stress events. We have in place a comprehensive and conservative set +of liquidity and funding policies. Our principal objective is to be able to +fund ourselves and to enable our core businesses to continue to serve clients +and generate revenues, even under adverse circumstances. + +Treasury, which reports to our chief financial officer, has primary +responsibility for developing, managing and executing our liquidity and +funding strategy within our risk appetite. + +Liquidity Risk, which is independent of our revenue-producing units and +Treasury, and reports to our chief risk officer, has primary responsibility +for assessing, monitoring and managing our liquidity risk through firmwide +oversight across our global businesses and the establishment of stress testing +and limits frameworks. + +Liquidity Risk Management Principles + +We manage liquidity risk according to three principles: (i) hold sufficient +excess liquidity in the form of GCLA to cover outflows during a stressed +period, (ii) maintain appropriate Asset-Liability Management and (iii) +maintain a viable Contingency Funding Plan. + +GCLA. + +GCLA is liquidity that we maintain to meet a broad range of potential cash +outflows and collateral needs in a stressed environment. A primary liquidity +principle is to + +pre-fund + +our estimated potential cash and collateral needs during a liquidity crisis +and hold this liquidity in the form of unencumbered, highly liquid securities +and cash. We believe that the securities held in our GCLA would be readily +convertible to cash in a matter of days, through liquidation, by entering into +repurchase agreements or from maturities of resale agreements, and that this +cash would allow us to meet immediate obligations without needing to sell +other assets or depend on additional funding from credit-sensitive markets. + +Our GCLA reflects the following principles: + +The first days or weeks of a liquidity crisis are the most critical to a +company’s survival; + +Focus must be maintained on all potential cash and collateral outflows, not +just disruptions to financing flows. Our businesses are diverse, and our +liquidity needs are determined by many factors, including market movements, +collateral requirements and client commitments, all of which can change +dramatically in a difficult funding environment; + +During a liquidity crisis, credit-sensitive funding, including unsecured debt, +certain deposits and some types of secured financing agreements, may be +unavailable, and the terms (e.g., interest rates, collateral provisions and +tenor) or availability of other types of secured financing may change and +certain deposits may be withdrawn; and + +As a result of our policy to + +pre-fund + +liquidity that we estimate may be needed in a crisis, we hold more +unencumbered securities and have larger funding balances than our businesses +would otherwise require. We believe that our liquidity is stronger with +greater balances of highly liquid unencumbered securities, even though it +increases our total assets and our funding costs. + +We maintain our GCLA across Group Inc., Goldman Sachs Funding LLC (Funding +IHC) and Group Inc.’s major broker-dealer and bank subsidiaries, asset types +and clearing agents to provide us with sufficient operating liquidity to +ensure timely settlement in all major markets, even in a difficult funding +environment. In addition to the GCLA, we maintain cash balances and securities +in several of our other entities, primarily for use in specific currencies, +entities or jurisdictions where we do not have immediate access to parent +company liquidity. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Asset-Liability Management. + +Our liquidity risk management policies are designed to ensure we have a +sufficient amount of financing, even when funding markets experience +persistent stress. We manage the maturities and diversity of our funding +across markets, products and counterparties, and seek to maintain a +diversified funding profile with an appropriate tenor, taking into +consideration the characteristics and liquidity profile of our assets. + +Our approach to asset-liability management includes: + +Conservatively managing the overall characteristics of our funding book, with +a focus on maintaining long-term, diversified sources of funding in excess of +our current requirements. See “Balance Sheet and Funding Sources — Funding +Sources” for further information; + +Actively managing and monitoring our asset base, with particular focus on the +liquidity, holding period and ability to fund assets on a secured basis. We +assess our funding requirements and our ability to liquidate assets in a +stressed environment while appropriately managing risk. This enables us to +determine the most appropriate funding products and tenors. See “Balance Sheet +and Funding Sources — Balance Sheet Management” for further information about +our balance sheet management process and “— Funding Sources — Secured Funding” +for further information about asset classes that may be harder to fund on a +secured basis; and + +Raising secured and unsecured financing that has a long tenor relative to the +liquidity profile of our assets. This reduces the risk that our liabilities +will come due in advance of our ability to generate liquidity from the sale of +our assets. Because we maintain a highly liquid balance sheet, the holding +period of certain of our assets may be materially shorter than their +contractual maturity dates. + +Our goal is to ensure that we maintain sufficient liquidity to fund our assets +and meet our contractual and contingent obligations in normal times, as well +as during periods of market stress. Through our dynamic balance sheet +management process, we use actual and projected asset balances to determine +secured and unsecured funding requirements. Funding plans are reviewed and +approved by the Firmwide Asset Liability Committee. In addition, our +independent risk oversight and control functions analyze, and the Firmwide +Asset Liability Committee reviews, our consolidated total capital position +(unsecured long-term borrowings plus total shareholders’ equity) so that we +maintain a level of long-term funding that is sufficient to meet our long-term +financing requirements. In a liquidity crisis, we would first use our GCLA in +order to avoid reliance on asset sales (other than our GCLA). However, we +recognize that orderly asset sales may be prudent or necessary in a severe or +persistent liquidity crisis. + +Subsidiary Funding Policies + +The majority of our unsecured funding is raised by Group Inc., which provides +the necessary funds to Funding IHC and other subsidiaries, some of which are +regulated, to meet their asset financing, liquidity and capital requirements. +In addition, Group Inc. provides its regulated subsidiaries with the necessary +capital to meet their regulatory requirements. The benefits of this approach +to subsidiary funding are enhanced control and greater flexibility to meet the +funding requirements of our subsidiaries. Funding is also raised at the +subsidiary level through a variety of products, including deposits, secured +funding and unsecured borrowings. + +Our intercompany funding policies assume that a subsidiary’s funds or +securities are not freely available to its parent, Funding IHC or other +subsidiaries unless (i) legally provided for and (ii) there are no additional +regulatory, tax or other restrictions. In particular, many of our subsidiaries +are subject to laws that authorize regulatory bodies to block or reduce the +flow of funds from those subsidiaries to Group Inc. or Funding IHC. Regulatory +action of that kind could impede access to funds that Group Inc. needs to make +payments on its obligations. Accordingly, we assume that the capital provided +to our regulated subsidiaries is not available to Group Inc. or other +subsidiaries and any other financing provided to our regulated subsidiaries is +not available to Group Inc. or Funding IHC until the maturity of such +financing. + +Group Inc. has provided substantial amounts of equity and subordinated +indebtedness, directly or indirectly, to its regulated subsidiaries. For +example, as of December 2021, Group Inc. had $38.08 billion of equity and +subordinated indebtedness invested in GS&Co., its principal U.S. registered +broker-dealer; $44.44 billion invested in GSI, a regulated U.K. broker-dealer; +$2.50 billion invested in GSJCL, a regulated Japanese broker-dealer; $46.17 +billion invested in GS Bank USA, a regulated New York State-chartered bank; +and $4.28 billion invested in GSIB, a regulated U.K. bank. Group Inc. also +provides financing, directly or indirectly, in the form of: $95.74 billion of +unsubordinated loans (including secured loans of $41.91 billion) and $17.68 +billion of collateral and cash deposits to these entities as of December 2021. +In addition, as of December 2021, Group Inc. had significant amounts of +capital invested in and loans to its other regulated subsidiaries. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Contingency Funding Plan. + +We maintain a contingency funding plan to provide a framework for analyzing +and responding to a liquidity crisis situation or periods of market stress. +Our contingency funding plan outlines a list of potential risk factors, key +reports and metrics that are reviewed on an ongoing basis to assist in +assessing the severity of, and managing through, a liquidity crisis and/or +market dislocation. The contingency funding plan also describes in detail our +potential responses if our assessments indicate that we have entered a +liquidity crisis, which include + +pre-funding + +for what we estimate will be our potential cash and collateral needs, as well +as utilizing secondary sources of liquidity. Mitigants and action items to +address specific risks which may arise are also described and assigned to +individuals responsible for execution. + +The contingency funding plan identifies key groups of individuals and their +responsibilities, which include fostering effective coordination, control and +distribution of information, implementing liquidity maintenance activities and +managing internal and external communication, all of which are critical in the +management of a crisis or period of market stress. + +Stress Tests + +In order to determine the appropriate size of our GCLA, we model liquidity +outflows over a range of scenarios and time horizons. One of our primary +internal liquidity risk models, referred to as the Modeled Liquidity Outflow, +quantifies our liquidity risks over a + +30-day + +stress scenario. We also consider other factors, including, but not limited +to, an assessment of our potential intraday liquidity needs through an +additional internal liquidity risk model, referred to as the Intraday +Liquidity Model, the results of our long-term stress testing models, our +resolution liquidity models and other applicable regulatory requirements and a +qualitative assessment of our condition, as well as the financial markets. The +results of the Modeled Liquidity Outflow, the Intraday Liquidity Model, the +long-term stress testing models and the resolution liquidity models are +reported to senior management on a regular basis. We also perform firmwide +stress tests. See “Overview and Structure of Risk Management” for information +about firmwide stress tests. + +Modeled Liquidity Outflow. + +Our Modeled Liquidity Outflow is based on conducting multiple scenarios that +include combinations of market-wide and firm-specific stress. These scenarios +are characterized by the following qualitative elements: + +Severely challenged market environments, which includes low consumer and +corporate confidence, financial and political instability, and adverse changes +in market values, including potential declines in equity markets and widening +of credit spreads; and + +A firm-specific crisis potentially triggered by material losses, reputational +damage, litigation and/or a ratings downgrade. + +The following are key modeling elements of our Modeled Liquidity Outflow: + +Liquidity needs over a + +30-day + +scenario; + +A + +two-notch + +downgrade of our long-term senior unsecured credit ratings; + +Changing conditions in funding markets, which limit our access to unsecured +and secured funding; + +No support from additional government funding facilities. Although we have +access to various central bank funding programs, we do not assume reliance on +additional sources of funding in a liquidity crisis; and + +A combination of contractual outflows and contingent outflows arising from +both our + +on- + +and + +off-balance + +sheet arrangements. Contractual outflows include, among other things, upcoming +maturities of unsecured debt, term deposits and secured funding. Contingent +outflows include, among other things, the withdrawal of customer credit +balances in our prime brokerage business, increase in variation margin +requirements due to adverse changes in the value of our exchange-traded and + +OTC-cleared + +derivatives, draws on unfunded commitments and withdrawals of deposits that +have no contractual maturity. See notes to the consolidated financial +statements for further information about contractual outflows, including Note +11 for collateralized financings, Note 13 for deposits, Note 14 for unsecured +long-term borrowings and Note 15 for operating lease payments, and + +“Off-Balance + +Sheet Arrangements” for further information about our various types of + +off-balance + +sheet arrangements. + +Intraday Liquidity Model. + +Our Intraday Liquidity Model measures our intraday liquidity needs using a +scenario analysis characterized by the same qualitative elements as our +Modeled Liquidity Outflow. The model assesses the risk of increased intraday +liquidity requirements during a scenario where access to sources of intraday +liquidity may become constrained. + +Long-Term Stress Testing. + +We utilize longer-term stress tests to take a forward view on our liquidity +position through prolonged stress periods in which we experience a severe +liquidity stress and recover in an environment that continues to be +challenging. We are focused on ensuring conservative asset-liability +management to prepare for a prolonged period of potential stress, seeking to +maintain a diversified funding profile with an appropriate tenor, taking into +consideration the characteristics and liquidity profile of our assets. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Resolution Liquidity Models. + +In connection with our resolution planning efforts, we have established our +Resolution Liquidity Adequacy and Positioning framework, which estimates +liquidity needs of our major subsidiaries in a stressed environment. The +liquidity needs are measured using our Modeled Liquidity Outflow assumptions +and include certain additional inter-affiliate exposures. We have also +established our Resolution Liquidity Execution Need framework, which measures +the liquidity needs of our major subsidiaries to stabilize and wind-down +following a Group Inc. bankruptcy filing in accordance with our preferred +resolution strategy. + +In addition, we have established a triggers and alerts framework, which is +designed to provide the Board with information needed to make an informed +decision on whether and when to commence bankruptcy proceedings for Group Inc. + +Limits + +We use liquidity risk limits at various levels and across liquidity risk types +to manage the size of our liquidity exposures. Limits are measured relative to +acceptable levels of risk given our liquidity risk tolerance. See “Overview +and Structure of Risk Management” for information about the limit approval +process. + +Limits are monitored by Treasury and Liquidity Risk. Liquidity Risk is +responsible for identifying and escalating to senior management and/or the +appropriate risk committee, on a timely basis, instances where limits have +been exceeded. + +GCLA and Unencumbered Metrics + +GCLA. + +Based on the results of our internal liquidity risk models, described above, +as well as our consideration of other factors, including, but not limited to, +a qualitative assessment of our condition, as well as the financial markets, +we believe our liquidity position as of both December 2021 and December 2020 +was appropriate. We strictly limit our GCLA to a narrowly defined list of +securities and cash because they are highly liquid, even in a difficult +funding environment. We do not include other potential sources of excess +liquidity in our GCLA, such as less liquid unencumbered securities or +committed credit facilities. + +The table below presents information about our GCLA. + +In the table above: + +The U.S. dollar-denominated GCLA consists of (i) unencumbered U.S. government +and agency obligations (including highly liquid U.S. agency mortgage-backed +obligations), all of which are eligible as collateral in Federal Reserve open +market operations and (ii) certain overnight U.S. dollar cash deposits. + +The + +non-U.S. + +dollar-denominated GCLA consists of + +non-U.S. + +government obligations (only unencumbered German, French, Japanese and U.K. +government obligations) and certain overnight cash deposits in highly liquid +currencies. + +We maintain our GCLA to enable us to meet current and potential liquidity +requirements of our parent company, Group Inc., and its subsidiaries. Our +Modeled Liquidity Outflow and Intraday Liquidity Model incorporate a +requirement for Group Inc., as well as a standalone requirement for each of +our major broker-dealer and bank subsidiaries. Funding IHC is required to +provide the necessary liquidity to Group Inc. during the ordinary course of +business, and is also obligated to provide capital and liquidity support to +major subsidiaries in the event of our material financial distress or failure. +Liquidity held directly in each of our major broker-dealer and bank +subsidiaries is intended for use only by that subsidiary to meet its liquidity +requirements and is assumed not to be available to Group Inc. or Funding IHC +unless (i) legally provided for and (ii) there are no additional regulatory, +tax or other restrictions. In addition, the Modeled Liquidity Outflow and +Intraday Liquidity Model also incorporate a broader assessment of standalone +liquidity requirements for other subsidiaries and we hold a portion of our +GCLA directly at Group Inc. or Funding IHC to support such requirements. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Other Unencumbered Assets. + +In addition to our GCLA, we have a significant amount of other unencumbered +cash and financial instruments, including other government obligations, high- +grade money market securities, corporate obligations, marginable equities, +loans and cash deposits not included in our GCLA. The fair value of our +unencumbered assets averaged $271.65 billion for the three months ended +December 2021, $214.06 billion for the three months ended December 2020, +$249.32 billion for the year ended December 2021 and $207.60 billion for the +year ended December 2020. We do not consider these assets liquid enough to be +eligible for our GCLA. + +Liquidity Regulatory Framework + +As a BHC, we are subject to a minimum Liquidity Coverage Ratio (LCR) under the +LCR rule approved by the U.S. federal bank regulatory agencies. The LCR rule +requires organizations to maintain an adequate ratio of eligible high-quality +liquid assets (HQLA) to expected net cash outflows under an acute, short-term +liquidity stress scenario. Eligible HQLA excludes HQLA held by subsidiaries +that is in excess of their minimum requirement and is subject to transfer +restrictions. We are required to maintain a minimum LCR of 100%. We expect +that fluctuations in client activity, business mix and the market environment +will impact our LCR. + +The table below presents information about our average daily LCR. + +In October 2020, the U.S. federal bank regulatory agencies issued a final rule +that established a net stable funding ratio (NSFR) requirement for large U.S. +banking organizations. This rule became effective on July 1, 2021 and requires +banking organizations to ensure they have access to stable funding over a + +one-year + +time horizon. The rule also requires disclosure of the ratio on a semi-annual +basis and a description of the banking organization’s stable funding sources +beginning in 2023. Our NSFR as of December 2021 exceeded the minimum +requirement. + +The following provides information about our subsidiary liquidity regulatory +requirements: + +GS Bank USA. + +GS Bank USA is subject to a minimum LCR of 100% under the LCR rule approved by +the U.S. federal bank regulatory agencies. As of December 2021, GS Bank USA’s +LCR exceeded the minimum requirement. The NSFR requirement described above +also applies to GS Bank USA. As of December 2021, GS Bank USA’s NSFR exceeded +the minimum requirement. + +GSI and GSIB. + +GSI and GSIB are subject to a minimum LCR of 100% under the LCR rule approved +by the U.K. regulatory authorities. GSI’s and GSIB’s average monthly LCR for +the trailing twelve-month period ended December 2021 exceeded the minimum +requirement. GSI and GSIB are subject to the applicable NSFR requirement in +the U.K., which became effective in January 2022. As of December 2021, both +GSI’s and GSIB’s NSFR exceeded the minimum requirement. + +GSBE. + +GSBE is subject to a minimum LCR of 100% under the LCR rule approved by the +European Parliament and Council. GSBE’s average monthly LCR for the trailing +twelve-month period ended December 2021 exceeded the minimum requirement. GSBE +is subject to the applicable NSFR requirement in the E.U., which became +effective in June 2021. As of December 2021, GSBE’s NSFR exceeded the minimum +requirement. + +Other Subsidiaries. + +We monitor local regulatory liquidity requirements of our subsidiaries to +ensure compliance. For many of our subsidiaries, these requirements either +have changed or are likely to change in the future due to the implementation +of the Basel Committee’s framework for liquidity risk measurement, standards +and monitoring, as well as other regulatory developments. + +The implementation of these rules and any amendments adopted by the regulatory +authorities could impact our liquidity and funding requirements and practices +in the future. + +Credit Ratings + +We rely on the short- and long-term debt capital markets to fund a significant +portion of our + +day-to-day + +operations and the cost and availability of debt financing is influenced by +our credit ratings. Credit ratings are also important when we are competing in +certain markets, such as OTC derivatives, and when we seek to engage in +longer-term transactions. See “Risk Factors” in Part I, Item 1A of this + +Form 10-K + +for information about the risks associated with a reduction in our credit +ratings. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The table below presents the unsecured credit ratings and outlook of Group +Inc. + +As of December 2021 + +DBRS + +Fitch + +Moody’s + +R&I + +S&P + +Short-term debt + +R-1 (middle) + +F1 + +P-1 + +a-1 + +A-2 + +Long-term debt + +A (high) + +A + +A2 + +A + +BBB+ + +Subordinated debt + +A + +BBB+ + +Baa2 + +A- + +BBB + +Trust preferred + +A + +BBB- + +Baa3 + +N/A + +BB+ + +Preferred stock + +BBB (high) + +BBB- + +Ba1 + +N/A + +BB+ + +Ratings outlook + +Stable + +Stable + +Stable + +Stable + +Stable + +In the table above: + +The ratings and outlook are by DBRS, Inc. (DBRS), Fitch, Inc. (Fitch), Moody’s +Investors Service (Moody’s), Rating and Investment Information, Inc. (R&I), +and Standard & Poor’s Ratings Services (S&P). + +The ratings for trust preferred relate to the guaranteed preferred beneficial +interests issued by Goldman Sachs Capital I. + +The DBRS, Fitch, Moody’s and S&P ratings for preferred stock include the APEX +issued by Goldman Sachs Capital II and Goldman Sachs Capital III. + +The table below presents the unsecured credit ratings and outlook of GS Bank +USA, GSIB, GSBE, GS&Co. and GSI. + +As of December 2021 + +Fitch + +Moody’s + +S&P + +GS Bank USA + +Short-term debt + +F1 + +P-1 + +A-1 + +Long-term debt + +A+ + +A1 + +A+ + +Short-term bank deposits + +F1+ + +P-1 + +N/A + +Long-term bank deposits + +AA- + +A1 + +N/A + +Ratings outlook + +Stable + +Stable + +Stable + +GSIB + +Short-term debt + +F1 + +P-1 + +A-1 + +Long-term debt + +A+ + +A1 + +A+ + +Short-term bank deposits + +F1 + +P-1 + +N/A + +Long-term bank deposits + +A+ + +A1 + +N/A + +Ratings outlook + +Stable + +Stable + +Stable + +GSBE + +Short-term debt + +F1 + +P-1 + +A-1 + +Long-term debt + +A + +A1 + +A+ + +Short-term bank deposits + +N/A + +P-1 + +N/A + +Long-term bank deposits + +N/A + +A1 + +N/A + +Ratings outlook + +Stable + +Stable + +Stable + +GS&Co. + +Short-term debt + +F1 + +N/A + +A-1 + +Long-term debt + +A+ + +N/A + +A+ + +Ratings outlook + +Stable + +N/A + +Stable + +GSI + +Short-term debt + +F1 + +P-1 + +A-1 + +Long-term debt + +A+ + +A1 + +A+ + +Ratings outlook + +Stable + +Stable + +Stable + +We believe our credit ratings are primarily based on the credit rating +agencies’ assessment of: + +Our liquidity, market, credit and operational risk management practices; + +Our level and variability of earnings; + +Our capital base; + +Our franchise, reputation and management; + +Our corporate governance; and + +The external operating and economic environment, including, in some cases, the +assumed level of government support or other systemic considerations, such as +potential resolution. + +Certain of our derivatives have been transacted under bilateral agreements +with counterparties who may require us to post collateral or terminate the +transactions based on changes in our credit ratings. We manage our GCLA to +ensure we would, among other potential requirements, be able to make the +additional collateral or termination payments that may be required in the +event of a + +two-notch + +reduction in our long-term credit ratings, as well as collateral that has not +been called by counterparties, but is available to them. + +See Note 7 to the consolidated financial statements for further information +about derivatives with credit-related contingent features and the additional +collateral or termination payments related to our net derivative liabilities +under bilateral agreements that could have been called by counterparties in +the event of a + +one- + +or + +two-notch + +downgrade in our credit ratings. + +Cash Flows + +As a global financial institution, our cash flows are complex and bear little +relation to our net earnings and net assets. Consequently, we believe that +traditional cash flow analysis is less meaningful in evaluating our liquidity +position than the liquidity and asset-liability management policies described +above. Cash flow analysis may, however, be helpful in highlighting certain +macro trends and strategic initiatives in our businesses. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Year Ended December 2021. + +Our cash and cash equivalents increased by $105.19 billion to $261.04 billion +at the end of 2021, primarily due to net cash provided by financing +activities, partially offset by net cash used for investing activities. The +net cash provided by financing activities primarily reflected an increase in +net deposits, reflecting increases across channels, and net issuances of +unsecured long-term borrowings. The net cash used for investing activities +primarily reflected purchases of investments and an increase in net lending +activities, partially offset by sales and paydowns of investments. + +Year Ended December 2020. + +Our cash and cash equivalents increased by $22.30 billion to $155.84 billion +at the end of 2020, primarily due to net cash provided by financing +activities, partially offset by net cash used for investing activities and +operating activities. The net cash provided by financing activities primarily +reflected an increase in net deposits, reflecting increases in consumer, +transaction banking and private bank deposits. The net cash used for investing +activities primarily reflected an increase in net purchases of investments, +reflecting an increase in U.S. government obligations accounted for as + +available-for-sale + +and an increase in net lending activities. The net cash used for operating +activities primarily reflected an increase in trading assets, net customer and +other receivables and payables, and collateralized transactions (an increase +in collateralized agreements, partially offset by an increase in +collateralized financings), partially offset by an increase in trading +liabilities as a result of our and our clients’ activities. + +For an analysis of cash flows for the year ended December 2019, see Part II, +Item 7 “Management’s Discussion and Analysis of Financial Condition and +Results of Operations” in our Annual Report on + +Form 10-K + +for the year ended December 31, 2020. + +Market Risk Management + +Overview + +Market risk is the risk of loss in the value of our inventory, investments, +loans and other financial assets and liabilities accounted for at fair value +due to changes in market conditions. We hold such positions primarily for +market making for our clients and for our investing and financing activities, +and therefore, these positions change based on client demands and our +investment opportunities. Since these positions are accounted for at fair +value, they fluctuate on a daily basis, with the related gains and losses +included in the consolidated statements of earnings. We employ a variety of +risk measures, each described in the respective sections below, to monitor +market risk. Categories of market risk include the following: + +Interest rate risk: results from exposures to changes in the level, slope and +curvature of yield curves, the volatilities of interest rates, prepayment +speeds and credit spreads; + +Equity price risk: results from exposures to changes in prices and +volatilities of individual equities, baskets of equities and equity indices; + +Currency rate risk: results from exposures to changes in spot prices, forward +prices and volatilities of currency rates; and + +Commodity price risk: results from exposures to changes in spot prices, +forward prices and volatilities of commodities, such as crude oil, petroleum +products, natural gas, electricity, and precious and base metals. + +Market Risk, which is independent of our revenue-producing units and reports +to our chief risk officer, has primary responsibility for assessing, +monitoring and managing our market risk through firmwide oversight across our +global businesses. + +Managers in revenue-producing units and Market Risk discuss market +information, positions and estimated loss scenarios on an ongoing basis. +Managers in revenue-producing units are accountable for managing risk within +prescribed limits. These managers have + +in-depth + +knowledge of their positions, markets and the instruments available to hedge +their exposures. + +Market Risk Management Process + +Our process for managing market risk includes the critical components of our +risk management framework described in the “Overview and Structure of Risk +Management,” as well as the following: + +Monitoring compliance with established market risk limits and reporting our +exposures; + +Diversifying exposures; + +Controlling position sizes; and + +Evaluating mitigants, such as economic hedges in related securities or +derivatives. + +Our market risk management systems enable us to perform an independent +calculation of + +Value-at-Risk + +(VaR) and stress measures, capture risk measures at individual position +levels, attribute risk measures to individual risk factors of each position, +report many different views of the risk measures (e.g., by desk, business, +product type or entity) and produce ad hoc analyses in a timely manner. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Risk Measures + +We produce risk measures and monitor them against established market risk +limits. These measures reflect an extensive range of scenarios and the results +are aggregated at product, business and firmwide levels. + +We use a variety of risk measures to estimate the size of potential losses for +both moderate and more extreme market moves over both short- and long-term +time horizons. Our primary risk measures are VaR, which is used for shorter- +term periods, and stress tests. Our risk reports detail key risks, drivers and +changes for each desk and business, and are distributed daily to senior +management of both our revenue-producing units and our independent risk +oversight and control functions. + +Value-at-Risk. + +VaR is the potential loss in value due to adverse market movements over a +defined time horizon with a specified confidence level. For assets and +liabilities included in VaR, see “Financial Statement Linkages to Market Risk +Measures.” We typically employ a + +one-day + +time horizon with a 95% confidence level. We use a single VaR model, which +captures risks, including interest rates, equity prices, currency rates and +commodity prices. As such, VaR facilitates comparison across portfolios of +different risk characteristics. VaR also captures the diversification of +aggregated risk at the firmwide level. + +We are aware of the inherent limitations to VaR and therefore use a variety of +risk measures in our market risk management process. Inherent limitations to +VaR include: + +VaR does not estimate potential losses over longer time horizons where moves +may be extreme; + +VaR does not take account of the relative liquidity of different risk +positions; and + +Previous moves in market risk factors may not produce accurate predictions of +all future market moves. + +To comprehensively capture our exposures and relevant risks in our VaR +calculation, we use historical simulations with full valuation of market +factors at the position level by simultaneously shocking the relevant market +factors for that position. These market factors include spot prices, credit +spreads, funding spreads, yield curves, volatility and correlation, and are +updated periodically based on changes in the composition of positions, as well +as variations in market conditions. We sample from five years of historical +data to generate the scenarios for our VaR calculation. The historical data is +weighted so that the relative importance of the data reduces over time. This +gives greater importance to more recent observations and reflects current +asset volatilities, which improves the accuracy of our estimates of potential +loss. As a result, even if our positions included in VaR were unchanged, our +VaR would increase with increasing market volatility and vice versa. + +Given its reliance on historical data, VaR is most effective in estimating +risk exposures in markets in which there are no sudden fundamental changes or +shifts in market conditions. + +Our VaR measure does not include: + +Positions that are best measured and monitored using sensitivity measures; and + +The impact of changes in counterparty and our own credit spreads on +derivatives, as well as changes in our own credit spreads on financial +liabilities for which the fair value option was elected. + +We perform daily backtesting of our VaR model (i.e., comparing daily net +revenues for positions included in VaR to the VaR measure calculated as of the +prior business day) at the firmwide level and for each of our businesses and +major regulated subsidiaries. + +Stress Testing. + +Stress testing is a method of determining the effect of various hypothetical +stress scenarios. We use stress testing to examine risks of specific +portfolios, as well as the potential impact of our significant risk exposures. +We use a variety of stress testing techniques to calculate the potential loss +from a wide range of market moves on our portfolios, including firmwide stress +tests, sensitivity analysis and scenario analysis. The results of our various +stress tests are analyzed together for risk management purposes. See “Overview +and Structure of Risk Management” for information about firmwide stress tests. + +Sensitivity analysis is used to quantify the impact of a market move in a +single risk factor across all positions (e.g., equity prices or credit +spreads) using a variety of defined market shocks, ranging from those that +could be expected over a + +one-day + +time horizon up to those that could take many months to occur. We also use +sensitivity analysis to quantify the impact of the default of any single +entity, which captures the risk of large or concentrated exposures. + +Scenario analysis is used to quantify the impact of a specified event, +including how the event impacts multiple risk factors simultaneously. For +example, for sovereign stress testing we calculate potential direct exposure +associated with our sovereign positions, as well as the corresponding debt, +equity and currency exposures associated with our + +non-sovereign + +positions that may be impacted by the sovereign distress. When conducting +scenario analysis, we often consider a number of possible outcomes for each +scenario, ranging from moderate to severely adverse market impacts. In +addition, these stress tests are constructed using both historical events and +forward-looking hypothetical scenarios. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Unlike VaR measures, which have an implied probability because they are +calculated at a specified confidence level, there may not be an implied +probability that our stress testing scenarios will occur. Instead, stress +testing is used to model both moderate and more extreme moves in underlying +market factors. When estimating potential loss, we generally assume that our +positions cannot be reduced or hedged (although experience demonstrates that +we are generally able to do so). + +Limits + +We use market risk limits at various levels to manage the size of our market +exposures. These limits are set based on VaR and on a range of stress tests +relevant to our exposures. See “Overview and Structure of Risk Management” for +information about the limit approval process. + +Market Risk is responsible for monitoring these limits, and identifying and +escalating to senior management and/or the appropriate risk committee, on a +timely basis, instances where limits have been exceeded (e.g., due to +positional changes or changes in market conditions, such as increased +volatilities or changes in correlations). Such instances are remediated by a +reduction in the positions we hold and/or a temporary or permanent increase to +the limit, if warranted. + +Metrics + +We analyze VaR at the firmwide level and a variety of more detailed levels, +including by risk category, business and region. Diversification effect in the +tables below represents the difference between total VaR and the sum of the +VaRs for the four risk categories. This effect arises because the four market +risk categories are not perfectly correlated. + +The table below presents our average daily VaR. + +Our average daily VaR decreased to $86 million in 2021 from $94 million in +2020, due to lower levels of volatility, partially offset by increased +exposures. The total decrease of $8 million was driven by decreases in the +equity prices, interest rates and currency rates categories, partially offset +by a decrease in the diversification effect and an increase in the commodity +prices category. + +The table below presents our + +period-end + +VaR. + +Our + +period-end + +VaR was $91 million as of December 2021, unchanged compared with December +2020, reflecting increased exposures, offset by lower levels of volatility. +This was driven by increases in the commodity prices, interest rates and +currency rates categories, offset by a decrease in the equity prices category +and an increase in the diversification effect. + +During 2021, the firmwide VaR risk limit was not exceeded, raised or reduced, +and there were no permanent or temporary changes to the firmwide VaR risk +limit. During 2020, the firmwide VaR risk limit was exceeded on 16 occasions +(all of which occurred during the first half of 2020), primarily due to higher +levels of volatility. There were no permanent changes to the firmwide VaR risk +limit during this period. However, there were temporary increases to the +firmwide VaR risk limit as a result of the market environment in 2020. + +The table below presents our high and low VaR. + +The chart below presents our daily VaR for 2021. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The table below presents, by number of business days, the frequency +distribution of our daily net revenues for positions included in VaR. + +Daily net revenues for positions included in VaR are compared with VaR +calculated as of the end of the prior business day. Net losses incurred on a +single day for such positions exceeded our 95% + +one-day + +VaR (i.e., a VaR exception) on one occasion during 2021 and on two occasions +during 2020. + +During periods in which we have significantly more positive net revenue days +than net revenue loss days, we expect to have fewer VaR exceptions because, +under normal conditions, our business model generally produces positive net +revenues. In periods in which our franchise revenues are adversely affected, +we generally have more loss days, resulting in more VaR exceptions. The daily +net revenues for positions included in VaR used to determine VaR exceptions +reflect the impact of any intraday activity, including bid/offer net revenues, +which are more likely than not to be positive by their nature. + +Sensitivity Measures + +Certain portfolios and individual positions are not included in VaR because +VaR is not the most appropriate risk measure. Other sensitivity measures we +use to analyze market risk are described below. + +10% Sensitivity Measures. + +The table below presents our market risk by asset category for positions +accounted for at fair value, that are not included in VaR. + +In the table above: + +The market risk of these positions is determined by estimating the potential +reduction in net revenues of a 10% decline in the value of these positions. + +Equity positions relate to private and restricted public equity securities, +including interests in funds that invest in corporate equities and real estate +and interests in hedge funds. + +Debt positions include interests in funds that invest in corporate mezzanine +and senior debt instruments, loans backed by commercial and residential real +estate, corporate bank loans and other corporate debt, including acquired +portfolios of distressed loans. + +Funded equity and debt positions are included in our consolidated balance +sheets in investments and loans. See Note 8 to the consolidated financial +statements for further information about investments and Note 9 to the +consolidated financial statements for further information about loans. + +These measures do not reflect the diversification effect across asset +categories or across other market risk measures. + +Credit and Funding Spread Sensitivity on Derivatives and Financial +Liabilities. + +VaR excludes the impact of changes in counterparty credit spreads, our own +credit spreads and unsecured funding spreads on derivatives, as well as +changes in our own credit spreads (debt valuation adjustment) on financial +liabilities for which the fair value option was elected. The estimated +sensitivity to a one basis point increase in credit spreads (counterparty and +our own) and unsecured funding spreads on derivatives (including hedges) was a +loss of $1 million as of December 2021 and $3 million as of December 2020. In +addition, the estimated sensitivity to a one basis point increase in our own +credit spreads on financial liabilities for which the fair value option was +elected was a gain of $33 million as of December 2021 and $22 million as of +December 2020. However, the actual net impact of a change in our own credit +spreads is also affected by the liquidity, duration and convexity (as the +sensitivity is not linear to changes in yields) of those financial liabilities +for which the fair value option was elected, as well as the relative +performance of any hedges undertaken. + +Interest Rate Sensitivity. + +Loans accounted for at amortized cost were $139.93 billion as of December 2021 +and $99.69 billion as of December 2020, substantially all of which had +floating interest rates. The estimated sensitivity to a 100 basis point +increase in interest rates on such loans was $1.07 billion as of December 2021 +and $737 million as of December 2020 of additional interest income over a +twelve-month period, which does not take into account the potential impact of +an increase in costs to fund such loans. See Note 9 to the consolidated +financial statements for further information about loans accounted for at +amortized cost. + +Other Market Risk Considerations + +We make investments in securities that are accounted for as + +available-for-sale, + +held-to-maturity + +or under the equity method which are included in investments in the +consolidated balance sheets. See Note 8 to the consolidated financial +statements for further information. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Direct investments in real estate are accounted for at cost less accumulated +depreciation. See Note 12 to the consolidated financial statements for further +information about other assets. + +Financial Statement Linkages to Market Risk Measures + +We employ a variety of risk measures, each described in the respective +sections above, to monitor market risk across the consolidated balance sheets +and consolidated statements of earnings. The related gains and losses on these +positions are included in market making, other principal transactions, +interest income and interest expense in the consolidated statements of +earnings, and debt valuation adjustment in the consolidated statements of +comprehensive income. + +The table below presents certain assets and liabilities in our consolidated +balance sheets and the market risk measures used to assess those assets and +liabilities. + +Assets or Liabilities + +Market Risk Measures + +Collateralized agreements, at fair value + +VaR + +Customer and other receivables, at fair value + +10% Sensitivity Measures + +Trading assets + +VaR + +Credit Spread Sensitivity + +Investments, at fair value + +VaR + +10% Sensitivity Measures + +Loans + +VaR + +10% Sensitivity Measures + +Interest Rate Sensitivity + +Deposits, at fair value + +VaR + +Credit Spread Sensitivity + +Collateralized financings, at fair value + +VaR + +Trading liabilities + +VaR + +Credit Spread Sensitivity + +Unsecured borrowings, at fair value + +VaR + +Credit Spread Sensitivity + +Credit Risk Management + +Overview + +Credit risk represents the potential for loss due to the default or +deterioration in credit quality of a counterparty (e.g., an OTC derivatives +counterparty or a borrower) or an issuer of securities or other instruments we +hold. Our exposure to credit risk comes mostly from client transactions in OTC +derivatives and loans and lending commitments. Credit risk also comes from +cash placed with banks, securities financing transactions (i.e., resale and +repurchase agreements and securities borrowing and lending activities) and +customer and other receivables. + +Credit Risk, which is independent of our revenue-producing units and reports +to our chief risk officer, has primary responsibility for assessing, +monitoring and managing our credit risk through firmwide oversight across our +global businesses. In addition, we hold other positions that give rise to +credit risk (e.g., bonds and secondary bank loans). These credit risks are +captured as a component of market risk measures, which are monitored and +managed by Market Risk. We also enter into derivatives to manage market risk +exposures. Such derivatives also give rise to credit risk, which is monitored +and managed by Credit Risk. + +Credit Risk Management Process + +Our process for managing credit risk includes the critical components of our +risk management framework described in the “Overview and Structure of Risk +Management,” as well as the following: + +Monitoring compliance with established credit risk limits and reporting our +credit exposures and credit concentrations; + +Establishing or approving underwriting standards; + +Assessing the likelihood that a counterparty will default on its payment +obligations; + +Measuring our current and potential credit exposure and losses resulting from +a counterparty default; + +Using credit risk mitigants, including collateral and hedging; and + +Maximizing recovery through active workout and restructuring of claims. + +We also perform credit reviews, which include initial and ongoing analyses of +our counterparties. For substantially all of our credit exposures, the core of +our process is an annual counterparty credit review. A credit review is an +independent analysis of the capacity and willingness of a counterparty to meet +its financial obligations, resulting in an internal credit rating. The +determination of internal credit ratings also incorporates assumptions with +respect to the nature of and outlook for the counterparty’s industry, and the +economic environment. Senior personnel, with expertise in specific industries, +inspect and approve credit reviews and internal credit ratings. + +Our risk assessment process may also include, where applicable, reviewing +certain key metrics, including, but not limited to, delinquency status, +collateral values, FICO credit scores and other risk factors. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Our credit risk management systems capture credit exposure to individual +counterparties and on an aggregate basis to counterparties and their +subsidiaries. These systems also provide management with comprehensive +information about our aggregate credit risk by product, internal credit +rating, industry, country and region. + +Risk Measures + +We measure our credit risk based on the potential loss in the event of + +non-payment + +by a counterparty using current and potential exposure. For derivatives and +securities financing transactions, current exposure represents the amount +presently owed to us after taking into account applicable netting and +collateral arrangements, while potential exposure represents our estimate of +the future exposure that could arise over the life of a transaction based on +market movements within a specified confidence level. Potential exposure also +takes into account netting and collateral arrangements. For loans and lending +commitments, the primary measure is a function of the notional amount of the +position. + +Stress Tests + +We conduct regular stress tests to calculate the credit exposures, including +potential concentrations that would result from applying shocks to +counterparty credit ratings or credit risk factors (e.g., currency rates, +interest rates, equity prices). These shocks cover a wide range of moderate +and more extreme market movements, including shocks to multiple risk factors, +consistent with the occurrence of a severe market or economic event. In the +case of sovereign default, we estimate the direct impact of the default on our +sovereign credit exposures, changes to our credit exposures arising from +potential market moves in response to the default, and the impact of credit +market deterioration on corporate borrowers and counterparties that may result +from the sovereign default. Unlike potential exposure, which is calculated +within a specified confidence level, stress testing does not generally assume +a probability of these events occurring. We also perform firmwide stress +tests. See “Overview and Structure of Risk Management” for information about +firmwide stress tests. + +To supplement these regular stress tests, as described above, we also conduct +tailored stress tests on an ad hoc basis in response to specific market events +that we deem significant. We also utilize these stress tests to estimate the +indirect impact of certain hypothetical events on our country exposures, such +as the impact of credit market deterioration on corporate borrowers and +counterparties along with the shocks to the risk factors described above. The +parameters of these shocks vary based on the scenario reflected in each stress +test. We review estimated losses produced by the stress tests in order to +understand their magnitude, highlight potential loss concentrations, and +assess and mitigate our exposures where necessary. + +Limits + +We use credit risk limits at various levels, as well as underwriting standards +to manage the size and nature of our credit exposures. Limits for industries +and countries are based on our risk appetite and are designed to allow for +regular monitoring, review, escalation and management of credit risk +concentrations. See “Overview and Structure of Risk Management” for +information about the limit approval process. + +Credit Risk is responsible for monitoring these limits, and identifying and +escalating to senior management and/or the appropriate risk committee, on a +timely basis, instances where limits have been exceeded. + +Risk Mitigants + +To reduce our credit exposures on derivatives and securities financing +transactions, we may enter into netting agreements with counterparties that +permit us to offset receivables and payables with such counterparties. We may +also reduce credit risk with counterparties by entering into agreements that +enable us to obtain collateral from them on an upfront or contingent basis +and/or to terminate transactions if the counterparty’s credit rating falls +below a specified level. We monitor the fair value of the collateral to ensure +that our credit exposures are appropriately collateralized. We seek to +minimize exposures where there is a significant positive correlation between +the creditworthiness of our counterparties and the market value of collateral +we receive. + +For loans and lending commitments, depending on the credit quality of the +borrower and other characteristics of the transaction, we employ a variety of +potential risk mitigants. Risk mitigants include collateral provisions, +guarantees, covenants, structural seniority of the bank loan claims and, for +certain lending commitments, provisions in the legal documentation that allow +us to adjust loan amounts, pricing, structure and other terms as market +conditions change. The type and structure of risk mitigants employed can +significantly influence the degree of credit risk involved in a loan or +lending commitment. + +When we do not have sufficient visibility into a counterparty’s financial +strength or when we believe a counterparty requires support from its parent, +we may obtain third-party guarantees of the counterparty’s obligations. We may +also mitigate our credit risk using credit derivatives or participation +agreements. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Credit Exposures + +As of December 2021, our aggregate credit exposure increased as compared with +December 2020, primarily reflecting increases in cash deposits with central +banks and loans and lending commitments. The percentage of our credit +exposures arising from + +non-investment-grade + +counterparties (based on our internally determined public rating agency +equivalents) decreased as compared with December 2020, primarily reflecting an +increase in investment-grade credit exposure related to cash deposits with +central banks. Our credit exposures are described further below. + +Cash and Cash Equivalents. + +Our credit exposure on cash and cash equivalents arises from our unrestricted +cash, and includes both interest-bearing and + +non-interest-bearing + +deposits. To mitigate the risk of credit loss, we place substantially all of +our deposits with highly rated banks and central banks. + +The table below presents our credit exposure from unrestricted cash and cash +equivalents, and the concentration by industry, region and internally +determined public rating agency equivalents. + +The table above excludes cash segregated for regulatory and other purposes of +$24.87 billion as of December 2021 and $24.52 billion as of December 2020. + +OTC Derivatives. + +Our credit exposure on OTC derivatives arises primarily from our market-making +activities. As a market maker, we enter into derivative transactions to +provide liquidity to clients and to facilitate the transfer and hedging of +their risks. We also enter into derivatives to manage market risk exposures. +We manage our credit exposure on OTC derivatives using the credit risk +process, measures, limits and risk mitigants described above. + +We generally enter into OTC derivatives transactions under bilateral +collateral arrangements that require the daily exchange of collateral. As +credit risk is an essential component of fair value, we include a credit +valuation adjustment (CVA) in the fair value of derivatives to reflect +counterparty credit risk, as described in Note 7 to the consolidated financial +statements. CVA is a function of the present value of expected exposure, the +probability of counterparty default and the assumed recovery upon default. + +The table below presents our net credit exposure from OTC derivatives and the +concentration by industry and region. + +Our credit exposure (before any potential recoveries) to OTC derivative +counterparties that defaulted during 2021 remained low, representing less than +2% of our total credit exposure from OTC derivatives. + +In the table above: + +OTC derivative assets, included in the consolidated balance sheets, are +reported on a + +net-by-counterparty + +basis (i.e., the net receivable for a given counterparty) when a legal right +of setoff exists under an enforceable netting agreement (counterparty netting) +and are accounted for at fair value, net of cash collateral received under +enforceable credit support agreements (cash collateral netting). + +Collateral represents cash collateral and the fair value of securities +collateral, primarily U.S. and + +non-U.S. + +government and agency obligations, received under credit support agreements, +that we consider when determining credit risk, but such collateral is not +eligible for netting under U.S. GAAP. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The table below presents the distribution of our net credit exposure from OTC +derivatives by tenor. + +In the table above: + +Tenor is based on remaining contractual maturity. + +Netting includes counterparty netting across tenor categories and collateral +that we consider when determining credit risk (including collateral that is +not eligible for netting under U.S. GAAP). Counterparty netting within the +same tenor category is included within such tenor category. + +The tables below present the distribution of our net credit exposure from OTC +derivatives by tenor and internally determined public rating agency +equivalents. + +Lending Activities. + +We manage our lending activities using the credit risk process, measures, +limits and risk mitigants described above. Other lending positions, including +secondary trading positions, are risk-managed as a component of market risk. + +The table below presents our loans and lending commitments. + +See Note 9 to the consolidated financial statements for information about net +charge-offs on wholesale and consumer loans, as well as past due and +nonaccrual loans accounted for at amortized cost. + +Corporate. + +Corporate loans and lending commitments include term loans, revolving lines of +credit, letter of credit facilities and bridge loans, and are principally used +for operating and general corporate purposes, or in connection with +acquisitions. Corporate loans may be secured or unsecured, depending on the +loan purpose, the risk profile of the borrower and other factors. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +The table below presents our credit exposure from corporate loans and lending +commitments, and the concentration by industry, region, internally determined +public rating agency equivalents and other credit metrics. + +In the table above, credit exposure excludes $4.14 billion as of December 2021 +and $3.20 billion as of December 2020 relating to issued letters of credit +which are classified as guarantees in our consolidated financial statements. +See Note 18 to the consolidated financial statements for further information +about guarantees. + +Wealth Management. + +Wealth management loans and lending commitments are extended to private bank +clients, including wealth management and other clients. These loans are used +to finance investments in both financial and nonfinancial assets, bridge cash +flow timing gaps or provide liquidity for other needs. Substantially all of +such loans are secured by securities, residential real estate, commercial real +estate or other assets. + +The table below presents our credit exposure from wealth management loans and +lending commitments, and the concentration by region, internally determined +public rating agency equivalents and other credit metrics. + +In the table above, other metrics/unrated loans primarily include loans backed +by residential real estate. Our risk assessment process for such loans include +reviewing certain key metrics, such as + +loan-to-value + +ratio and delinquency status. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Commercial Real Estate. + +Commercial real estate loans and lending commitments include originated loans +and lending commitments (other than those extended to private bank clients) +that are directly or indirectly secured by hotels, retail stores, multifamily +housing complexes and commercial and industrial properties. Commercial real +estate loans and lending commitments also includes loans and lending +commitments extended to clients who warehouse assets that are directly or +indirectly backed by commercial real estate. In addition, commercial real +estate includes loans purchased by us. + +The table below presents our credit exposure from commercial real estate loans +and lending commitments, and the concentration by region, internally +determined public rating agency equivalents and other credit metrics. + +In the table above, credit exposure includes loans and lending commitments of +$11.65 billion as of December 2021 and $7.88 billion as of December 2020 which +are extended to clients who warehouse assets that are directly or indirectly +backed by commercial real estate. + +In addition, we also have credit exposure to certain commercial real estate +loans held for securitization of $922 million as of December 2021 and $503 +million as of December 2020. Such loans are included in trading assets in our +consolidated balance sheets. + +Residential Real Estate. + +Residential real estate loans and lending commitments are extended to clients +(other than those extended to private bank clients) who warehouse assets that +are directly or indirectly secured by residential real estate and also +includes loans purchased by us. + +The table below presents our credit exposure from residential real estate +loans and lending commitments, and the concentration by region, internally +determined public rating agency equivalents and other credit metrics. + +In the table above: + +Credit exposure includes loans and lending commitments of $16.89 billion as of +December 2021 and $5.71 billion as of December 2020 which are extended to +clients who warehouse assets that are directly or indirectly secured by +residential real estate. + +Other metrics/unrated primarily includes loans purchased by us. Our risk +assessment process for such loans includes reviewing certain key metrics, such +as + +loan-to-value + +ratio, delinquency status, collateral values, expected cash flows and other +risk factors. + +In addition, we also have exposure to residential real estate loans held for +securitization of $11.57 billion as of December 2021 and $5.57 billion as of +December 2020. Such loans are included in trading assets in our consolidated +balance sheets. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Installment and Credit Card Lending. + +We originate unsecured installment loans and credit card loans (pursuant to +revolving lines of credit) to consumers in the Americas. The credit card lines +are cancellable by us and therefore do not result in credit exposure. + +The table below presents our credit exposure from originated installment and +credit card funded loans, and the concentration by the ten most concentrated +U.S. states. + +See Note 9 to the consolidated financial statements for further information +about the credit quality indicators of installment and credit card loans. + +Other. + +Other loans and lending commitments are extended to clients who warehouse +assets that are directly or indirectly secured by consumer loans, including +auto loans and private student loans, and other assets. Other loans also +includes unsecured consumer and credit card loans purchased by us. + +The table below presents our credit exposure from other loans and lending +commitments, and the concentration by region, internally determined public +rating agency equivalents and other credit metrics. + +In the table above: + +Other metrics/unrated primarily includes consumer and credit card loans +purchased by us. Our risk assessment process for such loans includes reviewing +certain key metrics, such as expected cash flows, delinquency status and other +risk factors. + +In addition, we also have exposure to other loans held for securitization of +$467 million as of December 2021 and $420 million as of December 2020. Such +loans are included in trading assets in our consolidated balance sheets. + +Credit Hedges. + +To mitigate the credit risk associated with our lending activities, we obtain +credit protection on certain loans and lending commitments through credit +default swaps, both single-name and index-based contracts, and through the +issuance of credit-linked notes. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Securities Financing Transactions. + +We enter into securities financing transactions in order to, among other +things, facilitate client activities, invest excess cash, acquire securities +to cover short positions and finance certain activities. We bear credit risk +related to resale agreements and securities borrowed only to the extent that +cash advanced or the value of securities pledged or delivered to the +counterparty exceeds the value of the collateral received. We also have credit +exposure on repurchase agreements and securities loaned to the extent that the +value of securities pledged or delivered to the counterparty for these +transactions exceeds the amount of cash or collateral received. Securities +collateral for these transactions primarily includes U.S. and + +non-U.S. + +government and agency obligations. + +The table below presents our credit exposure from securities financing +transactions and the concentration by industry, region and internally +determined public rating agency equivalents. + +The table above reflects both netting agreements and collateral that we +consider when determining credit risk. + +Other Credit Exposures. + +We are exposed to credit risk from our receivables from brokers, dealers and +clearing organizations and customers and counterparties. Receivables from +brokers, dealers and clearing organizations primarily consist of initial +margin placed with clearing organizations and receivables related to sales of +securities which have traded, but not yet settled. These receivables generally +have minimal credit risk due to the low probability of clearing organization +default and the short-term nature of receivables related to securities +settlements. Receivables from customers and counterparties generally consist +of collateralized receivables related to customer securities transactions and +generally have minimal credit risk due to both the value of the collateral +received and the short-term nature of these receivables. + +The table below presents our other credit exposures and the concentration by +industry, region and internally determined public rating agency equivalents. + +The table above reflects collateral that we consider when determining credit +risk. + +Selected Exposures + +We have credit and market exposures, as described below, that have had +heightened focus given recent events and broad market concerns. Credit +exposure represents the potential for loss due to the default or deterioration +in credit quality of a counterparty or borrower. Market exposure represents +the potential for loss in value of our long and short positions due to changes +in market prices. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Country Exposures. + +High external funding needs and inconsistent monetary policy have led to +significant depreciation of the Turkish Lira, prompting concerns about foreign +exchange reserves and economic instability. As of December 2021, our total +credit exposure to Turkey was $1.39 billion, which was to + +non-sovereign + +counterparties or borrowers. Such exposure consisted of $663 million related +to OTC derivatives, $160 million related to loans and lending commitments and +$567 million related to secured receivables. After taking into consideration +the benefit of hedges and Turkish corporate and sovereign collateral, and +other risk mitigants provided by Turkish counterparties, our net credit +exposure was $290 million. In addition, our total market exposure to Turkey as +of December 2021 was $105 million, primarily to + +non-sovereign + +issuers or underliers. Such exposure consisted of $179 million related to +debt, $(156) million related to credit derivatives and $82 million related to +equities. + +The potential for further sanctions on Russia has led to concerns about its +economic and financial stability. As of December 2021, our total credit +exposure to Russia was $650 million, substantially all of which was to + +non-sovereign + +counterparties or borrowers. Such exposure consisted of $134 million related +to OTC derivatives, $177 million related to loans and lending commitments and +$339 million related to secured receivables. After taking into consideration +the benefit of Russian corporate and sovereign collateral, and other risk +mitigants provided by Russian counterparties, our net credit exposure was $293 +million. In addition, our total market exposure to Russia as of December 2021 +was $414 million, primarily to + +non-sovereign + +issuers or underliers. Such exposure consisted of $258 million related to +debt, $(531) million related to credit derivatives and $687 million related to +equities. + +Liquidity pressures prompted the Argentine government to default and +restructure local and foreign obligations in 2020. Economic challenges persist +and the country still needs to secure new financial terms with the IMF. As of +December 2021, our total credit exposure to Argentina was $102 million, which +was to + +non-sovereign + +counterparties or borrowers, and was primarily related to loans and lending +commitments. In addition, our total market exposure to Argentina as of +December 2021 was $91 million, primarily to sovereign issuers or underliers. +Such exposure consisted of $70 million related to debt, $(14) million related +to credit derivatives and $35 million related to equities. + +Escalating geopolitical conflict has led to concerns about Ukraine’s political +and financial stability. As of December 2021, our total credit exposure to +Ukraine was not material. Our total market exposure to Ukraine as of December +2021 was $236 million, primarily to sovereign issuers or underliers. Such +exposure consisted of $164 million related to debt, $30 million related to +credit derivatives and $42 million related to equities. + +Lebanon’s sovereign debt default and sharp currency depreciation have led to +concerns about its financial and political stability. As of December 2021, our +total credit and market exposure to Lebanon was not material. + +Zambia’s sovereign debt default and liquidity pressures aggravated by the + +COVID-19 + +pandemic have led to concerns about the country’s financial stability. As of +December 2021, our total credit and market exposure to Zambia was not +material. + +Venezuela has delayed payments on its sovereign debt and is experiencing deep +economic and social crises. As of December 2021, our total credit and market +exposure to Venezuela was not material. + +Escalating political unrest in Ethiopia has led to concerns about the +country’s political, economic and financial stability. As of December 2021, +our total credit and market exposure to Ethiopia was not material. + +We have a comprehensive framework to monitor, measure and assess our country +exposures and to determine our risk appetite. We determine the country of risk +by the location of the counterparty, issuer or underlier’s assets, where they +generate revenue, the country in which they are headquartered, the +jurisdiction where a claim against them could be enforced, and/or the +government whose policies affect their ability to repay their obligations. We +monitor our credit exposure to a specific country both at the individual +counterparty level, as well as at the aggregate country level. See “Stress +Tests” for information about stress tests that are designed to estimate the +direct and indirect impact of events involving the above countries. + +Operational Risk Management + +Overview + +Operational risk is the risk of an adverse outcome resulting from inadequate +or failed internal processes, people, systems or from external events. Our +exposure to operational risk arises from routine processing errors, as well as +extraordinary incidents, such as major systems failures or legal and +regulatory matters. + +Potential types of loss events related to internal and external operational +risk include: + +Execution, delivery and process management; + +Business disruption and system failures; + +Employment practices and workplace safety; + +Clients, products and business practices; + +Damage to physical assets; + +Internal fraud; and + +External fraud. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Operational Risk, which is independent of our revenue-producing units and +reports to our chief risk officer, has primary responsibility for developing +and implementing a formalized framework for assessing, monitoring and managing +operational risk with the goal of maintaining our exposure to operational risk +at levels that are within our risk appetite. + +Operational Risk Management Process + +Our process for managing operational risk includes the critical components of +our risk management framework described in the “Overview and Structure of Risk +Management,” including a comprehensive data collection process, as well as +firmwide policies and procedures, for operational risk events. + +We combine + +top-down + +and + +bottom-up + +approaches to manage and measure operational risk. From a + +top-down + +perspective, our senior management assesses firmwide and business-level +operational risk profiles. From a + +bottom-up + +perspective, our first and second lines of defense are responsible for risk +identification and risk management on a + +day-to-day + +basis, including escalating operational risks and risk events to senior +management. + +We maintain a comprehensive control framework designed to provide a well- +controlled environment to minimize operational risks. The Firmwide Operational +Risk and Resilience Committee is responsible for overseeing operational risk, +and for ensuring our business and operational resilience. + +Our operational risk management framework is designed to comply with the +operational risk measurement rules under the Capital Framework and has evolved +based on the changing needs of our businesses and regulatory guidance. + +We have established policies that require all employees to report and escalate +operational risk events. When operational risk events are identified, our +policies require that the events be documented and analyzed to determine +whether changes are required in our systems and/or processes to further +mitigate the risk of future events. + +We use operational risk management applications to capture, analyze, aggregate +and report operational risk event data and key metrics. One of our key risk +identification and assessment tools is an operational risk and control self- +assessment process, which is performed by our managers. This process consists +of the identification and rating of operational risks, on a forward-looking +basis, and the related controls. The results from this process are analyzed to +evaluate operational risk exposures and identify businesses, activities or +products with heightened levels of operational risk. + +Risk Measurement + +We measure our operational risk exposure using both statistical modeling and +scenario analyses, which involve qualitative and quantitative assessments of +internal and external operational risk event data and internal control factors +for each of our businesses. Operational risk measurement also incorporates an +assessment of business environment factors, including: + +Evaluations of the complexity of our business activities; + +The degree of automation in our processes; + +New activity information; + +The legal and regulatory environment; and + +Changes in the markets for our products and services, including the diversity +and sophistication of our customers and counterparties. + +The results from these scenario analyses are used to monitor changes in +operational risk and to determine business lines that may have heightened +exposure to operational risk. These analyses are used in the determination of +the appropriate level of operational risk capital to hold. We also perform +firmwide stress tests. See “Overview and Structure of Risk Management” for +information about firmwide stress tests. + +Types of Operational Risks + +Increased reliance on technology and third-party relationships has resulted in +increased operational risks, such as information and cyber security risk, +third-party risk and business resilience risk. We manage those risks as +follows: + +Information and Cyber Security Risk. + +Information and cyber security risk is the risk of compromising the +confidentiality, integrity or availability of our data and systems, leading to +an adverse impact to us, our reputation, our clients and/or the broader +financial system. We seek to minimize the occurrence and impact of +unauthorized access, disruption or use of information and/or information +systems. We deploy and operate preventive and detective controls and processes +to mitigate emerging and evolving information security and cyber security +threats, including monitoring our network for known vulnerabilities and signs +of unauthorized attempts to access our data and systems. There is increased +information risk through diversification of our data across external service +providers, including use of a variety of cloud-provided or -hosted services +and applications. See “Risk Factors” in Part I, Item 1A of this + +Form 10-K + +for further information about information and cyber security risk. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Management’s Discussion and Analysis + +Third-Party Risk. + +Third-party risk, including vendor risk, is the risk of an adverse impact due +to reliance on third parties performing services or activities on our behalf. +These risks may include legal, regulatory, information security, reputational, +operational or any other risks inherent in engaging a third party. We +identify, manage and report key third-party risks and conduct due diligence +across multiple risk domains, including information security and cyber +security, resilience and additional third-party dependencies. The Third-Party +Risk Program monitors, reviews and reassesses third-party risks on an ongoing +basis. See “Risk Factors” in Part I, Item 1A of this + +Form 10-K + +for further information about third-party risk. + +Business Resilience Risk. + +Business resilience risk is the risk of disruption to our critical processes. +We monitor threats and assess risks and seek to ensure our state of readiness +in the event of a significant operational disruption to the normal operations +of our critical functions or their dependencies, such as critical facilities, +systems, third parties, data and/or personnel. We approach BCP through the +lens of business and operational resilience. The resilience framework defines +the fundamental principles for BCP and crisis management to ensure that +critical functions can continue to operate in the event of a disruption. The +business continuity program is comprehensive, consistent firmwide and + +up-to-date, + +incorporating new information, techniques and technologies as and when they +become available, and our resilience recovery plans incorporate and test +specific and measurable recovery time objectives in accordance with local +market best practices and regulatory requirements, and under specific +scenarios. See “Regulatory and Other Matters — Other Matters” for information +about the impact of the + +COVID-19 + +pandemic. See “Business — Business Continuity and Information Security” in +Part I, Item 1 of this + +Form 10-K + +for further information about business continuity. + +Model Risk Management + +Overview + +Model risk is the potential for adverse consequences from decisions made based +on model outputs that may be incorrect or used inappropriately. We rely on +quantitative models across our business activities primarily to value certain +financial assets and liabilities, to monitor and manage our risk, and to +measure and monitor our regulatory capital. + +Model Risk, which is independent of our revenue-producing units, model +developers, model owners and model users, and reports to our chief risk +officer, has primary responsibility for assessing, monitoring and managing our +model risk through firmwide oversight across our global businesses, and +provides periodic updates to senior management, risk committees and the Risk +Committee of the Board. + +Our model risk management framework is managed through a governance structure +and risk management controls, which encompass standards designed to ensure we +maintain a comprehensive model inventory, including risk assessment and +classification, sound model development practices, independent review and +model-specific usage controls. The Firmwide Model Risk Control Committee +oversees our model risk management framework. + +Model Review and Validation Process + +Model Risk consists of quantitative professionals who perform an independent +review, validation and approval of our models. This review includes an +analysis of the model documentation, independent testing, an assessment of the +appropriateness of the methodology used, and verification of compliance with +model development and implementation standards. + +We regularly refine and enhance our models to reflect changes in market or +economic conditions and our business mix. All models are reviewed on an annual +basis, and new models or significant changes to existing models and their +assumptions are approved prior to implementation. + +The model validation process incorporates a review of models and trade and +risk parameters across a broad range of scenarios (including extreme +conditions) in order to critically evaluate and verify: + +The model’s conceptual soundness, including the reasonableness of model +assumptions, and suitability for intended use; + +The testing strategy utilized by the model developers to ensure that the +models function as intended; + +The suitability of the calculation techniques incorporated in the model; + +The model’s accuracy in reflecting the characteristics of the related product +and its significant risks; + +The model’s consistency with models for similar products; and + +The model’s sensitivity to input parameters and assumptions. + +See “Critical Accounting Policies — Fair Value — Review of Valuation Models,” +“Liquidity Risk Management,” “Market Risk Management,” “Credit Risk +Management” and “Operational Risk Management” for further information about +our use of models within these areas. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Item 7A. Quantitative and Qualitative Disclosures About Market Risk + +Quantitative and qualitative disclosures about market risk are set forth in +“Management’s Discussion and Analysis of Financial Condition and Results of +Operations — Risk Management” in Part II, Item 7 of this + +Form 10-K. + +Item 8. Financial Statements and Supplementary Data + +Management’s Report on Internal Control over Financial Reporting + +Management of The Goldman Sachs Group, Inc., together with its consolidated +subsidiaries (the firm), is responsible for establishing and maintaining +adequate internal control over financial reporting. The firm’s internal +control over financial reporting is a process designed under the supervision +of the firm’s principal executive and principal financial officers to provide +reasonable assurance regarding the reliability of financial reporting and the +preparation of the firm’s financial statements for external reporting purposes +in accordance with U.S. generally accepted accounting principles. + +As of December 31, 2021, management conducted an assessment of the firm’s +internal control over financial reporting based on the framework established +in + +Internal Control — Integrated Framework (2013) + +issued by the Committee of Sponsoring Organizations of the Treadway Commission +(COSO). Based on this assessment, management has determined that the firm’s +internal control over financial reporting as of December 31, 2021 was +effective. + +Our internal control over financial reporting includes policies and procedures +that pertain to the maintenance of records that, in reasonable detail, +accurately and fairly reflect transactions and dispositions of assets; provide +reasonable assurance that transactions are recorded as necessary to permit +preparation of financial statements in accordance with U.S. generally accepted +accounting principles, and that receipts and expenditures are being made only +in accordance with authorizations of management and the directors of the firm; +and provide reasonable assurance regarding prevention or timely detection of +unauthorized acquisition, use or disposition of the firm’s assets that could +have a material effect on our financial statements. + +The firm’s internal control over financial reporting as of December 31, 2021 +has been audited by PricewaterhouseCoopers LLP (PCAOB ID 238), an independent +registered public accounting firm, as stated in their report appearing on +pages 118 to 120, which expresses an unqualified opinion on the effectiveness +of the firm’s internal control over financial reporting as of December 31, + +Report of Independent Registered Public Accounting Firm + +To the Board of Directors and Shareholders of The Goldman Sachs Group, Inc.: + +Opinions on the Financial Statements and Internal Control over Financial +Reporting + +We have audited the accompanying consolidated balance sheets of The Goldman +Sachs Group, Inc. and its subsidiaries (the Company) as of December 31, 2021 +and 2020, and the related consolidated statements of earnings, of +comprehensive income, of changes in shareholders’ equity and of cash flows for +each of the three years in the period ended December 31, 2021, including the +related notes (collectively referred to as the “consolidated financial +statements”). We also have audited the Company’s internal control over +financial reporting as of December 31, 2021, based on criteria established in + +Internal Control — Integrated Framework (2013) + +issued by the Committee of Sponsoring Organizations of the Treadway Commission +(COSO). + +In our opinion, the consolidated financial statements referred to above +present fairly, in all material respects, the financial position of the +Company as of December 31, 2021 and 2020, and the results of its operations +and its cash flows for each of the three years in the period ended December +31, 2021 in conformity with accounting principles generally accepted in the +United States of America. Also in our opinion, the Company maintained, in all +material respects, effective internal control over financial reporting as of +December 31, 2021, based on criteria established in + +Internal Control — Integrated Framework (2013) + +issued by the COSO. + +Change in Accounting Principle + +As discussed in Note 3 to the consolidated financial statements, the Company +changed the manner in which it accounts for credit losses on certain financial +instruments in 2020. + +Basis for Opinions + +The Company’s management is responsible for these consolidated financial +statements, for maintaining effective internal control over financial +reporting, and for its assessment of the effectiveness of internal control +over financial reporting, included in Management’s Report on Internal Control +over Financial Reporting appearing on page 117. Our responsibility is to +express opinions on the Company’s consolidated financial statements and on the +Company’s internal control over financial reporting based on our audits. We +are a public accounting firm registered with the Public Company Accounting +Oversight Board (United States) (PCAOB) and are required to be independent +with respect to the Company in accordance with the U.S. federal securities +laws and the applicable rules and regulations of the Securities and Exchange +Commission and the PCAOB. + +We conducted our audits in accordance with the standards of the PCAOB. Those +standards require that we plan and perform the audits to obtain reasonable +assurance about whether the consolidated financial statements are free of +material misstatement, whether due to error or fraud, and whether effective +internal control over financial reporting was maintained in all material +respects. + +Our audits of the consolidated financial statements included performing +procedures to assess the risks of material misstatement of the consolidated +financial statements, whether due to error or fraud, and performing procedures +that respond to those risks. Such procedures included examining, on a test +basis, evidence regarding the amounts and disclosures in the consolidated +financial statements. Our audits also included evaluating the accounting +principles used and significant estimates made by management, as well as +evaluating the overall presentation of the consolidated financial statements. +Our audit of internal control over financial reporting included obtaining an +understanding of internal control over financial reporting, assessing the risk +that a material weakness exists, and testing and evaluating the design and +operating effectiveness of internal control based on the assessed risk. Our +audits also included performing such other procedures as we considered +necessary in the circumstances. We believe that our audits provide a +reasonable basis for our opinions. + +Report of Independent Registered Public Accounting Firm + +Definition and Limitations of Internal Control over Financial Reporting + +A company’s internal control over financial reporting is a process designed to +provide reasonable assurance regarding the reliability of financial reporting +and the preparation of financial statements for external purposes in +accordance with generally accepted accounting principles. A company’s internal +control over financial reporting includes those policies and procedures that +(i) pertain to the maintenance of records that, in reasonable detail, +accurately and fairly reflect the transactions and dispositions of the assets +of the company; (ii) provide reasonable assurance that transactions are +recorded as necessary to permit preparation of financial statements in +accordance with generally accepted accounting principles, and that receipts +and expenditures of the company are being made only in accordance with +authorizations of management and directors of the company; and (iii) provide +reasonable assurance regarding prevention or timely detection of unauthorized +acquisition, use, or disposition of the company’s assets that could have a +material effect on the financial statements. + +Because of its inherent limitations, internal control over financial reporting +may not prevent or detect misstatements. Also, projections of any evaluation +of effectiveness to future periods are subject to the risk that controls may +become inadequate because of changes in conditions, or that the degree of +compliance with the policies or procedures may deteriorate. + +Critical Audit Matters + +The critical audit matters communicated below are matters arising from the +current period audit of the consolidated financial statements that were +communicated or required to be communicated to the audit committee and that +(i) relate to accounts or disclosures that are material to the consolidated +financial statements and (ii) involved our especially challenging, subjective, +or complex judgments. The communication of critical audit matters does not +alter in any way our opinion on the consolidated financial statements, taken +as a whole, and we are not, by communicating the critical audit matters below, +providing separate opinions on the critical audit matters or on the accounts +or disclosures to which they relate. + +Valuation of Certain Level 3 Financial Instruments + +As described in Notes 4 through 10 to the consolidated financial statements, +as of December 31, 2021, the Company carries financial instruments at fair +value, which includes $24.1 billion of financial assets and $29.2 billion of +financial liabilities classified in Level 3 of the fair value hierarchy, as +one or more inputs to the financial instrument’s valuation technique are +significant and unobservable. Significant unobservable inputs used by +management to value certain of these Level 3 financial instruments included +(i) industry multiples and public comparables, (ii) credit spreads or (iii) +correlation. + +The principal considerations for our determination that performing procedures +relating to the valuation of these certain Level 3 financial instruments is a +critical audit matter are (i) the significant judgment by management in +valuing the financial instruments, which in turn led to a high degree of +auditor judgment, subjectivity, and effort in performing procedures and +evaluating audit evidence related to the aforementioned significant +unobservable inputs used in the valuation of certain Level 3 financial +instruments, and (ii) the audit effort involved the use of professionals with +specialized skill and knowledge. + +Addressing the matter involved performing procedures and evaluating audit +evidence in connection with forming our overall opinion on the consolidated +financial statements. These procedures included testing the effectiveness of +controls relating to the valuation of financial instruments, including +controls over the methods and significant unobservable inputs used in the +valuation of certain Level 3 financial instruments. These procedures also +included, among others, for a sample of financial instruments, the involvement +of professionals with specialized skill and knowledge to assist in (i) +developing an independent estimate of fair value or (ii) testing management’s +process to determine the fair value of these financial instruments. Developing +the independent estimate involved (i) testing the completeness and accuracy of +data provided by management, (ii) evaluating and utilizing management’s +significant unobservable inputs or developing independent significant +unobservable inputs, and (iii) comparing management’s estimate to the +independently developed estimate of fair value. Testing management’s process +included evaluating the reasonableness of the aforementioned significant +unobservable inputs, evaluating the appropriateness of the techniques used, +and testing the completeness and accuracy of data used by management to +determine the fair value of these instruments. + +Report of Independent Registered Public Accounting Firm + +Allowance for Loan Losses — Wholesale Loan Portfolio + +As described in Note 9 to the consolidated financial statements, the Company’s +allowance for loan losses for the wholesale loan portfolio reflects +management’s estimate of loan losses over the remaining expected life of the +loans and also considers forecasts of future economic conditions. As of +December 31, 2021, $2.1 billion of the allowance for loan losses and $131.6 +billion of the loans accounted for at amortized cost related to the wholesale +loan portfolio. The allowance for loan losses for the wholesale loan portfolio +is measured on a collective basis for loans that exhibit similar risk +characteristics using a modeled approach and asset-specific basis for loans +that do not share similar risk characteristics. In addition, it includes +qualitative components to reflect the uncertain nature of economic +forecasting, capture uncertainty regarding model inputs, and account for model +imprecision and concentration risk. The wholesale models determine the +probability of default and loss given default based on various risk factors, +including internal credit ratings, industry default and loss data, expected +life, macroeconomic indicators, the borrower’s capacity to meet its financial +obligations, the borrower’s country of risk and industry, loan seniority and +collateral type. The most significant inputs to the forecast model for +wholesale loans include forecasted U.S. unemployment rates, GDP, credit +spreads, commercial and industrial delinquency rates, short- and long-term +interest rates, and oil prices. + +The principal considerations for our determination that performing procedures +relating to the allowance for loan losses for the wholesale loan portfolio is +a critical audit matter are (i) the significant judgment and estimation by +management in the determinations of internal credit ratings and the forecasted +U.S. unemployment rates, which in turn led to a high degree of auditor +judgment, subjectivity, and effort in performing procedures and evaluating +audit evidence related to management’s determinations, and (ii) the audit +effort involved the use of professionals with specialized skill and knowledge. + +Addressing the matter involved performing procedures and evaluating audit +evidence in connection with forming our overall opinion on the consolidated +financial statements. These procedures included testing the effectiveness of +controls relating to the Company’s allowance for loan losses for the wholesale +loan portfolio, including controls over the model, certain data, and +significant assumptions. These procedures also included, among others, testing +management’s process for estimating the allowance for loan losses for the +wholesale loan portfolio using a modeled approach, which involved evaluating +the appropriateness of the methodology and testing the completeness and +accuracy of certain data used in estimating the allowance for loan losses. The +procedures also involved the use of professionals with specialized skill and +knowledge to assist in evaluating (i) the appropriateness of the model and +methodology and (ii) the reasonableness of the internal credit ratings and the +forecasted U.S. unemployment rates used in estimating the allowance for loan +losses for the wholesale loan portfolio. + +/s/ PricewaterhouseCoopers LLP + +New York, New York + +February 24, 2022 + +We have served as the Company’s auditor since 1922. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Consolidated Statements of Earnings + +Consolidated Statements of Comprehensive Income + +The accompanying notes are an integral part of these consolidated financial +statements. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Consolidated Balance Sheets + +The accompanying notes are an integral part of these consolidated financial +statements. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Consolidated Statements of Changes in Shareholders’ Equity + +The accompanying notes are an integral part of these consolidated financial +statements. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Consolidated Statements of Cash Flows + +See Notes 12 and 16 for information about + +non-cash + +activities. + +The accompanying notes are an integral part of these consolidated financial +statements. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 1. + +Description of Business + +The Goldman Sachs Group, Inc. (Group Inc. or parent company), a Delaware +corporation, together with its consolidated subsidiaries (collectively, the +firm), is a leading global financial institution that delivers a broad range +of financial services across investment banking, securities, investment +management and consumer banking to a large and diversified client base that +includes corporations, financial institutions, governments and individuals. +Founded in 1869, the firm is headquartered in New York and maintains offices +in all major financial centers around the world. + +The firm reports its activities in four business segments: + +Investment Banking + +The firm provides a broad range of investment banking services to a diverse +group of corporations, financial institutions, investment funds and +governments. Services include strategic advisory assignments with respect to +mergers and acquisitions, divestitures, corporate defense activities, +restructurings and spin-offs, and equity and debt underwriting of public +offerings and private placements. The firm also provides lending to corporate +clients, including relationship lending, middle-market lending and acquisition +financing. The firm also provides transaction banking services to certain +corporate clients. + +Global Markets + +The firm facilitates client transactions and makes markets in fixed income, +equity, currency and commodity products with institutional clients, such as +corporations, financial institutions, investment funds and governments. The +firm also makes markets in and clears institutional client transactions on +major stock, options and futures exchanges worldwide and provides prime +brokerage and other equities financing activities, including securities +lending, margin lending and swaps. The firm also provides financing to clients +through securities purchased under agreements to resell (resale agreements), +and through structured credit, warehouse and asset-backed lending. + +Asset Management + +The firm manages assets and offers investment products (primarily through +separately managed accounts and commingled vehicles, such as mutual funds and +private investment funds) across all major asset classes to a diverse set of +institutional clients and a network of third-party distributors around the +world. The firm makes equity investments, which include alternative investing +activities related to public and private equity investments in corporate, real +estate and infrastructure assets, as well as investments through consolidated +investment entities, substantially all of which are engaged in real estate +investment activities. The firm also invests in corporate debt and provides +financing for real estate and other assets. + +Consumer & Wealth Management + +The firm provides investing and wealth advisory solutions, including financial +planning and counseling, executing brokerage transactions and managing assets +for individuals in its wealth management business. The firm also provides +loans, accepts deposits and provides investing services through its consumer +banking digital platform, + +Marcus by Goldman Sachs + +, and through its private bank, as well as issues credit cards to consumers. + +Note 2. + +Basis of Presentation + +These consolidated financial statements are prepared in accordance with +accounting principles generally accepted in the United States (U.S. GAAP) and +include the accounts of Group Inc. and all other entities in which the firm +has a controlling financial interest. Intercompany transactions and balances +have been eliminated. + +All references to 2021, 2020 and 2019 refer to the firm’s years ended, or the +dates, as the context requires, December 31, 2021, December 31, 2020 and +December 31, 2019, respectively. Any reference to a future year refers to a +year ending on December 31 of that year. Certain reclassifications have been +made to previously reported amounts to conform to the current presentation. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 3. + +Significant Accounting Policies + +The firm’s significant accounting policies include when and how to measure the +fair value of assets and liabilities, measuring the allowance for credit +losses on loans and lending commitments accounted for at amortized cost, and +when to consolidate an entity. See Note 4 for policies on fair value +measurements, Note 9 for policies on the allowance for credit losses, and +below and Note 17 for policies on consolidation accounting. All other +significant accounting policies are either described below or included in the +following footnotes: + +Fair Value Measurements + + Note 4 + +Trading Assets and Liabilities + + Note 5 + +Trading Cash Instruments + + Note 6 + +Derivatives and Hedging Activities + + Note 7 + +Investments + + Note 8 + +Loans + + Note 9 + +Fair Value Option + + Note 10 + +Collateralized Agreements and Financings + + Note 11 + +Other Assets + + Note 12 + +Deposits + + Note 13 + +Unsecured Borrowings + + Note 14 + +Other Liabilities + + Note 15 + +Securitization Activities + + Note 16 + +Variable Interest Entities + + Note 17 + +Commitments, Contingencies and Guarantees + + Note 18 + +Shareholders’ Equity + + Note 19 + +Regulation and Capital Adequacy + + Note 20 + +Earnings Per Common Share + + Note 21 + +Transactions with Affiliated Funds + + Note 22 + +Interest Income and Interest Expense + + Note 23 + +Income Taxes + + Note 24 + +Business Segments + + Note 25 + +Credit Concentrations + + Note 26 + +Legal Proceedings + + Note 27 + +Employee Benefit Plans + + Note 28 + +Employee Incentive Plans + + Note 29 + +Parent Company + + Note 30 + +Consolidation + +The firm consolidates entities in which the firm has a controlling financial +interest. The firm determines whether it has a controlling financial interest +in an entity by first evaluating whether the entity is a voting interest +entity or a variable interest entity (VIE). + +Voting Interest Entities. + +Voting interest entities are entities in which (i) the total equity investment +at risk is sufficient to enable the entity to finance its activities +independently and (ii) the equity holders have the power to direct the +activities of the entity that most significantly impact its economic +performance, the obligation to absorb the losses of the entity and the right +to receive the residual returns of the entity. The usual condition for a +controlling financial interest in a voting interest entity is ownership of a +majority voting interest. If the firm has a controlling majority voting +interest in a voting interest entity, the entity is consolidated. + +Variable Interest Entities. + +A VIE is an entity that lacks one or more of the characteristics of a voting +interest entity. The firm has a controlling financial interest in a VIE when +the firm has a variable interest or interests that provide it with (i) the +power to direct the activities of the VIE that most significantly impact the +VIE’s economic performance and (ii) the obligation to absorb losses of the VIE +or the right to receive benefits from the VIE that could potentially be +significant to the VIE. See Note 17 for further information about VIEs. + +Equity-Method Investments. + +When the firm does not have a controlling financial interest in an entity but +can exert significant influence over the entity’s operating and financial +policies, the investment is generally accounted for at fair value by electing +the fair value option available under U.S. GAAP. Significant influence +generally exists when the firm owns 20% to 50% of the entity’s common stock or + +in-substance + +common stock. + +In certain cases, the firm applies the equity method of accounting to new +investments that are strategic in nature or closely related to the firm’s +principal business activities, when the firm has a significant degree of +involvement in the cash flows or operations of the investee or when cost- +benefit considerations are less significant. See Note 8 for further +information about equity-method investments. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Investment Funds. + +The firm has formed investment funds with third-party investors. These funds +are typically organized as limited partnerships or limited liability companies +for which the firm acts as general partner or manager. Generally, the firm +does not hold a majority of the economic interests in these funds. These funds +are usually voting interest entities and generally are not consolidated +because third-party investors typically have rights to terminate the funds or +to remove the firm as general partner or manager. Investments in these funds +are generally measured at net asset value (NAV) and are included in +investments. See Notes 8, 18 and 22 for further information about investments +in funds. + +Use of Estimates + +Preparation of these consolidated financial statements requires management to +make certain estimates and assumptions, the most important of which relate to +fair value measurements, the allowance for credit losses on loans and lending +commitments accounted for at amortized cost, accounting for goodwill and +identifiable intangible assets, provisions for losses that may arise from +litigation and regulatory proceedings (including governmental investigations), +and accounting for income taxes. These estimates and assumptions are based on +the best available information but actual results could be materially +different. + +Revenue Recognition + +Financial Assets and Liabilities at Fair Value. + +Trading assets and liabilities and certain investments are carried at fair +value either under the fair value option or in accordance with other U.S. +GAAP. In addition, the firm has elected to account for certain of its loans +and other financial assets and liabilities at fair value by electing the fair +value option. The fair value of a financial instrument is the amount that +would be received to sell an asset or paid to transfer a liability in an +orderly transaction between market participants at the measurement date. +Financial assets are marked to bid prices and financial liabilities are marked +to offer prices. Fair value measurements do not include transaction costs. +Fair value gains or losses are generally included in market making or other +principal transactions. See Note 4 for further information about fair value +measurements. + +Revenue from Contracts with Clients. + +The firm recognizes revenue earned from contracts with clients for services, +such as investment banking, investment management, and execution and clearing +(contracts with clients), when the performance obligations related to the +underlying transaction are completed. + +Revenues from contracts with clients represent approximately 45% of total + +non-interest + +revenues for both 2021 and 2020 (including approximately 90% of investment +banking revenues, approximately 95% of investment management revenues and all +commissions and fees), and approximately 45% of total non-interest revenues +for 2019 (including approximately 85% of investment banking revenues, +approximately 95% of investment management revenues and all commissions and +fees). See Note 25 for information about net revenues by business segment. + +Investment Banking + +Advisory. + +Fees from financial advisory assignments are recognized in revenues when the +services related to the underlying transaction are completed under the terms +of the assignment. + +Non-refundable + +deposits and milestone payments in connection with financial advisory +assignments are recognized in revenues upon completion of the underlying +transaction or when the assignment is otherwise concluded. + +Expenses associated with financial advisory assignments are recognized when +incurred and are included in transaction based expenses. Client reimbursements +for such expenses are included in investment banking revenues. + +Underwriting. + +Fees from underwriting assignments are recognized in revenues upon completion +of the underlying transaction based on the terms of the assignment. + +Expenses associated with underwriting assignments are generally deferred until +the related revenue is recognized or the assignment is otherwise concluded. +Such expenses are included in transaction based expenses for completed +assignments. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Investment Management + +The firm earns management fees and incentive fees for investment management +services, which are included in investment management revenues. The firm makes +payments to brokers and advisors related to the placement of the firm’s +investment funds (distribution fees), which are included in transaction based +expenses. + +Management Fees. + +Management fees for mutual funds are calculated as a percentage of daily net +asset value and are received monthly. Management fees for hedge funds and +separately managed accounts are calculated as a percentage of + +month-end + +net asset value and are generally received quarterly. Management fees for +private equity funds are calculated as a percentage of monthly invested +capital or committed capital and are received quarterly, semi-annually or +annually, depending on the fund. Management fees are recognized over time in +the period the services are provided. + +Distribution fees paid by the firm are calculated based on either a percentage +of the management fee, the investment fund’s net asset value or the committed +capital. Such fees are included in transaction based expenses. + +Incentive Fees. + +Incentive fees are calculated as a percentage of a fund’s or separately +managed account’s return, or excess return above a specified benchmark or +other performance target. Incentive fees are generally based on investment +performance over a twelve-month period or over the life of a fund. Fees that +are based on performance over a twelve-month period are subject to adjustment +prior to the end of the measurement period. For fees that are based on +investment performance over the life of the fund, future investment +underperformance may require fees previously distributed to the firm to be +returned to the fund. + +Incentive fees earned from a fund or separately managed account are recognized +when it is probable that a significant reversal of such fees will not occur, +which is generally when such fees are no longer subject to fluctuations in the +market value of investments held by the fund or separately managed account. +Therefore, incentive fees recognized during the period may relate to +performance obligations satisfied in previous periods. + +Commissions and Fees + +The firm earns commissions and fees from executing and clearing client +transactions on stock, options and futures markets, as well as + +over-the-counter + +(OTC) transactions. Commissions and fees are recognized on the day the trade +is executed. The firm also provides third-party research services to clients +in connection with certain soft-dollar arrangements. Third-party research +costs incurred by the firm in connection with such arrangements are presented +net within commissions and fees. + +Remaining Performance Obligations + +Remaining performance obligations are services that the firm has committed to +perform in the future in connection with its contracts with clients. The +firm’s remaining performance obligations are generally related to its +financial advisory assignments and certain investment management activities. +Revenues associated with remaining performance obligations relating to +financial advisory assignments cannot be determined until the outcome of the +transaction. For the firm’s investment management activities, where fees are +calculated based on the net asset value of the fund or separately managed +account, future revenues associated with such remaining performance +obligations cannot be determined as such fees are subject to fluctuations in +the market value of investments held by the fund or separately managed +account. + +The firm is able to determine the future revenues associated with management +fees calculated based on committed capital. As of December 2021, substantially +all future net revenues associated with such remaining performance obligations +will be recognized through 2029. Annual revenues associated with such +performance obligations average less than $250 million through 2029. + +Transfers of Financial Assets + +Transfers of financial assets are accounted for as sales when the firm has +relinquished control over the assets transferred. For transfers of financial +assets accounted for as sales, any gains or losses are recognized in net +revenues. Assets or liabilities that arise from the firm’s continuing +involvement with transferred financial assets are initially recognized at fair +value. For transfers of financial assets that are not accounted for as sales, +the assets are generally included in trading assets and the transfer is +accounted for as a collateralized financing, with the related interest expense +recognized over the life of the transaction. See Note 11 for further +information about transfers of financial assets accounted for as +collateralized financings and Note 16 for further information about transfers +of financial assets accounted for as sales. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Cash and Cash Equivalents + +The firm defines cash equivalents as highly liquid overnight deposits held in +the ordinary course of business. Cash and cash equivalents included cash and +due from banks of $10.14 billion as of December 2021 and $11.95 billion as of +December 2020. Cash and cash equivalents also included interest-bearing +deposits with banks of $250.90 billion as of December 2021 and $143.89 billion +as of December 2020. + +The firm segregates cash for regulatory and other purposes related to client +activity. Cash and cash equivalents segregated for regulatory and other +purposes were $24.87 billion as of December 2021 and $24.52 billion as of +December 2020. In addition, the firm segregates securities for regulatory and +other purposes related to client activity. See Note 11 for further information +about segregated securities. + +Customer and Other Receivables + +Customer and other receivables included receivables from customers and +counterparties of $103.82 billion as of December 2021 and $82.39 billion as of +December 2020, and receivables from brokers, dealers and clearing +organizations of $56.85 billion as of December 2021 and $38.94 billion as of +December 2020. Such receivables primarily consist of customer margin loans, +receivables resulting from unsettled transactions and collateral posted in +connection with certain derivative transactions. + +Substantially all of these receivables are accounted for at amortized cost net +of any allowance for credit losses, which generally approximates fair value. +As these receivables are not accounted for at fair value, they are not +included in the firm’s fair value hierarchy in Notes 4 through 10. Had these +receivables been included in the firm’s fair value hierarchy, substantially +all would have been classified in level 2 as of both December 2021 and +December 2020. See Note 10 for further information about customer and other +receivables accounted for at fair value under the fair value option. Interest +on customer and other receivables is recognized over the life of the +transaction and included in interest income. + +Customer and other receivables includes receivables from contracts with +clients and contract assets. Contract assets represent the firm’s right to +receive consideration for services provided in connection with its contracts +with clients for which collection is conditional and not merely subject to the +passage of time. The firm’s receivables from contracts with clients were $3.01 +billion as of December 2021 and $2.60 billion as of December 2020. As of both +December 2021 and December 2020 contract assets were not material. + +Customer and Other Payables + +Customer and other payables included payables to customers and counterparties +of $241.93 billion as of December 2021 and $183.57 billion as of December +2020, and payables to brokers, dealers and clearing organizations of $10.00 +billion as of December 2021 and $7.09 billion as of December 2020. Such +payables primarily consist of customer credit balances related to the firm’s +prime brokerage activities. Customer and other payables are accounted for at +cost plus accrued interest, which generally approximates fair value. As these +payables are not accounted for at fair value, they are not included in the +firm’s fair value hierarchy in Notes 4 through 10. Had these payables been +included in the firm’s fair value hierarchy, substantially all would have been +classified in level 2 as of both December 2021 and December 2020. Interest on +customer and other payables is recognized over the life of the transaction and +included in interest expense. + +Offsetting Assets and Liabilities + +To reduce credit exposures on derivatives and securities financing +transactions, the firm may enter into master netting agreements or similar +arrangements (collectively, netting agreements) with counterparties that +permit it to offset receivables and payables with such counterparties. A +netting agreement is a contract with a counterparty that permits net +settlement of multiple transactions with that counterparty, including upon the +exercise of termination rights by a + +non-defaulting + +party. Upon exercise of such termination rights, all transactions governed by +the netting agreement are terminated and a net settlement amount is +calculated. In addition, the firm receives and posts cash and securities +collateral with respect to its derivatives and securities financing +transactions, subject to the terms of the related credit support agreements or +similar arrangements (collectively, credit support agreements). An enforceable +credit support agreement grants the + +non-defaulting + +party exercising termination rights the right to liquidate the collateral and +apply the proceeds to any amounts owed. In order to assess enforceability of +the firm’s right of setoff under netting and credit support agreements, the +firm evaluates various factors, including applicable bankruptcy laws, local +statutes and regulatory provisions in the jurisdiction of the parties to the +agreement. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Derivatives are reported on a + +net-by-counterparty + +basis (i.e., the net payable or receivable for derivative assets and +liabilities for a given counterparty) in the consolidated balance sheets when +a legal right of setoff exists under an enforceable netting agreement. Resale +agreements and securities sold under agreements to repurchase (repurchase +agreements) and securities borrowed and loaned transactions with the same term +and currency are presented on a + +net-by-counterparty + +basis in the consolidated balance sheets when such transactions meet certain +settlement criteria and are subject to netting agreements. + +In the consolidated balance sheets, derivatives are reported net of cash +collateral received and posted under enforceable credit support agreements, +when transacted under an enforceable netting agreement. In the consolidated +balance sheets, resale and repurchase agreements, and securities borrowed and +loaned, are not reported net of the related cash and securities received or +posted as collateral. See Note 11 for further information about collateral +received and pledged, including rights to deliver or repledge collateral. See +Notes 7 and 11 for further information about offsetting assets and +liabilities. + +Foreign Currency Translation + +Assets and liabilities denominated in + +non-U.S. + +currencies are translated at rates of exchange prevailing on the date of the +consolidated balance sheets and revenues and expenses are translated at +average rates of exchange for the period. Foreign currency remeasurement gains +or losses on transactions in nonfunctional currencies are recognized in +earnings. Gains or losses on translation of the financial statements of a + +non-U.S. + +operation, when the functional currency is other than the U.S. dollar, are +included, net of hedges and taxes, in the consolidated statements of +comprehensive income. + +Recent Accounting Developments + +Measurement of Credit Losses on Financial Instruments (ASC 326). + +In June 2016, the FASB issued ASU + +No. 2016-13, + +“Financial Instruments — Credit Losses (Topic 326) — Measurement of Credit +Losses on Financial Instruments.” This ASU amends several aspects of the +measurement of credit losses on certain financial instruments, including +replacing the existing incurred credit loss model and other models with the +Current Expected Credit Losses (CECL) model and amending certain aspects of +accounting for purchased financial assets with deterioration in credit quality +since origination. + +The firm adopted this ASU in January 2020 under a modified retrospective +approach. As a result of adopting this ASU, the firm’s allowance for credit +losses on financial assets and commitments that are measured at amortized cost +reflects management’s estimate of credit losses over the remaining expected +life of such assets. Expected credit losses for newly recognized financial +assets and commitments, as well as changes to expected credit losses during +the period, are recognized in earnings. These expected credit losses are +measured based on historical experience, current conditions and forecasts that +affect the collectability of the reported amount. + +The cumulative effect of measuring the allowance under CECL as a result of +adopting this ASU as of January 1, 2020 was an increase in the allowance for +credit losses of $848 million. The increase in the allowance is driven by the +fact that the allowance under CECL covers expected credit losses over the full +expected life of the loan portfolios and also takes into account forecasts of +expected future economic conditions. In addition, in accordance with the ASU, +the firm elected the fair value option for loans that were previously +accounted for as Purchased Credit Impaired (PCI), which resulted in a decrease +to the allowance for PCI loans of $169 million. The cumulative effect of +adopting this ASU was a decrease to retained earnings of $638 million (net of +tax). + +Facilitation of the Effects of Reference Rate Reform on Financial Reporting +(ASC 848). + +In March 2020, the FASB issued ASU + +No. 2020-04, + +“Reference Rate Reform — Facilitation of the Effects of Reference Rate Reform +on Financial Reporting.” This ASU provides optional relief from applying +generally accepted accounting principles to contracts, hedging relationships +and other transactions affected by reference rate reform. In addition, in +January 2021 the FASB issued ASU + +No. 2021-01, + +“Reference Rate Reform — Scope,” which clarified the scope of ASC 848 relating +to contract modifications. The firm adopted these ASUs upon issuance and +elected to apply the relief available to certain modified derivatives. The +adoption of these ASUs did not have a material impact on the firm’s +consolidated financial statements. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 4. + +Fair Value Measurements + +The fair value of a financial instrument is the amount that would be received +to sell an asset or paid to transfer a liability in an orderly transaction +between market participants at the measurement date. Financial assets are +marked to bid prices and financial liabilities are marked to offer prices. +Fair value measurements do not include transaction costs. The firm measures +certain financial assets and liabilities as a portfolio (i.e., based on its +net exposure to market and/or credit risks). + +The best evidence of fair value is a quoted price in an active market. If +quoted prices in active markets are not available, fair value is determined by +reference to prices for similar instruments, quoted prices or recent +transactions in less active markets, or internally developed models that +primarily use market-based or independently sourced inputs, including, but not +limited to, interest rates, volatilities, equity or debt prices, foreign +exchange rates, commodity prices, credit spreads and funding spreads (i.e., +the spread or difference between the interest rate at which a borrower could +finance a given financial instrument relative to a benchmark interest rate). + +U.S. GAAP has a three-level hierarchy for disclosure of fair value +measurements. This hierarchy prioritizes inputs to the valuation techniques +used to measure fair value, giving the highest priority to level 1 inputs and +the lowest priority to level 3 inputs. A financial instrument’s level in this +hierarchy is based on the lowest level of input that is significant to its +fair value measurement. In evaluating the significance of a valuation input, +the firm considers, among other factors, a portfolio’s net risk exposure to +that input. The fair value hierarchy is as follows: + +Level 1. + +Inputs are unadjusted quoted prices in active markets to which the firm had +access at the measurement date for identical, unrestricted assets or +liabilities. + +Level 2. + +Inputs to valuation techniques are observable, either directly or indirectly. + +Level 3. + +One or more inputs to valuation techniques are significant and unobservable. + +The fair values for substantially all of the firm’s financial assets and +liabilities are based on observable prices and inputs and are classified in +levels 1 and 2 of the fair value hierarchy. Certain level 2 and level 3 +financial assets and liabilities may require valuation adjustments that a +market participant would require to arrive at fair value for factors, such as +counterparty and the firm’s credit quality, funding risk, transfer +restrictions, liquidity and bid/offer spreads. Valuation adjustments are +generally based on market evidence. + +The valuation techniques and nature of significant inputs used to determine +the fair value of the firm’s financial instruments are described below. See +Notes 5 through 10 for further information about significant unobservable +inputs used to value level 3 financial instruments. + +Valuation Techniques and Significant Inputs for Trading Cash Instruments, +Investments and Loans + +Level 1. + +Level 1 instruments include U.S. government obligations, most + +non-U.S. + +government obligations, certain agency obligations, certain corporate debt +instruments, certain money market instruments and actively traded listed +equities. These instruments are valued using quoted prices for identical +unrestricted instruments in active markets. The firm defines active markets +for equity instruments based on the average daily trading volume both in +absolute terms and relative to the market capitalization for the instrument. +The firm defines active markets for debt instruments based on both the average +daily trading volume and the number of days with trading activity. + +Level 2. + +Level 2 instruments include certain + +non-U.S. + +government obligations, most agency obligations, most mortgage-backed loans +and securities, most corporate debt instruments, most state and municipal +obligations, most money market instruments, most other debt obligations, +restricted or less liquid listed equities, certain private equities, +commodities and certain lending commitments. + +Valuations of level 2 instruments can be verified to quoted prices, recent +trading activity for identical or similar instruments, broker or dealer +quotations or alternative pricing sources with reasonable levels of price +transparency. Consideration is given to the nature of the quotations (e.g., +indicative or executable) and the relationship of recent market activity to +the prices provided from alternative pricing sources. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Valuation adjustments are typically made to level 2 instruments (i) if the +instrument is subject to transfer restrictions and/or (ii) for other premiums +and liquidity discounts that a market participant would require to arrive at +fair value. Valuation adjustments are generally based on market evidence. + +Level 3. + +Level 3 instruments have one or more significant valuation inputs that are not +observable. Absent evidence to the contrary, level 3 instruments are initially +valued at transaction price, which is considered to be the best initial +estimate of fair value. Subsequently, the firm uses other methodologies to +determine fair value, which vary based on the type of instrument. Valuation +inputs and assumptions are changed when corroborated by substantive observable +evidence, including values realized on sales. + +Valuation techniques of level 3 instruments vary by instrument, but are +generally based on discounted cash flow techniques. The valuation techniques +and the nature of significant inputs used to determine the fair values of each +type of level 3 instrument are described below: + +Loans and Securities Backed by Commercial Real Estate + +Loans and securities backed by commercial real estate are directly or +indirectly collateralized by a single property or a portfolio of properties +and may include tranches of varying levels of subordination. Significant +inputs are generally determined based on relative value analyses and include: + +Market yields implied by transactions of similar or related assets and/or +current levels and changes in market indices, such as the CMBX (an index that +tracks the performance of commercial mortgage bonds); + +Transaction prices in both the underlying collateral and instruments with the +same or similar underlying collateral; + +A measure of expected future cash flows in a default scenario (recovery rates) +implied by the value of the underlying collateral, which is mainly driven by +current performance of the underlying collateral and capitalization rates. +Recovery rates are expressed as a percentage of notional or face value of the +instrument and reflect the benefit of credit enhancements on certain +instruments; and + +Timing of expected future cash flows (duration) which, in certain cases, may +incorporate the impact of any loan forbearances and other unobservable inputs +(e.g., prepayment speeds). + +Loans and Securities Backed by Residential Real Estate + +Loans and securities backed by residential real estate are directly or +indirectly collateralized by portfolios of residential real estate and may +include tranches of varying levels of subordination. Significant inputs are +generally determined based on relative value analyses, which incorporate +comparisons to instruments with similar collateral and risk profiles. +Significant inputs include: + +Market yields implied by transactions of similar or related assets; + +Transaction prices in both the underlying collateral and instruments with the +same or similar underlying collateral; + +Cumulative loss expectations, driven by default rates, home price projections, +residential property liquidation timelines, related costs and subsequent +recoveries; and + +Duration, driven by underlying loan prepayment speeds and residential property +liquidation timelines. + +Corporate Debt Instruments + +Corporate debt instruments includes corporate loans, debt securities and +convertible debentures. Significant inputs for corporate debt instruments are +generally determined based on relative value analyses, which incorporate +comparisons both to prices of credit default swaps that reference the same or +similar underlying instrument or entity and to other debt instruments for the +same or similar issuer for which observable prices or broker quotations are +available. Significant inputs include: + +Market yields implied by transactions of similar or related assets and/or +current levels and trends of market indices, such as the CDX (an index that +tracks the performance of corporate credit); + +Current performance and recovery assumptions and, where the firm uses credit +default swaps to value the related instrument, the cost of borrowing the +underlying reference obligation; + +Duration; and + +Market and transaction multiples for corporate debt instruments with +convertibility or participation options. + +Equity Securities + +Equity securities consists of private equities. Recent third-party completed +or pending transactions (e.g., merger proposals, debt restructurings, tender +offers) are considered the best evidence for any change in fair value. When +these are not available, the following valuation methodologies are used, as +appropriate: + +Industry multiples (primarily EBITDA and revenue multiples) and public +comparables; + +Transactions in similar instruments; + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Discounted cash flow techniques; and + +Third-party appraisals. + +The firm also considers changes in the outlook for the relevant industry and +financial performance of the issuer as compared to projected performance. +Significant inputs include: + +Market and transaction multiples; + +Discount rates and capitalization rates; and + +For equity securities with debt-like features, market yields implied by +transactions of similar or related assets, current performance and recovery +assumptions, and duration. + +Other Trading Cash Instruments, Investments and Loans + +The significant inputs to the valuation of other instruments, such as + +non-U.S. + +government obligations and U.S. and + +non-U.S. + +agency obligations, state and municipal obligations, and other loans and debt +obligations are generally determined based on relative value analyses, which +incorporate comparisons both to prices of credit default swaps that reference +the same or similar underlying instrument or entity and to other debt +instruments for the same issuer for which observable prices or broker +quotations are available. Significant inputs include: + +Market yields implied by transactions of similar or related assets and/or +current levels and trends of market indices; + +Current performance and recovery assumptions and, where the firm uses credit +default swaps to value the related instrument, the cost of borrowing the +underlying reference obligation; and + +Duration. + +Valuation Techniques and Significant Inputs for Derivatives + +The firm’s level 2 and level 3 derivatives are valued using derivative pricing +models (e.g., discounted cash flow models, correlation models and models that +incorporate option pricing methodologies, such as Monte Carlo simulations). +Price transparency of derivatives can generally be characterized by product +type, as described below. + +Interest Rate. + +In general, the key inputs used to value interest rate derivatives are +transparent, even for most long-dated contracts. Interest rate swaps and +options denominated in the currencies of leading industrialized nations are +characterized by high trading volumes and tight bid/offer spreads. Interest +rate derivatives that reference indices, such as an inflation index, or the +shape of the yield curve (e.g., + +10-year + +swap rate vs. + +2-year + +swap rate) are more complex, but the key inputs are generally observable. + +Credit. + +Price transparency for credit default swaps, including both single names and +baskets of credits, varies by market and underlying reference entity or +obligation. Credit default swaps that reference indices, large corporates and +major sovereigns generally exhibit the most price transparency. For credit +default swaps with other underliers, price transparency varies based on credit +rating, the cost of borrowing the underlying reference obligations, and the +availability of the underlying reference obligations for delivery upon the +default of the issuer. Credit default swaps that reference loans, asset-backed +securities and emerging market debt instruments tend to have less price +transparency than those that reference corporate bonds. In addition, more +complex credit derivatives, such as those sensitive to the correlation between +two or more underlying reference obligations, generally have less price +transparency. + +Currency. + +Prices for currency derivatives based on the exchange rates of leading +industrialized nations, including those with longer tenors, are generally +transparent. The primary difference between the price transparency of +developed and emerging market currency derivatives is that emerging markets +tend to be only observable for contracts with shorter tenors. + +Commodity. + +Commodity derivatives include transactions referenced to energy (e.g., oil, +natural gas and electricity), metals (e.g., precious and base) and soft +commodities (e.g., agricultural). Price transparency varies based on the +underlying commodity, delivery location, tenor and product quality (e.g., +diesel fuel compared to unleaded gasoline). In general, price transparency for +commodity derivatives is greater for contracts with shorter tenors and +contracts that are more closely aligned with major and/or benchmark commodity +indices. + +Equity. + +Price transparency for equity derivatives varies by market and underlier. +Options on indices and the common stock of corporates included in major equity +indices exhibit the most price transparency. Equity derivatives generally have +observable market prices, except for contracts with long tenors or reference +prices that differ significantly from current market prices. More complex +equity derivatives, such as those sensitive to the correlation between two or +more individual stocks, generally have less price transparency. + +Liquidity is essential to observability of all product types. If transaction +volumes decline, previously transparent prices and other inputs may become +unobservable. Conversely, even highly structured products may at times have +trading volumes large enough to provide observability of prices and other +inputs. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Level 1. + +Level 1 derivatives include short-term contracts for future delivery of +securities when the underlying security is a level 1 instrument, and exchange- +traded derivatives if they are actively traded and are valued at their quoted +market price. + +Level 2. + +Level 2 derivatives include OTC derivatives for which all significant +valuation inputs are corroborated by market evidence and exchange-traded +derivatives that are not actively traded and/or that are valued using models +that calibrate to market-clearing levels of OTC derivatives. + +The selection of a particular model to value a derivative depends on the +contractual terms of and specific risks inherent in the instrument, as well as +the availability of pricing information in the market. For derivatives that +trade in liquid markets, model selection does not involve significant +management judgment because outputs of models can be calibrated to market- +clearing levels. + +Valuation models require a variety of inputs, such as contractual terms, +market prices, yield curves, discount rates (including those derived from +interest rates on collateral received and posted as specified in credit +support agreements for collateralized derivatives), credit curves, measures of +volatility, prepayment rates, loss severity rates and correlations of such +inputs. Significant inputs to the valuations of level 2 derivatives can be +verified to market transactions, broker or dealer quotations or other +alternative pricing sources with reasonable levels of price transparency. +Consideration is given to the nature of the quotations (e.g., indicative or +executable) and the relationship of recent market activity to the prices +provided from alternative pricing sources. + +Level 3. + +Level 3 derivatives are valued using models which utilize observable level 1 +and/or level 2 inputs, as well as unobservable level 3 inputs. The significant +unobservable inputs used to value the firm’s level 3 derivatives are described +below. + +For level 3 interest rate and currency derivatives, significant unobservable +inputs include correlations of certain currencies and interest rates (e.g., +the correlation between Euro inflation and Euro interest rates) and specific +interest rate and currency volatilities. + +For level 3 credit derivatives, significant unobservable inputs include +illiquid credit spreads and upfront credit points, which are unique to +specific reference obligations and reference entities, and recovery rates. + +For level 3 commodity derivatives, significant unobservable inputs include +volatilities for options with strike prices that differ significantly from +current market prices and prices or spreads for certain products for which the +product quality or physical location of the commodity is not aligned with +benchmark indices. + +For level 3 equity derivatives, significant unobservable inputs generally +include equity volatility inputs for options that are long-dated and/or have +strike prices that differ significantly from current market prices. In +addition, the valuation of certain structured trades requires the use of level +3 correlation inputs, such as the correlation of the price performance of two +or more individual stocks or the correlation of the price performance for a +basket of stocks to another asset class, such as commodities. + +Subsequent to the initial valuation of a level 3 derivative, the firm updates +the level 1 and level 2 inputs to reflect observable market changes and any +resulting gains and losses are classified in level 3. Level 3 inputs are +changed when corroborated by evidence, such as similar market transactions, +third-party pricing services and/or broker or dealer quotations or other +empirical market data. In circumstances where the firm cannot verify the model +value by reference to market transactions, it is possible that a different +valuation model could produce a materially different estimate of fair value. +See Note 7 for further information about significant unobservable inputs used +in the valuation of level 3 derivatives. + +Valuation Adjustments. + +Valuation adjustments are integral to determining the fair value of derivative +portfolios and are used to adjust the + +mid-market + +valuations produced by derivative pricing models to the exit price valuation. +These adjustments incorporate bid/offer spreads, the cost of liquidity, and +credit and funding valuation adjustments, which account for the credit and +funding risk inherent in the uncollateralized portion of derivative +portfolios. The firm also makes funding valuation adjustments to +collateralized derivatives where the terms of the agreement do not permit the +firm to deliver or repledge collateral received. Market-based inputs are +generally used when calibrating valuation adjustments to market-clearing +levels. + +In addition, for derivatives that include significant unobservable inputs, the +firm makes model or exit price adjustments to account for the valuation +uncertainty present in the transaction. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Valuation Techniques and Significant Inputs for Other Financial Instruments at +Fair Value + +In addition to trading cash instruments, derivatives, and certain investments +and loans, the firm accounts for certain of its other financial assets and +liabilities at fair value under the fair value option. Such instruments +include resale and repurchase agreements; certain securities borrowed and +loaned transactions; certain customer and other receivables, including certain +margin loans; certain time deposits, including structured certificates of +deposit, which are hybrid financial instruments; substantially all other +secured financings, including transfers of assets accounted for as financings; +certain unsecured short- and long-term borrowings, substantially all of which +are hybrid financial instruments; and certain other liabilities. These +instruments are generally valued based on discounted cash flow techniques, +which incorporate inputs with reasonable levels of price transparency, and are +generally classified in level 2 because the inputs are observable. Valuation +adjustments may be made for liquidity and for counterparty and the firm’s +credit quality. The significant inputs used to value the firm’s other +financial instruments are described below. + +Resale and Repurchase Agreements and Securities Borrowed and Loaned. + +The significant inputs to the valuation of resale and repurchase agreements +and securities borrowed and loaned are funding spreads, the amount and timing +of expected future cash flows and interest rates. + +Customer and Other Receivables. + +The significant inputs to the valuation of receivables are interest rates, the +amount and timing of expected future cash flows and funding spreads. + +Deposits. + +The significant inputs to the valuation of time deposits are interest rates +and the amount and timing of future cash flows. The inputs used to value the +embedded derivative component of hybrid financial instruments are consistent +with the inputs used to value the firm’s other derivative instruments +described above. See Note 7 for further information about derivatives and Note +13 for further information about deposits. + +Other Secured Financings. + +The significant inputs to the valuation of other secured financings are the +amount and timing of expected future cash flows, interest rates, funding +spreads and the fair value of the collateral delivered by the firm (determined +using the amount and timing of expected future cash flows, market prices, +market yields and recovery assumptions). See Note 11 for further information +about other secured financings. + +Unsecured Short- and Long-Term Borrowings. + +The significant inputs to the valuation of unsecured short- and long-term +borrowings are the amount and timing of expected future cash flows, interest +rates, the credit spreads of the firm and commodity prices for prepaid +commodity transactions. The inputs used to value the embedded derivative +component of hybrid financial instruments are consistent with the inputs used +to value the firm’s other derivative instruments described above. See Note 7 +for further information about derivatives and Note 14 for further information +about borrowings. + +Other Liabilities. + +The significant inputs to the valuation of other liabilities are the amount +and timing of expected future cash flows and equity volatility and correlation +inputs. The inputs used to value the embedded derivative component of hybrid +financial instruments are consistent with the inputs used to value the firm’s +other derivative instruments described above. See Note 7 for further +information about derivatives. + +Financial Assets and Liabilities at Fair Value + +The table below presents financial assets and liabilities carried at fair +value. + +In the table above: + +Counterparty netting among positions classified in the same level is included +in that level. + +Counterparty and cash collateral netting represents the impact on derivatives +of netting across levels. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents a summary of level 3 financial assets. + +Level 3 financial assets as of December 2021 decreased compared with December +2020, primarily reflecting a decrease in level 3 investments. See Notes 5 +through 10 for further information about level 3 financial assets (including +information about unrealized gains and losses related to level 3 financial +assets and transfers in and out of level 3). + +Note 5. + +Trading Assets and Liabilities + +Trading assets and liabilities include trading cash instruments and +derivatives held in connection with the firm’s market-making or risk +management activities. These assets and liabilities are carried at fair value +either under the fair value option or in accordance with other U.S. GAAP, and +the related fair value gains and losses are generally recognized in the +consolidated statements of earnings. + +The table below presents a summary of trading assets and liabilities. + +See Note 6 for further information about trading cash instruments and Note 7 +for further information about derivatives. + +Gains and Losses from Market Making + +The table below presents market making revenues by major product type. + +In the table above: + +Gains/(losses) include both realized and unrealized gains and losses. +Gains/(losses) exclude related interest income and interest expense. See Note +23 for further information about interest income and interest expense. + +Gains/(losses) included in market making are primarily related to the firm’s +trading assets and liabilities, including both derivative and + +non-derivative + +financial instruments. + +Gains/(losses) are not representative of the manner in which the firm manages +its business activities because many of the firm’s market-making and client +facilitation strategies utilize financial instruments across various product +types. Accordingly, gains or losses in one product type frequently offset +gains or losses in other product types. For example, most of the firm’s +longer-term derivatives across product types are sensitive to changes in +interest rates and may be economically hedged with interest rate swaps. +Similarly, a significant portion of the firm’s trading cash instruments and +derivatives across product types has exposure to foreign currencies and may be +economically hedged with foreign currency contracts. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 6. + +Trading Cash Instruments + +Trading cash instruments consists of instruments held in connection with the +firm’s market-making or risk management activities. These instruments are +carried at fair value and the related fair value gains and losses are +recognized in the consolidated statements of earnings. + +Fair Value of Trading Cash Instruments by Level + +The table below presents trading cash instruments by level within the fair +value hierarchy. + +In the table above: + +Trading cash instrument assets are shown as positive amounts and trading cash +instrument liabilities are shown as negative amounts. + +Corporate debt instruments includes corporate loans, debt securities, +convertible debentures, prepaid commodity transactions and transfers of assets +accounted for as secured loans rather than purchases. + +Other debt obligations includes other asset-backed securities and money market +instruments. + +Equity securities includes public equities and exchange-traded funds. + +See Note 4 for an overview of the firm’s fair value measurement policies and +the valuation techniques and significant inputs used to determine the fair +value of trading cash instruments. See Note 7 for information about hedging +activities for precious metals included in commodities and accounted for at +the lower of cost or net realizable value. These precious metals are +designated in a fair value hedging relationship, and therefore their carrying +value equals fair value. + +Significant Unobservable Inputs + +The table below presents the amount of level 3 assets, and ranges and weighted +averages of significant unobservable inputs used to value level 3 trading cash +instruments. + +As of both December 2021 and December 2020, level 3 government and agency +obligations, state and municipal obligations, other debt obligations and +commodities were not material, and, therefore, are not included in the table +above. In addition, as of both December 2021 and December 2020, each of the +significant unobservable inputs for equity securities did not have a range as +they pertained to individual positions. Therefore, such unobservable inputs +are not included in the table above. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +In the table above: + +Ranges represent the significant unobservable inputs that were used in the +valuation of each type of trading cash instrument. + +Weighted averages are calculated by weighting each input by the relative fair +value of the trading cash instruments. + +The ranges and weighted averages of these inputs are not representative of the +appropriate inputs to use when calculating the fair value of any one trading +cash instrument. For example, the highest recovery rate for corporate debt +instruments is appropriate for valuing a specific corporate debt instrument, +but may not be appropriate for valuing any other corporate debt instrument. +Accordingly, the ranges of inputs do not represent uncertainty in, or possible +ranges of, fair value measurements of level 3 trading cash instruments. + +Increases in yield, duration or cumulative loss rate used in the valuation of +level 3 trading cash instruments would have resulted in a lower fair value +measurement, while increases in recovery rate would have resulted in a higher +fair value measurement as of both December 2021 and December 2020. Due to the +distinctive nature of each level 3 trading cash instrument, the +interrelationship of inputs is not necessarily uniform within each product +type. + +Trading cash instruments are valued using discounted cash flows. + +Level 3 Rollforward + +The table below presents a summary of the changes in fair value for level 3 +trading cash instruments. + +In the table above: + +Changes in fair value are presented for all trading cash instruments that are +classified in level 3 as of the end of the period. + +Net unrealized gains/(losses) relates to trading cash instruments that were +still held at + +period-end. + +Transfers between levels of the fair value hierarchy are reported at the +beginning of the reporting period in which they occur. If a trading cash +instrument was transferred to level 3 during a reporting period, its entire +gain or loss for the period is classified in level 3. + +For level 3 trading cash instrument assets, increases are shown as positive +amounts, while decreases are shown as negative amounts. For level 3 trading +cash instrument liabilities, increases are shown as negative amounts, while +decreases are shown as positive amounts. + +Level 3 trading cash instruments are frequently economically hedged with level +1 and level 2 trading cash instruments and/or level 1, level 2 or level 3 +derivatives. Accordingly, gains or losses that are classified in level 3 can +be partially offset by gains or losses attributable to level 1 or level 2 +trading cash instruments and/or level 1, level 2 or level 3 derivatives. As a +result, gains or losses included in the level 3 rollforward below do not +necessarily represent the overall impact on the firm’s results of operations, +liquidity or capital resources. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents information, by product type, for assets included in +the summary table above. + +In the table above, other includes U.S. and + +non-U.S. + +government and agency obligations, other debt obligations and equity +securities. + +Level 3 Rollforward Commentary + +Year Ended December 2021. + +The net realized and unrealized gains on level 3 trading cash instrument +assets of $132 million (reflecting $80 million of net realized gains and $52 +million of net unrealized gains) for 2021 included gains of $45 million +reported in market making and $87 million reported in interest income. + +The drivers of the net unrealized gains on level 3 trading cash instrument +assets for 2021 were not material. + +Transfers into level 3 trading cash instrument assets during 2021 primarily +reflected transfers of certain corporate debt instruments from level 2 +(principally due to certain unobservable yield and duration inputs becoming +significant to the valuation of these instruments, and reduced price +transparency as a result of a lack of market evidence, including fewer market +transactions in these instruments). + +Transfers out of level 3 trading cash instrument assets during 2021 primarily +reflected transfers of certain corporate debt instruments, and loans and +securities backed by commercial real estate to level 2 (in each case, +principally due to increased price transparency as a result of market +evidence, including market transactions in these instruments, and certain +unobservable yield and duration inputs no longer being significant to the +valuation of these instruments). + +Year Ended December 2020. + +The net realized and unrealized losses on level 3 trading cash instrument +assets of $77 million (reflecting $66 million of net realized gains and $143 +million of net unrealized losses) for 2020 included gains/(losses) of $(193) +million reported in market making and $116 million reported in interest +income. + +The net unrealized losses on level 3 trading cash instrument assets for 2020 +primarily reflected losses on certain corporate debt instruments (principally +driven by wider credit spreads). + +Transfers into level 3 trading cash instrument assets during 2020 primarily +reflected transfers of certain corporate debt instruments from level 2 +(principally due to reduced price transparency as a result of a lack of market +evidence, including fewer market transactions in these instruments). + +Transfers out of level 3 trading cash instrument assets during 2020 primarily +reflected transfers of certain corporate debt instruments, and loans and +securities backed by residential real estate to level 2 (in each case, +principally due to increased price transparency as a result of market +evidence, including market transactions in these instruments). + +Note 7. + +Derivatives and Hedging Activities + +Derivative Activities + +Derivatives are instruments that derive their value from underlying asset +prices, indices, reference rates and other inputs, or a combination of these +factors. Derivatives may be traded on an exchange (exchange-traded) or they +may be privately negotiated contracts, which are usually referred to as OTC +derivatives. Certain of the firm’s OTC derivatives are cleared and settled +through central clearing counterparties + +(OTC-cleared), + +while others are bilateral contracts between two counterparties (bilateral +OTC). + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Market Making. + +As a market maker, the firm enters into derivative transactions to provide +liquidity to clients and to facilitate the transfer and hedging of their +risks. In this role, the firm typically acts as principal and is required to +commit capital to provide execution, and maintains market-making positions in +response to, or in anticipation of, client demand. + +Risk Management. + +The firm also enters into derivatives to actively manage risk exposures that +arise from its market-making and investing and financing activities. The +firm’s holdings and exposures are hedged, in many cases, on either a portfolio +or risk-specific basis, as opposed to an instrument-by-instrument basis. The +offsetting impact of this economic hedging is reflected in the same business +segment as the related revenues. In addition, the firm may enter into +derivatives designated as hedges under U.S. GAAP. These derivatives are used +to manage interest rate exposure of certain fixed-rate unsecured borrowings +and deposits, foreign exchange risk of certain available-for-sale securities +and the net investment in certain + +non-U.S. + +operations, and the price risk of certain commodities. + +The firm enters into various types of derivatives, including: + +Futures and Forwards. + +Contracts that commit counterparties to purchase or sell financial +instruments, commodities or currencies in the future. + +Swaps. + +Contracts that require counterparties to exchange cash flows, such as currency +or interest payment streams. The amounts exchanged are based on the specific +terms of the contract with reference to specified rates, financial +instruments, commodities, currencies or indices. + +Options. + +Contracts in which the option purchaser has the right, but not the obligation, +to purchase from or sell to the option writer financial instruments, +commodities or currencies within a defined time period for a specified price. + +Derivatives are reported on a + +net-by-counterparty + +basis (i.e., the net payable or receivable for derivative assets and +liabilities for a given counterparty) when a legal right of setoff exists +under an enforceable netting agreement (counterparty netting). Derivatives are +accounted for at fair value, net of cash collateral received or posted under +enforceable credit support agreements (cash collateral netting). Derivative +assets are included in trading assets and derivative liabilities are included +in trading liabilities. Realized and unrealized gains and losses on +derivatives not designated as hedges are included in market making (for +derivatives included in the Global Markets segment), and other principal +transactions (for derivatives included in the remaining business segments) in +the consolidated statements of earnings. For both 2021 and 2020, substantially +all of the firm’s derivatives were included in the Global Markets segment. + +The tables below present the gross fair value and the notional amounts of +derivative contracts by major product type, the amounts of counterparty and +cash collateral netting in the consolidated balance sheets, as well as cash +and securities collateral posted and received under enforceable credit support + +agreements + +that do not + +meet + +the criteria for netting under U.S. GAAP. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to + +Consolidated + +Financial + +Statements + +In the tables above: + +Gross fair values exclude the effects of both counterparty netting and +collateral, and therefore are not representative of the firm’s exposure. + +Where the firm has received or posted collateral under credit support +agreements, but has not yet determined such agreements are enforceable, the +related collateral has not been netted. + +Notional amounts, which represent the sum of gross long and short derivative +contracts, provide an indication of the volume of the firm’s derivative +activity and do not represent anticipated losses. + +Total gross fair value of derivatives included derivative assets of $17.48 +billion as of December 2021 and $20.60 billion as of December 2020, and +derivative liabilities of $17.29 billion as of December 2021 and $22.98 +billion as of + +December + +2020, which are not subject to an enforceable netting agreement or are subject +to a netting agreement that the firm has not yet determined to be enforceable. + +Fair Value of Derivatives by Level + +The table below presents derivatives on a gross basis by level and product +type, as well as the impact of netting. + +In the table above: + +Gross fair values exclude the effects of both counterparty netting and +collateral netting, and therefore are not representative of the firm’s +exposure. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Counterparty netting is reflected in each level to the extent that receivable +and payable balances are netted within the same level and is included in +counterparty netting in levels. Where the counterparty netting is across +levels, the netting is included in cross-level counterparty netting. + +Derivative assets are shown as positive amounts and derivative liabilities are +shown as negative amounts. + +See Note 4 for an overview of the firm’s fair value measurement policies and +the valuation techniques and significant inputs used to determine the fair +value of derivatives. + +Significant Unobservable Inputs + +The table below presents the amount of level 3 derivative assets +(liabilities), and ranges, averages and medians of significant unobservable +inputs used to value level 3 derivatives. + +In the table above: + +Derivative assets are shown as positive amounts and derivative liabilities are +shown as negative amounts. + +Ranges represent the significant unobservable inputs that were used in the +valuation of each type of derivative. + +Averages represent the arithmetic average of the inputs and are not weighted +by the relative fair value or notional amount of the respective financial +instruments. An average greater than the median indicates that the majority of +inputs are below the average. For example, the difference between the average +and the median for credit spreads indicates that the majority of the inputs +fall in the lower end of the range. + +The ranges, averages and medians of these inputs are not representative of the +appropriate inputs to use when calculating the fair value of any one +derivative. For example, the highest correlation for interest rate derivatives +is appropriate for valuing a specific interest rate derivative but may not be +appropriate for valuing any other interest rate derivative. Accordingly, the +ranges of inputs do not represent uncertainty in, or possible ranges of, fair +value measurements of level 3 derivatives. + +Interest rates, currencies and equities derivatives are valued using option +pricing models, credit derivatives are valued using option pricing, +correlation and discounted cash flow models, and commodities derivatives are +valued using option pricing and discounted cash flow models. + +The fair value of any one instrument may be determined using multiple +valuation techniques. For example, option pricing models and discounted cash +flow models are typically used together to determine fair value. Therefore, +the level 3 balance encompasses both of these techniques. + +Correlation within currencies and equities includes cross-product type +correlation. + +Natural gas spread represents the spread per million British thermal units of +natural gas. + +Oil spread represents the spread per barrel of oil and refined products. + +Electricity price represents the price per megawatt hour of electricity. + +Range of Significant Unobservable Inputs + +The following provides information about the ranges of significant +unobservable inputs used to value the firm’s level 3 derivative instruments: + +Correlation. + +Ranges for correlation cover a variety of underliers both within one product +type (e.g., equity index and equity single stock names) and across product +types (e.g., correlation of an interest rate and a currency), as well as +across regions. Generally, cross-product type correlation inputs are used to +value more complex instruments and are lower than correlation inputs on assets +within the same derivative product type. + +Volatility. + +Ranges for volatility cover numerous underliers across a variety of markets, +maturities and strike prices. For example, volatility of equity indices is +generally lower than volatility of single stocks. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Credit spreads, upfront credit points and recovery rates. + +The ranges for credit spreads, upfront credit points and recovery rates cover +a variety of underliers (index and single names), regions, sectors, maturities +and credit qualities (high-yield and investment-grade). The broad range of +this population gives rise to the width of the ranges of significant +unobservable inputs. + +Commodity prices and spreads. + +The ranges for commodity prices and spreads cover variability in products, +maturities and delivery locations. + +Sensitivity of Fair Value Measurement to Changes in Significant Unobservable +Inputs + +The following is a description of the directional sensitivity of the firm’s +level 3 fair value measurements to changes in significant unobservable inputs, +in isolation, as of each + +period-end: + +Correlation. + +In general, for contracts where the holder benefits from the convergence of +the underlying asset or index prices (e.g., interest rates, credit spreads, +foreign exchange rates, inflation rates and equity prices), an increase in +correlation results in a higher fair value measurement. + +Volatility. + +In general, for purchased options, an increase in volatility results in a +higher fair value measurement. + +Credit spreads, upfront credit points and recovery rates. + +In general, the fair value of purchased credit protection increases as credit +spreads or upfront credit points increase or recovery rates decrease. Credit +spreads, upfront credit points and recovery rates are strongly related to +distinctive risk factors of the underlying reference obligations, which +include reference entity-specific factors, such as leverage, volatility and +industry, market-based risk factors, such as borrowing costs or liquidity of +the underlying reference obligation, and macroeconomic conditions. + +Commodity prices and spreads. + +In general, for contracts where the holder is receiving a commodity, an +increase in the spread (price difference from a benchmark index due to +differences in quality or delivery location) or price results in a higher fair +value measurement. + +Due to the distinctive nature of each of the firm’s level 3 derivatives, the +interrelationship of inputs is not necessarily uniform within each product +type. + +Level 3 Rollforward + +The table below presents a summary of the changes in fair value for level 3 +derivatives. + +In the table above: + +Changes in fair value are presented for all derivative assets and liabilities +that are classified in level 3 as of the end of the period. + +Net unrealized gains/(losses) relates to instruments that were still held at + +period-end. + +Transfers between levels of the fair value hierarchy are reported at the +beginning of the reporting period in which they occur. If a derivative was +transferred into level 3 during a reporting period, its entire gain or loss +for the period is classified in level 3. + +Positive amounts for transfers into level 3 and negative amounts for transfers +out of level 3 represent net transfers of derivative assets. Negative amounts +for transfers into level 3 and positive amounts for transfers out of level 3 +represent net transfers of derivative liabilities. + +A derivative with level 1 and/or level 2 inputs is classified in level 3 in +its entirety if it has at least one significant level 3 input. + +If there is one significant level 3 input, the entire gain or loss from +adjusting only observable inputs (i.e., level 1 and level 2 inputs) is +classified in level 3. + +Gains or losses that have been classified in level 3 resulting from changes in +level 1 or level 2 inputs are frequently offset by gains or losses +attributable to level 1 or level 2 derivatives and/or level 1, level 2 and +level 3 trading cash instruments. As a result, gains/(losses) included in the +level 3 rollforward below do not necessarily represent the overall impact on +the firm’s results of operations, liquidity or capital resources. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents information, by product type, for derivatives +included in the summary table above. + +Level 3 Rollforward Commentary + +Year Ended December 2021. + +The net realized and unrealized gains on level 3 derivatives of $717 million +(reflecting $265 million of net realized gains and $452 million of net +unrealized gains) for 2021 included gains of $700 million reported in market +making and gains of $17 million reported in other principal transactions. + +The net unrealized gains on level 3 derivatives for 2021 were primarily +attributable to gains on certain credit and currency derivatives (in each +case, primarily reflecting the impact of changes in foreign exchange rates), +gains on certain commodity derivatives (primarily reflecting the impact of an +increase in commodity prices) and gains on certain interest rate derivatives +(primarily reflecting the impact of an increase in interest rates), partially +offset by losses on certain equity derivatives (primarily reflecting the +impact of an increase in equity prices). + +The drivers of transfers into level 3 derivatives during 2021 were not +material. + +Transfers out of level 3 derivatives during 2021 primarily reflected transfers +of certain interest rate derivative assets to level 2 (principally due to +increased transparency of certain volatility inputs used to value these +derivatives). + +Year Ended December 2020. + +The net realized and unrealized gains on level 3 derivatives of $838 million +(reflecting $226 million of net realized gains and $612 million of net +unrealized gains) for 2020 included gains of $900 million reported in market +making and losses of $62 million reported in other principal transactions. + +The net unrealized gains on level 3 derivatives for 2020 were primarily +attributable to gains on certain equity derivatives (primarily reflecting the +impact of an increase in equity prices), gains on certain interest rate +derivatives (primarily reflecting the impact of a decrease in interest rates +and changes in foreign exchange rates), gains on certain commodity derivatives +(primarily reflecting the impact of changes in commodity prices), and gains on +certain credit derivatives (primarily reflecting the impact of a decrease in +interest rates), partially offset by losses on certain currency derivatives +(primarily reflecting the impact of changes in foreign exchange rates and a +decrease in interest rates). + +The drivers of both transfers into level 3 derivatives and transfers out of +level 3 derivatives during 2020 were not material. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +OTC Derivatives + +The table below presents OTC derivative assets and liabilities by tenor and +major product type. + +In the table above: + +Tenor is based on remaining contractual maturity. + +Counterparty netting within the same product type and tenor category is +included within such product type and tenor category. + +Counterparty netting across product types within the same tenor category is +included in counterparty netting in tenors. Where the counterparty netting is +across tenor categories, the netting is included in cross-tenor counterparty +netting. + +Credit Derivatives + +The firm enters into a broad array of credit derivatives to facilitate client +transactions and to manage the credit risk associated with market-making and +investing and financing activities. Credit derivatives are actively managed +based on the firm’s net risk position. Credit derivatives are generally +individually negotiated contracts and can have various settlement and payment +conventions. Credit events include failure to pay, bankruptcy, acceleration of +indebtedness, restructuring, repudiation and dissolution of the reference +entity. + +The firm enters into the following types of credit derivatives: + +Credit Default Swaps. + +Single-name credit default swaps protect the buyer against the loss of +principal on one or more bonds, loans or mortgages (reference obligations) in +the event the issuer of the reference obligations suffers a credit event. The +buyer of protection pays an initial or periodic premium to the seller and +receives protection for the period of the contract. If there is no credit +event, as defined in the contract, the seller of protection makes no payments +to the buyer. If a credit event occurs, the seller of protection is required +to make a payment to the buyer, calculated according to the terms of the +contract. + +Credit Options. + +In a credit option, the option writer assumes the obligation to purchase or +sell a reference obligation at a specified price or credit spread. The option +purchaser buys the right, but does not assume the obligation, to sell the +reference obligation to, or purchase it from, the option writer. The payments +on credit options depend either on a particular credit spread or the price of +the reference obligation. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Credit Indices, Baskets and Tranches. + +Credit derivatives may reference a basket of single-name credit default swaps +or a broad-based index. If a credit event occurs in one of the underlying +reference obligations, the protection seller pays the protection buyer. The +payment is typically a + +pro-rata + +portion of the transaction’s total notional amount based on the underlying +defaulted reference obligation. In certain transactions, the credit risk of a +basket or index is separated into various portions (tranches), each having +different levels of subordination. The most junior tranches cover initial +defaults and once losses exceed the notional amount of these junior tranches, +any excess loss is covered by the next most senior tranche. + +Total Return Swaps. + +A total return swap transfers the risks relating to economic performance of a +reference obligation from the protection buyer to the protection seller. +Typically, the protection buyer receives a floating rate of interest and +protection against any reduction in fair value of the reference obligation, +and the protection seller receives the cash flows associated with the +reference obligation, plus any increase in the fair value of the reference +obligation. + +The firm economically hedges its exposure to written credit derivatives +primarily by entering into offsetting purchased credit derivatives with +identical underliers. Substantially all of the firm’s purchased credit +derivative transactions are with financial institutions and are subject to +stringent collateral thresholds. In addition, upon the occurrence of a +specified trigger event, the firm may take possession of the reference +obligations underlying a particular written credit derivative, and +consequently may, upon liquidation of the reference obligations, recover +amounts on the underlying reference obligations in the event of default. + +As of December 2021, written credit derivatives had a total gross notional +amount of $510.24 billion and purchased credit derivatives had a total gross +notional amount of $569.34 billion, for total net notional purchased +protection of $59.10 billion. As of December 2020, written credit derivatives +had a total gross notional amount of $515.85 billion and purchased credit +derivatives had a total gross notional amount of $558.18 billion, for total +net notional purchased protection of $42.33 billion. The firm’s written and +purchased credit derivatives primarily consist of credit default swaps. + +The table below presents information about credit derivatives. + +In the table above: + +Fair values exclude the effects of both netting of receivable balances with +payable balances under enforceable netting agreements, and netting of cash +received or posted under enforceable credit support agreements, and therefore +are not representative of the firm’s credit exposure. + +Tenor is based on remaining contractual maturity. + +The credit spread on the underlier, together with the tenor of the contract, +are indicators of payment/performance risk. The firm is less likely to pay or +otherwise be required to perform where the credit spread and the tenor are +lower. + +Offsetting purchased credit derivatives represent the notional amount of +purchased credit derivatives that economically hedge written credit +derivatives with identical underliers. + +Other purchased credit derivatives represent the notional amount of all other +purchased credit derivatives not included in offsetting. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Impact of Credit and Funding Spreads on Derivatives + +The firm realizes gains or losses on its derivative contracts. These gains or +losses include credit valuation adjustments (CVA) relating to uncollateralized +derivative assets and liabilities, which represent the gains or losses +(including hedges) attributable to the impact of changes in credit exposure, +counterparty credit spreads, liability funding spreads (which include the +firm’s own credit), probability of default and assumed recovery. These gains +or losses also include funding valuation adjustments (FVA) relating to +uncollateralized derivative assets, which represent the gains or losses +(including hedges) attributable to the impact of changes in expected funding +exposures and funding spreads. + +The table below presents information about CVA and FVA. + +Bifurcated Embedded Derivatives + +The table below presents the fair value and the notional amount of derivatives +that have been bifurcated from their related borrowings. + +In the table above, derivatives that have been bifurcated from their related +borrowings are recorded at fair value and primarily consist of interest rate, +equity and commodity products. These derivatives are included in unsecured +short- and long-term borrowings, as well as other secured financings, with the +related borrowings. + +Derivatives with Credit-Related Contingent Features + +Certain of the firm’s derivatives have been transacted under bilateral +agreements with counterparties who may require the firm to post collateral or +terminate the transactions based on changes in the firm’s credit ratings. The +firm assesses the impact of these bilateral agreements by determining the +collateral or termination payments that would occur assuming a downgrade by +all rating agencies. A downgrade by any one rating agency, depending on the +agency’s relative ratings of the firm at the time of the downgrade, may have +an impact which is comparable to the impact of a downgrade by all rating +agencies. + +The table below presents information about net derivative liabilities under +bilateral agreements (excluding collateral posted), the fair value of +collateral posted and additional collateral or termination payments that could +have been called by counterparties in the event of a + +one- + +or + +two-notch + +downgrade in the firm’s credit ratings. + +Hedge Accounting + +The firm applies hedge accounting for (i) interest rate swaps used to manage +the interest rate exposure of certain fixed-rate unsecured long- and short- +term borrowings and certain fixed-rate certificates of deposit, (ii) foreign +exchange forward contracts used to manage the foreign exchange risk of certain + +available-for-sale + +securities, (iii) foreign currency forward contracts and foreign currency- +denominated debt used to manage foreign currency exposures on the firm’s net +investment in certain + +non-U.S. + +operations and (iv) commodity futures contracts used to manage the price risk +of certain commodities. + +To qualify for hedge accounting, the hedging instrument must be highly +effective at reducing the risk from the exposure being hedged. Additionally, +the firm must formally document the hedging relationship at inception and +assess the hedging relationship at least on a quarterly basis to ensure the +hedging instrument continues to be highly effective over the life of the +hedging relationship. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Fair Value Hedges + +The firm designates interest rate swaps as fair value hedges of certain fixed- +rate unsecured long- and short-term debt and fixed-rate certificates of +deposit. These interest rate swaps hedge changes in fair value attributable to +the designated benchmark interest rate (e.g., London Interbank Offered Rate +(LIBOR), Secured Overnight Financing Rate (SOFR) or Overnight Index Swap +Rate), effectively converting a substantial portion of fixed-rate obligations +into floating-rate obligations. + +The firm applies a statistical method that utilizes regression analysis when +assessing the effectiveness of these hedging relationships in achieving +offsetting changes in the fair values of the hedging instrument and the risk +being hedged (i.e., interest rate risk). An interest rate swap is considered +highly effective in offsetting changes in fair value attributable to changes +in the hedged risk when the regression analysis results in a coefficient of +determination of 80% or greater and a slope between 80% and 125%. + +For qualifying interest rate fair value hedges, gains or losses on derivatives +are included in interest expense. The change in fair value of the hedged item +attributable to the risk being hedged is reported as an adjustment to its +carrying value (hedging adjustment) and is also included in interest expense. +When a derivative is no longer designated as a hedge, any remaining difference +between the carrying value and par value of the hedged item is amortized in +interest expense over the remaining life of the hedged item using the +effective interest method. See Note 23 for further information about interest +income and interest expense. + +The table below presents the gains/(losses) from interest rate derivatives +accounted for as hedges and the related hedged borrowings and deposits, and +total interest expense. + +The table below presents the carrying value of deposits and unsecured +borrowings that are designated in a hedging relationship and the related +cumulative hedging adjustment (increase/(decrease)) from current and prior +hedging relationships included in such carrying values. + +In the table above, cumulative hedging adjustment included $5.91 billion as of +December 2021 and $6.34 billion as of December 2020 of hedging adjustments +from prior hedging relationships that were + +de-designated + +and substantially all were related to unsecured long-term borrowings. + +In addition, + +cumulative hedging adjustments for items no longer designated in a hedging +relationship were $68 million as of December 2021 and $489 million as of +December 2020 and substantially all were related to unsecured long-term +borrowings. + +The firm designates foreign exchange forward contracts as fair value hedges of +the foreign exchange risk of + +non-U.S. + +government securities classified as + +available-for-sale. + +See Note 8 for information about the amortized cost and fair value of such +securities. The effectiveness of such hedges is assessed based on changes in +spot rates. The gains/(losses) on the hedges (relating to both spot and +forward points) and the foreign exchange gains/(losses) on the related + +available-for-sale + +securities were included in market making and were not material for both 2021 +and 2020. + +During 2021, the firm designated commodity futures contracts as fair value +hedges of the price risk of certain precious metals included in commodities +within trading assets. As of December 2021, the carrying value of such +commodities was $1.05 billion and the amortized cost was $1.02 billion. +Changes in spot rates of such commodities are reflected as an adjustment to +their carrying value, and the related gains/(losses) on both the commodities +and the designated futures contracts are included in market making. The +contractual forward points on the designated futures contracts are amortized +into earnings ratably over the life of the contract and other gains/(losses) +as a result of changes in the forward points are included in other +comprehensive income/(loss). The cumulative hedging adjustment was not +material as of December 2021 and the related gains/(losses) were not material +for 2021. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Net Investment Hedges + +The firm seeks to reduce the impact of fluctuations in foreign exchange rates +on its net investments in certain + +non-U.S. + +operations through the use of foreign currency forward contracts and foreign +currency-denominated debt. For foreign currency forward contracts designated +as hedges, the effectiveness of the hedge is assessed based on the overall +changes in the fair value of the forward contracts (i.e., based on changes in +forward rates). For foreign currency-denominated debt designated as a hedge, +the effectiveness of the hedge is assessed based on changes in spot rates. For +qualifying net investment hedges, all gains or losses on the hedging +instruments are included in currency translation. + +The table below presents the gains/(losses) from net investment hedging. + +Gains or losses on individual net investments in + +non-U.S. + +operations are reclassified from accumulated other comprehensive income/(loss) +to other principal transactions in the consolidated statements of earnings +when such net investments are sold or substantially liquidated. The gross and +net gains and losses on hedges and the related net investments in + +non-U.S. + +operations reclassified to earnings from accumulated other comprehensive +income/(loss) was not material for 2021, $61 million (reflecting a gain of +$214 million related to hedges and a loss of $153 million on the related net +investments in + +non-U.S. + +operations) for 2020 and not material for 2019. + +The firm had designated $3.71 billion as of December 2021 and $4.97 billion as +of December 2020 of foreign currency-denominated debt, included in unsecured +long- and short-term borrowings, as hedges of net investments in + +non-U.S. + +subsidiaries. + +Note 8. + +Investments + +Investments includes debt instruments and equity securities that are accounted +for at fair value and are generally held by the firm in connection with its +long-term investing activities. In addition, investments includes debt +securities classified as + +available-for-sale + +and + +held-to-maturity + +that are generally held in connection with the firm’s asset-liability +management activities. Investments also consists of equity securities that are +accounted for under the equity method. + +The table below presents information about investments. + +Equity Securities and Debt Instruments, at Fair Value + +Equity securities and debt instruments, at fair value are accounted for at +fair value either under the fair value option or in accordance with other U.S. +GAAP, and the related fair value gains and losses are recognized in the +consolidated statements of earnings. + +Equity Securities, at Fair Value. + +Equity securities, at fair value consists of the firm’s public and private +equity investments in corporate and real estate entities. + +The table below presents information about equity securities, at fair value. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +In the table above: + +Equity securities, at fair value included investments accounted for at fair +value under the fair value option where the firm would otherwise apply the +equity method of accounting of $5.81 billion as of December 2021 and $7.14 +billion as of December 2020. Gains recognized as a result of changes in the +fair value of equity securities for which the fair value option was elected +were $2.12 billion for 2021 and $573 million for 2020. These gains are +included in other principal transactions. + +Debt Instruments, at Fair Value. + +Debt instruments, at fair value primarily includes mezzanine, senior and +distressed debt. + +The table below presents information about debt instruments, at fair value. + +In the table above: + +Money market instruments primarily includes time deposits and investments in +money market funds. + +Investments in Funds at Net Asset Value Per Share. + +Equity securities and debt instruments, at fair value include investments in +funds that are measured at NAV of the investment fund. The firm uses NAV to +measure the fair value of fund investments when (i) the fund investment does +not have a readily determinable fair value and (ii) the NAV of the investment +fund is calculated in a manner consistent with the measurement principles of +investment company accounting, including measurement of the investments at +fair value. + +Substantially all of the firm’s investments in funds at NAV consist of +investments in firm-sponsored private equity, credit, real estate and hedge +funds where the firm + +co-invests + +with third-party investors. + +Private equity funds primarily invest in a broad range of industries +worldwide, including leveraged buyouts, recapitalizations, growth investments +and distressed investments. Credit funds generally invest in loans and other +fixed income instruments and are focused on providing private high-yield +capital for leveraged and management buyout transactions, recapitalizations, +financings, refinancings, acquisitions and restructurings for private equity +firms, private family companies and corporate issuers. Real estate funds +invest globally, primarily in real estate companies, loan portfolios, debt +recapitalizations and property. Private equity, credit and real estate funds +are + +closed-end + +funds in which the firm’s investments are generally not eligible for +redemption. Distributions will be received from these funds as the underlying +assets are liquidated or distributed, the timing of which is uncertain. + +The firm also invests in hedge funds, primarily multi-disciplinary hedge funds +that employ a fundamental + +bottom-up + +investment approach across various asset classes and strategies. The firm’s +investments in hedge funds primarily include interests where the underlying +assets are illiquid in nature, and proceeds from redemptions will not be +received until the underlying assets are liquidated or distributed, the timing +of which is uncertain. + +Private equity and hedge funds described above are primarily “covered funds” +as defined in the Volcker Rule of the U.S. Dodd-Frank Wall Street Reform and +Consumer Protection Act (Dodd-Frank Act). Substantially all of the credit and +real estate funds described above are not covered funds. The Board of +Governors of the Federal Reserve System (FRB) extended the conformance period +to July 2022 for the firm’s investments in, and relationships with, certain +legacy “illiquid funds” (as defined in the Volcker Rule) that were in place +prior to December 2013. This extension is applicable to substantially all of +the firm’s remaining investments in, and relationships with, such covered +funds. As of December 2021, the firm’s total investments in funds at NAV of +$3.47 billion included $903 + +million of investments in covered funds for which compliance with the Volcker +Rule will need to be achieved by July 2022. + +The firm expects to achieve compliance for these covered funds through ongoing +harvesting of underlying fund investments in the ordinary course or through +structural modifications to these funds. To the extent that the firm is not +able to achieve compliance through these measures, the firm will be required +to sell its interests in such funds by July 2022. If that occurs, the firm may +receive a value for its interests that is less than the then carrying value as +there could be a limited secondary market for these investments and the firm +may be unable to sell them in orderly transactions. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents the fair value of investments in funds at NAV and the +related unfunded commitments. + +Available-for-Sale + +Securities + +Available-for-sale + +securities are accounted for at fair value, and the related unrealized fair +value gains and losses are included in accumulated other comprehensive +income/(loss) unless designated in a fair value hedging relationship. See Note +7 for information about + +available-for-sale + +securities that are designated in a hedging relationship. + +The table below presents information about + +available-for-sale + +securities by tenor. + +In the table above: + +Available-for-sale + +securities were classified in level 1 of the fair value hierarchy as of both +December 2021 and December 2020. + +The weighted average yield for + +available-for-sale + +securities is computed using the effective interest rate of each security at +the end of the period, weighted based on the fair value of each security. + +The gross unrealized gains included in accumulated other comprehensive +income/(loss) were $118 million and the gross unrealized losses included in +accumulated other comprehensive income/(loss) were $779 million as of December +2021 and primarily related to U.S. government obligations in a continuous +unrealized loss position for less than a year. The gross unrealized gains +included in accumulated other comprehensive income/(loss) were $631 million +and the gross unrealized losses included in accumulated other comprehensive +income/(loss) were not material as of December 2020. Net unrealized +gains/(losses) included in other comprehensive income/(loss) were $(1.28) +billion ($(955) million, net of tax) for 2021 and $557 million ($417 million, +net of tax) for 2020. + +If the fair value of available-for-sale securities is less than amortized +cost, such securities are considered impaired. If the firm has the intent to +sell the debt security, or if it is more likely than not that the firm will be +required to sell the debt security before recovery of its amortized cost, the +difference between the amortized cost (net of allowance, if any) and the fair +value of the securities is recognized as an impairment loss in earnings. The +firm did not record any such impairment losses during either 2021 or 2020. +Impaired available-for-sale debt securities that the firm has the intent and +ability to hold are reviewed to determine if an allowance for credit losses +should be recorded. The firm considers various factors in such determination, +including market conditions, changes in issuer credit ratings and severity of +the unrealized losses. The firm did not record any provision for credit losses +on such securities during either 2021 or 2020. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents gross realized gains/(losses) and the proceeds from +the sales of available-for-sale securities. + +In the table above, the realized gains/(losses) were reclassified from +accumulated other comprehensive income/(loss) to other principal transactions +in the consolidated statements of earnings. + +Fair Value of Investments by Level + +The table below presents investments accounted for at fair value by level +within the fair value hierarchy. + +See Note 4 for an overview of the firm’s fair value measurement policies and +the valuation techniques and significant inputs used to determine the fair +value of investments. + +Significant Unobservable Inputs + +The table below presents the amount of level 3 investments, and ranges and +weighted averages of significant unobservable inputs used to value such +investments. + +In the table above: + +Ranges represent the significant unobservable inputs that were used in the +valuation of each type of investment. + +Weighted averages are calculated by weighting each input by the relative fair +value of the investment. + +The ranges and weighted averages of these inputs are not representative of the +appropriate inputs to use when calculating the fair value of any one +investment. For example, the highest multiple for private equity securities is +appropriate for valuing a specific private equity security but may not be +appropriate for valuing any other private equity security. Accordingly, the +ranges of inputs do not represent uncertainty in, or possible ranges of, fair +value measurements of level 3 investments. + +Increases in yield, discount rate, capitalization rate or duration used in the +valuation of level 3 investments would have resulted in a lower fair value +measurement, while increases in recovery rate or multiples would have resulted +in a higher fair value measurement as of both December 2021 and December 2020. +Due to the distinctive nature of each level 3 investment, the +interrelationship of inputs is not necessarily uniform within each product +type. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Corporate debt securities, securities backed by real estate and other debt +obligations are valued using discounted cash flows, and equity securities are +valued using market comparables and discounted cash flows. + +The fair value of any one instrument may be determined using multiple +valuation techniques. For example, market comparables and discounted cash +flows may be used together to determine fair value. Therefore, the level 3 +balance encompasses both of these techniques. + +Level 3 Rollforward + +The table below presents a summary of the changes in fair value for level 3 +investments. + +In the table above: + +Changes in fair value are presented for all investments that are classified in +level 3 as of the end of the period. + +Net unrealized gains/(losses) relates to investments that were still held at + +period-end. + +Transfers between levels of the fair value hierarchy are reported at the +beginning of the reporting period in which they occur. If an investment was +transferred to level 3 during a reporting period, its entire gain or loss for +the period is classified in level 3. + +For level 3 investments, increases are shown as positive amounts, while +decreases are shown as negative amounts. + +The table below presents information, by product type, for investments +included in the summary table above. + +Level 3 Rollforward Commentary + +Year Ended December 2021. + +The net realized and unrealized gains on level 3 investments of $1.71 billion +(reflecting $449 million of net realized gains and $1.26 billion of net +unrealized gains) for 2021 included gains of $1.53 billion reported in other +principal transactions and $180 million reported in interest income. + +The net unrealized gains on level 3 investments for 2021 primarily reflected +gains on certain private equity securities and corporate debt securities (in +each case, principally driven by corporate performance and company-specific +events). + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Transfers into level 3 investments during 2021 primarily reflected transfers +of certain corporate debt securities from level 2 (principally due to reduced +price transparency as a result of a lack of market evidence, including fewer +market transactions in these instruments, and certain unobservable yield and +duration inputs becoming significant to the valuation of these instruments) +and transfers of certain private equity securities from level 2 (principally +due to reduced price transparency as a result of a lack of market evidence, +including fewer market transactions in these instruments). + +Transfers out of level 3 investments during 2021 primarily reflected transfers +of certain private equity securities to level 2 (principally due to increased +price transparency as a result of market evidence, including market +transactions in these instruments) and transfers of certain corporate debt +securities to level 2 (principally due to certain unobservable yield and +duration inputs no longer being significant to the valuation of these +instruments, and increased price transparency as a result of market evidence, +including market transactions of these instruments). + +Year Ended December 2020. + +The net realized and unrealized losses on level 3 investments of $228 million +(reflecting $215 million of net realized gains and $443 million of net +unrealized losses) for 2020 included losses of $428 million reported in other +principal transactions and $200 million reported in interest income. + +The net unrealized losses on level 3 investments for 2020 reflected losses on +certain private equity, corporate debt securities and securities backed by +real estate (in each case, principally driven by corporate performance). + +Transfers into level 3 investments during 2020 primarily reflected transfers +of certain corporate debt securities from level 2 (principally due to reduced +price transparency as a result of a lack of market evidence, including fewer +transactions in these instruments, and certain unobservable yield and duration +inputs becoming significant to the valuation of these instruments) and +transfers of certain private equity securities from level 2 (principally due +to reduced price transparency as a result of a lack of market evidence, +including fewer transactions in these instruments). + +Transfers out of level 3 investments during 2020 primarily reflected transfers +of certain private equity securities and corporate debt securities to level 2 +(principally due to increased price transparency as a result of market +evidence, including market transactions in these instruments). + +Held-to-Maturity + +Securities + +Held-to-maturity + +securities are accounted for at amortized cost. + +The table below presents information about + +held-to-maturity + +securities by type and tenor. + +In the table above: + +Substantially all of the securities backed by real estate consist of +securities backed by residential real estate. + +As these securities are not accounted for at fair value, they are not included +in the firm’s fair value hierarchy in Notes 4 through 10. Had these securities +been included in the firm’s fair value hierarchy, U.S. government obligations +would have been classified in level 1 and securities backed by real estate +would have been primarily classified in level 2 of the fair value hierarchy as +of both December 2021 and December 2020. + +The weighted average yield for held-to-maturity securities is computed using +the effective interest rate of each security at the end of the period, +weighted based on the amortized cost of each security. + +Held-to-maturity + +securities are reviewed to determine if an allowance for credit losses should +be recorded in the consolidated statements of earnings. The firm considers +various factors in such determination, including market conditions, changes in +issuer credit ratings, historical credit losses and sovereign guarantees. +Provision for credit losses on such securities was not material during either +2021 or 2020. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 9. + +Loans + +Loans include (i) loans held for investment that are accounted for at +amortized cost net of allowance for loan losses or at fair value under the +fair value option and (ii) loans held for sale that are accounted for at the +lower of cost or fair value. Interest on loans is recognized over the life of +the loan and is recorded on an accrual basis. + +The table below presents information about loans. + +In the table above, loans held for investment that are accounted for at +amortized cost include net deferred fees and costs, and unamortized premiums +and discounts, which are amortized over the life of the loan. These amounts +were less than 1% of loans accounted for at amortized cost as of both December +2021 and December 2020. + +The following is a description of the loan types in the table above: + +Corporate. + +Corporate loans includes term loans, revolving lines of credit, letter of +credit facilities and bridge loans, and are principally used for operating and +general corporate purposes, or in connection with acquisitions. Corporate +loans may be secured or unsecured, depending on the loan purpose, the risk +profile of the borrower and other factors. + +Wealth Management. + +Wealth management loans includes loans extended to private bank clients, +including wealth management and other clients. These loans are used to finance +investments in both financial and nonfinancial assets, bridge cash flow timing +gaps or provide liquidity for other needs. Substantially all of such loans are +secured by securities, residential real estate, commercial real estate or +other assets. + +Commercial Real Estate. + +Commercial real estate loans includes originated loans (other than those +extended to private bank clients) that are directly or indirectly secured by +hotels, retail stores, multifamily housing complexes and commercial and +industrial properties. Commercial real estate loans also includes loans +extended to clients who warehouse assets that are directly or indirectly +backed by commercial real estate. In addition, commercial real estate includes +loans purchased by the firm. + +Residential Real Estate. + +Residential real estate loans primarily includes loans extended by the firm to +clients (other than those extended to private bank clients) who warehouse +assets that are directly or indirectly secured by residential real estate and +loans purchased by the firm. + +Installment. + +Installment loans are unsecured and are originated by the firm. + +Credit Cards. + +Credit card loans are loans made pursuant to revolving lines of credit issued +to consumers by the firm. + +Other. + +Other loans primarily includes loans extended to clients who warehouse assets +that are directly or indirectly secured by consumer loans, including auto +loans and private student loans, and other assets. Other loans also includes +unsecured consumer and credit card loans purchased by the firm. + +Credit Quality + +Risk Assessment. + +The firm’s risk assessment process includes evaluating the credit quality of +its loans by our independent risk oversight and control function. For +corporate loans and a majority of wealth management, real estate and other +loans, the firm performs credit reviews which include initial and ongoing +analyses of its borrowers, resulting in an internal credit rating. A credit +review is an analysis of the capacity and willingness of a borrower to meet +its financial obligations and is performed on an annual basis or more +frequently if circumstances change that indicate that a review may be +necessary. The determination of internal credit ratings also incorporates +assumptions with respect to the nature of and outlook for the borrower’s +industry and the economic environment. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents gross loans by an internally determined public rating +agency equivalent or other credit metrics and the concentration of secured and +unsecured loans. + +In the table above: + +Wealth management loans included in the other metrics/unrated category +primarily consists of loans backed by residential real estate and securities, +and real estate loans included in the other metrics/unrated category primarily +consists of purchased loans. The firm’s risk assessment process for these +loans includes reviewing certain key metrics, such as + +loan-to-value + +ratio, delinquency status, collateral values, expected cash flows, the Fair +Isaac Corporation (FICO) credit score (which measures a borrower’s +creditworthiness by considering factors such as payment and credit history) +and other risk factors. + +For installment and credit card loans included in the other metrics/unrated +category, the evaluation of credit quality incorporates the borrower’s FICO +credit score. FICO credit scores are periodically refreshed by the firm to +assess the updated creditworthiness of the borrower. See “Vintage” below for +information about installment and credit card loans by FICO credit scores. + +The firm also assigns a regulatory risk rating to its loans based on the +definitions provided by the U.S. federal bank regulatory agencies. Total loans +included 92% of loans as of December 2021 and 85% of loans as of December 2020 +that were rated + +pass/non-criticized. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Vintage. + +The tables below present gross loans accounted for at amortized cost +(excluding installment and credit card loans) by an internally determined +public rating agency equivalent or other credit metrics and origination year +for term loans. + +In the tables above, revolving loans which converted to term loans were not +material as of both December 2021 and December 2020. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents gross installment loans by refreshed FICO credit +scores and origination year and gross credit card loans by refreshed FICO +credit scores. + +In the table above, credit card loans consist of revolving lines of credit. + +Credit Concentrations. + +The table below presents the concentration of gross loans by region. + +In the table above: + +EMEA represents Europe, Middle East and Africa. + +Nonaccrual and Past Due Loans. + +Loans accounted for at amortized cost (other than credit card loans) are +placed on nonaccrual status when it is probable that the firm will not collect +all principal and interest due under the contractual terms, regardless of the +delinquency status or if a loan is past due for 90 days or more, unless the +loan is both well collateralized and in the process of collection. At that +time, all accrued but uncollected interest is reversed against interest income +and interest subsequently collected is recognized on a cash basis to the +extent the loan balance is deemed collectible. Otherwise, all cash received is +used to reduce the outstanding loan balance. A loan is considered past due +when a principal or interest payment has not been made according to its +contractual terms. Credit card loans are not placed on nonaccrual status and +accrue interest until the loan is paid in full or is charged off. + +In certain circumstances, the firm may modify the original terms of a loan +agreement by granting a concession to a borrower experiencing financial +difficulty, typically in the form of a modification of loan covenants, but may +also include forbearance of interest or principal, payment extensions or +interest rate reductions. These modifications, to the extent significant, are +considered troubled debt restructurings (TDRs). Loan modifications that extend +payment terms for a period of less than 90 days are generally considered +insignificant and therefore not reported as TDRs. + +The firm adopted the relief issued under the Coronavirus Aid, Relief, and +Economic Security Act (CARES Act), as amended, and certain interpretive +guidance issued by the U.S. banking agencies that provides for certain +modified loans that would otherwise meet the definition of a TDR to not be +classified as such. Loans accounted for at amortized cost that were not +classified as TDRs as a result of this relief and interpretive guidance were +$166 million as of December 2021 and were $184 million as of December 2020. +The relief provided under the CARES Act expired in January 2022. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents information about past due loans. + +The table below presents information about nonaccrual loans. + +In the table above: + +Nonaccrual loans included $267 million as of December 2021 and $315 million as +of December 2020 of corporate and commercial real estate loans that were +modified in a TDR. The firm’s lending commitments related to these loans were +not material as of both December 2021 and December 2020. Installment loans +that were modified in a TDR were not material as of both December 2021 and +December 2020. + +Allowance for Credit Losses + +The firm’s allowance for credit losses consists of the allowance for losses on +loans and lending commitments accounted for at amortized cost. Loans and +lending commitments accounted for at fair value or accounted for at the lower +of cost or fair value are not subject to an allowance for credit losses. + +To determine the allowance for credit losses, the firm classifies its loans +and lending commitments accounted for at amortized cost into wholesale and +consumer portfolios. These portfolios represent the level at which the firm +has developed and documented its methodology to determine the allowance for +credit losses. The allowance for credit losses is measured on a collective +basis for loans that exhibit similar risk characteristics using a modeled +approach and asset-specific basis for loans that do not share similar risk +characteristics. + +The allowance for credit losses takes into account the weighted average of a +range of forecasts of future economic conditions over the expected life of the +loan and lending commitments. The expected life of each loan or lending +commitment is determined based on the contractual term adjusted for extension +options or demand features, or is modeled in the case of revolving credit card +loans. The forecasts include baseline, favorable and adverse economic +scenarios over a three-year period. For loans with expected lives beyond three +years, the model reverts to historical loss information based on a + +non-linear + +modeled approach. The forecasted economic scenarios consider a number of risk +factors relevant to the wholesale and consumer portfolios described below. The +firm applies judgment in weighing individual scenarios each quarter based on a +variety of factors, including the firm’s internally derived economic outlook, +market consensus, recent macroeconomic conditions and industry trends. + +The allowance for credit losses also includes qualitative components which +allow management to reflect the uncertain nature of economic forecasting, +capture uncertainty regarding model inputs, and account for model imprecision +and concentration risk. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Management’s estimate of credit losses entails judgment about loan +collectability at the reporting dates, and there are uncertainties inherent in +those judgments. The allowance for credit losses is subject to a governance +process that involves review and approval by senior management within the +firm’s independent risk oversight and control functions. Personnel within the +firm’s independent risk oversight and control functions are responsible for +forecasting the economic variables that underlie the economic scenarios that +are used in the modeling of expected credit losses. While management uses the +best information available to determine this estimate, future adjustments to +the allowance may be necessary based on, among other things, changes in the +economic environment or variances between actual results and the original +assumptions used. + +The table below presents gross loans and lending commitments accounted for at +amortized cost by portfolio. + +In the table above: + +Credit card lending commitments included $33.97 billion as of December 2021 +and $21.64 billion as of December 2020 related to credit card lines issued by +the firm to consumers. These credit card lines are cancellable by the firm. +Credit card lending commitments also included approximately $2.0 billion as of +December 2021 related to a commitment to acquire the General Motors + +co-branded + +credit card portfolio. + +See Note 18 for further information about lending commitments. + +The following is a description of the methodology used to calculate the +allowance for credit losses: + +Wholesale. + +The allowance for credit losses for wholesale loans and lending commitments +that exhibit similar risk characteristics is measured using a modeled +approach. These models determine the probability of default and loss given +default based on various risk factors, including internal credit ratings, +industry default and loss data, expected life, macroeconomic indicators, the +borrower’s capacity to meet its financial obligations, the borrower’s country +of risk and industry, loan seniority and collateral type. For lending +commitments, the methodology also considers probability of drawdowns or +funding. In addition, for loans backed by real estate, risk factors include +the loan-to-value ratio, debt service ratio and home price index. The most +significant inputs to the forecast model for wholesale loans and lending +commitments include unemployment rates, GDP, credit spreads, commercial and +industrial delinquency rates, short- and long-term interest rates, and oil +prices. + +The allowance for loan losses for wholesale loans that do not share similar +risk characteristics, such as nonaccrual loans or loans in a TDR, is +calculated using the present value of expected future cash flows discounted at +the loan’s original effective rate, the observable market price of the loan or +the fair value of the collateral. + +Wholesale loans are charged off against the allowance for loan losses when +deemed to be uncollectible. + +Consumer. + +The allowance for credit losses for consumer loans that exhibit similar risk +characteristics is calculated using a modeled approach which classifies +consumer loans into pools based on borrower-related and exposure-related +characteristics that differentiate a pool’s risk characteristics from other +pools. The factors considered in determining a pool are generally consistent +with the risk characteristics used for internal credit risk measurement and +management and include key metrics, such as FICO credit scores, delinquency +status, loan vintage and macroeconomic indicators. The most significant inputs +to the forecast model for consumer loans include unemployment rates and +delinquency rates. The expected life of revolving credit card loans is +determined by modeling expected future draws and the timing and amount of +repayments allocated to the funded balance. The firm also recognizes an +allowance for credit losses on commitments to acquire loans. However, no +allowance for credit losses is recognized on credit card lending commitments +as they are cancellable by the firm. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The allowance for credit losses for consumer loans that do not share similar +risk characteristics, such as loans in a TDR, is calculated using the present +value of expected future cash flows discounted at the loan’s original +effective rate. + +Installment loans are charged off when they are 120 days past due. Credit card +loans are charged off when they are 180 days past due. + +Allowance for Credit Losses Rollforward + +The table below presents information about the allowance for credit losses. + +In the table above: + +Other primarily represents the reduction to the allowance related to loans and +lending commitments transferred to held for sale. + +The allowance ratio is calculated by dividing the allowance for loan losses by +gross loans accounted for at amortized cost. + +The net + +charge-off + +ratio is calculated by dividing net charge-offs by average gross loans +accounted for at amortized cost. + +The beginning balance for the allowance for loan losses and allowance for +losses on lending commitments for 2020 reflects the cumulative effect of +measuring the allowance under the CECL standard as of January 1, 2020. The +cumulative effect was an increase in the allowance for credit losses of $679 +million, which consisted of (i) an increase in the allowance for loan losses +of $727 million (an increase in the allowance for wholesale loans of $452 +million, an increase in the allowance for consumer loans of $444 million and a +decrease in the allowance for PCI loans of $169 million) and (ii) a decrease +in the allowance for lending commitments of $48 million. + +Allowance for Credit Losses Commentary + +Year Ended December 2021. + +The allowance for credit losses decreased by $82 million during 2021. + +The provision for credit losses reflected growth in the firm’s lending +portfolios, primarily in the consumer portfolio related to credit cards, +including a provision for credit losses of approximately + +million relating to the commitment to acquire the General Motors + +co-branded + +credit card portfolio, largely offset by reserve reduction driven by improved +broader economic environment. + +Net charge-offs for 2021 for wholesale loans were primarily related to +corporate loans and net charge-offs for consumer loans were primarily related +to credit cards. + +Forecast model inputs as of December 2021. + +When modeling expected credit losses, the firm employs a weighted, multi- +scenario forecast, which includes baseline, adverse and favorable economic +scenarios. As of December 2021, this multi-scenario forecast was primarily +weighted towards the baseline economic scenario. + +The table below presents the forecasted U.S. unemployment and U.S. GDP growth +rates used in the baseline economic scenario of the forecast model. + +In addition, in the adverse economic scenario in the firm’s forecast model, +the U.S. unemployment rate peaks at + +approximately 9.5% + +during the first quarter of 2023 and the maximum decline in the quarterly U.S. +GDP relative to the fourth quarter of 2021 is + +approximately 2.5% + +, which occurs during the first quarter of 2023. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +In the table above: + +U.S. unemployment rate represents the rate forecasted as of the respective + +quarter-end. + +Growth in U.S. GDP represents the year-over-year growth rate forecasted for +the respective years. + +While the U.S. unemployment and U.S. GDP growth rates are significant inputs +to the forecast model, the model contemplates a variety of other inputs across +a range of scenarios to provide a forecast of future economic conditions. +Given the complex nature of the forecasting process, no single economic +variable can be viewed in isolation and independently of other inputs. + +Year Ended December 2020. + +The allowance for credit losses increased by $2.63 billion during 2020 +reflecting $679 million relating to the impact of CECL adoption and $1.95 +billion from activity during the period. + +The provision for credit losses for wholesale and consumer loans reflected the +impact of the coronavirus + +(COVID-19) + +pandemic on economic conditions, which resulted in higher modeled expected +losses and lower recoveries. In addition, the provision for credit losses for +wholesale loans was impacted by asset-specific provisions and ratings +downgrades primarily related to borrowers in the diversified industrials, +technology, media & telecommunications and natural resources industries. +Besides the weaker economic outlook related to the + +COVID-19 + +pandemic, the provision for credit losses for consumer loans for 2020 was also +impacted by the growth of the credit card portfolio. + +Net charge-offs for 2020 for wholesale loans were primarily related to +corporate loans and net charge-offs for consumer loans were primarily related +to installment loans. + +Fair Value of Loans by Level + +The table below presents loans held for investment accounted for at fair value +under the fair value option by level within the fair value hierarchy. + +The gains as a result of changes in the fair value of loans held for +investment for which the fair value option was elected were $216 million for +2021 and $151 million for 2020. These gains were included in other principal +transactions. + +See Note 4 for an overview of the firm’s fair value measurement policies and +the valuation techniques and significant inputs used to determine the fair +value of loans. + +Significant Unobservable Inputs + +The table below presents the amount of level 3 loans, and ranges and weighted +averages of significant unobservable inputs used to value such loans. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +In the table above: + +Ranges represent the significant unobservable inputs that were used in the +valuation of each type of loan. + +Weighted averages are calculated by weighting each input by the relative fair +value of the loan. + +The ranges and weighted averages of these inputs are not representative of the +appropriate inputs to use when calculating the fair value of any one loan. For +example, the highest yield for residential real estate loans is appropriate +for valuing a specific residential real estate loan but may not be appropriate +for valuing any other residential real estate loan. Accordingly, the ranges of +inputs do not represent uncertainty in, or possible ranges of, fair value +measurements of level 3 loans. + +Increases in yield or duration used in the valuation of level 3 loans would +have resulted in a lower fair value measurement, while increases in recovery +rate would have resulted in a higher fair value measurement as of both +December 2021 and December 2020. Due to the distinctive nature of each level 3 +loan, the interrelationship of inputs is not necessarily uniform within each +product type. + +Loans are valued using discounted cash flows. + +Level 3 Rollforward + +The table below presents a summary of the changes in fair value for level 3 +loans. + +In the table above: + +Changes in fair value are presented for loans that are classified in level 3 +as of the end of the period. + +Net unrealized gains/(losses) relates to loans that were still held at + +period-end. + +Purchases includes originations and secondary purchases. + +Transfers between levels of the fair value hierarchy are reported at the +beginning of the reporting period in which they occur. If a loan was +transferred to level 3 during a reporting period, its entire gain or loss for +the period is classified in level 3. + +The table below presents information, by loan type, for loans included in the +summary table above. + +Level 3 Rollforward Commentary + +Year Ended December 2021. + +The net realized and unrealized gains on level 3 loans of $66 million +(reflecting $99 million of net realized gains and $33 million of net +unrealized losses) for 2021 included gains of $42 million reported in other +principal transactions and $24 million reported in interest income. + +The drivers of the net unrealized losses on level 3 loans for 2021 were not +material. + +Transfers into level 3 loans during 2021 primarily reflected transfers of +certain loans backed by commercial real estate from level 2 (principally due +to certain unobservable yield and duration inputs becoming significant to the +valuation of these instruments) and transfers of certain corporate loans from +level 2 (principally due to reduced price transparency as a result of a lack +of market evidence, including fewer market transactions in these instruments). + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Transfers out of level 3 loans during 2021 primarily reflected transfers of +certain corporate loans and wealth management and other loans to level 2 (in +each case, principally due to increased price transparency as a result of +market evidence, including market transactions in these instruments). + +Year Ended December 2020. + +The net realized and unrealized gains on level 3 loans of $159 million +(reflecting $72 million of net realized gains and $87 million of net +unrealized gains) for 2020 included gains of $135 million reported in other +principal transactions and $24 million reported in interest income. + +The drivers of the net unrealized gains on level 3 loans for 2020 were not +material. + +Transfers into level 3 loans during 2020 reflected transfers of certain loans +backed by commercial real estate, corporate loans, and wealth management and +other loans from level 2 (in each case, principally due to reduced price +transparency as a result of a lack of market evidence, including fewer market +transactions in these instruments). + +Transfers out of level 3 loans during 2020 reflected transfers of certain +corporate loans to level 2 (principally due to duration and yield inputs no +longer being significant to the valuation of these loans and increased price +transparency as a result of increased market evidence, including market +transactions in these instruments). + +Estimated Fair Value + +The table below presents the estimated fair value of loans that are not +accounted for at fair value and in what level of the fair value hierarchy they +would have been classified if they had been included in the firm’s fair value +hierarchy. + +Note 10. + +Fair Value Option + +Other Financial Assets and Liabilities at Fair Value + +In addition to trading assets and liabilities, and certain investments and +loans, the firm accounts for certain of its other financial assets and +liabilities at fair value, substantially all under the fair value option. The +primary reasons for electing the fair value option are to: + +Reflect economic events in earnings on a timely basis; + +Mitigate volatility in earnings from using different measurement attributes +(e.g., transfers of financial assets accounted for as financings are recorded +at fair value, whereas the related secured financing would be recorded on an +accrual basis absent electing the fair value option); and + +Address simplification and cost-benefit considerations (e.g., accounting for +hybrid financial instruments at fair value in their entirety versus +bifurcation of embedded derivatives and hedge accounting for debt hosts). + +Hybrid financial instruments are instruments that contain bifurcatable +embedded derivatives and do not require settlement by physical delivery of +nonfinancial assets (e.g., physical commodities). If the firm elects to +bifurcate the embedded derivative from the associated debt, the derivative is +accounted for at fair value and the host contract is accounted for at +amortized cost, adjusted for the effective portion of any fair value hedges. +If the firm does not elect to bifurcate, the entire hybrid financial +instrument is accounted for at fair value under the fair value option. + +Other financial assets and liabilities accounted for at fair value under the +fair value option include: + +Resale and repurchase agreements; + +Certain securities borrowed and loaned transactions; + +Certain customer and other receivables and certain other liabilities; + +Certain time deposits (deposits with no stated maturity are not eligible for a +fair value option election), including structured certificates of deposit, +which are hybrid financial instruments; + +Substantially all other secured financings, including transfers of assets +accounted for as financings; and + +Certain unsecured short- and long-term borrowings, substantially all of which +are hybrid financial instruments. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Fair Value of Other Financial Assets and Liabilities by Level + +The table below presents, by level within the fair value hierarchy, other +financial assets and liabilities at fair value, substantially all of which are +accounted for at fair value under the fair value option. + +In the table above, other financial assets are shown as positive amounts and +other financial liabilities are shown as negative amounts. + +See Note 4 for an overview of the firm’s fair value measurement policies and +the valuation techniques and significant inputs used to determine the fair +value of other financial assets and liabilities. + +Significant Unobservable Inputs + +See below for information about the significant unobservable inputs used to +value level 3 other financial assets and liabilities at fair value as of both +December 2021 and December 2020. + +Other Secured Financings. + +The ranges and weighted averages of significant unobservable inputs used to +value level 3 other secured financings are presented below. These ranges and +weighted averages exclude unobservable inputs that are only relevant to a +single instrument, and therefore are not meaningful. + +As of December 2021: + +As of December 2020: + +Generally, increases in yield or duration, in isolation, would have resulted +in a lower fair value measurement as of + +period-end. + +Due to the distinctive nature of each of level 3 other secured financings, the +interrelationship of inputs is not necessarily uniform across such financings. +See Note 11 for further information about other secured financings. + +Deposits, Unsecured Borrowings and Other Liabilities. + +Substantially all of the firm’s deposits, unsecured short- and long-term +borrowings, and other liabilities that are classified in level 3 are hybrid +financial instruments. As the significant unobservable inputs used to value +hybrid financial instruments primarily relate to the embedded derivative +component of these deposits, unsecured borrowings and other liabilities, these +unobservable inputs are incorporated in the firm’s derivative disclosures in +Note 7. See Note 13 for further information about deposits, Note 14 for +further information about unsecured borrowings and Note 15 for further +information about other liabilities. + +Repurchase Agreements. + +As of December 2021, the firm had no level 3 repurchase agreements. As of +December 2020, the firm’s level 3 repurchase agreements were not material. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Level 3 Rollforward + +The table below presents a summary of the changes in fair value for level 3 +other financial liabilities accounted for at fair value. + +In the table above: + +Changes in fair value are presented for all other financial liabilities that +are classified in level 3 as of the end of the period. + +Net unrealized gains/(losses) relates to other financial liabilities that were +still held at + +period-end. + +Transfers between levels of the fair value hierarchy are reported at the +beginning of the reporting period in which they occur. If a financial +liability was transferred to level 3 during a reporting period, its entire +gain or loss for the period is classified in level 3. + +For level 3 other financial liabilities, increases are shown as negative +amounts, while decreases are shown as positive amounts. + +Level 3 other financial liabilities are frequently economically hedged with +trading assets and liabilities. Accordingly, gains or losses that are +classified in level 3 can be partially offset by gains or losses attributable +to level 1, 2 or 3 trading assets and liabilities. As a result, gains or +losses included in the level 3 rollforward below do not necessarily represent +the overall impact on the firm’s results of operations, liquidity or capital +resources. + +The table below presents information, by the consolidated balance sheet line +items, for liabilities included in the summary table above. + +Level 3 Rollforward Commentary + +Year Ended December 2021. + +The net realized and unrealized gains on level 3 other financial liabilities +of $424 million (reflecting $401 million of net realized losses and $825 +million of net unrealized gains) for 2021 included gains/(losses) of $355 +million reported in market making, $32 million reported in other principal +transactions and $(20) million reported in interest expense in the +consolidated statements of earnings, and $57 million reported in debt +valuation adjustment in the consolidated statements of comprehensive income. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The net unrealized gains on level 3 other financial liabilities for 2021 +primarily reflected gains on certain hybrid financial instruments included in +unsecured long- and short-term borrowings (principally due to an increase in +interest rates). + +Transfers into level 3 other financial liabilities during 2021 primarily +reflected transfers of certain hybrid financial instruments included in +unsecured long- and short-term borrowings from level 2 (principally due to +reduced price transparency of certain volatility and correlation inputs used +to value these instruments) and certain other secured financings from level 2 +(principally due to reduced price transparency of certain yield and duration +inputs used to value these instruments). + +Transfers out of level 3 other financial liabilities during 2021 primarily +reflected transfers of certain hybrid financial instruments included in +unsecured long- and short-term borrow + +in + +gs to level 2 (principally due to increased price transparency of certain +volatility and correlation inputs used to value these instruments, and certain +unobservable volatility inputs no longer being significant to the valuation of +these instruments) and certain other secured financings to level 2 +(principally due to increased price transparency of certain yield and duration +inputs used to value these instruments). + +Year Ended December 2020. + +The net realized and unrealized losses on level 3 other financial liabilities +of $1.62 billion (reflecting $317 million of net realized losses and $1.30 +billion of net unrealized losses) for 2020 included losses of $1.44 billion +reported in market making, $28 million reported in other principal +transactions and $15 million reported in interest expense in the consolidated +statements of earnings, and $139 million reported in debt valuation adjustment +in the consolidated statements of comprehensive income. + +The net unrealized losses on level 3 other financial liabilities for 2020 +primarily reflected losses on certain hybrid financial instruments included in +unsecured long- and short-term borrowings (principally due to an increase in +global equity prices), and losses on certain hybrid financial instruments +included in deposits (principally due to an increase in the market value of +the underlying assets). + +Transfers into level 3 other financial liabilities during 2020 primarily +reflected transfers of certain other secured financings from level 2 +(principally due to reduced price transparency of certain yield and duration +inputs used to value these instruments), and certain hybrid financial +instruments included in unsecured long- and short-term borrowings from level 2 +(principally due to reduced price transparency of certain volatility and +correlation inputs used to value these instruments). + +Transfers out of level 3 other financial liabilities during 2020 primarily +reflected transfers of certain hybrid financial instruments included in +unsecured short-term borrowings to level 2 (principally due to increased price +transparency of certain volatility and correlation inputs used to value these +instruments). + +Gains and Losses on Other Financial Assets and Liabilities Accounted for at +Fair Value Under the Fair Value Option + +The table below presents the gains and losses recognized in earnings as a +result of the election to apply the fair value option to certain financial +assets and liabilities. + +In the table above: + +Gains/(losses) were substantially all included in market making. + +Gains/(losses) exclude contractual interest, which is included in interest +income and interest expense, for all instruments other than hybrid financial +instruments. See Note 23 for further information about interest income and +interest expense. + +Gains/(losses) included in unsecured short- and long-term borrowings were +substantially all related to the embedded derivative component of hybrid +financial instruments for 2021, 2020 and 2019. These gains and losses would +have been recognized under other U.S. GAAP even if the firm had not elected to +account for the entire hybrid financial instrument at fair value. + +Other primarily consists of gains/(losses) on customer and other receivables, +deposits, other secured financings and other liabilities. + +Other financial assets and liabilities at fair value are frequently +economically hedged with trading assets and liabilities. Accordingly, gains or +losses on such other financial assets and liabilities can be partially offset +by gains or losses on trading assets and liabilities. As a result, gains or +losses on other financial assets and liabilities do not necessarily represent +the overall impact on the firm’s results of operations, liquidity or capital +resources. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +See Note 8 for information about gains/(losses) on equity securities and Note +9 for information about gains/(losses) on loans which are accounted for at +fair value under the fair value option. Gains/(losses) on trading assets and +liabilities accounted for at fair value under the fair value option are +included in market making. See Note 5 for further information about +gains/(losses) from market making. + +Long-Term Debt Instruments + +The difference between the aggregate contractual principal amount and the +related fair value of long-term other secured financings, for which the fair +value option was elected, was not material as of both December 2021 and +December 2020. + +The difference between the aggregate contractual principal amount and the +related fair value of unsecured long-term borrowings, for which the fair value +option was elected, was not material as of December 2021, and the fair value +exceeded the aggregate contractual principal amount by $445 million as of +December 2020. The amount above includes both principal-protected and + +non-principal-protected + +long-term borrowings. + +Debt Valuation Adjustment + +The firm calculates the fair value of financial liabilities for which the fair +value option is elected by discounting future cash flows at a rate which +incorporates the firm’s credit spreads. + +The table below presents information about the net debt valuation adjustment +(DVA) gains/(losses) on financial liabilities for which the fair value option +was elected. + +In the table above: + +After tax DVA is included in debt valuation adjustment in the consolidated +statements of comprehensive income. + +The gains/(losses) reclassified to market making in the consolidated +statements of earnings from accumulated other comprehensive income/(loss) upon +extinguishment of such financial liabilities were not material for 2021, 2020 +and 2019. + +Loans and Lending Commitments + +The table below presents the difference between the aggregate fair value and +the aggregate contractual principal amount for loans (included in trading +assets and loans in the consolidated balance sheets) for which the fair value +option was elected. + +In the table above, the aggregate contractual principal amount of loans on +nonaccrual status and/or more than 90 days past due (which excludes loans +carried at zero fair value and considered uncollectible) exceeds the related +fair value primarily because the firm regularly purchases loans, such as +distressed loans, at values significantly below the contractual principal +amounts. + +The fair value of unfunded lending commitments for which the fair value option +was elected was a liability of $20 million as of December 2021 and $25 million +as of December 2020, and the related total contractual amount of these lending +commitments was $611 million as of December 2021 and $1.64 billion as of +December 2020. See Note 18 for further information about lending commitments. + +Impact of Credit Spreads on Loans and Lending Commitments + +The estimated net gain/(loss) attributable to changes in instrument-specific +credit spreads on loans and lending commitments for which the fair value +option was elected was $277 million for 2021, $(106) million for 2020 and $134 +million for 2019. The firm generally calculates the fair value of loans and +lending commitments for which the fair value option is elected by discounting +future cash flows at a rate which incorporates the instrument-specific credit +spreads. For floating-rate loans and lending commitments, substantially all +changes in fair value are attributable to changes in instrument-specific +credit spreads, whereas for fixed-rate loans and lending commitments, changes +in fair value are also attributable to changes in interest rates. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 11. + +Collateralized Agreements and Financings + +Collateralized agreements are resale agreements and securities borrowed. +Collateralized financings are repurchase agreements, securities loaned and +other secured financings. The firm enters into these transactions in order to, +among other things, facilitate client activities, invest excess cash, acquire +securities to cover short positions and finance certain firm activities. + +Collateralized agreements and financings are presented on a + +net-by-counterparty + +basis when a legal right of setoff exists. Interest on collateralized +agreements, which is included in interest income, and collateralized +financings, which is included in interest expense, is recognized over the life +of the transaction. See Note 23 for further information about interest income +and interest expense. + +Resale and Repurchase Agreements + +A resale agreement is a transaction in which the firm purchases financial +instruments from a seller, typically in exchange for cash, and simultaneously +enters into an agreement to resell the same or substantially the same +financial instruments to the seller at a stated price plus accrued interest at +a future date. + +A repurchase agreement is a transaction in which the firm sells financial +instruments to a buyer, typically in exchange for cash, and simultaneously +enters into an agreement to repurchase the same or substantially the same +financial instruments from the buyer at a stated price plus accrued interest +at a future date. + +Even though repurchase and resale agreements (including “repos- and + +reverses-to-maturity”) + +involve the legal transfer of ownership of financial instruments, they are +accounted for as financing arrangements because they require the financial +instruments to be repurchased or resold before or at the maturity of the +agreement. The financial instruments purchased or sold in resale and +repurchase agreements typically include U.S. government and agency, and +investment-grade sovereign obligations. + +The firm receives financial instruments purchased under resale agreements and +makes delivery of financial instruments sold under repurchase agreements. To +mitigate credit exposure, the firm monitors the market value of these +financial instruments on a daily basis, and delivers or obtains additional +collateral due to changes in the market value of the financial instruments, as +appropriate. For resale agreements, the firm typically requires collateral +with a fair value approximately equal to the carrying value of the relevant +assets in the consolidated balance sheets. + +Securities Borrowed and Loaned Transactions + +In a securities borrowed transaction, the firm borrows securities from a +counterparty in exchange for cash or securities. When the firm returns the +securities, the counterparty returns the cash or securities. Interest is +generally paid periodically over the life of the transaction. + +In a securities loaned transaction, the firm lends securities to a +counterparty in exchange for cash or securities. When the counterparty returns +the securities, the firm returns the cash or securities posted as collateral. +Interest is generally paid periodically over the life of the transaction. + +The firm receives securities borrowed and makes delivery of securities loaned. +To mitigate credit exposure, the firm monitors the market value of these +securities on a daily basis, and delivers or obtains additional collateral due +to changes in the market value of the securities, as appropriate. For +securities borrowed transactions, the firm typically requires collateral with +a fair value approximately equal to the carrying value of the securities +borrowed transaction. + +Securities borrowed and loaned within Fixed Income, Currency and Commodities +(FICC) financing are recorded at fair value under the fair value option. See +Note 10 for further information about securities borrowed and loaned accounted +for at fair value. + +Substantially all of securities borrowed and loaned within Equities financing +are recorded based on the amount of cash collateral advanced or received plus +accrued interest. The firm also reviews such securities borrowed to determine +if an allowance for credit losses should be recorded by taking into +consideration the fair value of collateral received. As these agreements +generally can be terminated on demand, they exhibit little, if any, +sensitivity to changes in interest rates. Therefore, the carrying value of +such agreements approximates fair value. As these agreements are not accounted +for at fair value, they are not included in the firm’s fair value hierarchy in +Notes 4 through 10. Had these agreements been included in the firm’s fair +value hierarchy, they would have been classified in level 2 as of both +December 2021 and December 2020. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Offsetting Arrangements + +The table below presents resale and repurchase agreements and securities +borrowed and loaned transactions included in the consolidated balance sheets, +as well as the amounts not offset in the consolidated balance sheets. + +In the table above: + +Substantially all of the gross carrying values of these arrangements are +subject to enforceable netting agreements. + +Where the firm has received or posted collateral under credit support +agreements, but has not yet determined such agreements are enforceable, the +related collateral has not been netted. + +Amounts not offset includes counterparty netting that does not meet the +criteria for netting under U.S. GAAP and the fair value of collateral received +or posted subject to enforceable credit support agreements. + +Resale agreements and repurchase agreements are carried at fair value under +the fair value option. See Note 4 for further information about the valuation +techniques and significant inputs used to determine fair value. + +Securities borrowed included in the consolidated balance sheets of $39.96 +billion as of December 2021 and $28.90 billion as of December 2020, and +securities loaned of $9.17 billion as of December 2021 and $1.05 billion as of +December 2020 were at fair value under the fair value option. See Note 10 for +further information about securities borrowed and securities loaned accounted +for at fair value. + +Gross Carrying Value of Repurchase Agreements and Securities Loaned + +The table below presents the gross carrying value of repurchase agreements and +securities loaned by class of collateral pledged. + +The table below presents the gross carrying value of repurchase agreements and +securities loaned by maturity. + +In the table above: + +Repurchase agreements and securities loaned that are repayable prior to +maturity at the option of the firm are reflected at their contractual maturity +dates. + +Repurchase agreements and securities loaned that are redeemable prior to +maturity at the option of the holder are reflected at the earliest dates such +options become exercisable. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Other Secured Financings + +In addition to repurchase agreements and securities loaned transactions, the +firm funds certain assets through the use of other secured financings and +pledges financial instruments and other assets as collateral in these +transactions. These other secured financings include: + +Liabilities of consolidated VIEs; + +Transfers of assets accounted for as financings rather than sales (e.g., +pledged commodities, bank loans and mortgage whole loans); and + +Other structured financing arrangements. + +Other secured financings included nonrecourse arrangements. Nonrecourse other +secured financings were $8.64 billion as of December 2021 and $12.31 billion +as of December 2020. + +The firm has elected to apply the fair value option to substantially all other +secured financings because the use of fair value eliminates + +non-economic + +volatility in earnings that would arise from using different measurement +attributes. See Note 10 for further information about other secured financings +that are accounted for at fair value. + +Other secured financings that are not recorded at fair value are recorded +based on the amount of cash received plus accrued interest, which generally +approximates fair value. As these financings are not accounted for at fair +value, they are not included in the firm’s fair value hierarchy in Notes 4 +through 10. Had these financings been included in the firm’s fair value +hierarchy, substantially all would have been classified in level 3 as of both +December 2021 and December 2020. + +The table below presents information about other secured financings. + +In the table above: + +Short-term other secured financings includes financings maturing within one +year of the financial statement date and financings that are redeemable within +one year of the financial statement date at the option of the holder. + +Non-U.S. dollar-denominated short-term other secured financings at amortized +cost had a weighted average interest rate of 0.22% as of December 2021. This +rate includes the effect of hedging activities. + +U.S. dollar-denominated long-term other secured financings at amortized cost +had a weighted average interest rate of 1.06% as of December 2021 and 1.27% as +of December 2020. These rates include the effect of hedging activities. + +Non-U.S. + +dollar-denominated long-term other secured financings at amortized cost had a +weighted average interest rate of 0.46% as of December 2021 and 0.40% as of +December 2020. These rates include the effect of hedging activities. + +Total other secured financings included $1.97 billion as of December 2021 and +$2.05 billion as of December 2020 related to transfers of financial assets +accounted for as financings rather than sales. Such financings were +collateralized by financial assets, primarily included in trading assets, of +$2.02 billion as of December 2021 and $2.26 billion as of December 2020. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Other secured financings collateralized by financial instruments included +$10.37 billion as of December 2021 and $11.28 billion as of December 2020 of +other secured financings collateralized by trading assets, investments and +loans, and included $2.45 billion as of December 2021 and $5.63 billion as of +December 2020 of other secured financings collateralized by financial +instruments received as collateral and repledged. + +The table below presents other secured financings by maturity. + +In the table above: + +Long-term other secured financings that are repayable prior to maturity at the +option of the firm are reflected at their contractual maturity dates. + +Long-term other secured financings that are redeemable prior to maturity at +the option of the holder are reflected at the earliest dates such options +become exercisable. + +Collateral Received and Pledged + +The firm receives cash and securities (e.g., U.S. government and agency +obligations, other sovereign and corporate obligations, as well as equity +securities) as collateral, primarily in connection with resale agreements, +securities borrowed, derivative transactions and customer margin loans. The +firm obtains cash and securities as collateral on an upfront or contingent +basis for derivative instruments and collateralized agreements to reduce its +credit exposure to individual counterparties. + +In many cases, the firm is permitted to deliver or repledge financial +instruments received as collateral when entering into repurchase agreements +and securities loaned transactions, primarily in connection with secured +client financing activities. The firm is also permitted to deliver or repledge +these financial instruments in connection with other secured financings, +collateralized derivative transactions and firm or customer settlement +requirements. + +The firm also pledges certain trading assets in connection with repurchase +agreements, securities loaned transactions and other secured financings, and +other assets (substantially all real estate and cash) in connection with other +secured financings to counterparties who may or may not have the right to +deliver or repledge them. + +The table below presents financial instruments at fair value received as +collateral that were available to be delivered or repledged and were delivered +or repledged. + +The table below presents information about assets pledged. + +The firm also segregates securities for regulatory and other purposes related +to client activity. Such securities are segregated from trading assets and +investments, as well as from securities received as collateral under resale +agreements and securities borrowed transactions. Securities segregated by the +firm were $41.49 billion as of December 2021 and $32.97 billion as of December + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 12. + +Other Assets + +The table below presents other assets by type. + +Property, Leasehold Improvements and Equipment + +Property, leasehold improvements and equipment is net of accumulated +depreciation and amortization of $10.81 billion as of December 2021 and $10.12 +billion as of December 2020. Property, leasehold improvements and equipment +included $6.71 billion as of December 2021 and $6.54 billion as of December +2020 that the firm uses in connection with its operations, and $194 million as +of December 2021 and $318 million as of December 2020 of foreclosed real +estate primarily related to distressed loans that were purchased by the firm. +The remainder is held by investment entities, including VIEs, consolidated by +the firm. Substantially all property and equipment is depreciated on a +straight-line basis over the useful life of the asset. Leasehold improvements +are amortized on a straight-line basis over the shorter of the useful life of +the improvement or the term of the lease. Capitalized costs of software +developed or obtained for internal use are amortized on a straight-line basis +over three years. + +The firm tests property, leasehold improvements and equipment for impairment +when events or changes in circumstances suggest that an asset’s or asset +group’s carrying value may not be fully recoverable. To the extent the +carrying value of an asset or asset group exceeds the projected undiscounted +cash flows expected to result from the use and eventual disposal of the asset +or asset group, the firm determines the asset or asset group is impaired and +records an impairment equal to the difference between the estimated fair value +and the carrying value of the asset or asset group. In addition, the firm will +recognize an impairment prior to the sale of an asset or asset group if the +carrying value of the asset or asset group exceeds its estimated fair value. + +The firm had impairments of $143 million during 2021 and $171 million during +2020, primarily related to properties held by the firm’s investment entities. +There were no material impairments during 2019. + +Goodwill + +Goodwill is the cost of acquired companies in excess of the fair value of net +assets, including identifiable intangible assets, at the acquisition date. + +The table below presents the carrying value of goodwill by reporting unit. + +Goodwill is assessed for impairment annually in the fourth quarter or more +frequently if events occur or circumstances change that indicate an impairment +may exist. When assessing goodwill for impairment, first, a qualitative +assessment can be made to determine whether it is more likely than not that +the estimated fair value of a reporting unit is less than its estimated +carrying value. If the results of the qualitative assessment are not +conclusive, a quantitative goodwill test is performed. Alternatively, a +quantitative goodwill test can be performed without performing a qualitative +assessment. + +The quantitative goodwill test compares the estimated fair value of each +reporting unit with its estimated net book value (including goodwill and +identifiable intangible assets). If the reporting unit’s estimated fair value +exceeds its estimated net book value, goodwill is not impaired. An impairment +is recognized if the estimated fair value of a reporting unit is less than its +estimated net book value. + +To estimate the fair value of each reporting unit, other than Consumer +banking, a relative value technique is used because the firm believes market +participants would use this technique to value these reporting units. The +relative value technique applies observable + +price-to-earnings + +multiples or + +price-to-book + +multiples of comparable competitors to reporting units’ net earnings or net +book value. To estimate the fair value of Consumer banking, a discounted cash +flow valuation approach is used because the firm believes market participants +would use this technique to value that reporting unit given its early stage of +development. The estimated net carrying value of each reporting unit reflects +an allocation of total shareholders’ equity and represents the estimated +amount of total shareholders’ equity required to support the activities of the +reporting unit under currently applicable regulatory capital requirements. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +In the fourth quarter of 2021, the firm performed its annual assessment of +goodwill for impairment, for each of its reporting units, by performing a +qualitative assessment. Multiple factors were assessed with respect to each of +the firm’s reporting units to determine whether it was more likely than not +that the estimated fair value of any of those reporting units was less than +its estimated carrying value. The qualitative assessment also considered +changes since a quantitative test was last performed in 2019. + +The firm considered the following factors in the qualitative annual assessment +when evaluating whether it was more likely than not that the estimated fair +value of a reporting unit was less than its estimated carrying value: + +Performance Indicators. + +During 2021, the firm’s net revenues, diluted earnings per common share (EPS), +return on average common shareholders’ equity and book value per common share +all increased from 2020 and from when a quantitative test was last performed +in 2019. The firm’s operating expenses increased, primarily reflecting +significantly higher compensation and benefits expenses (reflecting strong +financial performance). Despite the increase in expenses, both the efficiency +ratio (total operating expenses divided by total net revenues) and + +pre-tax + +margin improved compared with 2020. + +Macroeconomic Indicators. + +The global economy continued to recover during 2021 from the impact of the + +COVID-19 + +pandemic, as the lifting of health and safety restrictions amid vaccine +distribution facilitated an increase in global economic recovery, and monetary +and fiscal policy from central banks and governments remained accommodative. +However, there remains uncertainty related to the impact and the duration of +the + +COVID-19 + +pandemic. + +Firm and Industry Events. + +There were no events, entity-specific or otherwise, that would have had a +significant negative impact on the valuation of the firm’s reporting units. + +Fair Value Indicators. + +Since the 2020 qualitative goodwill test, fair value indicators in the market +generally improved, as global equity prices were higher, credit spreads were +tighter, and the firm and its peers’ stock prices and + +price-to-book + +multiples were higher. Despite increased inflation concerns, supply chain +challenges and the rise in COVID-19 cases in the fourth quarter of 2021, the +firm’s stock price and + +price-to-book + +multiple ended the year higher compared with the end of 2020. + +As a result of the qualitative assessment, the firm determined that it was +more likely than not that the estimated fair value of each reporting unit +exceeded its respective estimated carrying value. Therefore, the firm +determined that goodwill for each reporting unit was not impaired and that a +quantitative goodwill test was not required. + +Identifiable Intangible Assets + +The table below presents identifiable intangible assets by reporting unit and +type. + +During 2021, the amount of intangible assets acquired by the firm was not +material. The firm acquired $155 million of intangible assets during 2020, +primarily related to acquired leases and customer lists, with a weighted +average amortization period of 10 years. + +Substantially all of the firm’s identifiable intangible assets have finite +useful lives and are amortized over their estimated useful lives generally +using the straight-line method. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The tables below present information about the amortization of identifiable +intangible assets. + +The firm tests intangible assets for impairment when events or changes in +circumstances suggest that an asset’s or asset group’s carrying value may not +be fully recoverable. To the extent the carrying value of an asset or asset +group exceeds the projected undiscounted cash flows expected to result from +the use and eventual disposal of the asset or asset group, the firm determines +the asset or asset group is impaired and records an impairment equal to the +difference between the estimated fair value and the carrying value of the +asset or asset group. In addition, the firm will recognize an impairment prior +to the sale of an asset or asset group if the carrying value of the asset or +asset group exceeds its estimated fair value. There were no material +impairments during 2021, 2020 or 2019. + +Operating Lease + +Right-of-Use + +Assets + +The firm enters into operating leases for real estate, office equipment and +other assets, substantially all of which are used in connection with its +operations. For leases longer than one year, the firm recognizes a + +right-of-use + +asset representing the right to use the underlying asset for the lease term, +and a lease liability representing the liability to make payments. The lease +term is generally determined based on the contractual maturity of the lease. +For leases where the firm has the option to terminate or extend the lease, an +assessment of the likelihood of exercising the option is incorporated into the +determination of the lease term. Such assessment is initially performed at the +inception of the lease and is updated if events occur that impact the original +assessment. + +An operating lease + +right-of-use + +asset is initially determined based on the operating lease liability, adjusted +for initial direct costs, lease incentives and amounts paid at or prior to +lease commencement. This amount is then amortized over the lease term. The +firm recognized $305 million for 2021, $182 million for 2020 and $963 million +(primarily related to the firm’s European headquarters in London) for 2019 of + +right-of-use + +assets and operating lease liabilities in + +non-cash + +transactions for leases entered into or assumed. See Note 15 for information +about operating lease liabilities. + +For leases where the firm will derive no economic benefit from leased space +that it has vacated or where the firm has shortened the term of a lease when +space is no longer needed, the firm will record an impairment or accelerated +amortization of + +right-of-use + +assets. There were no material impairments or accelerated amortizations during +2021 and 2020. + +Miscellaneous Receivables and Other + +Miscellaneous receivables and other included: + +Assets classified as held for sale of $1.02 billion as of December 2021 and +$437 million as of December 2020 related to certain of the firm’s consolidated +investments within the Asset Management segment, substantially all of which +consisted of property and equipment. + +Note 13. + +Deposits + +The table below presents the types and sources of deposits. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +In the table above: + +Substantially all deposits are interest-bearing. + +Savings and demand accounts consist of money market deposit accounts, +negotiable order of withdrawal accounts and demand deposit accounts that have +no stated maturity or expiration date. + +Time deposits included $35.43 billion as of December 2021 and $16.18 billion +as of December 2020 of deposits accounted for at fair value under the fair +value option. See Note 10 for further information about deposits accounted for +at fair value. + +Deposit sweep programs include long-term contractual agreements with U.S. +broker-dealers who sweep client cash to FDIC-insured deposits. As of December +2021, the firm had 15 such deposit sweep program agreements. + +Transaction banking deposits consists of deposits that the firm raised through +its cash management services business for corporate and other institutional +clients. + +Other deposits represent deposits from institutional clients. + +The table below presents the location of deposits. + +In the table above, U.S. deposits were held at Goldman Sachs Bank USA (GS Bank +USA) and substantially all + +non-U.S. + +deposits were held at Goldman Sachs International Bank (GSIB). + +The table below presents maturities of time deposits held in U.S. and + +non-U.S. + +offices. + +As of December 2021, deposits in U.S. offices included $25.44 billion and +deposits in + +non-U.S. + +offices included $32.73 billion of time deposits in denominations that met or +exceeded the applicable insurance limits, or were otherwise not covered by +insurance. + +The firm’s savings and demand deposits are recorded based on the amount of +cash received plus accrued interest, which approximates fair value. In +addition, the firm designates certain derivatives as fair value hedges to +convert a portion of its time deposits not accounted for at fair value from +fixed-rate obligations into floating-rate obligations. The carrying value of +time deposits not accounted for at fair value approximated fair value as of +both December 2021 and December 2020. As these savings and demand deposits and +time deposits are not accounted for at fair value, they are not included in +the firm’s fair value hierarchy in Notes 4 through 10. Had these deposits been +included in the firm’s fair value hierarchy, they would have been classified +in level 2 as of both December 2021 and December 2020. + +Note 14. + +Unsecured Borrowings + +The table below presents information about unsecured borrowings. + +Unsecured Short-Term Borrowings + +Unsecured short-term borrowings includes the portion of unsecured long-term +borrowings maturing within one year of the financial statement date and +unsecured long-term borrowings that are redeemable within one year of the +financial statement date at the option of the holder. + +The firm accounts for certain hybrid financial instruments at fair value under +the fair value option. See Note 10 for further information about unsecured +short-term borrowings that are accounted for at fair value. In addition, the +firm designates certain derivatives as fair value hedges to convert a portion +of its unsecured short-term borrowings not accounted for at fair value from +fixed-rate obligations into floating-rate obligations. The carrying value of +unsecured short-term borrowings that are not recorded at fair value generally +approximates fair value due to the short-term nature of the obligations. As +these unsecured short-term borrowings are not accounted for at fair value, +they are not included in the firm’s fair value hierarchy in Notes 4 through +10. Had these borrowings been included in the firm’s fair value hierarchy, +substantially all would have been classified in level 2 as of both December +2021 and December 2020. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents information about unsecured short-term borrowings. + +In the table above: + +The weighted average interest rates for these borrowings include the effect of +hedging activities and exclude unsecured short-term borrowings accounted for +at fair value under the fair value option. See Note 7 for further information +about hedging activities. + +Unsecured Long-Term Borrowings + +The table below presents information about unsecured long-term borrowings. + +In the table above: + +Unsecured long-term borrowings consists principally + +of + +senior borrowings, which have maturities extending through 2065 + +Floating-rate obligations includes equity-linked, credit-linked and indexed +instruments. Floating interest rates are generally based on USD LIBOR, Euro +Interbank Offered Rate or SOFR. + +The table below presents unsecured long-term borrowings by maturity. + +In the table above: + +Unsecured long-term borrowings maturing within one year of the financial +statement date and unsecured long-term borrowings that are redeemable within +one year of the financial statement date at the option of the holder are +excluded as they are included in unsecured short-term borrowings. + +Unsecured long-term borrowings that are repayable prior to maturity at the +option of the firm are reflected at their contractual maturity dates. + +Unsecured long-term borrowings that are redeemable prior to maturity at the +option of the holder are reflected at the earliest dates such options become +exercisable. + +The firm designates certain derivatives as fair value hedges to convert a +portion of fixed-rate unsecured long-term borrowings not accounted for at fair +value into floating-rate obligations. See Note 7 for further information about +hedging activities. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents unsecured long-term borrowings, after giving effect +to such hedging activities. + +In the table above, the aggregate amounts of unsecured long-term borrowings +had weighted average interest rates of 1.60% (2.25% related to fixed-rate +obligations and 1.48% related to floating-rate obligations) as of December +2021 and 2.01% (3.34% related to fixed-rate obligations and 1.70% related to +floating-rate obligations) as of December 2020. These rates exclude unsecured +long-term borrowings accounted for at fair value under the fair value option. + +The carrying value of unsecured long-term borrowings for which the firm did +not elect the fair value option was $201.70 billion as of December 2021 and +$172.57 billion as of December 2020. The estimated fair value of such +unsecured long-term borrowings was $209.37 billion as of December 2021 and +$183.29 billion as of December 2020. As these borrowings are not accounted for +at fair value, they are not included in the firm’s fair value hierarchy in +Notes 4 through 10. Had these borrowings been included in the firm’s fair +value hierarchy, substantially all would have been classified in level 2 as of +both December 2021 and December 2020. + +Subordinated Borrowings + +Unsecured long-term borrowings includes subordinated debt and junior +subordinated debt. Subordinated debt that matures within one year is included +in unsecured short-term borrowings. Junior subordinated debt is junior in +right of payment to other subordinated borrowings, which are junior to senior +borrowings. Long-term subordinated debt had maturities ranging from 2025 to +2045 as of both December 2021 and December 2020. + +The table below presents information about subordinated borrowings. + +In the table above: + +The rate is the weighted average interest rate for these borrowings (excluding +borrowings accounted for at fair value under the fair value option), including +the effect of fair value hedges used to convert fixed-rate obligations into +floating-rate obligations. See Note 7 for further information about hedging +activities. + +Junior Subordinated Debt + +In 2004, Group Inc. issued $2.84 billion of junior subordinated debt to +Goldman Sachs Capital I (Trust), a Delaware statutory trust. The Trust issued +$2.75 billion of guaranteed preferred beneficial interests (Trust Preferred +securities) to third parties and $85 million of common beneficial interests to +Group Inc. As of both December 2021 and December 2020, the outstanding par +amount of junior subordinated debt held by the Trust was $968 million and the +outstanding par amount of Trust Preferred securities and common beneficial +interests issued by the Trust was $939 million and $29 million, respectively. +The Trust is a wholly-owned finance subsidiary of the firm for regulatory and +legal purposes but is not consolidated for accounting purposes. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The firm pays interest semi-annually on the junior subordinated debt at an +annual rate of 6.345% and the debt matures on February 15, 2034. The coupon +rate and the payment dates applicable to the beneficial interests are the same +as the interest rate and payment dates for the junior subordinated debt. The +firm has the right, from time to time, to defer payment of interest on the +junior subordinated debt, and therefore cause payment on the Trust’s preferred +beneficial interests to be deferred, in each case up to ten consecutive semi- +annual periods. During any such deferral period, the firm will not be +permitted to, among other things, pay dividends on or make certain repurchases +of its common stock. The Trust is not permitted to pay any distributions on +the common beneficial interests held by Group Inc. unless all dividends +payable on the preferred beneficial interests have been paid in full. + +The firm has covenanted in favor of the holders of Group Inc.’s 6.345% junior +subordinated debt due February 15, 2034, that, subject to certain exceptions, +the firm will not redeem or purchase the capital securities issued by Goldman +Sachs Capital II and Goldman Sachs Capital III (APEX Trusts) or shares of +Group Inc.’s Perpetual + +Non-Cumulative + +Preferred Stock, Series E (Series E Preferred Stock), Perpetual + +Non-Cumulative + +Preferred Stock, Series F (Series F Preferred Stock) or Perpetual + +Non-Cumulative + +Preferred Stock, Series O, if the redemption or purchase results in less than +$253 million aggregate liquidation preference of that series outstanding, +prior to specified dates in 2022 for a price that exceeds a maximum amount +determined by reference to the net cash proceeds that the firm has received +from the sale of qualifying securities. + +The APEX Trusts hold Group Inc.’s Series E Preferred Stock and Series F +Preferred Stock. These trusts are Delaware statutory trusts sponsored by the +firm and wholly-owned finance subsidiaries of the firm for regulatory and +legal purposes but are not consolidated for accounting purposes. + +Note 15. + +Other Liabilities + +The table below presents other liabilities by type. + +Operating Lease Liabilities + +For leases longer than one year, the firm recognizes a + +right-of-use + +asset representing the right to use the underlying asset for the lease term, +and a lease liability representing the liability to make payments. See Note 12 +for information about operating lease + +right-of-use + +assets. + +The table below presents information about operating lease liabilities. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +In the table above, the weighted average discount rate represents the firm’s +incremental borrowing rate as of January 2019 for operating leases existing on +the date of adoption of ASU + +No. 2016-02, + +“Leases (Topic 842),” and at the lease inception date for leases entered into +subsequent to the adoption of this ASU. + +Operating lease costs were $463 million for 2021, $458 million for 2020 and +$538 million for 2019. Variable lease costs, which are included in operating +lease costs, were not material for 2021, 2020 and 2019. Total occupancy +expenses for space held in excess of the firm’s current requirements were not +material for both 2021 and 2020. + +Lease payments relating to operating lease arrangements that were signed, but +had not yet commenced were $300 million as of December 2021. + +Accrued Expenses and Other + +Accrued expenses and other included: + +Liabilities classified as held for sale of $310 million as of December 2021 +related to certain of the firm’s consolidated investments within the Asset +Management segment, substantially all of which consisted of other secured +financings primarily carried at fair value under the fair value option, and +were related to assets classified as held for sale. See Note 12 for further +information about assets held for sale. As of December 2020, liabilities +classified as held for sale were not material. + +Contract liabilities, which represent consideration received by the firm in +connection with its contracts with clients prior to providing the service. As +of both December 2021 and December 2020, the firm’s contract liabilities were +not material. + +Note 16. + +Securitization Activities + +The firm securitizes residential and commercial mortgages, corporate bonds, +loans and other types of financial assets by selling these assets to +securitization vehicles (e.g., trusts, corporate entities and limited +liability companies) or through a resecuritization. The firm acts as +underwriter of the beneficial interests that are sold to investors. The firm’s +residential mortgage securitizations are primarily in connection with +government agency securitizations. + +The firm accounts for a securitization as a sale when it has relinquished +control over the transferred financial assets. Prior to securitization, the +firm generally accounts for assets pending transfer at fair value and +therefore does not typically recognize significant gains or losses upon the +transfer of assets. Net revenues from underwriting activities are recognized +in connection with the sales of the underlying beneficial interests to +investors. + +The firm generally receives cash in exchange for the transferred assets but +may also have continuing involvement with the transferred financial assets, +including ownership of beneficial interests in securitized financial assets, +primarily in the form of debt instruments. The firm may also purchase senior +or subordinated securities issued by securitization vehicles (which are +typically VIEs) in connection with secondary market-making activities. + +The primary risks included in beneficial interests and other interests from +the firm’s continuing involvement with securitization vehicles are the +performance of the underlying collateral, the position of the firm’s +investment in the capital structure of the securitization vehicle and the +market yield for the security. Interests accounted for at fair value are +primarily classified in level 2 of the fair value hierarchy. Interests not +accounted for at fair value are carried at amounts that approximate fair +value. See Notes 4 through 10 for further information about fair value +measurements. + +The table below presents the amount of financial assets securitized and the +cash flows received on retained interests in securitization entities in which +the firm had continuing involvement as of the end of the period. + +The firm securitized assets of $886 million for 2021, $551 million for 2020 +and $601 million for 2019, in a + +non-cash + +exchange for loans and investments. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents information about nonconsolidated securitization +entities to which the firm sold assets and had continuing involvement as of +the end of the period. + +In the table above: + +CMOs represents collateralized mortgage obligations. + +The outstanding principal amount is presented for the purpose of providing +information about the size of the securitization entities and is not +representative of the firm’s risk of loss. + +The firm’s risk of loss from retained or purchased interests is limited to the +carrying value of these interests. + +Purchased interests represent senior and subordinated interests, purchased in +connection with secondary market-making activities, in securitization entities +in which the firm also holds retained interests. + +Substantially all of the total outstanding principal amount and total retained +interests relate to securitizations during 2017 and thereafter. + +In addition to the interests in the table above, the firm had other continuing +involvement in the form of derivative transactions and commitments with +certain nonconsolidated VIEs. The carrying value of these derivatives and +commitments was a net asset of $81 million as of December 2021 and $52 million +as of December 2020, and the notional amount of these derivatives and +commitments was $1.81 billion as of December 2021 and $1.43 billion as of +December 2020. The notional amounts of these derivatives and commitments are +included in maximum exposure to loss in the nonconsolidated VIE table in Note + +The table below presents information about the weighted average key economic +assumptions used in measuring the fair value of mortgage-backed retained +interests. + +In the table above: + +Amounts do not reflect the benefit of other financial instruments that are +held to mitigate risks inherent in these retained interests. + +Changes in fair value based on an adverse variation in assumptions generally +cannot be extrapolated because the relationship of the change in assumptions +to the change in fair value is not usually linear. + +The impact of a change in a particular assumption is calculated independently +of changes in any other assumption. In practice, simultaneous changes in +assumptions might magnify or counteract the sensitivities disclosed above. + +The constant prepayment rate is included only for positions for which it is a +key assumption in the determination of fair value. + +The discount rate for retained interests that relate to U.S. government +agency-issued CMOs does not include any credit loss. Expected credit loss +assumptions are reflected in the discount rate for the remainder of retained +interests. + +The firm has other retained interests not reflected in the table above with a +fair value of $360 million and a weighted average life of 3.6 years as of +December 2021, and a fair value of $192 million and a weighted average life of +3.9 years as of December 2020. Due to the nature and fair value of certain of +these retained interests, the weighted average assumptions for constant +prepayment and discount rates and the related sensitivity to adverse changes +are not meaningful as of both December 2021 and December 2020. The firm’s +maximum exposure to adverse changes in the value of these interests is the +carrying value of $360 million as of December 2021 and $192 million as of +December 2020. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 17. + +Variable Interest Entities + +A variable interest in a VIE is an investment (e.g., debt or equity) or other +interest (e.g., derivatives or loans and lending commitments) that will absorb +portions of the VIE’s expected losses and/or receive portions of the VIE’s +expected residual returns. + +The firm’s variable interests in VIEs include senior and subordinated debt; +loans and lending commitments; limited and general partnership interests; +preferred and common equity; derivatives that may include foreign currency, +equity and/or credit risk; guarantees; and certain of the fees the firm +receives from investment funds. Certain interest rate, foreign currency and +credit derivatives the firm enters into with VIEs are not variable interests +because they create, rather than absorb, risk. + +VIEs generally finance the purchase of assets by issuing debt and equity +securities that are either collateralized by or indexed to the assets held by +the VIE. The debt and equity securities issued by a VIE may include tranches +of varying levels of subordination. The firm’s involvement with VIEs includes +securitization of financial assets, as described in Note 16, and investments +in and loans to other types of VIEs, as described below. See Note 3 for the +firm’s consolidation policies, including the definition of a VIE. + +VIE Consolidation Analysis + +The enterprise with a controlling financial interest in a VIE is known as the +primary beneficiary and consolidates the VIE. The firm determines whether it +is the primary beneficiary of a VIE by performing an analysis that principally +considers: + +Which variable interest holder has the power to direct the activities of the +VIE that most significantly impact the VIE’s economic performance; + +Which variable interest holder has the obligation to absorb losses or the +right to receive benefits from the VIE that could potentially be significant +to the VIE; + +The VIE’s purpose and design, including the risks the VIE was designed to +create and pass through to its variable interest holders; + +The VIE’s capital structure; + +The terms between the VIE and its variable interest holders and other parties +involved with the VIE; and + +Related-party relationships. + +The firm reassesses its evaluation of whether an entity is a VIE when certain +reconsideration events occur. The firm reassesses its determination of whether +it is the primary beneficiary of a VIE on an ongoing basis based on current +facts and circumstances. + +VIE Activities + +The firm is principally involved with VIEs through the following business +activities: + +Mortgage-Backed VIEs. + +The firm sells residential and commercial mortgage loans and securities to +mortgage-backed VIEs and may retain beneficial interests in the assets sold to +these VIEs. The firm purchases and sells beneficial interests issued by +mortgage-backed VIEs in connection with market-making activities. In addition, +the firm may enter into derivatives with certain of these VIEs, primarily +interest rate swaps, which are typically not variable interests. The firm +generally enters into derivatives with other counterparties to mitigate its +risk. + +Real Estate, Credit- and Power-Related and Other Investing VIEs. + +The firm purchases equity and debt securities issued by and makes loans to +VIEs that hold real estate, performing and nonperforming debt, distressed +loans, power-related assets and equity securities. The firm generally does not +sell assets to, or enter into derivatives with, these VIEs. + +Corporate Debt and Other Asset-Backed VIEs. + +The firm structures VIEs that issue notes to clients, purchases and sells +beneficial interests issued by corporate debt and other asset-backed VIEs in +connection with market-making activities, and makes loans to VIEs that +warehouse corporate debt. Certain of these VIEs synthetically create the +exposure for the beneficial interests they issue by entering into credit +derivatives with the firm, rather than purchasing the underlying assets. In +addition, the firm may enter into derivatives, such as total return swaps, +with certain corporate debt and other asset-backed VIEs, under which the firm +pays the VIE a return due to the beneficial interest holders and receives the +return on the collateral owned by the VIE. The collateral owned by these VIEs +is primarily other asset-backed loans and securities. The firm may be removed +as the total return swap counterparty and may enter into derivatives with +other counterparties to mitigate its risk related to these swaps. The firm may +sell assets to the corporate debt and other asset-backed VIEs it structures. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Principal-Protected Note VIEs. + +The firm structures VIEs that issue principal-protected notes to clients. +These VIEs own portfolios of assets, principally with exposure to hedge funds. +Substantially all of the principal protection on the notes issued by these +VIEs is provided by the asset portfolio rebalancing that is required under the +terms of the notes. The firm enters into total return swaps with these VIEs +under which the firm pays the VIE the return due to the principal-protected +note holders and receives the return on the assets owned by the VIE. The firm +may enter into derivatives with other counterparties to mitigate its risk. The +firm also obtains funding through these VIEs. + +Investments in Funds. + +The firm makes equity investments in certain investment fund VIEs it manages +and is entitled to receive fees from these VIEs. The firm has generally not +sold assets to, or entered into derivatives with, these VIEs. + +Nonconsolidated VIEs + +The table below presents a summary of the nonconsolidated VIEs in which the +firm holds variable interests. + +In the table above: + +The nature of the firm’s variable interests is described in the rows under +maximum exposure to loss. + +The firm’s exposure to the obligations of VIEs is generally limited to its +interests in these entities. In certain instances, the firm provides +guarantees, including derivative guarantees, to VIEs or holders of variable +interests in VIEs. + +The maximum exposure to loss excludes the benefit of offsetting financial +instruments that are held to mitigate the risks associated with these variable +interests. + +The maximum exposure to loss from retained interests, purchased interests, and +debt and equity is the carrying value of these interests. + +The maximum exposure to loss from commitments and guarantees, and derivatives +is the notional amount, which does not represent anticipated losses and has +not been reduced by unrealized losses. As a result, the maximum exposure to +loss exceeds liabilities recorded for commitments and guarantees, and +derivatives. + +The table below presents information, by principal business activity, for +nonconsolidated VIEs included in the summary table above. + +As of both December 2021 and December 2020, the carrying values of the firm’s +variable interests in nonconsolidated VIEs are included in the consolidated +balance sheets as follows: + +Mortgage-backed: Assets primarily included in trading assets and loans. + +Real estate, credit- and power-related and other investing: Assets primarily +included in investments and loans, and liabilities included in trading +liabilities and other liabilities. + +Corporate debt and other asset-backed: Assets included in loans and trading +assets, and liabilities included in trading liabilities. + +Investments in funds: Assets included in investments. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Consolidated VIEs + +The table below presents a summary of the carrying value and balance sheet +classification of assets and liabilities in consolidated VIEs. + +In the table above: + +Assets and liabilities are presented net of intercompany eliminations and +exclude the benefit of offsetting financial instruments that are held to +mitigate the risks associated with the firm’s variable interests. + +VIEs in which the firm holds a majority voting interest are excluded if (i) +the VIE meets the definition of a business and (ii) the VIE’s assets can be +used for purposes other than the settlement of its obligations. + +Substantially all assets can only be used to settle obligations of the VIE. + +The table below presents information, by principal business activity, for +consolidated VIEs included in the summary table above. + +In the table above: + +The majority of the assets in principal-protected notes VIEs are intercompany +and are eliminated in consolidation. + +Creditors and beneficial interest holders of real estate, credit-related and +other investing VIEs do not have recourse to the general credit of the firm. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 18. + +Commitments, Contingencies and Guarantees + +Commitments + +The table below presents commitments by type. + +The table below presents commitments by expiration. + +In the tables above, beginning in the fourth quarter of 2021, the firm’s +commitments under letters of credit, issued by various banks which the firm +provides to counterparties to satisfy certain collateral and margin deposit +requirements, is included in other commitments. Previously, such letters of +credit were disclosed as a separate line item in the tables above. Previously +reported amounts have been conformed to the current presentation. + +Lending Commitments + +The firm’s commercial and warehouse financing lending commitments are +agreements to lend with fixed termination dates and depend on the satisfaction +of all contractual conditions to borrowing. These commitments are presented +net of amounts syndicated to third parties. The total commitment amount does +not necessarily reflect actual future cash flows because the firm may +syndicate portions of these commitments. In addition, commitments can expire +unused or be reduced or cancelled at the counterparty’s request. The firm also +provides credit to consumers by issuing credit card lines. + +The table below presents information about lending commitments. + +In the table above: + +Held for sale lending commitments are accounted for at the lower of cost or +fair value. The carrying value of lending commitments held for sale was a +liability of $91 million as of December 2021 and $68 million as of December +2020. The estimated fair value of such lending commitments approximates the +carrying value. Had these lending commitments been included in the fair value +hierarchy, they would have been primarily classified in level 3 as of both +December 2021 and December 2020. + +Gains or losses related to lending commitments at fair value, if any, are +generally recorded net of any fees in other principal transactions. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Commercial Lending. + +The firm’s commercial lending commitments were primarily extended to +investment-grade corporate borrowers. Such commitments primarily included +$120.99 billion as of December 2021 and $110.31 billion as of December 2020, +related to relationship lending activities (principally used for operating and +general corporate purposes) and $21.07 billion as of December 2021 and $15.81 +billion as of December 2020, related to other investment banking activities +(generally extended for contingent acquisition financing and are often +intended to be short-term in nature, as borrowers often seek to replace them +with other funding sources). The firm also extends lending commitments in +connection with other types of corporate lending, as well as commercial real +estate financing. See Note 9 for further information about funded loans. + +To mitigate the credit risk associated with the firm’s commercial lending +activities, the firm obtains credit protection on certain loans and lending +commitments through credit default swaps, both single-name and index-based +contracts, and through the issuance of credit-linked notes. + +Warehouse Financing. + +The firm provides financing to clients who warehouse financial assets. These +arrangements are secured by the warehoused assets, primarily consisting of +residential real estate, consumer and corporate loans. + +Credit Cards. + +The firm’s credit card lending commitments included $33.97 billion as of +December 2021 and $21.64 billion as of December 2020 related to credit card +lines issued by the firm to consumers. These credit card lines are cancellable +by the firm. Credit card commitments also includes approximately $2.0 billion +relating to the firm’s commitment to acquire a credit card portfolio in +connection with its agreement, in January 2021, to form a + +co-branded + +credit card relationship with General Motors. This acquisition was completed +in February 2022. + +Risk Participations + +The firm also risk participates certain of its commercial lending commitments +to other financial institutions. In the event of a risk participant’s default, +the firm will be responsible to fund the borrower. + +Collateralized Agreement Commitments/Collateralized Financing Commitments + +Collateralized agreement commitments includes forward starting resale and +securities borrowing agreements, and collateralized financing commitments +includes forward starting repurchase and secured lending agreements that +settle at a future date, generally within three business days. Collateralized +agreement commitments also includes transactions where the firm has entered +into commitments to provide contingent financing to its clients and +counterparties through resale agreements. The firm’s funding of these +commitments depends on the satisfaction of all contractual conditions to the +resale agreement and these commitments can expire unused. + +Investment Commitments + +Investment commitments includes commitments to invest in private equity, real +estate and other assets directly and through funds that the firm raises and +manages. Investment commitments included $1.60 billion as of December 2021 and +$1.69 billion as of December 2020, related to commitments to invest in funds +managed by the firm. If these commitments are called, they would be funded at +market value on the date of investment. + +Investment commitments also included approximately $1.90 billion as of +December 2021 related to the firm’s commitment to acquire NN Investment +Partners, a leading European asset manager with approximately $320 + +billion in assets under supervision, in an + +all-cash + +transaction. This acquisition is expected to close in the second quarter of +2022. In addition, investment commitments included approximately $2.0 + +billion as of December 2021 related to the firm’s commitment to acquire +GreenSky, Inc. (GreenSky), a leading technology company facilitating point-of- +sale financing for merchants and consumers. This acquisition is expected to +close + +in + +the first quarter of 2022. The GreenSky acquisition will be an + +all-stock + +transaction in which stockholders of GreenSky and unit holders of GreenSky +Holdings, LLC (GreenSky Holdings) will receive 0.03 + +shares of the firm’s common stock for each share of GreenSky Class A common +stock and each GreenSky Holdings common unit. The investment commitment in the +table above represents the purchase price of the acquisition based on the +stock price of Group Inc. as of December 2021. However, the final purchase +price of the acquisition will depend upon the stock price of Group Inc. at the +time of the closing of the transaction. In connection with this transaction, +the firm provided a commitment to acquire up to + +$800 million of loans originated by GreenSky’s bank partners, and, as of +December 2021, had acquired approximately $200 million of loans under this +commitment. The remaining commitment of approximately $600 + +million is included in other commitments in the table above. In the event that +the acquisition is not completed, the firm has agreed to provide a commitment +to purchase up to an additional $1.0 billion of loans originated by GreenSky’s +bank partners. This commitment is not included in the table above. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Contingencies + +Legal Proceedings. + +See Note 27 for information about legal proceedings. + +Guarantees + +The table below presents derivatives that meet the definition of a guarantee, +securities lending and clearing guarantees and certain other financial +guarantees. + +In the table above: + +The maximum payout is based on the notional amount of the contract and does +not represent anticipated losses. + +Amounts exclude certain commitments to issue standby letters of credit that +are included in lending commitments. See the tables in “Commitments” above for +a summary of the firm’s commitments. + +Derivative Guarantees. + +The firm enters into various derivatives that meet the definition of a +guarantee under U.S. GAAP, including written equity and commodity put options, +written currency contracts and interest rate caps, floors and swaptions. These +derivatives are risk managed together with derivatives that do not meet the +definition of a guarantee, and therefore the amounts in the table above do not +reflect the firm’s overall risk related to derivative activities. Disclosures +about derivatives are not required if they may be cash settled and the firm +has no basis to conclude it is probable that the counterparties held the +underlying instruments at inception of the contract. The firm has concluded +that these conditions have been met for certain large, internationally active +commercial and investment bank counterparties, central clearing +counterparties, hedge funds and certain other counterparties. + +Accordingly, the firm has not included such contracts in the table above. See +Note 7 for information about credit derivatives that meet the definition of a +guarantee, which are not included in the table above. + +Derivatives are accounted for at fair value and therefore the carrying value +is considered the best indication of payment/performance risk for individual +contracts. However, the carrying values in the table above exclude the effect +of counterparty and cash collateral netting. + +Securities Lending and Clearing Guarantees. + +Securities lending and clearing guarantees include the indemnifications and +guarantees that the firm provides in its capacity as an agency lender and in +its capacity as a sponsoring member of the Fixed Income Clearing Corporation. + +As an agency lender, the firm indemnifies most of its securities lending +customers against losses incurred in the event that borrowers do not return +securities and the collateral held is insufficient to cover the market value +of the securities borrowed. The maximum payout of such indemnifications was +$11.05 billion as of December 2021 and $19.86 billion as of December 2020. +Collateral held by the lenders in connection with securities lending +indemnifications was $11.36 billion as of December 2021 and $20.39 billion as +of December 2020. Because the contractual nature of these arrangements +requires the firm to obtain collateral with a market value that exceeds the +value of the securities lent to the borrower, there is minimal performance +risk associated with these indemnifications. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +As a sponsoring member of the Government Securities Division of the Fixed +Income Clearing Corporation, the firm guarantees the performance of its +sponsored member clients to the Fixed Income Clearing Corporation in +connection with certain resale and repurchase agreements. To minimize +potential losses on such guarantees, the firm obtains a security interest in +the collateral that the sponsored client placed with the Fixed Income Clearing +Corporation. Therefore, the risk of loss on such guarantees is minimal. There +were no amounts outstanding under the guarantee as of December 2021. As of +December 2020, the maximum payout on this guarantee was $1.49 billion and the +related collateral held was $1.50 billion. + +Other Financial Guarantees. + +In the ordinary course of business, the firm provides other financial +guarantees of the obligations of third parties (e.g., standby letters of +credit and other guarantees to enable clients to complete transactions and +fund-related guarantees). These guarantees represent obligations to make +payments to beneficiaries if the guaranteed party fails to fulfill its +obligation under a contractual arrangement with that beneficiary. Other +financial guarantees also include a guarantee that the firm has provided to +the Government of Malaysia that it will receive at least $1.4 billion in +assets and proceeds from assets seized by governmental authorities around the +world related to 1Malaysia Development Berhad, a sovereign wealth fund in +Malaysia (1MDB). The firm evaluates progress toward satisfying this obligation +based on the report that it receives on a semi-annual basis, expected in +February and August. Based on the latest report as of August 2021, +approximately $450 million in assets or proceeds from assets has been returned +to the Government of Malaysia in connection with this guarantee, which must be +satisfied by August 18, 2025. Any amounts paid by the firm under this +guarantee would be subject to reimbursement in the event the assets or +proceeds received by the Government of Malaysia through August 18, 2028 +exceeds $1.4 billion. See Note 27 for further information about matters +related to 1MDB. + +Guarantees of Securities Issued by Trusts. + +The firm has established trusts, including Goldman Sachs Capital I, the APEX +Trusts and other entities, for the limited purpose of issuing securities to +third parties, lending the proceeds to the firm and entering into contractual +arrangements with the firm and third parties related to this purpose. The firm +does not consolidate these entities. See Note 14 for further information about +the transactions involving Goldman Sachs Capital I and the APEX Trusts. + +The firm effectively provides for the full and unconditional guarantee of the +securities issued by these entities. Timely payment by the firm of amounts due +to these entities under the guarantee, borrowing, preferred stock and related +contractual arrangements will be sufficient to cover payments due on the +securities issued by these entities. No subsidiary of Group Inc. guarantees +the securities of Goldman Sachs Capital I or the APEX Trusts. + +Management believes that it is unlikely that any circumstances will occur, +such as nonperformance on the part of paying agents or other service +providers, that would make it necessary for the firm to make payments related +to these entities other than those required under the terms of the guarantee, +borrowing, preferred stock and related contractual arrangements and in +connection with certain expenses incurred by these entities. + +Indemnities and Guarantees of Service Providers. + +In the ordinary course of business, the firm indemnifies and guarantees +certain service providers, such as clearing and custody agents, trustees and +administrators, against specified potential losses in connection with their +acting as an agent of, or providing services to, the firm or its affiliates. + +The firm may also be liable to some clients or other parties for losses +arising from its custodial role or caused by acts or omissions of third-party +service providers, including + +sub-custodians + +and third-party brokers. In certain cases, the firm has the right to seek +indemnification from these third-party service providers for certain relevant +losses incurred by the firm. In addition, the firm is a member of payment, +clearing and settlement networks, as well as securities exchanges around the +world that may require the firm to meet the obligations of such networks and +exchanges in the event of member defaults and other loss scenarios. + +In connection with the firm’s prime brokerage and clearing businesses, the +firm agrees to clear and settle on behalf of its clients the transactions +entered into by them with other brokerage firms. The firm’s obligations in +respect of such transactions are secured by the assets in the client’s +account, as well as any proceeds received from the transactions cleared and +settled by the firm on behalf of the client. In connection with joint venture +investments, the firm may issue loan guarantees under which it may be liable +in the event of fraud, misappropriation, environmental liabilities and certain +other matters involving the borrower. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The firm is unable to develop an estimate of the maximum payout under these +guarantees and indemnifications. However, management believes that it is +unlikely the firm will have to make any material payments under these +arrangements, and no material liabilities related to these guarantees and +indemnifications have been recognized in the consolidated balance sheets as of +both December 2021 and December 2020. + +Other Representations, Warranties and Indemnifications. + +The firm provides representations and warranties to counterparties in +connection with a variety of commercial transactions and occasionally +indemnifies them against potential losses caused by the breach of those +representations and warranties. The firm may also provide indemnifications +protecting against changes in or adverse application of certain U.S. tax laws +in connection with ordinary-course transactions, such as securities issuances, +borrowings or derivatives. + +In addition, the firm may provide indemnifications to some counterparties to +protect them in the event additional taxes are owed or payments are withheld, +due either to a change in or an adverse application of certain + +non-U.S. + +tax laws. + +These indemnifications generally are standard contractual terms and are +entered into in the ordinary course of business. Generally, there are no +stated or notional amounts included in these indemnifications, and the +contingencies triggering the obligation to indemnify are not expected to +occur. The firm is unable to develop an estimate of the maximum payout under +these guarantees and indemnifications. However, management believes that it is +unlikely the firm will have to make any material payments under these +arrangements, and no material liabilities related to these arrangements have +been recognized in the consolidated balance sheets as of both December 2021 +and December 2020. + +Guarantees of Subsidiaries. + +Group Inc. is the entity that fully and unconditionally guarantees the +securities issued by GS Finance Corp., a wholly-owned finance subsidiary of +the firm. Group Inc. has guaranteed the payment obligations of Goldman Sachs & +Co. LLC (GS&Co.), GS Bank USA and Goldman Sachs Paris Inc. et Cie, subject to +certain exceptions. In addition, Group Inc. has provided guarantees to Goldman +Sachs International (GSI) and Goldman Sachs Bank Europe SE (GSBE) related to +agreements that each entity has entered into with certain of its +counterparties. Furthermore, Group Inc. provided a guarantee to GS Bank USA in +2020 related to securities that GS Bank USA acquired from certain affiliated +funds of Group Inc. and loans and lending commitments that GS Bank USA +acquired from certain subsidiaries of Group Inc. As of December 2021, none of +the securities acquired from the affiliated funds were outstanding. + +Group Inc. guarantees many of the obligations of its other consolidated +subsidiaries on a + +transaction-by-transaction + +basis, as negotiated with counterparties. Group Inc. is unable to develop an +estimate of the maximum payout under its subsidiary guarantees. However, +because these obligations are also obligations of consolidated subsidiaries, +Group Inc.’s liabilities as guarantor are not separately disclosed. + +Note 19. + +Shareholders’ Equity + +Common Equity + +As of both December 2021 and December 2020, the firm had 4.00 billion +authorized shares of common stock and 200 million authorized shares of +nonvoting common stock, each with a par value of $0.01 per share. + +The firm’s share repurchase program is intended to help maintain the +appropriate level of common equity. The share repurchase program is effected +primarily through regular open-market purchases (which may include repurchase +plans designed to comply with + +Rule 10b5-1 + +and accelerated share repurchases), the amounts and timing of which are +determined primarily by the firm’s current and projected capital position, and +capital deployment opportunities, but which may also be influenced by general +market conditions and the prevailing price and trading volumes of the firm’s +common stock. The firm suspended stock repurchases during the first quarter of +2020 and, consistent with the FRB’s requirement for all large bank holding +companies (BHCs), extended the suspension of stock repurchases through the +fourth quarter of 2020. The firm resumed stock repurchases in the first +quarter of 2021. + +The table below presents information about common stock repurchases. + +Pursuant to the terms of certain share-based compensation plans, employees may +remit shares to the firm or the firm may cancel share-based awards to satisfy +statutory employee tax withholding requirements. Under these plans, 1,830 +shares in 2021, 3,476 shares in 2020 and 7,490 shares in 2019 were remitted +with a total value of $0.5 million in 2021, $0.9 million in 2020 and $2 +million in 2019, and the firm cancelled 3.4 million share-based awards in +2021, 3.4 million in 2020 and 3.8 million in 2019 with a total value of $984 +million in 2021, $829 million in 2020 and $743 million in 2019. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents common stock dividends declared. + +On + +January 14, 2022 + +, the Board of Directors of Group Inc. (Board) declared a dividend of $ + +per common share to be paid on + +March 30, 2022 + +to common shareholders of record on + +March 2, 2022. + +Preferred Equity + +The tables below present information about the perpetual preferred stock +issued and outstanding as of December 2021. + +In the tables above: + +All shares have a par value of $0.01 per share and, where applicable, each +share is represented by the specified number of depositary shares. + +The earliest redemption date represents the date on which each share of + +non-cumulative + +preferred stock is redeemable at the firm’s option. + +Prior to redeeming preferred stock, the firm must receive approval from the +FRB. + +The redemption price per share for Series A through F and Series Q through V +Preferred Stock is the liquidation preference plus declared and unpaid +dividends. The redemption price per share for Series J through P Preferred +Stock is the liquidation preference plus accrued and unpaid dividends. Each +share of Series E and Series F Preferred Stock is redeemable at the firm’s +option, subject to certain covenant restrictions governing the firm’s ability +to redeem the preferred stock without issuing common stock or other +instruments with equity-like characteristics. See Note 14 for information +about the replacement capital covenants applicable to the Series E and Series +F Preferred Stock. + +All series of preferred stock are pari passu and have a preference over the +firm’s common stock on liquidation. + +The firm’s ability to declare or pay dividends on, or purchase, redeem or +otherwise acquire, its common stock is subject to certain restrictions in the +event that the firm fails to pay or set aside full dividends on the preferred +stock for the latest completed dividend period. + +In 2021, the firm + +redeemed + +all outstanding shares of its (i) Series N 6.30% + +Non-Cumulative + +Preferred Stock with a redemption value of $675 million ($25,000 per share), +plus accrued and unpaid dividends and its (ii) Series M 5.375% + +Fixed-to-Floating + +Rate + +Non-Cumulative + +Preferred Stock with a redemption value of $2 billion ($25,000 per share), +plus accrued and unpaid dividends. The difference between the redemption value +and net carrying value at the time of these redemptions was $41 million, which +was recorded as an addition to preferred stock dividends in 2021. + +In 2020, the firm redeemed the remaining 14,000 outstanding shares of its +Series L 5.70% + +Non-Cumulative + +Preferred Stock with a redemption value of $350 million ($25,000 per share), +plus accrued and unpaid dividends. The difference between the redemption value +and net carrying value was $1 million, which was recorded as an addition to +preferred stock dividends in 2020. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents the dividend rates of perpetual preferred stock as of +December 2021. + +In the table above, dividends on each series of preferred stock are payable in +arrears for the periods specified. + +The table below presents preferred stock dividends declared. + +On January 6, 2022, Group Inc. declared dividends of $239.58 per share of +Series A Preferred Stock, $255.56 per share of Series C Preferred Stock, +$255.56 per share of Series D Preferred Stock, $343.75 per share of Series J +Preferred Stock, $398.44 per share of Series K Preferred Stock, $687.50 per +share of Series Q Preferred Stock, $618.75 per share of Series R Preferred +Stock, $550.00 per share of Series S Preferred Stock and $486.67 per share of +Series U Preferred Stock to be paid on February 10, 2022 to preferred +shareholders of record on January 26, 2022. In addition, the firm declared +dividends of $1,000.00 per share of Series E Preferred Stock and $1,000.00 per +share of Series F Preferred Stock to be paid on March 1, 2022 to preferred +shareholders of record on February 14, 2022. + +Accumulated Other Comprehensive Income/(Loss) + +The table below presents changes in accumulated other comprehensive +income/(loss), net of tax, by type. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 20. + +Regulation and Capital Adequacy + +The FRB is the primary regulator of Group Inc., a BHC under the U.S. Bank +Holding Company Act of 1956 and a financial holding company under amendments +to this Act. The firm is subject to consolidated regulatory capital +requirements which are calculated in accordance with the regulations of the +FRB (Capital Framework). + +The capital requirements are expressed as risk-based capital and leverage +ratios that compare measures of regulatory capital to risk-weighted assets +(RWAs), average assets and + +off-balance + +sheet exposures. Failure to comply with these capital requirements would +result in restrictions being imposed by the firm’s regulators and could limit +the firm’s ability to repurchase shares, pay dividends and make certain +discretionary compensation payments. The firm’s capital levels are also +subject to qualitative judgments by the regulators about components of +capital, risk weightings and other factors. Furthermore, certain of the firm’s +subsidiaries are subject to separate regulations and capital requirements. + +Capital Framework + +The regulations under the Capital Framework are largely based on the Basel +Committee on Banking Supervision’s (Basel Committee) capital framework for +strengthening international capital standards (Basel III) and also implement +certain provisions of the Dodd-Frank Act. Under the Capital Framework, the +firm is an “Advanced approach” banking organization and has been designated as +a global systemically important bank + +(G-SIB). + +The Capital Framework includes the minimum risk-based capital and the capital +conservation buffer requirements. The buffer must consist entirely of capital +that qualifies as Common Equity Tier 1 (CET1) capital. + +The firm calculates its CET1 capital, Tier 1 capital and Total capital ratios +in accordance with both the Standardized and Advanced Capital Rules. Each of +the ratios calculated under the Standardized and Advanced Capital Rules must +meet its respective capital requirements. + +Under the Capital Framework, the firm is also subject to leverage requirements +which consist of a minimum Tier 1 leverage ratio and a minimum supplementary +leverage ratio (SLR), as well as the SLR buffer. + +Consolidated Regulatory Capital Requirements + +Risk-Based Capital Ratios. + +The table below presents the risk-based capital requirements. + +In the table above: + +As of both December 2021 and December 2020, under both the Standardized and +Advanced Capital Rules, the CET1 capital ratio requirement includes a minimum +of 4.5%, the Tier 1 capital ratio requirement includes a minimum of 6.0% and +the Total capital ratio requirement includes a minimum of 8.0%. These +requirements also include the capital conservation buffer requirements, +consisting of the + +G-SIB + +surcharge of 2.5% (Method 2) and the countercyclical capital buffer, which the +FRB has set to zero percent. In addition, the capital conservation buffer +requirements include the stress capital buffer (SCB) of 6.4% as of December +2021 and 6.6% as of December 2020 under the Standardized Capital Rules and a +buffer of 2.5% as of both December 2021 and December 2020 under the Advanced +Capital Rules. + +The + +G-SIB + +surcharge is updated annually based on financial data from the prior year and +is generally applicable for the following year. The + +G-SIB + +surcharge is calculated using two methodologies, the higher of which is +reflected in the firm’s risk-based capital requirements. The first calculation +(Method 1) is based on the Basel Committee’s methodology which, among other +factors, relies upon measures of the size, activity and complexity of each + +G-SIB. + +The second calculation (Method 2) uses similar inputs but includes a measure +of reliance on short-term wholesale funding. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents information about risk-based capital ratios. + +In the table above, + +As permitted by the FRB, the firm elected to temporarily delay the estimated +effects of adopting CECL on regulatory capital until January 2022 and to +subsequently + +phase + +in + +the effects through January 2025. In addition, the firm elected to increase +regulatory capital by 25% of the increase in the allowance for credit losses +since January 1, 2020, as permitted by the rules issued by the FRB. The impact +of this increase will also be phased in over the three-year transition period. +Reflecting the full impact of CECL as of both December 2021 and December 2020 +would not have had a material impact on the firm’s capital ratios. + +In the third quarter of 2021, based on regulatory feedback, the firm revised +certain interpretations of the Capital Rules underlying the calculation of +Standardized RWAs. As of December 2020, this change would have increased the +firm’s Standardized RWAs of $554 billion by approximately $23 billion, which +would have reduced the firm’s Standardized CET1 capital ratio of 14.7% by 0.6 +percentage points, Standardized Tier 1 capital ratio of 16.7% by 0.6 +percentage points and Standardized Total capital ratio of 19.5% by 0.8 +percentage points. + +In December 2021, the firm early adopted the U.S. federal bank regulatory +agencies’ final rule that implements the new standardized approach for +counterparty credit risk + +(SA-CCR). + +SA-CCR + +replaced the current exposure method for calculating the exposure amount of +derivative contracts for determining Standardized RWAs and supplementary +leverage exposure. Adoption of + +SA-CCR + +resulted in a decrease to the firm’s Standardized CET1 capital ratio by +approximately 0.3 percentage points as of December 2021. + +Leverage Ratios. + +The table below presents the leverage requirements. + +In the table above, the SLR requirement of 5% includes a minimum of 3% and a +2% buffer applicable to + +G-SIBs. + +The table below presents information about leverage ratios. + +In the table above: + +Average total assets represents the average daily assets for the quarter +adjusted for the impact of CECL transition. + +Impact of SLR temporary amendment represented the exclusion of average +holdings of U.S. Treasury securities and average deposits at the Federal +Reserve as permitted by the FRB. The impact of this temporary amendment was an +increase in the firm’s SLR by approximately 1.0 percentage points for the +three months ended December 2020. The amendment permitting this exclusion +expired on April 1, 2021. + +Off-balance sheet and other exposures primarily includes the monthly average +of + +off-balance + +sheet exposures, consisting of derivatives, securities financing transactions, +commitments and guarantees. + +Tier 1 leverage ratio is calculated as Tier 1 capital divided by average +adjusted total assets. + +SLR is calculated as Tier 1 capital divided by total leverage exposure. +Adoption of + +SA-CCR + +in December 2021, as described above, did not result in a material impact to +the firm’s SLR for the three months ended December 2021. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Risk-Based Capital. + +The table below presents information about risk-based capital. + +In the table above: + +Impact of CECL transition represents the impact of adoption as of January 1, +2020 and the impact of increasing regulatory capital by 25% of the increase in +the allowance for credit losses since January 1, 2020. The allowance for +credit losses within Standardized and Advanced Tier 2 capital also reflects +the impact of these adjustments. + +Deduction for identifiable intangible assets was net of deferred tax +liabilities of $17 million as of December 2021 and $29 million as of December + +Deduction for investments in covered funds represents the firm’s aggregate +investments in applicable covered funds, excluding investments that are +subject to an extended conformance period. See Note 8 for further information +about the Volcker Rule. + +Other adjustments within CET1 capital and Tier 1 capital primarily include +credit valuation adjustments on derivative liabilities, the overfunded portion +of the firm’s defined benefit pension plan obligation net of associated +deferred tax liabilities, disallowed deferred tax assets, debt valuation +adjustments and other required credit risk-based deductions. Other adjustments +within Advanced Tier 2 capital include eligible credit reserves. + +Qualifying subordinated debt is subordinated debt issued by Group Inc. with an +original maturity of five years or greater. The outstanding amount of +subordinated debt qualifying for Tier 2 capital is reduced upon reaching a +remaining maturity of five years. See Note 14 for further information about +the firm’s subordinated debt. + +Junior subordinated debt is debt issued to a Trust. As of December 2021, 10% +of this debt was included in Tier 2 capital and 90% was phased out of +regulatory capital. As of December 2020, 20% of this debt was included in Tier +2 capital and 80% was phased out of regulatory capital. Junior subordinated +debt is reduced by the amount of Trust Preferred securities purchased by the +firm and was fully phased out of Tier 2 capital beginning in January 2022. See +Note 14 for further information about the firm’s junior subordinated debt and +Trust Preferred securities. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents changes in CET1 capital, Tier 1 capital and Tier 2 +capital. + +RWAs. + +RWAs are calculated in accordance with both the Standardized and Advanced +Capital Rules. + +Credit Risk + +Credit RWAs are calculated based on measures of exposure, which are then risk +weighted under the Standardized and Advanced Capital Rules: + +The Standardized Capital Rules apply prescribed risk-weights, which depend +largely on the type of counterparty. The exposure measure for derivatives and +securities financing transactions are based on specific formulas which take +certain factors into consideration. + +Under the Advanced Capital Rules, the firm computes risk-weights for wholesale +and retail credit exposures in accordance with the Advanced Internal Ratings- +Based approach. The exposure measures for derivatives and securities financing +transactions are computed utilizing internal models. + +For both Standardized and Advanced credit RWAs, the risk-weights for +securitizations and equities are based on specific required formulaic +approaches. + +Market Risk + +RWAs for market risk in accordance with the Standardized and Advanced Capital +Rules are generally consistent. Market RWAs are calculated based on measures +of exposure which include the following: + +Value-at-Risk + +(VaR) is the potential loss in value of trading assets and liabilities, as +well as certain investments, loans, and other financial assets and liabilities +accounted for at fair value, due to adverse market movements over a defined +time horizon with a specified confidence level. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +For both risk management purposes and regulatory capital calculations, the +firm uses a single VaR model which captures risks, including those related to +interest rates, equity prices, currency rates and commodity prices. However, +VaR used for risk management purposes differs from VaR used for regulatory +capital requirements (regulatory VaR) due to differences in time horizons, +confidence levels and the scope of positions on which VaR is calculated. For +risk management purposes, a 95% + +one-day + +VaR is used, whereas for regulatory capital requirements, a 99% + +10-day + +VaR is used to determine Market RWAs and a 99% + +one-day + +VaR is used to determine regulatory VaR exceptions. In addition, the daily net +revenues used to determine risk management VaR exceptions (i.e., comparing the +daily net revenues to the VaR measure calculated as of the end of the prior +business day) include intraday activity, whereas the Capital Framework +requires that intraday activity be excluded from daily net revenues when +calculating regulatory VaR exceptions. Intraday activity includes bid/offer +net revenues, which are more likely than not to be positive by their nature. +As a result, there may be differences in the number of VaR exceptions and the +amount of daily net revenues calculated for regulatory VaR compared to the +amounts calculated for risk management VaR. + +The firm’s positional losses observed on a single day exceeded its 99% + +one-day + +regulatory VaR on one occasion during 2021 and on six occasions during 2020 +(all of which occurred during March 2020 and, as permitted by the FRB, did not +have any impact on the firm’s VaR multiplier used to calculate Market RWAs); + +Stressed VaR is the potential loss in value of trading assets and liabilities, +as well as certain investments, loans, and other financial assets and +liabilities accounted for at fair value, during a period of significant market +stress; + +Incremental risk is the potential loss in value of + +non-securitized + +positions due to the default or credit migration of issuers of financial +instruments over a + +one-year + +time horizon; + +Comprehensive risk is the potential loss in value, due to price risk and +defaults, within the firm’s credit correlation positions; and + +Specific risk is the risk of loss on a position that could result from factors +other than broad market movements, including event risk, default risk and +idiosyncratic risk. The standardized measurement method is used to determine +specific risk RWAs, by applying supervisory defined risk-weighting factors +after applicable netting is performed. + +Operational Risk + +Operational RWAs are only required to be included under the Advanced Capital +Rules. The firm utilizes an internal risk-based model to quantify Operational +RWAs. + +The table below presents information about RWAs. + +In the table above: + +Securities financing transactions represents resale and repurchase agreements +and securities borrowed and loaned transactions. + +Other includes receivables, certain debt securities, cash and cash +equivalents, and other assets. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents changes in RWAs. + +RWAs Rollforward Commentary + +Year Ended December 2021. + +Standardized Credit RWAs as of December 2021 increased by $114.92 billion +compared with December 2020, primarily reflecting an increase in commitments, +guarantees and loans (principally due to increased lending activity and +revisions to certain interpretations of the Capital Rules underlying the RWA +calculation based on regulatory feedback) and an increase in derivatives +(principally due to increased exposures and the impact of SA-CCR adoption). +Standardized Market RWAs as of December 2021 increased by $7.79 billion +compared with December 2020, primarily reflecting an increase in stressed VaR +(principally due to increased exposures to interest rates). + +Advanced Credit RWAs as of December 2021 increased by $25.79 billion compared +with December 2020, primarily reflecting an increase in commitments, +guarantees and loans (principally due to increased lending activity). This +increase was partially offset by a decrease in equity investments (principally +due to the sale of equity positions). Advanced Market RWAs as of December 2021 +increased by $7.79 billion compared with December 2020, primarily reflecting +an increase in stressed VaR (principally due to increased exposures to +interest rates). Advanced Operational RWAs as of December 2021 increased by +$4.60 billion compared with December 2020, primarily associated with +litigation and regulatory proceedings. + +Year Ended December 2020. + +Standardized Credit RWAs as of December 2020 decreased by $13.55 billion +compared with December 2019, primarily reflecting a decrease in equity +investments (principally due to the sale of certain equity positions) and a +decrease in other (principally due to decreased receivables as a result of +changes in risk measurements). These decreases were partially offset by an +increase in securities financing transactions (principally due to increased +funding exposures). Standardized Market RWAs as of December 2020 increased by +$4.14 billion compared with December 2019, primarily reflecting an increase in +regulatory VaR (principally due to increased market volatility) and an +increase in incremental risk (principally due to increased exposures in +equities held for market-making purposes). These increases were partially +offset by a decrease in specific risk (principally due to changes in risk +measurements on certain exposures). + +Advanced Credit RWAs as of December 2020 increased by $51.63 billion compared +with December 2019, primarily reflecting an increase in derivatives +(principally due to the impact of higher levels of volatility and counterparty +credit risk) and an increase in commitments, guarantees and loans (principally +due to increased lending activity). These increases were partially offset by a +decrease in equity investments (principally due to the sale of certain equity +positions). Advanced Market RWAs as of December 2020 increased by $4.34 +billion compared with December 2019, primarily reflecting an increase in +regulatory VaR (principally due to increased market volatility) and an +increase in incremental risk (principally due to increased exposures in +equities held for market-making purposes). These increases were partially +offset by a decrease in specific risk (principally due to changes in risk +measurements on certain exposures). Advanced Operational RWAs as of December +2020 increased by $9.13 billion compared with December 2019. The vast majority +of this increase was associated with litigation and regulatory proceedings. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Bank Subsidiaries + +GS Bank USA. + +GS Bank USA is the firm’s primary U.S. bank subsidiary. GS Bank USA is an +FDIC-insured, New York State-chartered bank and a member of the Federal +Reserve System, is supervised and regulated by the FRB, the FDIC, the New York +State Department of Financial Services (NYDFS) and the Consumer Financial +Protection Bureau, and is subject to regulatory capital requirements that are +calculated under the Capital Framework. On July 1, 2021, GS Bank USA acquired +GSBE, a + +non-U.S. + +banking subsidiary of the firm, which is also subject to standalone regulatory +capital requirements noted below. GS Bank USA is an Advanced approach banking +organization under the Capital Framework. + +The Capital Framework includes the minimum risk-based capital and the capital +conservation buffer requirements (consisting of a 2.5% buffer and the +countercyclical capital buffer). The buffer must consist entirely of capital +that qualifies as CET1 capital. In addition, the Capital Framework includes +the leverage ratio requirement. + +GS Bank USA is required to calculate the CET1 capital, Tier 1 capital and +Total capital ratios in accordance with both the Standardized and Advanced +Capital Rules. The lower of each risk-based capital ratio under the +Standardized and Advanced Capital Rules is the ratio against which GS Bank +USA’s compliance with its risk-based capital requirements is assessed. In +addition, under the regulatory framework for prompt corrective action +applicable to GS Bank USA, in order to meet the quantitative requirements for +a “well-capitalized” depository institution, GS Bank USA must also meet the +“well-capitalized” requirements in the table below. GS Bank USA’s capital +levels and prompt corrective action classification are also subject to +qualitative judgments by the regulators about components of capital, risk +weightings and other factors. Failure to comply with the capital requirements, +including a breach of the buffers described below, would result in +restrictions being imposed by the regulators. + +The table below presents GS Bank USA’s risk-based capital, leverage and “well- +capitalized” requirements. + +In the table above: + +The CET1 capital ratio requirement includes a minimum of 4.5%, the Tier 1 +capital ratio requirement includes a minimum of 6.0% and the Total capital +ratio requirement includes a minimum of 8.0%. These requirements also include +the capital conservation buffer requirements consisting of a 2.5% buffer and +the countercyclical capital buffer, which the FRB has set to zero percent. + +The “well-capitalized” requirements are the binding requirements for leverage +ratios. + +The table below presents information about GS Bank USA’s risk-based capital +ratios. + +In the table above: + +In accordance with the reporting requirements for business combinations of +entities under common control, prior period amounts are presented as if the +acquisition of GSBE by GS Bank USA had occurred at the beginning of 2020. + +The lower of the Standardized or Advanced ratio is the ratio against which GS +Bank USA’s compliance with the capital requirements is assessed under the +risk-based Capital Rules, and therefore, the Standardized ratios applied to GS +Bank USA as of both December 2021 and December 2020. + +As permitted by the FRB, GS Bank USA elected to temporarily delay the +estimated effects of adopting CECL on regulatory capital until January 2022 +and to subsequently + +phase + +in + +the effects through January 2025. In addition, GS Bank USA elected to increase +regulatory capital by 25% of the increase in the allowance for credit losses +since January 1, 2020, as permitted by the rules issued by the FRB. The impact +of this increase will also be phased in over the three-year transition period. +Reflecting the full impact of CECL as of both December 2021 and December 2020 +would not have had a material impact on GS Bank USA’s Standardized risk-based +capital ratios. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +In connection with the regulatory feedback the firm received in the third +quarter of 2021, GS Bank USA revised certain interpretations of the Capital +Rules underlying the calculation of Standardized RWAs. As of December 2020, +this change would have increased GS Bank USA’s Standardized RWAs of $281 +billion by approximately $11 billion, which would have reduced GS Bank USA’s +Standardized CET1 capital ratio of 12.3% by 0.4 percentage points, +Standardized Tier 1 capital ratio of 12.3% by 0.4 percentage points and +Standardized Total capital ratio of 14.6% by 0.6 percentage points. + +In December 2021, GS Bank USA adopted + +SA-CCR + +which resulted in an increase to GS Bank USA’s Standardized CET1 capital ratio +by approximately 1.9 percentage points as of December 2021. + +The Standardized risk-based capital ratios increased from December 2020 to +December 2021, reflecting an increase in capital due to capital contributions +and net earnings, partially offset by an increase in both Credit and Market +RWAs. The increase in Standardized Credit RWAs reflected an increase in +commitments, guarantees and loans (principally due to increased lending +activity and revisions to certain interpretations of the Capital Rules +underlying the RWA calculation based on regulatory feedback described above), +partially offset by a decrease in derivatives (principally due to the impact +of SA-CCR adoption described above). The increase in Standardized Market RWAs +primarily reflected an increase in stressed VaR and regulatory VaR (in each +case, principally due to increased exposures to interest rates). + +The Advanced risk-based capital ratios decreased from December 2020 to +December 2021, reflecting an increase in both Credit and Market RWAs, +partially offset by an increase in capital due to capital contributions and +net earnings. The increase in Advanced Credit RWAs reflected an increase in +commitments, guarantees and loans (principally due to increased lending +activity) and the increase in Advanced Market RWAs primarily reflected an +increase in stressed VaR and regulatory VaR (in each case, principally due to +increased exposures to interest rates). + +The table below presents information about GS Bank USA’s leverage ratios. + +In the table above: + +In accordance with the reporting requirements for business combinations of +entities under common control, prior period amounts are presented as if the +acquisition of GSBE by GS Bank USA had occurred at the beginning of 2020. + +Average adjusted total assets represents the average daily assets for the +quarter adjusted for deductions from Tier 1 capital and the impact of CECL +transition. + +Total leverage exposure, for the three months ended December 2020, excluded +average holdings of U.S. Treasury securities and average deposits at the +Federal Reserve as permitted by the FRB under a temporary amendment. The +impact of this temporary amendment was an increase in GS Bank USA’s SLR by +approximately 2.4 percentage points for the three months ended December 2020. +The amendment permitting this exclusion expired on April 1, 2021. + +Tier 1 leverage ratio is calculated as Tier 1 capital divided by average +adjusted total assets. + +SLR is calculated as Tier 1 capital divided by total leverage exposure. +Adoption of + +SA-CCR + +in December 2021 resulted in an increase to GS Bank USA’s SLR by approximately +0.2 percentage points for the three months ended December 2021. + +The deposits of GS Bank USA are insured by the FDIC to the extent provided by +law. The FRB requires that GS Bank USA maintain cash reserves with the Federal +Reserve. As of both December 2021 and December 2020, the reserve requirement +ratio was zero percent. The amount deposited by GS Bank USA at the Federal +Reserve was $122.01 billion as of December 2021 and $52.71 billion as of +December 2020. + +GS Bank USA is a registered swap dealer with the CFTC and, beginning in the +fourth quarter of 2021, also became a registered security-based swap dealer +with the SEC. As of December 2021, GS Bank USA was subject to and in +compliance with applicable capital requirements for swap dealers and security- +based swap dealers. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +GSIB. + +GSIB is our U.K. bank subsidiary regulated by the Prudential Regulation +Authority (PRA) and the Financial Conduct Authority (FCA). GSIB is subject to +the U.K. capital framework, which is largely based on Basel III. + +The table below presents GSIB’s risk-based capital requirements. + +The table below presents information about GSIB’s risk-based capital ratios. + +In the table above, the risk-based capital ratios as of December 2021 +reflected GSIB’s profits after foreseeable charges for the year ended December +2021 (which will not be finalized until verification by GSIB’s external +auditors and approval by GSIB’s Board of Directors for inclusion in risk-based +capital). These profits contributed approximately 68 basis points to the CET1 +capital ratio. + +The eligible retail deposits of GSIB are covered by the U.K. Financial +Services Compensation Scheme to the extent provided by law. + +GSIB is subject to minimum reserve requirements at the Bank of England. The +minimum reserve requirement was $172 million as of December 2021 and $126 +million as of December 2020. The amount deposited by GSIB at the Bank of +England was $2.20 billion as of December 2021 and $9.82 billion as of December + +GSBE. + +GSBE is our German bank subsidiary supervised by the European Central Bank, +BaFin and Deutsche Bundesbank. GSBE is subject to the capital requirements +prescribed in the amended E.U. Capital Requirements Directive (CRD) and E.U. +Capital Requirements Regulation (CRR), which are largely based on Basel III. + +The table below presents GSBE’s risk-based capital requirements. + +The table below presents information about GSBE’s risk-based capital ratios. + +In the table above: + +The risk-based capital ratios as of December 2021 reflected GSBE’s profits +after foreseeable charges for the year ended December 2021 (which will not be +finalized until verification by GSBE’s external auditors and approval by +GSBE’s shareholder (GS Bank USA) for inclusion in risk-based capital). These +profits contributed + +approximately 106 basis points to the CET1 capital ratio. + +Risk-based capital ratios as of December 2021 reflected the CRR and the CRD +rules which implement changes in the Basel standards with respect to +counterparty credit risk and large exposure. These rules became effective in +June 2021. Adoption of these rules did not result in a material impact to +GSBE’s risk-based capital ratios as of December 2021. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents GSBE’s leverage ratio requirement which became +effective in June 2021 and the leverage ratio. + +In the table above, the leverage ratio as of December 2021 reflected GSBE’s +profits after foreseeable charges for the year ended December 2021 (which will +not be finalized until verification by GSBE’s external auditors and approval +by GSBE’s shareholder (GS Bank USA) for inclusion in risk-based capital). +These profits contributed + +approximately 58 basis points to the leverage ratio. + +The deposits of GSBE are covered by the German statutory deposit protection +program to the extent provided by law. In addition, GSBE has elected to +participate in the German voluntary deposit protection program which provides +insurance for certain eligible deposits not covered by the German statutory +deposit program. GSBE is subject to minimum reserve requirements at central +banks in certain of the jurisdictions in which it operates. The minimum +reserve requirement was $189 million as of December 2021 and $25 million as of +December 2020. The amount deposited by GSBE at central banks was $20.36 +billion as of December 2021 and $3.17 billion as of December 2020, +substantially all of which was deposited with Deutsche Bundesbank. + +GSBE is a registered swap dealer with the CFTC and, beginning in the fourth +quarter of 2021, also became a registered security-based swap dealer with the +SEC. As of December 2021, GSBE was subject to and in compliance with +applicable capital requirements for swap dealers and security-based swap +dealers. + +Restrictions on Payments + +Group Inc. may be limited in its ability to access capital held at certain +subsidiaries as a result of regulatory, tax or other constraints. These +limitations include provisions of applicable law and regulations and other +regulatory restrictions that limit the ability of those subsidiaries to +declare and pay dividends without prior regulatory approval. For example, the +amount of dividends that may be paid by GS Bank USA are limited to the lesser +of the amounts calculated under a recent earnings test and an undivided +profits test. As a result of dividends paid in connection with the acquisition +of GSBE in July 2021, GS Bank USA cannot currently declare any additional +dividends without prior regulatory approval. + +In addition, subsidiaries not subject to separate regulatory capital +requirements may hold capital to satisfy local tax and legal guidelines, +rating agency requirements (for entities with assigned credit ratings) or +internal policies, including policies concerning the minimum amount of capital +a subsidiary should hold based on its underlying level of risk. + +Group Inc.’s equity investment in subsidiaries was $118.90 billion as of +December 2021 and $103.80 billion as of December 2020, of which Group Inc. was +required to maintain $77.22 billion as of December 2021 and $63.68 billion as +of December 2020, of minimum equity capital in its regulated subsidiaries in +order to satisfy the regulatory requirements of such subsidiaries. + +Group Inc.’s capital invested in certain + +non-U.S. + +dollar functional currency subsidiaries is exposed to foreign exchange risk, +substantially all of which is managed through a combination of derivatives and + +non-U.S. + +dollar-denominated + +debt. See Note 7 for information about the firm’s net investment hedges used +to hedge this risk. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 21. + +Earnings Per Common Share + +Basic EPS is calculated by dividing net earnings to common by the weighted +average number of common shares outstanding and restricted stock units (RSUs) +for which the delivery of the underlying common stock is not subject to +satisfaction of future service, performance or market conditions +(collectively, basic shares). Diluted EPS includes the determinants of basic +EPS and, in addition, reflects the dilutive effect of the common stock +deliverable for RSUs for which the delivery of the underlying common stock is +subject to satisfaction of future service, performance or market conditions. + +The table below presents information about basic and diluted EPS. + +In the table above: + +Net earnings to common represents net earnings applicable to common +shareholders, which is calculated as net earnings less preferred stock +dividends. + +Unvested share-based awards that have + +non-forfeitable + +rights to dividends or dividend equivalents are treated as a separate class of +securities under the + +two-class + +method. Distributed earnings allocated to these securities reduce net earnings +to common to calculate EPS under this method. The impact of applying this +methodology was a reduction in basic EPS of $0.10 for 2021, and $0.07 for both +2020 and 2019. + +Note 22. + +Transactions with Affiliated Funds + +The firm has formed nonconsolidated investment funds with third-party +investors. As the firm generally acts as the investment manager for these +funds, it is entitled to receive management fees and, in certain cases, +advisory fees or incentive fees from these funds. Additionally, the firm +invests alongside the third-party investors in certain funds. + +The tables below present information about affiliated funds. + +The firm has waived, and may waive in the future, certain management fees on +selected money market funds to enhance the yield for investors in such funds. +Management fees waived were $595 million (of which $565 million related to +voluntary waivers on money market funds) for 2021, $109 million for 2020 and +$44 million for 2019. + +The Volcker Rule restricts the firm from providing financial support to +covered funds (as defined in the rule) after the expiration of the conformance +period. As a general matter, in the ordinary course of business, the firm does +not expect to provide additional voluntary financial support to any covered +funds, but may choose to do so with respect to funds that are not subject to +the Volcker Rule. However, any such support is not expected to be material to +the results of operations of the firm. + +In March 2020, GS Bank USA and unaffiliated entities purchased certificates of +deposit and commercial paper from two money market funds managed by the firm. +These funds are not covered funds under the Volcker Rule. GS Bank USA’s +purchase price of these securities was $1.84 billion, of which none were +outstanding as of December 2021 and $321 million were outstanding as of +December 2020. These purchases were made to promote liquidity in the short- +term credit markets and to increase the funds’ weekly liquid assets. Group +Inc. provided a guarantee to GS Bank USA in connection with these securities. +See Note 18 for information about guarantees provided by Group Inc. to +subsidiaries. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The firm had an outstanding guarantee, as permitted under the Volcker Rule, on +behalf of its funds, of $87 million as of December 2020. The firm had +voluntarily provided this guarantee in connection with a financing agreement +with a third-party lender executed by one of the firm’s real estate funds that +is not covered by the Volcker Rule. The firm had no outstanding guarantee as +of December 2021 and except as noted above, the firm has not provided any +additional financial support to its affiliated funds during 2021 and 2020. + +In addition, in the ordinary course of business, the firm may also engage in +other activities with its affiliated funds, including, among others, +securities lending, trade execution, market-making, custody, and acquisition +and bridge financing. See Note 18 for information about the firm’s investment +commitments related to these funds. + +Note 23. + +Interest Income and Interest Expense + +Interest is recorded over the life of the instrument on an accrual basis based +on contractual interest rates. + +The table below presents sources of interest income and interest expense. + +In the table above: + +Collateralized agreements includes rebates paid and interest income on +securities borrowed. + +Loans excludes interest on loans held for sale that are accounted for at the +lower of cost or fair value. Such interest is included within other interest. + +Other interest income includes interest income on customer debit balances, +other interest-earning assets and loans held for sale that are accounted for +at the lower of cost or fair value. + +Collateralized financings consists of repurchase agreements and securities +loaned. + +Short- and long-term borrowings include both secured and unsecured borrowings. + +Other interest expense includes rebates received on other interest-bearing +liabilities and interest expense on customer credit balances. + +Note 24. + +Income Taxes + +Provision for Income Taxes + +Income taxes are provided for using the asset and liability method under which +deferred tax assets and liabilities are recognized for temporary differences +between the financial reporting and tax bases of assets and liabilities. The +firm reports interest expense related to income tax matters in provision for +taxes and income tax penalties in other expenses. + +The table below presents information about the provision for taxes. + +The table below presents a reconciliation of the U.S. federal statutory income +tax rate to the effective income tax rate. + +In the table above, + +Non-U.S. + +operations include the impact of the Base Erosion and Anti-Abuse Tax and +Global Intangible Low Taxed Income (GILTI). + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Deferred Income Taxes + +Deferred income taxes reflect the net tax effects of temporary differences +between the financial reporting and tax bases of assets and liabilities. These +temporary differences result in taxable or d + +e + +ductible amounts in future years and are measured using the tax rates and laws +that will be in effect when such differences are expected to reverse. +Valuation allowances are established to reduce deferred tax assets to the +amount that more likely than not will be realized and primarily relate to the +ability to utilize losses in various tax jurisdictions. Tax assets are +included in other assets and tax liabilities are included in other +liabilities. + +The table below presents information about deferred tax assets and +liabilities, excluding the impact of netting within tax jurisdictions. + +The firm has recorded deferred tax assets of $681 million as of December 2021 +and $510 million as of December 2020, in connection with U.S. federal, state +and local and foreign net operating loss carryforwards. The firm also recorded +a valuation allowance of $285 million as of December 2021 and $79 million as +of December 2020, related to these net operating loss carryforwards. + +As of December 2021, the U.S. federal net operating loss carryforward was +$1.16 billion, the state and local net operating loss carryforward was $1.80 +billion, and the foreign net operating loss carryforward was $1.31 billion. If +not utilized, the U.S. federal, the state and local, and foreign net operating +loss carryforwards will begin to expire in 2022. If these carryforwards +expire, they will not have a material impact on the firm’s results of +operations. As of December 2021, the firm has recorded deferred tax assets of +$32 million in connection with general business credit carryforwards and $11 +million in connection with state and local tax credit carryforwards. If not +utilized, the general business credit carryforward will begin to expire in +2022 and the state and local tax credit carryforward will begin to expire in +2023. As of December 2021, the firm did not have any foreign tax credit +carryforwards. + +As of both December 2021 and December 2020, the firm had no U.S. capital loss +carryforwards and no related net deferred income tax assets. As of December +2021, the firm had deferred tax assets of $270 million in connection with +foreign capital loss carryforwards and a valuation allowance of $270 million +related to these capital loss carryforwards. + +The valuation allowance increased by $344 million during 2021 and increased by +$84 million during 2020. The increases in both 2021 and 2020 were primarily +due to an increase in deferred tax assets from which the firm does not expect +to realize any benefit. + +The firm permanently reinvested eligible earnings of certain foreign +subsidiaries. As of both December 2021 and December 2020, all U.S. taxes were +accrued on these subsidiaries’ distributable earnings. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Unrecognized Tax Benefits + +The firm recognizes tax positions in the consolidated financial statements +only when it is more likely than not that the position will be sustained on +examination by the relevant taxing authority based on the technical merits of +the position. A position that meets this standard is measured at the largest +amount of benefit that will more likely than not be realized on settlement. A +liability is established for differences between positions taken in a tax +return and amounts recognized in the consolidated financial statements. + +The accrued liability for interest expense related to income tax matters and +income tax penalties was $131 million as of December 2021 and $129 million as +of December 2020. The firm recognized interest expense and income tax +penalties of $13 million for 2021, $41 million for 2020 and $60 million for +2019. It is reasonably possible that unrecognized tax benefits could change +significantly during the twelve months subsequent to December 2021 due to +potential audit settlements. However, at this time it is not possible to +estimate any potential change. + +The table below presents the changes in the liability for unrecognized tax +benefits, which is included in other liabilities. + +Regulatory Tax Examinations + +The firm is subject to examination by the U.S. Internal Revenue Service (IRS) +and other taxing authorities in jurisdictions where the firm has significant +business operations, such as the United Kingdom, Japan, Hong Kong and various +states, such as New York. The tax years under examination vary by +jurisdiction. The firm does not expect completion of these audits to have a +material impact on the firm’s financial condition, but it may be material to +operating results for a particular period, depending, in part, on the +operating results for that period. + +The table below presents the earliest tax years that remain subject to +examination by major jurisdiction. + +The firm has been accepted into the Compliance Assurance Process program by +the IRS for each of the tax years from 2013 through 2022. This program allows +the firm to work with the IRS to identify and resolve potential U.S. Federal +tax issues before the filing of tax returns. The fieldwork for tax years 2011 +through 2018 has been completed and the final resolution is not expected to +have a material impact on the effective tax rate. The 2019 and 2020 tax years +remain subject to post-filing review. New York State and City examinations of +2015 through 2018 commenced during 2021. + +All years, including and subsequent to the years in the table above, remain +open to examination by the taxing authorities. The firm believes that the +liability for unrecognized tax benefits it has established is adequate in +relation to the potential for additional assessments. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 25. + +Business Segments + +The firm reports its activities in four business segments: Investment Banking, +Global Markets, Asset Management and Consumer & Wealth Management. See Note 1 +for information about the firm’s business segments. + +Compensation and benefits expenses in the firm’s segments reflect, among other +factors, the overall performance of the firm, as well as the performance of +individual businesses. Consequently, + +pre-tax + +margins in one segment of the firm’s business may be significantly affected by +the performance of the firm’s other business segments. + +The firm allocates assets (including allocations of global core liquid assets +and cash, secured client financing and other assets), revenues and expenses +among the four business segments. Due to the integrated nature of these +segments, estimates and judgments are made in allocating certain assets, +revenues and expenses. The allocation process is based on the manner in which +management currently views the performance of the segments. + +The allocation of common shareholders’ equity and preferred stock dividends to +each segment is based on the estimated amount of equity required to support +the activities of the segment under relevant regulatory capital requirements. + +Net earnings for each segment is calculated by applying the firmwide tax rate +to each segment’s + +pre-tax + +earnings. + +Management believes that this allocation provides a reasonable representation +of each segment’s contribution to consolidated net earnings to common, return +on average common equity and total assets. Transactions between segments are +based on specific criteria or approximate third-party rates. + +Segment Results + +The table below presents a summary of the firm’s segment results. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +In the table above: + +Revenues and expenses directly associated with each segment are included in +determining + +pre-tax + +earnings. + +Net revenues in the firm’s segments include allocations of interest income and +expense to specific positions in relation to the cash generated by, or funding +requirements of, such positions. Net interest is included in segment net +revenues as it is consistent with how management assesses segment performance. + +Overhead expenses not directly allocable to specific segments are allocated +ratably based on direct segment expenses. + +Effective January 1, 2021, the allocation of attributed equity among the +firm’s segments was updated to reflect the results of the firm’s 2020 +Comprehensive Capital Analysis and Review process. The average common equity +balances above incorporate such impact, as well as the changes in the size and +composition of assets held in each of the firm’s segments that occurred during +2021. See Note 20 for information about the firm’s updated SCB, which became +effective on October 1, 2021. + +The table below presents depreciation and amortization expense by segment. + +Segment Assets + +The table below presents assets by segment. + +The table below presents gross loans by segment and loan type, and allowance +for loan losses by segment. + +See Note 9 for further information about loans. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Geographic Information + +Due to the highly integrated nature of international financial markets, the +firm manages its businesses based on the profitability of the enterprise as a +whole. The methodology for allocating profitability to geographic regions is +dependent on estimates and management judgment because a significant portion +of the firm’s activities require cross-border coordination in order to +facilitate the needs of the firm’s clients. Geographic results are generally +allocated as follows: + +Investment Banking: location of the client and investment banking team. + +Global Markets: FICC and Equities intermediation: location of the market- +making desk; FICC and Equities financing (excluding prime brokerage +financing): location of the desk; prime brokerage financing: location of the +primary market for the underlying security. + +Asset Management (excluding Equity investments and Lending and debt +investments): location of the sales team; Equity investments: location of the +investment; Lending and debt investments: location of the client. + +Consumer & Wealth Management: Wealth management: location of the sales team; +Consumer banking: location of the client. + +The table below presents total net revenues, + +pre-tax + +earnings and net earnings by geographic region. + +In the table above: + +Asia + +pre-tax + +earnings and net earnings for 2020 and 2019 were impacted by net provisions +for litigation and regulatory proceedings. + +Substantially all of the amounts in Americas were attributable to the U.S. + +Asia includes Australia a + +n + +d New Zealand. + +Note 26. + +Credit Concentrations + +The firm’s concentrations of credit risk arise from its market making, client +facilitation, investing, underwriting, lending and collateralized +transactions, and cash management activities, and may be impacted by changes +in economic, industry or political factors. These activities expose the firm +to many different industries and counterparties, and may also subject the firm +to a concentration of credit risk to a particular central bank, counterparty, +borrower or issuer, including sovereign issuers, or to a particular clearing +house or exchange. The firm seeks to mitigate credit risk by actively +monitoring exposures and obtaining collateral from counterparties as deemed +appropriate. + +The firm measures and monitors its credit exposure based on amounts owed to +the firm after taking into account risk mitigants that the firm considers when +determining credit risk. Such risk mitigants include netting and collateral +arrangements and economic hedges, such as credit derivatives, futures and +forward contracts. Netting and collateral agreements permit the firm to offset +receivables and payables with such counterparties and/or enable the firm to +obtain collateral on an upfront or contingent basis. + +The table below presents the credit concentrations included in trading cash +instruments and investments. + +In addition, the firm had $222.20 billion as of December 2021 and $116.63 +billion as of December 2020 of cash deposits held at central banks (included +in cash and cash equivalents), of which $122.01 billion as of December 2021 +and $52.71 billion as of December 2020 was held at the Fed + +e + +ral Reserve. + +As of both December 2021 and December 2020, the firm did not have credit +exposure to any other counterparty that exceeded 2% of total assets. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Collateral obtained by the firm related to derivative assets is principally +cash and is held by the firm or a third-party custodian. Collateral obtained +by the firm related to resale agreements and securities borrowed transactions +is primarily U.S. government and agency obligations and + +non-U.S. + +government and ag + +e + +ncy obligations. See Note 11 for further information about collateralized +agreements and financings. + +The table below presents U.S. government and agency obligations and + +non-U.S. + +government and agency obligations that collateralize resale agreements and +securities borrowed transactions. + +In the table above: + +Non-U.S. + +government and agency obligations primarily consists of securities issued by +the governments of the U.K., France and Japan. + +Given that the firm’s primary credit exposure on such transactions is to the +counterparty to the transaction, the firm would be exposed to the collateral +issuer only in the event of counterparty default. + +Note 27. + +Legal Proceedings + +The firm is involved in a number of judicial, regulatory and arbitration +proceedings (including those described below) concerning matters arising in +connection with the conduct of the firm’s businesses. Many of these +proceedings are in early stages, and many of these cases seek an indeterminate +amount of damages. + +Under ASC 450, an event is “reasonably possible” if “the chance of the future +event or events occurring is more than remote but less than likely” and an +event is “remote” if “the chance of the future event or events occurring is +slight.” Thus, references to the upper end of the range of reasonably possible +loss for cases in which the firm is able to estimate a range of reasonably +possible loss mean the upper end of the range of loss for cases for which the +firm believes the risk of loss is more than slight. + +With respect to matters described below for which management has been able to +estimate a range of reasonably possible loss where (i) actual or potential +plaintiffs have claimed an amount of money damages, (ii) the firm is being, or +threatened to be, sued by purchasers in a securities offering and is not being +indemnified by a party that the firm believes will pay the full amount of any +judgment, or (iii) the purchasers are demanding that the firm repurchase +securities, management has estimated the upper end of the range of reasonably +possible loss based on (a) in the case of (i), the amount of money damages +claimed, (b) in the case of (ii), the difference between the initial sales +price of the securities that the firm sold in such offering and the estimated +lowest subsequent price of such securities prior to the action being commenced +and (c) in the case of (iii), the price that purchasers paid for the +securities less the estimated value, if any, as of December 2021 of the +relevant securities, in each of cases (i), (ii) and (iii), taking into account +any other factors believed to be relevant to the particular matter or matters +of that type. As of the date hereof, the firm has estimated the upper end of +the range of reasonably possible aggregate loss for such matters and for any +other matters described below where management has been able to estimate a +range of reasonably possible aggregate loss to be approximately $2.0 billion +in excess of the aggregate reserves for such matters. + +Management is generally unable to estimate a range of reasonably possible loss +for matters other than those included in the estimate above, including where +(i) actual or potential plaintiffs have not claimed an amount of money +damages, except in those instances where management can otherwise determine an +appropriate amount, (ii) matters are in early stages, (iii) matters relate to +regulatory investigations or reviews, except in those instances where +management can otherwise determine an appropriate amount, (iv) there is +uncertainty as to the likelihood of a class being certified or the ultimate +size of the class, (v) there is uncertainty as to the outcome of pending +appeals or motions, (vi) there are significant factual issues to be resolved, +and/or (vii) there are novel legal issues presented. For example, the firm’s +potential liabilities with respect to the investigations and reviews described +below in “Regulatory Investigations and Reviews and Related Litigation” +generally are not included in management’s estimate of reasonably possible +loss. However, management does not believe, based on currently available +information, that the outcomes of such other matters will have a material +adverse effect on the firm’s financial condition, though the outcomes could be +material to the firm’s operating results for any particular period, depending, +in part, upon the operating results for such period. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +1MDB-Related Matters + +Between 2012 and 2013, subsidiaries of the firm acted as arrangers or +purchasers of approximately $6.5 billion of debt securities of 1MDB. + +On November 1, 2018, the U.S. Department of Justice (DOJ) unsealed a criminal +information and guilty plea by Tim Leissner, a former participating managing +director of the firm, and an indictment against Ng Chong Hwa, a former +managing director of the firm. On August 28, 2018, Leissner was adjudicated +guilty by the U.S. District Court for the Eastern District of New York of +conspiring to launder money and to violate the U.S. Foreign Corrupt Practices +Act’s (FCPA) anti-bribery and internal accounting controls provisions. Ng was +charged with conspiring to launder money and to violate the FCPA’s anti- +bribery and internal accounting controls provisions. On May 6, 2019, Ng +pleaded not guilty to the DOJ’s criminal charges, and trial commenced on +February 7, 2022. + +On August 18, 2020, the firm announced that it entered into a settlement +agreement with the Government of Malaysia to resolve the criminal and +regulatory proceedings in Malaysia involving the firm, which includes a +guarantee that the Government of Malaysia receives at least $1.4 billion in +assets and proceeds from assets seized by governmental authorities around the +world related to 1MDB. See Note 18 for further information about this +guarantee. + +On October 22, 2020, the firm announced that it reached settlements of +governmental and regulatory investigations relating to 1MDB with the DOJ, the +SEC, the FRB, the NYDFS, the FCA, the PRA, the Singapore Attorney General’s +Chambers, the Singapore Commercial Affairs Department, the Monetary Authority +of Singapore and the Hong Kong Securities and Futures Commission. Group Inc. +entered into a three-year deferred prosecution agreement with the DOJ, in +which a charge against the firm, one count of conspiracy to violate the FCPA, +was filed and will later be dismissed if the firm abides by the terms of the +agreement. In addition, GS Malaysia pleaded guilty to one count of conspiracy +to violate the FCPA, and was sentenced on June 9, 2021. In May 2021, the U.S. +Department of Labor granted the firm a five-year exemption to maintain its +status as a qualified professional asset manager (QPAM). + +The firm has received multiple demands, beginning in November 2018, from +alleged shareholders under Section 220 of the Delaware General Corporation Law +for books and records relating to, among other things, the firm’s involvement +with 1MDB and the firm’s compliance procedures. On December 13, 2019, an +alleged shareholder filed a lawsuit in the Court of Chancery of the State of +Delaware seeking books and records relating to, among other things, the firm’s +involvement with 1MDB and the firm’s compliance procedures. The lawsuit was +dismissed without prejudice on August 4, 2021. + +On February 19, 2019, a purported shareholder derivative action relating to +1MDB was filed in the U.S. District Court for the Southern District of New +York against Group Inc. and the directors at the time and a former chairman +and chief executive officer of the firm. The second amended complaint filed on +November 13, 2020, alleges breaches of fiduciary duties, including in +connection with alleged insider trading by certain current and former +directors, unjust enrichment and violations of the anti-fraud provisions of +the Exchange Act, including in connection with Group Inc.’s common stock +repurchases and solicitation of proxies, and seeks unspecified damages, +disgorgement and injunctive relief. Defendants moved to dismiss this action on +January 15, 2021. On February 3, 2022, the parties reached a settlement in +principle, subject to final documentation and court approval, to resolve this +action. + +Beginning in March 2019, the firm has also received demands from three +shareholders to investigate and pursue claims against certain current and +former directors and executive officers based on their oversight and public +disclosures regarding 1MDB and related internal controls. In June 2019, the +Board appointed a Special Committee to consider the demands and, in January +2021, the Board voted to reject them. In June 2021, the firm reached a +settlement with the three shareholders. Following the Board’s decision to +reject the initial three demands, the firm received two additional demands +from alleged shareholders (one of which is the alleged shareholder that filed +the December 2019 books and records action in Delaware Chancery Court) to +investigate and pursue claims related to 1MDB (and, for one of the demands, +other matters) against other parties, including certain current and former +directors and executive officers of the firm. In December 2021, the Board +voted to reject the two additional demands. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +On December 20, 2018, a putative securities class action lawsuit was filed in +the U.S. District Court for the Southern District of New York against Group +Inc. and certain former officers of the firm alleging violations of the anti- +fraud provisions of the Exchange Act with respect to Group Inc.’s disclosures +and public statements concerning 1MDB and seeking unspecified damages. The +plaintiffs filed the second amended complaint on October 28, 2019. On June 28, +2021, the court dismissed the claims against one of the individual defendants +but denied the defendants’ motion to dismiss with respect to the firm and the +remaining individual defendants. On November 12, 2021, the plaintiffs moved +for class certification. + +Mortgage-Related Matters + +Beginning in April 2010, a number of purported securities law class actions +were filed in the U.S. District Court for the Southern District of New York +challenging the adequacy of Group Inc.’s public disclosure of, among other +things, the firm’s activities in the collateralized debt obligation market, +and the firm’s conflict of interest management. + +The consolidated amended complaint filed on July 25, 2011, which named as +defendants Group Inc. and certain current and former officers and employees of +Group Inc. and its affiliates, generally alleges violations of Sections 10(b) +and 20(a) of the Exchange Act and seeks monetary damages. The defendants have +moved for summary judgment. On April 7, 2020, the Second Circuit Court of +Appeals affirmed the district court’s August 14, 2018 grant of class +certification. On June 21, 2021, the United States Supreme Court vacated the +judgment of the Second Circuit and remanded the case for further proceedings, +and on August 26, 2021, the Second Circuit vacated the district court’s grant +of class certification and remanded the case for further proceedings. On +December 8, 2021, the district court granted the plaintiffs’ motion for class +certification. On December 22, 2021, defendants filed a petition with the +Second Circuit seeking interlocutory review of the district court’s grant of +class certification. + +Complaints were filed in the U.S. District Court for the Southern District of +New York on July 25, 2019 and May 29, 2020 against Goldman Sachs Mortgage +Company and GS Mortgage Securities Corp. by U.S. Bank National Association, as +trustee for two residential mortgage-backed securitization trusts that issued +$1.7 billion of securities. The complaints generally allege that mortgage +loans in the trusts failed to conform to applicable representations and +warranties and seek specific performance or, alternatively, compensatory +damages and other relief. On November 23, 2020, the court granted in part and +denied in part defendants’ motion to dismiss the complaint in the first action +and denied defendants’ motion to dismiss the complaint in the second action. +On January 14, 2021, amended complaints were filed in both actions. + +Currencies-Related Litigation + +GS&Co. and Group Inc. are among the defendants named in an action filed in the +U.S. District Court for the Southern District of New York on November 7, 2018, +and GSI, GSIB, Goldman Sachs Group UK Limited and GS Bank USA are among the +defendants in an action filed in the High Court of England and Wales on +November 11, 2020, in each case by certain direct purchasers of foreign +exchange instruments that opted out of a class settlement reached with, among +others, GS&Co. and Group Inc. The third amended complaint in the U.S. district +court action, filed on August 3, 2020, generally alleges that the defendants +violated federal antitrust law and state common law in connection with an +alleged conspiracy to manipulate the foreign currency exchange markets and +seeks declaratory and injunctive relief, as well as unspecified amounts of +compensatory, punitive, treble and other damages. The claim in the English +action is for breaches of English and E.U. competition rules from 2003 to 2013 +and alleges manipulation of foreign exchange rates and bid/offer spreads, the +exchange of commercially sensitive information among defendants and collusive +trading. + +GS&Co. is among the defendants named in a putative class action filed in the +U.S. District Court for the Southern District of New York on August 4, 2021. +The amended complaint, filed on January 6, 2022, generally asserts claims +under federal antitrust law and state common law in connection with an alleged +conspiracy among the defendants to manipulate auctions for foreign exchange +transactions on an electronic trading platform, as well as claims under the +Racketeer Influenced and Corrupt Organizations Act. The complaint seeks +declaratory and injunctive relief, as well as unspecified amounts of treble +and other damages. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Banco Espirito Santo S.A. and Oak Finance + +Beginning in February 2015, GSI commenced actions against Novo Banco S.A. +(Novo Banco) in the English Commercial Court and the Bank of Portugal (BoP) in +Portuguese Administrative Court in response to BoP’s decisions in December +2014, September 2015 and December 2015 to reverse an earlier transfer to Novo +Banco of an $835 million facility agreement (the Facility), structured by GSI, +between Oak Finance Luxembourg S.A. (Oak Finance), a special purpose vehicle +formed in connection with the Facility, and Banco Espirito Santo S.A. (BES) +prior to the failure of BES. In July 2018, the English Supreme Court found +that the English courts did not yet have jurisdiction over GSI’s action. In +July 2018, the Liquidation Committee for BES issued a decision seeking to claw +back from GSI $54 million paid to GSI and $50 million paid to Oak Finance in +connection with the Facility, alleging that GSI acted in bad faith in +extending the Facility, including because GSI allegedly knew that BES was at +risk of imminent failure. In October 2018, GSI commenced an action in Lisbon +Commercial Court challenging the Liquidation Committee’s decision and has +since also issued a claim against the Portuguese State seeking compensation +for losses of approximately $222 million related to the failure of BES, +together with a contingent claim for the $104 million sought by the +Liquidation Committee. + +Financial Advisory Services + +Group Inc. and certain of its affiliates are from time to time parties to +various civil litigation and arbitration proceedings and other disputes with +clients and third parties relating to the firm’s financial advisory +activities. These claims generally seek, among other things, compensatory +damages and, in some cases, punitive damages, and in certain cases allege that +the firm did not appropriately disclose or deal with conflicts of interest. + +Archegos-Related Matters + +GS&Co. is among the underwriters named as defendants in a putative securities +class action filed on August 13, 2021 in New York Supreme Court, County of New +York, relating to ViacomCBS Inc.’s (ViacomCBS) March 2021 public offerings of +$1.7 billion of common stock and $1.0 billion of preferred stock. In addition +to the underwriters, the defendants include ViacomCBS and certain of its +officers and directors. GS&Co. underwrote 646,154 shares of common stock +representing an aggregate offering price of approximately $55 million and +323,077 shares of preferred stock representing an aggregate offering price of +approximately $32 million. The complaint asserts claims under the federal +securities laws and alleges that the offering documents contained material +misstatements and omissions, including, among other things, that the offering +documents failed to disclose that Archegos Capital Management (Archegos) had +substantial exposure to ViacomCBS, including through total return swaps to +which certain of the underwriters, including GS&Co., were allegedly +counterparties, and that such underwriters failed to disclose their exposure +to Archegos. The complaint seeks rescission and compensatory damages in +unspecified amounts. On November 5, 2021, + +the + +plaintiffs filed an amended complaint, and, on December 22, 2021, + +the + +defendants filed motions to dismiss the amended complaint. On January 4, 2022, +the plaintiffs moved for class certification. + +Group Inc. is also a defendant in putative securities class actions filed +beginning in October 2021 in the U.S. District Court for the Southern District +of New York. The complaints allege that Group Inc., along with another +financial institution, sold shares in Vipshop Holdings Ltd. (Vipshop), GSX +Techedu Inc. (Gaotu), Tencent Music Entertainment Group (Tencent), ViacomCBS, +iQIYI Inc. (iQIYI) and Baidu Inc. (Baidu) based on material nonpublic +information regarding the liquidation of Archegos’ position in Vipshop, Gaotu, +Tencent, ViacomCBS, iQIYI and Baidu, respectively. The complaints generally +assert violations of Sections 10(b), 20A and 20(a) of the Exchange Act and +seek unspecified damages. + +On January 24, 2022, the firm received a demand from an alleged shareholder +under Section 220 of the Delaware General Corporation Law for books and +records relating to, among other things, the firm’s involvement with Archegos +and the firm’s controls with respect to insider trading. + +Underwriting Litigation + +Firm affiliates are among the defendants in a number of proceedings in +connection with securities offerings. In these proceedings, including those +described below, the plaintiffs assert class action or individual claims under +federal and state securities laws and in some cases other applicable laws, +allege that the offering documents for the securities that they purchased +contained material misstatements and omissions, and generally seek +compensatory and rescissory damages in unspecified amounts, as well as +rescission. Certain of these proceedings involve additional allegations. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Altice USA, Inc. + +GS&Co. is among the underwriters named as defendants in putative securities +class actions pending in New York Supreme Court, County of Queens, and the +U.S. District Court for the Eastern District of New York beginning in June +2018, relating to Altice USA, Inc.’s (Altice) $2.15 billion June 2017 initial +public offering. In addition to the underwriters, the defendants include +Altice and certain of its officers and directors. GS&Co. underwrote 12,280,042 +shares of common stock representing an aggregate offering price of +approximately $368 million. On June 26, 2020, the court dismissed the amended +complaint in the state court action, and on September 4, 2020, plaintiffs +moved for leave to file a consolidated amended complaint. Plaintiffs in the +district court action filed a second amended complaint on October 7, 2020. On +November 8, 2021, the state court preliminarily approved a settlement. The +firm will not be required to contribute to the settlement. + +Uber Technologies, Inc. + +GS&Co. is among the underwriters named as defendants in several putative +securities class actions filed beginning in September 2019 in California +Superior Court, County of San Francisco and the U.S. District Court for the +Northern District of California, relating to Uber Technologies, Inc.’s (Uber) +$8.1 billion May 2019 initial public offering. In addition to the +underwriters, the defendants include Uber and certain of its officers and +directors. GS&Co. underwrote 35,864,408 shares of common stock representing an +aggregate offering price of approximately $1.6 billion. On November 16, 2020, +the court in the state court action granted defendants’ motion to dismiss the +consolidated amended complaint filed on February 11, 2020, and on December 16, +2020, plaintiffs appealed. On August 7, 2020, defendants’ motion to dismiss +the district court action was denied. On September 25, 2020, the plaintiffs in +the district court action moved for class certification. On December 5, 2020, +the plaintiffs in the state court action filed a complaint in the district +court, which was consolidated with the existing district court action on +January 25, 2021. On May 14, 2021, the plaintiffs filed a second amended +complaint in the district court, purporting to add the plaintiffs from the +state court action as additional class representatives. On October 1, 2021, +defendants’ motion to dismiss the additional class representatives from the +second amended complaint was denied, and, on October 29, 2021, the plaintiffs +in the district court action filed a revised motion for class certification. + +Alnylam Pharmaceuticals, Inc. + +GS&Co. is among the underwriters named as defendants in a putative securities +class action filed on September 12, 2019 in New York Supreme Court, County of +New York, relating to Alnylam Pharmaceuticals, Inc.’s (Alnylam) $805 million +November 2017 public offering of common stock. In addition to the +underwriters, the defendants include Alnylam and certain of its officers and +directors. GS&Co. underwrote 2,576,000 shares of common stock representing an +aggregate offering price of approximately $322 million. On October 30, 2020, +the court denied the defendants’ motion to dismiss the amended complaint filed +on November 7, 2019. On February 22, 2021, the plaintiffs moved for class +certification. On April 29, 2021, the Appellate Division of the Supreme Court +of the State of New York for the First Department denied defendants’ appeal of +the New York Supreme Court’s denial of the defendants’ motion to dismiss the +amended complaint, except with respect to one of the plaintiffs’ claims +against Alnylam’s officers and directors. On December 3, 2021, the court +preliminarily approved a settlement. The firm will not be required to +contribute to the settlement. + +Venator Materials PLC. + +GS&Co. is among the underwriters named as defendants in putative securities +class actions in Texas District Court, Dallas County, New York Supreme Court, +New York County, and the U.S. District Court for the Southern District of +Texas, filed beginning in February 2019, relating to Venator Materials PLC’s +(Venator) $522 million August 2017 initial public offering and $534 million +December 2017 secondary equity offering. In addition to the underwriters, the +defendants include Venator, certain of its officers and directors and certain +of its shareholders. GS&Co. underwrote 6,351,347 shares of common stock in the +August 2017 initial public offering representing an aggregate offering price +of approximately $127 million and 5,625,768 shares of common stock in the +December 2017 secondary equity offering representing an aggregate offering +price of approximately $127 million. On January 21, 2020, the Texas Court of +Appeals reversed the Texas District Court and dismissed the claims against the +underwriter defendants, including GS&Co., in the Texas state court action for +lack of personal jurisdiction. On March 22, 2021, the defendants’ motion to +dismiss the New York state court action was granted and the plaintiffs have +filed a notice of appeal. On July 7, 2021, the court in the federal action +granted in part and denied in part defendants’ motion to dismiss the +consolidated complaint. On August 16, 2021, the plaintiffs in the federal +action filed an amended consolidated complaint. On November 19, 2021, the +plaintiffs in the putative class action moved for class certification. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +XP Inc. + +GS&Co. is among the underwriters named as defendants in putative securities +class actions pending in New York Supreme Court, County of New York, and the +U.S. District Court for the Eastern District of York, filed beginning March +19, 2020, relating to XP Inc.’s (XP) $2.3 billion December 2019 initial public +offering. In addition to the underwriters, the defendants include XP, certain +of its officers and directors and certain of its shareholders. GS&Co. +underwrote 19,326,218 shares of common stock in the December 2019 initial +public offering representing an aggregate offering price of approximately $522 +million. On August 5, 2020, defendants’ motion to stay the state court action +in favor of the federal court action was denied. On February 8, 2021, the +state court granted the defendants’ motion to dismiss the state court action, +and on March 7, 2021, the district court granted the defendants’ motion to +dismiss the federal court action. On + +November 22, 2021, the Second + +Circuit affirmed the district court’s order granting the defendants’ motion to +dismiss. + +GoHealth, Inc. + +GS&Co. is among the underwriters named as defendants in putative securities +class actions filed beginning on September 21, 2020 and consolidated in the +U.S. District Court for the Northern District of Illinois relating to +GoHealth, Inc.’s (GoHealth) $914 million July 2020 initial public offering. In +addition to the underwriters, the defendants include GoHealth, certain of its +officers and directors and certain of its shareholders. GS&Co. underwrote +11,540,550 shares of common stock representing an aggregate offering price of +approximately $242 million. On February 25, 2021, the plaintiffs filed a +consolidated complaint. On April 26, 2021, the defendants filed a motion to +dismiss the consolidated complaint. + +Array Technologies, Inc. + +GS&Co. is among the underwriters named as defendants in a putative securities +class action filed on May 14, 2021 in the U.S. District Court for the Southern +District of New York, relating to Array Technologies, Inc.’s (Array) $1.2 +billion October 2020 initial public offering of common stock, $1.3 billion +December 2020 offering of common stock and $993 million March 2021 offering of +common stock. In addition to the underwriters, the defendants include Array +and certain of its officers and directors. GS&Co. underwrote an aggregate of +31,912,213 shares of common stock in the three offerings representing an +aggregate offering price of approximately $877 million. On December 7, 2021, +the plaintiffs filed an amended consolidated complaint. + +Skillz Inc. + +GS&Co. is among the underwriters named as defendants in a putative securities +class action filed on October 8, 2021 in the U.S. District Court for the +Northern District of California relating to Skillz Inc.’s (Skillz) +approximately $883 million March 2021 public offering of common stock. In +addition to the underwriters, the defendants include Skillz and certain of its +officers and directors. GS&Co. underwrote 8,832,000 shares of common stock +representing an aggregate offering price of approximately $212 million. On +December 23, 2021, the defendants filed a motion to dismiss the amended +consolidated complaint. + +ContextLogic Inc. + +GS&Co. is among the underwriters named as defendants in putative securities +class actions filed beginning on May 17, 2021 in the U.S. District Court for +the Northern District of California, relating to ContextLogic Inc.’s +(ContextLogic) $1.1 billion December 2020 initial public offering of common +stock. In addition to the underwriters, the defendants include ContextLogic +and certain of its officers and directors. GS&Co. underwrote 16,169,000 shares +of common stock representing an aggregate offering price of approximately $388 +million. + +DiDi Global Inc. + +Goldman Sachs (Asia) L.L.C. (GS Asia) is among the underwriters named as +defendants in putative securities class actions filed beginning on July 6, +2021 in the U.S. District Courts for the Southern District of New York and the +Central District of California relating to DiDi Global Inc.’s (DiDi) $4.4 +billion June 2021 initial public offering of American Depositary Shares (ADS). +In addition to the underwriters, the defendants include DiDi and certain of +its officers and directors. GS Asia underwrote 104,554,000 ADS representing an +aggregate offering price of approximately $1.5 billion. On September 22, 2021, +plaintiffs in the California action voluntarily dismissed their claims without +prejudice. On January 7, 2022, plaintiffs in the federal action filed a +consolidated amended complaint, which includes allegations of violations of +Sections 10(b) and 20A of the Exchange Act against the underwriter defendants. + +Vroom Inc. + +GS&Co. is among the underwriters named as defendants in a putative securities +class action filed on October 4, 2021 in the U.S. District Court for the +Southern District of New York relating to Vroom Inc.’s (Vroom) approximately +$589 million September 2020 public offering of common stock. In addition to +the underwriters, the defendants include Vroom and certain of its officers and +directors. GS&Co. underwrote 3,886,819 shares of common stock representing an +aggregate offering price of approximately $212 million. On December 20, 2021, +the defendants served a motion to dismiss the consolidated complaint. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Zymergen Inc. + +GS&Co. is among the underwriters named as defendants in a putative securities +class action filed on August 4, 2021 in the U.S. District Court for the +Northern District of California relating to Zymergen Inc.’s (Zymergen) $575 +million April 2021 initial public offering of common stock. In addition to the +underwriters, the defendants include Zymergen and certain of its officers and +directors. GS&Co. underwrote 5,750,345 shares of common stock representing an +aggregate offering price of approximately $178 million. + +Waterdrop Inc. + +GS Asia is among the underwriters named as defendants in a putative securities +class action filed on September 14, 2021 in the U.S. District Court for the +Southern District of New York relating to Waterdrop Inc.’s (Waterdrop) $360 +million May 2021 initial public offering of ADS. In addition to the +underwriters, the defendants include Waterdrop and certain of its officers and +directors. GS Asia underwrote 15,300,000 ADS representing an aggregate +offering price of approximately $184 million. + +Investment Management Services + +Group Inc. and certain of its affiliates are parties to various civil +litigation and arbitration proceedings and other disputes with clients +relating to losses allegedly sustained as a result of the firm’s investment +management services. These claims generally seek, among other things, +restitution or other compensatory damages and, in some cases, punitive +damages. + +Securities Lending Antitrust Litigation + +Group Inc. and GS&Co. are among the defendants named in a putative antitrust +class action and three individual actions relating to securities lending +practices filed in the U.S. District Court for the Southern District of New +York beginning in August 2017. The complaints generally assert claims under +federal and state antitrust law and state common law in connection with an +alleged conspiracy among the defendants to preclude the development of +electronic platforms for securities lending transactions. The individual +complaints also assert claims for tortious interference with business +relations and under state trade practices law and, in the second and third +individual actions, unjust enrichment under state common law. The complaints +seek declaratory and injunctive relief, as well as unspecified amounts of +compensatory, treble, punitive and other damages. Group Inc. was voluntarily +dismissed from the putative class action on January 26, 2018. Defendants’ +motion to dismiss the class action complaint was denied on September 27, 2018. +Defendants’ motion to dismiss the first individual action was granted on +August 7, 2019. The plaintiffs in the putative class action moved for class +certification on February 22, 2021. On September 30, 2021, the defendants’ +motion to dismiss the second and third individual actions, which were +consolidated in June 2019, was granted. On October 25, 2021, the plaintiff in +the second individual action appealed to the Second Circuit Court of Appeals. + +Variable Rate Demand Obligations Antitrust Litigation + +GS&Co. is among the defendants named in a putative class action relating to +variable rate demand obligations (VRDOs), filed beginning in February 2019 +under separate complaints and consolidated in the U.S. District Court for the +Southern District of New York. The consolidated amended complaint, filed on +May 31, 2019, generally asserts claims under federal antitrust law and state +common law in connection with an alleged conspiracy among the defendants to +manipulate the market for VRDOs. The complaint seeks declaratory and +injunctive relief, as well as unspecified amounts of compensatory, treble and +other damages. On November 2, 2020, the court granted in part and denied in +part the defendants’ motion to dismiss, dismissing the state common law claims +against GS&Co., but denying dismissal of the federal antitrust law claims. + +GS&Co. is also among the defendants named in a related putative class action +filed on June 2, 2021 in the U.S. District Court for the Southern District of +New York. The complaint alleges the same conspiracy in the market for VRDOs as +that alleged in the consolidated amended complaint filed on May 31, 2019, and +asserts federal antitrust law, state law and state common law claims against +the defendants. The complaint seeks declaratory and injunctive relief, as well +as unspecified amounts of compensatory, treble and other damages. + +On August 6, 2021, plaintiffs + +in the May 31, 2019 action filed an amended complaint consolidating the June +2, 2021 action with the May 31, 2019 action. On September 14, 2021, defendants +filed a joint partial motion to dismiss the + +August 6, 2021 amended + +consolidated complaint. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Interest Rate Swap Antitrust Litigation + +Group Inc., GS&Co., GSI, GS Bank USA and Goldman Sachs Financial Markets, L.P. +are among the defendants named in a putative antitrust class action relating +to the trading of interest rate swaps, filed in November 2015 and consolidated +in the U.S. District Court for the Southern District of New York. The same +Goldman Sachs entities + +are + +also among the defendants named in two antitrust actions relating to the +trading of interest rate swaps, commenced in April 2016 and June 2018, +respectively, in the U.S. District Court for the Southern District of New York +by three operators of swap execution facilities and certain of their +affiliates. These actions have been consolidated for pretrial proceedings. The +complaints generally assert claims under federal antitrust law and state +common law in connection with an alleged conspiracy among the defendants to +preclude exchange trading of interest rate swaps. The complaints in the +individual actions also assert claims under state antitrust law. The +complaints seek declaratory and injunctive relief, as well as treble damages +in an unspecified amount. Defendants moved to dismiss the class and the first +individual action and the district court dismissed the state common law claims +asserted by the plaintiffs in the first individual action and otherwise +limited the state common law claim in the putative class action and the +antitrust claims in both actions to the period from 2013 to 2016. On November +20, 2018, the court granted in part and denied in part the defendants’ motion +to dismiss the second individual action, dismissing the state common law +claims for unjust enrichment and tortious interference, but denying dismissal +of the federal and state antitrust claims. On March 13, 2019, the court denied +the plaintiffs’ motion in the putative class action to amend their complaint +to add allegations related to + +conduct from + +to + +2012, but granted the motion to add limited allegations from 2013 + +to + +2016, which the plaintiffs added in a fourth consolidated amended complaint +filed on March 22, 2019. The plaintiffs in the putative class action moved for +class certification on March 7, 2019. + +Commodities-Related Litigation + +GSI is among the defendants named in putative class actions relating to +trading in platinum and palladium, filed beginning on November 25, 2014 and +most recently amended on May 15, 2017, in the U.S. District Court for the +Southern District of New York. The amended complaint generally alleges that +the defendants violated federal antitrust laws and the Commodity Exchange Act +in connection with an alleged conspiracy to manipulate a benchmark for +physical platinum and palladium prices and seek declaratory and injunctive +relief, as well as treble damages in an unspecified amount. On March 29, 2020, +the court granted the defendants’ motions to dismiss and for reconsideration, +resulting in the dismissal of all claims. On April 27, 2020, plaintiffs +appealed to the Second Circuit Court of Appeals. + +GS&Co., GSI, J. Aron & Company and Metro International Trade Services (Metro), +a previously consolidated subsidiary of Group Inc. that was sold in the fourth +quarter of 2014, are among the defendants in a number of putative class and +individual actions filed beginning on August 1, 2013 and consolidated in the +U.S. District Court for the Southern District of New York. The complaints +generally allege violations of federal antitrust laws and state laws in +connection with the storage of aluminum and aluminum trading. The complaints +seek declaratory, injunctive and other equitable relief, as well as +unspecified monetary damages, including treble damages. In December 2016, the +district court granted defendants’ motions to dismiss and on August 27, 2019, +the Second Circuit vacated the district court’s dismissals and remanded the +case to district court for further proceedings. On July 23, 2020, the district +court denied the class plaintiffs’ motion for class certification, and on +December 16, 2020 the Second Circuit denied leave to appeal the denial. On +February 17, 2021, the district court granted defendants’ motion for summary +judgment with respect to the claims of most of the individual plaintiffs. On +April 14, 2021, the plaintiffs appealed to the Second Circuit Court of +Appeals. + +In connection with the sale of Metro, the firm agreed to provide indemnities +to the buyer, including for any potential liabilities for legal or regulatory +proceedings arising out of the conduct of Metro’s business while the firm +owned it. + +U.S. Treasury Securities Litigation + +GS&Co. is among the primary dealers named as defendants in several putative +class actions relating to the market for U.S. Treasury securities, filed +beginning in July 2015 and consolidated in the U.S. District Court for the +Southern District of New York. GS&Co. is also among the primary dealers named +as defendants in a similar individual action filed in the U.S. District Court +for the Southern District of New York on August 25, 2017. The consolidated +class action complaint, filed on December 29, 2017, generally alleges that the +defendants violated antitrust laws in connection with an alleged conspiracy to +manipulate the when-issued market and auctions for U.S. Treasury securities +and that certain defendants, including GS&Co., colluded to preclude trading of +U.S. Treasury securities on electronic trading platforms in order to impede +competition in the bidding process. The individual action alleges a similar +conspiracy regarding manipulation of the when-issued market and auctions, as +well as related futures and options in violation of the Commodity Exchange +Act. The complaints seek declaratory and injunctive relief, treble damages in +an unspecified amount and restitution. Defendants’ motion to dismiss was +granted on March 31, 2021. On May 14, 2021, plaintiffs filed an amended +complaint. On June 14, 2021, defendants filed a motion to dismiss the amended +complaint. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Corporate Bonds Antitrust Litigation + +Group Inc. and GS&Co. are among the dealers named as defendants in a putative +class action relating to the secondary market for + +odd-lot + +corporate bonds, filed on April 21, 2020 in the U.S. District Court for the +Southern District of New York. The amended consolidated complaint, filed on +October 29, 2020, asserts claims under federal antitrust law in connection +with alleged anti-competitive conduct by the defendants in the secondary +market for + +odd-lots + +of corporate bonds, and seeks declaratory and injunctive relief, as well as +unspecified monetary damages, including treble and punitive damages and +restitution. On October 25, 2021, the court granted defendants’ motion to +dismiss with prejudice. On November 23, 2021, plaintiffs appealed to the +Second Circuit Court of Appeals. + +Credit Default Swap Antitrust Litigation + +Group Inc., GS&Co. and GSI are among the defendants named in a putative +antitrust class action relating to the settlement of credit default swaps, +filed on June 30, 2021 in the U.S. District Court for the District of New +Mexico. The complaint generally asserts claims under federal antitrust law and +the Commodity Exchange Act in connection with an alleged conspiracy among the +defendants to manipulate the benchmark price used to value credit default +swaps for settlement. The complaint also asserts a claim for unjust enrichment +under state common law. The complaint seeks declaratory and injunctive relief, +as well as unspecified amounts of treble and other damages. On November 15, +2021, the defendants filed a motion to dismiss the complaint. On February 4, +2022, the plaintiffs filed an amended complaint. + +Employment-Related Matters + +On September 15, 2010, a putative class action was filed in the U.S. District +Court for the Southern District of New York by three female former employees. +The complaint, as subsequently amended, alleges that Group Inc. and GS&Co. +have systematically discriminated against female employees in respect of +compensation, promotion and performance evaluations. The complaint alleges a +class consisting of all female employees employed at specified levels in +specified areas by Group Inc. and GS&Co. since July 2002, and asserts claims +under federal and New York City discrimination laws. The complaint seeks class +action status, injunctive relief and unspecified amounts of compensatory, +punitive and other damages. + +On March 30, 2018, the district court certified a damages class as to the +plaintiffs’ disparate impact and treatment claims. On September 4, 2018, the +Second Circuit Court of Appeals denied defendants’ petition for interlocutory +review of the district court’s class certification decision and subsequently +denied defendants’ petition for rehearing. On September 27, 2018, plaintiffs +advised the district court that they would not seek to certify a class for +injunctive and declaratory relief. On March 26, 2020, the Magistrate Judge in +the district court granted in part a motion to compel arbitration as to class +members who are parties to certain agreements with Group Inc. and/or GS&Co. in +which they agreed to arbitrate employment-related disputes. On April 16, 2020, +plaintiffs submitted objections to the Magistrate Judge’s order and defendants +submitted conditional objections in the event that the district judge +overturned any portion of the Magistrate Judge’s order. On July 22, 2021, +defendants filed a motion to decertify the class. On August 9, 2021, +plaintiffs filed a motion for partial summary judgment as to a portion of a +disparate impact claim, and defendants filed a motion for summary judgment as +to plaintiff’s disparate impact and treatment claims. On September 15, 2021, +the district court affirmed the decision of the Magistrate Judge to compel +arbitration. + +Communications Recordkeeping Investigation and Review + +The firm is cooperating with the SEC and producing documents in connection +with an investigation of the firm’s compliance with records preservation +requirements relating to business communications sent over electronic +messaging channels that have not been approved by the firm. The SEC has stated +that it is conducting similar investigations of record preservation practices +at other financial institutions. + +Regulatory Investigations and Reviews and Related Litigation + +Group Inc. and certain of its affiliates are subject to a number of other +investigations and reviews by, and in some cases have received subpoenas and +requests for documents and information from, various governmental and +regulatory bodies and self-regulatory organizations and litigation and +shareholder requests relating to various matters relating to the firm’s +businesses and operations, including: + +The securities offering process and underwriting practices; + +The firm’s investment management and financial advisory services; + +Conflicts of interest; + +Research practices, including research independence and interactions between +research analysts and other firm personnel, including investment banking +personnel, as well as third parties; + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Transactions involving government-related financings and other matters, +municipal securities, including wall-cross procedures and conflict of interest +disclosure with respect to state and municipal clients, the trading and +structuring of municipal derivative instruments in connection with municipal +offerings, political contribution rules, municipal advisory services and the +possible impact of credit default swap transactions on municipal issuers; + +Consumer lending, as well as residential mortgage lending, servicing and +securitization, and compliance with related consumer laws; + +The offering, auction, sales, trading and clearance of corporate and +government securities, currencies, commodities and other financial products +and related sales and other communications and activities, as well as the +firm’s supervision and controls relating to such activities, including +compliance with applicable short sale rules, algorithmic, high-frequency and +quantitative trading, the firm’s U.S. alternative trading system (dark pool), +futures trading, options trading, when-issued trading, transaction reporting, +technology systems and controls, communications recordkeeping and recording, +securities lending practices, prime brokerage activities, trading and +clearance of credit derivative instruments and interest rate swaps, +commodities activities and metals storage, private placement practices, +allocations of and trading in securities, and trading activities and +communications in connection with the establishment of benchmark rates, such +as currency rates; + +Compliance with the FCPA; + +The firm’s hiring and compensation practices; + +The firm’s system of risk management and controls; and + +Insider trading, the potential misuse and dissemination of material nonpublic +information regarding corporate and governmental developments and the +effectiveness of the firm’s insider trading controls and information barriers. + +The firm is cooperating with all such governmental and regulatory +investigations and reviews. + +Note 28. + +Employee Benefit Plans + +The firm sponsors various pension plans and certain other postretirement +benefit plans, primarily healthcare and life insurance. The firm also provides +certain benefits to former or inactive employees prior to retirement. + +Defined Benefit Pension Plans and Postretirement Plans + +Employees of certain + +non-U.S. + +subsidiaries participate in various defined benefit pension plans. These plans +generally provide benefits based on years of credited service and a percentage +of eligible compensation. The firm maintains a defined benefit pension plan +for certain U.K. employees. As of April 2008, the U.K. defined benefit plan +was closed to new participants and frozen for existing participants as of +March 31, 2016. The + +non-U.S. + +plans do not have a material impact on the firm’s consolidated results of +operations. + +The firm also maintains a defined benefit pension plan for substantially all +U.S. employees hired prior to November 1, 2003. As of November 2004, this plan +was closed to new participants and frozen for existing participants. In +addition, the firm maintains unfunded postretirement benefit plans that +provide medical and life insurance for eligible retirees and their dependents +covered under these programs. These plans do not have a material impact on the +firm’s consolidated results of operations. + +The firm recognizes the funded status of its defined benefit pension and +postretirement plans, measured as the difference between the fair value of the +plan assets and the benefit obligation, in the consolidated balance sheets. As +of December 2021, other assets included $411 million (related to overfunded +pension plans) and other liabilities included $426 million related to these +plans. As of December 2020, other assets included $343 million (related to +overfunded pension plans) and other liabilities included $478 million related +to these plans. + +Defined Contribution Plans + +The firm contributes to employer-sponsored U.S. and + +non-U.S. + +defined contribution plans. The firm’s contribution to these plans was $274 +million for 2021, $261 million for 2020 and $254 million for 2019. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 29. + +Employee Incentive Plans + +The cost of employee services received in exchange for a share-based award is +generally measured based on the grant-date fair value of the award. Share- +based awards that do not require future service (i.e., vested awards, +including awards granted to retirement-eligible employees) are expensed +immediately. Share-based awards that require future service are amortized over +the relevant service period. Forfeitures are recorded when they occur. + +Cash dividend equivalents paid on RSUs are generally charged to retained +earnings. If RSUs that require future service are forfeited, the related +dividend equivalents originally charged to retained earnings are reclassified +to compensation expense in the period in which forfeiture occurs. + +The firm generally issues new shares of common stock upon delivery of share- +based awards. In certain cases, primarily related to conflicted employment (as +outlined in the applicable award agreements), the firm may cash settle share- +based compensation awards accounted for as equity instruments. For these +awards, whose terms allow for cash settlement, additional + +paid-in + +capital is adjusted to the extent of the difference between the value of the +award at the time of cash settlement and the grant-date value of the award. + +Stock Incentive Plan + +The firm sponsors a stock incentive plan, The Goldman Sachs Amended and +Restated Stock Incentive Plan (2021) (2021 SIP), which provides for grants of +RSUs, restricted stock, dividend equivalent rights, incentive stock options, +nonqualified stock options, stock appreciation rights, and other share-based +awards, each of which may be subject to terms and conditions, including +performance or market conditions. On April 29, 2021, shareholders approved the +2021 SIP. The 2021 SIP is a successor to several predecessor stock incentive +plans, the first of which was adopted on April 30, 1999, and each of which was +approved by the firm’s shareholders. + +As of December 2021, 69.8 million shares were available to be delivered +pursuant to awards granted under the 2021 SIP. If any shares of common stock +underlying awards granted under the 2021 SIP or awards granted under the 2018, +2015 or 2013 predecessor stock incentive plans are not delivered because such +awards are forfeited, terminated or canceled, or if shares of common stock +underlying such awards are surrendered or withheld to satisfy any obligation +of the grantee (including taxes), those shares will become available to be +delivered pursuant to awards granted under the 2021 SIP. Shares available to +be delivered under the 2021 SIP also are subject to adjustment for certain +events or changes in corporate structure as provided under the 2021 SIP. The +2021 SIP is scheduled to terminate on the date of the annual meeting of +shareholders that occurs in 2025. + +Restricted Stock Units + +The firm grants RSUs (including RSUs subject to performance or market +conditions) to employees, which are generally valued based on the closing +price of the underlying shares on the date of grant after taking into account +a liquidity discount for any applicable post-vesting and delivery transfer +restrictions. The value of equity awards also considers the impact of material +non-public information, if any, that the firm expects to make available +shortly following grant. RSUs generally vest and underlying shares of common +stock deliver (net of required withholding tax) as outlined in the applicable +award agreements. Award agreements generally provide that vesting is +accelerated in certain circumstances, such as on retirement, death, disability +and, in certain cases, conflicted employment. Delivery of the underlying +shares of common stock is conditioned on the grantees satisfying certain +vesting and other requirements outlined in the award agreements. RSUs not +subject to performance conditions generally + +vest + +and + +deliver over a three-year period. + +RSUs + +that are subject to performance or market conditions generally deliver after +the end of a three to five year period. For awards that are subject to +performance or market conditions, generally the final award is adjusted from + +zero up to 150% of the original grant based on satisfaction of those +conditions. Dividend equivalents that accrue on these awards are paid when the +awards settle. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +The table below presents the 2021 activity related to stock settled RSUs. + +In the table above: + +In relation to + +2021 year-end, + +during the first quarter of 2022, the firm granted to its employees +approximately 12 million RSUs (of which 4.4 million RSUs require future +service as a condition of delivery for the related shares of common stock) and +delivered, net of required withholding tax, approximately 1 million shares of +restricted stock (which do not require future service). Both RSU and +restricted stock awards are subject to additional conditions as outlined in +the award agreements. Generally, shares underlying these RSUs, net of required +withholding tax, deliver over a three-year period, but are subject to a one- +year post-vesting and delivery transfer restriction. The restricted stock is +subject to a three-year post-vesting and delivery transfer restriction. These +awards are not included in the table above. + +As of December 2021, there was $565 million of total unrecognized compensation +cost related to + +non-vested + +share-based compensation arrangements. This cost is expected to be recognized +over a weighted average period of 2.02 years. In addition, there is +unrecognized compensation cost related to share-based compensation +arrangements subject to performance conditions. The maximum payout related to +these awards is $31 million. This cost is expected to be recognized over a +weighted average period of two years. + +The table below presents the share-based compensation and the related excess +tax benefit. + +In the table above, excess net tax benefit for share-based awards includes the +net tax benefit on dividend equivalents paid on RSUs and the delivery of +common stock underlying share-based awards. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Note 30. + +Parent Company + +Group Inc. — Condensed Statements of Earnings + +Supplemental Disclosures: + +In the condensed statements of earnings above, revenues and expenses included +the following with subsidiaries and other affiliates: + +Group Inc.’s other comprehensive income/(loss) was $(634) million for 2021, +$50 million for 2020 and $(2.18) billion for 2019. + +Group Inc. — Condensed Balance Sheets + +Supplemental Disclosures: + +Goldman Sachs Funding LLC (Funding IHC), a wholly-owned, direct subsidiary of +Group Inc., has provided Group Inc. with a committed line of credit that +allows Group Inc. to draw sufficient funds to meet its cash needs in the +ordinary course of business. + +Trading assets included derivative contracts with subsidiaries of $1.38 +billion as of December 2021 and $843 million as of December 2020. + +Trading liabilities included derivative contracts with subsidiaries of $1.12 +billion as of December 2021 and $320 million as of December 2020. + +As of December 2021, unsecured long-term borrowings with subsidiaries by +maturity date are $38.85 billion in 2023, $324 million in 2024, $385 million +in 2025, $45 million in 2026 and $798 million in 2027-thereafter. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Notes to Consolidated Financial Statements + +Group Inc. — Condensed Statements of Cash Flows + +Supplemental Disclosures: + +Cash payments for interest, net of capitalized interest, were $4.72 billion +for 2021, $5.92 billion for 2020 and $9.53 billion for 2019, and included +$1.33 billion for 2021, $1.90 billion for 2020 and $3.01 billion for 2019 of +payments to subsidiaries. + +Cash payments/(refunds) for income taxes, net, were $3.74 billion for 2021, +$1.37 billion for 2020 and $272 million for 2019. + +Non-cash + +activities during the year ended December 2021: + +Group Inc. exchanged $948 million of loans for additional equity investment in +its wholly-owned subsidiaries. + +Non-cash + +activities during the year ended December 2020: + +Group Inc. exchanged $11.2 million of Trust Preferred securities and common +beneficial interests for $12.5 million of certain of Group Inc.’s junior +subordinated debt. + +Non-cash + +activities during the year ended December 2019: + +Group Inc. acquired $8.50 billion of deposits with GS Bank USA from Funding +IHC in exchange for borrowings. + +Group Inc. exchanged $211 million of Trust Preferred securities and common +beneficial interests for $231 million of certain of Group Inc.’s junior +subordinated debt. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Supplemental Financial Information + +Common Stock Performance + +The graph and table below compare the performance of an investment in the +firm’s common stock from December 31, 2016 (the last trading day before the +firm’s 2017 fiscal year) through December 31, 2021, with the S&P 500 Index +(S&P 500) and the S&P 500 Financials Index (S&P 500 Financials). + +The graph and table above assume $100 was invested on December 31, 2016 in +each of the firm’s common stock, the S&P 500 and the S&P 500 Financials, and +the dividends were reinvested without payment of any commissions. The +performance shown represents past performance and should not be considered an +indication of future performance. + +Statistical Disclosures + +Distribution of Assets, Liabilities and Shareholders’ Equity + +The tables below present information about average balances, interest and +average interest rates. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Supplemental Financial Information + +In the tables above: + +Assets, liabilities and interest are classified as U.S. and + +non-U.S. + +based on the location of the entity in which the assets and liabilities are +held. + +Derivative instruments and commodities are included in other + +non-interest-earning + +assets and other + +non-interest-bearing + +liabilities. + +Other interest-earning assets primarily consists of certain receivables from +customers and counterparties. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Supplemental Financial Information + +Substantially all of the other interest-bearing liabilities consists of +certain payables to customers and counterparties. + +Interest rates for borrowings include the effects of interest rate swaps +accounted for as hedges. + +Loans exclude loans held for sale that are accounted for at the lower of cost +or fair value. Such loans are included within other interest-earning assets. + +Short- and long-term borrowings include both secured and unsecured borrowings. + +Changes in Net Interest Income, Volume and Rate Analysis + +The tables below present the effect on net interest income of volume and rate +changes. In this analysis, changes due to volume/rate variance have been +allocated to volume. + +Deposits + +The table below presents information about interest-bearing deposits. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Supplemental Financial Information + +In the table above, deposits are classified as U.S. and + +non-U.S. + +based on the location of the entity in which such deposits are held. + +The amount of deposits in U.S. offices held by + +non-U.S. + +depositors was $7.56 billion as of December 2021 and $4.53 billion as of +December 2020. + +The amount of uninsured deposits in U.S. offices was $127.05 billion as of +December 2021 and $83.33 billion as of December 2020. The amount of uninsured +deposits in + +non-U.S. + +offices was $49.08 billion as of December 2021 and $26.08 billion as of +December 2020. + +The table below presents uninsured time deposits by maturity. + +In the table above: + +All U.S. time deposits were in accounts eligible for FDIC insurance and + +non-U.S. + +time deposits include deposits in accounts eligible for insurance in their +local jurisdictions, as well as deposits in uninsured accounts. + +The insurance limit is allocated between time and other deposits on a + +pro-rata + +basis for account holders who have both time and other deposits that, in +aggregate, exceed the insurance limit. + +Loan Portfolio + +The table below presents information about loans. + +Maturities and Interest Rates. + +The table below presents gross loans by tenor. + +The table below presents the gross loans by tenor and for loans with tenors +greater than one year, the distributions of such loans between fixed and +floating interest rates. + +Allowance for Loan Losses + +The table below presents information about the allowance for loan losses. + +The table below presents information about the net + +charge-off + +ratio for loans accounted for at amortized cost. + +In the table above, the net + +charge-off + +ratio is calculated by dividing the net charge-offs by average gross loans +accounted for at amortized cost. Net charge-offs for wholesale loans were +primarily related to corporate loans for both 2021 and 2020. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Item 9. Changes in and Disagreements with Accountants on Accounting and +Financial Disclosure + +There were no changes in or disagreements with accountants on accounting and +financial disclosure during the last two years. + +Item 9A. Controls and Procedures + +As of the end of the period covered by this report, an evaluation was carried +out by Goldman Sachs management, with the participation of our Chief Executive +Officer and Chief Financial Officer, of the effectiveness of our disclosure +controls and procedures (as defined in + +Rule 13a-15(e) + +under the Exchange Act). Based upon that evaluation, our Chief Executive +Officer and Chief Financial Officer concluded that these disclosure controls +and procedures were effective as of the end of the period covered by this +report. In addition, no change in our internal control over financial +reporting (as defined in + +Rule 13a-15(f) + +under the Exchange Act) occurred during the fourth quarter of our year ended +December 31, 2021 that has materially affected, or is reasonably likely to +materially affect, our internal control over financial reporting. + +Management’s Report on Internal Control over Financial Reporting and the +Report of Independent Registered Public Accounting Firm are set forth in Part +II, Item 8 of this + +Form 10-K. + +Item 9B. Other Information + +Not applicable. + +Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections + +Not applicable. + +PART III + +Item 10. Directors, Executive Officers and Corporate Governance + +Information about our executive officers is included on page 25 of this + +Form 10-K. + +Information about our directors, including our audit committee and audit +committee financial experts and the procedures by which shareholders can +recommend director nominees, and our executive officers will be in our +definitive Proxy Statement for our 2022 Annual Meeting of Shareholders, which +will be filed within 120 days of the end of 2021 (2022 Proxy Statement) and is +incorporated in this + +Form 10-K + +by reference. Information about our Code of Business Conduct and Ethics, which +applies to our senior financial officers, is included in “Business �� Available +Information” in Part I, Item 1 of this + +Form 10-K. + +Item 11. Executive Compensation + +Information relating to our executive officer and director compensation and +the compensation committee of the Board will be in the 2022 Proxy Statement +and is incorporated in this + +Form 10-K + +by reference. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Item 12. Security Ownership of Certain Beneficial Owners and Management and +Related Stockholder Matters + +Information relating to security ownership of certain beneficial owners of our +common stock and information relating to the security ownership of our +management will be in the 2022 Proxy Statement and is incorporated in this + +Form 10-K + +by reference. + +The table below presents information as of December 31, 2021 regarding +securities to be issued pursuant to outstanding restricted stock units (RSUs) +and securities remaining available for issuance under our equity compensation +plans that were in effect during 2021. + +In the table above: + +Securities to be Issued Upon Exercise of Outstanding Options and Rights +includes 20,288,851 shares that may be issued pursuant to outstanding RSUs. +These awards are subject to vesting and other conditions to the extent set +forth in the respective award agreements, and the underlying shares will be +delivered net of any required tax withholding. As of December 31, 2021, there +were no outstanding options. + +Shares underlying RSUs are deliverable without the payment of any +consideration, and therefore these awards have not been taken into account in +calculating the weighted average exercise price. + +Securities Available For Future Issuance Under Equity Compensation Plans +represents shares remaining to be issued under our current stock incentive +plan (SIP), excluding shares reflected in column (a). If any shares of common +stock underlying awards granted under our current SIP, our SIP adopted in +2018, our SIP adopted in 2015 or our SIP adopted in 2013 are not delivered due +to forfeiture, termination or cancellation or are surrendered or withheld, +those shares will again become available to be delivered under our current +SIP. Shares available for grant are also subject to adjustment for certain +changes in corporate structure as permitted under our current SIP. + +Item 13. Certain Relationships and Related Transactions, and Director +Independence + +Information regarding certain relationships and related transactions and +director independence will be in the 2022 Proxy Statement and is incorporated +in this + +Form 10-K + +by reference. + +Item 14. Principal Accountant Fees and Services + +Information regarding principal accountant fees and services will be in the +2022 Proxy Statement and is incorporated in this + +Form 10-K + +by reference. + +PART IV + +Item 15. Exhibit and Financial Statement Schedules + +(a) Documents filed as part of this Report: + +1. Consolidated Financial Statements + +The consolidated financial statements required to be filed in this + +Form 10-K + +are included in Part II, Item 8 hereof. + +2. Exhibits + +Plan of Incorporation (incorporated by reference to Exhibit 2.1 to the +Registrant’s Registration Statement on Form S-1 (No. + +Restated Certificate of Incorporation of The Goldman Sachs Group, Inc., +amended as of November 10, 2021 (incorporated by reference to Exhibit 3.1 to +the Registrant’s Current Report on Form 8-K, filed on November 10, 2021). + +Amended and Restated By-Laws of The Goldman Sachs Group, Inc., amended as of +October 28, 2021 (incorporated by reference to Exhibit 3.1 to the Registrant’s +Quarterly Report on Form 10-Q for the quarter ended September 30, 2021). + +Description of The Goldman Sachs Group, Inc.’s Securities registered pursuant +to Section 12 of the Securities Exchange Act of 1934. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Indenture, dated as of May 19, 1999, between The Goldman Sachs Group, Inc. +and The Bank of New York, as trustee (incorporated by reference to Exhibit 6 +to the Registrant’s Registration Statement on Form 8-A, filed on June 29, + +Subordinated Debt Indenture, dated as of February 20, 2004, between The +Goldman Sachs Group, Inc. and The Bank of New York, as trustee (incorporated +by reference to Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K for +the fiscal year ended November 28, 2003). + +Warrant Indenture, dated as of February 14, 2006, between The Goldman Sachs +Group, Inc. and The Bank of New York, as trustee (incorporated by reference to +Exhibit 4.34 to the Registrant’s Post-Effective Amendment No. 3 to Form S-3, +filed on March 1, 2006). + +Senior Debt Indenture, dated as of December 4, 2007, among GS Finance Corp., +as issuer, The Goldman Sachs Group, Inc., as guarantor, and The Bank of New +York, as trustee (incorporated by reference to Exhibit 4.69 to the +Registrant’s Post-Effective Amendment No. 10 to Form S-3, filed on December 4, + +Senior Debt Indenture, dated as of July 16, 2008, between The Goldman Sachs +Group, Inc. and The Bank of New York Mellon, as trustee (incorporated by +reference to Exhibit 4.82 to the Registrant’s Post-Effective Amendment No. 11 +to Form S-3 (No. 333-130074), filed on July 17, + +Fourth Supplemental Indenture, dated as of December 31, 2016, between The +Goldman Sachs Group, Inc. and The Bank of New York Mellon, as trustee, with +respect to the Senior Debt Indenture, dated as of July 16, 2008 (incorporated +by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, +filed on January 6, 2017). + +Senior Debt Indenture, dated as of October 10, 2008, among GS Finance Corp., +as issuer, The Goldman Sachs Group, Inc., as guarantor, and The Bank of New +York Mellon, as trustee (incorporated by reference to Exhibit 4.70 to the +Registrant’s Registration Statement on Form S-3 (No. 333-154173), filed on +October 10, 2008). + +First Supplemental Indenture, dated as of February 20, 2015, among GS Finance +Corp., as issuer, The Goldman Sachs Group, Inc., as guarantor, and The Bank of +New York Mellon, as trustee, with respect to the Senior Debt Indenture, dated +as of October 10, 2008 (incorporated by reference to Exhibit 4.7 to the +Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, + +Fourth Supplemental Indenture, dated as of August 21, 2018, among GS Finance +Corp., as issuer, The Goldman Sachs Group, Inc., as guarantor, and The Bank of +New York Mellon, as trustee, with respect to the Senior Debt Indenture, dated +as of October 10, 2008 (incorporated by reference to Exhibit 4.1 to the +Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, + +Ninth Supplemental Subordinated Debt Indenture, dated as of May 20, 2015, +between The Goldman Sachs Group, Inc. and The Bank of New York Mellon, as +trustee, with respect to the Subordinated Debt Indenture, dated as of February +20, 2004 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current +Report on Form 8-K, filed on May 22, 2015). + +Tenth Supplemental Subordinated Debt Indenture, dated as of July 7, 2017, +between The Goldman Sachs Group, Inc. and The Bank of New York Mellon, as +trustee, with respect to the Subordinated Debt Indenture, dated as of February +20, 2004 (incorporated by reference to Exhibit 4.89 to the Registrant’s +Registration Statement on Form S-3 (No. 333-219206), filed on July 10, 2017). + +Seventh Supplemental Indenture, dated as of July 1, 2020, among GS Finance +Corp., as issuer, The Goldman Sachs Group, Inc., as guarantor, and The Bank of +New York Mellon, as trustee, with respect to the Senior Debt Indenture, dated +as of October 10, 2008 (incorporated by reference to Exhibit 4.69 to the +Registrant’s Registration Statement on Form S-3 (No. 333-239610), filed on +July 1, + +Eighth Supplemental Indenture, dated as of October 14, 2020, among GS Finance +Corp., as issuer, The Goldman Sachs Group, Inc., as guarantor, and The Bank of +New York Mellon, as trustee, with respect to the Senior Debt Indenture, dated +as of October 10, 2008 (incorporated by reference to Exhibit 4.1 to the +Registrant’s Current Report on Form 8-K, filed on October 14, 2020). + +Certain instruments defining the rights of holders of long-term debt +securities of the Registrant and its subsidiaries are omitted pursuant to Item +601(b)(4)(iii) of + +Regulation S-K. + +The Registrant hereby undertakes to furnish to the SEC, upon request, copies +of any such instruments. + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +Form of Performance-Based Cash Compensation Award Agreement (pre-2015) +(incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report +on Form 8-K, filed on December 23, 2010). + +Amended and Restated General Guarantee Agreement, dated November 21, 2011, +made by The Goldman Sachs Group, Inc. relating to certain obligations of +Goldman Sachs Bank USA (incorporated by reference to Exhibit 4.1 to the +Registrant’s Current Report on Form 8-K, filed on November 21, 2011). + +Form of Aircraft Time Sharing Agreement (incorporated by reference to Exhibit +10.61 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended +December 31, 2011). + +The Goldman Sachs Group, Inc. Clawback Policy, effective as of January 1, +2015 (incorporated by reference to Exhibit 10.53 to the Registrant’s Annual +Report on Form 10-K for the fiscal year ended December 31, + +Form of Non-Employee Director RSU Award Agreement. † + +Form of One-Time/Year-End RSU Award Agreement. † + +Form of Year-End RSU Award Agreement (not fully vested). † + +Form of Year-End RSU Award Agreement (fully vested). † + +Form of Year-End RSU Award Agreement (Base (not fully vested) and/or +Supplemental). † + +Form of Year-End Short-Term RSU Award Agreement. † + +Form of Year-End Restricted Stock Award Agreement (incorporated by reference +to Exhibit 10.46 to the Registrant’s Annual Report on Form 10-K for the fiscal +year ended December 31, 2020). † + +Form of Year-End Restricted Stock Award Agreement (fully vested) +(incorporated by reference to Exhibit 10.53 to the Registrant’s Annual Report +on Form 10-K for the fiscal year ended December 31, 2017). † + +Form of Year-End Short-Term Restricted Stock Award Agreement (incorporated by +reference to Exhibit 10.57 to the Registrant’s Annual Report on Form 10-K for +the fiscal year ended December 31, 2015). † + +Form of Fixed Allowance RSU Award Agreement (incorporated by reference to +Exhibit 10.49 to the Registrant’s Annual Report on Form 10-K for the fiscal +year ended December 31, 2020). + +Form of Fixed Allowance Restricted Stock Award Agreement (incorporated by +reference to Exhibit 10.50 to the Registrant’s Annual Report on Form 10-K for +the fiscal year ended December 31, 2020). † + +Form of Fixed Allowance Deferred Cash Award Agreement (incorporated by +reference to Exhibit 10.59 to the Registrant’s Annual Report on Form 10-K for +the fiscal year ended December 31, 2015). † + +Form of Performance-Based Restricted Stock Unit Award Agreement (fully +vested). † + +Form of Performance-Based Restricted Stock Unit Award Agreement (not fully +vested). † + +Form of Performance-Based Cash Compensation Award Agreement (incorporated by +reference to Exhibit 10.61 to the Registrant’s Annual Report on Form 10-K for +the fiscal year ended December 31, 2015). † + +Form of Signature Card for Equity Awards. † + +Amended and Restated General Guarantee Agreement, dated September 28, 2018, +made by The Goldman Sachs Group, Inc. relating to certain obligations of +Goldman Sachs Bank USA (incorporated by reference to Exhibit 4.1 to the +Registrant’s Current Report on Form 8-K, filed on September 28, + +Amended and Restated General Guarantee Agreement, dated September 28, 2018, +made by The Goldman Sachs Group, Inc. relating to certain obligations of +Goldman Sachs & Co. LLC (incorporated by reference to Exhibit 99.1 to the +Registrant’s Current Report on Form 8-K, filed on September 28, 2018). + +THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES + +SIGNATURES + +Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange +Act of 1934, the Registrant has duly caused this report to be signed on its +behalf by the undersigned, thereunto duly authorized. + +T + +HE + +G + +OLDMAN + +S + +ACHS + +G + +ROUP + +, I + +NC + +By: + +/s/ + +Denis P. Coleman III + +Denis P. Coleman III + +Title: + + Chief Financial Officer + +Date: + +February 24, 2022 + +Pursuant to the requirements of the Securities Exchange Act of 1934, this +report has been signed below by the following persons on behalf of the +Registrant and in the capacities and on the dates indicated. + +By: + +/s/ + +David Solomon + +David Solomon + +Capacity: + + Director, Chairman and Chief Executive Officer (Principal Executive + +Officer) + +Date: + +February 24, 2022 + +By: + +/s/ + +M. Michele Burns + +M. Michele Burns + +Capacity: + + Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Drew G. Faust + +Drew G. Faust + +Capacity: + + Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Mark A. Flaherty + +Mark A. Flaherty + +Capacity: + + Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Kimberley D. Harris + +Kimberley D. Harris + +Capacity: + + Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Ellen J. Kullman + +Ellen J. Kullman + +Capacity: + + Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Lakshmi N. Mittal + +Lakshmi N. Mittal + +Capacity: + + Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Adebayo O. Ogunlesi + +Adebayo O. Ogunlesi + +Capacity: + + Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Peter Oppenheimer + +Peter Oppenheimer + +Capacity: + + Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Jan E. Tighe + +Jan E. Tighe + +Capacity: + +Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Jessica R. Uhl + +Jessica R. Uhl + +Capacity: + +Director + +Date: + +February 24, 2022 + +By: + +/s/ + +David A. Viniar + +David A. Viniar + +Capacity: + + Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Mark O. Winkelman + +Mark O. Winkelman + +Capacity: + + Director + +Date: + +February 24, 2022 + +By: + +/s/ + +Denis P. Coleman III + +Denis P. Coleman III + +Capacity: + +Chief Financial Officer + +(Principal Financial Officer) + +Date: + +February 24, 2022 + +By: + +/s/ + +Sheara J. Fredman + +Sheara J. Fredman + +Capacity: + +Chief Accounting Officer + +(Principal Accounting Officer) + +Date: + +February 24, 2022EX-4.1 2 d192225dex41.htm EX-4.1 EX-4.1 + +Exhibit 4.1 + +THE GOLDMAN SACHS GROUP, INC. + +DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE +SECURITIES EXCHANGE ACT OF 1934 + +AS OF DECEMBER 31, 2021 + +The following is a description of each class of securities of The Goldman +Sachs Group, Inc. (the "Company") that is registered under Section 12 of the +Securities and Exchange Act of 1934, as amended, as of December 31, 2021. + +TABLE OF CONTENTS + +Description of Common Stock + +Description of the Depositary Shares, Each Representing 1/1,000th Interest in +a Share of Floating Rate Non-Cumulative Preferred Stock, Series A + +Description of the Depositary Shares, Each Representing 1/1,000th Interest in +a Share of Floating Rate Non-Cumulative Preferred Stock, Series C + +Description of the Depositary Shares, Each Representing 1/1,000th Interest in +a Share of Floating Rate Non-Cumulative Preferred Stock, Series D + +Description of the Depositary Shares, Each Representing 1/1,000th Interest in +a Share of 5.50% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series +J + +Description of the Depositary Shares, Each Representing 1/1,000th Interest in +a Share of 6.375% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, +Series K + +Description of (i) 5.793% Fixed-to-Floating Rate Normal Automatic Preferred +Enhanced Capital Securities of Goldman Sachs Capital II (Fully and +Unconditionally Guaranteed by The Goldman Sachs Group, Inc.) and (ii) Floating +Rate Normal Automatic Preferred Enhanced Capital Securities of Goldman Sachs +Capital III (Fully and Unconditionally Guaranteed by The Goldman Sachs Group, +Inc.) + +Description of Medium-Term Notes, Series F, Callable Fixed and Floating Rate +Notes due 2031 of GS Finance Corp. (Fully and Unconditionally Guaranteed by +The Goldman Sachs Group, Inc.) + +Description of Medium-Term Notes, Series E, Index-Linked Notes due 2028 of GS +Finance Corp. (Fully and Unconditionally Guaranteed by The Goldman Sachs +Group, Inc.)1 + +DESCRIPTION OF COMMON STOCK + +The following is a brief description of the material terms of the Company's +common stock. The following summary does not purport to be complete and is +qualified in its entirety by reference to the pertinent sections of the +Company's restated certificate of incorporation and the Company's amended and +restated by-laws, which are exhibits to the Annual Report of which this +exhibit is a part. Unless the context otherwise provides, all references to +the Company in this description refer only to The Goldman Sachs Group, Inc. +and does not include its consolidated subsidiaries. + +Pursuant to the Company's restated certificate of incorporation, the Company's +authorized capital stock consists of 4,350,000,000 shares, each with a par +value of $0.01 per share, of which 4,000,000,000 shares are designated as +common stock and 200,000,000 shares are designated as nonvoting common stock. +All outstanding shares of common stock are validly issued, fully paid and +nonassessable, which means that its holders have paid their purchase price in +full and that the Company may not ask them to surrender additional funds. + +The Company's Shareholders' Agreement governs, among other things, the voting +of shares of common stock owned by participating managing directors of the +Company. Shares of common stock subject to the Company's Shareholders' +Agreement are called "voting shares." Before any of the Company's shareholders +vote, a separate, preliminary vote is held by the persons covered by the +Company's Shareholders' Agreement. In the election of directors, all voting +shares will be voted in favor of the election of the director nominees +receiving the highest numbers of votes cast by the covered persons in the +preliminary vote. For all other matters, all voting shares will be voted in +accordance with the majority of the votes cast by the covered persons in the +preliminary vote. + +Common Stock + +Each holder of common stock is entitled to one vote for each share owned of +record on all matters submitted to a vote of shareholders. There are no +cumulative voting rights. Accordingly, the holders of a plurality of the +shares of common stock voting in a contested election of directors can elect +all the directors if they choose to do so, subject to any voting rights of +holders of preferred stock to elect directors. In an uncontested director +election, a director must receive a majority of the votes cast for or against +the director to be elected. + +Subject to the preferential rights of any holders of any outstanding series of +preferred stock, the holders of common stock, together with the holders of the +nonvoting common stock, are entitled to such dividends and distributions, +whether payable in cash or otherwise, as may be declared from time to time by +the Company's board of directors from legally available funds. Subject to the +preferential rights of holders of any outstanding series of preferred stock, +upon the Company's liquidation, dissolution or winding up and after payment of +all prior claims, the holders of common stock, with the shares of the common +stock and the nonvoting common stock being considered as a single class for +this purpose, will be entitled to receive pro rata all the Company's assets. +Holders of common stock have no redemption or conversion rights or preemptive +rights to purchase or subscribe for securities of the Company. + +Nonvoting Common Stock + +The nonvoting common stock has the same rights and privileges as, ranks +equally and shares proportionately with, and is identical in all respects as +to all matters to, the common stock, except that the nonvoting common stock +has no voting rights other than those voting rights required by law. + +Section 203 of the Delaware General Corporation Law + +The Company is subject to the provisions of Section 203 of the Delaware +General Corporation Law. In general, Section 203 prohibits a publicly held +Delaware corporation from engaging in a "business combination" with an +"interested stockholder" for a period of three years after the date of the +transaction in which the person became an interested stockholder, unless the +business combination is approved in a prescribed manner. A "business +combination" includes a merger, asset sale or a transaction resulting in a +financial benefit to the interested stockholder. An "interested stockholder" +is a person who, together with affiliates and associates, owns (or, in certain +cases, within the preceding three years, did own) 15% or more of the +corporation's outstanding voting stock. Under Section 203, a business +combination between the Company and an interested stockholder is prohibited +unless it satisfies one of the following conditions: + +prior to the stockholder becoming an interested stockholder, the board of +directors of the Company must have previously approved either the business +combination or the transaction that resulted in the stockholder becoming an +interested stockholder; + +on consummation of the transaction that resulted in the stockholder becoming +an interested stockholder, the interested stockholder owned at least 85% of +the voting stock of the Company outstanding at the time the transaction +commenced, excluding, for purposes of determining the number of shares +outstanding (but not the outstanding voting stock owned by the interested +stockholder), those shares owned (i) by persons who are directors and also +officers and (ii) employee stock plans in which employee participants do not +have the right to determine confidentially whether shares held subject to the +plan will be tendered in a tender or exchange offer; or + +at or subsequent to such time the business combination is approved by the +board of directors and authorized at an annual or special meeting of +stockholders, and not by written consent, by the affirmative vote of at least +66 2/3% of the outstanding voting stock which is not owned by the interested +stockholder. + +The Company's board of directors has adopted a resolution providing that the +shareholders' agreement will not create an "interested stockholder." + +Certain Anti-Takeover Matters + +The Company's restated certificate of incorporation and amended and restated +by-laws include a number of provisions that may have the effect of encouraging +persons considering unsolicited tender offers or other unilateral takeover +proposals to negotiate with the Company's board of directors rather than +pursue non-negotiated takeover attempts. These provisions include: + +Constituency Provision + +In accordance with the Company's restated certificate of incorporation, a +director of the Company may (but is not required to) in taking any action +(including an action that may involve or relate to a change or potential +change in control of the Company), consider, among other things, the effects +that the Company's actions may have on other interests or persons (including +its employees, former partners of The Goldman Sachs Group, L.P. and the +community) in addition to the Company's shareholders. + +Advance Notice Requirements + +The Company's amended and restated by-laws establish advance notice procedures +with regard to shareholder proposals relating to the nomination of candidates +for election as directors or new business to be brought before meetings of +shareholders of the Company. These procedures provide that notice of such +shareholder proposals must be timely given in writing to the Secretary of the +Company prior to the meeting at which the action is to be taken. The time +periods vary depending on the nature of the proposal. The notice must contain +certain information specified in the amended and restated by-laws and must +otherwise comply with the amended and restated by-laws. + +Limitation on Ability of Shareholders to Call Special Meetings + +The Company's restated certificate of incorporation and amended and restated +by-laws provide procedures pursuant to which holders of record of not less +than 25% of the voting power of outstanding shares of the Company's common +stock may call a special meeting of shareholders. The Company's amended and +restated by-laws impose certain procedural requirements on shareholders +requesting such a meeting (including the provision of the same information +required for shareholder proposals at annual meetings under the Company's +advance notice by-law provisions described above), as well as qualifications +designed to prevent duplicative and unnecessary meetings. + +No Written Consent of Shareholders + +The Company's restated certificate of incorporation requires all shareholder +actions to be taken by a vote of the shareholders at an annual or special +meeting, and does not permit the Company's shareholders to act by written +consent without a meeting. + +Blank Check Preferred Stock + +The Company's restated certificate of incorporation provides for 150,000,000 +authorized shares of preferred stock. The existence of authorized but unissued +shares of preferred stock may enable the board of directors to render more + +difficult or to discourage an attempt to obtain control of the Company by +means of a merger, tender offer, proxy contest or otherwise. For example, if +in the due exercise of its fiduciary obligations, the board of directors were +to determine that a takeover proposal is not in the best interests of the +Company, the board of directors could cause shares of preferred stock to be +issued without shareholder approval in one or more private offerings or other +transactions that might dilute the voting or other rights of the proposed +acquiror or insurgent shareholder or shareholder group. In this regard, the +restated certificate of incorporation grants the Company's board of directors +broad power to establish the rights and preferences of authorized and unissued +shares of preferred stock. The issuance of shares of preferred stock could +decrease the amount of earnings and assets available for distribution to +holders of shares of common stock. The issuance may also adversely affect the +rights and powers, including voting rights, of such holders and may have the +effect of delaying, deterring or preventing a change in control of the +Company. + +Listing + +The common stock of the Company is listed on the NYSE under the ticker symbol +"GS." + +DESCRIPTION OF THE DEPOSITARY SHARES, EACH REPRESENTING 1/1,000 TH INTEREST +IN A SHARE OF FLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES A + +DESCRIPTION OF SERIES A PREFERRED STOCK + +The depositary is the sole holder of the Company's Floating Rate Non- +Cumulative Preferred Stock, Series A (the "Series A Preferred Stock"), and all +references herein to the holders of the Series A Preferred Stock shall mean +the depositary. However, the holders of depositary shares are entitled, +through the depositary, to exercise the rights and preferences of the holders +of the Series A Preferred Stock, as described below under "Description of +Depositary Shares." + +The following is a brief description of the material terms of the Series A +Preferred Stock. The following summary of the terms and provisions of the +Series A Preferred Stock does not purport to be complete and is qualified in +its entirety by reference to the pertinent sections of the Company's restated +certificate of incorporation, which is an exhibit to the Annual Report of +which this exhibit is a part. Unless the context otherwise provides, all +references to the Company in this description refer only to The Goldman Sachs +Group, Inc. and does not include its consolidated subsidiaries. + +General + +The Company's authorized capital stock includes 150,000,000 shares of +preferred stock, par value $0.01 per share. The Series A Preferred Stock is +part of a single series of the Company's authorized preferred stock. The +Company may from time to time, without notice to or the consent of holders of +the Series A Preferred Stock, issue additional shares of the Series A +Preferred Stock, up to the maximum number of authorized but unissued shares. + +Shares of the Series A Preferred Stock rank senior to the Company's common +stock, equally with each other series of the Company's preferred stock +outstanding as of December 31, 2020 and at least equally to each other series +of preferred stock that the Company may issue (except for any senior series +that may be issued with the requisite consent of the holders of the Series A +Preferred Stock), with respect to the payment of dividends and distributions +of assets upon liquidation, dissolution or winding up. In addition, the +Company will generally be able to pay dividends and distributions upon +liquidation, dissolution or winding up only out of lawfully available funds +for such payment ( i.e. , after taking account of all indebtedness and other +non-equity claims). The Series A Preferred Stock is fully paid and +nonassessable, which means that its holders have paid their purchase price in +full and that the Company may not ask them to surrender additional funds. +Holders of Series A Preferred Stock do not have preemptive or subscription +rights to acquire more stock of the Company. + +The Series A Preferred Stock is not convertible into, or exchangeable for, +shares of any other class or series of stock or other securities of the +Company, except under certain limited circumstances described below under "- +Regulatory Changes Relating to Capital Adequacy." The Series A Preferred Stock +has no stated maturity and is not subject to any sinking fund or other +obligation of the Company to redeem or repurchase the Series A Preferred +Stock. The Series A Preferred Stock represents non-withdrawable capital, is +not a bank deposit and is not insured by the FDIC or any other governmental +agency, nor is it the obligation of, or guaranteed by, a bank. + +Dividends + +Dividends on shares of the Series A Preferred Stock are not mandatory. Holders +of Series A Preferred Stock are entitled to receive, when, as and if declared +by the Company's board of directors or a duly authorized committee of the +board, out of funds legally available for the payment of dividends under +Delaware law, non-cumulative cash dividends from the original issue date, +quarterly in arrears on the 10th day of February, May, August and November of +each year (each, a "dividend payment date"). These dividends accrue, with +respect to each dividend period, on the liquidation preference amount of +$25,000 per share (equivalent to $25 per depositary share) at a rate per annum +equal to the greater of (1) 0.75% above LIBOR (as described below) on the +related LIBOR determination date (as described below) or (2) 3.75%. In the +event that the Company issues additional shares of Series A Preferred Stock +after the original issue date, dividends on such shares may accrue from the +original issue date or any other date the Company specifies at the time such +additional shares are issued. + +Dividends will be payable to holders of record of Series A Preferred Stock as +they appear on the Company's books on the applicable record date, which shall +be the 15th calendar day before that dividend payment date or such other +record date fixed by the Company's board of directors (or a duly authorized +committee of the board) that is not more than 60 nor less than 10 days prior +to such dividend payment date (each, a "dividend record date"). These dividend +record dates will apply regardless of whether a particular dividend record +date is a business day. The corresponding record dates for the depositary +shares are the same as the record dates for the Series A Preferred Stock. + +A dividend period is the period from and including a dividend payment date to +but excluding the next dividend payment date. Dividends payable on the Series +A Preferred Stock are computed on the basis of a 360-day year and the actual +number of days elapsed in the dividend period. If any date on which dividends +would otherwise be payable is not a business day, then the dividend payment +date will be the next succeeding business day unless such day falls in the +next calendar month, in which case the dividend payment date will be the +immediately preceding day that is a business day. + +For any dividend period, LIBOR shall be determined by the calculation agent on +the second London business day immediately preceding the first day of such +dividend period in the following manner: + +LIBOR will be the offered rate per annum for three-month deposits in U.S. +dollars, beginning on the first day of such period, as that rate appears on +Moneyline Telerate Page 3750 as of 11:00 A.M., London time, on the second +London business day immediately preceding the first day of such dividend +period. + +If the rate described above does not appear on Moneyline Telerate page 3750, +LIBOR will be determined on the basis of the rates, at approximately 11:00 +A.M., London time, on the second London business day immediately preceding the +first day of such dividend period, at which deposits of the following kind are +offered to prime banks in the London interbank market by four major banks in +that market selected by the calculation agent: three-month deposits in U.S. +dollars, beginning on the first day of such dividend period, and in a +Representative Amount. The calculation agent will request the principal London +office of each of these banks to provide a quotation of its rate. If at least +two quotations are provided, LIBOR for the second London business day +immediately preceding the first day of such dividend period will be the +arithmetic mean of the quotations. + +If fewer than two quotations are provided as described above, LIBOR for the +second London business day immediately preceding the first day of such +dividend period will be the arithmetic mean of the rates for loans of the +following kind to leading European banks quoted, at approximately 11:00 A.M. +New York City time on the second London business day immediately preceding the +first day of such dividend period, by three major banks in New York City +selected by the calculation agent: three-month loans of U.S. dollars, +beginning on the first day of such dividend period, and in a Representative +Amount. + +If fewer than three banks selected by the calculation agent are quoting as +described above, LIBOR for the new dividend period will be LIBOR in effect for +the prior dividend period. + +The calculation agent's determination of any dividend rate, and its +calculation of the amount of dividends for any dividend period, will be on +file at the Company's principal offices, will be made available to any +stockholder upon request and will be final and binding in the absence of +manifest error. + +This subsection uses several terms that have special meanings relevant to +calculating LIBOR. Those terms have the following meanings: + +The term "Representative Amount" means an amount that, in the calculation +agent's judgment, is representative of a single transaction in the relevant +market at the relevant time. + +The term "Moneyline Telerate Page" means the display on Moneyline Telerate, +Inc., or any successor service, on the page or pages specified herein or any +replacement page or pages on that service. + +The term "business day" means a day that is a Monday, Tuesday, Wednesday, +Thursday or Friday and is not a day on which banking institutions in New York +City generally are authorized or obligated by law or executive order to close. + +The term "London business day" means a day that is a Monday, Tuesday, +Wednesday, Thursday or Friday and is a day on which dealings in U.S. dollars +are transacted in the London interbank market. + +Dividends on shares of Series A Preferred Stock are not cumulative. +Accordingly, if the board of directors of the Company, or a duly authorized +committee of the board, does not declare a dividend on the Series A Preferred +Stock payable in respect of any dividend period before the related dividend +payment date, such dividend will not accrue and the Company will have no +obligation to pay a dividend for that dividend period on the dividend payment +date or at any future time, whether or not dividends on the Series A Preferred +Stock are declared for any future dividend period. + +So long as any share of Series A Preferred Stock remains outstanding, no +dividend shall be paid or declared on the Company's common stock or any other +shares of the Company's junior stock (as defined below) (other than a dividend +payable solely in junior stock), and no common stock or other junior stock +shall be purchased, redeemed or otherwise acquired for consideration by the +Company, directly or indirectly (other than as a result of a reclassification +of junior stock for or into other junior stock, or the exchange or conversion +of one share of junior stock for or into another share of junior stock and +other than through the use of the proceeds of a substantially contemporaneous +sale of junior stock), during a dividend period, unless the full dividends for +the latest completed dividend period on all outstanding shares of Series A +Preferred Stock have been declared and paid (or declared and a sum sufficient +for the payment thereof has been set aside). However, the foregoing provision +shall not restrict the ability of Goldman Sachs & Co. LLC, or any of the +Company's other affiliates, to engage in any market-making transactions in the +Company's junior stock in the ordinary course of business. + +As used in this description of the Series A Preferred Stock, "junior stock" +means any class or series of stock of the Company that ranks junior to the +Series A Preferred Stock either as to the payment of dividends or as to the +distribution of assets upon any liquidation, dissolution or winding up of the +Company. Junior stock includes the Company's common stock. + +When dividends are not paid (or duly provided for) on any dividend payment +date (or, in the case of parity stock, as defined below, having dividend +payment dates different from the dividend payment dates pertaining to the +Series A Preferred Stock, on a dividend payment date falling within the +related dividend period for the Series A Preferred Stock) in full upon the +Series A Preferred Stock and any shares of parity stock, all dividends +declared upon the Series A Preferred Stock and all such equally ranking +securities payable on such dividend payment date (or, in the case of parity +stock having dividend payment dates different from the dividend payment dates +pertaining to the Series A Preferred Stock, on a dividend payment date falling +within the related dividend period for the Series A Preferred Stock) shall be +declared pro rata so that the respective amounts of such dividends shall +bear the same ratio to each other as all accrued but unpaid dividends per +share on the Series A Preferred Stock and all parity stock payable on such +dividend payment date (or, in the case of parity stock having dividend payment +dates different from the dividend payment dates pertaining to the Series A +Preferred Stock, on a dividend payment date falling within the related +dividend period for the Series A Preferred Stock) bear to each other. + +As used in this description of the Series A Preferred Stock, "parity stock" +means any other class or series of stock of the Company that ranks equally +with the Series A Preferred Stock in the payment of dividends and in the +distribution of assets on any liquidation, dissolution or winding up of the +Company. + +Subject to the foregoing, such dividends (payable in cash, stock or otherwise) +as may be determined by the Company's board of directors (or a duly authorized +committee of the board) may be declared and paid on the Company's common stock +and any other stock ranking equally with or junior to the Series A Preferred +Stock from time to time out of any funds legally available for such payment, +and the shares of the Series A Preferred Stock shall not be entitled to +participate in any such dividend. + +Liquidation Rights + +Upon any voluntary or involuntary liquidation, dissolution or winding up of +the Company, holders of the Series A Preferred Stock are entitled to receive +out of assets of the Company available for distribution to stockholders, after +satisfaction of liabilities to creditors, if any, before any distribution of +assets is made to holders of common stock or of any of the Company's other +shares of stock ranking junior as to such a distribution to the shares of +Series A Preferred Stock, a liquidating distribution in the amount of $25,000 +per share (equivalent to $25 per depositary share) plus declared and unpaid +dividends, without accumulation of any undeclared dividends. Holders of the +Series A Preferred Stock will not be entitled to any other amounts from the +Company after they have received their full liquidation preference. + +In any such distribution, if the assets of the Company are not sufficient to +pay the liquidation preferences in full to all holders of the Series A +Preferred Stock and all holders of any other shares of the Company's stock +ranking equally as to such distribution with the Series A Preferred Stock, the +amounts paid to the holders of Series A Preferred Stock and to the holders of +all such other stock will be paid pro rata in accordance with the respective +aggregate liquidation + +preferences of those holders. In any such distribution, the "liquidation +preference" of any holder of preferred stock means the amount payable to such +holder in such distribution, including any declared but unpaid dividends (and +any unpaid, accrued cumulative dividends in the case of any holder of stock on +which dividends accrue on a cumulative basis). If the liquidation preference +has been paid in full to all holders of Series A Preferred Stock, the holders +of the Company's other stock shall be entitled to receive all remaining assets +of the Company according to their respective rights and preferences. + +For purposes of this description of the Series A Preferred Stock, the merger +or consolidation of the Company with any other entity, including a merger or +consolidation in which the holders of Series A Preferred Stock receive cash, +securities or property for their shares, or the sale, lease or exchange of all +or substantially all of the assets of the Company for cash, securities or +other property shall not constitute a liquidation, dissolution or winding up +of the Company. + +Redemption + +The Series A Preferred Stock is not subject to any mandatory redemption, +sinking fund or other similar provisions. The Series A Preferred Stock is +currently redeemable at the Company's option, in whole or in part, upon not +less than 30 nor more than 60 days' notice, at a redemption price equal to +$25,000 per share (equivalent to $25 per depositary share), plus declared and +unpaid dividends, without accumulation of any undeclared dividends. Holders of +Series A Preferred Stock have no right to require the redemption or repurchase +of the Series A Preferred Stock. + +If shares of the Series A Preferred Stock are to be redeemed, the notice of +redemption shall be given by first-class mail to the holders of record of the +Series A Preferred Stock to be redeemed, mailed not less than 30 days nor more +than 60 days prior to the date fixed for redemption thereof ( provided that, +if the depositary shares representing the Series A Preferred Stock are held in +book-entry form through The Depository Trust Company, or "DTC," the Company +may give such notice in any manner permitted by the DTC). Each notice of +redemption will include a statement setting forth: (i) the redemption date, +(ii) the number of shares of the Series A Preferred Stock to be redeemed and, +if less than all the shares held by such holder are to be redeemed, the number +of such shares to be redeemed from such holder, (iii) the redemption price and +(iv) the place or places where holders may surrender certificates evidencing +shares of Series A Preferred Stock for payment of the redemption price. If +notice of redemption of any shares of Series A Preferred Stock has been given +and if the funds necessary for such redemption have been set aside by the +Company for the benefit of the holders of any shares of Series A Preferred +Stock so called for redemption, then, from and after the redemption date, +dividends will cease to accrue on such shares of Series A Preferred Stock, +such shares of Series A Preferred Stock shall no longer be deemed outstanding +and all rights of the holders of such shares will terminate, except the right +to receive the redemption price. + +In case of any redemption of only part of the shares of the Series A Preferred +Stock at the time outstanding, the shares to be redeemed shall be selected +either pro rata or in such other manner as the Company may determine to be +fair and equitable. + +See "Description of Depositary Shares" below for information about redemption +of the depositary shares relating to the Company's Series A Preferred Stock. + +Regulatory Changes Relating to Capital Adequacy + +The SEC had previously approved the application of the Company and Goldman +Sachs & Co. LLC to be supervised by the SEC as a consolidated supervised +entity ("CSE") pursuant to the SEC's rules at that time relating to CSEs +(referred to as the "CSE Rules"). The Company treated the Series A Preferred +Stock as allowable capital in accordance with the CSE Rules (such capital is +referred to below as "Allowable Capital"). + +If the regulatory capital requirements that apply to the Company change in the +future, the Series A Preferred Stock may be converted, at the Company's option +and without consent of the holders, into a new series of preferred stock, +subject to the limitations described below. The Company will be entitled to +exercise this conversion right as follows. + +If both of the following occur: + +the Company (by election or otherwise) becomes subject to any law, rule, +regulation or guidance (together, "regulations") relating to the Company's +capital adequacy, which regulation (i) modifies the existing requirements for +treatment as Allowable Capital, (ii) provides for a type or level of capital +characterized as "Tier 1" or its equivalent pursuant to regulations of any +governmental body + +having jurisdiction over the Company (or any of the Company's subsidiaries or +consolidated affiliates) and implementing capital standards published by the +Basel Committee on Banking Supervision, the SEC, the Board of Governors of the +Federal Reserve System (the "Federal Reserve Board") or any other United +States national governmental body, or any other applicable regime based on +capital standards published by the Basel Committee on Banking Supervision or +its successor, or (iii) provides for a type of capital that in the Company's +judgment (after consultation with counsel of recognized standing) is +substantially equivalent to such "Tier 1" capital (such capital described in +either (ii) or (iii) is referred to below as "Tier 1 Capital Equivalent"), and + +the Company affirmatively elects to qualify the Series A Preferred Stock for +such Allowable Capital or Tier 1 Capital Equivalent treatment without any +sublimit or other quantitative restriction on the inclusion of the Series A +Preferred Stock in Allowable Capital or Tier 1 Capital Equivalent (other than +any limitation the Company elects to accept and any limitation requiring that +common equity or a specified form of common equity constitute the dominant +form of Allowable Capital or Tier 1 Capital Equivalent) under such +regulations, + +then, upon such affirmative election, the Series A Preferred Stock shall be +convertible at the Company's option into a new series of preferred stock +having terms and provisions substantially identical to those of the Series A +Preferred Stock, except that such new series may have such additional or +modified rights, preferences, privileges and voting powers, and such +limitations and restrictions thereof, as are necessary, in the Company's +judgment (after consultation with counsel of recognized standing), to comply +with the Required Unrestricted Capital Provisions (defined below), provided +that the Company will not cause any such conversion unless the Company +determines that the rights, preferences, privileges and voting powers of such +new series of preferred stock, taken as a whole, are not materially less +favorable to the holders thereof than the rights, preferences, privileges and +voting powers of the Series A Preferred Stock, taken as a whole. For example, +the Company could agree to restrict its ability to pay dividends on or redeem +the new series of preferred stock for a specified period or indefinitely, to +the extent permitted by the terms and provisions of the new series of +preferred stock, since such a restriction would be permitted in the Company's +discretion under the terms and provisions of the Series A Preferred Stock. + +The Company will provide notice to holders of the Series A Preferred Stock of +any election to qualify the Series A Preferred Stock for Allowable Capital or +Tier 1 Capital Equivalent treatment and of any determination to convert the +Series A Preferred Stock into a new series of preferred stock, promptly upon +the effectiveness of any such election or determination. A copy of any such +notice and of the relevant regulations will be on file at the Company's +principal offices and, upon request, will be made available to any +stockholder. + +As used above, the term "Required Unrestricted Capital Provisions" means the +terms that are, in the Company's judgment (after consultation with counsel of +recognized standing), required for preferred stock to be treated as Allowable +Capital or Tier 1 Capital Equivalent, as applicable, without any sublimit or +other quantitative restriction on the inclusion of such preferred stock in +Allowable Capital or Tier 1 Capital Equivalent (other than any limitation the +Company elects to accept and any limitation requiring that common equity or a +specified form of common equity constitute the dominant form of Allowable +Capital or Tier 1 Capital Equivalent) pursuant to applicable regulations. + +Voting Rights + +Except as provided below, the holders of the Series A Preferred Stock have no +voting rights. + +Whenever dividends on any shares of the Series A Preferred Stock shall have +not been declared and paid for the equivalent of six or more dividend +payments, whether or not for consecutive dividend periods (as used in this +section, a "Nonpayment"), the holders of such shares, voting together as a +class with holders of any and all other series of voting preferred stock (as +defined below) then outstanding, will be entitled to vote for the election of +a total of two additional members of the Company's board of directors (as used +in this section, the "Preferred Stock Directors"), provided that the +election of any such directors shall not cause the Company to violate the +corporate governance requirement of the New York Stock Exchange (or any other +exchange on which the Company's securities may be listed) that listed +companies must have a majority of independent directors. In that event, the +number of directors on the Company's board of directors shall automatically +increase by two, and the new directors shall be elected at a special meeting +called at the request of the holders of record of at least 20% of the Series A +Preferred Stock or of any other series of voting preferred stock (unless such +request is received less than 90 days before the date fixed for the next +annual or special meeting of the stockholders, in which event such election +shall be held at such next annual or special meeting of stockholders), and at +each subsequent annual meeting. These voting rights will continue until +dividends on the shares of the Series A Preferred Stock and any such series of +voting preferred stock for at least four dividend periods, whether or not +consecutive, following the Nonpayment shall have been fully paid (or declared +and a sum sufficient for the payment of such dividends shall have been set +aside for payment). + +As used in this description of the Series A Preferred Stock, "voting preferred +stock" means any other class or series of preferred stock of the Company +ranking equally with the Series A Preferred Stock either as to dividends or +the distribution of assets upon liquidation, dissolution or winding up and +upon which like voting rights have been conferred and are exercisable. Whether +a plurality, majority or other portion of the shares of Series A Preferred +Stock and any other voting preferred stock have been voted in favor of any +matter shall be determined by reference to the liquidation amounts of the +shares voted. + +If and when dividends for at least four dividend periods, whether or not +consecutive, following a Nonpayment have been paid in full (or declared and a +sum sufficient for such payment shall have been set aside), the holders of the +Series A Preferred Stock shall be divested of the foregoing voting rights +(subject to revesting in the event of each subsequent Nonpayment) and, if such +voting rights for all other holders of voting preferred stock have terminated, +the term of office of each Preferred Stock Director so elected shall terminate +and the number of directors on the board of directors shall automatically +decrease by two. In determining whether dividends have been paid for four +dividend periods following a Nonpayment, the Company may take account of any +dividend the Company elects to pay for such a dividend period after the +regular dividend date for that period has passed. Any Preferred Stock Director +may be removed at any time without cause by the holders of record of a +majority of the outstanding shares of the Series A Preferred Stock when they +have the voting rights described above (voting together as a class with all +series of voting preferred stock then outstanding). So long as a Nonpayment +shall continue, any vacancy in the office of a Preferred Stock Director (other +than prior to the initial election after a Nonpayment) may be filled by the +written consent of the Preferred Stock Director remaining in office, or if +none remains in office, by a vote of the holders of record of a majority of +the outstanding shares of Series A Preferred Stock when they have the voting +rights described above (voting together as a class with all series of voting +preferred stock then outstanding). The Preferred Stock Directors shall each be +entitled to one vote per director on any matter. + +So long as any shares of Series A Preferred Stock remain outstanding, the +Company will not, without the affirmative vote or consent of the holders of at +least two-thirds of the outstanding shares of the Series A Preferred Stock and +all other series of voting preferred stock entitled to vote thereon, voting +together as a single class, given in person or by proxy, either in writing or +at a meeting: + +amend or alter the provisions of the Company's restated certificate of +incorporation so as to authorize or create, or increase the authorized amount +of, any class or series of stock ranking senior to the Series A Preferred +Stock with respect to payment of dividends or the distribution of assets upon +liquidation, dissolution or winding up of the Company; + +amend, alter or repeal the provisions of the Company's restated certificate of +incorporation so as to materially and adversely affect the special rights, +preferences, privileges and voting powers of the Series A Preferred Stock, +taken as a whole; or + +consummate a binding share exchange or reclassification involving the Series A +Preferred Stock or a merger or consolidation of the Company with another +entity, unless in each case (i) the shares of Series A Preferred Stock remain +outstanding or, in the case of any such merger or consolidation with respect +to which the Company is not the surviving or resulting entity, are converted +into or exchanged for preference securities of the surviving or resulting +entity or its ultimate parent, and (ii) such shares remaining outstanding or +such preference securities, as the case may be, have such rights, preferences, +privileges and voting powers, taken as a whole, as are not materially less +favorable to the holders thereof than the rights, preferences, privileges and +voting powers of the Series A Preferred Stock, taken as a whole; + +provided, however , that any increase in the amount of the authorized or +issued Series A Preferred Stock or authorized preferred stock or the creation +and issuance, or an increase in the authorized or issued amount, of other +series of preferred stock ranking equally with and/or junior to the Series A +Preferred Stock with respect to the payment of dividends (whether such +dividends are cumulative or non-cumulative) and/or the distribution of assets +upon liquidation, dissolution or winding up of the Company will not be deemed +to adversely affect the special rights, preferences, privileges or voting +powers of the Series A Preferred Stock. In addition, any conversion of the +Series A Preferred Stock upon the occurrence of certain regulatory events, as +discussed above under "- Regulatory Changes Relating to Capital Adequacy," +will not be deemed to adversely affect the special rights, preferences, +privileges or voting powers of the Series A Preferred Stock. + +If an amendment, alteration, repeal, share exchange, reclassification, merger +or consolidation described above would adversely affect one or more but not +all series of voting preferred stock (including the Series A Preferred Stock +for this purpose), then only the series affected and entitled to vote shall +vote as a class in lieu of all such series of preferred stock. + +Without the consent of the holders of the Series A Preferred Stock, so long as +such action does not adversely affect the special rights, preferences, +privileges and voting powers of the Series A Preferred Stock, taken as a +whole, the Company may amend, alter, supplement or repeal any terms of the +Series A Preferred Stock: + +to cure any ambiguity, or to cure, correct or supplement any provision +contained in the certificate of designation for the Series A Preferred Stock +that may be defective or inconsistent; or + +to make any provision with respect to matters or questions arising with +respect to the Series A Preferred Stock that is not inconsistent with the +provisions of the certificate of designations. + +The foregoing voting provisions will not apply if, at or prior to the time +when the act with respect to which such vote would otherwise be required shall +be effected, all outstanding shares of Series A Preferred Stock shall have +been redeemed or called for redemption upon proper notice and sufficient funds +shall have been set aside by the Company for the benefit of the holders of the +Series A Preferred Stock to effect such redemption. + +DESCRIPTION OF DEPOSITARY SHARES + +Please note that as used in this section, references to "holders" of +depositary shares mean those who own depositary shares registered in their own +names, on the books that the Company or the depositary maintain for this +purpose, and not indirect holders who own beneficial interests in depositary +shares registered in street name or issued in book-entry form through The +Depository Trust Company. + +General + +The Company has issued fractional interests in shares of preferred stock in +the form of depositary shares, each representing a 1/1,000th ownership +interest in a share of Series A Preferred Stock and evidenced by a depositary +receipt. The shares of Series A Preferred Stock represented by depositary +shares are deposited under a deposit agreement among the Company, the +depositary and the holders from time to time of the depositary receipts +evidencing the depositary shares. Subject to the terms of the deposit +agreement, each holder of a depositary share is entitled, through the +depositary, in proportion to the applicable fraction of a share of Series A +Preferred Stock represented by such depositary share, to all the rights and +preferences of the Series A Preferred Stock represented thereby (including +dividend, voting, redemption and liquidation rights). + +Dividends and Other Distributions + +The depositary will distribute any cash dividends or other cash distributions +received in respect of the deposited Series A Preferred Stock to the record +holders of depositary shares relating to the underlying Series A Preferred +Stock in proportion to the number of depositary shares held by the holders. +The depositary will distribute any property received by it other than cash to +the record holders of depositary shares entitled to those distributions, +unless it determines that the distribution cannot be made proportionally among +those holders or that it is not feasible to make a distribution. In that +event, the depositary may, with the Company's approval, sell the property and +distribute the net proceeds from the sale to the holders of the depositary +shares in proportion to the number of depositary shares they hold. + +Record dates for the payment of dividends and other matters relating to the +depositary shares will be the same as the corresponding record dates for the +Series A Preferred Stock. + +The amounts distributed to holders of depositary shares will be reduced by any +amounts required to be withheld by the depositary or by the Company on account +of taxes or other governmental charges. + +Redemption of Depositary Shares + +If the Company redeems the Series A Preferred Stock represented by the +depositary shares, the depositary shares will be redeemed from the proceeds +received by the depositary resulting from the redemption of the Series A +Preferred Stock held by the depositary. The redemption price per depositary +share will be equal to 1/1,000th of the redemption price per share payable +with respect to the Series A Preferred Stock (or $25 per depositary share). +Whenever the Company redeems shares of Series A Preferred Stock held by the +depositary, the depositary will redeem, as of the same redemption date, the +number of depositary shares representing shares of Series A Preferred Stock so +redeemed. + +In case of any redemption of less than all of the outstanding depositary +shares, the depositary shares to be redeemed will be selected by the +depositary pro rata or in such other manner determined by the depositary to +be equitable. In any such case, the Company will redeem depositary shares only +in increments of 1,000 shares and any multiple thereof. + +Voting the Series A Preferred Stock + +When the depositary receives notice of any meeting at which the holders of the +Series A Preferred Stock are entitled to vote, the depositary will mail the +information contained in the notice to the record holders of the depositary +shares relating to the Series A Preferred Stock. Each record holder of the +depositary shares on the record date, which will be the same date as the +record date for the Series A Preferred Stock, may instruct the depositary to +vote the amount of the Series A Preferred Stock represented by the holder's +depositary shares. To the extent possible, the depositary will vote the amount +of the Series A Preferred Stock represented by depositary shares in accordance +with the instructions it receives. The Company will agree to take all +reasonable actions that the depositary determines are necessary to enable the +depositary to vote as instructed. If the depositary does not receive specific +instructions from the holders of any depositary shares representing the Series +A Preferred Stock, it will vote all depositary shares of that series held by +it proportionately with instructions received. + +Listing + +The depositary shares are listed on the New York Stock Exchange under the +ticker symbol "GS PrA." + +Form of Preferred Stock and Depositary Shares + +The depositary shares are issued in book-entry form through The Depository +Trust Company. The Series A Preferred Stock is issued in registered form to +the depositary. + +DESCRIPTION OF THE DEPOSITARY SHARES, EACH REPRESENTING 1/1,000 TH INTEREST +IN A SHARE OF FLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES C + +DESCRIPTION OF SERIES C PREFERRED STOCK + +The depositary is the sole holder of the Company's Floating Rate Non- +Cumulative Preferred Stock, Series C (the "Series C Preferred Stock"), and all +references herein to the holders of the Series C Preferred Stock shall mean +the depositary. However, the holders of depositary shares are entitled, +through the depositary, to exercise the rights and preferences of the holders +of the Series C Preferred Stock, as described below under "Description of +Depositary Shares." + +The following is a brief description of the material terms of the Series C +Preferred Stock. The following summary of the terms and provisions of the +Series C Preferred Stock does not purport to be complete and is qualified in +its entirety by reference to the pertinent sections of the Company's restated +certificate of incorporation, which is an exhibit to the Annual Report of +which this exhibit is a part. Unless the context otherwise provides, all +references to the Company in this description refer only to The Goldman Sachs +Group, Inc. and does not include its consolidated subsidiaries. + +General + +The Company's authorized capital stock includes 150,000,000 shares of +preferred stock, par value $0.01 per share. The Series C Preferred Stock is +part of a single series of the Company's authorized preferred stock. The +Company may from time to time, without notice to or the consent of holders of +the Series C Preferred Stock, issue additional shares of the Series C +Preferred Stock, up to the maximum number of authorized but unissued shares. + +Shares of the Series C Preferred Stock rank senior to the Company's common +stock, equally with each other series of the Company's preferred stock +outstanding as of December 31, 2020 and at least equally with each other +series of preferred stock that the Company may issue (except for any senior +series that may be issued with the requisite consent of the holders of the +Series C Preferred Stock), with respect to the payment of dividends and +distributions of assets upon liquidation, dissolution or winding up. In +addition, the Company will generally be able to pay dividends and +distributions upon liquidation, dissolution or winding up only out of lawfully +available funds for such payment ( i.e. , after taking account of all +indebtedness and other non-equity claims). The Series C Preferred Stock is +fully paid and nonassessable, which means that its holders have paid their +purchase price in full and that the Company may not ask them to surrender +additional funds. Holders of Series C Preferred Stock do not have preemptive +or subscription rights to acquire more stock of the Company. + +The Series C Preferred Stock is not convertible into, or exchangeable for, +shares of any other class or series of stock or other securities of the +Company, except under certain limited circumstances described below under "- +Regulatory Changes Relating to Capital Adequacy." The Series C Preferred Stock +has no stated maturity and is not subject to any sinking fund or other +obligation of the Company to redeem or repurchase the Series C Preferred +Stock. The Series C Preferred Stock represents non-withdrawable capital, is +not a bank deposit and is not insured by the FDIC or any other governmental +agency, nor is it the obligation of, or guaranteed by, a bank. + +Dividends + +Dividends on shares of the Series C Preferred Stock are not mandatory. Holders +of Series C Preferred Stock are entitled to receive, when, as and if declared +by the Company's board of directors or a duly authorized committee of the +board, out of funds legally available for the payment of dividends under +Delaware law, non-cumulative cash dividends from the original issue date, +quarterly in arrears on the 10th day of February, May, August, and November of +each year (each, a "dividend payment date"). These dividends accrue, with +respect to each dividend period, on the liquidation preference amount of +$25,000 per share (equivalent to $25 per depositary share) at a rate per annum +equal to the greater of (1) 0.75% above LIBOR (as described below) on the +related LIBOR determination date (as described below) or (2) 4.00%. In the +event that the Company issues additional shares of Series C Preferred Stock +after the original issue date, dividends on such shares may accrue from the +original issue date or any other date the Company specifies at the time such +additional shares are issued. + +Dividends will be payable to holders of record of Series C Preferred Stock as +they appear on the Company's books on the applicable record date, which shall +be the 15th calendar day before that dividend payment date or such other +record date fixed by the Company's board of directors (or a duly authorized +committee of the board) that is not more than 60 nor less than 10 days prior +to such dividend payment date (each, a "dividend record date"). These dividend +record dates will apply regardless of whether a particular dividend record +date is a business day. The corresponding record dates for the depositary +shares are the same as the record dates for the Series C Preferred Stock. + +A dividend period is the period from and including a dividend payment date to +but excluding the next dividend payment date. Dividends payable on the Series +C Preferred Stock are computed on the basis of a 360-day year and the actual +number of days elapsed in the dividend period. If any date on which dividends +would otherwise be payable is not a business day, then the dividend payment +date will be the next succeeding business day unless such day falls in the +next calendar month, in which case the dividend payment date will be the +immediately preceding day that is a business day. + +For any dividend period, LIBOR shall be determined by the calculation agent on +the second London business day immediately preceding the first day of such +dividend period in the following manner: + +LIBOR will be the offered rate per annum for three-month deposits in U.S. +dollars, beginning on the first day of such period, as that rate appears on +Moneyline Telerate Page 3750 as of 11:00 A.M., London time, on the second +London business day immediately preceding the first day of such dividend +period. + +If the rate described above does not appear on Moneyline Telerate page 3750, +LIBOR will be determined on the basis of the rates, at approximately 11:00 +A.M., London time, on the second London business day immediately preceding the +first day of such dividend period, at which deposits of the following kind are +offered to prime banks in the London interbank market by four major banks in +that market selected by the calculation agent: three-month deposits in U.S. +dollars, beginning on the first day of such dividend period, and in a +Representative Amount. The calculation agent will request the principal London +office of each of these banks to provide a quotation of its rate. If at least +two quotations are provided, LIBOR for the second London business day +immediately preceding the first day of such dividend period will be the +arithmetic mean of the quotations. + +If fewer than two quotations are provided as described above, LIBOR for the +second London business day immediately preceding the first day of such +dividend period will be the arithmetic mean of the rates for loans of the +following kind to leading European banks quoted, at approximately 11:00 A.M. +New York City time on the second London business day immediately preceding the +first day of such dividend period, by three major banks in New York City +selected by the calculation agent: three-month loans of U.S. dollars, +beginning on the first day of such dividend period, and in a Representative +Amount. + +If fewer than three banks selected by the calculation agent are quoting as +described above, LIBOR for the new dividend period will be LIBOR in effect for +the prior dividend period. + +The calculation agent's determination of any dividend rate, and its +calculation of the amount of dividends for any dividend period, will be on +file at the Company's principal offices, will be made available to any +stockholder upon request and will be final and binding in the absence of +manifest error. + +This subsection uses several terms that have special meanings relevant to +calculating LIBOR. Those terms have the following meanings: + +The term "Representative Amount" means an amount that, in the calculation +agent's judgment, is representative of a single transaction in the relevant +market at the relevant time. + +The term "Moneyline Telerate Page" means the display on Moneyline Telerate, +Inc., or any successor service, on the page or pages specified herein or any +replacement page or pages on that service. + +The term "business day" means a day that is a Monday, Tuesday, Wednesday, +Thursday or Friday and is not a day on which banking institutions in New York +City generally are authorized or obligated by law or executive order to close. + +The term "London business day" means a day that is a Monday, Tuesday, +Wednesday, Thursday or Friday and is a day on which dealings in U.S. dollars +are transacted in the London interbank market. + +Dividends on shares of Series C Preferred Stock are not cumulative. +Accordingly, if the board of directors of the Company, or a duly authorized +committee of the board, does not declare a dividend on the Series C Preferred +Stock payable in respect of any dividend period before the related dividend +payment date, such dividend will not accrue and the Company will have no +obligation to pay a dividend for that dividend period on the dividend payment +date or at any future time, whether or not dividends on the Series C Preferred +Stock are declared for any future dividend period. + +So long as any share of Series C Preferred Stock remains outstanding, no +dividend shall be paid or declared on the Company's common stock or any other +shares of the Company's junior stock (as defined below) (other than a dividend +payable solely in junior stock), and no common stock or other junior stock +shall be purchased, redeemed or otherwise acquired for consideration by the +Company, directly or indirectly (other than as a result of a reclassification +of junior stock for or into other junior stock, or the exchange or conversion +of one share of junior stock for or into another share of junior stock and +other than through the use of the proceeds of a substantially contemporaneous +sale of junior stock), during a dividend period, unless the full dividends for +the latest completed dividend period on all outstanding shares of Series C +Preferred Stock have been declared and paid (or declared and a sum sufficient +for the payment thereof has been set aside). However, the foregoing provision +shall not restrict the ability of Goldman Sachs & Co. LLC, or any of the +Company's other affiliates, to engage in any market-making transactions in the +Company's junior stock in the ordinary course of business. + +As used in this description of the Series C Preferred Stock, "junior stock" +means any class or series of stock of the Company that ranks junior to the +Series C Preferred Stock either as to the payment of dividends or as to the +distribution of assets upon any liquidation, dissolution or winding up of the +Company. Junior stock includes the Company's common stock. + +When dividends are not paid (or duly provided for) on any dividend payment +date (or, in the case of parity stock, as defined below, having dividend +payment dates different from the dividend payment dates pertaining to the +Series C Preferred Stock, on a dividend payment date falling within the +related dividend period for the Series C Preferred Stock) in full upon the +Series C Preferred Stock and any shares of parity stock, all dividends +declared upon the Series C Preferred Stock and all such equally ranking +securities payable on such dividend payment date (or, in the case of parity +stock having dividend payment dates different from the dividend payment dates +pertaining to the Series C Preferred Stock, on a dividend payment date falling +within the related dividend period for the Series C Preferred Stock) shall be +declared pro rata so that the respective amounts of such dividends shall +bear the same ratio to each other as all accrued but unpaid dividends per +share on the Series C Preferred Stock and all parity stock payable on such +dividend payment date (or, in the case of parity stock having dividend payment +dates different from the dividend payment dates pertaining to the Series C +Preferred Stock, on a dividend payment date falling within the related +dividend period for the Series C Preferred Stock) bear to each other. + +As used in this description of the Series C Preferred Stock, "parity stock" +means any other class or series of stock of the Company that ranks equally +with the Series C Preferred Stock in the payment of dividends and in the +distribution of assets on any liquidation, dissolution or winding up of the +Company. + +Subject to the foregoing, such dividends (payable in cash, stock or otherwise) +as may be determined by the Company's board of directors (or a duly authorized +committee of the board) may be declared and paid on the Company's common stock +and any other stock ranking equally with or junior to the Series C Preferred +Stock from time to time out of any funds legally available for such payment, +and the shares of the Series C Preferred Stock shall not be entitled to +participate in any such dividend. + +Liquidation Rights + +Upon any voluntary or involuntary liquidation, dissolution or winding up of +the Company, holders of the Series C Preferred Stock are entitled to receive +out of assets of the Company available for distribution to stockholders, after +satisfaction of liabilities to creditors, if any, before any distribution of +assets is made to holders of common stock or of any of the Company's other +shares of stock ranking junior as to such a distribution to the shares of +Series C Preferred Stock, a liquidating distribution in the amount of $25,000 +per share (equivalent to $25 per depositary share) plus declared and unpaid +dividends, without accumulation of any undeclared dividends. Holders of the +Series C Preferred Stock will not be entitled to any other amounts from the +Company after they have received their full liquidation preference. + +In any such distribution, if the assets of the Company are not sufficient to +pay the liquidation preferences in full to all holders of the Series C +Preferred Stock and all holders of any other shares of the Company's stock +ranking equally as to such distribution with the Series C Preferred Stock, the +amounts paid to the holders of Series C Preferred Stock and to the holders of +all such other stock will be paid pro rata in accordance with the respective +aggregate liquidation + +preferences of those holders. In any such distribution, the "liquidation +preference" of any holder of preferred stock means the amount payable to such +holder in such distribution, including any declared but unpaid dividends (and +any unpaid, accrued cumulative dividends in the case of any holder of stock on +which dividends accrue on a cumulative basis). If the liquidation preference +has been paid in full to all holders of the Company's Series C Preferred Stock +and any other shares of the Company's stock ranking equally as to the +liquidation distribution, the holders of the Company's other stock shall be +entitled to receive all remaining assets of the Company according to their +respective rights and preferences. + +For purposes of this description of the Series C Preferred Stock, the merger +or consolidation of the Company with any other entity, including a merger or +consolidation in which the holders of Series C Preferred Stock receive cash, +securities or property for their shares, or the sale, lease or exchange of all +or substantially all of the assets of the Company for cash, securities or +other property shall not constitute a liquidation, dissolution or winding up +of the Company. + +Redemption + +The Series C Preferred Stock is not subject to any mandatory redemption, +sinking fund or other similar provisions. The Series C Preferred Stock is +currently redeemable at the Company's option, in whole or in part, upon not +less than 30 nor more than 60 days' notice, at a redemption price equal to +$25,000 per share (equivalent to $25 per depositary share), plus any declared +and unpaid dividends, without accumulation of any undeclared dividends. +Holders of Series C Preferred Stock have no right to require the redemption or +repurchase of the Series C Preferred Stock. + +If shares of the Series C Preferred Stock are to be redeemed, the notice of +redemption shall be given by first class mail to the holders of record of the +Series C Preferred Stock to be redeemed, mailed not less than 30 days nor more +than 60 days prior to the date fixed for redemption thereof ( provided that, +if the depositary shares representing the Series C Preferred Stock are held in +book-entry form through The Depository Trust Company, or "DTC," the Company +may give such notice in any manner permitted by the DTC). Each notice of +redemption will include a statement setting forth: (i) the redemption date, +(ii) the number of shares of the Series C Preferred Stock to be redeemed and, +if less than all the shares held by such holder are to be redeemed, the number +of such shares to be redeemed from such holder, (iii) the redemption price and +(iv) the place or places where holders may surrender certificates evidencing +shares of Series C Preferred Stock for payment of the redemption price. If +notice of redemption of any shares of Series C Preferred Stock has been given +and if the funds necessary for such redemption have been set aside by the +Company for the benefit of the holders of any shares of Series C Preferred +Stock so called for redemption, then, from and after the redemption date, +dividends will cease to accrue on such shares of Series C Preferred Stock, +such shares of Series C Preferred Stock shall no longer be deemed outstanding +and all rights of the holders of such shares will terminate, except the right +to receive the redemption price. + +In case of any redemption of only part of the shares of the Series C Preferred +Stock at the time outstanding, the shares to be redeemed shall be selected +either pro rata or in such other manner as the Company may determine to be +fair and equitable. + +See "Description of Depositary Shares" below for information about redemption +of the depositary shares relating to the Company's Series C Preferred Stock. + +Regulatory Changes Relating to Capital Adequacy + +The Company was previously regulated by the SEC as a consolidated supervised +entity ("CSE") pursuant to the SEC's rules at that time relating to CSEs +(referred to as the "CSE Rules"). The Company treated the Series C Preferred +Stock as allowable capital in accordance with the CSE Rules (such capital is +referred to below as "Allowable Capital"). + +If the regulatory capital requirements that apply to the Company change in the +future, the Series C Preferred Stock may be converted, at the Company's option +and without consent of the holders, into a new series of preferred stock, +subject to the limitations described below. The Company will be entitled to +exercise this conversion right as follows. + +If both of the following occur: + +the Company (by election or otherwise) becomes subject to any law, rule, +regulation or guidance (together, "regulations") relating to the Company's +capital adequacy, which regulation (i) modifies the existing requirements for +treatment as Allowable Capital, (ii) provides for a type or level of capital +characterized as "Tier 1" or its equivalent pursuant to regulations of any +governmental body having jurisdiction over the Company (or any of the +Company's subsidiaries or consolidated affiliates) and implementing capital +standards published by the Basel Committee on Banking Supervision, the SEC, +the Federal Reserve Board or any other United States national governmental +body, or any other applicable regime based on capital standards published by +the Basel Committee on Banking Supervision or its successor, or (iii) provides +for a type of capital that in the Company's judgment (after consultation with +counsel of recognized standing) is substantially equivalent to such "Tier 1" +capital (such capital described in either (ii) or (iii) is referred to below +as "Tier 1 Capital Equivalent"), and + +the Company affirmatively elects to qualify the Series C Preferred Stock for +such Allowable Capital or Tier 1 Capital Equivalent treatment without any +sublimit or other quantitative restriction on the inclusion of the Series C +Preferred Stock in Allowable Capital or Tier 1 Capital Equivalent (other than +any limitation the Company elects to accept and any limitation requiring that +common equity or a specified form of common equity constitute the dominant +form of Allowable Capital or Tier 1 Capital Equivalent) under such +regulations, + +then, upon such affirmative election, the Series C Preferred Stock shall be +convertible at the Company's option into a new series of preferred stock +having terms and provisions substantially identical to those of the Series C +Preferred Stock, except that such new series may have such additional or +modified rights, preferences, privileges and voting powers, and such +limitations and restrictions thereof, as are necessary, in the Company's +judgment (after consultation with counsel of recognized standing), to comply +with the Required Unrestricted Capital Provisions (defined below), provided +that the Company will not cause any such conversion unless the Company +determines that the rights, preferences, privileges and voting powers of such +new series of preferred stock, taken as a whole, are not materially less +favorable to the holders thereof than the rights, preferences, privileges and +voting powers of the Series C Preferred Stock, taken as a whole. For example, +the Company could agree to restrict its ability to pay dividends on or redeem +the new series of preferred stock for a specified period or indefinitely, to +the extent permitted by the terms and provisions of the new series of +preferred stock, since such a restriction would be permitted in the Company's +discretion under the terms and provisions of the Series C Preferred Stock. + +The Company will provide notice to holders of the Series C Preferred Stock of +any election to qualify the Series C Preferred Stock for Allowable Capital or +Tier 1 Capital Equivalent treatment and of any determination to convert the +Series C Preferred Stock into a new series of preferred stock, promptly upon +the effectiveness of any such election or determination. A copy of any such +notice and of the relevant regulations will be on file at the Company's +principal offices and, upon request, will be made available to any +stockholder. + +As used above, the term "Required Unrestricted Capital Provisions" means the +terms that are, in the Company's judgment (after consultation with counsel of +recognized standing), required for preferred stock to be treated as Allowable +Capital or Tier 1 Capital Equivalent, as applicable, without any sublimit or +other quantitative restriction on the inclusion of such preferred stock in +Allowable Capital or Tier 1 Capital Equivalent (other than any limitation the +Company elects to accept and any limitation requiring that common equity or a +specified form of common equity constitute the dominant form of Allowable +Capital or Tier 1 Capital Equivalent) pursuant to applicable regulations. + +Voting Rights + +Except as provided below, the holders of the Series C Preferred Stock have no +voting rights. + +Whenever dividends on any shares of the Series C Preferred Stock shall have +not been declared and paid for the equivalent of six or more dividend +payments, whether or not for consecutive dividend periods (as used in this +section, a "Nonpayment"), the holders of such shares, voting together as a +class with holders of any and all other series of voting preferred stock (as +defined below) then outstanding, will be entitled to vote for the election of +a total of two additional members of the Company's board of directors (as used +in this section, the "Preferred Stock Directors"), provided that the +election of any such directors shall not cause the Company to violate the +corporate governance requirement of the New York Stock Exchange (or any other +exchange on which the Company's securities may be listed) that listed +companies must have a majority of independent directors and provided further +that the Company's board of directors shall at no time include more than two +Preferred Stock Directors. In that event, the number of directors on the +Company's board of directors shall automatically increase by two, and the new +directors shall be elected at a special meeting called at the request of the +holders of record of at least 20% of the Series C Preferred Stock or of any +other series of voting preferred stock (unless such request is received less +than 90 days before the date fixed for the next annual or special meeting of +the stockholders, in which event such election shall be held at such next +annual or special meeting of stockholders), and at each subsequent annual +meeting. These voting rights will continue until dividends on the shares of +the Series C Preferred Stock and any such series of voting preferred stock for +at least four dividend periods, whether or not consecutive, following the +Nonpayment shall have been fully paid (or declared and a sum sufficient for +the payment of such dividends shall have been set aside for payment). + +As used in this description of the Series C Preferred Stock, "voting preferred +stock" means any other class or series of preferred stock of the Company +ranking equally with the Series C Preferred Stock either as to dividends or +the distribution of assets upon liquidation, dissolution or winding up and +upon which like voting rights have been conferred and are exercisable. Whether +a plurality, majority or other portion of the shares of Series C Preferred +Stock and any other voting preferred stock have been voted in favor of any +matter shall be determined by reference to the liquidation amounts of the +shares voted. + +If and when dividends for at least four dividend periods, whether or not +consecutive, following a Nonpayment have been paid in full (or declared and a +sum sufficient for such payment shall have been set aside), the holders of the +Series C Preferred Stock shall be divested of the foregoing voting rights +(subject to revesting in the event of each subsequent Nonpayment) and, if such +voting rights for all other holders of voting preferred stock have terminated, +the term of office of each Preferred Stock Director so elected shall terminate +and the number of directors on the board of directors shall automatically +decrease by two. In determining whether dividends have been paid for four +dividend periods following a Nonpayment, the Company may take account of any +dividend the Company elects to pay for such a dividend period after the +regular dividend date for that period has passed. Any Preferred Stock Director +may be removed at any time without cause by the holders of record of a +majority of the outstanding shares of the Series C Preferred Stock when they +have the voting rights described above (voting together as a class with all +series of voting preferred stock then outstanding). So long as a Nonpayment +shall continue, any vacancy in the office of a Preferred Stock Director (other +than prior to the initial election after a Nonpayment) may be filled by the +written consent of the Preferred Stock Director remaining in office, or if +none remains in office, by a vote of the holders of record of a majority of +the outstanding shares of Series C Preferred Stock and all voting preferred +stock when they have the voting rights described above (voting together as a +class). The Preferred Stock Directors shall each be entitled to one vote per +director on any matter. + +So long as any shares of Series C Preferred Stock remain outstanding, the +Company will not, without the affirmative vote or consent of the holders of at +least two-thirds of the outstanding shares of the Series C Preferred Stock and +all other series of voting preferred stock entitled to vote thereon, voting +together as a single class, given in person or by proxy, either in writing or +at a meeting: + +amend or alter the provisions of the Company's restated certificate of +incorporation so as to authorize or create, or increase the authorized amount +of, any class or series of stock ranking senior to the Series C Preferred +Stock with respect to payment of dividends or the distribution of assets upon +liquidation, dissolution or winding up of the Company; + +amend, alter or repeal the provisions of the Company's restated certificate of +incorporation so as to materially and adversely affect the special rights, +preferences, privileges and voting powers of the Series C Preferred Stock, +taken as a whole; or + +consummate a binding share exchange or reclassification involving the Series C +Preferred Stock or a merger or consolidation of the Company with another +entity, unless in each case (i) the shares of Series C Preferred Stock remain +outstanding or, in the case of any such merger or consolidation with respect +to which the Company is not the surviving or resulting entity, are converted +into or exchanged for preference securities of the surviving or resulting +entity or its ultimate parent, and (ii) such shares remaining outstanding or +such preference securities, as the case may be, have such rights, preferences, +privileges and voting powers, taken as a whole, as are not materially less +favorable to the holders thereof than the rights, preferences, privileges and +voting powers of the Series C Preferred Stock, taken as a whole; + +provided, however , that any increase in the amount of the authorized or +issued Series C Preferred Stock or authorized preferred stock or the creation +and issuance, or an increase in the authorized or issued amount, of other +series of preferred stock ranking equally with and/or junior to the Series C +Preferred Stock with respect to the payment of dividends (whether such +dividends are cumulative or non-cumulative) and/or the distribution of assets +upon liquidation, dissolution or winding up of the Company will not be deemed +to adversely affect the rights, preferences, privileges or voting powers of +the Series C Preferred Stock. In addition, any conversion of the Series C +Preferred Stock upon the occurrence of certain regulatory events, as discussed +above under "- Regulatory Changes Relating to Capital Adequacy," will not be +deemed to adversely affect the rights, preferences, privileges or voting +powers of the Series C Preferred Stock. + +If an amendment, alteration, repeal, share exchange, reclassification, merger +or consolidation described above would adversely affect one or more but not +all series of voting preferred stock (including the Series C Preferred Stock +for this purpose), then only the series affected and entitled to vote shall +vote as a class in lieu of all such series of preferred stock. + +Without the consent of the holders of the Series C Preferred Stock, so long as +such action does not adversely affect the rights, preferences, privileges and +voting powers of the Series C Preferred Stock, the Company may amend, alter, +supplement or repeal any terms of the Series C Preferred Stock: + +to cure any ambiguity, or to cure, correct or supplement any provision +contained in the certificate of designation for the Series C Preferred Stock +that may be defective or inconsistent; or + +to make any provision with respect to matters or questions arising with +respect to the Series C Preferred Stock that is not inconsistent with the +provisions of the certificate of designations. + +The foregoing voting provisions will not apply if, at or prior to the time +when the act with respect to which such vote would otherwise be required shall +be effected, all outstanding shares of Series C Preferred Stock shall have +been redeemed or called for redemption upon proper notice and sufficient funds +shall have been set aside by the Company for the benefit of the holders of the +Series C Preferred Stock to effect such redemption. + +DESCRIPTION OF DEPOSITARY SHARES + +Please note that as used in this section, references to "holders" of +depositary shares mean those who own depositary shares registered in their own +names, on the books that the Company or the depositary maintain for this +purpose, and not indirect holders who own beneficial interests in depositary +shares registered in street name or issued in book-entry form through The +Depository Trust Company. + +General + +The Company has issued fractional interests in shares of preferred stock in +the form of depositary shares, each representing a 1/1,000th ownership +interest in a share of Series C Preferred Stock and evidenced by a depositary +receipt. The shares of Series C Preferred Stock represented by depositary +shares are deposited under a deposit agreement among the Company, the +depositary and the holders from time to time of the depositary receipts +evidencing the depositary shares. Subject to the terms of the deposit +agreement, each holder of a depositary share is entitled, through the +depositary, in proportion to the applicable fraction of a share of Series C +Preferred Stock represented by such depositary share, to all the rights and +preferences of the Series C Preferred Stock represented thereby (including +dividend, voting, redemption and liquidation rights). + +Dividends and Other Distributions + +The depositary will distribute any cash dividends or other cash distributions +received in respect of the deposited Series C Preferred Stock to the record +holders of depositary shares relating to the underlying Series C Preferred +Stock in proportion to the number of depositary shares held by the holders. +The depositary will distribute any property received by it other than cash to +the record holders of depositary shares entitled to those distributions, +unless it determines that the distribution cannot be made proportionally among +those holders or that it is not feasible to make a distribution. In that +event, the depositary may, with the Company's approval, sell the property and +distribute the net proceeds from the sale to the holders of the depositary +shares in proportion to the number of depositary shares they hold. + +Record dates for the payment of dividends and other matters relating to the +depositary shares will be the same as the corresponding record dates for the +Series C Preferred Stock. + +The amounts distributed to holders of depositary shares will be reduced by any +amounts required to be withheld by the depositary or by the Company on account +of taxes or other governmental charges. + +Redemption of Depositary Shares + +If the Company redeems the Series C Preferred Stock represented by the +depositary shares, the depositary shares will be redeemed from the proceeds +received by the depositary resulting from the redemption of the Series C +Preferred Stock held by the depositary. The redemption price per depositary +share will be equal to 1/1,000th of the redemption price per share payable +with respect to the Series C Preferred Stock (or $25 per depositary share). +Whenever the Company redeems shares of Series C Preferred Stock held by the +depositary, the depositary will redeem, as of the same redemption date, the +number of depositary shares representing shares of Series C Preferred Stock so +redeemed. + +In case of any redemption of less than all of the outstanding depositary +shares, the depositary shares to be redeemed will be selected by the +depositary pro rata or in such other manner determined by the depositary to +be equitable. In any such case, the Company will redeem depositary shares only +in increments of 1,000 shares and any multiple thereof. + +Voting the Series C Preferred Stock + +When the depositary receives notice of any meeting at which the holders of the +Series C Preferred Stock are entitled to vote, the depositary will mail the +information contained in the notice to the record holders of the depositary +shares relating to the Series C Preferred Stock. Each record holder of the +depositary shares on the record date, which will be the same date as the +record date for the Series C Preferred Stock, may instruct the depositary to +vote the amount of the Series C Preferred Stock represented by the holder's +depositary shares. To the extent possible, the depositary will vote the amount +of the Series C Preferred Stock represented by depositary shares in accordance +with the instructions it receives. The Company will agree to take all +reasonable actions that the depositary determines are necessary to enable the +depositary to vote as instructed. If the depositary does not receive specific +instructions from the holders of any depositary shares representing the Series +C Preferred Stock, it will vote all depositary shares of that series held by +it proportionately with instructions received. + +Listing + +The depositary shares are listed on the New York Stock Exchange under the +ticker symbol "GS PrC." + +Form of Preferred Stock and Depositary Shares + +The depositary shares are issued in book-entry form through The Depository +Trust Company. The Series C Preferred Stock is issued in registered form to +the depositary. + +DESCRIPTION OF THE DEPOSITARY SHARES, EACH REPRESENTING 1/1,000 TH INTEREST +IN A SHARE OF FLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES D + +DESCRIPTION OF SERIES D PREFERRED STOCK + +The depositary is the sole holder of the Company's Floating Rate Non- +Cumulative Preferred Stock, Series D (the "Series D Preferred Stock"), and all +references herein to the holders of the Series D Preferred Stock shall mean +the depositary. However, the holders of depositary shares are entitled, +through the depositary, to exercise the rights and preferences of the holders +of the Series D Preferred Stock, as described below under "Description of +Depositary Shares." + +The following is a brief description of the material terms of the Series D +Preferred Stock. The following summary of the terms and provisions of the +Series D Preferred Stock does not purport to be complete and is qualified in +its entirety by reference to the pertinent sections of the Company's restated +certificate of incorporation, which is an exhibit to the Annual Report of +which this exhibit is a part. Unless the context otherwise provides, all +references to the Company in this description refer only to The Goldman Sachs +Group, Inc. and does not include its consolidated subsidiaries. + +General + +The Company's authorized capital stock includes 150,000,000 shares of +preferred stock, par value $0.01 per share. The Series D Preferred Stock is +part of a single series of authorized preferred stock. The Company may from +time to time, without notice to or the consent of holders of the Series D +Preferred Stock, issue additional shares of the Series D Preferred Stock, up +to the maximum number of authorized but unissued shares. + +Shares of the Series D Preferred Stock rank senior to the Company's common +stock, equally with each other series of the Company's preferred stock +outstanding as of December 31, 2020 and at least equally with each other +series of preferred stock that the Company may issue (except for any senior +series that may be issued with the requisite consent of the holders of the +Series D Preferred Stock), with respect to the payment of dividends and +distributions of assets upon liquidation, dissolution or winding up. In +addition, the Company will generally be able to pay dividends and +distributions upon liquidation, dissolution or winding up only out of lawfully +available funds for such payment ( i.e. , after taking account of all +indebtedness and other non-equity claims). The Series D Preferred Stock is +fully paid and nonassessable, which means that its holders have paid their +purchase price in full and that the Company may not ask them to surrender +additional funds. Holders of Series D Preferred Stock do not have preemptive +or subscription rights to acquire more stock of the Company. + +The Series D Preferred Stock is not convertible into, or exchangeable for, +shares of any other class or series of stock or other securities of the +Company, except under certain limited circumstances described below under "- +Regulatory Changes Relating to Capital Adequacy." The Series D Preferred Stock +has no stated maturity and is not subject to any sinking fund or other +obligation of the Company to redeem or repurchase the Series D Preferred +Stock. The Series D Preferred Stock represents non-withdrawable capital, is +not a bank deposit and is not insured by the FDIC or any other governmental +agency, nor is it the obligation of, or guaranteed by, a bank. + +Dividends + +Dividends on shares of the Series D Preferred Stock are not mandatory. Holders +of Series D Preferred Stock are entitled to receive, when, as and if declared +by the Company's board of directors (or a duly authorized committee of the +board), out of funds legally available for the payment of dividends under +Delaware law, non-cumulative cash dividends from the original issue date, +quarterly in arrears on the 10th day of February, May, August, and November of +each year (each, a "dividend payment date"). These dividends accrue, with +respect to each dividend period, on the liquidation preference amount of +$25,000 per share (equivalent to $25 per depositary share) at a rate per annum +equal to the greater of (1) 0.67% above LIBOR (as described below) on the +related LIBOR determination date (as described below) or (2) 4.00%. In the +event that the Company issues additional shares of Series D Preferred Stock +after the original issue date, dividends on such shares may accrue from the +original issue date or any other date the Company specifies at the time such +additional shares are issued. + +Dividends will be payable to holders of record of Series D Preferred Stock as +they appear on the Company's books on the applicable record date, which shall +be the 15th calendar day before that dividend payment date or such other +record date fixed by the Company's board of directors (or a duly authorized +committee of the board) that is not more than 60 nor less than 10 days prior +to such dividend payment date (each, a "dividend record date"). These dividend +record dates will apply regardless of whether a particular dividend record +date is a business day. The corresponding record dates for the depositary +shares are the same as the record dates for the Series D Preferred Stock. + +A dividend period is the period from and including a dividend payment date to +but excluding the next dividend payment date. Dividends payable on the Series +D Preferred Stock are computed on the basis of a 360-day year and the actual +number of days elapsed in the dividend period. If any date on which dividends +would otherwise be payable is not a business day, then the dividend payment +date will be the next succeeding business day unless such day falls in the +next calendar month, in which case the dividend payment date will be the +immediately preceding day that is a business day. + +For any dividend period, LIBOR shall be determined by the calculation agent on +the second London business day immediately preceding the first day of such +dividend period in the following manner: + +LIBOR will be the offered rate per annum for three-month deposits in U.S. +dollars, beginning on the first day of such period, as that rate appears on +Moneyline Telerate Page 3750 (or any successor or replacement page) as of +11:00 A.M., London time, on the second London business day immediately +preceding the first day of such dividend period. + +If the rate described above does not appear on Moneyline Telerate page 3750 +(or any successor or replacement page), LIBOR will be determined on the basis +of the rates, at approximately 11:00 A.M., London time, on the second London +business day immediately preceding the first day of such dividend period, at +which deposits of the following kind are offered to prime banks in the London +interbank market by four major banks in that market selected by the +calculation agent: three-month deposits in U.S. dollars, beginning on the +first day of such dividend period, and in a Representative Amount. The +calculation agent will request the principal London office of each of these +banks to provide a quotation of its rate. If at least two quotations are +provided, LIBOR for the second London business day immediately preceding the +first day of such dividend period will be the arithmetic mean of the +quotations. + +If fewer than two quotations are provided as described above, LIBOR for the +second London business day immediately preceding the first day of such +dividend period will be the arithmetic mean of the rates for loans of the +following kind to leading European banks quoted, at approximately 11:00 A.M. +New York City time on the second London business day immediately preceding the +first day of such dividend period, by three major banks in New York City +selected by the calculation agent: three-month loans of U.S. dollars, +beginning on the first day of such dividend period, and in a Representative +Amount. + +If fewer than three banks selected by the calculation agent are quoting as +described above, LIBOR for the new dividend period will be LIBOR in effect for +the prior dividend period. + +The calculation agent's determination of any dividend rate, and its +calculation of the amount of dividends for any dividend period, will be on +file at the Company's principal offices, will be made available to any +stockholder upon request and will be final and binding in the absence of +manifest error. + +This subscription uses several terms that have special meanings relevant to +calculating LIBOR. Those terms have the following meanings: + +The term "Representative Amount" means an amount that, in the calculation +agent's judgment, is representative of a single transaction in the relevant +market at the relevant time. + +The term "Moneyline Telerate Page" means the display on Moneyline Telerate, +Inc., or any successor service, on the page or pages specified herein or any +replacement page or pages on that service. + +The term "business day" means a day that is a Monday, Tuesday, Wednesday, +Thursday or Friday and is not a day on which banking institutions in New York +City generally are authorized or obligated by law or executive order to close. + +The term "London business day" means a day that is a Monday, Tuesday, +Wednesday, Thursday or Friday and is a day on which dealings in U.S. dollars +are transacted in the London interbank market. + +Dividends on shares of Series D Preferred Stock are not cumulative. +Accordingly, if the board of directors of the Company (or a duly authorized +committee of the board) does not declare a dividend on the Series D Preferred +Stock payable in respect of any dividend period before the related dividend +payment date, such dividend will not accrue and the Company will have no +obligation to pay a dividend for that dividend period on the dividend payment +date or at any future time, whether or not dividends on the Series D Preferred +Stock are declared for any future dividend period. + +So long as any share of Series D Preferred Stock remains outstanding, no +dividend shall be paid or declared on the Company's common stock or any other +shares of the Company's junior stock (as defined below) (other than a dividend +payable solely in junior stock), and no common stock or other junior stock +shall be purchased, redeemed or otherwise acquired for consideration by the +Company, directly or indirectly (other than as a result of a reclassification +of junior stock for or into other junior stock, or the exchange or conversion +of one share of junior stock for or into another share of junior stock and +other than through the use of the proceeds of a substantially contemporaneous +sale of junior stock), during a dividend period, unless the full dividends for +the latest completed dividend period on all outstanding shares of Series D +Preferred Stock have been declared and paid (or declared and a sum sufficient +for the payment thereof has been set aside). However, the foregoing provision +shall not restrict the ability of Goldman Sachs & Co. LLC, or any of the +Company's other affiliates, to engage in any market-making transactions in the +Company's junior stock in the ordinary course of business. + +As used in this description of the Series D Preferred Stock, "junior stock" +means any class or series of stock of the Company that ranks junior to the +Series D Preferred Stock either as to the payment of dividends or as to the +distribution of assets upon any liquidation, dissolution or winding up of the +Company. Junior stock includes the Company's common stock. + +When dividends are not paid (or duly provided for) on any dividend payment +date (or, in the case of parity stock, as defined below, having dividend +payment dates different from the dividend payment dates pertaining to the +Series D Preferred Stock, on a dividend payment date falling within the +related dividend period for the Series D Preferred Stock) in full upon the +Series D Preferred Stock and any shares of parity stock, all dividends +declared upon the Series D Preferred Stock and all such equally ranking +securities payable on such dividend payment date (or, in the case of parity +stock having dividend payment dates different from the dividend payment dates +pertaining to the Series D Preferred Stock, on a dividend payment date falling +within the related dividend period for the Series D Preferred Stock) shall be +declared pro rata so that the respective amounts of such dividends shall +bear the same ratio to each other as all accrued but unpaid dividends per +share on the Series D Preferred Stock and all parity stock payable on such +dividend payment date (or, in the case of parity stock having dividend payment +dates different from the dividend payment dates pertaining to the Series D +Preferred Stock, on a dividend payment date falling within the related +dividend period for the Series D Preferred Stock) bear to each other. + +As used in this description of the Series D Preferred Stock, "parity stock" +means any other class or series of stock of the Company that ranks equally +with the Series D Preferred Stock in the payment of dividends and in the +distribution of assets on any liquidation, dissolution or winding up of the +Company. + +Subject to the foregoing, such dividends (payable in cash, stock or otherwise) +as may be determined by the Company's board of directors (or a duly authorized +committee of the board) may be declared and paid on the Company's common stock +and any other stock ranking equally with or junior to the Series D Preferred +Stock from time to time out of any funds legally available for such payment, +and the shares of the Series D Preferred Stock shall not be entitled to +participate in any such dividend. + +Liquidation Rights + +Upon any voluntary or involuntary liquidation, dissolution or winding up of +the Company, holders of the Series D Preferred Stock are entitled to receive +out of assets of the Company available for distribution to stockholders, after +satisfaction of liabilities to creditors, if any, before any distribution of +assets is made to holders of common stock or of any of the Company's other +shares of stock ranking junior as to such a distribution to the shares of +Series D Preferred Stock, a liquidating distribution in the amount of $25,000 +per share (equivalent to $25 per depositary share) plus declared and unpaid +dividends, without accumulation of any undeclared dividends. Holders of the +Series D Preferred Stock will not be entitled to any other amounts from the +Company after they have received their full liquidation preference. + +In any such distribution, if the assets of the Company are not sufficient to +pay the liquidation preferences in full to all holders of the Series D +Preferred Stock and all holders of any other shares of the Company's stock +ranking equally as to such distribution with the Series D Preferred Stock, the +amounts paid to the holders of Series D Preferred Stock and to the holders of +all such other stock will be paid pro rata in accordance with the respective +aggregate liquidation + +preferences of those holders. In any such distribution, the "liquidation +preference" of any holder of preferred stock means the amount payable to such +holder in such distribution, including any declared but unpaid dividends (and +any unpaid, accrued cumulative dividends in the case of any holder of stock on +which dividends accrue on a cumulative basis). If the liquidation preference +has been paid in full to all holders of the Company's Series D Preferred Stock +and any other shares of the Company's stock ranking equally as to the +liquidation distribution, the holders of the Company's other stock shall be +entitled to receive all remaining assets of the Company according to their +respective rights and preferences. + +For purposes of this description of the Series D Preferred Stock, the merger +or consolidation of the Company with any other entity, including a merger or +consolidation in which the holders of Series D Preferred Stock receive cash, +securities or property for their shares, or the sale, lease or exchange of all +or substantially all of the assets of the Company for cash, securities or +other property shall not constitute a liquidation, dissolution or winding up +of the Company. + +Redemption + +The Series D Preferred Stock is not subject to any mandatory redemption, +sinking fund or other similar provisions. The Series D Preferred Stock is +currently redeemable at the Company's option, in whole or in part, upon not +less than 30 nor more than 60 days' notice, at a redemption price equal to +$25,000 per share (equivalent to $25 per depositary share), plus any declared +and unpaid dividends, without accumulation of any undeclared dividends. +Holders of Series D Preferred Stock have no right to require the redemption or +repurchase of the Series D Preferred Stock. + +If shares of the Series D Preferred Stock are to be redeemed, the notice of +redemption shall be given by first class mail to the holders of record of the +Series D Preferred Stock to be redeemed, mailed not less than 30 days nor more +than 60 days prior to the date fixed for redemption thereof ( provided that, +if the depositary shares representing the Series D Preferred Stock are held in +book-entry form through The Depository Trust Company, or "DTC," the Company +may give such notice in any manner permitted by the DTC). Each notice of +redemption will include a statement setting forth: (i) the redemption date, +(ii) the number of shares of the Series D Preferred Stock to be redeemed and, +if less than all the shares held by such holder are to be redeemed, the number +of such shares to be redeemed from such holder, (iii) the redemption price and +(iv) the place or places where holders may surrender certificates evidencing +shares of Series D Preferred Stock for payment of the redemption price. If +notice of redemption of any shares of Series D Preferred Stock has been given +and if the funds necessary for such redemption have been set aside by the +Company for the benefit of the holders of any shares of Series D Preferred +Stock so called for redemption, then, from and after the redemption date, +dividends will cease to accrue on such shares of Series D Preferred Stock, +such shares of Series D Preferred Stock shall no longer be deemed outstanding +and all rights of the holders of such shares will terminate, except the right +to receive the redemption price. + +In case of any redemption of only part of the shares of the Series D Preferred +Stock at the time outstanding, the shares to be redeemed shall be selected +either pro rata or in such other manner as the Company may determine to be +fair and equitable. + +See "Description of Depositary Shares" below for information about redemption +of the depositary shares relating to the Company's Series D Preferred Stock. + +Regulatory Changes Relating to Capital Adequacy + +The Company was previously regulated by the SEC as a consolidated supervised +entity ("CSE") pursuant to the SEC's rules relating to CSEs (referred to as +the "CSE Rules"). The Company treated the Series D Preferred Stock as +allowable capital in accordance with the CSE Rules (such capital is referred +to below as "Allowable Capital"). + +If the regulatory capital requirements that apply to the Company change in the +future, the Series D Preferred Stock may be converted, at the Company's option +and without consent of the holders, into a new series of preferred stock, +subject to the limitations described below. The Company will be entitled to +exercise this conversion right as follows. + +If both of the following occur: + +the Company (by election or otherwise) becomes subject to any law, rule, +regulation or guidance (together, "regulations") relating to the Company's +capital adequacy, which regulation (i) modifies the existing requirements for +treatment as Allowable Capital, (ii) provides for a type or level of capital +characterized as "Tier 1" or its equivalent pursuant to regulations of any +governmental body + +having jurisdiction over the Company (or any of the Company's subsidiaries or +consolidated affiliates) and implementing capital standards published by the +Basel Committee on Banking Supervision, the SEC, the Federal Reserve Board or +any other United States national governmental body, or any other applicable +regime based on capital standards published by the Basel Committee on Banking +Supervision or its successor, or (iii) provides for a type of capital that in +the Company's judgment (after consultation with counsel of recognized +standing) is substantially equivalent to such "Tier 1" capital (such capital +described in either (ii) or (iii) is referred to below as "Tier 1 Capital +Equivalent"), and + +the Company affirmatively elects to qualify the Series D Preferred Stock for +such Allowable Capital or Tier 1 Capital Equivalent treatment without any +sublimit or other quantitative restriction on the inclusion of the Series D +Preferred Stock in Allowable Capital or Tier 1 Capital Equivalent (other than +any limitation the Company elects to accept and any limitation requiring that +common equity or a specified form of common equity constitute the dominant +form of Allowable Capital or Tier 1 Capital Equivalent) under such +regulations, + +then, upon such affirmative election, the Series D Preferred Stock shall be +convertible at the Company's option into a new series of preferred stock +having terms and provisions substantially identical to those of the Series D +Preferred Stock, except that such new series may have such additional or +modified rights, preferences, privileges and voting powers, and such +limitations and restrictions thereof, as are necessary, in the Company's +judgment (after consultation with counsel of recognized standing), to comply +with the Required Unrestricted Capital Provisions (defined below), provided +that the Company will not cause any such conversion unless the Company +determines that the rights, preferences, privileges and voting powers of such +new series of preferred stock, taken as a whole, are not materially less +favorable to the holders thereof than the rights, preferences, privileges and +voting powers of the Series D Preferred Stock, taken as a whole. For example, +the Company could agree to restrict its ability to pay dividends on or redeem +the new series of preferred stock for a specified period or indefinitely, to +the extent permitted by the terms and provisions of the new series of +preferred stock, since such a restriction would be permitted in the Company's +discretion under the terms and provisions of the Series D Preferred Stock. + +The Company will provide notice to holders of the Series D Preferred Stock of +any election to qualify the Series D Preferred Stock for Allowable Capital or +Tier 1 Capital Equivalent treatment and of any determination to convert the +Series D Preferred Stock into a new series of preferred stock, promptly upon +the effectiveness of any such election or determination. A copy of any such +notice and of the relevant regulations will be on file at the Company's +principal offices and, upon request, will be made available to any +stockholder. + +As used above, the term "Required Unrestricted Capital Provisions" means the +terms that are, in the Company's judgment (after consultation with counsel of +recognized standing), required for preferred stock to be treated as Allowable +Capital or Tier 1 Capital Equivalent, as applicable, without any sublimit or +other quantitative restriction on the inclusion of such preferred stock in +Allowable Capital or Tier 1 Capital Equivalent (other than any limitation the +Company elects to accept and any limitation requiring that common equity or a +specified form of common equity constitute the dominant form of Allowable +Capital or Tier 1 Capital Equivalent) pursuant to applicable regulations. + +Voting Rights + +Except as provided below, the holders of the Series D Preferred Stock have no +voting rights. + +Whenever dividends on any shares of the Series D Preferred Stock shall have +not been declared and paid for the equivalent of six or more dividend +payments, whether or not for consecutive dividend periods (as used in this +section, a "Nonpayment"), the holders of such shares, voting together as a +class with holders of any and all other series of voting preferred stock (as +defined below) then outstanding, will be entitled to vote for the election of +a total of two additional members of the Company's board of directors (as used +in this section, the "Preferred Stock Directors"), provided that the +election of any such directors shall not cause the Company to violate the +corporate governance requirement of the New York Stock Exchange (or any other +exchange on which the Company's securities may be listed) that listed +companies must have a majority of independent directors and provided further +that the Company's board of directors shall at no time include more than two +Preferred Stock Directors. In that event, the number of directors on the +Company's board of directors shall automatically increase by two, and the new +directors shall be elected at a special meeting called at the request of the +holders of record of at least 20% of the Series D Preferred Stock or of any +other series of voting preferred stock (unless such request is received less +than 90 days before the date fixed for the next annual or special meeting of +the stockholders, in which event such election shall be held at such next +annual or special meeting of stockholders), and at each subsequent annual +meeting. These voting rights will continue until dividends on the shares of +the Series D Preferred Stock and any such series of voting preferred stock for +at least four dividend periods, whether or not consecutive, following the +Nonpayment shall have been fully paid (or declared and a sum sufficient for +the payment of such dividends shall have been set aside for payment). + +As used in this description of the Series D Preferred Stock, "voting preferred +stock" means any other class or series of preferred stock of the Company +ranking equally with the Series D Preferred Stock either as to dividends or +the distribution of assets upon liquidation, dissolution or winding up and +upon which like voting rights have been conferred and are exercisable. Whether +a plurality, majority or other portion of the shares of Series D Preferred +Stock and any other voting preferred stock have been voted in favor of any +matter shall be determined by reference to the liquidation amounts of the +shares voted. + +If and when dividends for at least four dividend periods, whether or not +consecutive, following a Nonpayment have been paid in full (or declared and a +sum sufficient for such payment shall have been set aside), the holders of the +Series D Preferred Stock shall be divested of the foregoing voting rights +(subject to revesting in the event of each subsequent Nonpayment) and, if such +voting rights for all other holders of voting preferred stock have terminated, +the term of office of each Preferred Stock Director so elected shall terminate +and the number of directors on the board of directors shall automatically +decrease by two. In determining whether dividends have been paid for four +dividend periods following a Nonpayment, the Company may take account of any +dividend the Company elects to pay for such a dividend period after the +regular dividend date for that period has passed. Any Preferred Stock Director +may be removed at any time without cause by the holders of record of a +majority of the outstanding shares of the Series D Preferred Stock when they +have the voting rights described above (voting together as a class with all +series of voting preferred stock then outstanding). So long as a Nonpayment +shall continue, any vacancy in the office of a Preferred Stock Director (other +than prior to the initial election after a Nonpayment) may be filled by the +written consent of the Preferred Stock Director remaining in office, or if +none remains in office, by a vote of the holders of record of a majority of +the outstanding shares of Series D Preferred Stock and all voting preferred +stock when they have the voting rights described above (voting together as a +class). The Preferred Stock Directors shall each be entitled to one vote per +director on any matter. + +So long as any shares of Series D Preferred Stock remain outstanding, the +Company will not, without the affirmative vote or consent of the holders of at +least two-thirds of the outstanding shares of the Series D Preferred Stock and +all other series of voting preferred stock entitled to vote thereon, voting +together as a single class, given in person or by proxy, either in writing or +at a meeting: + +amend or alter the provisions of the Company's restated certificate of +incorporation so as to authorize or create, or increase the authorized amount +of, any class or series of stock ranking senior to the Series D Preferred +Stock with respect to payment of dividends or the distribution of assets upon +liquidation, dissolution or winding up of the Company; + +amend, alter or repeal the provisions of the Company's restated certificate of +incorporation so as to materially and adversely affect the special rights, +preferences, privileges and voting powers of the Series D Preferred Stock, +taken as a whole; or + +consummate a binding share exchange or reclassification involving the Series D +Preferred Stock or a merger or consolidation of the Company with another +entity, unless in each case (i) the shares of Series D Preferred Stock remain +outstanding or, in the case of any such merger or consolidation with respect +to which the Company is not the surviving or resulting entity, are converted +into or exchanged for preference securities of the surviving or resulting +entity or its ultimate parent, and (ii) such shares remaining outstanding or +such preference securities, as the case may be, have such rights, preferences, +privileges and voting powers, taken as a whole, as are not materially less +favorable to the holders thereof than the rights, preferences, privileges and +voting powers of the Series D Preferred Stock, taken as a whole; + +provided, however , that any increase in the amount of the authorized or +issued Series D Preferred Stock or authorized preferred stock or the creation +and issuance, or an increase in the authorized or issued amount, of other +series of preferred stock ranking equally with and/or junior to the Series D +Preferred Stock with respect to the payment of dividends (whether such +dividends are cumulative or non-cumulative) and/or the distribution of assets +upon liquidation, dissolution or winding up of the Company will not be deemed +to adversely affect the rights, preferences, privileges or voting powers of +the Series D Preferred Stock. In addition, any conversion of the Series D +Preferred Stock upon the occurrence of certain regulatory events, as discussed +above under "- Regulatory Changes Relating to Capital Adequacy," will not be +deemed to adversely affect the rights, preferences, privileges or voting +powers of the Series D Preferred Stock. + +If an amendment, alteration, repeal, share exchange, reclassification, merger +or consolidation described above would adversely affect one or more but not +all series of voting preferred stock (including the Series D Preferred Stock +for this purpose), then only the series affected and entitled to vote shall +vote as a class in lieu of all such series of preferred stock. + +Without the consent of the holders of the Series D Preferred Stock, so long as +such action does not adversely affect the rights, preferences, privileges and +voting powers of the Series D Preferred Stock, the Company may amend, alter, +supplement or repeal any terms of the Series D Preferred Stock: + +to cure any ambiguity, or to cure, correct or supplement any provision +contained in the certificate of designation for the Series D Preferred Stock +that may be defective or inconsistent; or + +to make any provision with respect to matters or questions arising with +respect to the Series D Preferred Stock that is not inconsistent with the +provisions of the certificate of designations. + +The foregoing voting provisions will not apply if, at or prior to the time +when the act with respect to which such vote would otherwise be required shall +be effected, all outstanding shares of Series D Preferred Stock shall have +been redeemed or called for redemption upon proper notice and sufficient funds +shall have been set aside by the Company for the benefit of the holders of the +Series D Preferred Stock to effect such redemption. + +DESCRIPTION OF DEPOSITARY SHARES + +Please note that as used in this section, references to "holders" of +depositary shares mean those who own depositary shares registered in their own +names, on the books that the Company or the depositary maintain for this +purpose, and not indirect holders who own beneficial interests in depositary +shares registered in street name or issued in book-entry form through The +Depository Trust Company. + +General + +The Company has issued fractional interests in shares of preferred stock in +the form of depositary shares, each representing a 1/1,000th ownership +interest in a share of Series D Preferred Stock and evidenced by a depositary +receipt. The shares of Series D Preferred Stock represented by depositary +shares are deposited under a deposit agreement among the Company, the +depositary and the holders from time to time of the depositary receipts +evidencing the depositary shares. Subject to the terms of the deposit +agreement, each holder of a depositary share is entitled, through the +depositary, in proportion to the applicable fraction of a share of Series D +Preferred Stock represented by such depositary share, to all the rights and +preferences of the Series D Preferred Stock represented thereby (including +dividend, voting, redemption and liquidation rights). + +Dividends and Other Distributions + +The depositary will distribute any cash dividends or other cash distributions +received in respect of the deposited Series D Preferred Stock to the record +holders of depositary shares relating to the underlying Series D Preferred +Stock in proportion to the number of depositary shares held by the holders. +The depositary will distribute any property received by it other than cash to +the record holders of depositary shares entitled to those distributions, +unless it determines that the distribution cannot be made proportionally among +those holders or that it is not feasible to make a distribution. In that +event, the depositary may, with the Company's approval, sell the property and +distribute the net proceeds from the sale to the holders of the depositary +shares in proportion to the number of depositary shares they hold. + +Record dates for the payment of dividends and other matters relating to the +depositary shares will be the same as the corresponding record dates for the +Series D Preferred Stock. + +The amounts distributed to holders of depositary shares will be reduced by any +amounts required to be withheld by the depositary or by the Company on account +of taxes or other governmental charges. + +Redemption of Depositary Shares + +If the Company redeems the Series D Preferred Stock represented by the +depositary shares, the depositary shares will be redeemed from the proceeds +received by the depositary resulting from the redemption of the Series D +Preferred Stock held by the depositary. The redemption price per depositary +share will be equal to 1/1,000th of the redemption price per share payable +with respect to the Series D Preferred Stock (or $25 per depositary share). +Whenever the Company redeems shares of Series D Preferred Stock held by the +depositary, the depositary will redeem, as of the same redemption date, the +number of depositary shares representing shares of Series D Preferred Stock so +redeemed. + +In case of any redemption of less than all of the outstanding depositary +shares, the depositary shares to be redeemed will be selected by the +depositary pro rata or in such other manner determined by the depositary to +be equitable. In any such case, the Company will redeem depositary shares only +in increments of 1,000 shares and any multiple thereof. + +Voting the Series D Preferred Stock + +When the depositary receives notice of any meeting at which the holders of the +Series D Preferred Stock are entitled to vote, the depositary will mail the +information contained in the notice to the record holders of the depositary +shares relating to the Series D Preferred Stock. Each record holder of the +depositary shares on the record date, which will be the same date as the +record date for the Series D Preferred Stock, may instruct the depositary to +vote the amount of the Series D Preferred Stock represented by the holder's +depositary shares. To the extent possible, the depositary will vote the amount +of the Series D Preferred Stock represented by depositary shares in accordance +with the instructions it receives. The Company will agree to take all +reasonable actions that the depositary determines are necessary to enable the +depositary to vote as instructed. If the depositary does not receive specific +instructions from the holders of any depositary shares representing the Series +D Preferred Stock, it will vote all depositary shares of that series held by +it proportionately with instructions received. + +Listing + +The depositary shares are listed on the New York Stock Exchange under the +ticker symbol "GS PrD." + +Form of Preferred Stock and Depositary Shares + +The depositary shares are issued in book-entry form through The Depository +Trust Company. The Series D Preferred Stock is issued in registered form to +the depositary. + +DESCRIPTION OF THE DEPOSITARY SHARES, EACH REPRESENTING 1/1,000 TH INTEREST +IN A SHARE OF + +5.50% FIXED-TO-FLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES J + +DESCRIPTION OF SERIES J PREFERRED STOCK + +The depositary is the sole holder of the Company's 5.50% Fixed-To-Floating +Rate Non-Cumulative Preferred Stock, Series J (the "Series J Preferred +Stock"), and all references herein to the holders of the Series J Preferred +Stock shall mean the depositary. However, the holders of depositary shares are +entitled, through the depositary, to exercise the rights and preferences of +the holders of the Series J Preferred Stock, as described below under +"Description of Depositary Shares." + +The following is a brief description of the material terms of the Series C +Preferred Stock. The following summary of the terms and provisions of the +Series J Preferred Stock does not purport to be complete and is qualified in +its entirety by reference to the pertinent sections of the Company's restated +certificate of incorporation, which is an exhibit to the Annual Report of +which this exhibit is a part. Unless the context otherwise provides, all +references to the Company in this description refer only to The Goldman Sachs +Group, Inc. and does not include its consolidated subsidiaries. + +General + +The Company's authorized capital stock includes 150,000,000 shares of +preferred stock, par value $0.01 per share. The Series J Preferred Stock is +part of a single series of the Company's authorized preferred stock. The +Company may from time to time, without notice to or the consent of holders of +the Series J Preferred Stock, issue additional shares of the Series J +Preferred Stock, up to the maximum number of authorized but unissued shares. + +Shares of the Series J Preferred Stock rank senior to the Company's common +stock, equally with each other series of the Company's preferred stock +outstanding as of December 31, 2020 and at least equally with each other +series of preferred stock that the Company may issue (except for any senior +series that may be issued with the requisite consent of the holders of Series +J Preferred Stock), with respect to the payment of dividends and distributions +of assets upon liquidation, dissolution or winding up. In addition, the +Company will generally be able to pay dividends and distributions upon +liquidation, dissolution or winding up only out of lawfully available funds +for such payment ( i.e. , after taking account of all indebtedness and other +non-equity claims). The Series J Preferred Stock is fully paid and +nonassessable, which means that its holders have paid their purchase price in +full and that the Company may not ask them to surrender additional funds. +Holders of Series J Preferred Stock do not have preemptive or subscription +rights to acquire more stock of the Company. + +The Series J Preferred Stock is not convertible into, or exchangeable for, +shares of any other class or series of stock or other securities of the +Company. The Series J Preferred Stock has no stated maturity and is not +subject to any sinking fund or other obligation of the Company to redeem or +repurchase the Series J Preferred Stock. The Series J Preferred Stock +represents non-withdrawable capital, is not a bank deposit and is not insured +by the FDIC or any other governmental agency, nor is it the obligation of, or +guaranteed by, a bank. + +Dividends + +Dividends on shares of the Series J Preferred Stock are not mandatory. Holders +of Series J Preferred Stock are entitled to receive, when, as and if declared +by the Company's board of directors (or a duly authorized committee of the +board), out of funds legally available for the payment of dividends, non- +cumulative cash dividends from the original issue date, quarterly in arrears +on the 10th day of February, May, August and November of each year (each, a +"dividend payment date"). These dividends accrue, with respect to each +dividend period, on the liquidation preference amount of $25,000 per share +(equivalent to $25 per depositary share) at a rate per annum equal to 5.50% +from the original issue date to, but excluding, May 10, 2023, and, thereafter +at a floating rate per annum equal to LIBOR plus 3.64% on the related LIBOR +determination date. In the event that the Company issues additional shares of +Series J Preferred Stock after the original issue date, dividends on such +shares may accrue from the original issue date or any other date the Company +specifies at the time such additional shares are issued. + +Dividends will be payable to holders of record of Series J Preferred Stock as +they appear on the Company's books on the applicable record date, which shall +be the 15th calendar day before that dividend payment date or such other +record date fixed by the Company's board of directors (or a duly authorized +committee of the board) that is not more than 60 nor less than 10 days prior +to such dividend payment date (each, a "dividend record date"). These dividend +record dates will apply regardless of whether a particular dividend record +date is a business day. The corresponding record dates for the depositary +shares are the same as the record dates for the Series J Preferred Stock. + +A dividend period is the period from and including a dividend payment date to +but excluding the next dividend payment date. Dividends payable on the Series +J Preferred Stock for any period beginning prior to May 10, 2023 are +calculated on the basis of a 360-day year consisting of twelve 30-day months, +and dividends for periods beginning on or after such date will be calculated +on the basis of a 360-day year and the actual number of days elapsed in the +dividend period. If any date on which dividends would otherwise be payable is +not a business day, then the dividend payment date will be the next succeeding +business day unless, after May 10, 2023, such day falls in the next calendar +month, in which case the dividend payment date will be the immediately +preceding day that is a business day. "Business day" means a day that is a +Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which +banking institutions in New York City generally are authorized or obligated by +law or executive order to close. + +For any dividend period commencing on or after May 10, 2023, LIBOR will be +determined by the calculation agent on the second London business day +immediately preceding the first day of such dividend period in the following +manner: + +LIBOR will be the offered rate per annum for three-month deposits in U.S. +dollars, beginning on the first day of such period, as that rate appears on +Reuters screen LIBOR01 (or any successor or replacement page) as of +approximately 11:00 A.M., London time, on the second London business day +immediately preceding the first day of such dividend period. + +If the rate described above does not so appear on the Reuters screen LIBOR01 +(or any successor or replacement page), then LIBOR will be determined on the +basis of the rates, at approximately 11:00 A.M., London time, on the second +London business day immediately preceding the first day of such dividend +period, at which deposits of the following kind are offered to prime banks in +the London interbank market by four major banks in that market selected by the +calculation agent: three-month deposits in U.S. dollars, beginning on the +first day of such dividend period, and in a Representative Amount. The +calculation agent will request the principal London office of each of these +banks to provide a quotation of its rate. If at least two quotations are +provided, LIBOR for the second London business day immediately preceding the +first day of such dividend period will be the arithmetic mean of the +quotations. + +If fewer than two of the requested quotations described above are provided, +LIBOR for the second London business day immediately preceding the first day +of such dividend period will be the arithmetic mean of the rates for loans of +the following kind to leading European banks quoted, at approximately 11:00 +A.M., New York City time, on the second London business day immediately +preceding the first day of such dividend period, by three major banks in New +York City selected by the calculation agent: three-month loans of U.S. +dollars, beginning on the first day of such dividend period, and in a +Representative Amount. + +If no quotation is provided as described above, then the calculation agent, +after consulting such sources as it deems comparable to any of the foregoing +quotations or display page, or any such source as it deems reasonable from +which to estimate LIBOR or any of the foregoing lending rates, shall determine +LIBOR for the second London business day immediately preceding the first day +of such dividend period in its sole discretion. + +The calculation agent's determination of any dividend rate, and its +calculation of the amount of dividends for any dividend period, will be on +file at the Company's principal offices, will be made available to any +stockholder upon request and will be final and binding in the absence of +manifest error. + +This subsection uses several terms that have special meanings relevant to +calculating LIBOR. Those terms have the following meanings: + +The term "Representative Amount" means an amount that, in the calculation +agent's judgment, is representative of a single transaction in the relevant +market at the relevant time. + +The term "London business day" means a day that is a Monday, Tuesday, +Wednesday, Thursday or Friday and is a day on which dealings in U.S. dollars +are transacted in the London interbank market. + +The term "Reuters screen" means the display on the Reuters 3000 Xtra service, +or any successor or replacement service. + +Dividends on shares of Series J Preferred Stock are not cumulative. +Accordingly, if the board of directors of the Company (or a duly authorized +committee of the board) does not declare a dividend on the Series J Preferred +Stock payable in respect of any dividend period before the related dividend +payment date, such dividend will not accrue and the Company will have no +obligation to pay a dividend for that dividend period on the dividend payment +date or at any future time, whether or not dividends on the Series J Preferred +Stock are declared for any future dividend period. + +So long as any share of Series J Preferred Stock remains outstanding, no +dividend shall be paid or declared on the Company's common stock or any other +shares of the Company's junior stock (as defined below) (other than a dividend +payable solely in junior stock), and no common stock or other junior stock +shall be purchased, redeemed or otherwise acquired for consideration by the +Company, directly or indirectly (other than as a result of a reclassification +of junior stock for or into other junior stock, or the exchange or conversion +of one share of junior stock for or into another share of junior stock and +other than through the use of the proceeds of a substantially contemporaneous +sale of junior stock), during a dividend period, unless the full dividends for +the latest completed dividend period on all outstanding shares of Series J +Preferred Stock have been declared and paid (or declared and a sum sufficient +for the payment thereof has been set aside). However, the foregoing provision +shall not restrict the ability of Goldman Sachs & Co. LLC, or any of the +Company's other affiliates, to engage in any market-making transactions in the +Company's junior stock in the ordinary course of business. + +As used in this description of the Series J Preferred Stock, "junior stock" +means any class or series of stock of the Company that ranks junior to the +Series J Preferred Stock either as to the payment of dividends or as to the +distribution of assets upon any liquidation, dissolution or winding up of the +Company's junior stock includes the Company's common stock. + +When dividends are not paid (or duly provided for) on any dividend payment +date (or, in the case of parity stock, as defined below, having dividend +payment dates different from the dividend payment dates pertaining to the +Series J Preferred Stock, on a dividend payment date falling within the +related dividend period for the Series J Preferred Stock) in full on the +Series J Preferred Stock and any shares of parity stock, all dividends +declared on the Series J Preferred Stock and all such equally ranking +securities payable on such dividend payment date (or, in the case of parity +stock having dividend payment dates different from the dividend payment dates +pertaining to the Series J Preferred Stock, on a dividend payment date falling +within the related dividend period for the Series J Preferred Stock) shall be +declared pro rata so that the respective amounts of such dividends shall +bear the same ratio to each other as all accrued but unpaid dividends per +share on the Series J Preferred Stock and all parity stock payable on such +dividend payment date (or, in the case of parity stock having dividend payment +dates different from the dividend payment dates pertaining to the Series J +Preferred Stock, on a dividend payment date falling within the related +dividend period for the Series J Preferred Stock) bear to each other. + +As used in this description of the Series J Preferred Stock, "parity stock" +means any other class or series of stock of the Company that ranks equally +with the Series J Preferred Stock in the payment of dividends and in the +distribution of assets on any liquidation, dissolution or winding up of the +Company. + +Subject to the foregoing, such dividends (payable in cash, stock or otherwise) +as may be determined by the Company's board of directors (or a duly authorized +committee of the board) may be declared and paid on the Company's common stock +and any other stock ranking equally with or junior to the Series J Preferred +Stock from time to time out of any funds legally available for such payment, +and the shares of the Series J Preferred Stock shall not be entitled to +participate in any such dividend. + +Dividends on the Series J Preferred Stock will not be declared, paid or set +aside for payment if the Company fails to comply, or if and to the extent such +act would cause the Company to fail to comply, with applicable laws and +regulations. The restated certificate of incorporation provides that dividends +on the Series J Preferred Stock may not be declared or set aside for payment +if and to the extent such dividends would cause the Company to fail to comply +with applicable capital adequacy standards. + +Liquidation Rights + +Upon any voluntary or involuntary liquidation, dissolution or winding up of +the Company, holders of Series J Preferred Stock are entitled to receive out +of assets of the Company available for distribution to stockholders, after +satisfaction of liabilities to creditors, if any, before any distribution of +assets is made to holders of common stock or of any of the Company's other +shares of stock ranking junior as to such a distribution to the shares of +Series J Preferred Stock, a liquidating distribution in the amount of $25,000 +per share (equivalent to $25 per depositary share) plus declared and unpaid +dividends, without accumulation of any undeclared dividends. Holders of Series +J Preferred Stock will not be entitled to any other amounts from the Company +after they have received their full liquidation preference. + +The Series J Preferred Stock may be fully subordinate to interests held by the +U.S. government in the event of a receivership, insolvency, liquidation, or +similar proceeding, including a proceeding under the "orderly liquidation +authority" provisions of the Dodd-Frank Wall Street Reform and Consumer +Protection Act. + +In any such distribution, if the assets of the Company are not sufficient to +pay the liquidation preferences in full to all holders of Series J Preferred +Stock and all holders of any other shares of the Company's stock ranking +equally as to such distribution with the Series J Preferred Stock, the amounts +paid to the holders of Series J Preferred Stock and to the holders of all such +other stock will be paid pro rata in accordance with the respective +aggregate liquidation preferences of those holders. In any such distribution, +the "liquidation preference" of any holder of preferred stock means the amount +payable to such holder in such distribution, including any declared but unpaid +dividends (and any unpaid, accrued cumulative dividends in the case of any +holder of stock on which dividends accrue on a cumulative basis). If the +liquidation preference has been paid in full to all holders of the Company's +Series J Preferred Stock and any other shares of the Company's stock ranking +equally as to the liquidation distribution, the holders of the Company's other +stock shall be entitled to receive all remaining assets of the Company +according to their respective rights and preferences. + +For purposes of this description of the Series J Preferred Stock, the merger +or consolidation of the Company with any other entity, including a merger or +consolidation in which the holders of Series J Preferred Stock receive cash, +securities or property for their shares, or the sale, lease or exchange of all +or substantially all of the assets of the Company for cash, securities or +other property shall not constitute a liquidation, dissolution or winding up +of the Company. + +Redemption + +The Series J Preferred Stock is perpetual and has no maturity date, and is not +subject to any mandatory redemption, sinking fund or other similar provisions. +The Company may, at its option, redeem the Series J Preferred Stock (i) in +whole or in part, from time to time, on any date on or after May 10, 2023, or +(ii) in whole but not in part at any time within 90 days following a +Regulatory Capital Treatment Event, in each case, upon not less than 30 nor +more than 60 days' notice, at a redemption price equal to $25,000 per share +(equivalent to $25 per depositary share), plus accrued and unpaid dividends +for the then-current dividend period to but excluding the redemption date, +whether or not declared. Holders of Series J Preferred Stock have no right to +require the redemption or repurchase of the Series J Preferred Stock. + +The Company is a bank holding company and a financial holding company +regulated by the Federal Reserve Board. The Company treats the Series J +Preferred Stock as "tier 1 capital" (or its equivalent) for purposes of the +capital adequacy guidelines of the Federal Reserve Board (or, as and if +applicable, the capital adequacy guidelines or regulations of any successor +appropriate federal banking agency). + +A "Regulatory Capital Treatment Event" means the good faith determination by +the Company that, as a result of (i) any amendment to, or change in, the laws +or regulations of the United States or any political subdivision of or in the +United States that is enacted or becomes effective after the initial issuance +of any share of the Series J Preferred Stock, (ii) any proposed change in +those laws or regulations that is announced or becomes effective after the +initial issuance of any share of the Series J Preferred Stock, or (iii) any +official administrative decision or judicial decision or administrative action +or other official pronouncement interpreting or applying those laws or +regulations that is announced after the initial issuance of any share of the +Series J Preferred Stock, there is more than an insubstantial risk that the +Company will not be entitled to treat the full liquidation preference amount +of $25,000 per share of Series J Preferred Stock then outstanding as "tier 1 +capital" (or its equivalent) for purposes of the capital adequacy guidelines +of the Federal Reserve Board (or, as and if applicable, the capital adequacy +guidelines or regulations of any successor appropriate federal banking agency) +as then in effect and applicable, for so long as any share of Series J +Preferred Stock is outstanding. "Appropriate federal banking agency" means the +"appropriate federal banking agency" with respect to the Company as that term +is defined in Section 3(q) of the Federal Deposit Insurance Act or any +successor provision. + +The Company will not exercise its option to redeem any shares of preferred +stock without obtaining the approval of the Federal Reserve Board (or any +successor appropriate federal banking agency) if then required by applicable +law. Unless the Federal Reserve Board (or any successor appropriate federal +banking agency) authorizes the Company to do otherwise in writing, the Company +will redeem the Series J Preferred Stock only if it is replaced with other +tier 1 capital that is not a restricted core capital element ( e.g. , common +stock or another series of noncumulative perpetual preferred stock). + +If shares of Series J Preferred Stock are to be redeemed, the notice of +redemption shall be given by first class mail to the holders of record of +Series J Preferred Stock to be redeemed, mailed not less than 30 days nor more +than 60 days prior to the date fixed for redemption thereof ( provided that, +if the depositary shares representing the Series J Preferred Stock are held in +book-entry form through The Depository Trust Company, or "DTC," the Company +may give such notice in any manner permitted by the DTC). Each notice of +redemption will include a statement setting forth: (i) the redemption date, +(ii) the number of shares of Series J Preferred Stock to be redeemed and, if +less than all the shares held by such holder are to be redeemed, the number of +such shares to be redeemed from such holder, (iii) the redemption price and +(iv) the place or places where holders may surrender certificates evidencing +shares of Series J Preferred Stock for payment of the redemption price. If +notice of redemption of any shares of Series J Preferred Stock has been given +and if the funds necessary for such redemption have been set aside by the +Company for the benefit of the holders of any shares of Series J Preferred +Stock so called for redemption, then, from and after the redemption date, +dividends will cease to accrue on such shares of Series J Preferred Stock, +such shares of Series J Preferred Stock shall no longer be deemed outstanding +and all rights of the holders of such shares will terminate, except the right +to receive the redemption price. + +In case of any redemption of only part of the shares of the Series J Preferred +Stock at the time outstanding, the shares to be redeemed shall be selected +either pro rata or in such other manner as the Company may determine to be +fair and equitable. + +See "Description of Depositary Shares" below for information about redemption +of the depositary shares relating to the Company's Series J Preferred Stock. + +Voting Rights + +Except as provided below, the holders of Series J Preferred Stock have no +voting rights. + +Whenever dividends on any shares of Series J Preferred Stock shall have not +been declared and paid for the equivalent of six or more dividend payments, +whether or not for consecutive dividend periods (as used in this section, a +"Nonpayment"), the holders of such shares, voting together as a class with +holders of any and all other series of voting preferred stock (as defined +below) then outstanding, will be entitled to vote for the election of a total +of two additional members of the Company's board of directors (as used in this +section, the "Preferred Stock Directors"), provided that the Company's board +of directors shall at no time include more than two Preferred Stock Directors. +In that event, the number of directors on the Company's board of directors +shall automatically increase by two, and the new directors shall be elected at +a special meeting called at the request of the holders of record of at least +20% of the Series J Preferred Stock or of any other series of voting preferred +stock (unless such request is received less than 90 days before the date fixed +for the next annual or special meeting of the stockholders, in which event +such election shall be held at such next annual or special meeting of +stockholders), and at each subsequent annual meeting. + +These voting rights will continue until dividends on the shares of Series J +Preferred Stock and any such series of voting preferred stock for four +consecutive dividend periods following the Nonpayment shall have been fully +paid (or declared and a sum sufficient for the payment of such dividends shall +have been set aside for payment). + +As used in this description of the Series J Preferred Stock, "voting preferred +stock" means any other class or series of preferred stock of the Company +ranking equally with the Series J Preferred Stock either as to dividends or +the distribution of assets upon liquidation, dissolution or winding up and +upon which like voting rights have been conferred and are exercisable. Whether +a plurality, majority or other portion of the shares of Series J Preferred +Stock and any other voting preferred stock have been voted in favor of any +matter shall be determined by reference to the liquidation amounts of the +shares voted. + +If and when dividends for four consecutive dividend periods following a +Nonpayment have been paid in full (or declared and a sum sufficient for such +payment shall have been set aside), the holders of Series J Preferred Stock +shall be divested of the foregoing voting rights (subject to revesting in the +event of each subsequent Nonpayment) and, if such voting rights for all other +holders of voting preferred stock have terminated, the term of office of each +Preferred Stock Director so elected shall terminate and the number of +directors on the board of directors shall automatically decrease by two. Any +Preferred Stock Director may be removed at any time without cause by the +holders of record of a majority of the outstanding shares of Series J +Preferred Stock when they have the voting rights described above (voting +together as a class with all series of voting preferred stock then +outstanding). So long as a Nonpayment shall continue, any vacancy in the +office of a Preferred Stock Director (other than prior to the initial election +after a Nonpayment) may be filled by the written consent of the Preferred +Stock Director remaining in office, or if none remains in office, by a vote of +the holders of record of a majority of the outstanding shares of Series J +Preferred Stock and all voting preferred stock when they have the voting +rights described above (voting together as a class). The Preferred Stock +Directors shall each be entitled to one vote per director on any matter. + +So long as any shares of Series J Preferred Stock remain outstanding, the +Company will not, without the affirmative vote or consent of the holders of at +least two-thirds of the outstanding shares of the Series J Preferred Stock and +all other series of voting preferred stock entitled to vote thereon, voting +together as a single class, given in person or by proxy, either in writing or +at a meeting: + +amend or alter the provisions of the Company's restated certificate of +incorporation so as to authorize or create, or increase the authorized amount +of, any class or series of stock ranking senior to the Series J Preferred +Stock with respect to payment of dividends or the distribution of assets upon +liquidation, dissolution or winding up of the Company; + +amend, alter or repeal the provisions of the Company's restated certificate of +incorporation so as to materially and adversely affect the special rights, +preferences, privileges and voting powers of the Series J Preferred Stock, +taken as a whole; or + +consummate a binding share exchange or reclassification involving the Series J +Preferred Stock or a merger or consolidation of the Company with another +entity, unless in each case (i) the shares of Series J Preferred Stock remain +outstanding or, in the case of any such merger or consolidation with respect +to which the Company is not the surviving or resulting entity, are converted +into or exchanged for preference securities of the surviving or resulting +entity or its ultimate parent, and (ii) such shares remaining outstanding or +such preference securities, as the case may be, have such rights, preferences, +privileges and voting powers, taken as a whole, as are not materially less +favorable to the holders thereof than the rights, preferences, privileges and +voting powers of the Series J Preferred Stock, taken as a whole; + +provided, however , that any increase in the amount of the authorized or +issued Series J Preferred Stock or authorized preferred stock or the creation +and issuance, or an increase in the authorized or issued amount, of other +series of preferred stock ranking equally with and/or junior to the Series J +Preferred Stock with respect to the payment of dividends (whether such +dividends are cumulative or non-cumulative) and/or the distribution of assets +upon liquidation, dissolution or winding up of the Company will not be deemed +to adversely affect the rights, preferences, privileges or voting powers of +the Series J Preferred Stock. + +If an amendment, alteration, repeal, share exchange, reclassification, merger +or consolidation described above would adversely affect one or more but not +all series of voting preferred stock (including the Series J Preferred Stock +for this purpose), then only the series affected and entitled to vote shall +vote as a class in lieu of all such series of preferred stock. + +Without the consent of the holders of Series J Preferred Stock, so long as +such action does not adversely affect the rights, preferences, privileges and +voting powers of the Series J Preferred Stock, the Company may amend, alter, +supplement or repeal any terms of the Series J Preferred Stock: + +to cure any ambiguity, or to cure, correct or supplement any provision +contained in the certificate of designation for the Series J Preferred Stock +that may be defective or inconsistent; or + +to make any provision with respect to matters or questions arising with +respect to the Series J Preferred Stock that is not inconsistent with the +provisions of the certificate of designations. + +The foregoing voting provisions will not apply if, at or prior to the time +when the act with respect to which such vote would otherwise be required shall +be effected, all outstanding shares of Series J Preferred Stock shall have +been redeemed or called for redemption upon proper notice and sufficient funds +shall have been set aside by the Company for the benefit of the holders of +Series J Preferred Stock to effect such redemption. + +DESCRIPTION OF DEPOSITARY SHARES + +Please note that as used in this section, references to "holders" of +depositary shares mean those who own depositary shares registered in their own +names, on the books that the Company or the depositary maintain for this +purpose, and not indirect holders who own beneficial interests in depositary +shares registered in street name or issued in book-entry form through The +Depository Trust Company. + +General + +The Company has issued fractional interests in shares of preferred stock in +the form of depositary shares, each representing a 1/1,000th ownership +interest in a share of Series J Preferred Stock and evidenced by a depositary +receipt. The shares of Series J Preferred Stock represented by depositary +shares are deposited under a deposit agreement among the Company, the +depositary and the holders from time to time of the depositary receipts +evidencing the depositary shares. Subject to the terms of the deposit +agreement, each holder of a depositary share is entitled, through the +depositary, in proportion to the applicable fraction of a share of Series J +Preferred Stock represented by such depositary share, to all the rights and +preferences of the Series J Preferred Stock represented thereby (including +dividend, voting, redemption and liquidation rights). + +Dividends and Other Distributions + +The depositary will distribute any cash dividends or other cash distributions +received in respect of the deposited Series J Preferred Stock to the record +holders of depositary shares relating to the underlying Series J Preferred +Stock in proportion to the number of depositary shares held by the holders. +The depositary will distribute any property received by it other than cash to +the record holders of depositary shares entitled to those distributions, +unless it determines that the distribution cannot be made proportionally among +those holders or that it is not feasible to make a distribution. In that +event, the depositary may, with the Company's approval, sell the property and +distribute the net proceeds from the sale to the holders of the depositary +shares in proportion to the number of depositary shares they hold. + +Record dates for the payment of dividends and other matters relating to the +depositary shares will be the same as the corresponding record dates for the +Series J Preferred Stock. + +The amounts distributed to holders of depositary shares will be reduced by any +amounts required to be withheld by the depositary or by the Company on account +of taxes or other governmental charges. + +Redemption of Depositary Shares + +If the Company redeems the Series J Preferred Stock represented by the +depositary shares, the depositary shares will be redeemed from the proceeds +received by the depositary resulting from the redemption of the Series J +Preferred Stock held by the depositary. The redemption price per depositary +share will be equal to 1/1,000th of the redemption price per share payable +with respect to the Series J Preferred Stock (or $25 per depositary share). +Whenever the Company redeems shares of Series J Preferred Stock held by the +depositary, the depositary will redeem, as of the same redemption date, the +number of depositary shares representing shares of Series J Preferred Stock so +redeemed. + +In case of any redemption of less than all of the outstanding depositary +shares, the depositary shares to be redeemed will be selected by the +depositary pro rata or in such other manner determined by the depositary to +be equitable. In any such case, the Company will redeem depositary shares only +in increments of 1,000 shares and any multiple thereof. + +Voting the Series J Preferred Stock + +When the depositary receives notice of any meeting at which the holders of +Series J Preferred Stock are entitled to vote, the depositary will mail the +information contained in the notice to the record holders of the depositary +shares relating to the Series J Preferred Stock. Each record holder of the +depositary shares on the record date, which will be the same date as the +record date for the Series J Preferred Stock, may instruct the depositary to +vote the amount of Series J Preferred Stock represented by the holder's +depositary shares. To the extent possible, the depositary will vote the amount +of Series J Preferred Stock represented by depositary shares in accordance +with the instructions it receives. The Company will agree to take all +reasonable actions that the depositary determines are necessary to enable the +depositary to vote as instructed. If the depositary does not receive specific +instructions from the holders of any depositary shares representing the Series +J Preferred Stock, it will vote all depositary shares of that series held by +it proportionately with instructions received. + +Listing + +The depositary shares are listed on the New York Stock Exchange under the +ticker symbol "GS PrJ." + +Form of Preferred Stock and Depositary Shares + +The depositary shares are issued in book-entry form through The Depository +Trust Company. The Series J Preferred Stock is issued in registered form to +the depositary. + +DESCRIPTION OF THE DEPOSITARY SHARES, EACH REPRESENTING 1/1,000 TH INTEREST +IN A SHARE OF 6.375% FIXED-TO-FLOATING RATE NON-CUMULATIVE PREFERRED STOCK, +SERIES K + +DESCRIPTION OF SERIES K PREFERRED STOCK + +The depositary is the sole holder of the Company's 6.375% Fixed-to-Floating +Rate Non-Cumulative Preferred Stock, Series K (the "Series K Preferred +Stock"), and all references herein to the holders of the Series K Preferred +Stock shall mean the depositary. However, the holders of depositary shares are +entitled, through the depositary, to exercise the rights and preferences of +the holders of Series K Preferred Stock, as described below under "Description +of Depositary Shares." + +The following is a brief description of the material terms of the Series K +Preferred Stock. The following summary of the terms and provisions of the +Series K Preferred Stock does not purport to be complete and is qualified in +its entirety by reference to the pertinent sections of the Company's restated +certificate of incorporation, which is an exhibit to the Annual Report of +which this exhibit is a part. Unless the context otherwise provides, all +references to the Company in this description refer only to The Goldman Sachs +Group, Inc. and does not include its consolidated subsidiaries. + +General + +The Company's authorized capital stock includes 150,000,000 shares of +preferred stock, par value $0.01 per share. The Series K Preferred Stock is +part of a single series of the Company's authorized preferred stock. The +Company may from time to time, without notice to or the consent of holders of +the Series K Preferred Stock, issue additional shares of the Series K +Preferred Stock, up to the maximum number of authorized but unissued shares. + +Shares of the Series K Preferred Stock rank senior to the Company's common +stock, equally with each other series of the Company's preferred stock +outstanding as of December 31, 2020 and at least equally with each other +series of preferred stock that the Company may issue (except for any senior +series that may be issued with the requisite consent of the holders of Series +K Preferred Stock), with respect to the payment of dividends and distributions +of assets upon liquidation, dissolution or winding up. In addition, the +Company will generally be able to pay dividends and distributions upon +liquidation, dissolution or winding up only out of lawfully available funds +for such payment ( i.e. , after taking account of all indebtedness and other +non-equity claims). The Series K Preferred Stock is fully paid and +nonassessable, which means that its holders have paid their purchase price in +full and that the Company may not ask them to surrender additional funds. +Holders of Series K Preferred Stock do not have preemptive or subscription +rights to acquire more stock of the Company. + +The Series K Preferred Stock is not convertible into, or exchangeable for, +shares of any other class or series of stock or other securities of the +Company. The Series K Preferred Stock has no stated maturity and is not +subject to any sinking fund or other obligation of the Company to redeem or +repurchase the Series K Preferred Stock. The Series K Preferred Stock +represents non-withdrawable capital, is not a bank deposit and is not insured +by the FDIC or any other governmental agency, nor is it the obligation of, or +guaranteed by, a bank. + +Dividends + +Dividends on shares of the Series K Preferred Stock are not mandatory. Holders +of Series K Preferred Stock are entitled to receive, when, as and if declared +by the Company's board of directors (or a duly authorized committee of the +board), out of funds legally available for the payment of dividends, non- +cumulative cash dividends from the original issue date, quarterly in arrears +on the 10th day of February, May, August and November of each year (each, a +"dividend payment date"). These dividends accrue, with respect to each +dividend period, on the liquidation preference amount of $25,000 per share +(equivalent to $25 per depositary share) at a rate per annum equal to 6.375% +from the original issue date to, but excluding, May 10, 2024 (or, if not a +business day, the next succeeding business day), and, thereafter at a floating +rate per annum equal to LIBOR plus 3.55% on the related LIBOR determination +date. In the event that the Company issues additional shares of Series K +Preferred Stock after the original issue date, dividends on such shares may +accrue from the original issue date or any other date the Company specifies at +the time such additional shares are issued. + +Dividends will be payable to holders of record of Series K Preferred Stock as +they appear on the Company's books on the applicable record date, which shall +be the 15th calendar day before that dividend payment date or such other +record date fixed by the Company's board of directors (or a duly authorized +committee of the board) that is not more than 60 nor less than 10 days prior +to such dividend payment date (each, a "dividend record date"). These dividend +record dates will apply regardless of whether a particular dividend record +date is a business day. The corresponding record dates for the depositary +shares are the same as the record dates for the Series K Preferred Stock. + +A dividend period is the period from and including a dividend payment date to +but excluding the next dividend payment date. Dividends payable on the Series +K Preferred Stock for any period beginning prior to May 10, 2024 will be +calculated on the basis of a 360-day year consisting of twelve 30-day months, +and dividends for periods beginning on or after such date will be calculated +on the basis of a 360-day year and the actual number of days elapsed in the +dividend period. If any date on which dividends would otherwise be payable is +not a business day, then the dividend payment date will be the next succeeding +business day unless, after May 10, 2024, such day falls in the next calendar +month, in which case the dividend payment date will be the immediately +preceding day that is a business day. "Business day" means a day that is a +Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on which +banking institutions in New York City generally are authorized or obligated by +law or executive order to close. + +For any dividend period commencing on or after May 10, 2024, LIBOR will be +determined by the calculation agent on the second London business day +immediately preceding the first day of such dividend period in the following +manner: + +LIBOR will be the offered rate per annum for three-month deposits in U.S. +dollars, beginning on the first day of such period, as that rate appears on +Reuters screen LIBOR01 (or any successor or replacement page) as of +approximately 11:00 A.M., London time, on the second London business day +immediately preceding the first day of such dividend period. + +If the rate described above does not so appear on the Reuters screen LIBOR01 +(or any successor or replacement page), then LIBOR will be determined on the +basis of the rates, at approximately 11:00 A.M., London time, on the second +London business day immediately preceding the first day of such dividend +period, at which deposits of the following kind are offered to prime banks in +the London interbank market by four major banks in that market selected by the +calculation agent: three-month deposits in U.S. dollars, beginning on the +first day of such dividend period, and in a Representative Amount. The +calculation agent will request the principal London office of each of these +banks to provide a quotation of its rate. If at least two quotations are +provided, LIBOR for the second London business day immediately preceding the +first day of such dividend period will be the arithmetic mean of the +quotations. + +If fewer than two of the requested quotations described above are provided, +LIBOR for the second London business day immediately preceding the first day +of such dividend period will be the arithmetic mean of the rates for loans of +the following kind to leading European banks quoted, at approximately 11:00 +A.M., New York City time, on the second London business day immediately +preceding the first day of such dividend period, by three major banks in New +York City selected by the calculation agent: three-month loans of U.S. +dollars, beginning on the first day of such dividend period, and in a +Representative Amount. + +If no quotation is provided as described above, then the calculation agent, +after consulting such sources as it deems comparable to any of the foregoing +quotations or display page, or any such source as it deems reasonable from +which to estimate LIBOR or any of the foregoing lending rates, shall determine +LIBOR for the second London business day immediately preceding the first day +of such dividend period in its sole discretion. + +The calculation agent's determination of any dividend rate, and its +calculation of the amount of dividends for any dividend period, will be on +file at the Company's principal offices, will be made available to any +stockholder upon request and will be final and binding in the absence of +manifest error. + +This subsection uses several terms that have special meanings relevant to +calculating LIBOR. Those terms have the following meanings: + +The term "Representative Amount" means an amount that, in the calculation +agent's judgment, is representative of a single transaction in the relevant +market at the relevant time. + +The term "London business day" means a day that is a Monday, Tuesday, +Wednesday, Thursday or Friday and is a day on which dealings in U.S. dollars +are transacted in the London interbank market. + +The term "Reuters screen" means the display on the Reuters 3000 Xtra service, +or any successor or replacement service. + +Dividends on shares of Series K Preferred Stock are not cumulative. +Accordingly, if the board of directors of the Company (or a duly authorized +committee of the board) does not declare a dividend on the Series K Preferred +Stock payable in respect of any dividend period before the related dividend +payment date, such dividend will not accrue and the Company will have no +obligation to pay a dividend for that dividend period on the dividend payment +date or at any future time, whether or not dividends on the Series K Preferred +Stock are declared for any future dividend period. + +So long as any share of Series K Preferred Stock remains outstanding, no +dividend shall be paid or declared on the Company's common stock or any other +shares of the Company's junior stock (as defined below) (other than a dividend +payable solely in junior stock), and no common stock or other junior stock +shall be purchased, redeemed or otherwise acquired for consideration by the +Company, directly or indirectly (other than as a result of a reclassification +of junior stock for or into other junior stock, or the exchange or conversion +of one share of junior stock for or into another share of junior stock and +other than through the use of the proceeds of a substantially contemporaneous +sale of junior stock), during a dividend period, unless the full dividends for +the latest completed dividend period on all outstanding shares of Series K +Preferred Stock have been declared and paid (or declared and a sum sufficient +for the payment thereof has been set aside). However, the foregoing provision +shall not restrict the ability of Goldman Sachs & Co. LLC, or any of the +Company's other affiliates, to engage in any market-making transactions in the +Company's junior stock in the ordinary course of business. + +As used in this description of the Series K Preferred Stock, "junior stock" +means any class or series of stock of the Company that ranks junior to the +Series K Preferred Stock either as to the payment of dividends or as to the +distribution of assets upon any liquidation, dissolution or winding up of the +Company. Junior stock includes the Company's common stock. + +When dividends are not paid (or duly provided for) on any dividend payment +date (or, in the case of parity stock, as defined below, having dividend +payment dates different from the dividend payment dates pertaining to the +Series K Preferred Stock, on a dividend payment date falling within the +related dividend period for the Series K Preferred Stock) in full on the +Series K Preferred Stock and any shares of parity stock, all dividends +declared on the Series K Preferred Stock and all such equally ranking +securities payable on such dividend payment date (or, in the case of parity +stock having dividend payment dates different from the dividend payment dates +pertaining to the Series K Preferred Stock, on a dividend payment date falling +within the related dividend period for the Series K Preferred Stock) shall be +declared pro rata so that the respective amounts of such dividends shall +bear the same ratio to each other as all accrued but unpaid dividends per +share on the Series K Preferred Stock and all parity stock payable on such +dividend payment date (or, in the case of parity stock having dividend payment +dates different from the dividend payment dates pertaining to the Series K +Preferred Stock, on a dividend payment date falling within the related +dividend period for the Series K Preferred Stock) bear to each other. + +As used in this description of the Series K Preferred Stock, "parity stock" +means any other class or series of stock of the Company that ranks equally +with the Series K Preferred Stock in the payment of dividends and in the +distribution of assets on any liquidation, dissolution or winding up of the +Company. + +Subject to the foregoing, such dividends (payable in cash, stock or otherwise) +as may be determined by the Company's board of directors (or a duly authorized +committee of the board) may be declared and paid on the Company's common stock +and any other stock ranking equally with or junior to the Series K Preferred +Stock from time to time out of any funds legally available for such payment, +and the shares of the Series K Preferred Stock shall not be entitled to +participate in any such dividend. + +Dividends on the Series K Preferred Stock will not be declared, paid or set +aside for payment if the Company fails to comply, or if and to the extent such +act would cause the Company to fail to comply, with applicable laws, rules and +regulations. The restated certificate of incorporation provides that dividends +on the Series K Preferred Stock may not be declared or set aside for payment +if and to the extent such dividends would cause the Company to fail to comply +with applicable capital adequacy standards. + +Liquidation Rights + +Upon any voluntary or involuntary liquidation, dissolution or winding up of +the Company, holders of Series K Preferred Stock are entitled to receive out +of assets of the Company available for distribution to stockholders, after +satisfaction of liabilities to creditors, if any, before any distribution of +assets is made to holders of common stock or of any of the Company's other +shares of stock ranking junior as to such a distribution to the shares of +Series K Preferred Stock, a liquidating distribution in the amount of $25,000 +per share (equivalent to $25 per depositary share) plus declared and unpaid +dividends, without accumulation of any undeclared dividends. Holders of Series +K Preferred Stock will not be entitled to any other amounts from the Company +after they have received their full liquidation preference. + +The Series K Preferred Stock, like the Company's other series of preferred +stock, may be fully subordinate to any interests held by the U.S. government +in the event of a receivership, insolvency, liquidation, or similar +proceeding, including a proceeding under the "orderly liquidation authority" +provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. + +In any such distribution, if the assets of the Company are not sufficient to +pay the liquidation preferences in full to all holders of Series K Preferred +Stock and all holders of any other shares of the Company's stock ranking +equally as to such distribution with the Series K Preferred Stock, the amounts +paid to the holders of Series K Preferred Stock and to the holders of all such +other stock will be paid pro rata in accordance with the respective +aggregate liquidation preferences of those holders. In any such distribution, +the " liquidation preference" of any holder of preferred stock means the +amount payable to such holder in such distribution, including any declared but +unpaid dividends (and any unpaid, accrued cumulative dividends in the case of +any holder of stock on which dividends accrue on a cumulative basis). If the +liquidation preference has been paid in full to all holders of the Company's +Series K Preferred Stock and any other shares of the Company's stock ranking +equally as to the liquidation distribution, the holders of the Company's other +stock shall be entitled to receive all remaining assets of the Company +according to their respective rights and preferences. + +For purposes of this description of the Series K Preferred Stock, the merger +or consolidation of the Company with any other entity, including a merger or +consolidation in which the holders of Series K Preferred Stock receive cash, +securities or property for their shares, or the sale, lease or exchange of all +or substantially all of the assets of the Company for cash, securities or +other property shall not constitute a liquidation, dissolution or winding up +of the Company. + +Redemption + +The Series K Preferred Stock is perpetual and has no maturity date, and is not +subject to any mandatory redemption, sinking fund or other similar provisions. +The Company may, at the Company's option, redeem the Series K Preferred Stock +(i) in whole or in part, from time to time, on any date on or after May 10, +2024 (or, if not a business day, the next succeeding business day), or (ii) in +whole but not in part at any time within 90 days following a Regulatory +Capital Treatment Event, in each case, upon not less than 30 nor more than 60 +days' notice, at a redemption price equal to $25,000 per share (equivalent to +$25 per depositary share), plus accrued and unpaid dividends for the then- +current dividend period to but excluding the redemption date, whether or not +declared. Holders of Series K Preferred Stock have no right to require the +redemption or repurchase of the Series K Preferred Stock. + +The Company is a bank holding company and a financial holding company +regulated by the Federal Reserve Board. The Company treats the Series K +Preferred Stock as "tier 1 capital" (or its equivalent) for purposes of the +capital adequacy guidelines of the Federal Reserve Board (or, as and if +applicable, the capital adequacy guidelines or regulations of any successor +appropriate federal banking agency). + +A "Regulatory Capital Treatment Event" means the good faith determination by +the Company that, as a result of (i) any amendment to, or change in, the laws, +rules or regulations of the United States or any political subdivision of or +in the United States that is enacted or becomes effective after the initial +issuance of any share of the Series K Preferred Stock, (ii) any proposed +change in those laws, rules or regulations that is announced or becomes +effective after the initial issuance of any share of the Series K Preferred +Stock, or (iii) any official administrative decision or judicial decision or +administrative action or other official pronouncement interpreting or applying +those laws, rules or regulations or policies with respect thereto that is +announced after the initial issuance of any share of the Series K Preferred +Stock, there is more than an insubstantial risk that the Company will not be +entitled to treat the full liquidation preference amount of $25,000 per share +of Series K Preferred Stock then outstanding as "tier 1 capital" (or its +equivalent) for purposes of the capital adequacy guidelines of the Federal +Reserve Board (or, as and if applicable, the capital adequacy guidelines or +regulations of any successor appropriate federal banking agency) as then in +effect and applicable, for so long as any share of Series K Preferred Stock is +outstanding. "Appropriate federal banking agency" means the "appropriate +federal banking agency" with respect to the Company as that term is defined in +Section 3(q) of the Federal Deposit Insurance Act or any successor provision. + +The Company will not exercise its option to redeem any shares of preferred +stock without obtaining the approval of the Federal Reserve Board (or any +successor appropriate federal banking agency) as required by applicable law. +Unless the Federal Reserve Board (or any successor appropriate federal banking +agency) authorizes the Company to do otherwise in writing, the Company will +redeem the Series K Preferred Stock only if it is replaced with other tier 1 +capital that is not a restricted core capital element ( e.g. , common stock +or another series of noncumulative perpetual preferred stock). + +If shares of Series K Preferred Stock are to be redeemed, the notice of +redemption shall be given by first class mail to the holders of record of +Series K Preferred Stock to be redeemed, mailed not less than 30 days nor more +than 60 days prior to the date fixed for redemption thereof ( provided that, +if the depositary shares representing the Series K Preferred Stock are held in +book-entry form through The Depository Trust Company, or "DTC," the Company +may give such notice in any manner permitted by the DTC). Each notice of +redemption will include a statement setting forth: (i) the redemption date, +(ii) the number of shares of Series K Preferred Stock to be redeemed and, if +less than all the shares held by such holder are to be redeemed, the number of +such shares to be redeemed from such holder, (iii) the redemption price and +(iv) the place or places where holders may surrender certificates evidencing +shares of Series K Preferred Stock for payment of the redemption price. If +notice of redemption of any shares of Series K Preferred Stock has been given +and if the funds necessary for such redemption have been set aside by the +Company for the benefit of the holders of any shares of Series K Preferred +Stock so called for redemption, then, from and after the redemption date, +dividends will cease to accrue on such shares of Series K Preferred Stock, +such shares of Series K Preferred Stock shall no longer be deemed outstanding +and all rights of the holders of such shares will terminate, except the right +to receive the redemption price. + +In case of any redemption of only part of the shares of the Series K Preferred +Stock at the time outstanding, the shares to be redeemed shall be selected +either pro rata or by lot. + +See "Description of Depositary Shares" below for information about redemption +of the depositary shares relating to the Company's Series K Preferred Stock. + +Voting Rights + +Except as provided below, the holders of Series K Preferred Stock have no +voting rights. + +Whenever dividends on any shares of Series K Preferred Stock shall have not +been declared and paid for the equivalent of six or more dividend payments, +whether or not for consecutive dividend periods (as used in this section, a +"Nonpayment"), the holders of such shares, voting together as a class with +holders of any and all other series of voting preferred stock (as defined +below) then outstanding, will be entitled to vote for the election of a total +of two additional members of the Company's board of directors (as used in this +section, the "Preferred Stock Directors"), provided that the Company's board +of directors shall at no time include more than two Preferred Stock Directors. +In that event, the number of directors on the Company's board of directors +shall automatically increase by two, and the new directors shall be elected at +a special meeting called at the request of the holders of record of at least +20% of the Series K Preferred Stock or of any other series of voting preferred +stock (unless such request is received less than 90 days before the date fixed +for the next annual or special meeting of the stockholders, in which event +such election shall be held at such next annual or special meeting of +stockholders), and at each subsequent annual meeting. These voting rights will +continue until dividends on the shares of Series K Preferred Stock and any +such series of voting preferred stock for four consecutive dividend periods +following the Nonpayment shall have been fully paid (or declared and a sum +sufficient for the payment of such dividends shall have been set aside for +payment). + +As used in this description of the Series K Preferred Stock, "voting preferred +stock" means any other class or series of preferred stock of the Company +ranking equally with the Series K Preferred Stock either as to dividends or +the distribution of assets upon liquidation, dissolution or winding up and +upon which like voting rights have been conferred and are exercisable. Whether +a plurality, majority or other portion of the shares of Series K Preferred +Stock and any other voting preferred stock have been voted in favor of any +matter shall be determined by reference to the liquidation amounts of the +shares voted. + +If and when dividends for four consecutive dividend periods following a +Nonpayment have been paid in full (or declared and a sum sufficient for such +payment shall have been set aside), the holders of Series K Preferred Stock +shall be divested of the foregoing voting rights (subject to revesting in the +event of each subsequent Nonpayment) and, if such voting rights for all other +holders of voting preferred stock have terminated, the term of office of each +Preferred Stock Director so elected shall terminate and the number of +directors on the board of directors shall automatically decrease by two. Any +Preferred Stock Director may be removed at any time without cause by the +holders of record of a majority of the outstanding shares of Series K +Preferred Stock when they have the voting rights described above (voting +together as a class with all series of voting preferred stock then +outstanding). So long as a Nonpayment shall continue, any vacancy in the +office of a Preferred Stock Director (other than prior to the initial election +after a Nonpayment) may be filled by the written consent of the Preferred +Stock Director remaining in office, or if none remains in office, by a vote of +the holders of record of a majority of the outstanding shares of Series K +Preferred Stock and all voting preferred stock when they have the voting +rights described above (voting together as a class). The Preferred Stock +Directors shall each be entitled to one vote per director on any matter. + +So long as any shares of Series K Preferred Stock remain outstanding, the +Company will not, without the affirmative vote or consent of the holders of at +least two-thirds of the outstanding shares of the Series K Preferred Stock and +all other series of voting preferred stock entitled to vote thereon, voting +together as a single class, given in person or by proxy, either in writing or +at a meeting: + +amend or alter the provisions of the Company's restated certificate of +incorporation so as to authorize or create, or increase the authorized amount +of, any class or series of stock ranking senior to the Series K Preferred +Stock with respect to payment of dividends or the distribution of assets upon +liquidation, dissolution or winding up of the Company; + +amend, alter or repeal the provisions of the Company's restated certificate of +incorporation so as to materially and adversely affect the special rights, +preferences, privileges and voting powers of the Series K Preferred Stock, +taken as a whole; or + +consummate a binding share exchange or reclassification involving the Series K +Preferred Stock or a merger or consolidation of the Company with another +entity, unless in each case (i) the shares of Series K Preferred Stock remain +outstanding or, in the case of any such merger or consolidation with respect +to which the Company is not the surviving or resulting entity, are converted +into or exchanged for preference securities of the surviving or resulting +entity or its ultimate parent, and (ii) such shares remaining outstanding or +such preference securities, as the case may be, have such rights, preferences, +privileges and voting powers, taken as a whole, as are not materially less +favorable to the holders thereof than the rights, preferences, privileges and +voting powers of the Series K Preferred Stock, taken as a whole; + +provided, however , that any increase in the amount of the authorized or +issued Series K Preferred Stock or authorized preferred stock or the creation +and issuance, or an increase in the authorized or issued amount, of other +series of preferred stock ranking equally with and/or junior to the Series K +Preferred Stock with respect to the payment of dividends (whether such +dividends are cumulative or non-cumulative) and/or the distribution of assets +upon liquidation, dissolution or winding up of the Company will not be deemed +to adversely affect the rights, preferences, privileges or voting powers of +the Series K Preferred Stock. + +If an amendment, alteration, repeal, share exchange, reclassification, merger +or consolidation described above would adversely affect one or more but not +all series of voting preferred stock (including the Series K Preferred Stock +for this purpose), then only the series affected and entitled to vote shall +vote as a class in lieu of all such series of preferred stock. + +Without the consent of the holders of Series K Preferred Stock, so long as +such action does not adversely affect the rights, preferences, privileges and +voting powers of the Series K Preferred Stock, the Company may amend, alter, +supplement or repeal any terms of the Series K Preferred Stock: + +to cure any ambiguity, or to cure, correct or supplement any provision +contained in the certificate of designation for the Series K Preferred Stock +that may be defective or inconsistent; or + +to make any provision with respect to matters or questions arising with +respect to the Series K Preferred Stock that is not inconsistent with the +provisions of the certificate of designations. + +The foregoing voting provisions will not apply if, at or prior to the time +when the act with respect to which such vote would otherwise be required shall +be effected, all outstanding shares of Series K Preferred Stock shall have +been redeemed or called for redemption upon proper notice and sufficient funds +shall have been set aside by the Company for the benefit of the holders of +Series K Preferred Stock to effect such redemption. + +DESCRIPTION OF DEPOSITARY SHARES + +Please note that as used in this section, references to "holders" of +depositary shares mean those who own depositary shares registered in their own +names, on the books that the Company or the depositary maintain for this +purpose, and not indirect holders who own beneficial interests in depositary +shares registered in street name or issued in book-entry form through The +Depository Trust Company. + +General + +The Company has issued fractional interests in shares of preferred stock in +the form of depositary shares, each representing a 1/1,000th ownership +interest in a share of Series K Preferred Stock and evidenced by a depositary +receipt. The shares of Series K Preferred Stock represented by depositary +shares are deposited under a deposit agreement among the Company, the +depositary and the holders from time to time of the depositary receipts +evidencing the depositary shares. Subject to the terms of the deposit +agreement, each holder of a depositary share is entitled, through the +depositary, in proportion to the applicable fraction of a share of Series K +Preferred Stock represented by such depositary share, to all the rights and +preferences of the Series K Preferred Stock represented thereby (including +dividend, voting, redemption and liquidation rights). + +Dividends and Other Distributions + +The depositary will distribute any cash dividends or other cash distributions +received in respect of the deposited Series K Preferred Stock to the record +holders of depositary shares relating to the underlying Series K Preferred +Stock in proportion to the number of depositary shares held by the holders. +The depositary will distribute any property received by it other than cash to +the record holders of depositary shares entitled to those distributions, +unless it determines that the distribution cannot be made proportionally among +those holders or that it is not feasible to make a distribution. In that +event, the depositary may, with the Company's approval, sell the property and +distribute the net proceeds from the sale to the holders of the depositary +shares in proportion to the number of depositary shares they hold. + +Record dates for the payment of dividends and other matters relating to the +depositary shares will be the same as the corresponding record dates for the +Series K Preferred Stock. + +The amounts distributed to holders of depositary shares will be reduced by any +amounts required to be withheld by the depositary or by the Company on account +of taxes or other governmental charges. + +Redemption of Depositary Shares + +If the Company redeems the Series K Preferred Stock represented by the +depositary shares, the depositary shares will be redeemed from the proceeds +received by the depositary resulting from the redemption of the Series K +Preferred Stock held by the depositary. The redemption price per depositary +share will be equal to 1/1,000th of the redemption price per share payable +with respect to the Series K Preferred Stock (or $25 per depositary share). +Whenever the Company redeems shares of Series K Preferred Stock held by the +depositary, the depositary will redeem, as of the same redemption date, the +number of depositary shares representing shares of Series K Preferred Stock so +redeemed. + +In case of any redemption of less than all of the outstanding depositary +shares, the depositary shares to be redeemed will be selected by the +depositary pro rata or by lot. In any such case, the Company will redeem +depositary shares only in increments of 1,000 shares and any multiple thereof. + +Voting the Series K Preferred Stock + +When the depositary receives notice of any meeting at which the holders of +Series K Preferred Stock are entitled to vote, the depositary will mail the +information contained in the notice to the record holders of the depositary +shares relating to the Series K Preferred Stock. Each record holder of the +depositary shares on the record date, which will be the same date as the +record date for the Series K Preferred Stock, may instruct the depositary to +vote the amount of Series K Preferred Stock represented by the holder's +depositary shares. To the extent possible, the depositary will vote the amount +of Series K Preferred Stock represented by depositary shares in accordance +with the instructions it receives. The Company will agree to take all +reasonable actions that the depositary determines are necessary to enable the +depositary to vote as instructed. If the depositary does not receive specific +instructions from the holders of any depositary shares representing the Series +K Preferred Stock, it will vote all depositary shares of that series held by +it proportionately with instructions received. + +Listing + +The depositary shares are listed on the New York Stock Exchange under the +ticker symbol "GS PrK." + +Form of Preferred Stock and Depositary Shares + +The depositary shares are issued in book-entry form through The Depository +Trust Company. The Series K Preferred Stock is issued in registered form to +the depositary. + +DESCRIPTION OF (i) 5.793% FIXED-TO-FLOATING RATE NORMAL AUTOMATIC PREFERRED +ENHANCED CAPITAL SECURITIES OF GOLDMAN SACHS CAPITAL II (FULLY AND +UNCONDITIONALLY GUARANTEED BY THE GOLDMAN SACHS GROUP, INC.) AND (ii) FLOATING +RATE NORMAL AUTOMATIC PREFERRED ENHANCED CAPITAL SECURITIES OF GOLDMAN SACHS +CAPITAL III (FULLY AND UNCONDITIONALLY GUARANTEED BY THE GOLDMAN SACHS GROUP, +INC.) + +The following is a brief description of the terms of the 5.793% Fixed-to- +Floating Rate Normal Automatic Preferred Enhanced Capital Securities of +Goldman Sachs Capital II and the Floating Rate Normal Automatic Preferred +Enhanced Capital Securities of Goldman Sachs Capital III (the "APEX") and of +the Trust Agreements (both as defined below) under which they are issued. It +does not purport to be complete. Unless the context otherwise provides, all +references to the Company in this description refer only to The Goldman Sachs +Group, Inc. and does not include its consolidated subsidiaries. + +The APEX and the Common Securities of Goldman Sachs Capital II ("Capital II") +and Goldman Sachs Capital III ("Capital III"), each a Delaware statutory trust +(a "Trust"), represent beneficial interests in the relevant Trust. The Trust +in respect of Capital II holds the Company's Perpetual Non-Cumulative +Preferred Stock, Series E (the "Series E Preferred Stock"), and the Trust in +respect of Capital III holds the Company's Perpetual Non-Cumulative Preferred +Stock, Series F (the "Series F Preferred Stock," and collectively with the +Series E Preferred Stock, the "Preferred"). + +Each holder of APEX has a beneficial interest in the relevant Trust but does +not own any specific shares of the Preferred held by that Trust. However, the +applicable trust agreement among the Company, The Bank of New York Mellon, BNY +Mellon Trust of Delaware, the administrative trustees and the several holders +of the relevant Trust securities (each, a "Trust Agreement") under which each +Trust operates defines the financial entitlements of its APEX in a manner that +causes those financial entitlements to correspond to the financial +entitlements of that Trust in the Preferred it holds. Accordingly, each APEX +of Capital II corresponds to 1/100th of a share of Series E Preferred Stock +held by Capital II and each APEX of Capital III corresponds to 1/100th of a +share of Series F Preferred Stock held by Capital III. + +The Trusts + +Each Trust is a statutory trust organized under Delaware law pursuant to a +Trust Agreement and the filing of a certificate of trust with the Delaware +Secretary of State. + +The Trusts are used solely for the following purposes: + +issuing the APEX and the Common Securities; + +holding shares of the Preferred; and + +engaging in other activities that are directly related to the activities +described above. + +The Company owns all of the Common Securities, either directly or indirectly. +The Common Securities rank equally with the APEX and the Trusts make payment +on their Trust securities pro rata , except that if the Company pays less +than the full dividend on or redemption price of the Preferred, the rights of +the holders of the Common Securities to payment in respect of distributions +and payments upon liquidation, redemption and otherwise are subordinated to +the rights of the holders of the APEX. + +Each Trust is perpetual, but may be dissolved earlier as provided in its Trust +Agreement. + +The Company pays all fees and expenses related to the Trusts. + +DESCRIPTION OF THE APEX + +General + +The APEX are securities of each Trust and are issued pursuant to the +applicable Trust Agreement. The Property Trustee, The Bank of New York Mellon, +acts as indenture trustee for the APEX under the Trust Agreement for purposes +of compliance with the provisions of the Trust Indenture Act. Each APEX has a +liquidation amount of $1,000. + +The terms of the APEX of each Trust include those stated in the Trust +Agreement for such Trust, including any amendments thereto and those made part +of the Trust Agreement by the Trust Indenture Act and the Delaware Statutory +Trust Act. + +In addition to the APEX, each Trust Agreement authorizes the administrative +trustees of the Trust to issue the Common Securities on behalf of the Trust. +The Company owns, directly or indirectly, all of the Common Securities. The +Common Securities rank on a parity, and payments upon redemption, liquidation +or otherwise are made on a proportionate basis, with the APEX except as set +forth below under "- Ranking of Common Securities." The Trust Agreements do +not permit the Trust to issue any securities other than the Common Securities +and the APEX or to incur any indebtedness. + +Under the Trust Agreement, the Property Trustee on behalf of the relevant +Trust holds the Preferred for the benefit of the holders of its APEX and +Common Securities. + +The payment of distributions out of money held by a Trust, and payments upon +redemption of the APEX or liquidation of the Trust, are guaranteed by the +Company to the extent described under "Description of the Guarantees." Each +Guarantee, when taken together with the Company's obligations under the +applicable Trust Agreement, including its obligations to pay costs, expenses, +debts and liabilities of the Trust, other than with respect to its Common +Securities and APEX, has the effect of providing a full and unconditional +guarantee of amounts due on the APEX. The Bank of New York Mellon, as the +Guarantee Trustee, holds each Guarantee for the benefit of the holders of the +APEX. The Guarantees do not cover payment of distributions when the Trusts do +not have sufficient available funds to pay those distributions. + +When the term "holder" is used in this description of the APEX with respect to +a registered APEX, it means the person in whose name such APEX is registered +in the security register. The APEX are currently held in book-entry form only, +and are held in the name of DTC or its nominee. + +Capital II's APEX are listed on the New York Stock Exchange under the symbol +"GS/PE" and Capital III's APEX are listed on the New York Stock Exchange under +the symbol "GS/PF." + +The financial entitlements as a holder of APEX generally correspond to the +applicable Trust's financial entitlements as a holder of the Preferred. The +corresponding asset for each APEX is a 1/100th, or $1,000, interest in one +share of Preferred held by the Trust. Each Trust will pass through to the +holder amounts that it receives on the corresponding assets for the APEX as +distributions on, or the liquidation preference of, APEX. Holders of a Trust's +APEX are be entitled to receive distributions corresponding to non-cumulative +dividends on the Preferred held by the Trust. These cash dividends are payable +if, as and when declared by the Company's board of directors, on the Dividend +Payment Dates (as defined below), which are: quarterly in arrears on each +March 1, June 1, September 1 and December 1 (or if such day is not a business +day, the next business day). + +Assuming that the Company does not elect to pay partial dividends or to skip +dividends on the Preferred, holders of APEX will receive distributions on the +$1,000 liquidation amount per APEX at a rate per annum equal to the greater of +(x) three-month LIBOR for the related distribution period plus 0.765% (in the +case of Capital II's APEX) or 0.77% (in the case of Capital III's APEX) and +(y) 4.000%, payable quarterly on each March 1, June 1, September 1 and +December 1 (or if any such date is not a business day, on the next business +day). + +Dividends are calculated on the basis of a 360-day year and the number of days +actually elapsed in the dividend period. Distributions on the APEX and +dividends on the Preferred are non-cumulative. + +The Bank of New York Mellon acts as registrar and transfer agent, or "Transfer +Agent," for the APEX. If The Bank of New York Mellon should resign or be +removed, the Company or the Trust will designate a successor and the term +"Transfer Agent" as used herein will refer to that successor. A "business day" +as used in this section means any day other than a Saturday, Sunday or any +other day on which banking institutions and trust companies in New York, New +York or Wilmington, Delaware are permitted or required by any applicable law +to close. + +Each Trust must make distributions on its APEX on each distribution date to +the extent that it has funds available therefor. A Trust's funds available for +distribution to a holder of its APEX will be limited to payments received from +the Company on the Preferred held by the Trust. The Company guarantees the +payment of distributions on the APEX out of moneys held by each Trust to the +extent of available Trust funds, as described under "Description of the +Guarantees" below. + +Distributions on the APEX are payable to holders as they appear in the +security register of the Trust on the relevant record dates. The record dates +are the fifteenth calendar day immediately preceding the next succeeding +distribution date. Distributions are paid through the Property Trustee or +paying agent, who hold amounts received in respect of the Preferred for the +benefit of the holders of the APEX. + +For more information about dividends on the Preferred, see "- Dividends" +below. + +Agreed Tax Treatment of the APEX + +As a beneficial owner of APEX, by acceptance of the beneficial interest +therein, the holder will be deemed to have agreed, for all U.S. federal income +tax purposes: + +to treat the holder as the owner of a 1/100th interest in a share of the +relevant Preferred; and + +to treat the Trust as one or more grantor trusts or agency arrangements. + +Mandatory Redemption of APEX upon Redemption of the Preferred + +The APEX have no stated maturity but must be redeemed on the date the Company +redeems the Preferred, and the Property Trustee or paying agent will apply the +proceeds from such repayment or redemption to redeem a like amount, as defined +below, of the APEX. The Preferred is perpetual but the Company may redeem it +on any Dividend Payment Date, subject to certain limitations. See "- +Redemption" below. The redemption price per APEX will equal the redemption +price of the Preferred. See "- Redemption" below. If notice of redemption of +any Preferred has been given and if the funds necessary for the redemption +have been set aside by the Company for the benefit of the holders of any +shares of the Preferred so called for redemption, then, from and after the +redemption date, those shares shall no longer be deemed outstanding and all +rights of the holders of those shares (including the right to receive any +dividends) will terminate, except the right to receive the redemption price. + +If less than all of the shares of the Preferred held by the Trust are to be +redeemed on a redemption date, then the proceeds from such redemption will be +allocated pro rata to the redemption of the APEX and the Common Securities, +except as set forth below under "- Ranking of Common Securities." + +The term " like amount " as used above means APEX having a liquidation +amount equal to that portion of the liquidation amount of the Preferred to be +contemporaneously redeemed, the proceeds of which will be used to pay the +redemption price of such APEX. + +Distributions to be paid on or before the redemption date for any APEX called +for redemption will be payable to the holders as of the record dates for the +related dates of distribution. If the APEX called for redemption are no longer +in book-entry form, the Property Trustee, to the extent funds are available, +will irrevocably deposit with the paying agent for the APEX funds sufficient +to pay the applicable redemption price and will give such paying agent +irrevocable instructions and authority to pay the redemption price to the +holders thereof upon surrender of their certificates evidencing the APEX. + +If notice of redemption shall have been given and funds deposited as required, +then upon the date of such deposit: + +all rights of the holders of such APEX called for redemption will cease, +except the right of the holders of such APEX to receive the redemption price +and any distribution payable in respect of the APEX on or prior to the +redemption date, but without interest on such redemption price; and + +the APEX called for redemption will cease to be outstanding. If any redemption +date is not a business day, then the redemption amount will be payable on the +next business day (and without any interest or other payment in respect of any +such delay). However, if payment on the next business day causes payment of +the redemption amount to be in the next calendar month, then payment will be +on the preceding business day. + +If payment of the redemption amount for the Preferred held by a Trust called +for redemption is improperly withheld or refused and accordingly the +redemption amount of the Trust's APEX is not paid either by the Trust or by +the Company under the applicable Guarantee, then dividends on the Preferred +called for redemption will continue to accrue and distributions on such series +of APEX called for redemption will continue to accumulate at the applicable +rate then borne by such APEX from the original redemption date scheduled to +the actual date of payment. In this case, the actual payment date will be +considered the redemption date for purposes of calculating the redemption +amount. + +Redemptions of the APEX will require prior approval of the Federal Reserve +Board. + +The Company will not exercise its option to redeem any shares of the Preferred +without obtaining the approval of the Federal Reserve Board (or any successor +appropriate federal banking agency) as required by applicable law. Unless the +Federal Reserve Board (or any successor appropriate federal banking agency) +authorizes the Company to do otherwise in writing, the Company will redeem the +Preferred only if it is replaced with other tier 1 capital that is not a +restricted core capital element ( e.g. , common stock or another series of +noncumulative perpetual preferred stock). + +If less than all of the outstanding shares of the Preferred held by a Trust +are to be redeemed on a redemption date, then the aggregate liquidation amount +of APEX and Common Securities of that Trust to be redeemed shall be allocated +pro rata to the APEX and Common Securities based upon the relative +liquidation amounts of such series, except as set forth below under "- Ranking +of Common Securities." The Property Trustee will select the particular APEX to +be redeemed on a pro rata basis not more than 60 days before the redemption +date from the outstanding APEX not previously called for redemption by any +method the Property Trustee deems fair and appropriate, or if the APEX are in +book-entry only form, in accordance with the procedures of DTC. The Property +Trustee shall promptly notify the Transfer Agent in writing of the APEX +selected for redemption and, in the case of any APEX selected for redemption +in part, the liquidation amount to be redeemed. + +For all purposes of the Trust Agreement, unless the context otherwise +requires, all provisions relating to the redemption of APEX shall relate, in +the case of any APEX redeemed or to be redeemed only in part, to the portion +of the aggregate liquidation amount of APEX that has been or is to be +redeemed. If less than all of the APEX, the APEX held through the facilities +of DTC will be redeemed pro rata in accordance with DTC's internal +procedures. + +Liquidation Distribution upon Dissolution + +Pursuant to each Trust Agreement, the applicable Trust shall dissolve on the +first to occur of: + +certain events of bankruptcy, dissolution or liquidation of the Company; + +redemption of all of its APEX as described above; and + +the entry of an order for the dissolution of the Trust by a court of competent +jurisdiction. + +Except as set forth in the next paragraph, if an early dissolution occurs as a +result of certain events of bankruptcy, dissolution or liquidation of the +Company, the Property Trustee and the administrative trustees will liquidate +the Trust as expeditiously as they determine possible by distributing, after +satisfaction of liabilities to creditors of the Trust as provided by +applicable law, to each holder of its APEX a like amount of the Preferred held +by the Trust as of the date of such distribution. Except as set forth in the +next paragraph, if an early dissolution occurs as a result of the entry of an +order for the dissolution of the Trust by a court of competent jurisdiction, +the Property Trustee will liquidate the Trust as expeditiously as it +determines to be possible by distributing, after satisfaction of liabilities +to creditors of the Trust as provided by applicable law, to each holder of its +APEX a like amount of the Preferred held by the Trust as of the date of such +distribution. The Property Trustee shall give notice of liquidation to each +holder of APEX at least 30 days and not more than 60 days before the date of +liquidation. + +If, whether because of an order for dissolution entered by a court of +competent jurisdiction or otherwise, the Property Trustee determines that +distribution of the Preferred in the manner provided above is not possible, or +if the early dissolution occurs as a result of the redemption of all the APEX, +the Property Trustee shall liquidate the property of the Trust and wind up its +affairs. In that case, upon the winding up of the Trust, except with respect +to an early dissolution that occurs as a result of the redemption of all the +APEX, the holders will be entitled to receive out of the assets of the Trust +available for distribution to holders and after satisfaction of liabilities to +creditors of the Trust as provided by applicable law, an amount equal to the +aggregate liquidation amount per Trust security plus accrued and unpaid +distributions to the date of payment. If, upon any such winding up, the Trust +has insufficient assets available to pay in full such aggregate liquidation +distribution, then the amounts payable directly by the Trust on its Trust +securities shall be paid on a pro rata basis, except as set forth below +under "- Ranking of Common Securities." + +The term "like amount" as used above means Preferred having a liquidation +preference equal to the liquidation amount of the APEX of the holder to whom +such Preferred would be distributed. + +Distribution of Trust Assets + +Upon liquidation of a Trust other than as a result of an early dissolution +upon the redemption of all the APEX and after satisfaction of the liabilities +of creditors of the Trust as provided by applicable law, the assets of the +Trust will be distributed to the holders of such Trust securities in exchange +therefor. + +After the liquidation date fixed for any distribution of assets of the Trust: + +the APEX will no longer be deemed to be outstanding; + +DTC or its nominee, as the record holder of the APEX, will receive a +registered global certificate or certificates representing the Preferred to be +delivered upon such distribution; + +any certificates representing the APEX not held by DTC or its nominee will be +deemed to represent shares of the Preferred having a Liquidation Preference +equal to the APEX until such certificates are so surrendered for transfer and +reissuance; and + +all rights of the holders of the APEX will cease, except the right to receive +Preferred upon such surrender. + +Since each APEX corresponds to 1/100th of a share of Preferred, holders of +APEX may receive fractional shares of the Preferred or depositary shares +representing the Preferred upon this distribution. + +Ranking of Common Securities + +If on any distribution date a Trust does not have funds available from +dividends on the Preferred it holds to make full distributions on its APEX and +Common Securities, then the available funds from dividends on the Preferred it +holds shall be applied first to make distributions then due on its APEX on a +pro rata basis on such distribution date up to the amount of such +distributions corresponding to dividends on the Preferred (or if less, the +amount of the corresponding distributions that would have been made on the +APEX had the Company paid a full dividend on the Preferred) before any such +amount is applied to make a distribution on the Trust's Common Securities on +such distribution date. + +If on any date where APEX and Common Securities must be redeemed because the +Company is redeeming Preferred and a Trust does not have funds available from +the Company's redemption of the Preferred it holds to pay the full redemption +price then due on all of its outstanding APEX and Common Securities to be +redeemed, then (i) the available funds shall be applied first to pay the +redemption price on the APEX to be redeemed on such redemption date and (ii) +Common Securities shall be redeemed only to the extent funds are available for +such purpose after the payment of the full redemption price on the APEX to be +redeemed. + +If an early dissolution event occurs in respect of a Trust, no liquidation +distributions shall be made on its Common Securities until full liquidation +distributions have been made on its APEX. + +In the case of any event of default under the Trust Agreement of a Trust +resulting from the Company's failure to comply in any material respect with +any of its obligations as issuer of the Preferred held by the Trust, including +obligations set forth in its restated certificate of incorporation, as +amended, or "restated certificate of incorporation," or arising under +applicable law, the Company, as holder of its Common Securities, will be +deemed to have waived any right to act with respect to any such event of +default under the Trust Agreement until the effect of all such events of +default with respect to its APEX have been cured, waived or otherwise +eliminated. Until all events of default under the Trust Agreement have been so +cured, waived or otherwise eliminated, the Property Trustee shall act solely +on behalf of the holders of its APEX and not on the Company's behalf, and only +the holders of its APEX will have the right to direct the Property Trustee to +act on their behalf. + +Events of Default; Notice + +Any one of the following events constitutes an event of default under a Trust +Agreement, or a "Trust Event of Default," regardless of the reason for such +event of default and whether it shall be voluntary or involuntary or be +effected by operation of law or pursuant to any judgment, decree or order of +any court or any order, rule or regulation of any administrative or +governmental body: + +the failure to comply in any material respect with the Company's obligations +as issuer of the Preferred, under its restated certificate of incorporation, +or those of the Trust, or arising under applicable law; + +the default by the Trust in the payment of any distribution on any Trust +security of the Trust when such becomes due and payable, and continuation of +such default for a period of 30 days; + +the default by the Trust in the payment of any redemption price of any Trust +security of the Trust when such becomes due and payable; + +the failure to perform or the breach, in any material respect, of any other +covenant or warranty of the trustees in the Trust Agreement for 90 days after +the defaulting trustee or trustees have received written notice of the failure +to perform or breach in the manner specified in such Trust Agreement; or + +the occurrence of certain events of bankruptcy or insolvency with respect to +the Property Trustee and the Company's failure to appoint a successor Property +Trustee within 90 days. + +Within 30 days after any Trust Event of Default with respect to a Trust +actually known to the Property Trustee occurs, the Property Trustee will +transmit notice of such Trust Event of Default to the holders of its APEX and +to the administrative trustees, unless such Trust Event of Default shall have +been cured or waived. The Company, as sponsor, and the administrative trustees +are required to file annually with the Property Trustee a certificate as to +whether or not the Company or the administrative trustees are in compliance +with all the conditions and covenants applicable to the Company and to the +administrative trustees under the Trust Agreement. + +Mergers, Consolidations, Amalgamations or Replacements of a Trust + +A Trust may not merge with or into, consolidate, amalgamate, or be replaced +by, or convey, transfer or lease its properties and assets substantially as an +entirety to the Company or any other person, except as described below or as +otherwise described in its Trust Agreement. A Trust may, at the Company's +request, with the consent of the administrative trustees but without the +consent of the holders of its APEX, the Property Trustee or the Delaware +Trustee, merge with or into, consolidate, amalgamate, or be replaced by, or +convey, transfer or lease its properties and assets substantially as an +entirety to, a trust organized as such under the laws of any state if: + +such successor entity either: + +expressly assumes all of the obligations of the Trust with respect to its +APEX, or + +substitutes for its APEX other securities having substantially the same terms +as its APEX, or the "Successor Securities," so long as the Successor +Securities rank the same as its APEX in priority with respect to distributions +and payments upon liquidation, redemption and otherwise; + +a trustee of such successor entity possessing the same powers and duties as +the Property Trustee is appointed to hold the Preferred then held by or on +behalf of the Property Trustee; + +such merger, consolidation, amalgamation, replacement, conveyance, transfer or +lease does not cause its APEX, including any Successor Securities, to be +downgraded by any nationally recognized statistical rating organization; + +such merger, consolidation, amalgamation, replacement, conveyance, transfer or +lease does not adversely affect the rights, preferences and privileges of the +holders of its APEX, including any Successor Securities, in any material +respect; + +such successor entity has purposes substantially identical to those of the +Trust; + +prior to such merger, consolidation, amalgamation, replacement, conveyance, +transfer or lease, the Property Trustee has received an opinion from counsel +to the Trust experienced in such matters to the effect that: + +such merger, consolidation, amalgamation, replacement, conveyance, transfer or +lease does not adversely affect the rights, preferences and privileges of the +holders of its APEX, including any Successor Securities, in any material +respect, and + +following such merger, consolidation, amalgamation, replacement, conveyance, +transfer or lease, neither the Trust nor such successor entity will be +required to register as an investment company under the Investment Company Act +of 1940, or "Investment Company Act"; + +the Trust has received an opinion of counsel experienced in such matters that +such merger, consolidation, amalgamation, conveyance, transfer or lease will +not cause the Trust or the successor entity to be classified as an association +or a publicly traded partnership taxable as a corporation for U.S. federal +income tax purposes; and + +the Company or any permitted successor or assignee owns all of the common +securities of such successor entity and guarantees the obligations of such +successor entity under the Successor Securities at least to the extent +provided by the Guarantee. + +Notwithstanding the foregoing, a Trust may not, except with the consent of +holders of 100% in liquidation amount of its APEX, consolidate, amalgamate, +merge with or into, or be replaced by or convey, transfer or lease its +properties and assets substantially as an entirety to any other entity or +permit any other entity to consolidate, amalgamate, merge with or into, or +replace it if such consolidation, amalgamation, merger, replacement, +conveyance, transfer or lease would cause the Trust or the successor entity to +be classified as other than one or more grantor trusts or agency arrangements +or to be classified as an association or a publicly traded partnership taxable +as a corporation for U.S. federal income tax purposes. + +Voting Rights; Amendment of a Trust Agreement + +Except as provided herein and under "- Amendments and Assignment" below and as +otherwise required by law and the Trust Agreement, the holders of a Trust's +APEX have no voting rights or control over the administration, operation or +management of the Trust or the obligations of the parties to its Trust +Agreement, including in respect of the Preferred held by the Trust. Under the +Trust Agreement, however, the Property Trustee is required to obtain their +consent before exercising some of its rights in respect of these securities. + +Trust Agreement. The Company and the administrative trustees may amend a +Trust's Trust Agreement without the consent of the holders of its APEX, the +Property Trustee or the Delaware Trustee, unless in the case of the first two +bullets below such amendment will materially and adversely affect the +interests of any holder of APEX or the Property Trustee or the Delaware +Trustee or impose any additional duty or obligation on the Property Trustee or +the Delaware Trustee, to: + +cure any ambiguity, correct or supplement any provisions in the Trust +Agreement that may be inconsistent with any other provision, or to make any +other provisions with respect to matters or questions arising under the Trust +Agreement, which may not be inconsistent with the other provisions of the +Trust Agreement; + +modify, eliminate or add to any provisions of the Trust Agreement to such +extent as shall be necessary to ensure that the Trust will be classified for +U.S. federal income tax purposes as one or more grantor trusts or agency +arrangements and not as an association or a publicly traded partnership +taxable as a corporation at all times that any Trust securities are +outstanding, or to ensure that the Trust will not be required to register as +an "investment company" under the Investment Company Act; + +provide that certificates for the APEX may be executed by an administrative +trustee by facsimile signature instead of manual signature, in which case such +amendment(s) shall also provide for the appointment by the Company of an +authentication agent and certain related provisions; + +require that holders that are not U.S. persons for U.S. federal income tax +purposes irrevocably appoint a U.S. person to exercise any voting rights to +ensure that the Trust will not be treated as a foreign trust for U.S. federal +income tax purposes; or + +conform the terms of the Trust Agreement to the description of the Trust +Agreement, the APEX and the Common Securities in the prospectus dated December +5, 2006, of the Company and the Trusts, as supplemented by the prospectus +supplement, dated May 8, 2007, in the manner provided in the Trust Agreement. + +Any such amendment shall become effective when notice thereof is given to the +Property Trustee, the Delaware Trustee and the holders of the APEX. + +The Company and the administrative trustees may generally amend a Trust's +Trust Agreement with: + +the consent of holders representing not less than a majority, based upon +liquidation amounts, of its APEX; and + +receipt by the administrative trustees of the Trust of an opinion of counsel +to the effect that such amendment or the exercise of any power granted to the +administrative trustees of the Trust or the administrative trustees in +accordance with such amendment will not affect the Trust's status as one or +more grantor trusts or agency arrangements for U.S. federal income tax +purposes or affect the Trust's exemption from status as an "investment +company" under the Investment Company Act. + +However, without the consent of each affected holder of Trust securities, a +Trust Agreement may not be amended to: + +change the amount or timing, or otherwise adversely affect the amount, of any +distribution required to be made in respect of Trust securities as of a +specified date; or + +restrict the right of a holder of Trust securities to institute a suit for the +enforcement of any such payment on or after such date. + +Preferred Stock . So long as Preferred is held by the Property +Trustee on behalf of a Trust, the trustees of the Trust will not waive any +rights in respect of the Preferred without obtaining the prior approval of the +holders of at least a majority in liquidation amount of its APEX then +outstanding. The trustees of the Trust shall also not consent to any amendment +to the Trust's or the Company's governing documents that would change the +dates on which dividends are payable or the amount of such dividends, without +the prior written consent of each holder of APEX. In addition to obtaining the +foregoing approvals from holders, the administrative trustees shall obtain, at +the Company's expense, an opinion of counsel to the effect that such action +shall not cause the Trust to be taxable as a corporation or classified as a +partnership for U.S. federal income tax purposes. + +General. Any required approval of holders of APEX may be given at a +meeting of holders convened for such purpose or pursuant to written consent. +The Property Trustee will cause a notice of any meeting at which holders are +entitled to vote, or of any matter upon which action by written consent of +such holders is to be taken, to be given to each record holder in the manner +set forth in the Trust Agreement. + +No vote or consent of the holders of APEX will be required for a Trust to +redeem and cancel the APEX in accordance with a Trust Agreement. + +Notwithstanding that holders of the APEX are entitled to vote or consent under +any of the circumstances described above, any of the APEX that are owned by +the Company or its affiliates or the trustees shall be deemed not to be +outstanding. + +Payment and Paying Agent + +Payments on the APEX shall be made to DTC, which shall credit the relevant +accounts on the applicable distribution dates. If any APEX are not held by +DTC, such payments shall be made by check mailed to the address of the holder +as such address shall appear on the register. + +The paying agent is The Bank of New York Mellon and any co-paying agent chosen +by the Property Trustee and acceptable to the Company and to the +administrative trustees. + +Registrar and Transfer Agent + +The Bank of New York Mellon acts as registrar and transfer agent, or "Transfer +Agent," for the APEX. + +Information Concerning the Property Trustee + +Other than during the occurrence and continuance of a Trust Event of Default, +the Property Trustee undertakes to perform only the duties that are +specifically set forth in the Trust Agreement. After a Trust Event of Default, +the Property Trustee must exercise the same degree of care and skill as a +prudent individual would exercise or use in the conduct of his or her own +affairs. Subject to this provision, the Property Trustee is under no +obligation to exercise any of the powers vested in it by the Trust Agreement +at the request of any holder of APEX unless it is offered indemnity +satisfactory to it by such holder against the costs, expenses and liabilities +that might be incurred. If no Trust Event of Default has occurred and is +continuing and the Property Trustee is required to decide between alternative +courses of action, construe ambiguous provisions in the Trust Agreement or is +unsure of the application of any provision of the Trust Agreement, and the +matter is not one upon which holders of APEX are entitled under the Trust +Agreement to vote, then the Property Trustee will take any action that the +Company directs. If the Company does not provide direction, the Property +Trustee may take any action that it deems advisable and in the interests of +the holders of the Trust securities and will have no liability except for its +own bad faith, negligence or willful misconduct. + +The Company and its affiliates may maintain certain accounts and other banking +relationships with the Property Trustee and its affiliates in the ordinary +course of business. + +Trust Expenses + +Pursuant to each Trust Agreement, the Company, as sponsor, agrees to pay: + +all debts and other obligations of the Trust (other than with respect to its +APEX); + +all costs and expenses of the Trust, including costs and expenses relating to +the organization of the Trust, the fees, expenses and indemnities of the +trustees and the cost and expenses relating to the operation of the Trust; and + +any and all taxes and costs and expenses with respect thereto, other than U.S. +withholding taxes, to which the Trust might become subject. + +Governing Law + +Each Trust Agreement is governed by and construed in accordance with the laws +of the State of Delaware. + +Miscellaneous + +The administrative trustees are authorized and directed to conduct the affairs +of and to operate each Trust in such a way that it will not be required to +register as an "investment company" under the Investment Company Act or +characterized as other than one or more grantor trusts or agency arrangements +for U.S. federal income tax purposes. + +In this regard, the Company and the administrative trustees are authorized to +take any action, not inconsistent with applicable law, the certificate of +trust of a Trust or its Trust Agreement, that the Company and the +administrative trustees determine to be necessary or desirable to achieve such +end, as long as such action does not materially and adversely affect the +interests of the holders of the APEX. + +Holders of the APEX have no preemptive or similar rights. The APEX are not +convertible into or exchangeable for the Company's common stock or preferred +stock. + +Subject to any applicable rules of the Federal Reserve Board (or any successor +appropriate federal banking agency), the Company or its affiliates may from +time to time purchase any of the APEX that are then outstanding by tender, in +the open market or by private agreement. + +The Trust may not borrow money or issue debt or mortgage or pledge any of its +assets. + +DESCRIPTION OF THE GUARANTEES + +The following is a brief description of the terms of the Guarantee (as +defined below) pursuant to the Guarantee Agreement for Goldman Sachs Capital +II (formerly known as Goldman Sachs Capital IV), dated as of March 23, 2016, +and the Guarantee Agreement for Goldman Sachs Capital III (formerly known as +Goldman Sachs Capital V), dated as of March 23, 2016 (collectively, the +"Guarantee Agreements"). The description does not purport to be complete. + +General + +The following payments on each Trust's APEX, also referred to as the +"guarantee payments," if not fully paid by the Trust, will be paid by the +Company under a guarantee, or "Guarantee," that the Company has executed and +delivered for the benefit of the holders of such APEX. Pursuant to each +Guarantee, the Company irrevocably and unconditionally agrees to pay in full +the guarantee payments, without duplication: + +any accumulated and unpaid distributions required to be paid on the APEX, to +the extent the Trust has funds available to make the payment; + +the redemption price for any APEX called for redemption, to the extent the +Trust has funds available to make the payment; and + +upon a voluntary or involuntary dissolution, winding up or liquidation of the +Trust, other than in connection with a distribution of a like amount of +corresponding assets to the holders of the APEX, the lesser of: + +the aggregate of the liquidation amount and all accumulated and unpaid +distributions on the APEX to the date of payment, to the extent the Trust has +funds available to make the payment; and + +the amount of assets of the Trust remaining available for distribution to +holders of the APEX upon liquidation of the Trust. + +The Company's obligation to make a guarantee payment may be satisfied by +direct payment of the required amounts by the Company to the holders of the +APEX or by causing the Trust to pay the amounts to the holders. + +If the Company does not make a regular dividend payment on the Preferred held +by a Trust, the Trust will not have sufficient funds to make the related +payments on the relevant series of APEX. The Guarantee does not cover payments +on the APEX when the Trust does not have sufficient funds to make these +payments. Because the Company is a holding company, its rights to participate +in the assets of any of its subsidiaries upon the subsidiary's liquidation or +reorganization will be subject to the prior claims of the subsidiary's +creditors except to the extent that the Company may itself be a creditor with +recognized claims against the subsidiary. The Guarantee does not limit the +incurrence or issuance by the Company of other secured or unsecured +indebtedness. + +Each Guarantee is qualified as an indenture under the Trust Indenture Act. The +Bank of New York Mellon acts as "Guarantee Trustee" for each Guarantee for +purposes of compliance with the provisions of the Trust Indenture Act. The +Guarantee Trustee holds each Guarantee for the benefit of the holders of APEX. + +Effect of the Guarantees + +Each Guarantee, when taken together with the Company's obligations and the +Trust's obligations under the Trust Agreement, including the obligations to +pay costs, expenses, debts and liabilities of the applicable Trust, other than +with respect to its Trust securities, has the effect of providing a full and +unconditional guarantee, on a subordinated basis, of payments due on its APEX. + +The Company has also agreed separately to irrevocably and unconditionally +guarantee the obligations of each Trust with respect to its Common Securities +to the same extent as the Guarantee. + +Status of the Guarantees + +Each Guarantee is unsecured and ranks: + +subordinate and junior in right of payment to all of the Company's senior and +subordinated debt; and + +equally with any of the Company's other present or future obligations that by +their terms rank pari passu with such Guarantee. + +Each Guarantee constitutes a guarantee of payment and not of collection, which +means that the guaranteed party may sue the guarantor to enforce its rights +under the Guarantee without suing any other person or entity. Each Guarantee +is held for the benefit of the holders of APEX. Each Guarantee will be +discharged only by payment of the guarantee payments in full to the extent not +paid by the applicable Trust. + +Amendments and Assignment + +A Guarantee may be amended only with the prior approval of the holders of not +less than a majority in aggregate liquidation amount of the applicable +outstanding APEX. No vote is required, however, for any changes that do not +adversely affect the rights of holders of APEX in any material respect. All +guarantees and agreements contained in the Guarantee bind the Company's +successors, assignees, receivers, trustees and representatives and are for the +benefit of the holders of the applicable APEX then outstanding. + +Termination of the Guarantees + +A Guarantee will terminate: + +upon full payment of the redemption price of all applicable APEX; or + +upon full payment of the amounts payable in accordance with the Trust +Agreement upon liquidation of the Trust. + +A Guarantee will continue to be effective or will be reinstated, as the case +may be, if at any time any holder of APEX must restore payment of any sums +paid under the APEX or the Guarantee. + +Events of Default + +An event of default under a Guarantee will occur if the Company fails to +perform any payment obligation or if the Company fails to perform any other +obligation under the Guarantee and such default remains unremedied for 30 +days. + +The holders of a majority in liquidation amount of the applicable APEX have +the right to direct the time, method and place of conducting any proceeding +for any remedy available to the Guarantee Trustee in respect of a Guarantee or +to direct the exercise of any trust or power conferred upon the Guarantee +Trustee under the Guarantee. Any holder of APEX may institute a legal +proceeding directly against the Company to enforce the Guarantee Trustee's +rights and the Company's obligations under a Guarantee, without first +instituting a legal proceeding against the Trust, the Guarantee Trustee or any +other person or entity. + +As guarantor, the Company is required to file annually with the Guarantee +Trustee a certificate as to whether or not the Company is in compliance with +all applicable conditions and covenants under the Guarantee. + +Information Concerning the Guarantee Trustee + +Prior to the occurrence of an event of default relating to a Guarantee, the +Guarantee Trustee is required to perform only the duties that are specifically +set forth in the Guarantees. Following the occurrence of an event of default, +the Guarantee Trustee will exercise the same degree of care as a prudent +individual would exercise in the conduct of his or her own affairs. Provided +that the foregoing requirements have been met, the Guarantee Trustee is under +no obligation to exercise any of the powers vested in it by the Guarantees at +the request of any holder of APEX, unless offered indemnity satisfactory to it +against the costs, expenses and liabilities which might be incurred thereby. + +The Company and its affiliates may maintain certain accounts and other banking +relationships with the Guarantee Trustee and its affiliates in the ordinary +course of business. + +Governing Law + +The Guarantees are governed by, and construed in accordance with, the laws of +the State of New York. + +Limited Purpose of Trust + +The Trust securities evidence beneficial interests in the Trust. A principal +difference between the rights of a holder of a Trust security and a holder of +Preferred is that a holder of Preferred would be entitled to receive from the +issuer the dividends, redemption payments and payment upon liquidation in +respect of Preferred while a holder of Trust securities is entitled to receive +distributions from a Trust, or from the Company under a Guarantee, if and to +the extent the Trust has funds available for the payment of such +distributions. + +Rights upon Dissolution + +Upon any voluntary or involuntary dissolution of the Trust, holders of each +series of APEX will receive the distributions described under "- Liquidation +Distribution upon Dissolution" above. Upon any voluntary or involuntary +liquidation or bankruptcy of the Company, the holders of the Preferred would +be preferred shareholders of the Company, entitled to the preferences upon +liquidation described under "Description of the Preferred" below. Since the +Company is the guarantor under the Guarantee and has agreed to pay for all +costs, expenses and liabilities of the Trust, other than the Trust's +obligations to the holders of the Trust securities, the positions of a holder +of APEX relative to other creditors and to the Company's shareholders in the +event of liquidation or bankruptcy are expected to be substantially the same +as if that holder held the corresponding assets of the Trust directly. + +DESCRIPTION OF THE PREFERRED + +The following is a brief description of the terms of the Preferred held by +the relevant Trust. This summary does not purport to be complete and is +subject to and qualified in its entirety by reference to the Company's +restated certificate of incorporation, which is an exhibit to the Annual +Report of which this exhibit is a part. + +General + +The Company's authorized capital stock includes 150,000,000 shares of +preferred stock, par value $0.01 per share (including the Preferred). + +Shares of the Preferred rank senior to the Company's common stock, equally +with each other series of the Company's preferred stock outstanding as of +December 31, 2020, and at least equally with each other series of preferred +stock that the Company may issue (except for any senior series that may be +issued with the requisite consent of the holders of the Preferred), with +respect to the payment of dividends and distributions of assets upon +liquidation, dissolution or winding up. The Preferred is fully paid and +nonassessable, which means that its holders have paid their purchase price in +full and that the Company may not ask them to surrender additional funds. +Holders of the Preferred do not have preemptive or subscription rights to +acquire more preferred stock of the Company. The Preferred is not convertible +into, or exchangeable for, shares of any other class or series of stock or +other securities of the Company. The Preferred has no stated maturity and is +not subject to any sinking fund or other obligation of the Company to redeem +or repurchase the Preferred. + +The Preferred has a fixed liquidation preference of $100,000 per share. If the +Company liquidates, dissolves or winds up its affairs, holders of the +Preferred will be entitled to receive, out of the Company's assets that are +available for distribution to shareholders, an amount per share equal to the +liquidation preference per share, plus any declared and unpaid dividends, +without regard to any undeclared dividends. + +Unless the Trust is dissolved prior to the redemption of the Preferred, +holders of APEX will not receive shares of the Preferred, and their interest +in the Preferred will be represented by their APEX. If the Trust is dissolved, +the Company may elect to distribute depositary shares representing the +Preferred instead of fractional shares. Since the Preferred is held by the +Property Trustee, holders of APEX are only able to exercise voting or other +rights with respect to the Preferred through the Property Trustee. + +Dividends + +Dividends on shares of the Preferred are not mandatory. Holders of the +Preferred are entitled to receive, when, as and if declared by the Company's +board of directors (or a duly authorized committee of the board), out of funds +legally available for the payment of dividends under Delaware law, non- +cumulative cash dividends from the date of their issuance. These dividends are +payable on March 1, June 1, September 1 and December 1 of each year (each, for +purposes of this section, a "Dividend Payment Date"), with respect to the +Dividend Period, or portion thereof, ending on the day preceding the +respective Dividend Payment Date, at a rate per annum equal to the greater of +(x) three-month LIBOR for the related distribution period plus 0.765% (in the +case of the Series E Preferred Stock) or 0.77% (in the case of the Series F +Preferred Stock) and (y) 4.000%. + +Dividends are payable to holders of record of the Preferred as they appear on +the Company's books on the applicable record date, which shall be the 15th +calendar day before that Dividend Payment Date or such other record date fixed +by the Company's board of directors (or a duly authorized committee of the +board) that is not more than 60 nor less than 10 days prior to such Dividend +Payment Date (each, for purposes of this section, a "Dividend Record Date"). +These Dividend Record Dates apply regardless of whether a particular Dividend +Record Date is a business day. + +A "Dividend Period" is the period from and including a Dividend Payment Date +to but excluding the next Dividend Payment Date. If any that would otherwise +be a Dividend Payment Date is not a business day, then the next business day +will be the applicable Dividend Payment Date. + +The amount of dividends payable per share of the Preferred on each Dividend +Payment Date is calculated by multiplying the per annum Dividend Rate in +effect for that Dividend Period by a fraction, the numerator of which is the +actual number of days in that Dividend Period and the denominator of which is +360, and multiplying the rate obtained by $100,000. + +For any Dividend Period, LIBOR shall be determined by Goldman Sachs & Co. LLC, +as calculation agent for the Preferred, on the second London business day +immediately preceding the first day of such Dividend Period, as the case may +be, in the following manner: + +LIBOR will be the offered rate per annum for three-month deposits in U.S. +dollars, beginning on the first day of such period, as that rate appears on +Reuters Screen LIBOR01 (or any successor or replacement page) as of 11:00 +A.M., London time, on the second London business day immediately preceding the +first day of such Dividend Period or Interest Period, as the case may be. + +If the rate described above does not appear on Reuters Screen LIBOR01 (or any +successor or replacement page), LIBOR will be determined on the basis of the +rates, at approximately 11:00 A.M., London time, on the second London business +day immediately preceding the first day of such Dividend Period or Interest +Period, as the case may be, at which deposits of the following kind are +offered to prime banks in the London interbank market by four major banks in +that market selected by the calculation agent: three-month deposits in U.S. +dollars, beginning on the first day of such Dividend Period or Interest +Period, as the case may be, and in a Representative Amount. The calculation +agent will request the principal London office of each of these banks to +provide a quotation of its rate. If at least two quotations are provided, +LIBOR for the second London business day immediately preceding the first day +of such Dividend Period or Interest Period, as the case may be, will be the +arithmetic mean of the quotations. + +If fewer than two quotations are provided as described above, LIBOR for the +second London business day immediately preceding the first day of such +Dividend Period or Interest Period, as the case may be, will be the arithmetic +mean of the rates for loans of the following kind to leading European banks +quoted, at approximately 11:00 A.M. New York City time on the second London +business day immediately preceding the first day of such Dividend Period or +Interest Period, as the case may be, by three major banks in New York City +selected by the calculation agent: three-month loans of U.S. dollars, +beginning on the first day of such Dividend Period, and in a Representative +Amount. + +If fewer than three banks selected by the calculation agent are quoting as +described above, LIBOR for the new Dividend Period will be LIBOR in effect for +the prior Dividend Period or Interest Period, as the case may be. + +The calculation agent's determination of any dividend rate, and its +calculation of the amount of dividends for any Dividend Period, will be on +file at the Company's principal offices, will be made available to any +stockholder upon request and will be final and binding in the absence of +manifest error. + +This subsection uses several terms that have special meanings relevant to +calculating LIBOR. Those terms have the following meanings: + +The term "Representative Amount" means an amount that, in the calculation +agent's judgment, is representative of a single transaction in the relevant +market at the relevant time. + +"Reuters Screen LIBOR01 Page" means the display designated on the Reuters 3000 +Xtra (or such other page as may replace that page on that service or such +other service as may be nominated by the British Bankers' Association for the +purpose of displaying London interbank offered rates for U.S. Dollar +deposits). + +The term "business day" means a day that is a Monday, Tuesday, Wednesday, +Thursday or Friday and is not a day on which banking institutions in New York +City generally are authorized or obligated by law or executive order to close. + +The term "London business day" means a day that is a Monday, Tuesday, +Wednesday, Thursday or Friday and is a day on which dealings in U.S. dollars +are transacted in the London interbank market. If the Company determines not +to pay any dividend or a full dividend, the Company will provide prior written +notice to the Property Trustee, who will notify holders of APEX, and the +administrative trustees. + +Dividends on the Preferred are not cumulative. Accordingly, if the board of +directors of the Company (or a duly authorized committee of the board) does +not declare a dividend on the Preferred payable in respect of any Dividend +Period before the related Dividend Payment Date, such dividend will not accrue +and the Company will have no obligation to pay a dividend for that Dividend +Period on the Dividend Payment Date or at any future time, whether or not +dividends on the Preferred are declared for any future Dividend Period. + +So long as any share of Preferred remains outstanding, no dividend shall be +paid or declared on the Company's common stock or any other shares of the +Company's junior stock (as defined below) (other than a dividend payable +solely in junior stock), and no common stock or other junior stock shall be +purchased, redeemed or otherwise acquired for consideration by the Company, +directly or indirectly (other than as a result of a reclassification of junior +stock for or into other Junior Stock, or the exchange or conversion of one +share of junior stock for or into another share of junior stock and other than +through the use of the proceeds of a substantially contemporaneous sale of +junior stock), during a Dividend Period, unless the full dividends for the +latest completed Dividend Period on all outstanding shares of Preferred have +been declared and paid (or declared and a sum sufficient for the payment +thereof has been set aside). However, the foregoing provision shall not +restrict the ability of Goldman Sachs & Co. LLC, or any of the Company's other +affiliates, to engage in any market-making transactions in the Company's +junior stock in the ordinary course of business. + +As used in this description of the Preferred, "junior stock" means any class +or series of stock of the Company that ranks junior to the Preferred either as +to the payment of dividends or as to the distribution of assets upon any +liquidation, dissolution or winding up of the Company's junior stock includes +the Company's common stock. + +When dividends are not paid (or declared and a sum sufficient for payment +thereof set aside) on any Dividend Payment Date (or, in the case of parity +stock, as defined below, having Dividend Payment Dates different from the +Dividend Payment Dates pertaining to the Preferred, on a Dividend Payment Date +falling within the related Dividend Period for the Preferred) in full upon the +Preferred and any shares of parity stock, all dividends declared upon the +Preferred and all such equally ranking securities payable on such Dividend +Payment Date (or, in the case of parity stock having dividend payment dates +different from the dividend payment dates pertaining to the Preferred, on a +dividend payment date falling within the related Dividend Period for the +Preferred) shall be declared pro rata so that the respective amounts of such +dividends shall bear the same ratio to each other as all accrued but unpaid +dividends per share on the Preferred and all parity stock payable on such +Dividend Payment Date (or, in the case of parity stock having dividend payment +dates different from the dividend payment dates pertaining to the Preferred, +on a dividend payment date falling within the related Dividend Period for the +Preferred) bear to each other. + +As used in this description of the Preferred, "parity stock" means any other +class or series of stock of the Company that ranks equally with the Preferred +in the payment of dividends and in the distribution of assets on any +liquidation, dissolution or winding up of the Company. + +Subject to the foregoing, such dividends (payable in cash, stock or otherwise) +as may be determined by the Company's board of directors (or a duly authorized +committee of the board) may be declared and paid on the Company's common stock +and any other stock ranking equally with or junior to the Preferred from time +to time out of any funds legally available for such payment, and the shares of +the Preferred shall not be entitled to participate in any such dividend. + +Redemption + +The Preferred may be redeemed (but subject to applicable regulatory limits) in +whole or in part, at the Company's option. Any such redemption will be at a +cash redemption price of $100,000 per share, plus any declared and unpaid +dividends including, without regard to any undeclared dividends. Holders of +Preferred have no right to require the redemption or repurchase of the +Preferred. If notice of redemption of any Preferred has been given and if the +funds necessary for the redemption have been set aside by the Company for the +benefit of the holders of any shares of the Preferred so called for +redemption, then, from and after the redemption date, those shares shall no +longer be deemed outstanding and all rights of the holders of those shares +(including the right to receive any dividends) will terminate, except the +right to receive the redemption price. + +If fewer than all of the outstanding shares of the Preferred are to be +redeemed, the shares to be redeemed will be selected either pro rata from +the holders of record of shares of the Preferred in proportion to the number +of shares held by those holders or by lot or in such other manner as the +Company's board of directors or a committee thereof may determine to be fair +and equitable. + +The Company will mail notice of every redemption of Preferred by first class +mail, postage prepaid, addressed to the holders of record of the Preferred to +be redeemed at their respective last addresses appearing on the Company's +books. This mailing will be at least 30 days and not more than 60 days before +the date fixed for redemption ( provided that if the Preferred is held in +book-entry form through DTC, the Company may give this notice in any manner +permitted by DTC). Any notice mailed or otherwise given as provided in this +paragraph will be conclusively presumed to have been duly given, whether or +not the holder receives this notice, and failure duly to give this notice by +mail or otherwise, or any defect in this notice or in the mailing or provision +of this notice, to any holder of Preferred designated for redemption will not +affect the redemption of any other Preferred. If the Company redeems the +Preferred, the Trust, as holder of the Preferred, will redeem the +corresponding APEX as described under "- Mandatory Redemption of APEX upon +Redemption of Preferred." + +Each notice shall state: + +the redemption date; + +the number of shares of the Preferred to be redeemed and, if less than all +shares of the Preferred held by the holder are to be redeemed, the number of +shares to be redeemed from the holder; + +the redemption price; and + +the place or places where the Preferred is to be redeemed. + +The Company's right to redeem the Preferred once issued is subject to prior +approval of the Federal Reserve Board (or any successor banking agency). + +Liquidation Rights + +Upon any voluntary or involuntary liquidation, dissolution or winding up of +the Company, holders of the Preferred are entitled to receive out of assets of +the Company available for distribution to stockholders, after satisfaction of +liabilities to creditors, if any, before any distribution of assets is made to +holders of common stock or of any of the Company's other shares of stock +ranking junior as to such a distribution to the shares of the Preferred, a +liquidating distribution in the amount of $100,000 per share, plus declared +and unpaid dividends, without accumulation of any undeclared dividends. +Holders of the Preferred are not entitled to any other amounts from the +Company after they have received their full liquidation preference. + +In any such distribution, if the assets of the Company are not sufficient to +pay the liquidation preferences in full to all holders of the Preferred and +all holders of any other shares of the Company's stock ranking equally as to +such distribution with the Preferred, the amounts paid to the holders of the +Preferred and to the holders of all such other stock will be paid pro rata +in accordance with the respective aggregate liquidation preferences of those +holders. In any such distribution, the "liquidation preference" of any holder +of preferred stock means the amount payable to such holder in such +distribution, including any declared but unpaid dividends (and any unpaid, +accrued cumulative dividends in the case of any holder of stock on which +dividends accrue on a cumulative basis). If the liquidation preference has +been paid in full to all holders of Preferred and any other shares of the +Company's stock ranking equally as to the liquidation distribution, the +holders of the Company's other stock shall be entitled to receive all +remaining assets of the Company according to their respective rights and +preferences. + +For purposes of this description of the Preferred, the merger or consolidation +of the Company with any other entity, including a merger or consolidation in +which the holders of Preferred receive cash, securities or property for their +shares, or the sale, lease or exchange of all or substantially all of the +assets of the Company for cash, securities or other property shall not +constitute a liquidation, dissolution or winding up of the Company. + +Voting Rights + +Except as provided below, the holders of the Preferred have no voting rights. + +Whenever dividends on any shares of the Preferred shall have not been declared +and paid for a period the equivalent of six or more dividend payments, whether +or not consecutive, equivalent to at least 18 months Dividend Periods (as used +in this section, a "Nonpayment"), the holders of such shares, voting together +as a class with holders of any and all other series of voting preferred stock +(as defined below) then outstanding, will be entitled to vote for the election +of a total of two additional members of the Company's board of directors (as +used in this section, the "Preferred Stock Directors"), provided that the +election of any such director shall not cause the Company to violate the +corporate governance requirement of the New York Stock Exchange (or any other +exchange on which the Company's securities may be listed) that listed +companies must have a majority of independent directors and provided further +that the Company's board of directors shall at no time include more than two +Preferred Stock Directors. In that event, the number of directors on the +Company's board of directors shall automatically increase by two, and the new +directors shall be elected at a special meeting called at the request of the +holders of record of at least 20% of the Preferred or of any other series of +voting preferred stock (unless such request is received less than 90 days +before the date fixed for the next annual or special meeting of the +stockholders, in which event such election shall be held at such next annual +or special meeting of stockholders), and at each subsequent annual meeting. +These voting rights will continue until dividends on the shares of the +Preferred and any such series of voting preferred stock for at least one year +four Dividend Periods, whether or not consecutive, following the Nonpayment +shall have been fully paid (or declared and a sum sufficient for the payment +of such dividends shall have been set aside for payment). + +As used in this description of the Preferred, "voting preferred stock" means +any other class or series of preferred stock of the Company ranking equally +with the Preferred either as to dividends or the distribution of assets upon +liquidation, dissolution or winding up and upon which like voting rights have +been conferred and are exercisable. Whether a plurality, majority or other +portion of the shares of the Preferred and any other voting preferred stock +have been voted in favor of any matter shall be determined by reference to the +liquidation amounts of the shares voted. + +If and when dividends for at least four Dividend Periods, whether or not +consecutive, following a Nonpayment have been paid in full (or declared and a +sum sufficient for such payment shall have been set aside), the holders of the +Preferred shall be divested of the foregoing voting rights (subject to +revesting in the event of each subsequent Nonpayment) and, if such voting +rights for all other holders of voting preferred stock have terminated, the +term of office of each Preferred Stock Director so elected shall terminate and +the number of directors on the board of directors shall automatically decrease +by two. In determining whether dividends have been paid for at least four +Dividend Periods, whether or not consecutive, the Company may take account of +any dividend the Company elects to pay for a Dividend Period after the regular +dividend date for that period has passed. Any Preferred Stock Director may be +removed at any time without cause by the holders of record of a majority of +the outstanding shares of the Preferred when they have the voting rights +described above (voting together as a class with all series of voting +preferred stock then outstanding). So long as a Nonpayment shall continue, any +vacancy in the office of a Preferred Stock Director (other than prior to the +initial election after a Nonpayment) may be filled by the written consent of +the Preferred Stock Director remaining in office, or if none remains in +office, by a vote of the holders of record of a majority of the outstanding +shares of the Preferred and all voting preferred stock when they have the +voting rights described above (voting together as a class). The Preferred +Stock Directors shall each be entitled to one vote per director on any matter. + +So long as any shares of the Preferred remain outstanding, the Company will +not, without the affirmative vote or consent of the holders of at least two- +thirds of the outstanding shares of the Preferred and all other series of +voting preferred stock entitled to vote thereon, voting together as a single +class, given in person or by proxy, either in writing or at a meeting: + +authorized amount of, any class or series of stock ranking senior to the +Preferred with respect to payment of dividends or the distribution of assets +upon liquidation, dissolution or winding up of the Company; + +amend, alter or repeal the provisions of the Company's restated certificate of +incorporation so as to materially and adversely affect the special rights, +preferences, privileges and voting powers of the Preferred, taken as a whole; +or + +consummate a binding share exchange or reclassification involving the +Preferred or a merger or consolidation of the Company with another entity, +unless in each case (i) the shares of the Preferred remain outstanding or, in +the case of any such merger or consolidation with respect to which the Company +is not the surviving or resulting entity, are converted into or exchanged for +preference securities of the surviving or resulting entity or its ultimate +parent, and (ii) such shares remaining outstanding or such preference +securities, as the case may be, have such rights, preferences, privileges and +voting powers, taken as a whole, as are not materially less favorable to the +holders thereof than the rights, preferences, privileges and voting powers of +the Preferred, taken as a whole; + +provided , however , that any increase in the amount of the authorized or +issued Preferred or other authorized preferred stock or the creation and +issuance, or an increase in the authorized or issued amount, of other series +of preferred stock ranking equally with and/or junior to the Preferred with +respect to the payment of dividends (whether such dividends are cumulative or +non-cumulative) and/or the distribution of assets upon liquidation, +dissolution or winding up of the Company will not be deemed to adversely +affect the rights, preferences, privileges or voting powers of the Preferred. + +If an amendment, alteration, repeal, share exchange, reclassification, merger +or consolidation described above would adversely affect one or more but not +all series of voting preferred stock (including the Preferred for this +purpose), then only the series affected and entitled to vote shall vote as a +class in lieu of all such series of preferred stock. + +Without the consent of the holders of the Preferred, so long as such action +does not adversely affect the rights, preferences, privileges and voting +powers of the Preferred, the Company may amend, alter, supplement or repeal +any terms of the Preferred: + +to cure any ambiguity, or to cure, correct or supplement any provision +contained in the certificate of designations for the Preferred that may be +defective or inconsistent; or + +to make any provision with respect to matters or questions arising with +respect to the Preferred that is not inconsistent with the provisions of the +certificate of designations. + +The foregoing voting provisions do not apply if, at or prior to the time when +the act with respect to which such vote would otherwise be required shall be +effected, all outstanding shares of the Preferred shall have been redeemed or +called for redemption upon proper notice and sufficient funds shall have been +set aside by the Company for the benefit of the holders of the Preferred to +effect such redemption. + +Form + +The Preferred are issued only in fully registered form. Other than the +fractional shares currently held by each Trust, no fractional shares will be +issued unless a Trust is dissolved and the Company delivers the shares, rather +than depositary receipts representing the shares, to the registered holders of +its APEX. If a Trust is dissolved and depositary receipts or shares of the +Preferred held by the Trust are distributed to holders of its APEX, the +Company would intend to distribute them in book-entry form only and the +procedures governing holding and transferring beneficial interests in the +Preferred, and the circumstances in which holders of beneficial interests will +be entitled to receive certificates evidencing their shares or depositary +receipts. If the Company determines to issue depositary shares representing +fractional interests in the Preferred, each depositary share will be +represented by a depositary receipt. In such an event, the Preferred +represented by the depositary shares will be deposited under a deposit +agreement among the Company, a depositary and the holders from time to time of +the depositary receipts representing depositary shares. Subject to the terms +and conditions of any deposit agreement, each holder of a depositary share +will be entitled, through the depositary, in proportion to the applicable +fraction of a share of the Preferred represented by such depositary share, to +all the rights applicable fraction of a share of the Preferred represented by +such depositary share, to all the rights and preferences of the Preferred +represented thereby (including dividends, voting, redemption and liquidation +rights). + +Title + +The Company, the transfer agent and registrar for the Preferred held by a +Trust, and any of their agents may treat the registered owner of the +Preferred, which shall be the Property Trustee unless and until the Trust is +dissolved, as the absolute owner of that stock, whether or not any payment for +the Preferred shall be overdue and despite any notice to the contrary, for any +purpose. + +Transfer Agent and Registrar + +If a Trust is dissolved and shares of the Preferred held by the Trust or +depositary receipts representing the Preferred are distributed to holders of +APEX, the Company may appoint a transfer agent, registrar, calculation agent, +redemption agent and dividend disbursement agent for the Preferred. The +registrar for the Preferred will send notices to shareholders of any meetings +at which holders of the Preferred have the right to vote on any matter. + +DESCRIPTION OF MEDIUM-TERM NOTES, SERIES F, CALLABLE FIXED AND FLOATING +RATE NOTES DUE 2031 OF GS FINANCE CORP. (FULLY AND UNCONDITIONALLY GUARANTEED +BY THE GOLDMAN SACHS GROUP, INC.) + +The following is a brief description of the terms of the Callable Fixed and +Floating Rate Notes, an issuance of Medium-Term Notes, Series F of GS Finance +Corp. ("GSFC") (the "Callable Notes"), which are fully and unconditionally +guaranteed by the Company. It does not purport to be complete. This +description is subject to and qualified in its entirety by reference to the +Senior Debt Indenture, dated as of October 10, 2008, among GSFC, as issuer, +the Company, as guarantor, and The Bank of New York Mellon, as trustee, as +supplemented by the First Supplemental Indenture, dated as of February 20, +2015, the Fourth Supplemental Indenture, dated as of August 21, 2018 and the +Seventh Supplemental Indenture, dated as of July 1, 2020 (collectively, the +"GSFC 2008 Indenture"), which are exhibits to the Annual Report of which this +exhibit is a part. Unless the context otherwise provides, all references to +the Company in this description refer only to The Goldman Sachs Group, Inc. +and does not include its consolidated subsidiaries. + +The GSFC 2008 indenture permits GSFC to issue, from time to time, different +series of debt securities and, within each different series of debt +securities, different debt securities. The Medium-Term Notes, Series F are a +single, distinct series of debt securities. GSFC may, however, issue notes in +such amounts, at such times and on such terms as GSFC wishes. The notes of the +Medium-Term Notes, Series F may differ from one another, and from other +series, in their terms. + +In this description, references to a series of debt securities mean a series +issued under the GSFC 2008 Indenture, such as the notes issued under GSFC's +Medium-Term Notes, Series F program. + +Terms of the Callable Notes + +The Callable Notes were originally issued on March 11, 2021 and have a stated +maturity date of March 11, 2031 (the "stated maturity date"). As noted above, +the Callable Notes are part of a series of debt securities, entitled "Medium- +Term Notes, Series F," that GSFC may issue under the GSFC 2008 Indenture from +time to time. The Callable Notes are listed on the New York Stock Exchange +Bonds Market under the ticker symbol "GS/31B." + +The payment of principal of, and any interest and premium on, the Callable +Notes is fully and unconditionally guaranteed by the Company. The guarantee +will remain in effect until the entire principal of, and interest and premium, +if any, on, the Callable Notes has been paid in full or discharged in +accordance with the provisions of the GSFC 2008 Indenture, or otherwise fully +defeased by GSFC or by the Company. The guarantee of senior debt securities of +GSFC, such as the Callable Notes, will rank equally in right of payment to all +senior indebtedness of the Company. + +Payment of Principal on Stated Maturity Date + +GSFC will pay holders of Callable Notes that have not been redeemed by the +stated maturity date an amount in cash equal to the outstanding face amount of +such holders' Callable Notes. The stated maturity date of the Callable Notes +is March 11, 2031, subject to GSFC's early redemption right. If the stated +maturity date falls on a day that is not a business day, payment of principal +otherwise due on such day will be made on the next succeeding business day, +and no interest on such payment shall accrue for the period from and after the +stated maturity date. + +Interest Payments + +For each fixed rate interest period, the fixed interest rate on the Callable +Notes will equal 5% per annum. For each floating rate interest period, the +floating interest rate on the Callable Notes will be based upon the CMS spread +on the relevant interest determination date for such floating rate interest +period and will be a rate per annum equal to: + +if (i) the CMS spread minus 0.25% times (ii) 6.5 is greater than or equal to +the maximum interest rate, the maximum interest rate; + +if (i) the CMS spread minus 0.25% times (ii) 6.5 is less than the maximum +interest rate but greater than the minimum interest rate, (i) the CMS spread +minus 0.25% times (ii) 6.5; or + +if (i) the CMS spread minus 0.25% times (ii) 6.5 is equal to or less than the +minimum interest rate, the minimum interest rate. + +The maximum interest rate on the Callable Notes is 10% per annum. Based on the +formula used to calculate the floating interest rate on the Callable Notes, +holders will not benefit from any increases in the CMS spread minus 0.25% +above approximately 1.54%. The minimum interest rate on the Callable Notes is +0% per annum. + +The term "fixed rate interest periods" means the periods from and including a +fixed rate interest payment date (or the original issue date, in the case of +the first fixed rate interest period) to but excluding the next succeeding +fixed rate interest payment date, where the term "fixed rate interest payment +dates" means March 11, June 11, September 11 and December 11 of each year, +commencing on June 11, 2021 and ending on March 11, 2022, subject to +adjustments as described below. + +The term "floating rate interest periods" means the periods from and including +a floating rate interest payment date (or the final fixed rate interest +payment date, in the case of the first floating rate interest period) to but +excluding the next succeeding floating rate interest payment date (or the +stated maturity date, in the case of the final floating rate interest period), +where the term "floating rate interest payment dates" means March 11, June 11, +September 11 and December 11 of each year, beginning on June 11, 2022 and +ending on the stated maturity date, subject to adjustments as described below. + +The term "interest determination dates" means, for each floating rate interest +period, the second U.S. Government securities business day preceding such +floating rate interest period. + +The term "CMS spread" means, on any interest determination date, the 30-year +CMS rate minus the 5-year CMS rate, as described under "- CMS Rate" below. + +The calculation agent will calculate the amount of interest payable on each +fixed rate interest payment date and floating rate interest payment date +(each, an "interest payment date") for the applicable fixed rate interest +period and floating rate interest period (each, an "interest period") in the +following manner. For each $1,000 face amount of the Callable Notes and for +each interest period, the calculation agent will calculate the amount of +interest to be paid by calculating the product of (i) the $1,000 face amount +times (ii) the applicable fixed interest rate or floating interest rate times +(iii) the applicable day count convention on a 30/360 (ISDA) basis. + +Interest will be paid on the Callable Notes on each quarterly interest payment +date. If an interest payment date (other than the interest payment date that +falls on the stated maturity date) falls on a day that is not a business day, +the payment due on such interest payment date will be postponed to the next +day that is a business day; provided that interest due with respect to such +interest payment date shall not accrue from and including such interest +payment date to and including the date of payment of such interest as so +postponed. If the stated maturity date falls on a day that is not a business +day, payment of interest otherwise due on such day will be made on the next +succeeding business day, and no interest on such payment shall accrue for the +period from and after the stated maturity date. + +CMS Rate + +References to the 30-year CMS rate or the 5-year CMS rate on an interest +determination date mean the rate appearing on the Refinitiv page ICESWAP1 for +30-year or 5-year index maturity, as the case may be, as of approximately +11:00 A.M., New York City time, on such interest determination date. If a CMS +rate cannot be determined in this manner on the relevant interest +determination date, the following procedures will apply to the Callable Notes. + +If the calculation agent determines on an interest determination date that a +CMS rate has been discontinued, then the calculation agent will use a +substitute or successor rate that it has determined in its sole discretion is +most comparable to the applicable CMS rate, provided that if the calculation +agent determines there is an industry-accepted successor rate, then the +calculation agent shall use such successor rate. If the calculation agent has +determined a substitute or successor rate in accordance with the foregoing, +the calculation agent in its sole discretion may determine the business day +convention, the applicable business days and the interest determination dates +to be used, and any other relevant methodology for calculating such substitute +or successor rate, including any adjustment factor needed to make such +substitute or successor rate comparable to the applicable CMS rate, in a +manner that is consistent with any industry-accepted practices for such +substitute or successor rate. + +Unless the calculation agent uses a substitute or successor rate as so +provided, if the CMS rate cannot be determined in the manner described above, +the applicable CMS rate for that interest determination date will be +determined by the calculation agent, after consulting such sources as it deems +comparable to the foregoing display page, or any other source it deems +reasonable, in its sole discretion. + +The applicable CMS rate will be subject to the corrections, if any, published +on the Refinitiv page ICESWAP1 within one hour of the time that rate was first +displayed on such source. + +The term "Refinitiv page ICESWAP1" means the display on the Refinitiv Eikon +service, or any successor or replacement service, on the page ICESWAP1, or any +successor or replacement page on that service. + +Manner of Payment + +Any payment on the Callable Notes at maturity or upon redemption will be made +to an account designated by the holder of such Callable Notes and approved by +GSFC, or at the office of the trustee in New York City, but only when such +Callable Notes are surrendered to the trustee at that office. GSFC may pay +interest on any interest payment date by check mailed to the person who is the +holder on the regular record date. GSCF also may make any payment in +accordance with the applicable procedures of the depositary. + +Modified Business Day + +Any payment on the Callable Notes that would otherwise be due on a day that is +not a business day may instead be paid on the next day that is a business day, +with the same effect as if paid on the original due date. For the Callable +Notes, however, the term business day may have a different meaning than it +does for other Series F medium-term notes, as described under "- Special +Calculation Provisions" below. + +Role of Calculation Agent + +The calculation agent in its sole discretion will make all determinations +regarding the CMS spread, the 30-year CMS rate, the 5-year CMS rate, the +interest determination dates, the regular record dates, the interest payable +on each interest payment date, U.S. Government securities business days, +business days, postponement of the stated maturity date and the amount payable +on the Callable Notes at maturity or redemption, as applicable. Absent +manifest error, all determinations of the calculation agent will be final and +binding on holders of the Callable Notes and GSFC, without any liability on +the part of the calculation agent. + +Goldman Sachs & Co. LLC ("GS&Co."), an affiliate of GSFC, is currently serving +as the calculation agent as of the date of this description. GSFC may change +the calculation agent for the Callable Notes at any time after the date of +this prospectus supplement without notice and GS&Co. may resign as calculation +agent at any time upon 60 days' written notice to GSFC. + +Early Redemption Right + +GSFC may redeem the Callable Notes, at GSFC's option, in whole but not in +part, on the interest payment date falling on March 11, 2022 and on each +interest payment date occurring thereafter, for an amount equal to 100% of the +face amount plus any accrued and unpaid interest to, but excluding, the +redemption date. + +If GSFC chooses to exercise its early redemption right, it will notify the +holder of the Callable Notes and the trustee by giving at least five business +days' prior notice. The day GSFC gives the notice, which will be a business +day, will be the redemption notice date and the immediately following interest +payment date, which GSFC will state in the redemption notice, will be the +redemption date. GSFC will not give a redemption notice that results in a +redemption date later than the stated maturity date. + +If GSFC gives the holder a redemption notice, GSFC will redeem the entire +outstanding face amount of such holder's Callable Notes. On the redemption +date, GSFC will pay to the holder of record on the business day immediately +preceding the redemption date, the redemption price in cash, together with any +accrued and unpaid interest to, but excluding, the redemption date, in the +manner described under "- Manner of Payment" above. + +Special Calculation Provisions + +The term "business day" with respect to the Callable Notes means each Monday, +Tuesday, Wednesday, Thursday and Friday that is not a day on which banking +institutions in New York City generally are authorized or obligated by law, +regulation or executive order to close. + +References to a U.S. Government securities business day with respect to the +Callable Notes mean any day except for a Saturday, Sunday or a day on which +the Securities Industry and Financial Markets Association recommends that the +fixed income department of its members be closed for the entire day for +purposes of trading in U.S. government securities. + +Defeasance and Covenant Defeasance + +The provisions for full defeasance and covenant defeasance in the GSFC 2008 +Indenture do not apply to the Callable Notes. + +Default, Remedies and Waiver of Default + +A holder will have special rights if an event of default with respect to his +or her series of debt securities occurs and is continuing, as described in +this subsection. + +Events of Default + +References to an event of default with respect to any series of debt +securities mean any of the following: + +GSFC or the Company does not pay the principal or any premium on any debt +security of that series within 30 days after the due date; + +GSFC or the Company does not pay interest on any debt security of that series +within 30 days after the due date; or + +GSFC files for bankruptcy or other events of bankruptcy, insolvency or +reorganization relating to GSFC occur. Those events must arise under U.S. +federal or state law, unless GSFC merges, consolidates or sells its assets as +described above and the successor firm is a non-U.S. entity. If that happens, +then those events must arise under U.S. federal or state law or the law of the +jurisdiction in which the successor firm is legally organized. + +As described below under "Remedies If an Event of Default Occurs," under the +GSFC 2008 Indenture, events of bankruptcy, insolvency or reorganization +relating to the Company will not cause any of GSFC's debt securities issued +under such indenture to be automatically accelerated. In the event that the +Company becomes subject to certain events of bankruptcy, insolvency or +reorganization (but GSFC does not), any series of debt securities issued under +the GSFC 2008 Indenture will not be immediately due and repayable. In +addition, under the GSFC 2008 Indenture, a breach of a covenant or warranty by +the Company (including, for example, a breach of the Company's covenants and +warranties with respect to mergers and similar transactions or restrictions on +liens) will not have the potential to cause any of GSFC's debt securities +issued under the GSFC 2008 Indenture to be declared due and payable +immediately. Instead, under the GSFC 2008 Indenture, the trustee or holder +will need to wait until the earlier of the time that (i) GSFC itself becomes +subject to certain events of bankruptcy, insolvency or reorganization or +otherwise defaults on the terms of the debt securities, (ii) the Company +otherwise defaults on the terms of the debt securities and (iii) the final +maturity of the debt securities. The return the holder receives on any series +of debt securities issued under the GSFC 2008 Indenture may be significantly +less than what a holder would have otherwise received had the debt securities +been automatically accelerated upon certain events of bankruptcy, insolvency +or reorganization relating to the Company or declared due and payable +immediately following the breach of a covenant or warranty by the Company. + +Covenant Breaches + +References to a covenant breach with respect to any series of debt securities +mean any of the following: + +GSFC or the Company does not deposit a required sinking fund payment with +regard to any debt security of that series on the due date; + +GSFC remains in breach of any other covenant it makes in the GSFC 2008 +Indenture for the benefit of the relevant series for 60 days after GSFC and +the Company receive a notice of default stating that GSFC is in breach and +requiring GSFC to remedy the breach. The notice must be sent by the trustee or +the holders of at least 10% in principal amount of the relevant series of debt +securities then outstanding; + +Except as provided by the GSFC 2008 Indenture, the debt security of that +series and the related guarantee, the guarantee ceases to be effective, or a +court finds the guarantee to be unenforceable or invalid, or the Company +denies its obligations as the guarantor. + +A covenant breach shall not be an event of default with respect to any +security. + +Remedies If an Event of Default or Covenant Breach Occurs + +If an event of default has occurred with respect to any series of debt +securities and has not been cured or waived, the trustee or the holders of not +less than 25% in principal amount of all debt securities of that series then +outstanding may declare the entire principal amount of the debt securities of +that series to be due immediately. If the event of default occurs because of +events in bankruptcy, insolvency or reorganization relating to GSFC, the +entire principal amount of the debt securities of that series will be +automatically accelerated, without any action by the trustee or any holder. + +Each of the situations described above is called an acceleration of the stated +maturity of the affected series of debt securities. If the stated maturity of +any series is accelerated and a judgment for payment has not yet been +obtained, the holders of a majority in principal amount of the debt securities +of that series may cancel the acceleration for the entire series. + +If an event of default or a covenant breach occurs, the trustee will have +special duties. In that situation, the trustee will be obligated to use those +of its rights and powers under the GSFC 2008 Indenture, and to use the same +degree of care and skill in doing so, that a prudent person would use in that +situation in conducting his or her own affairs. + +Except as described in the prior paragraph, the trustee is not required to +take any action under the GSFC 2008 Indenture at the request of any holders +unless the holders offer the trustee reasonable protection from expenses and +liability ( i.e., an indemnity). If the trustee is provided with an +indemnity reasonably satisfactory to it, the holders of a majority in +principal amount of all debt securities of the relevant series may direct the +time, method and place of conducting any lawsuit or other formal legal action +seeking any remedy available to the trustee with respect to that series. These +majority holders may also direct the trustee in performing any other action +under the GSFC 2008 Indenture with respect to the debt securities of that +series. + +Before a holder bypasses the trustee and bring its own lawsuit or other formal +legal action or take other steps to enforce its rights or protect its +interests relating to any debt security, all of the following must occur: + +The holder must give the trustee written notice that an event of default or a +covenant breach has occurred, and the event of default or covenant breach must +not have been cured or waived; + +The holders of not less than 25% in principal amount of all debt securities of +a holder's series must make a written request that the trustee take action +because of the default, and they or other holders must offer to the trustee +indemnity reasonably satisfactory to the trustee against the cost and other +liabilities of taking that action; + +The trustee must not have taken action for 60 days after the above steps have +been taken; and + +During those 60 days, the holders of a majority in principal amount of the +debt securities of a holder's series must not have given the trustee +directions that are inconsistent with the written request of the holders of +not less than 25% in principal amount of the debt securities of a holder's +series. + +A holder is entitled at any time, however, to bring a lawsuit for the payment +of money due on his or her debt security on or after its stated maturity (or, +if the debt security is redeemable, on or after its redemption date). + +Waiver of Default + +The holders of not less than a majority in principal amount of the debt +securities of any series may waive a default for all debt securities of that +series. If this happens, the default will be treated as if it has not +occurred. No one can waive a payment default on a holder's debt security, +however, without the approval of the particular holder of that debt security. + +GSFC and the Company Will Give the Trustee Information About Defaults +Annually + +GSFC and the Company will furnish to the trustee every year a written +statement, respectively, of two of their officers certifying that to their +knowledge GSFC or the Company, as the case may be, is in compliance with the +GSFC 2008 Indenture and the debt securities issued under it, or else +specifying any default under the relevant debt indenture. For the purpose of +this paragraph, the term "default" means any event which is, or after notice +or lapse of time or both would become, an event of default or covenant breach. + +Default Amount on Acceleration + +If an event of default occurs and the maturity of the Callable Notes is +accelerated, GSFC will pay the default amount in respect of the principal of +the Callable Notes at the maturity, instead of the amount payable on the +Callable Notes as described earlier. + +For the purpose of determining whether the holders of GSFC's Medium-Term Notes +Series F, which include the Callable Notes, are entitled to take any action +under the GSFC 2008 Indenture, GSFC will treat the outstanding face amount of +each Callable Note as the outstanding principal amount of that note. Although +the terms of the Callable Notes differ from those of the other Medium-Term +Notes Series F, holders of specified percentages in principal amount of all +Medium-Term Notes Series F, together in some cases with other series of GSFC's +debt securities, will be able to take action affecting all the Medium-Term +Notes Series F, including the Callable Notes, except with respect to certain +Medium-Term Notes Series F, if the terms of such notes specify that the +holders of specified percentages in the principal amount of all such notes +must also consent to such action. This action may involve changing some of the +terms that apply to the Medium-Term Notes Series F, accelerating the maturity +of the Medium-Term Notes Series F, after a default or waiving some of GSFC's +obligations under the GSFC 2008 Indenture. In addition, certain changes to the +GSFC 2008 Indenture and the Callable Notes that only affect certain debt +securities may be made with the approval of holders of a majority of the +principal amount of such affected debt securities. + +Guarantee by the Company + +The Company has fully and unconditionally guaranteed the payment of principal +of, and any interest and premium on, the Medium-Term Notes, Series F, which +include the Callable Notes, when due and payable, whether at the stated +maturity, by declaration of acceleration, call for redemption or otherwise, in +accordance with the terms of the security and the GSFC 2008 Indenture. The +guarantee will remain in effect until the entire principal of, and interest +and premium, if any, on, the debt securities has been paid in full or +discharged in accordance with the provisions of the GSFC 2008 Indenture, or +otherwise fully defeased by the Company. + +The guarantee by the Company of its debt securities issued under the GSFC 2008 +Indenture will rank equally in right of payment with all senior indebtedness +of the Company. + +Mergers and Similar Transactions + +GSFC and the Company are generally permitted to merge or consolidate with +another corporation or other entity. GSFC and the Company also permitted to +sell their assets substantially as an entirety to another corporation or other +entity. With regard to any series of debt securities, however, GSFC or the +Company may not take any of these actions unless all the following conditions +are met: + +If the successor entity in the transaction is not GSFC or the Company, as the +case may be, the successor entity must be organized as a corporation, +partnership or trust and must expressly assume the obligations of GSFC or the +Company under the debt securities of that series and the GSFC 2008 Indenture +with respect to that series. The successor entity may be organized under the +laws of any jurisdiction, whether in the United States or elsewhere. + +Immediately after the transaction, no default under the debt securities of +that series or the related guarantees has occurred and is continuing. For this +purpose, "default under the debt securities of that series or the related +guarantees" means an event of default or a covenant breach with respect to +that series or the related guarantees or any event that would be an event of +default with respect to that series or the related guarantees if the +requirements for giving GSFC or the Company default notice and for GSFC's or +the Company's default having to continue for a specific period of time were +disregarded. + +If the conditions described above are satisfied with respect to debt +securities of any series, neither GSFC nor the Company will need to obtain the +approval of the holders of those debt securities in order to merge or +consolidate or to sell assets of GSFC or the Company. Also, these conditions +will apply only if GSFC or the Company wishes to merge or consolidate with +another entity or sell assets of GSFC or the Company substantially as an +entirety to another entity. Neither GSFC nor the Company will need to satisfy +these conditions if GSFC or the Company enters into other types of +transactions, including any transaction in which GSFC or the Company acquire +the stock or assets of another entity, any transaction that involves a change +of control of GSFC or the Company but in which GSFC or the Company does not +merge or consolidate and any transaction in which GSFC or the Company sells +less than substantially all assets of GSFC or the Company. While GSFC is +currently a wholly owned subsidiary of the Company, there is no requirement +that it remain a subsidiary. + +Also, if GSFC or the Company merges, consolidates or sells assets of GSFC or +the Company substantially as an entirety and the successor is a non-U.S. +entity, neither GSFC nor any successor would have any obligation to compensate +a holder for any resulting adverse tax consequences relating to his or her +debt securities. + +Notwithstanding the foregoing and for the avoidance of doubt, GSFC may sell or +transfer its assets substantially as an entirety, in one or more transactions, +to one or more entities, provided that GSFC's assets and the assets of its +direct or indirect subsidiaries in which it owns a majority of the combined +voting power, taken together, are not sold or transferred substantially as an +entirety to one or more entities that are not majority-owned subsidiaries of +the Company, and the Company. may sell or transfer its assets substantially as +an entirety in one or more transactions, to one or more entities, provided +that the assets of the Company and its direct or indirect subsidiaries in +which it owns a majority of the combined voting power, taken together, are not +sold or transferred substantially as an entirety to one or more entities that +are not such subsidiaries. + +Restriction on Liens + +In the GSFC 2008 Indenture, the Company promises, with respect to each series +of senior debt securities, not to create, assume, incur or guarantee any debt +for borrowed money that is secured by a lien on the voting or profit +participating equity ownership interests that the Company or any of its +subsidiaries own in Goldman Sachs & Co. LLC, or in any subsidiary of the +Company that beneficially owns or holds, directly or indirectly, those +interests in Goldman Sachs & Co. LLC, unless the Company also secures the +senior debt securities of that series on an equal or priority basis with the +other secured debt. The promise of the Company, however, is subject to an +important exception: it may secure debt for borrowed money with liens on those +interests without securing the senior debt securities of any series if its +board of directors determines that the liens do not materially detract from or +interfere with the value or control of those interests, as of the date of the +determination. + +Except as noted above, the GSFC 2008 Indenture does not restrict the Company's +ability to put liens on its interests in its subsidiaries other than Goldman +Sachs & Co. LLC, nor does the indenture restrict the Company's ability to sell +or otherwise dispose of its interests in any of its subsidiaries, including +Goldman Sachs & Co. LLC. In addition, the restriction on liens in the GSFC +2008 Indenture applies only to liens that secure debt for borrowed money. For +example, liens imposed by operation of law, such as liens to secure statutory +obligations for taxes or workers' compensation benefits, or liens the Company +creates to secure obligations to pay legal judgments or surety bonds, would +not be covered by this restriction. + +Modification of the Debt Indenture and Waiver of Covenants + +There are four types of changes GSFC and the Company can make to the GSFC 2008 +Indenture and the debt securities or series of debt securities and related +guarantees issued under the GSFC 2008 Indenture. + +Changes Requiring Each Holder's Approval + +First, there are changes that cannot be made without the approval of the +holder of each debt security affected by the change under the GSFC 2008 +Indenture. Here is a list of those types of changes: + +change the stated maturity for any principal or interest payment on a debt +security; + +reduce the principal amount, the amount payable on acceleration of the stated +maturity after a default, the interest rate or the redemption price for a debt +security; + +permit redemption of a debt security if not previously permitted; + +impair any right a holder may have to require repayment of its debt security; + +change the currency of any payment on a debt security; + +change the place of payment on a debt security; + +impair a holder's right to sue for payment of any amount due on its debt +security; + +reduce the percentage in principal amount of the debt securities of any one or +more affected series, taken + +separately or together, as applicable, and whether comprising the same or +different series or less than all of the debt securities of a series, the +approval of whose holders is needed to change the applicable debt indenture or +those debt securities; + +reduce the percentage in principal amount of the debt securities of any one or +more affected series, taken separately or together, as applicable, and whether +comprising the same or different series or less than all of the debt +securities of a series, the consent of whose holders is needed to waive GSFC's +compliance with the applicable debt indenture or to waive defaults; and + +change the provisions of the applicable debt indenture dealing with +modification and waiver in any other respect, except to increase any required +percentage referred to above or to add to the provisions that cannot be +changed or waived without approval of the holder of each affected debt +security. + +Changes Not Requiring Approval + +The second type of change does not require any approval by holders of the debt +securities affected. These changes are limited to clarifications and changes +that would not adversely affect any debt securities of any series in any +material respect. Neither GSFC nor the Company needs any approval to make +changes that affect only debt securities to be issued under the applicable +indenture after the changes take effect. + +GSFC and the Company may also make changes or obtain waivers that do not +adversely affect a particular debt security, even if they affect other debt +securities. In those cases, neither GSFC nor the Company needs to obtain the +approval of the holder of the unaffected debt security; GSFC and the Company +need only obtain any required approvals from the holders of the affected debt +securities. + +Changes Requiring Majority Approval + +Any other change to the GSFC 2008 Indenture and the debt securities issued +under such debt indenture would require the following approval: + +If the change affects only particular debt securities within a series, it must +be approved by the holders of a majority in principal amount of such +particular debt securities. + +If the change affects multiple debt securities of one or more series, it must +be approved by the holders of a majority in principal amount of all debt +securities affected by the change, with all such affected debt securities +voting together as one class for this purpose (and by the holders of a +majority in principal amount of any affected debt securities that by their +terms are entitled to vote separately). + +In each case, the required approval must be given by written consent. + +This would mean that modification of terms with respect to certain debt +securities of a series could be effectuated under the GSFC 2008 Indenture +without obtaining the consent of the holders of a majority in principal amount +of other securities of such series that are not affected by such modification. + +The same majority approval would be required for GSFC to obtain a waiver of +any of its covenants in the GSFC 2008 Indenture. GSFC's covenants include the +promises GSFC and the Company make about merging and, with respect to the +Company, putting liens on GSFC's interests in Goldman Sachs & Co. LLC. If the +holders approve a waiver of a covenant, neither GSFC nor the Company will have +to comply with it. The holders, however, cannot approve a waiver of any +provision in a particular debt security, or in the GSFC 2008 Indenture as it +affects that debt security, that neither GSFC nor the Company can change +without the approval of the holder of that debt security as described above in +"- Changes Requiring Each Holder's Approval," unless that holder approves the +waiver. + +Special Rules for Action by Holders + +When holders take any action under the GSFC 2008 Indenture, such as giving a +notice of default, notice of covenant breach, declaring an acceleration, +approving any change or waiver or giving the trustee an instruction, GSFC will +apply the following rules. + +Only Outstanding Debt Securities Are Eligible + +Only holders of outstanding debt securities or the outstanding debt securities +of the applicable series, as applicable, will be eligible to participate in +any action by holders of such debt securities or the debt securities of that +series. Also, GSFC will count only outstanding debt securities in determining +whether the various percentage requirements for taking action have been met. +For these purposes, a debt security will not be "outstanding" if: + +it has been surrendered for cancellation; + +GSFC has deposited or set aside, in trust for its holder, money for its +payment or redemption; + +GSFC has fully defeased it; or + +GSFC or one of its affiliates, such as Goldman Sachs & Co. LLC, is the owner. + +Determining Record Dates for Action by Holders + +GSFC and the Company will generally be entitled to set any day as a record +date for the purpose of determining the holders that are entitled to take +action under a particular debt indenture. In certain limited circumstances, +only the trustee will be entitled to set a record date for action by holders. +If GSFC, the Company or the trustee set a record date for an approval or other +action to be taken by holders, that vote or action may be taken only by +persons or entities who are holders on the record date and must be taken +during the period that GSFC specifies for this purpose, or that the trustee +specifies if it sets the record date. GSFC, the Company or the trustee, as +applicable, may shorten or lengthen this period from time to time. + +This period, however, may not extend beyond the 180th day after the record +date for the action. In addition, record dates for any global debt security +may be set in accordance with procedures established by the depositary from +time to time. Accordingly, record dates for global debt securities may differ +from those for other debt securities. + +Form of Callable Notes + +The Callable Notes are issued in book-entry form through The Depository Trust +Company and represented by a global note. GSFC will not issue definitive notes +in exchange for the global note except in limited circumstances. + +DESCRIPTION OF MEDIUM-TERM NOTES, SERIES E, INDEX-LINKED NOTES DUE 2028 OF +GS FINANCE CORP. (FULLY AND UNCONDITIONALLY GUARANTEED BY THE GOLDMAN SACHS +GROUP, INC.) 2 + +The following is a brief description of the terms of the Large Cap Growth +Index-Linked ETNs, an issuance of Medium-Term Notes, Series E of GS Finance +Corp. ("GSFC") (the "Index Linked Notes"), which are fully and unconditionally +guaranteed by the Company. It does not purport to be complete. This +description is subject to and qualified in its entirety by reference to the +Senior Debt Indenture, dated as of October 10, 2008, among GSFC, as issuer, +the Company, as guarantor, and The Bank of New York Mellon, as trustee, as +supplemented by the First Supplemental Indenture, dated as of February 20, +2015 (collectively, the "GSFC 2008 Indenture"), which are exhibits to the +Annual Report of which this exhibit is a part. Unless the context otherwise +provides, all references to the Company in this description refer only to The +Goldman Sachs Group, Inc. and does not include its consolidated subsidiaries. + +The GSFC 2008 indenture permits GSFC to issue, from time to time, different +series of debt securities and, within each different series of debt +securities, different debt securities. The Medium-Term Notes, Series E are a +single, distinct series of debt securities. GSFC may, however, issue notes in +such amounts, at such times and on such terms as GSFC wishes. The notes of the +Medium-Term Notes, Series E may differ from one another, and from other +series, in their terms. + +In this description, references to a series of debt securities mean a series +issued under the GSFC 2008 Indenture, such as the notes issued under GSFC's +Medium-Term Notes, Series E program. + +Terms of the Index-Linked Notes + +As noted above, the Index-Linked Notes are part of a series of debt +securities, entitled "Medium-Term Notes, Series E," that GSFC may issue under +the GSFC 2008 Indenture from time to time. The Index-Linked Notes were, until +redemption on February 15, 2022, listed on the New York Stock Exchange Arca +under the ticker symbol "FRLG." + +The payment of principal of, and any interest and premium on, the Index-Linked +Notes is fully and unconditionally guaranteed by the Company. The guarantee +will remain in effect until the entire principal of, and interest and premium, +if any, on, the Index-Linked Notes has been paid in full or discharged in +accordance with the provisions of the GSFC 2008 Indenture, or otherwise fully +defeased by GSFC or by the Company. The guarantee of senior debt securities of +GSFC, such as the Index-Linked Notes, will rank equally in right of payment to +all senior indebtedness of the Company. + +The Index-Linked Notes do not bear interest. The amount that will be paid on +the Index-Linked Notes at stated maturity (April 3, 2028) or redemption (which +could be postponed up to 30 calendar days if a market disruption event occurs) +is based on the leveraged performance of the Russell 1000® Growth Total Return +Index, less significant applicable fees. + +The Index-Linked Notes had two times leverage on the inception date (March 29, +2018) and are rebalanced to approximately two times leverage both quarterly +and in the event of a decline in the index level of 20% or more since the +prior rebalancing date. As a result, the actual leverage may be greater or +less than two times between rebalancing dates (which could be postponed up to +5 trading days if a market disruption event occurs, potentially causing +leverage to significantly exceed two). + +Amount payable on the notes: + +The Index-Linked Notes do not bear interest. + +At maturity: + +if the Index-Linked Notes have not been previously redeemed, on the stated +maturity date GSFC will pay such holder, for each $100 face amount of his or +her Index-Linked Notes, an amount in cash equal to (i) the closing indicative +note value on the final valuation date minus (ii) the settlement fee on the +final valuation date + +Upon redemption at the option of the holder: + +if the holder elects to have GSFC redeem at least $500,000 face amount of his +or her Index-Linked Notes, on the applicable redemption date GSFC will pay +such holder, for each $100 face amount of his or her Index-Linked Notes so +redeemed, an amount in cash equal to (i) the closing indicative note value on +the applicable redemption valuation date minus (ii) the settlement fee on such +redemption valuation date + +Upon redemption at the option of the issuer: + +if GSFC redeems a holder's notes at its option, on the applicable redemption +date GSFC will pay such holder, for each $100 face amount of such holder's +notes, an amount in cash equal to the closing indicative note value on the +applicable redemption valuation date + +Upon automatic redemption: + +if a holder's notes are automatically redeemed, on the applicable redemption +date GSFC will pay such holder, for each $100 face amount of his or her Index- +Linked Notes, an amount in cash equal to the automatic redemption note value + +Closing indicative note value: + +on the initial valuation date, $100; or + +on any valuation date other than the initial valuation date, (i) the asset +position on such valuation date minus (ii) the financing level on such +valuation date, subject to a minimum of $0 + +The closing indicative note value is intended to approximate the intrinsic +economic value of the Index-Linked Notes at a particular point in time and +will fluctuate over time based on the changes in the closing level of the +index, subject to applicable fees . + +The closing indicative note value is expected to be published on each +valuation date, so long as no market disruption event has occurred or is +continuing, under the Bloomberg symbol "FRLGIV Index." + +Intraday indicative note value: at any given time on any valuation date +after the initial valuation date, before the closing indicative note value for +such day is published, (i) the intraday asset position at such time on the +current valuation date minus (ii) the financing level on the immediately +preceding valuation date minus (iii) the daily investor fee on the current +valuation date, subject to a minimum of $0. + +The intraday indicative note value is intended to approximate the intrinsic +economic value of the Index-Linked Notes during the trading day and will +fluctuate within a trading day based on changes in the intraday level of the +index, subject to applicable fees. + +The intraday indicative note value is expected to be published every 15 +seconds on each valuation day during the hours on which trading is generally +conducted on NYSE Arca, so long as no market disruption event has occurred or +is continuing. The intraday indicative note value is expected to be published +under the Bloomberg symbol "FRLGIV Index." + +Asset position: + +on the initial valuation date, $200, which is equal to the initial leverage +factor times the face amount per note; or + +on any valuation date other than the initial valuation date, the sum of (i) +the product of (a) the asset position on the immediately preceding valuation +date times (b) the index performance factor on the current valuation date plus +(ii) the rebalancing amount (if any) on the current valuation date + +The asset position represents a hypothetical leveraged investment in the index +and reflects the exposure to the index. The value of the asset position will +increase or decrease depending on the performance of the index and, on each +rebalancing date, will further increase or decrease to reflect changes to the +exposure to the index due to the rebalancing adjustment. The asset position is +expected to be published on each valuation date, so long as no market +disruption event has occurred or is continuing, under the Bloomberg symbol +"FRLGAP Index." + +Intraday asset position: at any given time on any valuation date after the +initial valuation date, the product of (i) the asset position on the +immediately preceding valuation date times (ii) the intraday index +performance factor. + +Settlement fee: the settlement fee is a fee imposed upon redemption at the +option of the holder and payment on the stated maturity date and is equal to +the product of 0.06% times the asset position on the applicable redemption +valuation date or the final valuation date, as applicable. + +The settlement fee is assessed to account for the brokerage and transaction +costs in unwinding any hedge the issuer may have relating to the Index-Linked +Notes. + +Index performance factor: + +on the initial valuation date, 1; or + +on any valuation date other than the initial valuation date, the quotient of +(i) the closing level of the index on the current valuation date divided by +(ii) the closing level of the index on the immediately preceding valuation +date + +Intraday index performance factor: at any given time on any valuation date +after the initial valuation date, the quotient of (i) the applicable +intraday level of the index at such time divided by (ii) the closing level +of the index on the immediately preceding valuation date + +Initial leverage factor : 2 + +Leverage factor : on any valuation date, the quotient of (i) the asset +position on such valuation date divided by (ii) the closing indicative note +value on such valuation date + +The leverage factor reflects the leveraged exposure to the index and will +reset to approximately 2 on each rebalancing date. + +Financing level: + +on the initial valuation date, $100; or + +on any valuation date other than the initial valuation date, the sum of (i) +the financing level on the immediately preceding valuation date plus (ii) the +daily investor fee on the current valuation date plus (iii) the rebalancing +fee (if any) on the current valuation date plus (iv) the rebalancing amount +(if any) on the current valuation date. + +The financing level represents a hypothetical loan and the accrual of the +daily investor fee and the rebalancing fee (on each rebalancing date). On each +rebalancing date, the financing level will increase due to the rebalancing fee +and will increase or decrease to reflect changes in the hypothetical loan +associated with the rebalanced exposure to the index. The daily investor fee +is intended to compensate the issuer for providing investors leveraged +participation in the index, including financing fees that investors may have +otherwise incurred had they sought to borrow funds at a similar rate from a +third party to invest in the index. The financing level is expected to be +published on each valuation date, so long as no market disruption event has +occurred or is continuing, under the Bloomberg symbol "FRLGFL Index." + +Daily investor fee: + +on the initial valuation date, $0; or + +on any valuation date other than the initial valuation date, the product of +(i) the sum of (a) the product of (1) the financing level on the +immediately preceding rebalancing date (or if none, the inception date) +times (2) the financing fee rate plus (b) the product of (1) 0.65% per +annum times (2) 50% times (3) the asset position on the immediately +preceding valuation date times (ii) the quotient of (a) the number of +calendar days from, but excluding, the immediately preceding valuation date +to, and including, the current valuation date divided by (b) 360. In no case +will the daily investor fee be negative. + +The daily investor fee is assessed daily and is intended to compensate the +issuer for providing investors leveraged participation in the index, including +financing fees that investors may have otherwise incurred had they sought to +borrow funds at a similar rate from a third party to invest in the index. + +Financing fee rate: + +on any valuation date prior to and including the first quarterly rebalancing +date, 3.12175%; or + +on any valuation date after the first quarterly rebalancing date, the sum of +(i) 0.81% per annum plus (ii) 3-month USD LIBOR calculated on the +immediately preceding quarterly rebalancing date. + +The financing fee rate is intended to represent a rate for a financing fee +that investors may have otherwise incurred had they sought to borrow funds at +a similar rate from a third party to invest in the index. + +3-month USD LIBOR: on any day, the 3-month London Interbank Offered Rate +(LIBOR) for deposits in U.S. dollars as it appears on Reuters screen LIBOR01 +page (or any successor or replacement service or page thereof) at 11:00 a.m., +London time on such day (or, if such day is not a London business day, the +immediately preceding London business day), subject to adjustment as described +below. + +Discontinuance of 3-month USD LIBOR: if the calculation agent determines, +on a day on which 3-month USD LIBOR is scheduled to be determined under the +terms of the Index-Linked Notes, that 3-month USD LIBOR has been discontinued, +then the calculation agent will use a substitute or successor rate that it has +determined in its sole discretion is most comparable to the 3-month USD LIBOR +rate, provided that if the calculation agent determines there is an +industry-accepted successor rate, then the calculation agent shall use such +successor rate. If the calculation agent has determined a substitute or +successor rate in accordance with the foregoing, the calculation agent in its +sole discretion may determine the definition of business day and the valuation +dates to be used, and any other relevant methodology for calculating such +substitute or successor rate, including any adjustment factor needed to make +such substitute or successor rate comparable to the 3-month USD LIBOR rate, in +a manner that is consistent with industry-accepted practices for such +substitute or successor rate. + +Unless the calculation agent uses a substitute or successor rate as so +provided, if the 3-month USD LIBOR rate cannot be determined in the manner +described above, then: + +If 3-month USD LIBOR does not appear on the Reuters screen LIBOR page on any +day, then the calculation agent will determine 3-month USD LIBOR on the basis +of the rates at which deposits in U.S. dollars are offered by four major banks +in the London interbank market at approximately 11:00 a.m., London time, on +such London business day to prime banks in the London interbank market for a +period of three months commencing in two London business days and in a +representative amount. The calculation agent will request the principal London +office of each of the four major banks in the London interbank market to +provide a quotation of its rate. If at least two such quotations are provided, +3-month USD LIBOR for such London business day will be the arithmetic mean of +the quotations. + +If fewer than two quotations are provided as requested, 3-month USD LIBOR for +such London business day will be the arithmetic mean of the rates quoted by +major banks in New York City, selected by the calculation agent, at +approximately 11:00 a.m., New York City time, on such London business day for +loans in U.S. dollars to leading European banks for a period of three months +commencing in two London business days and in a representative amount. + +If no quotation is provided, then the calculation agent, after consulting such +sources as it deems comparable to any of the foregoing quotations or display +page, or any such source as it deems reasonable from which to estimate 3-month +USD LIBOR or any of the foregoing lending rates, shall determine 3-month USD +LIBOR for the applicable day in its sole discretion. + +For the purposes of the previous paragraph, "representative amount" means an +amount that is representative for a single transaction in the relevant market +at the relevant time. + +Closing level of the index: as described below under "- Special +Calculation Provisions - Closing Level of the Index" + +Intraday level of the index: as described below under "- Special +Calculation Provisions - Intraday Level of the Index" + +Inception date: March 29, 2018 + +Initial valuation date: the inception date + +Final valuation date : March 29, 2028, unless the calculation agent +determines that a market disruption event occurs or is continuing on that day +or that day is not otherwise a trading day. In that event, the final valuation +date will be the first following trading day on which the calculation agent +determines that a market disruption event does not occur and is not +continuing. In no event, however, will the final valuation date be postponed +by more than thirty calendar days. If the final valuation date is postponed to +the last possible day, but a market disruption event occurs or is continuing +on that day or that day is not a trading day, that day will nevertheless be +the final valuation date. + +Valuation dates: each trading day during the period commencing on the +initial valuation date and ending on the final valuation date. Notwithstanding +the immediately preceding sentence, if the calculation agent determines that a +market disruption event occurs or is continuing on a redemption valuation +date, the automatic redemption valuation date, a loss rebalancing date, a +quarterly rebalancing date or the final valuation date, such redemption +valuation date, automatic redemption valuation date, loss rebalancing date, +quarterly rebalancing date or final valuation date, as applicable, will be +postponed for the purpose of the redemption, rebalancing or maturity +valuation, as applicable, as described herein. + +Stated maturity date: April 3, 2028, unless that day is not a business +day, in which case the stated maturity date will be postponed to the next +following business day. If the final valuation date is postponed as described +under "- Final Valuation Date" above, the stated maturity date will be +postponed by the same number of business day(s) from but excluding the +originally scheduled final valuation date to and including the actual final +valuation date. + +Redemption (three types: at the option of the holder; at the option of the +issuer; and automatic): + +Redemption at the option of the holder: + +A holder may elect to have GSFC redeem his or her Index-Linked Notes prior to +the stated maturity date, in whole or in part, provided that in each case +such holder redeems at least $500,000 face amount of notes. + +Redemption at the option of the issuer: + +GSFC may redeem the Index-Linked Notes at its option prior to the stated +maturity date, in whole but not in part. + +Automatic redemption: + +GSFC will automatically redeem the Index-Linked Notes, in whole but not in +part, if, at any time on any valuation date prior to the final valuation date, +the intraday level of the index is equal to or less than 70% of the closing +level of the index on the immediately preceding rebalancing date (or if none, +the inception date). + +Redemption valuation date (with respect to redemption at the option of the +holder): the first valuation date following the date on which the holder +delivers notice to GSFC in compliance with the applicable procedures. +Notwithstanding the immediately preceding sentence, if a market disruption +event occurs or is continuing on a redemption valuation date (with respect to +redemption at the option of the holder), such redemption valuation date will +be the first following trading day on which the calculation agent determines +that a market disruption event does not occur and is not continuing. In no +event, however, will a redemption valuation date be postponed by more than 30 +calendar days. If such redemption valuation date is postponed to the last +possible day, but a market disruption event occurs or is continuing on that +day or that day is not a trading day, that day will nevertheless be the +redemption valuation date. + +Redemption date (with respect to redemption at the option of the holder): +the third business day following the applicable redemption valuation date + +Redemption valuation date (with respect to redemption at the option of the +issuer): the tenth valuation date following the date on which GSFC provides +notice to holders of the Index-Linked Notes and the trustee. Notwithstanding +the immediately preceding sentence, if a market disruption event occurs or is +continuing on a redemption valuation date (with respect to redemption at the +option of the issuer), such redemption valuation date will be the first +following trading day on which the calculation agent determines that a market +disruption event does not occur and is not continuing. In no event, however, +will a redemption valuation date be postponed by more than 30 calendar days. +If such redemption valuation date is postponed to the last possible day, but a +market disruption event occurs or is continuing on that day or that day is not +a trading day, that day will nevertheless be the redemption valuation date. + +Redemption date (with respect to redemption at the option of the issuer): +the third business day following the applicable redemption valuation date + +Redemption date (with respect to automatic redemption): the fifth business +day following the automatic redemption valuation date + +Automatic redemption event: GSFC will automatically redeem the Index- +Linked Notes, in whole but not in part, if, at any time on any valuation date +prior to the final valuation date, the intraday level of the index is equal to +or less than the automatic redemption trigger + +If an automatic redemption event occurs on a rebalancing date, the Index- +Linked Notes will be automatically redeemed pursuant to the automatic +redemption event without giving regard to the rebalancing adjustment. If GSFC +provides notice of an issuer redemption of the Index-Linked Notes and then an +automatic redemption event occurs on or prior to the applicable redemption +valuation date, the notice of issuer redemption will be superseded and the +Index-Linked Notes will be automatically redeemed on the relevant redemption +date at an amount equal to the automatic redemption note value. Additionally, +if a holder provides notice of a holder redemption but an automatic redemption +event occurs on or prior to the applicable redemption valuation date, such +notice of holder redemption will be superseded and the Index-Linked Notes will +be automatically redeemed on the redemption date (for the automatic +redemption) at an amount equal to the automatic redemption note value. + +Automatic redemption event date: the valuation date on which the automatic +redemption event occurs + +Automatic redemption valuation date: the automatic redemption event date, +provided that if (i) a market disruption event occurs after the occurrence +of the automatic redemption event but before the determination of the +automatic redemption note value and (ii) such market disruption event is +continuing at 3:30 p.m., New York City time, on the automatic redemption event +date, the automatic redemption valuation date will be the first following +valuation date on which the calculation agent determines that a market +disruption event does not occur and is not continuing. In no event, however, +will the automatic redemption valuation date be postponed by more than 30 +calendar days. If the automatic redemption valuation date is postponed to the +last possible day, but a market disruption event occurs or is continuing on +that day, that day will nevertheless be the automatic redemption valuation +date. + +Automatic redemption trigger: at any time on any valuation date, 70% of +the closing level of the index on the immediately preceding rebalancing date +(or if none, the inception date). The automatic redemption trigger is expected +to be published on each valuation date, so long as no market disruption event +has occurred or is continuing, under the Bloomberg symbol "FRLGAT Index." + +Automatic redemption note value: upon the occurrence of an automatic +redemption event, the result of (i) the product of (a) the asset position +on the valuation date immediately preceding the automatic redemption event +date times (b) the automatic redemption index performance factor minus +(ii) the financing level on the automatic redemption event date, subject to a +minimum of $0 + +Automatic redemption index performance factor: + +if an automatic redemption event occurs prior to 2:30 p.m., New York City +time, or at or after 3:30 p.m., New York City time, on the automatic +redemption event date, the quotient of (i) the index VWAP level divided by +(ii) the closing level of the index on the valuation date immediately +preceding the automatic redemption event date; or + +if an automatic redemption event occurs at or after 2:30 p.m., New York City +time, but prior to 3:30 p.m., New York City time, on the automatic redemption +event date, the quotient of (i) the closing level of the index on the +automatic redemption event date divided by (ii) the closing level of the +index on the valuation date immediately preceding the automatic redemption +event date + +Index VWAP level: on any applicable valuation date, the sum of the +products , as calculated for each index stock, of (i) the VWAP of such index +stock times (ii) the quotient of (a) the available float shares of such +index stock on such valuation date divided by (b) the index divisor on such +valuation date. + +The index VWAP level is intended to replicate the proceeds realized from a +sale of the index stocks in the quantities that they comprise the index +gradually over the relevant VWAP period. + +Volume-weighted average price (VWAP): with respect to each index stock, on +any applicable valuation date, the sum of the quotients , calculated for +each transaction on such index stock on the primary exchange during the +applicable VWAP period, of (i) the product of (a) the gross price at which +such transaction is executed times (b) the relevant number of shares of the +index stock referenced in such transaction divided by (ii) the total number +of shares of the index stock traded on the primary exchange during such VWAP +period. + +Notwithstanding the above, in the event of a suspension of or limitation of +trading in an index stock on its respective primary market during a part or +all of the VWAP period where such suspension or limitation does not trigger a +market disruption event (such suspension or limitation, an "index stock +disruption"), the VWAP will be calculated during the portion of the VWAP +period during which there is no such index stock disruption; provided that +if the index stock disruption continues for the entire VWAP period, the +calculation agent will determine the VWAP for such index stock in its sole +discretion and in a commercially reasonable manner. + +VWAP period: + +if an automatic redemption event occurs prior to 2:30 p.m., New York City +time, on the automatic redemption event date, the one-hour period starting 30 +minutes after the automatic redemption event occurs; or + +if an automatic redemption event occurs at or after 3:30 p.m., New York City +time, on the automatic redemption event date, the one-hour period starting at +10:00 a.m., New York City time, on the valuation date immediately following +such automatic redemption event date. + +Available float shares: with respect to each index stock, on any +applicable valuation date, the result , as published by the index sponsor, +of (i) total shares of such index stock outstanding minus (ii) the shares of +such index stock held by control holders + +Index divisor: on any applicable valuation date, a value calculated and +published by the index sponsor that is intended to maintain conformity in +index values over time + +Primary exchange: for each index stock, the exchange on which such index +stock has its primary listing, as determined by the calculation agent + +Rebalancing: rebalancing can occur on a quarterly rebalancing date or +because of a loss rebalancing event + +Loss rebalancing event: if, on any valuation date that is not a +rebalancing date, the closing level of the index is equal to or less than the +loss rebalancing trigger, a loss rebalancing event is deemed to have occurred +on such valuation date. A loss rebalancing event will result in the Index- +Linked Notes being rebalanced on the loss rebalancing date and will have the +effect of deleveraging the Index-Linked Notes with the aim of resetting the +then-current leverage factor back to approximately 2. This means that after +the applicable loss rebalancing date, a constant percentage increase in the +closing level of the index will have less of a positive effect on the value of +the Index-Linked Notes relative to before such loss rebalancing date + +Loss rebalancing trigger: on any valuation date, 80% of the closing level +of the index on the immediately preceding rebalancing date (or if none, the +initial valuation date). The loss rebalancing trigger is expected to be +published on each valuation date, so long as no market disruption event has +occurred or is continuing, under the Bloomberg symbol "FRLGRT Index." + +Loss rebalancing date: the first valuation date immediately following any +valuation date on which a loss rebalancing event occurs, unless the +calculation agent determines that a market disruption event occurs or is +continuing on that day or that day is not otherwise a trading day. In that +event, the loss rebalancing date will be the first following trading day on +which the calculation agent determines that a market disruption event does not +occur and is not continuing. In no event, however, will the loss rebalancing +date be postponed by more than five trading days. If the loss rebalancing date +is postponed to the last possible day, but a market disruption event occurs or +is continuing on that day or that day is not a trading day, that day will +nevertheless be the loss rebalancing date. + +Quarterly rebalancing calculation date: the last valuation date of each +March, June, September and December, commencing in June 2018 and ending in +December 2027. + +Quarterly rebalancing date: the first valuation date immediately following +each quarterly rebalancing calculation date, unless the calculation agent +determines that a market disruption event occurs or is continuing on that day +or that day is not otherwise a trading day. In that event, the quarterly +rebalancing date will be the first following trading day on which the +calculation agent determines that a market disruption event does not occur and +is not continuing. In no event, however, will the quarterly rebalancing date +be postponed by more than five trading days. If the quarterly rebalancing date +is postponed to the last possible day, but a market disruption event occurs or +is continuing on that day or that day is not a trading day, that day will +nevertheless be the quarterly rebalancing date. + +The rebalancing adjustment on each quarterly rebalancing date will have the +effect of re-leveraging the Index-Linked Notes with the aim of resetting the +then-current leverage factor back to approximately 2. This means that after +each quarterly rebalancing date, a constant percentage increase in the closing +level of the index may have more or less of a positive effect on the value of +the Index-Linked Notes relative to before such quarterly rebalancing date. + +Rebalancing date: a quarterly rebalancing date or loss rebalancing date + +Rebalancing amount: + +on any valuation date that is not a rebalancing date, $0; or + +on any valuation date that is a rebalancing date, the product of (i) the +result of (a) the product of (1) 2 times (2) the closing indicative note +value on the immediately preceding valuation date on which a loss rebalancing +event occurs or the immediately preceding quarterly rebalancing calculation +date (whichever is more recent) minus (b) the asset position on the +immediately preceding valuation date on which a loss rebalancing event occurs +or the immediately preceding quarterly rebalancing calculation date (whichever +is more recent) times (ii) the quotient of (a) the closing level of the +index on the current rebalancing date divided by (b) the closing level of +the index on the immediately preceding valuation date on which a loss +rebalancing event occurs or the immediately preceding quarterly rebalancing +calculation date (whichever is more recent). + +The rebalancing amount represents the change in the exposure to the index as a +result of any rebalancing event. On each rebalancing date, a rebalancing +amount is added to or subtracted from the asset position and the financing +level depending on the performance of the index since the preceding +rebalancing date so that the leverage is reset to approximately 2. + +Rebalancing fee: + +on any valuation date that is not a rebalancing date, $0; or + +on any valuation date that is a rebalancing date, the product of (i) the +rebalancing fee rate times (ii) the absolute value of the rebalancing amount +on such rebalancing date. In no case will the rebalancing fee be negative. + +The rebalancing fee is charged to account for the issuer's brokerage and +transaction costs due to the change in the exposure to the index. + +Rebalancing fee rate: 0.06% + +Consequences of a Market Disruption Event or a Non-Trading Day + +If a market disruption event occurs or is continuing on a day that would +otherwise be a redemption valuation date, the automatic redemption valuation +date, a loss rebalancing date, a quarterly rebalancing date or the final +valuation date, as applicable, or such day is not a trading day, then the +redemption valuation date, the automatic redemption valuation date, the loss +rebalancing date, the quarterly rebalancing date or the final valuation date, +as applicable, will be postponed as described above. + +If the automatic redemption valuation date is postponed, the calculation agent +in its sole discretion will determine the automatic redemption index +performance factor based on the index VWAP level over a one-hour period as +soon as practicable after the cessation of the market disruption event. If the +calculation agent determines that the index VWAP level that must be used to +determine the amount payable on the Index-Linked Notes is not available on the +automatic redemption valuation date because of a market disruption event, a +non-trading day or for any other reason, then the calculation agent will +nevertheless determine the automatic redemption index performance factor in +its sole discretion. + +If the calculation agent determines that the closing level of the index that +must be used to determine the amount payable on the Index-Linked Notes is not +available on a redemption valuation date, the automatic redemption valuation +date or the final valuation date because of a market disruption event, a non- +trading day or for any other reason (other than as described under "- +Discontinuance or Modification of the Index" below), then the calculation +agent will nevertheless determine the level of the index based on its +assessment, and in its sole discretion, of the level of the index on that day. + +If the calculation agent determines that the closing level of the index that +must be used to determine the rebalancing amount is not available on a loss +rebalancing date or quarterly rebalancing date because of a market disruption +event, a non-trading day or for any other reason (other than as described +under "- Discontinuance or Modification of the Index" below), then the +calculation agent will nevertheless determine the rebalancing amount based on +its assessment, and in its sole discretion, of the level of the index on that +day. + +Discontinuance or Modification of the Index + +If the index sponsor discontinues publication of the index and the index +sponsor or anyone else publishes a substitute index that the calculation agent +determines is comparable to the index, or if the calculation agent designates +a substitute index, then the calculation agent will determine the amount +payable on the Index-Linked Notes by reference to the substitute index. +References to a successor index mean any substitute index approved by the +calculation agent. + +If the calculation agent determines that the publication of the index is +discontinued and there is no successor index, the calculation agent will +determine the applicable level of the index (and, with respect to the +determination of the index VWAP, the index divisor and the available float +shares) used to determine the amount payable on the Index-Linked Notes by a +computation methodology that the calculation agent determines will as closely +as reasonably possible replicate the index. + +If the calculation agent determines that the index, the stocks comprising the +index or the method of calculating the index is changed at any time in any +respect - including any split or reverse split and any addition, deletion or +substitution and any reweighting or rebalancing of the index or of the index +stocks and whether the change is made by the index sponsor under its existing +policies or following a modification of those policies, is due to the +publication of a successor index, is due to events affecting one or more of +the index stocks or their issuers or is due to any other reason - and is not +otherwise reflected in the level of the index by the index sponsor pursuant to +the then-current index methodology of the index, then the calculation agent +will be permitted (but not required) to make such adjustments in the index or +the method of its calculation as it believes are appropriate to ensure that +the levels of the index used to determine the amount payable on the Index- +Linked Notes is equitable. + +All determinations and adjustments to be made by the calculation agent with +respect to the index may be made by the calculation agent in its sole +discretion. The calculation agent is not obligated to make any such +adjustments. + +Default, Remedies and Waiver of Default + +A holder will have special rights if an event of default with respect to his +or her series of debt securities occurs and is continuing, as described in +this subsection. + +Events of Default + +References to an event of default with respect to any series of debt +securities mean any of the following: + +GSFC or the Company does not pay the principal or any premium on any debt +security of that series on the due date; + +GSFC or the Company does not pay interest on any debt security of that series +within 30 days after the due date; + +GSFC or the Company does not deposit a required sinking fund payment with +regard to any debt security of that series on the due date; + +GSFC remains in breach of any other covenant it makes in the GSFC 2008 +Indenture for the benefit of the relevant series, for 60 days after GSFC and +the Company receive a notice of default stating that GSFC is in breach and +requiring GSFC to remedy the breach. The notice must be sent by the trustee or +the holders of at least 10% in principal amount of the relevant series of debt +securities then outstanding; + +GSFC files for bankruptcy or other events of bankruptcy, insolvency or +reorganization relating to GSFC occur. Those events must arise under U.S. +federal or state law, unless GSFC merges, consolidates or sells its assets as +described above and the successor firm is a non-U.S. entity. If that happens, +then those events must arise under U.S. federal or state law or the law of the +jurisdiction in which the successor firm is legally organized; or + +Except as provided by the GSFC 2008 Indenture, the debt security of that +series and the related guarantee, the guarantee ceases to be effective, or a +court finds the guarantee to be unenforceable or invalid, or the Company +denies its obligations as the guarantor. + +As described below under "- Remedies If an Event of Default Occurs," under the +GSFC 2008 Indenture, events of bankruptcy, insolvency or reorganization +relating to the Company will not cause any of GSFC's debt securities issued +under such indenture to be automatically accelerated. In the event that the +Company becomes subject to certain events of bankruptcy, insolvency or +reorganization (but GSFC does not), any series of debt securities issued under +the GSFC 2008 Indenture will not be immediately due and repayable. In +addition, under the GSFC 2008 Indenture, a breach of a covenant or warranty by +the Company (including, for example, a breach of the Company's covenants and +warranties with respect to mergers and similar transactions or restrictions on +liens) will not have the potential to cause any of GSFC's debt securities +issued under the GSFC 2008 Indenture to be declared due and payable +immediately. Instead, under the GSFC 2008 Indenture, the trustee or holder +will need to wait until the earlier of the time that (i) GSFC itself becomes +subject to certain events of bankruptcy, insolvency or reorganization or +otherwise defaults on the terms of the debt securities, (ii) the Company +otherwise defaults on the terms of the debt securities and (iii) the final +maturity of the debt securities. The return the holder receives on any series +of debt securities issued under the GSFC 2008 Indenture may be significantly +less than what a holder would have otherwise received had the debt securities +been automatically accelerated upon certain events of bankruptcy, insolvency +or reorganization relating to the Company or declared due and payable +immediately following the breach of a covenant or warranty by the Company. + +Remedies If an Event of Default Occurs + +If an event of default has occurred with respect to any series of debt +securities and has not been cured or waived, the trustee or the holders of not +less than 25% in principal amount of all debt securities of that series then +outstanding may declare the entire principal amount of the debt securities of +that series to be due immediately. If the event of default occurs because of +events in bankruptcy, insolvency or reorganization relating to GSFC, the +entire principal amount of the debt securities of that series will be +automatically accelerated, without any action by the trustee or any holder. + +Each of the situations described above is called an acceleration of the stated +maturity of the affected series of debt securities. If the stated maturity of +any series is accelerated and a judgment for payment has not yet been +obtained, the holders of a majority in principal amount of the debt securities +of that series may cancel the acceleration for the entire series. + +If an event of default occurs, the trustee will have special duties. In that +situation, the trustee will be obligated to use those of its rights and powers +under the GSFC 2008 Indenture, and to use the same degree of care and skill in +doing so, that a prudent person would use in that situation in conducting his +or her own affairs. + +Except as described in the prior paragraph, the trustee is not required to +take any action under the GSFC 2008 Indenture at the request of any holders +unless the holders offer the trustee reasonable protection from expenses and +liability ( i.e. , an indemnity). If the trustee is provided with an +indemnity reasonably satisfactory to it, the holders of a majority in +principal amount of all debt securities of the relevant series may direct the +time, method and place of conducting any lawsuit or other formal legal action +seeking any remedy available to the trustee with respect to that series. These +majority holders may also direct the trustee in performing any other action +under the GSFC 2008 Indenture with respect to the debt securities of that +series. + +Before a holder bypasses the trustee and bring its own lawsuit or other formal +legal action or take other steps to enforce its rights or protect its +interests relating to any debt security, all of the following must occur: + +The holder must give the trustee written notice that an event of default has +occurred, and the event of default must not have been cured or waived; + +The holders of not less than 25% in principal amount of all debt securities of +a holder's series must make a written request that the trustee take action +because of the default, and they or other holders must offer to the trustee +indemnity reasonably satisfactory to the trustee against the cost and other +liabilities of taking that action; + +The trustee must not have taken action for 60 days after the above steps have +been taken; and + +During those 60 days, the holders of a majority in principal amount of the +debt securities of a holder's series must not have given the trustee +directions that are inconsistent with the written request of the holders of +not less than 25% in principal amount of the debt securities of a holder's +series. + +A holder is entitled at any time, however, to bring a lawsuit for the payment +of money due on his or her debt security on or after its stated maturity (or, +if the debt security is redeemable, on or after its redemption date). + +Waiver of Default + +The holders of not less than a majority in principal amount of the debt +securities of any series may waive a default for all debt securities of that +series. If this happens, the default will be treated as if it has not +occurred. No one can waive a payment default on a holder's debt security, +however, without the approval of the particular holder of that debt security. + +GSFC and the Company Will Give the Trustee Information About Defaults +Annually + +GSFC and the Company will furnish to the trustee every year a written +statement, respectively, of two of their officers certifying that to their +knowledge GSFC or the Company, as the case may be, is in compliance with the +GSFC 2008 Indenture and the debt securities issued under it, or else +specifying any default under the relevant debt indenture. + +Default Amount on Acceleration + +If an event of default occurs and the maturity of the Index-Linked Notes is +accelerated, GSFC will pay the default amount in respect of the principal of +the Index-Linked Notes at the maturity, instead of the amount payable on the +Index-Linked Notes as described earlier. The default amount is described under +"- Special Calculation Provisions" below. + +For the purpose of determining whether the holders of GSFC's Medium-Term Notes +Series E, which include the Index-Linked Notes, are entitled to take any +action under the GSFC 2008 Indenture, GSFC will treat the outstanding face +amount of each Series E Note as the outstanding principal amount of that note. +Although the terms of the Index-Linked Notes differ from those of the other +Medium-Term Notes Series E, holders of specified percentages in principal +amount of all Medium-Term Notes Series E, together in some cases with other +series of GSFC's debt securities, will be able to take action affecting all +the Medium-Term Notes Series E, including the Index-Linked Notes, except with +respect to certain Medium-Term Notes Series E, if the terms of such notes +specify that the holders of specified percentages in the principal amount of +all such notes must also consent to such action. This action may involve +changing some of the terms that apply to the Medium-Term Notes Series E, +accelerating the maturity of the Medium-Term Notes Series E, after a default +or waiving some of GSFC's obligations under the GSFC 2008 Indenture. In +addition, certain changes to the GSFC 2008 Indenture and the Index-Linked +Notes that only affect certain debt securities may be made with the approval +of holders of a majority of the principal amount of such affected debt +securities. + +Guarantee by the Company + +The Company has fully and unconditionally guaranteed the payment of principal +of, and any interest and premium on, the Medium-Term Notes, Series E, which +include the Index-Linked Notes, when due and payable, whether at the stated +maturity, by declaration of acceleration, call for redemption or otherwise, in +accordance with the terms of the security and the GSFC 2008 Indenture. The +guarantee will remain in effect until the entire principal of, and interest +and premium, if any, on, the debt securities has been paid in full or +discharged in accordance with the provisions of the GSFC 2008 Indenture, or +otherwise fully defeased by the Company. + +The guarantee by the Company of its debt securities issued under the GSFC 2008 +Indenture will rank equally in right of payment with all senior indebtedness +of the Company. + +Mergers and Similar Transactions + +GSFC and the Company are generally permitted to merge or consolidate with +another corporation or other entity. GSFC and the Company also permitted to +sell their assets substantially as an entirety to another corporation or other +entity. With regard to any series of debt securities, however, GSFC or the +Company may not take any of these actions unless all the following conditions +are met: + +If the successor entity in the transaction is not GSFC or the Company, as the +case may be, the successor entity must be organized as a corporation, +partnership or trust and must expressly assume the obligations of GSFC or the +Company under the debt securities of that series and the GSFC 2008 Indenture +with respect to that series. The successor entity may be organized under the +laws of any jurisdiction, whether in the United States or elsewhere. + +Immediately after the transaction, no default under the debt securities of +that series or the related guarantees has occurred and is continuing. For this +purpose, "default under the debt securities of that series or the related +guarantees" means an event of default with respect to that series or the +related guarantees or any event that would be an event of default with respect +to that series or the related guarantees if the requirements for giving GSFC +or the Company default notice and for GSFC's or the Company's default having +to continue for a specific period of time were disregarded. + +If the conditions described above are satisfied with respect to debt +securities of any series, neither GSFC nor the Company will need to obtain the +approval of the holders of those debt securities in order to merge or +consolidate or to sell assets of GSFC or the Company. Also, these conditions +will apply only if GSFC or the Company wishes to merge or consolidate with +another entity or sell assets of GSFC or the Company substantially as an +entirety to another entity. Neither GSFC nor the Company will need to satisfy +these conditions if GSFC or the Company enters into other types of +transactions, including any transaction in which GSFC or the Company acquire +the stock or assets of another entity, any transaction that involves a change +of control of GSFC or the Company but in which GSFC or the Company does not +merge or consolidate and any transaction in which GSFC or the Company sells +less than substantially all assets of GSFC or the Company. While GSFC is +currently a wholly owned subsidiary of the Company, there is no requirement +that it remain a subsidiary. + +Also, if GSFC or the Company merges, consolidates or sells assets of GSFC or +the Company substantially as an entirety and the successor is a non-U.S. +entity, neither GSFC nor any successor would have any obligation to compensate +a holder for any resulting adverse tax consequences relating to his or her +debt securities. + +Restriction on Liens + +In the GSFC 2008 Indenture, the Company promises, with respect to each series +of senior debt securities, not to create, assume, incur or guarantee any debt +for borrowed money that is secured by a lien on the voting or profit +participating equity ownership interests that the Company or any of its +subsidiaries own in Goldman Sachs & Co. LLC, or in any subsidiary of the +Company that beneficially owns or holds, directly or indirectly, those +interests in Goldman Sachs & Co. LLC, unless the Company also secures the +senior debt securities of that series on an equal or priority basis with the +other secured debt. The promise of the Company, however, is subject to an +important exception: it may secure debt for borrowed money with liens on those +interests without securing the senior debt securities of any series if its +board of directors determines that the liens do not materially detract from or +interfere with the value or control of those interests, as of the date of the +determination. + +Except as noted above, the GSFC 2008 Indenture does not restrict the Company's +ability to put liens on its interests in its subsidiaries other than Goldman +Sachs & Co. LLC, nor does the indenture restrict the Company's ability to sell +or otherwise dispose of its interests in any of its subsidiaries, including +Goldman Sachs & Co. LLC. In addition, the restriction on liens in the GSFC +2008 Indenture applies only to liens that secure debt for borrowed money. For +example, liens imposed by operation of law, such as liens to secure statutory +obligations for taxes or workers' compensation benefits, or liens the Company +creates to secure obligations to pay legal judgments or surety bonds, would +not be covered by this restriction. + +Modification of the Debt Indenture and Waiver of Covenants + +There are four types of changes GSFC and the Company can make to the GSFC 2008 +Indenture and the debt securities or series of debt securities and related +guarantees issued under the GSFC 2008 Indenture. + +Changes Requiring Each Holder's Approval + +First, there are changes that cannot be made without the approval of the +holder of each debt security affected by the change under the GSFC 2008 +Indenture. Here is a list of those types of changes: + +change the stated maturity for any principal or interest payment on a debt +security; + +reduce the principal amount, the amount payable on acceleration of the stated +maturity after a default, the interest rate or the redemption price for a debt +security; + +permit redemption of a debt security if not previously permitted; + +impair any right a holder may have to require repayment of its debt security; + +change the currency of any payment on a debt security; + +change the place of payment on a debt security; + +impair a holder's right to sue for payment of any amount due on its debt +security; + +reduce the percentage in principal amount of the debt securities of any one or +more affected series, taken + +separately or together, as applicable, and whether comprising the same or +different series or less than all of the debt securities of a series, the +approval of whose holders is needed to change the applicable debt indenture or +those debt securities; + +reduce the percentage in principal amount of the debt securities of any one or +more affected series, taken separately or together, as applicable, and whether +comprising the same or different series or less than all of the debt +securities of a series, the consent of whose holders is needed to waive GSFC's +compliance with the applicable debt indenture or to waive defaults; and + +change the provisions of the applicable debt indenture dealing with +modification and waiver in any other respect, except to increase any required +percentage referred to above or to add to the provisions that cannot be +changed or waived without approval of the holder of each affected debt +security. + +Changes Not Requiring Approval + +The second type of change does not require any approval by holders of the debt +securities affected. These changes are limited to clarifications and changes +that would not adversely affect any debt securities of any series in any +material respect. Neither GSFC nor the Company needs any approval to make +changes that affect only debt securities to be issued under the applicable +indenture after the changes take effect. + +GSFC and the Company may also make changes or obtain waivers that do not +adversely affect a particular debt security, even if they affect other debt +securities. In those cases, neither GSFC nor the Company needs to obtain the +approval of the holder of the unaffected debt security; GSFC and the Company +need only obtain any required approvals from the holders of the affected debt +securities. + +Changes Requiring Majority Approval + +Any other change to the GSFC 2008 Indenture and the debt securities issued +under such debt indenture would require the following approval: + +If the change affects only particular debt securities within a series, it must +be approved by the holders of a majority in principal amount of such +particular debt securities. + +If the change affects multiple debt securities of one or more series, it must +be approved by the holders of a majority in principal amount of all debt +securities affected by the change, with all such affected debt securities +voting together as one class for this purpose (and by the holders of a +majority in principal amount of any affected debt securities that by their +terms are entitled to vote separately). + +In each case, the required approval must be given by written consent. + +This would mean that modification of terms with respect to certain debt +securities of a series could be effectuated under the GSFC 2008 Indenture +without obtaining the consent of the holders of a majority in principal amount +of other securities of such series that are not affected by such modification. + +The same majority approval would be required for GSFC to obtain a waiver of +any of its covenants in the GSFC 2008 Indenture. GSFC's covenants include the +promises GSFC and the Company make about merging and, with respect to the +Company, putting liens on GSFC's interests in Goldman Sachs & Co. LLC. If the +holders approve a waiver of a covenant, neither GSFC nor the Company will have +to comply with it. The holders, however, cannot approve a waiver of any +provision in a particular debt security, or in the GSFC 2008 Indenture as it +affects that debt security, that neither GSFC nor the Company can change +without the approval of the holder of that debt security as described above in +"- Changes Requiring Each Holder's Approval," unless that holder approves the +waiver. + +Special Rules for Action by Holders + +When holders take any action under the GSFC 2008 Indenture, such as giving a +notice of default, declaring an acceleration, approving any change or waiver +or giving the trustee an instruction, GSFC will apply the following rules. + +Only Outstanding Debt Securities Are Eligible + +Only holders of outstanding debt securities or the outstanding debt securities +of the applicable series, as applicable, will be eligible to participate in +any action by holders of such debt securities or the debt securities of that +series. Also, GSFC will count only outstanding debt securities in determining +whether the various percentage requirements for taking action have been met. +For these purposes, a debt security will not be "outstanding" if: + +it has been surrendered for cancellation; + +GSFC has deposited or set aside, in trust for its holder, money for its +payment or redemption; + +GSFC has fully defeased it; or + +GSFC or one of its affiliates, such as Goldman Sachs & Co. LLC, is the owner. + +Determining Record Dates for Action by Holders + +GSFC and the Company will generally be entitled to set any day as a record +date for the purpose of determining the holders that are entitled to take +action under a particular debt indenture. In certain limited circumstances, +only the trustee will be entitled to set a record date for action by holders. +If GSFC, the Company or the trustee set a record date for an approval or other +action to be taken by holders, that vote or action may be taken only by +persons or entities who are holders on the record date and must be taken +during the period that GSFC specifies for this purpose, or that the trustee +specifies if it sets the record date. GSFC, the Company or the trustee, as +applicable, may shorten or lengthen this period from time to time. + +This period, however, may not extend beyond the 180th day after the record +date for the action. In addition, record dates for any global debt security +may be set in accordance with procedures established by the depositary from +time to time. Accordingly, record dates for global debt securities may differ +from those for other debt securities. + +Bloomberg symbols: + +The Bloomberg symbols under which information relating to the Index-Linked +Notes can be located are set forth below. The publication of this information +may occasionally be subject to delay or postponement. + +Closing level of the index and intraday level of the index: RU10GRTR Index + +Closing indicative note value and intraday indicative note value: FRLGIV Index + +Asset position: FRLGAP Index + +Financing level: FRLGFL Index + +Loss rebalancing trigger: FRLGRT Index + +Automatic redemption trigger: FRLGAT Index + +Modified Business Day + +Any payment on the Index-Linked Notes that would otherwise be due on a day +that is not a business day may instead be paid on the next day that is a +business day, with the same effect as if paid on the original due date. The +business day term is discussed under "- Special Calculation Provisions" below. + +Role of Calculation Agent + +The calculation agent in its sole discretion will make all determinations +regarding the index, market disruption events, business days, trading days, +including determining the closing level or intraday level of the index on any +valuation date; the 3-month USD LIBOR rate; whether the Index-Linked Notes +will be redeemed; the valuation dates; the final valuation date; the +redemption valuation dates; the automatic redemption valuation date, the +redemption dates, the stated maturity date and the amount payable on the +Index-Linked Notes. Absent manifest error, all determinations of the +calculation agent will be final and binding on holders of the Index-Linked +Notes and GSFC, without any liability on the part of the calculation agent. + +Special Calculation Provisions + +Business Day + +References to a business day with respect to the Index-Linked Notes mean each +Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which +banking institutions in New York City generally are authorized or obligated by +law, regulation or executive order to close. + +London Business Day + +References to a London business day with respect to the Index-Linked Notes +mean each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on +which banking institutions in London generally are authorized or obligated by +law, regulation or executive order to close and is also a day on which +dealings in the applicable index currency are transacted in the London +interbank market. + +Trading Day + +References to a trading day with respect to the Index-Linked Notes mean a day +on which the respective principal securities markets for all of the index +stocks are open for trading, the index sponsor is open for business and the +index is calculated and published by the index sponsor. + +Closing Level of the Index + +References to the closing level of the index on any trading day mean the +closing level of the index or any successor index reported by Bloomberg +Financial Services, or any successor reporting service GSFC may select, on +such trading day for the index. Currently, whereas the index sponsor publishes +the official closing level of the index to six decimal places, Bloomberg +Financial Services reports the closing level of the index to fewer decimal +places. As a result, the closing level of the index reported by Bloomberg +Financial Services generally may be lower or higher than the official closing +level of the index published by the index sponsor. + +Intraday Level of the Index + +References to the intraday level of the index at any time on any trading day +mean the level of the index or any successor index reported by Bloomberg +Financial Services, or any successor reporting service GSFC may select, at +such time on such trading day for the index. Currently, whereas the index +sponsor publishes the official level of the index to six decimal places, +Bloomberg Financial Services reports the level of the index to fewer decimal +places. As a result, the level of the index reported by Bloomberg Financial +Services generally may be lower or higher than the official level of the index +published by the index sponsor. + +Default Amount + +The default amount for the Index-Linked Notes on any day (except as provided +in the last sentence under "- Default Quotation Period" below) will be an +amount, in the specified currency for the principal of the Index-Linked Notes, +equal to the cost of having a qualified financial institution, of the kind and +selected as described below, expressly assume all of GSFC's payment and other +obligations with respect to the Index-Linked Notes as of that day and as if no +default or acceleration had occurred, or to undertake other obligations +providing substantially equivalent economic value to holders with respect to +their notes. That cost will equal: + +the lowest amount that a qualified financial institution would charge to +effect this assumption or undertaking, plus + +the reasonable expenses, including reasonable attorneys' fees, incurred by the +holder of the Index-Linked Notes in preparing any documentation necessary for +this assumption or undertaking. + +During the default quotation period for a holder's notes, which is described +below, the holder and/or GSFC may request a qualified financial institution to +provide a quotation of the amount it would charge to effect this assumption or +undertaking. If either party obtains a quotation, it must notify the other +party in writing of the quotation. The amount referred to in the first bullet +point above will equal the lowest - or, if there is only one, the only - +quotation obtained, and as to which notice is so given, during the default +quotation period. With respect to any quotation, however, the party not +obtaining the quotation may object, on reasonable and significant grounds, to +the assumption or undertaking by the qualified financial institution providing +the quotation and notify the other party in writing of those grounds within +two business days after the last day of the default quotation period, in which +case that quotation will be disregarded in determining the default amount. + +Default Quotation Period + +The default quotation period is the period beginning on the day the default +amount first becomes due and ending on the third business day after that day, +unless: + +no quotation of the kind referred to above is obtained, or + +every quotation of that kind obtained is objected to within five business days +after the day the default amount first becomes due. + +If either of these two events occurs, the default quotation period will +continue until the third business day after the first business day on which +prompt notice of a quotation is given as described above. If that quotation is +objected to as described above within five business days after that first +business day, however, the default quotation period will continue as described +in the prior sentence and this sentence. + +In any event, if the default quotation period and the subsequent two business +day objection period have not ended before the final valuation date, then the +default amount will equal the principal amount of the Index-Linked Notes. + +Qualified Financial Institutions + +For the purpose of determining the default amount at any time, a qualified +financial institution must be a financial institution organized under the laws +of any jurisdiction in the United States of America, Europe or Japan, which at +that time has outstanding debt obligations with a stated maturity of one year +or less from the date of issue and that is, or whose securities are, rated +either: + +A-1 or higher by Standard & Poor's Ratings Services or any successor, or any +other comparable rating then used by that rating agency, or + +P-1 or higher by Moody's Investors Service, Inc. or any successor, or any +other comparable rating then used by that rating agency. + +Market Disruption Event + +With respect to any given trading day, any of the following will be a market +disruption event: + +a suspension, absence or material limitation of trading in index stocks +constituting 20% or more, by weight, of the index on their respective primary +markets, in each case for more than two consecutive hours of trading or during +the one-half hour before the close of trading in that market, as determined by +the calculation agent in its sole discretion, or + +a suspension, absence or material limitation of trading in option or futures +contracts relating to the index or to index stocks constituting 20% or more, +by weight, of the index in the respective primary markets for those contracts, +in each case for more than two consecutive hours of trading or during the one- +half hour before the close of trading in that market, as determined by the +calculation agent in its sole discretion, or + +index stocks constituting 20% or more, by weight, of the index, or option or +futures contracts, if available, relating to the index or to index stocks +constituting 20% or more, by weight, of the index are not trading on what were +the respective primary markets for those index stocks or contracts or are +subject to a material reduction in trading volume, each as determined by the +calculation agent in its sole discretion, + +and , in the case of any of these events, the calculation agent determines +in its sole discretion that the event could materially interfere with the +ability of GSFC or any of its affiliates or a similarly situated party to +unwind all or a material portion of a hedge that could be effected with +respect to the offered notes. + +The following events will not be market disruption events: + +a limitation on the hours or numbers of days of trading, but only if the +limitation results from an announced change in the regular business hours of +the relevant market, and + +a decision to permanently discontinue trading in option or futures contracts +relating to the index or to any index stock. + +For this purpose, an "absence of trading" in the primary securities market on +which an index stock, or on which option or futures contracts relating to the +index or an index stock, are traded will not include any time when that market +is itself closed for trading under ordinary circumstances. In contrast, a +suspension or limitation of trading in an index stock or in option or futures +contracts, if available, relating to the index or an index stock in the +primary market for that stock or those contracts, by reason of: + +a price change exceeding limits set by that market, + +an imbalance of orders relating to that index stock or those contracts, or + +a disparity in bid and ask quotes relating to that index stock or those +contracts, + +will constitute a suspension or material limitation of trading in that stock +or those contracts in that market. + +Further, for this purpose, a "material reduction in trading volume" will be +deemed to occur on a trading day at any time that the reported trading volume +on that trading day falls below 75% of the trailing 30-trading-day average +trading volume ("30-day ADTV"), where the 30-day ADTV is adjusted by a ratio +of the elapsed hours in such trading day divided by the total number of +scheduled hours for such trading day. + +As is the case throughout this description of the Index-Linked Notes, +references to the index in this description of market disruption events +includes the index and any successor index as it may be modified, replaced or +adjusted from time to time. + +EX-10.20 3 d192225dex1020.htm EX-10.20 EX-10.20 + +Exhibit 10.20 + +Description of PMD Retiree Medical Program + +Under the retiree medical program in effect as of December 31, 2021, +Participating Managing Directors ("PMDs") who retire with eight or more years +of service as PMDs are eligible to receive retiree medical coverage for +themselves and their eligible dependents. The PMD retiree medical program +provides, as of December 31, 2021, a subsidy for such coverage of up to 75% of +the applicable premium. + +During 2020, the firm amended the PMD retiree medical program so that, +effective January 1, 2022, individuals who became PMDs on or before December +31, 2020 ("Grandfathered PMDs"), and who retire or retired with eight or more +years of PMD service, will be eligible for retiree medical coverage with a +subsidy of up to 100% of the premium attributable to individual coverage for +the PMD retiree, but without any subsidy for the premium attributable to +covering the PMD's covered dependents. PMDs other than Grandfathered PMDs no +longer will receive a firm subsidy toward retiree medical coverage and will be +required to pay 100% of the applicable premium for retiree and dependent +coverage. + +A PMD's eligibility under the PMD retiree medical program generally terminates +if the PMD engages in conduct constituting cause or if the PMD goes to work +for a competitor. A PMD with less than eight years of service, or who goes to +work for a non-competitor, may be eligible for retiree medical coverage but +not the subsidy. The PMD retiree medical program, coverage and/or subsidy can +be amended or terminated at any time as provided in the applicable plan +documents.EX-10.39 4 d192225dex1039.htm EX-10.39 EX-10.39 + +Exhibit 10.39 + +T HE GOLDMAN SACHS GROUP, INC. + +O UTSIDE DIRECTOR RSU AWARD + +This Award Agreement, together with The Goldman Sachs Amended and Restated +Stock Incentive Plan (2021) (the "Plan"), governs your award of RSUs +(your "Award") that will be granted to you as set forth on your Award +Statement. You should read carefully this entire Award Agreement, which +includes the Award Statement and any attached Appendix. + +D OCUMENTS THAT GOVERN YOUR AWARD; DEFINITIONS + +1. The Plan . Your Award is granted under the Plan, and the Plan's +terms apply to, and are a part of, this Award Agreement. + +2. Your Award Statement . The Award Statement delivered to you +contains some of your Award's specific terms. For example, it contains the +Date[s] of Grant, the [calculation that will be used to determine the] number +of RSUs [that will be] awarded to you [on any such Date of Grant] and the +Delivery Date. + +3. Definitions . Unless otherwise defined herein, including in the +Definitions Appendix or any other Appendix, capitalized terms have the +meanings provided in the Plan. + +D ELIVERY OF YOUR RSU SHARES + +4. Delivery . RSU Shares (less applicable withholding) will be +delivered in respect of your Outstanding RSUs reasonably promptly (but no more +than 30 Business Days) after the Delivery Date listed on your Award Statement. +Unless otherwise determined by the Committee, delivery of the RSU Shares will +be effected by book-entry credit to your Account and no delivery of RSU Shares +will be made unless you have timely established your Account. Until such +delivery, you have only the rights of a general unsecured creditor, and no +rights as a shareholder of GS Inc. + +D IVIDEND EQUIVALENT RIGHTS + +5. Dividend Equivalent Rights . Each RSU includes a Dividend +Equivalent Right, which entitles you to receive an amount (less applicable +withholding), at or after the time of distribution of any regular cash +dividend paid by GS Inc. in respect of a share of Common Stock, equal to any +regular cash dividend payment that would have been made in respect of an RSU +Share underlying your Outstanding RSUs for any record date that occurs on or +after the Date of Grant. + +A CCELERATED DELIVERY + +6. Accelerated Delivery in the Event of Conflicted Employment or Death +. In the event of your Conflicted Employment or death, your Outstanding +Award will be treated as described in this Paragraph 6, and all other terms of +this Award Agreement continue to apply. + +(a) You Are Determined to Have Accepted Conflicted Employment. + +(i) Generally. Unless prohibited by applicable law or regulation, if you +accept Conflicted Employment, as soon as practicable after the Committee has +received satisfactory documentation relating to your Conflicted Employment, +RSU Shares will be delivered in respect of your Outstanding RSUs (including in +the form of cash as described in Paragraph 7(b)). + +(ii) You May Have to Take Other Steps to Address Conflicts of Interest. The +Committee retains the authority to exercise its rights under the Award +Agreement or the Plan (including Section 1.3.2 of the Plan) to take or require +you to take other steps it determines in its sole discretion to be necessary +or appropriate to cure an actual or perceived conflict of interest (which may +include a determination that the accelerated delivery described in Paragraph +6(a)(i) will not apply because such actions are not necessary or appropriate +to cure an actual or perceived conflict of interest). + +(b) Death. If you die, the RSU Shares underlying your Outstanding RSUs will +be delivered to the representative of your estate as soon as practicable after +the date of death and after such documentation as may be requested by the +Committee is provided to the Committee. + +O THER TERMS, CONDITIONS AND AGREEMENTS + +7. Additional Terms, Conditions and Agreements . + +(a) You Must Satisfy Applicable Tax Withholding Requirements. Delivery of +RSU Shares is conditioned on your satisfaction of any applicable withholding +taxes in accordance with Section 3.2 of the Plan, provided that the Committee +may determine not to apply the withholding rate described in Section 3.2.2 of +the Plan. + +(b) Firm May Deliver Cash or Other Property Instead of RSU Shares. In +accordance with Section 1.3.2(i) of the Plan, in the sole discretion of the +Committee, in lieu of all or any portion of the RSU Shares, the Firm may +deliver cash, other securities, other awards under the Plan or other property, +and all references in this Award Agreement to deliveries of RSU Shares will +include such deliveries of cash, other securities, other awards under the Plan +or other property. + +(c) Firm May Affix Legends and Place Stop Orders on RSU Shares. GS Inc. may +affix to Certificates representing RSU Shares any legend that the Committee +determines to be necessary or advisable. GS Inc. may advise the transfer agent +to place a stop order against any legended RSU Shares. + +(d) You Agree to Certain Consents. By accepting this Award, you have +expressly consented to all of the items listed in Section 3.3.3(d) of the +Plan, including the Firm's supplying to any third-party recordkeeper of the +Plan or other person such personal information of yours as the Committee deems +advisable to administer the Plan, and you agree to provide any additional +consents that the Committee determines to be necessary or advisable. + +N ON-TRANSFERABILITY + +8. Non-transferability. Except as otherwise may be provided in this +Paragraph 8 or as otherwise may be provided by the Committee, the limitations +on transferability set forth in Section 3.5 of the Plan will apply to this +Award. Any purported transfer or assignment in violation of the provisions of +this Paragraph 8 or Section 3.5 of the Plan will be void. The Committee may +adopt procedures pursuant to which you may transfer some or all of your RSUs +through a gift for no consideration to any child, stepchild, grandchild, +parent, stepparent, grandparent, spouse, sibling, niece, nephew, mother-in- +law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in- +law, including adoptive relationships, any person sharing the recipient's +household (other than a tenant or employee), a trust in which these persons +have more than 50% of the beneficial interest, and any other entity in which +these persons (or the recipient) own more than 50% of the voting interests. + +G OVERNING LAW + +9. Governing Law . T HIS AWARD WILL BE GOVERNED BY AND CONSTRUED +IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO +PRINCIPLES OF CONFLICT OF LAWS. + +C ERTAIN TAX PROVISIONS + +10. Compliance of Award Agreement and Plan with Section + +409A . The provisions of this Paragraph 10 apply to you only if you +are a U.S. taxpayer. + +(a) This Award Agreement and the Plan provisions that apply to this Award are +intended and will be construed to comply with Section 409A (including the +requirements applicable to, or the conditions for exemption from treatment as, +409A Deferred Compensation), whether by reason of short-term deferral +treatment or other exceptions or provisions. The Committee will have full +authority to give effect to this intent. To the extent necessary to give +effect to this intent, in the case of any conflict or potential inconsistency +between the provisions of the Plan (including Sections 1.3.2 and 2.1 thereof) +and this Award Agreement, the provisions of this Award Agreement will govern, +and in the case of any conflict or potential inconsistency between this +Paragraph 10 and the other provisions of this Award Agreement, this Paragraph +10 will govern. + +(b) Delivery of RSU Shares will not be delayed beyond the date on which all +applicable conditions or restrictions on delivery of RSU Shares required by +this Agreement (including those specified in Paragraphs 4, 6(b) and 7 and the +consents and other items specified in Section 3.3 of the Plan) are satisfied, +and will occur by December 31 of the calendar year in which the Delivery Date +occurs unless, in order to permit such conditions or restrictions to be +satisfied, the Committee elects, pursuant to Reg. 1.409A-1(b)(4)(i)(D) or +otherwise as may be permitted in accordance with Section 409A, to delay +delivery of RSU Shares to a later date as may be permitted under Section 409A, +including Reg. 1.409A-3(d). For the avoidance of doubt, if the Award includes +a "series of installment payments" as described in Reg. 1.409A-2(b)(2)(iii), +your right to the series of installment payments will be treated as a right to +a series of separate payments and not as a right to a single payment. + +(c) Notwithstanding the provisions of Paragraph 7(b) and Section 1.3.2(i) of +the Plan, to the extent necessary to comply with Section 409A, any securities, +other Awards or other property that the Firm may deliver in respect of your +RSUs will not have the effect of deferring delivery or payment, income +inclusion, or a substantial risk of forfeiture, beyond the date on which such +delivery, payment or inclusion would occur or such risk of forfeiture would +lapse, with respect to the RSU Shares that would otherwise have been +deliverable (unless the Committee elects a later date for this purpose +pursuant to Reg. 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted under +Section 409A, including and to the extent applicable, the subsequent election +provisions of Section 409A(a)(4)(C) of the Code and Reg. 1.409A-2(b)). + +(d) Notwithstanding the timing provisions of Paragraph 6(b), the delivery of +RSU Shares referred to therein will be made after the date of death and during +the calendar year that includes the date of death (or on such later date as +may be permitted under Section 409A). + +(e) Notwithstanding any provision of Paragraph 5 or Section 2.8.2 of the Plan +to the contrary, the Dividend Equivalent Rights with respect to each of your +Outstanding RSUs will be paid to you within the calendar year that includes +the date of distribution of any corresponding + +regular cash dividends paid by GS Inc. in respect of a share of Common Stock +the record date for which occurs on or after the Date of Grant. The payment +will be in an amount (less applicable withholding) equal to such regular +dividend payment as would have been made in respect of the RSU Shares +underlying such Outstanding RSUs. + +(f) The timing of delivery or payment referred to in Paragraph 6(a)(i) will be +the earlier of (i) the Delivery Date or (ii) within the calendar year in which +the Committee receives satisfactory documentation relating to your Conflicted +Employment, provided that such delivery or payment will be made, and any +Committee action referred to in Paragraph 6(a)(i) will be taken, only at such +time as, and if and to the extent that it, as reasonably determined by the +Firm, would not result in the imposition of any additional tax to you under +Section 409A. + +(g) Section 3.4 of the Plan will not apply to Awards that are 409A Deferred +Compensation except to the extent permitted under Section 409A. + +(h) Delivery of RSU Shares in respect of this Award may be made, if and to the +extent elected by the Committee, later than the Delivery Date or other date or +period specified hereinabove (but, in the case of any Award that constitutes +409A Deferred Compensation, only to the extent that the later delivery is +permitted under Section 409A). + +(i) You understand and agree that you are solely responsible for the payment +of any taxes and penalties due pursuant to Section 409A, but in no event will +you be permitted to designate, directly or indirectly, the taxable year of the +delivery. + +A MENDMENT, CONSTRUCTION AND REGULATORY REPORTING + +11. Amendment . The Committee reserves the right at any time to +amend the terms of this Award Agreement, and the Board may amend the Plan in +any respect; provided , that, notwithstanding the foregoing and Sections +1.3.2(f), 1.3.2(h) and 3.1 of the Plan, no such amendment will materially +adversely affect your rights and obligations under this Award Agreement +without your consent; and provided further , that the Committee expressly +reserves the right to accelerate the delivery of the RSU Shares and in its +discretion to provide that such Shares may not be transferable until the +Delivery Date. A modification that impacts the tax consequences of this Award +or the timing of delivery of RSU Shares will not be an amendment that +materially adversely affects your rights and obligations under this Award +Agreement. Any amendment of this Award Agreement will be in writing. + +12. Construction, Headings . Unless the context requires otherwise, +(a) words describing the singular number include the plural and vice versa, +(b) words denoting any gender include all genders and (c) the words "include," +"includes" and "including" will be deemed to be followed by the words "without +limitation." The headings in this Award Agreement are for the purpose of +convenience only and are not intended to define or limit the construction of +the provisions hereof. References in this Award Agreement to any specific Plan +provision will not be construed as limiting the applicability of any other +Plan provision. + +13. Providing Information to the Appropriate Authorities . In +accordance with applicable law, nothing in this Award Agreement or the Plan +prevents you from providing information you reasonably believe to be true to +the appropriate governmental authority, including a regulatory, judicial, +administrative, or other governmental entity; reporting possible violations of +law or regulation; making other disclosures that are protected under any +applicable law or regulation; or filing a charge or participating in any +investigation or proceeding conducted by a governmental authority. For the +avoidance of doubt, governmental authority includes federal, state and local +government agencies such as + +the SEC, the Equal Employment Opportunity Commission and any state or local +human rights agency ( e.g. , the New York State Division of Human Rights, +the New York City Commission on Human Rights, the California Department of +Fair Employment and Housing), as well as law enforcement. + +IN WITNESS WHEREOF , GS Inc. has caused this Award Agreement to be duly +executed and delivered as of the [applicable] Date of Grant [for each Award +granted hereunder]. + +THE GOLDMAN SACHS GROUP, INC. + +Accepted and Agreed: + +By: + +Print Name: + +D EFINITIONS APPENDIX + +The following capitalized terms are used in this Award Agreement with the +following meanings: + +(a) " 409A Deferred Compensation " means a "deferral of compensation" or +"deferred compensation" as those terms are defined in the regulations under +Section 409A. + +The following capitalized terms are used in this Award Agreement with the +meanings that are assigned to them in the Plan. + +(a) " Account " means any brokerage account, custody account or similar +account, as approved or required by GS Inc. from time to time, into which +shares of Common Stock, cash or other property in respect of an Award are +delivered. + +(b) " Award Agreement " means the written document or documents by which +each Award is evidenced, including any related Award Statement and signature +card. + +(c) " Award Statement " means a written statement that reflects certain +Award terms. + +(d) " Board " means the Board of Directors of GS Inc. + +(e) " 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. + +(f) " Certificate " means a stock certificate (or other appropriate document +or evidence of ownership) representing shares of Common Stock. + +(g) " 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 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. + +(h) " Common Stock " means common stock of GS Inc., par value $0.01 per +share. + +(i) " Conflicted Employment " means the Grantee's employment at any U.S. +Federal, state or local government, any non-U.S. government, any supranational +or international organization, any self-regulatory organization, or any agency +or instrumentality of any such government or organization, or any other +employer determined by the Committee, if, as a result of such employment, the +Grantee's continued holding of any Outstanding Award or Shares at Risk would +result in an actual or perceived conflict of interest. + +(j) " Date of Grant " means the date specified in the Grantee's Award +Agreement as the date of grant of the Award. + +(k) " 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. + +(l) " 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. + +(m) " Exchange Act " means the Securities Exchange Act of 1934, as amended +from time to time, and the applicable rules and regulations thereunder. + +(n) " Firm " means GS Inc. and its subsidiaries and affiliates. + +(o) " GS Inc. " means The Goldman Sachs Group, Inc., and any successor +thereto. + +(p) " Outstanding " means any Award to the extent it has not been forfeited, +canceled, terminated, exercised or with respect to which the shares of Common +Stock underlying the Award have not been previously delivered or other +payments made. + +(q) " 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. + +(r) " RSU Shares " means shares of Common Stock that underlie an RSU. + +(s) " Section 409A " means Section 409A of the Code, including any +amendments or successor provisions to that Section and any regulations and +other administrative guidance thereunder, in each case as they, from time to +time, may be amended or interpreted through further administrative guidance. + +(t) " 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). + +EX-10.40 5 d192225dex1040.htm EX-10.40 EX-10.40 + +Exhibit 10.40 + +T HE GOLDMAN SACHS GROUP, INC. + +[O NE-TIME][YEAR-END] RSU AWARD + +This Award Agreement, together with The Goldman Sachs Amended and Restated +Stock Incentive Plan (2021) (the "Plan"), governs your +award of RSUs (your "Award"). You should read carefully this entire Award +Agreement, which includes the Award Statement, any attached Appendix and the +signature card. + +A CCEPTANCE + +1. You Must Decide Whether to Accept this Award Agreement . To be +eligible to receive your Award, you must by the date specified (a) +open and activate an Account and (b) agree to all the terms of your +Award by executing the related signature card in accordance with its +instructions. By executing the signature card, you confirm your agreement to + all of the terms of this Award Agreement, including the arbitration +and choice of forum provisions in Paragraph [15][16]. + +D OCUMENTS THAT GOVERN YOUR AWARD; DEFINITIONS + +2. The Plan . Your Award is granted under the Plan, and the Plan's +terms apply to, and are a part of, this Award Agreement. + +3. Your Award Statement . The Award Statement delivered to you +contains some of your Award's specific terms. For example, it contains the +number of RSUs awarded to you and any applicable Vesting Dates[,] [and] +Delivery Dates [and Transferability Dates]. + +4. Definitions . Unless otherwise defined herein, including in the +Definitions Appendix or any other Appendix, capitalized terms have the +meanings provided in the Plan. + +V ESTING OF YOUR RSUS + +5. Vesting . On each Vesting Date listed on your Award Statement, +you will become Vested in the amount of Outstanding RSUs listed next to that +date. When an RSU becomes Vested, it means only that your continued active +Employment is not required for delivery of that portion of RSU Shares. +Vesting does not mean you have a non-forfeitable right to the Vested portion +of your Award. The terms of this Award Agreement (including conditions to +delivery [and any applicable Transfer Restrictions]) continue to apply to +Vested RSUs, and you can still forfeit Vested RSUs and any RSU Shares. + +D ELIVERY OF YOUR RSU SHARES + +6. Delivery . Reasonably promptly (but no more than 30 Business +Days) after each Delivery Date listed on your Award Statement, RSU Shares +(less applicable withholding as described in Paragraph [12] +) will be +delivered (by book entry credit to your Account) in respect of the amount of +Outstanding RSUs listed next to that date. The Committee or the SIP Committee +may select multiple dates within the 30-Business-Day period following the +Delivery Date to deliver RSU Shares in respect of all or a portion of the RSUs +with the same Delivery Date listed on the Award Statement, and all such dates +will be treated as a single Delivery Date for purposes of this Award. Until +such delivery, you have only the rights of a general unsecured creditor, and +no rights as a shareholder of GS Inc. Without limiting the Committee's +authority under Section 1.3.2(h) of the Plan, the Firm may accelerate any +Delivery Date by up to 30 days. + +[T RANSFER RESTRICTIONS FOLLOWING DELIVERY + +7. Transfer Restrictions and Shares at Risk . All RSU Shares that +are delivered on any date in respect of RSUs after tax withholding will be +Shares at Risk subject to Transfer Restrictions until the applicable +Transferability Date listed on your Award Statement. Any purported sale, +exchange, transfer, assignment, pledge, hypothecation, fractionalization, +hedge or other disposition in violation of the Transfer Restrictions on Shares +at Risk will be void. Within 30 Business Days after the applicable +Transferability Date listed on your Award Statement (or any other date on +which the Transfer Restrictions are to be removed), GS Inc. will remove the +Transfer Restrictions. The Committee or the SIP Committee may select multiple +dates within such 30-Business-Day period on which to remove Transfer +Restrictions for all or a portion of the Shares at Risk with the same +Transferability Date listed on the Award Statement, and all such dates will be +treated as a single Transferability Date for purposes of this Award.] + +D IVIDENDS + +8. [Dividend Equivalent Rights and] Dividends . [Each RSU includes +a Dividend Equivalent Right, which entitles you to receive an amount (less +applicable withholding), at or after the time of distribution of any regular +cash dividend paid by GS Inc. in respect of a share of Common Stock, equal to +any regular cash dividend payment that would have been made in respect of an +RSU Share underlying your Outstanding RSUs for any record date that occurs on +or after the Date of Grant.] [You will be entitled to receive on a current +basis any regular cash dividend paid in respect of your Shares at Risk. The +RSUs do not include Dividend Equivalent Rights.] + +F ORFEITURE OF YOUR AWARD + +9. How You May Forfeit Your Award . This Paragraph [8][9] sets +forth the events that result in forfeiture of up to all of your RSUs and +[Shares at Risk and] may require repayment to the Firm of up to all other +amounts previously delivered or paid to you under your Award in accordance +with Paragraph [9][10]. More than one event may apply, and in no case will the +occurrence of one event limit the forfeiture and repayment obligations as a +result of the occurrence of any other event. In addition, the Firm reserves +the right to (a) suspend vesting of Outstanding RSUs, [payments under Dividend +Equivalent Rights or] delivery of RSU Shares [or release of Transfer +Restrictions], (b) deliver any RSU Shares[,] [or] dividends [or payments under +Dividend Equivalent Rights] into an escrow account in accordance with +Paragraph [12] +(v) or (c) apply Transfer Restrictions to any RSU Shares +in connection with any investigation of whether any of the events that result +in forfeiture under the Plan or this Paragraph [8][9] have occurred. Paragraph +[10][11] (relating to certain circumstances under which you will not forfeit +your unvested RSUs upon Employment termination) and Paragraph [11][12] +(relating to certain circumstances under which vesting[, delivery] and/or +[delivery] [release of Transfer Restrictions] may be accelerated) provide for +exceptions to one or more provisions of this Paragraph [8][9]. [The U.K. +Material Risk Taker Appendix supplements this Paragraph 9 and sets forth +additional events that result in forfeiture of up to all of your RSUs and +Shares at Risk and may require repayment to the Firm as described in Paragraph +10 and the Appendix.] + +(a) Unvested RSUs Forfeited if Your Employment Terminates. If your +Employment terminates for any reason or you are otherwise no longer actively +Employed with the Firm (which includes off-premises notice periods, "garden +leaves," pay in lieu of notice or any other similar status), your rights to +your Outstanding RSUs that are not Vested will terminate, and no RSU Shares +will be delivered in respect of such RSUs. + +(b) Vested and Unvested RSUs Forfeited [if You Solicit Clients or Employees, +Interfere with Client or Employee Relationships or Participate in the Hiring +of Employees] [Upon Certain Events]. If any of the following occurs before +the applicable Delivery Date, your rights to all of your Outstanding RSUs +(whether or not Vested) will terminate, and no RSU Shares will be delivered in +respect of such RSUs: + +(i) [You Solicit Clients or Employees, Interfere with Client or Employee +Relationships or Participate in the Hiring of Employees. Either:] + +[(A)] you, in any manner, directly or indirectly, [(A)][(1)] Solicit any +Client to transact business with a Covered Enterprise or to reduce or refrain +from doing any business with the Firm, [(B)][(2)] interfere with or damage (or +attempt to interfere with or damage) any relationship between the Firm and any +Client, [(C)][(3)] Solicit any person who is an employee of the Firm to resign +from the Firm, [(D)][(4)] Solicit any Selected Firm Personnel to apply for or +accept employment (or other association) with any person or entity other than +the Firm or [(E)][(5)] participate in the hiring of any Selected Firm +Personnel by any person or entity other than the Firm (including, without +limitation, participating in the identification of individuals for potential +hire, and participating in any hiring decision), whether as an employee or +consultant or otherwise, or + +(ii) [(B)] Selected Firm Personnel are Solicited, hired or accepted into +partnership, membership or similar status by any entity where you have, or +will have, direct or indirect managerial responsibility for such Selected Firm +Personnel, unless the Committee determines that you were not involved in such +Solicitation, hiring or acceptance. + +(iii) [GS Inc. Fails to Maintain the Minimum Tier 1 Capital Ratio. GS Inc. +fails to maintain the required "Minimum Tier 1 Capital Ratio" as defined under +Federal Reserve Board Regulations applicable to GS Inc. for a period of 90 +consecutive business days.] + +(iv) [GS Inc. Is Determined to Be in Default. The Board of Governors of the +Federal Reserve or the Federal Deposit Insurance Corporation (the "FDIC") +makes a written recommendation under Title II (Orderly Liquidation Authority) +of the Dodd-Frank Wall Street Reform and Consumer Protection Act for the +appointment of the FDIC as a receiver of GS Inc. based on a determination that +GS Inc. is "in default" or "in danger of default."] + +(c) Vested and Unvested RSUs [and Shares at Risk] Forfeited upon Certain +Events. If any of the following occurs [(i)] your rights to all of your +Outstanding RSUs (whether or not Vested) will terminate, and no RSU Shares +will be delivered in respect of such RSUs [and (ii) your rights to all of your +Shares at Risk will terminate and your Shares at Risk will be cancelled, in +each case], as may be further described below: + +(i) You Failed to Consider Risk. You Failed to Consider Risk during + +(ii) Your Conduct Constitutes Cause. Any event that constitutes Cause +[(including, for the avoidance of doubt, "Serious Misconduct" as defined in +the U.K. Material Risk Taker Appendix)] has occurred before the applicable +Delivery Date [for RSUs or the applicable Transferability Date for Shares at +Risk]. + +(iii) You Do Not Meet Your Obligations to the Firm. The Committee + +determines that, before the applicable Delivery Date [for RSUs or the +applicable Transferability Date for Shares at Risk], you failed to meet, in +any respect, any obligation under any agreement with the Firm, or any +agreement entered into in connection with your Employment or this Award, +including the Firm's notice period requirement applicable to you, any offer +letter, employment agreement or any shareholders' agreement relating to the +Firm. Your failure to pay or reimburse the Firm, on demand, for any amount you +owe to the Firm will constitute (A) failure to meet an obligation you have +under an agreement, regardless of whether such obligation arises under a +written agreement, and/or (B) a material violation of Firm policy constituting +Cause. + +(iv) You Do Not Provide Timely Certifications or Comply with Your +Certifications. You fail to certify to GS Inc. that you have complied with +all of the terms of the Plan and this Award Agreement, or the Committee +determines that you have failed to comply with a term of the Plan or this +Award Agreement to which you have certified compliance. + +(v) You Do Not Follow Dispute Resolution/Arbitration Procedures. You attempt +to have any dispute under the Plan or this Award Agreement resolved in any +manner that is not provided for by Paragraph [15][16] or Section 3.17 of the +Plan, or you attempt to arbitrate a dispute without first having exhausted +your internal administrative remedies in accordance with Paragraph +([vii][viii]). + +(vi) You Bring an Action that Results in a Determination that Any Award +Agreement Term Is Invalid. As a result of any action brought by you, it is +determined that any term of this Award Agreement is invalid. + +(vii) You Receive Compensation in Respect of Your Award from Another +Employer. Your Employment terminates for any reason or you otherwise are no +longer actively Employed with the Firm and another entity grants you cash, +equity or other property (whether vested or unvested) to replace, substitute +for or otherwise in respect of any Outstanding RSUs [or Shares at Risk]; +provided , however , that your rights will only be terminated in respect +of the RSUs [and Shares at Risk] that are replaced, substituted for or +otherwise considered by such other entity in making its grant. + +(viii) [You Receive Compensation that this Award Is Intended to Replace. +This Award is intended to replace or substitute for any award or compensation +forgone with an entity to which you previously provided services, and such +entity nevertheless delivers to you such award or compensation (including any +cash, equity or other property (whether vested or unvested)), as determined by +the Firm in its sole discretion.] + +R EPAYMENT OF YOUR AWARD + +10. When You May Be Required to Repay Your Award . If the Committee +determines that any term of this Award was not satisfied, you will be +required, immediately upon demand therefor, to repay to the Firm the +following: + +(a) Any RSU Shares [(which, for the avoidance of doubt, includes Shares at +Risk)] for which the terms (including the terms for delivery) of the related +RSUs were not satisfied, in accordance with Section 2.6.3 of the Plan. + +(b) Any [payments under Dividend Equivalent Rights] [Shares at Risk] for which +the terms [(including the terms for release of Transfer Restrictions)] were +not satisfied [(including any such payments made in respect of RSUs that are +forfeited or RSU Shares that are cancelled or + +required to be repaid)], in accordance with Section [2.8.3][2.5.3] of the +Plan. + +(c) Any dividends paid in respect of any RSU Shares that are cancelled or +required to be repaid. + +(d) Any amount applied to satisfy tax withholding or other obligations with +respect to any RSUs, RSU Shares[,][and] dividend payments [and payments under +Dividend Equivalent Rights] that are forfeited or required to be repaid. + +E XCEPTIONS TO THE VESTING[, DELIVERY] AND/OR [DELIVERY] [TRANSFERABILITY] +DATES + +11. Circumstances Under Which You Will Not Forfeit Your Unvested RSUs on +Employment Termination (but the Original Delivery Date [and Transferability +Date] Continue[s] to Apply) . If your Employment terminates at a time +when you meet the requirements for Extended Absence[, Retirement,] +["downsizing" or Approved Termination,] [each] as described below, then +Paragraph [8] + will not apply, and your Outstanding RSUs will be treated +as described in this Paragraph [10][11]. All other terms of this Award +Agreement, including the other forfeiture and repayment events in Paragraphs +[8][9] and [9][10], continue to apply. + +(a) [Extended Absence [or Retirement] and No Association With a Covered +Enterprise.] + +(i) Generally. If your Employment terminates by Extended Absence [or +Retirement], your Outstanding RSUs that are not Vested will become Vested. +However, your rights to any Outstanding RSU that becomes Vested by this +Paragraph [10] +[(i)] will terminate and no RSU Share will be +delivered in respect of that RSU if you Associate With a Covered Enterprise on +or before the originally scheduled Vesting Date for that RSU. + +(ii) [Special Treatment for Involuntary or Mutual Agreement Termination. The +second sentence of Paragraph [10] +[(i)] (relating to forfeiture if you +Associate With a Covered Enterprise) will not apply if (A) the Firm +characterizes your Employment termination as "involuntary" or by "mutual +agreement" (and, in each case, you have not engaged in conduct constituting +Cause) and (B) you execute a general waiver and release of claims and an +agreement to pay any associated tax liability, in each case, in the form the +Firm prescribes. No Employment termination that you initiate, including any +purported "constructive termination," a "termination for good reason" or +similar concepts, can be "involuntary" or by "mutual agreement."] + +(b) [Downsizing. If (i) the Firm terminates your Employment solely by reason +of a "downsizing" (and you have not engaged in conduct constituting Cause) and +(ii) you execute a general waiver and release of claims and an agreement to +pay any associated tax liability, in each case, in the form the Firm +prescribes, your Outstanding RSUs that are not yet Vested will become Vested. +Whether or not your Employment is terminated solely by reason of a +"downsizing" will be determined by the Firm in its sole discretion.] + +(c) [Approved Terminations of Fixed-Term Employees. If the Firm classifies +you as a "fixed-term" employee and your Employment terminates solely by reason +of an Approved Termination (and you have not engaged in conduct constituting +Cause), your Outstanding RSUs that are not yet Vested will become Vested.] + +12. Accelerated Vesting[,] [and/or] Delivery [and/or Release of Transfer +Restrictions] in the Event of a Qualifying Termination After a Change in +Control[, Conflicted Employment] or + +Death . In the event of your Qualifying Termination After a Change +in Control[, Conflicted Employment] or death, each as described below, then +Paragraph [8] + will not apply, your Outstanding RSUs [and Shares at Risk] +will be treated as described in this Paragraph [11][12], and, except as set +forth in Paragraph [11] +, all other terms of this Award Agreement, +including the other forfeiture and repayment events in Paragraphs [8][9] and +[9][10], continue to apply. + +(a) You Have a Qualifying Termination After a Change in Control. If your +Employment terminates when you meet the requirements of a Qualifying +Termination After a Change in Control, the RSU Shares underlying your +Outstanding RSUs (whether or not Vested) will be delivered[, and any Transfer +Restrictions will cease to apply]. In addition, the forfeiture events in +Paragraph 8 will not apply to your Award. + +(b) [You Are Determined to Have Accepted Conflicted Employment. + +(i) Generally. Notwithstanding anything to the contrary in the Plan or +otherwise, for purposes of this Award Agreement, "Conflicted Employment" means +your employment at any U.S. Federal, state or local government, any non-U.S. +government, any supranational or international organization, any self- +regulatory organization, or any agency or instrumentality of any such +government or organization, or any other employer (other than an "Accounting +Firm" within the meaning of SEC Rule 2-01(f)(2) of Regulation S-X or any +successor thereto) determined by the Committee, if, as a result of such +employment, your continued holding of any Outstanding RSUs would result in an +actual or perceived conflict of interest. Unless prohibited by applicable law +or regulation, the following will apply as soon as practicable after the +Committee has received satisfactory documentation relating to your Conflicted +Employment. + +(A) Vesting. If your Employment terminates solely because you resign to +accept Conflicted Employment and you have completed at least three years of +continuous service with the Firm, your Outstanding RSUs will Vest; otherwise, +you will forfeit any Outstanding RSUs that are not Vested in accordance with +Paragraph 8(a). + +(B) Delivery. If your Employment terminates solely because you resign to +accept Conflicted Employment or if, following your termination of Employment, +you notify the Firm that you are accepting Conflicted Employment, RSU Shares +will be delivered in respect of your Outstanding Vested RSUs (including in the +form of cash as described in Paragraph 12(b)). + +(ii) You May Have to Take Other Steps to Address Conflicts of Interest. The +Committee retains the authority to exercise its rights under the Award +Agreement or the Plan (including Section 1.3.2 of the Plan) to take or require +you to take other steps it determines in its sole discretion to be necessary +or appropriate to cure an actual or perceived conflict of interest (which may +include a determination that the accelerated vesting and/or delivery described +in Paragraph 11(b)(i) will not apply because such actions are not necessary or +appropriate to cure an actual or perceived conflict of interest).] + +(c) Death. If you die, the RSU Shares underlying your Outstanding RSUs +(whether or not Vested) will be delivered to the representative of your estate +[and any Transfer Restrictions will cease to apply] as soon as practicable +after the date of death and after such documentation as may be requested by +the Committee is provided to the Committee. + +O THER TERMS, CONDITIONS AND AGREEMENTS + +13. Additional Terms, Conditions and Agreements . + +(a) You Must Satisfy Applicable Tax Withholding Requirements. Delivery of +RSU Shares is conditioned on your satisfaction of any applicable withholding +taxes in accordance with Section 3.2 of the Plan, which includes the Firm +deducting or withholding amounts from any payment or distribution to you. In +addition, to the extent permitted by applicable law, the Firm, in its sole +discretion, may require you to provide amounts equal to all or a portion of +any Federal, state, local, foreign or other tax obligations imposed on you or +the Firm in connection with the grant, Vesting or delivery of this Award by +requiring you to choose between remitting the amount (i) in cash (or through +payroll deduction or otherwise) or (ii) in the form of proceeds from the +Firm's executing a sale of RSU Shares delivered to you under this Award. In no +event, however, does this Paragraph [12] + give you any discretion to +determine or affect the timing of the delivery of RSU Shares or the timing of +payment of tax obligations. + +(b) Firm May Deliver Cash or Other Property Instead of RSU Shares. In +accordance with Section 1.3.2(i) of the Plan, in the sole discretion of the +Committee, in lieu of all or any portion of the RSU Shares, the Firm may +deliver cash, other securities, other awards under the Plan or other property, +and all references in this Award Agreement to deliveries of RSU Shares will +include such deliveries of cash, other securities, other awards under the Plan +or other property. + +(c) Amounts May Be Rounded to Avoid Fractional Shares. RSUs that become +Vested on a Vesting Date[,] [and] RSU Shares that become deliverable on a +Delivery Date [and RSU Shares subject to Transfer Restrictions] may, in each +case, be rounded to avoid fractional Shares. + +(d) You May Be Required to Become a Party to the Shareholders' Agreement. +Your rights to your RSUs are conditioned on your becoming a party to any +shareholders' agreement to which other similarly situated employees ( e.g., +employees with a similar title or position) of the Firm are required to be a +party. + +(e) Firm May Affix Legends and Place Stop Orders on Restricted RSU Shares. +GS Inc. may affix to Certificates representing RSU Shares any legend that the +Committee determines to be necessary or advisable (including to reflect any +restrictions to which you may be subject under a separate agreement). GS Inc. +may advise the transfer agent to place a stop order against any legended RSU +Shares. + +(f) You Agree to Certain Consents, Terms and Conditions. By accepting this +Award you understand and agree that: + +(i) You Agree to Certain Consents as a Condition to the Award. You have +expressly consented to all of the items listed in Section 3.3.3(d) of the +Plan, including the Firm's supplying to any third-party recordkeeper of the +Plan or other person such personal information of yours as the Committee deems +advisable to administer the Plan, and you agree to provide any additional +consents that the Committee determines to be necessary or advisable; + +(ii) You Are Subject to the Firm's Policies, Rules and Procedures. You are +subject to the Firm's policies in effect from time to time concerning trading +in RSU Shares and hedging or pledging RSU Shares and equity-based compensation +or other awards (including, without limitation, the "Firmwide Policy with +Respect to Personal Transactions Involving GS Securities and GS Equity Awards" +or any successor policies), and confidential or proprietary + +information, and you will effect sales of RSU Shares in accordance with such +rules and procedures as may be adopted from time to time (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); + +(iii) You Are Responsible for Costs Associated with Your Award. You will be +responsible for all brokerage costs and other fees or expenses associated with +your RSUs, including those related to the sale of RSU Shares; + +(iv) You Will Be Deemed to Represent Your Compliance with All the Terms of +Your Award if You Accept Delivery of, or Sell, RSU Shares. You will be deemed +to have represented and certified that you have complied with all of the terms +of the Plan and this Award Agreement when RSU Shares are delivered to you and +[you receive payment in respect of Dividend Equivalent Rights] [when you +request the sale of RSU Shares following the release of Transfer +Restrictions]; + +(v) Firm May Deliver Your Award into an Escrow Account. The Firm may +establish and maintain an escrow account on such terms (which may include your +executing any documents related to, and your paying for any costs associated +with, such account) as it may deem necessary or appropriate, and the delivery +of RSU Shares [(including Shares at Risk)]or the payment of cash (including +dividends [and payments under Dividend Equivalent Rights]) or other property +may initially be made into and held in that escrow account until such time as +the Committee has received such documentation as it may have requested or +until the Committee has determined that any other conditions or restrictions +on delivery of RSU Shares, cash or other property required by this Award +Agreement have been satisfied; + +(vi) You May Be Required to Certify Compliance with Award Terms; You Are +Responsible for Providing the Firm with Updated Address and Contact +Information After Your Departure from the Firm. If your Employment terminates +while you continue to hold RSUs [or Shares at Risk], from time to time, you +may be required to provide certifications of your compliance with all of the +terms of the Plan and this Award Agreement as described in Paragraph +(iv). You understand and agree that (A) your address on file with the +Firm at the time any certification is required will be deemed to be your +current address, (B) it is your responsibility to inform the Firm of any +changes to your address to ensure timely receipt of the certification +materials, (C) you are responsible for contacting the Firm to obtain such +certification materials if not received and (D) your failure to return +properly completed certification materials by the specified deadline (which +includes your failure to timely return the completed certification because you +did not provide the Firm with updated contact information) will result in the +forfeiture of all of your RSUs [and Shares at Risk] and subject previously +delivered amounts to repayment under Paragraph [8] +(iv); + +(vii) [You Authorize the Firm to Register, in Its or Its Designee's Name, Any +Shares at Risk and Sell, Assign or Transfer Any Forfeited Shares at Risk. You +are granting to the Firm the full power and authority to register any Shares +at Risk in its or its designee's name and authorizing the Firm or its designee +to sell, assign or transfer any Shares at Risk if you forfeit your Shares at +Risk;] + +(viii) You Must Comply with Applicable Deadlines and Procedures to Appeal +Determinations Made by the Committee, the SIP Committee or SIP +Administrators. If you disagree with a determination made by the Committee, +the SIP Committee, the SIP Administrators, or any of their delegates or +designees and you wish to appeal such determination, + +you must submit a written request to the SIP Committee for review within 180 +days after the determination at issue. You must exhaust your internal +administrative remedies ( i.e. , submit your appeal and wait for resolution +of that appeal) before seeking to resolve a dispute through arbitration +pursuant to Paragraph [15][16] and Section 3.17 of the Plan; and + +(ix) You Agree that Covered Persons Will Not Have Liability. In addition to +and without limiting the generality of the provisions of Section 1.3.5 of the +Plan, neither the Firm nor any Covered Person will have any liability to you +or any other person for any action taken or omitted in respect of this or any +other Award. + +14. Non-transferability . Except as otherwise may be provided in +this Paragraph [13][14] or as otherwise may be provided by the Committee, the +limitations on transferability set forth in Section 3.5 of the Plan will apply +to this Award. Any purported transfer or assignment in violation of the +provisions of this Paragraph [13][14] or Section 3.5 of the Plan will be void. +The Committee may adopt procedures pursuant to which some or all recipients of +RSUs may transfer some or all of their RSUs [and/or Shares at Risk (which will +continue to be subject to Transfer Restrictions until the applicable +Transferability Date)] through a gift for no consideration to any immediate +family member, a trust or other estate planning vehicle approved by the +Committee or SIP Committee in which the recipient and/or the recipient's +immediate family members in the aggregate have 100% of the beneficial +interest. + +15. Right of Offset . Except as provided in Paragraph +[17(h)][18(f)], the obligation to deliver RSU Shares [or to make payments +under Dividend Equivalent Rights] [to pay dividends or to remove Transfer +Restrictions] under this Award Agreement is subject to Section 3.4 of the +Plan, which provides for the Firm's right to offset against such obligation +any outstanding amounts you owe to the Firm and any amounts the Committee +deems appropriate pursuant to any tax equalization policy or agreement. + +A RBITRATION, CHOICE OF FORUM AND GOVERNING LAW + +16. Arbitration; Choice of Forum . + +(a) B Y ACCEPTING THIS AWARD, YOU ARE INDICATING THAT YOU UNDERSTAND AND +AGREE THAT THE ARBITRATION AND CHOICE OF FORUM PROVISIONS SET FORTH IN SECTION +3.17 OF THE PLAN WILL APPLY TO THIS AWARD. THESE PROVISIONS, WHICH ARE +EXPRESSLY INCORPORATED HEREIN BY REFERENCE, PROVIDE AMONG OTHER THINGS THAT +ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN THE FIRM AND YOU ARISING OUT OF OR +RELATING TO OR CONCERNING THE PLAN OR THIS AWARD AGREEMENT WILL BE FINALLY +SETTLED BY ARBITRATION IN NEW YORK CITY, PURSUANT TO THE TERMS MORE FULLY SET +FORTH IN SECTION 3.17 OF THE PLAN; PROVIDED THAT NOTHING HEREIN SHALL PRECLUDE +YOU FROM FILING A CHARGE WITH OR PARTICIPATING IN ANY INVESTIGATION OR +PROCEEDING CONDUCTED BY ANY GOVERNMENTAL AUTHORITY, INCLUDING BUT NOT LIMITED +TO THE SEC, THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AND A STATE OR LOCAL +HUMAN RIGHTS AGENCY, AS WELL AS LAW ENFORCEMENT. + +(b) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider class, collective or representative claims, to order +consolidation or to join different claimants or grant relief other than on an +individual basis to the individual claimant involved. + +(c) Notwithstanding any applicable forum rules to the contrary, to the extent +there is a question of enforceability of this Award Agreement arising from a +challenge to the arbitrator's jurisdiction or to the arbitrability of a claim, +it will be decided by a court and not an arbitrator. + +(d) The Federal Arbitration Act governs interpretation and enforcement of all +arbitration provisions under the Plan and this Award Agreement, and all +arbitration proceedings thereunder. + +(e) Nothing in this Award Agreement creates a substantive right to bring a +claim under U.S. Federal, state, or local employment laws. + +(f) By accepting your Award, you irrevocably appoint each General Counsel of +GS Inc., or any person whom the General Counsel of GS Inc. designates, as your +agent for service of process in connection with any suit, action or proceeding +arising out of or relating to or concerning the Plan or any Award which is not +arbitrated pursuant to the provisions of Section 3.17.1 of the Plan, who shall +promptly advise you of any such service of process. + +(g) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider any claim as to which you have not first exhausted +your internal administrative remedies in accordance with Paragraph +([vii][viii]). + +17. Governing Law . T HIS AWARD WILL BE GOVERNED BY AND CONSTRUED +IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO +PRINCIPLES OF CONFLICT OF LAWS. + +C ERTAIN TAX PROVISIONS + +18. Compliance of Award Agreement and Plan with Section + +409A . The provisions of this Paragraph [17][18] apply to you only if +you are a U.S. taxpayer. + +(a) This Award Agreement and the Plan provisions that apply to this Award are +intended and will be construed to comply with Section 409A (including the +requirements applicable to, or the conditions for exemption from treatment as, +409A Deferred Compensation), whether by reason of short-term deferral +treatment or other exceptions or provisions. The Committee will have full +authority to give effect to this intent. To the extent necessary to give +effect to this intent, in the case of any conflict or potential inconsistency +between the provisions of the Plan (including Sections 1.3.2 and 2.1 thereof) +and this Award Agreement, the provisions of this Award Agreement will govern, +and in the case of any conflict or potential inconsistency between this +Paragraph [17][18] and the other provisions of this Award Agreement, this +Paragraph [17][18] will govern. + +(b) Delivery of RSU Shares will not be delayed beyond the date on which all +applicable conditions or restrictions on delivery of RSU Shares required by +this Agreement (including those specified in Paragraphs 6, [7,] 10 +(a)(ii), +, 11([b][c])[, 12(b)] and [12][13] and the consents and other items +specified in Section 3.3 of the Plan) are satisfied. To the extent that any +portion of this Award is intended to satisfy the requirements for short-term +deferral treatment under Section 409A, delivery for such portion will occur by +the March 15 coinciding with the last day of the applicable "short-term +deferral" period described in Reg. 1.409A-1(b)(4) in order for the delivery of +RSU Shares to be within the short-term deferral exception unless, in order to +permit all applicable conditions or restrictions on delivery to be satisfied, +the Committee elects, pursuant to Reg. 1.409A-1(b)(4)(i)(D) or otherwise as +may be permitted in accordance with Section 409A, to delay delivery of RSU +Shares to a later date within the same calendar year or to such later date as +may be permitted under Section 409A, including Reg. 1.409A-3(d). For the +avoidance of doubt, if the Award includes a "series of installment payments" +as described in + +Reg. 1.409A-2(b)(2)(iii), your right to the series of installment payments +will be treated as a right to a series of separate payments and not as a right +to a single payment. + +(c) Notwithstanding the provisions of Paragraph [12] + and Section +1.3.2(i) of the Plan, to the extent necessary to comply with Section 409A, any +securities, other Awards or other property that the Firm may deliver in +respect of your RSUs will not have the effect of deferring delivery or +payment, income inclusion, or a substantial risk of forfeiture, beyond the +date on which such delivery, payment or inclusion would occur or such risk of +forfeiture would lapse, with respect to the RSU Shares that would otherwise +have been deliverable (unless the Committee elects a later date for this +purpose pursuant to Reg. 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted +under Section 409A, including and to the extent applicable, the subsequent +election provisions of Section 409A(a)(4)(C) of the Code and Reg. +1.409A-2(b)). + +(d) Notwithstanding the timing provisions of Paragraph [11] +, the +delivery of RSU Shares referred to therein will be made after the date of +death and during the calendar year that includes the date of death (or on such +later date as may be permitted under Section 409A). + +(e) The timing of delivery or payment pursuant to Paragraph [11] + will +occur on the earlier of (i) the Delivery Date or (ii) a date that is within +the calendar year in which the termination of Employment occurs; provided , +however , that, if you are a "specified employee" (as defined by the Firm in +accordance with Section 409A(a)(2)(i)(B) of the Code), delivery will occur on +the earlier of the Delivery Date or (to the extent required to avoid the +imposition of additional tax under Section 409A) the date that is six months +after your termination of Employment (or, if the latter date is not during a +Window Period, the first trading day of the next Window Period). For purposes +of Paragraph [11] +, references in this Award Agreement to termination of +Employment mean a termination of Employment from the Firm (as defined by the +Firm) which is also a separation from service (as defined by the Firm in +accordance with Section 409A). + +(f) [Notwithstanding any provision of Paragraph 7 or Section 2.8.2 of the Plan +to the contrary, the Dividend Equivalent Rights with respect to each of your +Outstanding RSUs will be paid to you within the calendar year that includes +the date of distribution of any corresponding regular cash dividends paid by +GS Inc. in respect of a share of Common Stock the record date for which occurs +on or after the Date of Grant. The payment will be in an amount (less +applicable withholding) equal to such regular dividend payment as would have +been made in respect of the RSU Shares underlying such Outstanding RSUs.] + +(g) [The timing of delivery or payment referred to in Paragraph 11(b)(i) will +be the earlier of (i) the Delivery Date or (ii) a date that is within the +calendar year in which the Committee receives satisfactory documentation +relating to your Conflicted Employment, provided that such delivery or +payment will be made, and any Committee action referred to in Paragraph +11(b)(ii) will be taken, only at such time as, and if and to the extent that +it, as reasonably determined by the Firm, would not result in the imposition +of any additional tax to you under Section 409A.] + +(h) Paragraph [14][15] and Section 3.4 of the Plan will not apply to Awards +that are 409A Deferred Compensation except to the extent permitted under +Section 409A. + +(i) Delivery of RSU Shares in respect of any Award may be made, if and to the +extent elected by the Committee, later than the Delivery Date or other date or +period specified + +hereinabove (but, in the case of any Award that constitutes 409A Deferred +Compensation, only to the extent that the later delivery is permitted under +Section 409A). + +(j) You understand and agree that you are solely responsible for the payment +of any taxes and penalties due pursuant to Section 409A, but in no event will +you be permitted to designate, directly or indirectly, the taxable year of the +delivery. + +C OMMITTEE AUTHORITY, AMENDMENT, CONSTRUCTION AND REGULATORY REPORTING + +19. Committee Authority . The Committee has the authority to +determine, in its sole discretion, that any event triggering forfeiture or +repayment of your Award will not apply[,] [and] to limit the forfeitures and +repayments that result under Paragraphs [8 and 9] [9 and 10 and to remove +Transfer Restrictions before the applicable Transferability Date]. In +addition, the Committee, in its sole discretion, may determine whether +Paragraph[s] [10(a)(ii)] [and] [10] + will apply upon a termination of +Employment[ and whether a termination of Employment constitutes an Approved +Termination under Paragraph 10(c)]. + +20. Amendment . The Committee reserves the right at any time to +amend the terms of this Award Agreement, and the Board may amend the Plan in +any respect; provided that, notwithstanding the foregoing and Sections +1.3.2(f), 1.3.2(h) and 3.1 of the Plan, no such amendment will materially +adversely affect your rights and obligations under this Award Agreement +without your consent; and provided further that the Committee expressly +reserves its rights to amend the Award Agreement and the Plan as described in +Sections 1.3.2(h)(1), (2) and (4) of the Plan. A modification that impacts the +tax consequences of this Award or the timing of delivery of RSU Shares will +not be an amendment that materially adversely affects your rights and +obligations under this Award Agreement. Any amendment of this Award Agreement +will be in writing. + +21. Construction, Headings . Unless the context requires otherwise, +(a) words describing the singular number include the plural and vice versa, +(b) words denoting any gender include all genders and (c) the words "include," +"includes" and "including" will be deemed to be followed by the words "without +limitation." The headings in this Award Agreement are for the purpose of +convenience only and are not intended to define or limit the construction of +the provisions hereof. References in this Award Agreement to any specific Plan +provision will not be construed as limiting the applicability of any other +Plan provision. + +22. Providing Information to the Appropriate Authorities . In +accordance with applicable law, nothing in this Award Agreement (including the +forfeiture and repayment provisions in Paragraphs 8 and 9) or the Plan +prevents you from providing information you reasonably believe to be true to +the appropriate governmental authority, including a regulatory, judicial, +administrative, or other governmental entity; reporting possible violations of +law or regulation; making other disclosures that are protected under any +applicable law or regulation; or filing a charge or participating in any +investigation or proceeding conducted by a governmental authority. For the +avoidance of doubt, governmental authority includes federal, state and local +government agencies such as the SEC, the Equal Employment Opportunity +Commission and any state or local human rights agency ( e.g. , the New York +State Division of Human Rights, the New York City Commission on Human Rights, +the California Department of Fair Employment and Housing), as well as law +enforcement. + +IN WITNESS WHEREOF , GS Inc. has caused this Award Agreement to be duly +executed and delivered as of the Date of Grant. + +THE GOLDMAN SACHS GROUP, INC. + +[ U.K. M ATERIAL RISK TAKER APPENDIX + +This Appendix supplements Paragraph 9 and sets forth additional events that +result in forfeiture of up to all of your RSUs and Shares at Risk and may +require repayment to the Firm of up to all other amounts previously delivered +or paid to you under your Award in accordance with Paragraph 10. As with the +events described in Paragraph 9, more than one event may apply, in no case +will the occurrence of one event limit the forfeiture and repayment +obligations as a result of the occurrence of any other event and the Firm +reserves the right to (a) suspend vesting of Outstanding RSUs, delivery of RSU +Shares or release of Transfer Restrictions, (b) deliver any RSU Shares or +dividends into an escrow account in accordance with Paragraph 13(f)(v) or (c) +apply Transfer Restrictions to any RSU Shares in connection with any +investigation of whether any of the events that result in forfeiture under +this Appendix have occurred. + +With respect to the events described in this Appendix, the Committee will +consider certain factors to determine whether and what portion of your Award +will terminate, including the reason for the "Loss Event" (as defined below) +or "Risk Event" (as defined below) and the extent to which: (1) you +participated in the Loss Event or Risk Event, (2) your compensation for +[] may or may not have been adjusted to take into +account the risk associated with the Loss Event, Risk Event, your "Serious +Misconduct" (as defined below) or the Serious Misconduct of a "Supervised +Employee" (as defined below) and (3) your compensation may be adjusted for the +year in which the Loss Event, Risk Event, your Serious Misconduct or a +Supervised Employee's Serious Misconduct is discovered. + +(a) A Loss Event Occurs Prior to Delivery. If a Loss Event occurs prior to +the delivery of RSU Shares, your rights in respect of all or a portion of your +RSUs (whether or not Vested) which are scheduled to deliver on the next +Delivery Date immediately following the date that the Loss Event is identified +(or, if not practicable, then the next following Delivery Date) will +terminate, and no RSU Shares will be delivered in respect of such RSUs. + +(i) A " Loss Event " means (A) an annual pre-tax loss at GS Inc. or (B) +annual negative revenues in one or more reporting segments as disclosed in the +Firm's Form 10-K other than the Asset Management segment, or annual negative +revenues in the Asset Management segment of $5 billion or more, provided in +either case that you are employed in a business within such reporting segment. + +(b) A Risk Event Occurs []. If a Risk Event occurs +[], (i) your rights in respect of all or a portion of +your RSUs (whether or not Vested) will terminate and no RSU Shares will be +delivered in respect of such RSUs, (ii) your rights to all or a portion of any +Shares at Risk will terminate and such Shares at Risk will be cancelled and +(iii) you will be obligated immediately upon demand therefor to pay the Firm +an amount not in excess of the greater of the Fair Market Value of the RSU +Shares (plus any dividend payments) delivered in respect of the Award (without +reduction for any amount applied to satisfy tax withholding or other +obligations) determined as of (A) the date the Risk Event occurred and (B) the +date that the repayment request is made. + +(i) A " Risk Event " means there occurs a loss of 5% or more of firmwide +total capital from a reportable operational risk event determined in +accordance with the firmwide Reporting Operational Risk Events Policy. + +(c) You Engage in Serious Misconduct []. If you +engage in Serious Misconduct during [], you +will be obligated immediately upon demand therefor to pay the Firm an amount +not in excess of the + +greater of the Fair Market Value of the RSU Shares (plus any dividend +payments) delivered in respect of the Award (without reduction for any amount +applied to satisfy tax withholding or other obligations) determined as of (i) +the date the Serious Misconduct occurred and (ii) the date that the repayment +request is made. + +(i) " Serious Misconduct " means that you engage in conduct that the Firm +reasonably considers, in its sole discretion, to be misconduct sufficient to +justify summary termination of employment under English law. + +(d) A Supervised Employee Engages in Serious Misconduct. If the Committee +determines that it is appropriate to hold you accountable in whole or in part +for Serious Misconduct related to compliance, control or risk that occurred +during [] by a Supervised Employee, your rights in respect +of all or a portion of your RSUs (whether or not Vested) will terminate and no +RSU Shares will be delivered in respect of such RSUs and your rights to all or +a portion of any Shares at Risk will terminate and such Shares at Risk will be +cancelled. + +(i) " Supervised Employee " means an individual with respect to whom the +Committee determines you had supervisory responsibility as a result of direct +or indirect reporting lines or your management responsibility for an office, +division or business. + +Notwithstanding any provision in the Plan, this Award Agreement or any other +agreement or arrangement you may have with the Firm, the parties agree that to +the extent that there is any dispute arising out of or relating to the payment +required by Paragraphs (b) and (c) of this Appendix (including your refusal to +remit payment) the parties will submit to arbitration in accordance with +Paragraph 16 of this Award Agreement and Section 3.17 of the Plan as the sole +means of resolution of such dispute (including the recovery by the Firm of the +payment amount).] + +D EFINITIONS APPENDIX + +The following capitalized terms are used in this Award Agreement with the +following meanings: + +(a) " 409A Deferred Compensation " means a "deferral of compensation" or +"deferred compensation" as those terms are defined in the regulations under +Section 409A. + +(b) [" Approved Termination " means that you are classified by the Firm as a +"fixed-term employee" and you (i) successfully complete the fixed-term +engagement, as determined by the Firm in its sole discretion, including +remaining Employed through the completion date specified by the Firm, and (ii) +terminate Employment immediately after the completion date without any "stay- +on" or other agreement or understanding to continue Employment with the Firm. +If you agree to stay with the Firm as an employee after your fixed-term +engagement ends and then later terminate Employment, you will not have an +Approved Termination.] + +(c) " Associate With a Covered Enterprise " means that you (i) form, or +acquire a 5% or greater equity ownership, voting or profit participation +interest in, any Covered Enterprise or (ii) associate in any capacity +(including association as an officer, employee, partner, director, consultant, +agent or advisor) with any Covered Enterprise. Associate With a Covered +Enterprise may include, as determined in the discretion of either the +Committee or the SIP Committee, (i) becoming the subject of any publicly +available announcement or report of a pending or future association with a +Covered Enterprise and (ii) unpaid associations, including an association in +contemplation of future employment. "Association With a Covered Enterprise" +will have its correlative meaning. + +(d) [" Conflicted Employment " means your employment at any U.S. Federal, +state or local government, any non-U.S. government, any supranational or +international organization, any self-regulatory organization, or any agency or +instrumentality of any such government or organization, or any other employer +(other than an "Accounting Firm" within the meaning of SEC Rule 2-01(f)(2) of +Regulation S-X or any successor thereto) determined by the Committee, if, as a +result of such employment, your continued holding of any Outstanding RSUs +would result in an actual or perceived conflict of interest.] + +(e) " Covered Enterprise " means a Competitive Enterprise and any other +existing or planned business enterprise that: (i) offers, holds itself out as +offering or reasonably may be expected to offer products or services that are +the same as or similar to those offered by the Firm or that the Firm +reasonably expects to offer ("Firm Products or Services") or (ii) engages in, +holds itself out as engaging in or reasonably may be expected to engage in any +other activity that is the same as or similar to any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage +("Firm Activities"). For the avoidance of doubt, Firm Activities include any +activity that requires the same or similar skills as any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage, +irrespective of whether any such financial activity is in furtherance of an +advisory, agency, proprietary or fiduciary undertaking. + +The enterprises covered by this definition include enterprises that offer, +hold themselves out as offering or reasonably may be expected to offer Firm +Products or Services, or engage in, hold themselves out as engaging in or +reasonably may be expected to engage in Firm Activities directly, as well as +those that do so indirectly by ownership or control ( e.g. , by owning, +being owned by or by being under common ownership with an enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +Firm Products or Services or that engages in, holds itself out as engaging in +or reasonably may be expected to engage in Firm Activities). The definition of +Covered Enterprise includes, solely by way of example, any enterprise that +offers, holds itself out as offering or reasonably may be + +expected to offer any product or service, or engages in, holds itself out as +engaging in or reasonably may be expected to engage in any activity, in any +case, associated with investment banking; public or private finance; lending; +financial advisory services; private investing for anyone other than you or +your family members (including, for the avoidance of doubt, any type of +proprietary investing or trading); private wealth management; private banking; +consumer or commercial cash management; consumer, digital or commercial +banking; merchant banking; asset, portfolio or hedge fund management; +insurance or reinsurance underwriting or brokerage; property management; or +securities, futures, commodities, energy, derivatives, currency or digital +asset brokerage, sales, lending, custody, clearance, settlement or trading. An +enterprise that offers, holds itself out as offering or reasonably may be +expected to offer Firm Products or Services, or engages in, holds itself out +as engaging in or reasonably may be expected to engage in Firm Activities is a +Covered Enterprise , irrespective of whether the enterprise is a customer, +client or counterparty of the Firm or is otherwise associated with the Firm +and, because the Firm is a global enterprise, irrespective of where the +Covered Enterprise is physically located. + +(f) " Failed to Consider Risk " means that you participated (or otherwise +oversaw or were responsible for, depending on the circumstances, another +individual's participation) in the structuring or marketing of any product or +service, or participated on behalf of the Firm or any of its clients in the +purchase or sale of any security or other property, in any case without +appropriate consideration of the risk to the Firm or the broader financial +system as a whole (for example, where you have improperly analyzed such risk +or where you have failed sufficiently to raise concerns about such risk) and, +as a result of such action or omission, the Committee determines there has +been, or reasonably could be expected to be, a material adverse impact on the +Firm, your business unit or the broader financial system. + +(g) " Qualifying Termination After a Change in Control " means that the Firm +terminates your Employment other than for Cause or you terminate your +Employment for Good Reason, in each case, within 18 months following a Change +in Control. + +(h) " SEC " means the U.S. Securities and Exchange Commission. + +(i) " Selected Firm Personnel " means any individual who is or in the three +months preceding the conduct prohibited by Paragraph [8] +[(i)] was (i) a +Firm employee or consultant with whom you personally worked while employed by +the Firm, (ii) a Firm employee or consultant who, at any time during the year +preceding the date of the termination of your Employment, worked in the same +division in which you worked or (iii) an Advisory Director, a Managing +Director or a Senior Advisor of the Firm. + +(j) [" Shares at Risk " means RSU Shares subject to Transfer Restrictions.] + +The following capitalized terms are used in this Award Agreement with the +meanings that are assigned to them in the Plan. + +(a) " Account " means any brokerage account, custody account or similar +account, as approved or required by GS Inc. from time to time, into which +shares of Common Stock, cash or other property in respect of an Award are +delivered. + +(b) " Award Agreement " means the written document or documents by which +each Award is evidenced, including any related Award Statement and signature +card. + +(c) " Award Statement " means a written statement that reflects certain +Award terms. + +(d) " Board " means the Board of Directors of GS Inc. + +(e) " 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. + +(f) " Cause " means (i) the Grantee's conviction, whether following trial or +by plea of guilty or nolo contendere (or similar plea), in a criminal +proceeding (A) on a misdemeanor charge involving fraud, false statements or +misleading omissions, wrongful taking, embezzlement, bribery, forgery, +counterfeiting or extortion, or (B) on a felony charge, or (C) on an +equivalent charge to those in clauses (A) and (B) in jurisdictions which do +not use those designations, (ii) the Grantee's engaging in any conduct which +constitutes an employment disqualification under applicable law (including +statutory disqualification as defined under the Exchange Act), (iii) the +Grantee's willful failure to perform the Grantee's duties to the Firm, (iv) +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, (v) 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, (vi) the +Grantee's engaging in any act or making any statement which impairs, impugns, +denigrates, disparages or negatively reflects upon the name, reputation or +business interests of the Firm or (vii) 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 may have under any other agreement with a Grantee or at law or +in equity. + +(g) " Certificate " means a stock certificate (or other appropriate document +or evidence of ownership) representing shares of Common Stock. + +(h) " 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 shareholders +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: (i) 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 (A) 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 (B) 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 (ii) 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 (A) were members of the Board on the Effective Date or (B) 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). + +(i) " 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. + +(j) " Code " means the Internal Revenue Code of 1986, as amended from time +to time, and the applicable rulings and regulations thereunder. + +(k) " 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 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. + +(l) " Common Stock " means common stock of GS Inc., par value $0.01 per +share. + +(m) " Competitive Enterprise " means an existing or planned business +enterprise that (i) engages, or may reasonably be expected to engage, in any +activity; (ii) owns or controls, or may reasonably be expected to own or +control, a significant interest in any entity that engages in any activity or +(iii) is, or may reasonably be expected to be, owned by, or a significant +interest in which is, or may reasonably be expected to be, owned or controlled +by, any entity that engages in any activity that, in any case, competes or +will compete 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 (including for the avoidance of +doubt, any type of proprietary investing or trading); private wealth +management; private banking; consumer or commercial cash management; consumer, +digital or commercial banking; merchant banking; asset, portfolio or hedge +fund management; insurance or reinsurance underwriting or brokerage; property +management; or securities, futures, commodities, energy, derivatives, currency +or digital asset brokerage, sales, lending, custody, clearance, settlement or +trading. + +(n) " Covered Person " means a member of the Board or the Committee or any +employee of the Firm. + +(o) " Date of Grant " means the date specified in the Grantee's Award +Agreement as the date of grant of the Award. + +(p) " 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. + +(q) " 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. + +(r) " Effective Date " means the date this Plan is approved by the +shareholders of GS Inc. pursuant to Section 3.15 of the Plan. + +(s) " 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 +(i) 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), (ii) whether and when a change in a +Grantee's association with the Firm results in a termination of Employment and +(iii) 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. + +(t) " Exchange Act " means the Securities Exchange Act of 1934, as amended +from time to time, and the applicable rules and regulations thereunder. + +(u) " 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. + +(v) " Firm " means GS Inc. and its subsidiaries and affiliates. + +(w) " 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). + +(x) " Grantee " means a person who receives an Award. + +(y) " GS Inc. " means The Goldman Sachs Group, Inc., and any successor +thereto. + +(z) " 1999 SIP " means The Goldman Sachs 1999 Stock Incentive Plan, as in +effect prior to the effective date of the 2003 SIP. + +(aa) " 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. + +(bb) [" Restricted Share " means a share of Common Stock delivered under the +Plan that is subject to Transfer Restrictions, forfeiture provisions and/or +other terms and conditions specified herein and in the Restricted Share Award +Agreement or other applicable Award Agreement. All references to Restricted +Shares include "Shares at Risk."] + +(cc) [" Retirement " means termination of the Grantee's Employment (other +than for Cause) on or after the Date of Grant at a time when (i) (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 60 and (B) the Grantee has +completed at least 10 years of service with the Firm (as determined by the +Committee in its sole discretion) or, if earlier, (ii) (A) the Grantee has +attained age 50 and (B) the Grantee has completed at least five years of +service with the Firm (as determined by the Committee in its sole +discretion).] + +(dd) " RSU " means a restricted stock unit 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. + +(ee) " RSU Shares " means shares of Common Stock that underlie an RSU. + +(ff) " Section 409A " means Section 409A of the Code, including any +amendments or successor provisions to that Section and any regulations and +other administrative guidance thereunder, in each case as they, from time to +time, may be amended or interpreted through further administrative guidance. + +(gg) " 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. + +(hh) " SIP Committee " means the persons who have been delegated certain +authority under the Plan by the Committee. + +(ii) " Solicit " means any direct or indirect communication of any kind +whatsoever, regardless of by whom initiated, inviting, advising, suggesting, +encouraging or requesting any person or entity, in any manner, to take or +refrain from taking any action. The terms "Solicited," "Soliciting" and +"Solicitation" will have their correlative meanings. + +(jj) " Transfer Restrictions " means restrictions that prohibit the sale, +exchange, transfer, assignment, pledge, hypothecation, fractionalization, +hedge or other disposal (including through the use of any cash-settled +instrument), whether voluntarily or involuntarily by the Grantee, of an Award +or any shares of Common Stock, cash or other property delivered in respect of +an Award. + +(kk) [" Transferability Date " means the date Transfer Restrictions on a +Restricted Share will be released. Within 30 Business Days after the +applicable Transferability Date, GS Inc. shall take, or shall cause to be +taken, such steps as may be necessary to remove the Transfer Restrictions.] + +(ll) " 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. + +(mm) " 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. + +(nn) " 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). + +EX-10.41 6 d192225dex1041.htm EX-10.41 EX-10.41 + +Exhibit 10.41 + +T HE GOLDMAN SACHS GROUP, INC. + +Y EAR-END RSU AWARD + +This Award Agreement, together with The Goldman Sachs Amended and Restated +Stock Incentive Plan (2021) (the "Plan"), governs your year-end award of +RSUs (your "Award"). You should read carefully this entire Award Agreement, +which includes the Award Statement, any attached Appendix and the signature +card. + +A CCEPTANCE + +1. You Must Decide Whether to Accept this Award Agreement . To be +eligible to receive your Award, you must by the date specified (a) +open and activate an Account and (b) agree to all the terms of your +Award by executing the related signature card in accordance with its +instructions. By executing the signature card, you confirm your agreement to + all of the terms of this Award Agreement, including the arbitration +and choice of forum provisions in Paragraph 16. + +D OCUMENTS THAT GOVERN YOUR AWARD; DEFINITIONS + +2. The Plan . Your Award is granted under the Plan, and the Plan's +terms apply to, and are a part of, this Award Agreement. + +3. Your Award Statement . The Award Statement delivered to you +contains some of your Award's specific terms. For example, it contains the +number of RSUs awarded to you and any applicable Vesting Dates, Delivery Dates +and Transferability Dates. + +4. Definitions . Unless otherwise defined herein, including in the +Definitions Appendix or any other Appendix, capitalized terms have the +meanings provided in the Plan. + +V ESTING OF YOUR RSUS + +5. Vesting . On each Vesting Date listed on your Award Statement, +you will become Vested in the amount of Outstanding RSUs listed next to that +date. When an RSU becomes Vested, it means only that your continued active +Employment is not required for delivery of that portion of RSU Shares. +Vesting does not mean you have a non-forfeitable right to the Vested portion +of your Award. The terms of this Award Agreement (including conditions to +delivery and any applicable Transfer Restrictions) continue to apply to Vested +RSUs, and you can still forfeit Vested RSUs and any RSU Shares. + +D ELIVERY OF YOUR RSU SHARES + +6. Delivery . Reasonably promptly (but no more than 30 Business +Days) after each Delivery Date listed on your Award Statement, RSU Shares +(less applicable withholding as described in Paragraph 13(a)) will be +delivered (by book entry credit to your Account) in respect of the amount of +Outstanding RSUs listed next to that date. The Committee or the SIP Committee +may select multiple dates within the 30-Business-Day period following the +Delivery Date to deliver RSU Shares in respect of all or a portion of the RSUs +with the same Delivery Date listed on the Award Statement, and all such dates +will be treated as a single Delivery Date for purposes of this Award. Until +such delivery, you have only the rights of a general unsecured creditor, and +no rights as a shareholder of GS Inc. Without limiting the Committee's +authority under Section 1.3.2(h) of the Plan, the Firm may accelerate any +Delivery Date by up to 30 days. + +T RANSFER RESTRICTIONS FOLLOWING DELIVERY + +7. Transfer Restrictions and Shares at Risk . percent of the +RSU Shares that are delivered on any date will be Shares at Risk subject to +Transfer Restrictions until the [applicable] Transferability Date [listed on +your Award Statement]. Any purported sale, exchange, transfer, assignment, +pledge, hypothecation, fractionalization, hedge or other disposition in +violation of the Transfer Restrictions on Shares at Risk will be void. Within +30 Business Days after the Transferability Date listed on your Award Statement +(or any other date on which the Transfer Restrictions are to be removed), GS +Inc. will remove the Transfer Restrictions. The Committee or the SIP Committee +may select multiple dates within such 30-Business-Day period on which to +remove Transfer Restrictions for all or a portion of the Shares at Risk with +the same Transferability Date listed on the Award Statement, and all such +dates will be treated as a single Transferability Date for purposes of this +Award. + +D IVIDENDS + +8. Dividend Equivalent Rights and Dividends . Each RSU includes a +Dividend Equivalent Right, which entitles you to receive an amount (less +applicable withholding), at or after the time of distribution of any regular +cash dividend paid by GS Inc. in respect of a share of Common Stock, equal to +any regular cash dividend payment that would have been made in respect of an +RSU Share underlying your Outstanding RSUs for any record date that occurs on +or after the Date of Grant. In addition, you will be entitled to receive on a +current basis any regular cash dividend paid in respect of your Shares at +Risk. + +F ORFEITURE OF YOUR AWARD + +9. How You May Forfeit Your Award . This Paragraph 9 sets forth the +events that result in forfeiture of up to all of your RSUs and Shares at Risk +and may require repayment to the Firm of up to all other amounts previously +delivered or paid to you under your Award in accordance with Paragraph 10. +More than one event may apply, and in no case will the occurrence of one event +limit the forfeiture and repayment obligations as a result of the occurrence +of any other event. In addition, the Firm reserves the right to (a) suspend +vesting of Outstanding RSUs, payments under Dividend Equivalent Rights, +delivery of RSU Shares or release of Transfer Restrictions, (b) deliver any +RSU Shares, dividends or payments under Dividend Equivalent Rights into an +escrow account in accordance with Paragraph 13(f)(v) or (c) apply Transfer +Restrictions to any RSU Shares in connection with any investigation of whether +any of the events that result in forfeiture under the Plan or this Paragraph 9 +have occurred. Paragraph 11 (relating to certain circumstances under which you +will not forfeit your unvested RSUs upon Employment termination) and Paragraph +12 (relating to certain circumstances under which vesting, delivery and/or +release of Transfer Restrictions may be accelerated) provide for exceptions to +one or more provisions of this Paragraph 9. + +(a) Unvested RSUs Forfeited if Your Employment Terminates. If your +Employment terminates for any reason or you are otherwise no longer actively +Employed with the Firm (which includes off-premises notice periods, "garden +leaves," pay in lieu of notice or any other similar status), your rights to +your Outstanding RSUs that are not Vested will terminate, and no RSU Shares +will be delivered in respect of such RSUs. + +(b) Vested and Unvested RSUs Forfeited Upon Certain Events. If any of the +following occurs before the applicable Delivery Date, your rights to all of +your Outstanding RSUs (whether or not Vested) will terminate, and no RSU +Shares will be delivered in respect of such RSUs: + +(i) You Solicit Clients or Employees, Interfere with Client or Employee +Relationships or Participate in the Hiring of Employees : + +(A) you, in any manner, directly or indirectly, (1) Solicit any Client to +transact business with a Covered Enterprise or to reduce or refrain from doing +any business with the Firm, (2) interfere with or damage (or attempt to +interfere with or damage) any relationship between the Firm and any Client, +(3) Solicit any person who is an employee of the Firm to resign from the Firm, +(4) Solicit any Selected Firm Personnel to apply for or accept employment (or +other association) with any person or entity other than the Firm or (5) +participate in the hiring of any Selected Firm Personnel by any person or +entity other than the Firm (including, without limitation, participating in +the identification of individuals for potential hire, and participating in any +hiring decision), whether as an employee or consultant or otherwise, or + +(B) Selected Firm Personnel are Solicited, hired or accepted into partnership, +membership or similar status by any entity where you have, or will have, +direct or indirect managerial responsibility for such Selected Firm Personnel. + +(ii) [ GS Inc. Fails to Maintain the Minimum Tier 1 Capital Ratio. GS Inc. +fails to maintain the required "Minimum Tier 1 Capital Ratio" as defined under +Federal Reserve Board Regulations applicable to GS Inc. for a period of 90 +consecutive business days.] + +(iii) [ GS Inc. Is Determined to Be in Default. The Board of Governors of +the Federal Reserve or the Federal Deposit Insurance Corporation (the "FDIC") +makes a written recommendation under Title II (Orderly Liquidation Authority) +of the Dodd-Frank Wall Street Reform and Consumer Protection Act for the +appointment of the FDIC as a receiver of GS Inc. based on a determination that +GS Inc. is "in default" or "in danger of default."] + +(c) Vested and Unvested RSUs and Shares at Risk Forfeited upon Certain +Events. If any of the following occurs (i) your rights to all of your +Outstanding RSUs (whether or not Vested) will terminate, and no RSU Shares +will be delivered in respect of such RSUs and (ii) your rights to all of your +Shares at Risk will terminate and your Shares at Risk will be cancelled, in +each case, as may be further described below: + +(i) You Failed to Consider Risk. You Failed to Consider Risk during + +(ii) Your Conduct Constitutes Cause. Any event that constitutes Cause has +occurred before the applicable Delivery Date for RSUs or the Transferability +Date for Shares at Risk. + +(iii) You Do Not Meet Your Obligations to the Firm. The Committee determines +that, before the applicable Delivery Date for RSUs or the Transferability Date +for Shares at Risk, you failed to meet, in any respect, any obligation under +any agreement with the Firm, or any agreement entered into in connection with +your Employment or this Award, including the Firm's notice period requirement +applicable to you, any offer letter, employment agreement or any shareholders' +agreement relating to the Firm. Your failure to pay or reimburse the Firm, on +demand, for any amount you owe to the Firm will constitute (A) failure to meet +an obligation you have under an agreement, regardless of whether such +obligation arises under a written agreement, and/or (B) a material violation +of Firm policy constituting Cause. + +(iv) You Do Not Provide Timely Certifications or Comply with Your +Certifications. You fail to certify to GS Inc. that you have complied with +all of the terms of the Plan and this Award Agreement, or the Committee +determines that you have failed to comply with a term of the Plan or this +Award Agreement to which you have certified compliance. + +(v) You Do Not Follow Dispute Resolution/Arbitration Procedures. You attempt +to have any dispute under the Plan or this Award Agreement resolved in any +manner that is not provided for by Paragraph 16 or Section 3.17 of the Plan, +or you attempt to arbitrate a dispute without first having exhausted your +internal administrative remedies in accordance with Paragraph 13(f)(viii). + +(vi) You Bring an Action that Results in a Determination that Any Award +Agreement Term Is Invalid. As a result of any action brought by you, it is +determined that any term of this Award Agreement is invalid. + +(vii) You Receive Compensation in Respect of Your Award from Another +Employer. Your Employment terminates for any reason or you otherwise are no +longer actively Employed with the Firm and another entity grants you cash, +equity or other property (whether vested or unvested) to replace, substitute +for or otherwise in respect of any Outstanding RSUs or Shares at Risk; +provided , however , that your rights will only be terminated in respect +of the RSUs and Shares at Risk that are replaced, substituted for or otherwise +considered by such other entity in making its grant. + +R EPAYMENT OF YOUR AWARD + +10. When You May Be Required to Repay Your Award . If the Committee +determines that any term of this Award was not satisfied, you will be +required, immediately upon demand therefor, to repay to the Firm the +following: + +(a) Any RSU Shares (which, for the avoidance of doubt, includes any Shares at +Risk) for which the terms (including the terms for delivery) of the related +RSUs were not satisfied, in accordance with Section 2.6.3 of the Plan. + +(b) Any Shares at Risk for which the terms (including the terms for the +release of Transfer Restrictions) were not satisfied, in accordance with +Section 2.5.3 of the Plan. + +(c) Any RSU Shares that were delivered (but not subject to Transfer +Restrictions) at the same time any Shares at Risk that are cancelled or +required to be repaid were delivered. + +(d) Any payments under Dividend Equivalent Rights for which the terms were not +satisfied (including any such payments made in respect of RSUs that are +forfeited or RSU Shares that are cancelled or required to be repaid), in +accordance with Section 2.8.3 of the Plan. + +(e) Any dividends paid in respect of any RSU Shares that are cancelled or +required to be repaid. + +(f) Any amount applied to satisfy tax withholding or other obligations with +respect to any RSUs, RSU Shares, dividend payments and payments under Dividend +Equivalent Rights that are forfeited or required to be repaid. + +E XCEPTIONS TO THE VESTING, DELIVERY AND/OR TRANSFERABILITY DATES + +11. Circumstances Under Which You Will Not Forfeit Your Unvested RSUs on +Employment Termination (but the Original Delivery Date and Transferability +Date Continue to Apply) . If your Employment terminates at a time when +you meet the requirements for Extended Absence, Retirement[,][or] "downsizing" +[or Approved Termination], each as described below, then Paragraph 9(a) + +will not apply, and your Outstanding RSUs will be treated as described in this +Paragraph 11. All other terms of this Award Agreement, including the other +forfeiture and repayment events in Paragraphs 9 and 10, continue to apply. + +(a) Extended Absence or Retirement and No Association With a Covered +Enterprise. + +(i) Generally. If your Employment terminates by Extended Absence or +Retirement, your Outstanding RSUs that are not Vested will become Vested. +However, your rights to any Outstanding RSU that becomes Vested by this +Paragraph 11(a)(i) will terminate and no RSU Share will be delivered in +respect of that RSU if you Associate With a Covered Enterprise on or before +the originally scheduled Vesting Date for that RSU. + +(ii) Special Treatment for Involuntary or Mutual Agreement Termination. The +second sentence of Paragraph 11(a)(i) (relating to forfeiture if you Associate +With a Covered Enterprise) will not apply if (A) the Firm characterizes your +Employment termination as "involuntary" or by "mutual agreement" (and, in each +case, you have not engaged in conduct constituting Cause) and (B) you execute +a general waiver and release of claims and an agreement to pay any associated +tax liability, in each case, in the form the Firm prescribes. No Employment +termination that you initiate, including any purported "constructive +termination," a "termination for good reason" or similar concepts, can be +"involuntary" or by "mutual agreement." + +(b) Downsizing. If (i) the Firm terminates your Employment solely by reason +of a "downsizing" (and you have not engaged in conduct constituting Cause) and +(ii) you execute a general waiver and release of claims and an agreement to +pay any associated tax liability, in each case, in the form the Firm +prescribes, your Outstanding RSUs that are not yet Vested will become Vested. +Whether or not your Employment is terminated solely by reason of a +"downsizing" will be determined by the Firm in its sole discretion. + +(c) [ Approved Terminations of Fixed-Term Employees. If the Firm classifies +you as a "fixed-term" employee and your Employment terminates solely by reason +of an Approved Termination (and you have not engaged in conduct constituting +Cause), your Outstanding RSUs that are not yet Vested will become Vested.] + +12. Accelerated Vesting, Delivery and/or Release of Transfer Restrictions +in the Event of a Qualifying Termination After a Change in Control, Conflicted +Employment or Death . In the event of your Qualifying Termination After +a Change in Control, Conflicted Employment or death, each as described below, +then Paragraph 9(a) will not apply, your Outstanding RSUs and Shares at Risk +will be treated as described in this Paragraph 12, and, except as set forth in +Paragraph 12(a), all other terms of this Award Agreement, including the other +forfeiture and repayment events in Paragraphs 9 and 10, continue to apply. + +(a) You Have a Qualifying Termination After a Change in Control. If your +Employment terminates when you meet the requirements of a Qualifying +Termination After a Change in Control, the RSU Shares underlying your +Outstanding RSUs (whether or not Vested) will be delivered, and any Transfer +Restrictions will cease to apply. In addition, the forfeiture events in +Paragraph 9 will not apply to your Award. + +(b) You Are Determined to Have Accepted Conflicted Employment. + +(i) Generally. Notwithstanding anything to the contrary in the Plan or +otherwise, for purposes of this Award Agreement, "Conflicted Employment" means +your + +employment at any U.S. Federal, state or local government, any non-U.S. +government, any supranational or international organization, any self- +regulatory organization, or any agency or instrumentality of any such +government or organization, or any other employer (other than an "Accounting +Firm" within the meaning of SEC Rule 2-01(f)(2) of Regulation S-X or any +successor thereto) determined by the Committee, if, as a result of such +employment, your continued holding of any Outstanding RSUs and Shares at Risk +would result in an actual or perceived conflict of interest. Unless prohibited +by applicable law or regulation, the following will apply as soon as +practicable after the Committee has received satisfactory documentation +relating to your Conflicted Employment. + +(A) Vesting. If your Employment terminates solely because you resign to +accept Conflicted Employment and you have completed at least three years of +continuous service with the Firm, your Outstanding RSUs will Vest; otherwise, +you will forfeit any Outstanding RSUs that are not Vested in accordance with +Paragraph 9(a). + +(B) Delivery and Release of Transfer Restrictions. If your Employment +terminates solely because you resign to accept Conflicted Employment or if, +following your termination of Employment, you notify the Firm that you are +accepting Conflicted Employment, RSU Shares will be delivered in respect of +your Outstanding Vested RSUs (including in the form of cash as described in +Paragraph 13(b)) and any Transfer Restrictions will cease to apply. + +(ii) You May Have to Take Other Steps to Address Conflicts of Interest. The +Committee retains the authority to exercise its rights under the Award +Agreement or the Plan (including Section 1.3.2 of the Plan) to take or require +you to take other steps it determines in its sole discretion to be necessary +or appropriate to cure an actual or perceived conflict of interest (which may +include a determination that the accelerated vesting, delivery and/or release +of Transfer Restrictions described in Paragraph 12(b)(i) will not apply +because such actions are not necessary or appropriate to cure an actual or +perceived conflict of interest). + +(c) Death. If you die, the RSU Shares underlying your Outstanding RSUs +(whether or not Vested) will be delivered to the representative of your estate +and any Transfer Restrictions will cease to apply as soon as practicable after +the date of death and after such documentation as may be requested by the +Committee is provided to the Committee. + +O THER TERMS, CONDITIONS AND AGREEMENTS + +13. Additional Terms, Conditions and Agreements . + +(a) You Must Satisfy Applicable Tax Withholding Requirements. Delivery of +RSU Shares is conditioned on your satisfaction of any applicable withholding +taxes in accordance with Section 3.2 of the Plan, which includes the Firm +deducting or withholding amounts from any payment or distribution to you. In +addition, to the extent permitted by applicable law, the Firm, in its sole +discretion, may require you to provide amounts equal to all or a portion of +any Federal, state, local, foreign or other tax obligations imposed on you or +the Firm in connection with the grant, Vesting or delivery of this Award by +requiring you to choose between remitting the amount (i) in cash (or through +payroll deduction or otherwise) or (ii) in the form of proceeds from the +Firm's executing a sale of RSU Shares delivered to you under this Award. In no +event, however, does this Paragraph 13(a) give you any discretion to determine +or affect the timing of the delivery of RSU Shares or the timing of payment of +tax obligations. + +(b) Firm May Deliver Cash or Other Property Instead of RSU Shares. In +accordance with Section 1.3.2(i) of the Plan, in the sole discretion of the +Committee, in lieu of all or any portion of the RSU Shares, the Firm may +deliver cash, other securities, other awards under the Plan or other property, +and all references in this Award Agreement to deliveries of RSU Shares will +include such deliveries of cash, other securities, other awards under the Plan +or other property. + +(c) Amounts May Be Rounded to Avoid Fractional Shares. RSUs that become +Vested on a Vesting Date, RSU Shares that become deliverable on a Delivery +Date and RSU Shares subject to Transfer Restrictions may, in each case, be +rounded to avoid fractional Shares. + +(d) You May Be Required to Become a Party to the Shareholders' Agreement. +Your rights to your RSUs are conditioned on your becoming a party to any +shareholders' agreement to which other similarly situated employees ( e.g., +employees with a similar title or position) of the Firm are required to be a +party. + +(e) Firm May Affix Legends and Place Stop Orders on Restricted RSU Shares. +GS Inc. may affix to Certificates representing RSU Shares any legend that the +Committee determines to be necessary or advisable (including to reflect any +restrictions to which you may be subject under a separate agreement). GS Inc. +may advise the transfer agent to place a stop order against any legended RSU +Shares. + +(f) You Agree to Certain Consents, Terms and Conditions. By accepting this +Award you understand and agree that: + +(i) You Agree to Certain Consents as a Condition to the Award. You have +expressly consented to all of the items listed in Section 3.3.3(d) of the +Plan, including the Firm's supplying to any third-party recordkeeper of the +Plan or other person such personal information of yours as the Committee deems +advisable to administer the Plan, and you agree to provide any additional +consents that the Committee determines to be necessary or advisable; + +(ii) You Are Subject to the Firm's Policies, Rules and Procedures. You are +subject to the Firm's policies in effect from time to time concerning trading +in RSU Shares and hedging or pledging RSU Shares and equity-based compensation +or other awards (including, without limitation, the "Firmwide Policy with +Respect to Personal Transactions Involving GS Securities and GS Equity Awards" +or any successor policies), and confidential or proprietary information, and +you will effect sales of RSU Shares in accordance with such rules and +procedures as may be adopted from time to time (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); + +(iii) You Are Responsible for Costs Associated with Your Award. You will be +responsible for all brokerage costs and other fees or expenses associated with +your RSUs, including those related to the sale of RSU Shares; + +(iv) You Will Be Deemed to Represent Your Compliance with All the Terms of +Your Award if You Accept Delivery of, or Sell, RSU Shares. You will be deemed +to have represented and certified that you have complied with all of the terms +of the Plan and this Award Agreement when RSU Shares are delivered to you, you +receive payment in respect of Dividend Equivalent Rights and you request the +sale of RSU Shares following the release of Transfer Restrictions; + +(v) Firm May Deliver Your Award into an Escrow Account. The Firm may +establish and maintain an escrow account on such terms (which may include your +executing any documents related to, and your paying for any costs associated +with, such account) as it may deem necessary or appropriate, and the delivery +of RSU Shares (including Shares at Risk) or the payment of cash (including +dividends and payments under Dividend Equivalent Rights) or other property may +initially be made into and held in that escrow account until such time as the +Committee has received such documentation as it may have requested or until +the Committee has determined that any other conditions or restrictions on +delivery of RSU Shares, cash or other property required by this Award +Agreement have been satisfied; + +(vi) You May Be Required to Certify Compliance with Award Terms; You Are +Responsible for Providing the Firm with Updated Address and Contact +Information After Your Departure from the Firm. If your Employment terminates +while you continue to hold RSUs or Shares at Risk, from time to time, you may +be required to provide certifications of your compliance with all of the terms +of the Plan and this Award Agreement as described in Paragraph 9(c)(iv). You +understand and agree that (A) your address on file with the Firm at the time +any certification is required will be deemed to be your current address, (B) +it is your responsibility to inform the Firm of any changes to your address to +ensure timely receipt of the certification materials, (C) you are responsible +for contacting the Firm to obtain such certification materials if not received +and (D) your failure to return properly completed certification materials by +the specified deadline (which includes your failure to timely return the +completed certification because you did not provide the Firm with updated +contact information) will result in the forfeiture of all of your RSUs and +Shares at Risk and subject previously delivered amounts to repayment under +Paragraph 9(c)(iv); + +(vii) You Authorize the Firm to Register, in Its or Its Designee's Name, Any +Shares at Risk and Sell, Assign or Transfer Any Forfeited Shares at Risk. You +are granting to the Firm the full power and authority to register any Shares +at Risk in its or its designee's name and authorizing the Firm or its designee +to sell, assign or transfer any Shares at Risk if you forfeit your Shares at +Risk; + +(viii) You Must Comply with Applicable Deadlines and Procedures to Appeal +Determinations Made by the Committee, the SIP Committee or SIP +Administrators. If you disagree with a determination made by the Committee, +the SIP Committee, the SIP Administrators, or any of their delegates or +designees and you wish to appeal such determination, you must submit a written +request to the SIP Committee for review within 180 days after the +determination at issue. You must exhaust your internal administrative remedies +( i.e. , submit your appeal and wait for resolution of that appeal) before +seeking to resolve a dispute through arbitration pursuant to Paragraph 16 and +Section 3.17 of the Plan; and + +(ix) You Agree that Covered Persons Will Not Have Liability. In addition to +and without limiting the generality of the provisions of Section 1.3.5 of the +Plan, neither the Firm nor any Covered Person will have any liability to you +or any other person for any action taken or omitted in respect of this or any +other Award. + +14. Non-transferability . Except as otherwise may be provided in +this Paragraph 14 or as otherwise may be provided by the Committee, the +limitations on transferability set forth in Section 3.5 of the Plan will apply +to this Award. Any purported transfer or assignment in violation of the +provisions of this Paragraph 14 or Section 3.5 of the Plan will be void. The +Committee may adopt procedures pursuant to which some or all recipients of +RSUs may transfer some or all of their RSUs and/or Shares at Risk (which will +continue to be subject to Transfer Restrictions until the Transferability +Date) through a gift for no consideration to any immediate family member, a +trust or other estate planning vehicle approved by the + +Committee or SIP Committee in which the recipient and/or the recipient's +immediate family members in the aggregate have 100% of the beneficial +interest. + +15. Right of Offset . Except as provided in Paragraph 18(h), the +obligation to deliver RSU Shares, to pay dividends or payments under Dividend +Equivalent Rights or to remove the Transfer Restrictions under this Award +Agreement is subject to Section 3.4 of the Plan, which provides for the Firm's +right to offset against such obligation any outstanding amounts you owe to the +Firm and any amounts the Committee deems appropriate pursuant to any tax +equalization policy or agreement. + +A RBITRATION, CHOICE OF FORUM AND GOVERNING LAW + +16. Arbitration; Choice of Forum . + +(a) B Y ACCEPTING THIS AWARD, YOU ARE INDICATING THAT YOU UNDERSTAND AND +AGREE THAT THE ARBITRATION AND CHOICE OF FORUM PROVISIONS SET FORTH IN SECTION +3.17 OF THE PLAN WILL APPLY TO THIS AWARD. THESE PROVISIONS, WHICH ARE +EXPRESSLY INCORPORATED HEREIN BY REFERENCE, PROVIDE AMONG OTHER THINGS THAT +ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN THE FIRM AND YOU ARISING OUT OF OR +RELATING TO OR CONCERNING THE PLAN OR THIS AWARD AGREEMENT WILL BE FINALLY +SETTLED BY ARBITRATION IN NEW YORK CITY, PURSUANT TO THE TERMS MORE FULLY SET +FORTH IN SECTION 3.17 OF THE PLAN; PROVIDED THAT NOTHING HEREIN SHALL PRECLUDE +YOU FROM FILING A CHARGE WITH OR PARTICIPATING IN ANY INVESTIGATION OR +PROCEEDING CONDUCTED BY ANY GOVERNMENTAL AUTHORITY, INCLUDING BUT NOT LIMITED +TO THE SEC, THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AND A STATE OR LOCAL +HUMAN RIGHTS AGENCY, AS WELL AS LAW ENFORCEMENT. + +(b) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider class, collective or representative claims, to order +consolidation or to join different claimants or grant relief other than on an +individual basis to the individual claimant involved. + +(c) Notwithstanding any applicable forum rules to the contrary, to the extent +there is a question of enforceability of this Award Agreement arising from a +challenge to the arbitrator's jurisdiction or to the arbitrability of a claim, +it will be decided by a court and not an arbitrator. + +(d) The Federal Arbitration Act governs interpretation and enforcement of all +arbitration provisions under the Plan and this Award Agreement, and all +arbitration proceedings thereunder. + +(e) Nothing in this Award Agreement creates a substantive right to bring a +claim under U.S. Federal, state, or local employment laws. + +(f) By accepting your Award, you irrevocably appoint each General Counsel of +GS Inc., or any person whom the General Counsel of GS Inc. designates, as your +agent for service of process in connection with any suit, action or proceeding +arising out of or relating to or concerning the Plan or any Award which is not +arbitrated pursuant to the provisions of Section 3.17.1 of the Plan, who shall +promptly advise you of any such service of process. + +(g) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider any claim as to which you have not first exhausted +your internal administrative remedies in accordance with Paragraph +13(f)(viii). + +17. Governing Law . T HIS AWARD WILL BE GOVERNED BY AND CONSTRUED +IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO +PRINCIPLES OF CONFLICT OF LAWS. + +C ERTAIN TAX PROVISIONS + +18. Compliance of Award Agreement and Plan with Section + +409A . The provisions of this Paragraph 18 apply to you only if you +are a U.S. taxpayer. + +(a) This Award Agreement and the Plan provisions that apply to this Award are +intended and will be construed to comply with Section 409A (including the +requirements applicable to, or the conditions for exemption from treatment as, +409A Deferred Compensation), whether by reason of short-term deferral +treatment or other exceptions or provisions. The Committee will have full +authority to give effect to this intent. To the extent necessary to give +effect to this intent, in the case of any conflict or potential inconsistency +between the provisions of the Plan (including Sections 1.3.2 and 2.1 thereof) +and this Award Agreement, the provisions of this Award Agreement will govern, +and in the case of any conflict or potential inconsistency between this +Paragraph 18 and the other provisions of this Award Agreement, this Paragraph +18 will govern. + +(b) Delivery of RSU Shares will not be delayed beyond the date on which all +applicable conditions or restrictions on delivery of RSU Shares required by +this Agreement (including those specified in Paragraphs 6, 7, 11(a)(ii), +11(b), 12(c) and 13 and the consents and other items specified in Section 3.3 +of the Plan) are satisfied. To the extent that any portion of this Award is +intended to satisfy the requirements for short-term deferral treatment under +Section 409A, delivery for such portion will occur by the March 15 coinciding +with the last day of the applicable "short-term deferral" period described in +Reg. 1.409A-1(b)(4) in order for the delivery of RSU Shares to be within the +short-term deferral exception unless, in order to permit all applicable +conditions or restrictions on delivery to be satisfied, the Committee elects, +pursuant to Reg. 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted in +accordance with Section 409A, to delay delivery of RSU Shares to a later date +within the same calendar year or to such later date as may be permitted under +Section 409A, including Reg. 1.409A-3(d). For the avoidance of doubt, if the +Award includes a "series of installment payments" as described in Reg. +1.409A-2(b)(2)(iii), your right to the series of installment payments will be +treated as a right to a series of separate payments and not as a right to a +single payment. + +(c) Notwithstanding the provisions of Paragraph 13(b) and Section 1.3.2(i) of +the Plan, to the extent necessary to comply with Section 409A, any securities, +other Awards or other property that the Firm may deliver in respect of your +RSUs will not have the effect of deferring delivery or payment, income +inclusion, or a substantial risk of forfeiture, beyond the date on which such +delivery, payment or inclusion would occur or such risk of forfeiture would +lapse, with respect to the RSU Shares that would otherwise have been +deliverable (unless the Committee elects a later date for this purpose +pursuant to Reg. 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted under +Section 409A, including and to the extent applicable, the subsequent election +provisions of Section 409A(a)(4)(C) of the Code and Reg. 1.409A-2(b)). + +(d) Notwithstanding the timing provisions of Paragraph 12(c), the delivery of +RSU Shares referred to therein will be made after the date of death and during +the calendar year that includes the date of death (or on such later date as +may be permitted under Section 409A). + +(e) The timing of delivery or payment pursuant to Paragraph 12(a) will occur +on the earlier of (i) the Delivery Date or (ii) a date that is within the +calendar year in which the termination + +of Employment occurs; provided , however , that, if you are a "specified +employee" (as defined by the Firm in accordance with Section 409A(a)(2)(i)(B) +of the Code), delivery will occur on the earlier of the Delivery Date or (to +the extent required to avoid the imposition of additional tax under Section +409A) the date that is six months after your termination of Employment (or, if +the latter date is not during a Window Period, the first trading day of the +next Window Period). For purposes of Paragraph 12(a), references in this Award +Agreement to termination of Employment mean a termination of Employment from +the Firm (as defined by the Firm) which is also a separation from service (as +defined by the Firm in accordance with Section 409A). + +(f) Notwithstanding any provision of Paragraph 8 or Section 2.8.2 of the Plan +to the contrary, the Dividend Equivalent Rights with respect to each of your +Outstanding RSUs will be paid to you within the calendar year that includes +the date of distribution of any corresponding regular cash dividends paid by +GS Inc. in respect of a share of Common Stock the record date for which occurs +on or after the Date of Grant. The payment will be in an amount (less +applicable withholding) equal to such regular dividend payment as would have +been made in respect of the RSU Shares underlying such Outstanding RSUs. + +(g) The timing of delivery or payment referred to in Paragraph 12(b)(i) will +be the earlier of (i) the Delivery Date or (ii) a date that is within the +calendar year in which the Committee receives satisfactory documentation +relating to your Conflicted Employment, provided that such delivery or +payment will be made, and any Committee action referred to in Paragraph +12(b)(ii) will be taken, only at such time as, and if and to the extent that +it, as reasonably determined by the Firm, would not result in the imposition +of any additional tax to you under Section 409A. + +(h) Paragraph 15 and Section 3.4 of the Plan will not apply to Awards that are +409A Deferred Compensation except to the extent permitted under Section 409A. + +(i) Delivery of RSU Shares in respect of any Award may be made, if and to the +extent elected by the Committee, later than the Delivery Date or other date or +period specified hereinabove (but, in the case of any Award that constitutes +409A Deferred Compensation, only to the extent that the later delivery is +permitted under Section 409A). + +(j) You understand and agree that you are solely responsible for the payment +of any taxes and penalties due pursuant to Section 409A, but in no event will +you be permitted to designate, directly or indirectly, the taxable year of the +delivery. + +C OMMITTEE AUTHORITY, AMENDMENT, CONSTRUCTION AND REGULATORY REPORTING + +19. Committee Authority . The Committee has the authority to +determine, in its sole discretion, that any event triggering forfeiture or +repayment of your Award will not apply, to limit the forfeitures and +repayments that result under Paragraphs 9 and 10 and to remove Transfer +Restrictions before the Transferability Date. In addition, the Committee, in +its sole discretion, may determine whether Paragraphs 11(a)(ii) and 11(b) will +apply upon a termination of Employment [and whether a termination of +Employment constitutes an Approved Termination under Paragraph 11(c)]. + +20. Amendment . The Committee reserves the right at any time to +amend the terms of this Award Agreement, and the Board may amend the Plan in +any respect; provided that, notwithstanding the foregoing and Sections +1.3.2(f), 1.3.2(h) and 3.1 of the Plan, no such amendment will materially +adversely affect your rights and obligations under this Award Agreement +without your consent; and provided further that the Committee expressly +reserves its rights to amend the Award Agreement and the Plan as described in +Sections 1.3.2(h)(1), (2) and (4) of the Plan. A modification that impacts the +tax consequences of this + +Award or the timing of delivery of RSU Shares will not be an amendment that +materially adversely affects your rights and obligations under this Award +Agreement. Any amendment of this Award Agreement will be in writing. + +21. Construction, Headings . Unless the context requires otherwise, +(a) words describing the singular number include the plural and vice versa, +(b) words denoting any gender include all genders and (c) the words "include," +"includes" and "including" will be deemed to be followed by the words "without +limitation." The headings in this Award Agreement are for the purpose of +convenience only and are not intended to define or limit the construction of +the provisions hereof. References in this Award Agreement to any specific Plan +provision will not be construed as limiting the applicability of any other +Plan provision. + +22. Providing Information to the Appropriate Authorities . In +accordance with applicable law, nothing in this Award Agreement (including the +forfeiture and repayment provisions in Paragraphs 9 and 10) or the Plan +prevents you from providing information you reasonably believe to be true to +the appropriate governmental authority, including a regulatory, judicial, +administrative, or other governmental entity; reporting possible violations of +law or regulation; making other disclosures that are protected under any +applicable law or regulation; or filing a charge or participating in any +investigation or proceeding conducted by a governmental authority. For the +avoidance of doubt, governmental authority includes federal, state and local +government agencies such as the SEC, the Equal Employment Opportunity +Commission and any state or local human rights agency ( e.g. , the New York +State Division of Human Rights, the New York City Commission on Human Rights, +the California Department of Fair Employment and Housing), as well as law +enforcement. + +IN WITNESS WHEREOF , GS Inc. has caused this Award Agreement to be duly +executed and delivered as of the Date of Grant. + +THE GOLDMAN SACHS GROUP, INC. + +D EFINITIONS APPENDIX + +The following capitalized terms are used in this Award Agreement with the +following meanings: + +(a) " 409A Deferred Compensation " means a "deferral of compensation" or +"deferred compensation" as those terms are defined in the regulations under +Section 409A. + +(b) [" Approved Termination " means that you are classified by the Firm as a +"fixed-term employee" and you (i) successfully complete the fixed-term +engagement, as determined by the Firm in its sole discretion, including +remaining Employed through the completion date specified by the Firm, and (ii) +terminate Employment immediately after the completion date without any "stay- +on" or other agreement or understanding to continue Employment with the Firm. +If you agree to stay with the Firm as an employee after your fixed-term +engagement ends and then later terminate Employment, you will not have an +Approved Termination.] + +(c) " Associate With a Covered Enterprise " means that you (i) form, or +acquire a 5% or greater equity ownership, voting or profit participation +interest in, any Covered Enterprise or (ii) associate in any capacity +(including association as an officer, employee, partner, director, consultant, +agent or advisor) with any Covered Enterprise. Associate With a Covered +Enterprise may include, as determined in the discretion of either the +Committee or the SIP Committee, (i) becoming the subject of any publicly +available announcement or report of a pending or future association with a +Covered Enterprise and (ii) unpaid associations, including an association in +contemplation of future employment. "Association With a Covered Enterprise" +will have its correlative meaning. + +(d) " Conflicted Employment " means your employment at any U.S. Federal, +state or local government, any non-U.S. government, any supranational or +international organization, any self-regulatory organization, or any agency or +instrumentality of any such government or organization, or any other employer +(other than an "Accounting Firm" within the meaning of SEC Rule 2-01(f)(2) of +Regulation S-X or any successor thereto) determined by the Committee, if, as a +result of such employment, your continued holding of any Outstanding RSUs and +Shares at Risk would result in an actual or perceived conflict of interest. + +(e) " Covered Enterprise " means a Competitive Enterprise and any other +existing or planned business enterprise that: (i) offers, holds itself out as +offering or reasonably may be expected to offer products or services that are +the same as or similar to those offered by the Firm or that the Firm +reasonably expects to offer ("Firm Products or Services") or (ii) engages in, +holds itself out as engaging in or reasonably may be expected to engage in any +other activity that is the same as or similar to any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage +("Firm Activities"). For the avoidance of doubt, Firm Activities include any +activity that requires the same or similar skills as any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage, +irrespective of whether any such financial activity is in furtherance of an +advisory, agency, proprietary or fiduciary undertaking. + +The enterprises covered by this definition include enterprises that offer, +hold themselves out as offering or reasonably may be expected to offer Firm +Products or Services, or engage in, hold themselves out as engaging in or +reasonably may be expected to engage in Firm Activities directly, as well as +those that do so indirectly by ownership or control ( e.g. , by owning, +being owned by or by being under common ownership with an enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +Firm Products or Services or that engages in, holds itself out as engaging in +or reasonably may be expected to engage in Firm Activities). The definition of +Covered Enterprise includes, solely by way of example, any enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +any product or + +service, or engages in, holds itself out as engaging in or reasonably may be +expected to engage in any activity, in any case, associated with investment +banking; public or private finance; lending; financial advisory services; +private investing for anyone other than you or your family members (including, +for the avoidance of doubt, any type of proprietary investing or trading); +private wealth management; private banking; consumer or commercial cash +management; consumer, digital or commercial banking; merchant banking; asset, +portfolio or hedge fund management; insurance or reinsurance underwriting or +brokerage; property management; or securities, futures, commodities, energy, +derivatives, currency or digital asset brokerage, sales, lending, custody, +clearance, settlement or trading. An enterprise that offers, holds itself out +as offering or reasonably may be expected to offer Firm Products or Services, +or engages in, holds itself out as engaging in or reasonably may be expected +to engage in Firm Activities is a Covered Enterprise , irrespective of +whether the enterprise is a customer, client or counterparty of the Firm or is +otherwise associated with the Firm and, because the Firm is a global +enterprise, irrespective of where the Covered Enterprise is physically +located. + +(f) " Failed to Consider Risk " means that you participated (or otherwise +oversaw or were responsible for, depending on the circumstances, another +individual's participation) in the structuring or marketing of any product or +service, or participated on behalf of the Firm or any of its clients in the +purchase or sale of any security or other property, in any case without +appropriate consideration of the risk to the Firm or the broader financial +system as a whole (for example, where you have improperly analyzed such risk +or where you have failed sufficiently to raise concerns about such risk) and, +as a result of such action or omission, the Committee determines there has +been, or reasonably could be expected to be, a material adverse impact on the +Firm, your business unit or the broader financial system. + +(g) " Qualifying Termination After a Change in Control " means that the Firm +terminates your Employment other than for Cause or you terminate your +Employment for Good Reason, in each case, within 18 months following a Change +in Control. + +(h) " SEC " means the U.S. Securities and Exchange Commission. + +(i) " Selected Firm Personnel " means any individual who is or in the three +months preceding the conduct prohibited by Paragraph 9(b)(i) was (i) a Firm +employee or consultant with whom you personally worked while employed by the +Firm, (ii) a Firm employee or consultant who, at any time during the year +preceding the date of the termination of your Employment, worked in the same +division in which you worked or (iii) an Advisory Director, a Managing +Director or a Senior Advisor of the Firm. + +(j) " Shares at Risk " means RSU Shares subject to Transfer Restrictions. + +The following capitalized terms are used in this Award Agreement with the +meanings that are assigned to them in the Plan. + +(a) " Account " means any brokerage account, custody account or similar +account, as approved or required by GS Inc. from time to time, into which +shares of Common Stock, cash or other property in respect of an Award are +delivered. + +(b) " Award Agreement " means the written document or documents by which +each Award is evidenced, including any related Award Statement and signature +card. + +(c) " Award Statement " means a written statement that reflects certain +Award terms. + +(d) " Board " means the Board of Directors of GS Inc. + +(e) " 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. + +(f) " Cause " means (i) the Grantee's conviction, whether following trial or +by plea of guilty or nolo contendere (or similar plea), in a criminal +proceeding (A) on a misdemeanor charge involving fraud, false statements or +misleading omissions, wrongful taking, embezzlement, bribery, forgery, +counterfeiting or extortion, or (B) on a felony charge, or (C) on an +equivalent charge to those in clauses (A) and (B) in jurisdictions which do +not use those designations, (ii) the Grantee's engaging in any conduct which +constitutes an employment disqualification under applicable law (including +statutory disqualification as defined under the Exchange Act), (iii) the +Grantee's willful failure to perform the Grantee's duties to the Firm, (iv) +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, (v) 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, (vi) the +Grantee's engaging in any act or making any statement which impairs, impugns, +denigrates, disparages or negatively reflects upon the name, reputation or +business interests of the Firm or (vii) 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 may have under any other agreement with a Grantee or at law or +in equity. + +(g) " Certificate " means a stock certificate (or other appropriate document +or evidence of ownership) representing shares of Common Stock. + +(h) " 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 shareholders +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: (i) 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 (A) 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 (B) 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 (ii) 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 (A) were members of the +Board on the Effective Date or (B) 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). + +(i) " 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. + +(j) " Code " means the Internal Revenue Code of 1986, as amended from time +to time, and the applicable rulings and regulations thereunder. + +(k) " 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 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. + +(l) " Common Stock " means common stock of GS Inc., par value $0.01 per +share. + +(m) " Competitive Enterprise " means an existing or planned business +enterprise that (i) engages, or may reasonably be expected to engage, in any +activity; (ii) owns or controls, or may reasonably be expected to own or +control, a significant interest in any entity that engages in any activity or +(iii) is, or may reasonably be expected to be, owned by, or a significant +interest in which is, or may reasonably be expected to be, owned or controlled +by, any entity that engages in any activity that, in any case, competes or +will compete 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 (including for the avoidance of +doubt, any type of proprietary investing or trading); private wealth +management; private banking; consumer or commercial cash management; consumer, +digital or commercial banking; merchant banking; asset, portfolio or hedge +fund management; insurance or reinsurance underwriting or brokerage; property +management; or securities, futures, commodities, energy, derivatives, currency +or digital asset brokerage, sales, lending, custody, clearance, settlement or +trading. + +(n) " Covered Person " means a member of the Board or the Committee or any +employee of the Firm. + +(o) " Date of Grant " means the date specified in the Grantee's Award +Agreement as the date of grant of the Award. + +(p) " 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. + +(q) " 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. + +(r) " Effective Date " means the date this Plan is approved by the +shareholders of GS Inc. pursuant to Section 3.15 of the Plan. + +(s) " 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 +(i) 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), (ii) whether and when a change in a +Grantee's association with the Firm results in a termination of Employment and +(iii) 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. + +(t) " Exchange Act " means the Securities Exchange Act of 1934, as amended +from time to time, and the applicable rules and regulations thereunder. + +(u) " 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. + +(v) " Firm " means GS Inc. and its subsidiaries and affiliates. + +(w) " 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). + +(x) " Grantee " means a person who receives an Award. + +(y) " GS Inc. " means The Goldman Sachs Group, Inc., and any successor +thereto. + +(z) " 1999 SIP " means The Goldman Sachs 1999 Stock Incentive Plan, as in +effect prior to the effective date of the 2003 SIP. + +(aa) " 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. + +(bb) " Restricted Share " means a share of Common Stock delivered under the +Plan that is subject to Transfer Restrictions, forfeiture provisions and/or +other terms and conditions specified herein and in the Restricted Share Award +Agreement or other applicable Award Agreement. All references to Restricted +Shares include "Shares at Risk." + +(cc) " Retirement " means termination of the Grantee's Employment (other +than for Cause) on or after the Date of Grant at a time when (i) (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 60 and (B) the Grantee has +completed at least 10 years of service with the Firm (as determined by the +Committee in its sole discretion) or, if earlier, (ii) (A) the Grantee has +attained age 50 and (B) the Grantee has completed at least five years of +service with the Firm (as determined by the Committee in its sole discretion). + +(dd) " RSU " means a restricted stock unit 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. + +(ee) " RSU Shares " means shares of Common Stock that underlie an RSU. + +(ff) " Section 409A " means Section 409A of the Code, including any +amendments or successor provisions to that Section and any regulations and +other administrative guidance thereunder, in each case as they, from time to +time, may be amended or interpreted through further administrative guidance. + +(gg) " 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. + +(hh) " SIP Committee " means the persons who have been delegated certain +authority under the Plan by the Committee. + +(ii) " Solicit " means any direct or indirect communication of any kind +whatsoever, regardless of by whom initiated, inviting, advising, suggesting, +encouraging or requesting any person or entity, in any manner, to take or +refrain from taking any action. The terms "Solicited," "Soliciting" and +"Solicitation" will have their correlative meanings. + +(jj) " Transfer Restrictions " means restrictions that prohibit the sale, +exchange, transfer, assignment, pledge, hypothecation, fractionalization, +hedge or other disposal (including through the use of any cash-settled +instrument), whether voluntarily or involuntarily by the Grantee, of an Award +or any shares of Common Stock, cash or other property delivered in respect of +an Award. + +(kk) " Transferability Date " means the date Transfer Restrictions on a +Restricted Share will be released. Within 30 Business Days after the +applicable Transferability Date, GS Inc. shall take, or shall cause to be +taken, such steps as may be necessary to remove Transfer Restrictions. + +(ll) " 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. + +(mm) " 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. + +(nn) " 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). + +EX-10.42 7 d192225dex1042.htm EX-10.42 EX-10.42 + +Exhibit 10.42 + +T HE GOLDMAN SACHS GROUP, INC. + +A WARD + +This Award Agreement, together with The Goldman Sachs Amended and Restated +Stock Incentive Plan (2021) (the "Plan"), governs your of +RSUs (your "Award"). You should read carefully this entire Award Agreement, +which includes the Award Statement, any attached Appendix and the signature +card. + +A CCEPTANCE + +1. You Must Decide Whether to Accept this Award Agreement . To be +eligible to receive your Award, you must by the date specified (a) +open and activate an Account and (b) agree to all the terms of your +Award by executing the related signature card in accordance with its +instructions. By executing the signature card, you confirm your agreement to + all of the terms of this Award Agreement, including the arbitration +and choice of forum provisions in Paragraph 16. + +D OCUMENTS THAT GOVERN YOUR AWARD; DEFINITIONS + +2. The Plan . Your Award is granted under the Plan, and the Plan's +terms apply to, and are a part of, this Award Agreement. + +3. Your Award Statement . The Award Statement delivered to you +contains some of your Award's specific terms. For example, it contains the +number of RSUs awarded to you and [any applicable][the] Delivery Date[s] and +Transferability Date[s]. [The portion of your RSUs that are designated on the +Award Statement as " Year-End Base RSUs" are referred to in this Award +Agreement as "Base RSUs." The portion of your RSUs that are designated on the +Award Statement as " Year-End Additional Base RSUs" are referred to in +this Award Agreement as "Additional Base RSUs." The portion of your RSUs that +are designated on the Award Statement as " Year-End Supplemental RSUs" are +referred to in this Award Agreement as "Supplemental RSUs." All references to +RSUs in this Award Agreement include the Base RSUs, the Additional Base RSUs +and the Supplemental RSUs.] + +4. Definitions . Unless otherwise defined herein, including in the +Definitions Appendix or any other Appendix, capitalized terms have the +meanings provided in the Plan. + +V ESTING OF YOUR RSUS + +5. Vesting . All of your RSUs are Vested. When an RSU is Vested, it +means only that your continued active Employment is not required for +delivery of that portion of RSU Shares. Vesting does not mean you have a +non-forfeitable right to the Vested portion of your Award. The terms of this +Award Agreement (including conditions to delivery and any applicable Transfer +Restrictions) continue to apply to Vested RSUs, and you can still forfeit +Vested RSUs and any RSU Shares. + +D ELIVERY OF YOUR RSU SHARES + +6. Delivery . Reasonably promptly (but no more than 30 Business +Days) after [each][the] Delivery Date listed on your Award Statement, RSU +Shares (less applicable withholding as described in Paragraph 13(a)) will be +delivered (by book entry credit to your Account) [in respect of the amount of +Outstanding RSUs listed next to that date]. The Committee or the SIP Committee +may select multiple dates within the 30-Business-Day period following the +Delivery Date to deliver RSU Shares in respect of all or a portion of the RSUs +with the same Delivery Date listed on the Award Statement, and all such + +dates will be treated as a single Delivery Date for purposes of this Award. +Until such delivery, you have only the rights of a general unsecured creditor, +and no rights as a shareholder of GS Inc. Without limiting the Committee's +authority under Section 1.3.2(h) of the Plan, the Firm may accelerate any +Delivery Date by up to 30 days. + +T RANSFER RESTRICTIONS FOLLOWING DELIVERY + +7. Transfer Restrictions and Shares at Risk . + +(a) percent of the RSU Shares that are delivered on any date will be +Shares at Risk subject to Transfer Restrictions until the [applicable] +Transferability Date [listed on your Award Statement]. + +(b) Purported Transactions that Violate the Transfer Restrictions Are Void. +Any purported sale, exchange, transfer, assignment, pledge, hypothecation, +fractionalization, hedge or other disposition in violation of the Transfer +Restrictions on Shares at Risk will be void. + +(c) Removal of Transfer Restrictions. Within 30 Business Days after the +[applicable] Transferability Date [listed on your Award Statement] (or any +other date on which the Transfer Restrictions are to be removed), GS Inc. will +remove the Transfer Restrictions. The Committee or the SIP Committee may +select multiple dates within such 30-Business-Day period on which to remove +Transfer Restrictions for all or a portion of the Shares at Risk with the same +Transferability Date [listed on your Award Statement], and all such dates will +be treated as a single Transferability Date for purposes of this Award. + +D IVIDENDS + +8. [ Dividend Equivalent Rights and] Dividends . [Each RSU +includes a Dividend Equivalent Right, which entitles you to receive an amount +(less applicable withholding), at or after the time of distribution of any +regular cash dividend paid by GS Inc. in respect of a share of Common Stock, +equal to any regular cash dividend payment that would have been made in +respect of an RSU Share underlying your Outstanding RSUs for any record date +that occurs on or after the Date of Grant. In addition,] [y][Y]ou will be +entitled to receive on a current basis any regular cash dividend paid in +respect of your Shares at Risk. [The RSUs do not include Dividend +Equivalent Rights.] + +F ORFEITURE OF YOUR AWARD + +9. How You May Forfeit Your Award . This Paragraph 9 sets forth the +events that result in forfeiture of up to all of your RSUs and Shares at Risk +and may require repayment to the Firm of up to all other amounts previously +delivered or paid to you under your Award in accordance with Paragraph 10. +More than one event may apply, and in no case will the occurrence of one event +limit the forfeiture and repayment obligations as a result of the occurrence +of any other event. In addition, the Firm reserves the right to (a) suspend +[payments under Dividend Equivalent Rights,] delivery of RSU Shares or release +of Transfer Restrictions, (b) deliver any RSU Shares [or][,] dividends [or +payments under Dividend Equivalent Rights] into an escrow account in +accordance with Paragraph 13(f)(v) or (c) apply Transfer Restrictions to any +RSU Shares in connection with any investigation of whether any of the events +that result in forfeiture under the Plan or this Paragraph 9 have occurred. +Paragraph 11 [(relating to certain circumstances under which restrictions on +Association With a Covered Enterprise will not apply) and Paragraph 12] +(relating to certain circumstances under which delivery and/or release of +Transfer Restrictions may be accelerated) provide for exceptions to one or +more provisions of this Paragraph 9. [[Each of] the [U.K. Material Risk Taker +Appendix] [and the] [GSBE Material Risk Taker Appendix] + +supplements this Paragraph 9 and sets forth additional events that result in +forfeiture of up to all of your RSUs and Shares at Risk and may require +repayment to the Firm as described in Paragraph 10[and][,] the [U.K. Material +Risk Taker Appendix] [and the] [GSBE Material Risk Taker Appendix].] + +(a) [RSUs Forfeited Upon Certain Events. If any of the following occurs +before the applicable Delivery Date, your rights to all of your Outstanding +RSUs will terminate, and no RSU Shares will be delivered in respect of such +RSUs: + +(i) GS Inc. Fails to Maintain the Minimum Tier 1 Capital Ratio. GS Inc. +fails to maintain the required "Minimum Tier 1 Capital Ratio" as defined under +Federal Reserve Board Regulations applicable to GS Inc. for a period of 90 +consecutive business days. + +(ii) GS Inc. Is Determined to Be in Default. The Board of Governors of the +Federal Reserve or the Federal Deposit Insurance Corporation (the "FDIC") +makes a written recommendation under Title II (Orderly Liquidation Authority) +of the Dodd-Frank Wall Street Reform and Consumer Protection Act for the +appointment of the FDIC as a receiver of GS Inc. based on a determination that +GS Inc. is "in default" or "in danger of default."] + +(b) RSUs [and Shares at Risk] Forfeited Upon Certain Events. If any of the +following occurs, [i] your rights to your Outstanding RSUs will terminate, and +no RSU Shares will be delivered in respect of such RSUs [and (ii) your rights +to all of your Shares at Risk will terminate and your Shares at Risk will be +cancelled, in each case], as may be further described below: + +(i) You Associate With a Covered Enterprise. + +(A) If you Associate With a Covered Enterprise before the earlier of + or a Qualifying Termination After a Change in Control, your +rights to % of your Outstanding RSUs will terminate, and no RSU Shares +will be delivered in respect of such RSUs. + +(ii) You Solicit Clients or Employees, Interfere with Client or Employee +Relationships or Participate in the Hiring of Employees. Before , +either: + +(A) you, in any manner, directly or indirectly, (1) Solicit any Client to +transact business with a Covered Enterprise or to reduce or refrain from doing +any business with the Firm, (2) interfere with or damage (or attempt to +interfere with or damage) any relationship between the Firm and any Client, +(3) Solicit any person who is an employee of the Firm to resign from the Firm, +(4) Solicit any Selected Firm Personnel to apply for or accept employment (or +other association) with any person or entity other than the Firm or (5) +participate in the hiring of any Selected Firm Personnel by any person or +entity other than the Firm (including, without limitation, participating in +the identification of individuals for potential hire, and participating in any +hiring decision), whether as an employee or consultant or otherwise, or + +(B) Selected Firm Personnel are Solicited, hired or accepted into partnership, +membership or similar status by any entity where you have, or will have, +direct or indirect managerial responsibility for such Selected Firm Personnel, +unless the Committee determines that you were not involved in such +Solicitation, hiring or acceptance. + +(iii) [ GS Inc. Fails to Maintain the Minimum Tier 1 Capital Ratio. Before +the applicable Delivery Date, GS Inc. fails to maintain the required "Minimum +Tier 1 Capital Ratio" + +as defined under Federal Reserve Board Regulations applicable to GS Inc. for a +period of 90 consecutive business days.] + +(iv) [ GS Inc. Is Determined to Be in Default. Before the applicable +Delivery Date, the Board of Governors of the Federal Reserve or the Federal +Deposit Insurance Corporation (the "FDIC") makes a written recommendation +under Title II (Orderly Liquidation Authority) of the Dodd-Frank Wall Street +Reform and Consumer Protection Act for the appointment of the FDIC as a +receiver of GS Inc. based on a determination that GS Inc. is "in default" or +"in danger of default."] + +(v) [ Accounting Restatement Required Under Sarbanes-Oxley. GS Inc. is +required to prepare an accounting restatement due to GS Inc.'s material +noncompliance, as a result of misconduct, with any financial reporting +requirement under the securities laws as described in Section 304(a) of +Sarbanes-Oxley; provided , however , that your rights with respect to the +RSUs will only be terminated to the same extent that would be required under +Section 304(a) of Sarbanes-Oxley had you been a "chief executive officer" or +"chief financial officer" of GS Inc. (regardless of whether you actually hold +such position at the relevant time).] + +(c) [RSUs and Shares at Risk Forfeited upon Certain Events. If any of the +following occurs (i) your rights to all of your Outstanding RSUs will +terminate, and no RSU Shares will be delivered in respect of such RSUs and +(ii) your rights to all of your Shares at Risk will terminate and your Shares +at Risk will be cancelled, in each case, as may be further described below:] + +(i) You Failed to Consider Risk. You Failed to Consider Risk during + +(ii) Your Conduct Constitutes Cause. Any event that constitutes Cause +[(including, for the avoidance of doubt, "Serious Misconduct" as defined in +the U.K. Material Risk Taker Appendix)] has occurred before . + +(iii) You Do Not Meet Your Obligations to the Firm. The Committee determines +that, before , you failed to meet, in any respect, any obligation +under any agreement with the Firm, or any agreement entered into in connection +with your Employment or this Award, including the Firm's notice period +requirement applicable to you, any offer letter, employment agreement or any +shareholders' agreement relating to the Firm. Your failure to pay or reimburse +the Firm, on demand, for any amount you owe to the Firm will constitute (A) +failure to meet an obligation you have under an agreement, regardless of +whether such obligation arises under a written agreement, and/or (B) a +material violation of Firm policy constituting Cause. + +(iv) You Do Not Provide Timely Certifications or Comply with Your +Certifications. You fail to certify to GS Inc. that you have complied with +all of the terms of the Plan and this Award Agreement, or the Committee +determines that you have failed to comply with a term of the Plan or this +Award Agreement to which you have certified compliance. + +(v) You Do Not Follow Dispute Resolution/Arbitration Procedures. You attempt +to have any dispute under the Plan or this Award Agreement resolved in any +manner that is not provided for by Paragraph 16 or Section 3.17 of the Plan, +or you attempt to arbitrate a dispute without first having exhausted your +internal administrative remedies in accordance with Paragraph 13(f)(viii). + +(vi) You Bring an Action that Results in a Determination that Any Award +Agreement Term Is Invalid. As a result of any action brought by you, it is +determined that any term of this Award Agreement is invalid. + +(vii) You Receive Compensation in Respect of Your Award from Another +Employer. Your Employment terminates for any reason or you otherwise are no +longer actively Employed with the Firm and another entity grants you cash, +equity or other property (whether vested or unvested) to replace, substitute +for or otherwise in respect of any Outstanding RSUs or Shares at Risk; +provided , however , that your rights will only be terminated in respect +of the RSUs and Shares at Risk that are replaced, substituted for or otherwise +considered by such other entity in making its grant. + +(viii) [ Accounting Restatement Required Under Sarbanes-Oxley. GS Inc. is +required to prepare an accounting restatement due to GS Inc.'s material +noncompliance, as a result of misconduct, with any financial reporting +requirement under the securities laws as described in Section 304(a) of +Sarbanes-Oxley; provided , however , that your rights will only be +terminated in respect of the RSUs and Shares at Risk to the same extent that +would be required under Section 304(a) of Sarbanes-Oxley had you been a "chief +executive officer" or "chief financial officer" of GS Inc. (regardless of +whether you actually hold such position at the relevant time).] + +(ix) [GS Inc. Fails to Maintain the Minimum Tier 1 Capital Ratio. Prior to +the Transferability Date, GS Inc. fails to maintain the required "Minimum Tier +1 Capital Ratio" as defined under Federal Reserve Board Regulations applicable +to GS Inc. for a period of 90 consecutive business days.] + +(x) [GS Inc. Is Determined to Be in Default. Prior to the Transferability +Date, the Board of Governors of the Federal Reserve or the Federal Deposit +Insurance Corporation (the "FDIC") makes a written recommendation under Title +II (Orderly Liquidation Authority) of the Dodd-Frank Wall Street Reform and +Consumer Protection Act for the appointment of the FDIC as a receiver of GS +Inc. based on a determination that GS Inc. is "in default" or "in danger of +default."] + +R EPAYMENT OF YOUR AWARD + +10. When You May Be Required to Repay Your Award . + +(a) [Repayment, Generally]. If the Committee determines that any term of +this Award was not satisfied, you will be required, immediately upon demand +therefor, to repay to the Firm the following: + +(i) Any RSU Shares (which, for the avoidance of doubt, includes any Shares at +Risk) for which the terms (including the terms for delivery) of the related +RSUs were not satisfied, in accordance with Section 2.6.3 of the Plan. + +(ii) Any Shares at Risk for which the terms (including the terms for the +release of Transfer Restrictions) were not satisfied, in accordance with +Section 2.5.3 of the Plan. + +(iii) Any RSU Shares that were delivered (but not subject to Transfer +Restrictions) at the same time any Shares at Risk that are cancelled or +required to be repaid were delivered. + +(iv) [Any payments under Dividend Equivalent Rights for which the terms were +not satisfied (including any such payments made in respect of RSUs that are +forfeited or RSU Shares that are cancelled or required to be repaid), in +accordance with Section 2.8.3 of the Plan.] + +(v) Any dividends paid in respect of any RSU Shares that are cancelled or +required to be repaid. + +(vi) Any amount applied to satisfy tax withholding or other obligations with +respect to any RSUs, RSU Shares[ and][,] dividend payments [and payments under +Dividend Equivalent Rights] that are forfeited or required to be repaid. + +(b) [ Repayment Upon Accounting Restatement Required Under Sarbanes-Oxley. +If an event described in Paragraph 9(b)(viii) (relating to a requirement under +Sarbanes-Oxley that GS Inc. prepare an accounting restatement) occurs, any RSU +Shares, cash or other property delivered, paid or withheld in respect of this +Award will be subject to repayment as described in Paragraph 10(a) to the same +extent that would be required under Section 304(a) of Sarbanes-Oxley had you +been a "chief executive officer" or "chief financial officer" of GS Inc. +(regardless of whether you actually hold such position at the relevant time).] + +[E XCEPTIONS TO ASSOCIATION WITH A COVERED ENTERPRISE,][ACCELERATED] +DELIVERY DATE[S] AND/OR TRANSFERABILITY DATE[S] + +11. [Restrictions on Association With a Covered Enterprise Cease to Apply +After an Involuntary or Mutual Agreement Termination (but the Original +Delivery Date and Transferability Date Continue to Apply) . Paragraph +9(a)(i) (relating to forfeiture if you Associate With a Covered Enterprise) +will not apply if (a) your Employment terminates and the Firm characterizes +your Employment termination as "involuntary" or by "mutual agreement" (and, in +each case, you have not engaged in conduct constituting Cause) and (b) you +execute a general waiver and release of claims and an agreement to pay any +associated tax liability, in each case, in the form the Firm prescribes. No +Employment termination that you initiate, including any purported +"constructive termination," a "termination for good reason" or similar +concepts, can be "involuntary" or by "mutual agreement." All other terms of +this Award Agreement, including the other forfeiture and repayment events in +Paragraphs 9 and 10, continue to apply.] + +12. Accelerated Delivery and/or Release of Transfer Restrictions in the +Event of a Qualifying Termination After a Change in Control, Conflicted +Employment or Death . In the event of your Qualifying Termination After +a Change in Control, Conflicted Employment or death, each as described below, +your Outstanding RSUs and Shares at Risk will be treated as described in this +Paragraph 12, and, except as set forth in Paragraph 12(a), all other terms of +this Award Agreement, including the other forfeiture and repayment events in +Paragraphs 9 and 10, continue to apply. + +(a) You Have a Qualifying Termination After a Change in Control. If your +Employment terminates when you meet the requirements of a Qualifying +Termination After a Change in Control, the RSU Shares underlying your +Outstanding RSUs will be delivered, and any Transfer Restrictions will cease +to apply. In addition, the forfeiture events in Paragraph 9 will not apply to +your Award. + +(b) You Are Determined to Have Accepted Conflicted Employment. + +(i) Generally. Notwithstanding anything to the contrary in the Plan or + +otherwise, for purposes of this Award Agreement, "Conflicted Employment" means +your employment at any U.S. Federal, state or local government, any non-U.S. +government, any supranational or international organization, any self- +regulatory organization, or any agency or instrumentality of any such +government or organization, or any other employer (other than an "Accounting +Firm" within the meaning of SEC Rule 2-01(f)(2) of Regulation S-X or any +successor thereto) determined by the Committee, if, as a result of such +employment, your continued holding of any Outstanding RSUs and Shares at Risk +would result in an actual or perceived conflict of interest. Unless prohibited +by applicable law or regulation, if your Employment terminates solely because +you resign to accept Conflicted Employment or if, following your termination +of Employment, you notify the Firm that you are accepting Conflicted +Employment, RSU Shares will be delivered in respect of your Outstanding RSUs +(including in the form of cash as described in Paragraph 13(b)) and any +Transfer Restrictions will cease to apply as soon as practicable after the +Committee has received satisfactory documentation relating to your Conflicted +Employment. + +(ii) You May Have to Take Other Steps to Address Conflicts of Interest. The +Committee retains the authority to exercise its rights under the Award +Agreement or the Plan (including Section 1.3.2 of the Plan) to take or require +you to take other steps it determines in its sole discretion to be necessary +or appropriate to cure an actual or perceived conflict of interest (which may +include a determination that the accelerated delivery and/or release of +Transfer Restrictions described in Paragraph 12(b)(i) will not apply because +such actions are not necessary or appropriate to cure an actual or perceived +conflict of interest). + +(c) Death. If you die, the RSU Shares underlying your Outstanding RSUs will +be delivered to the representative of your estate and any Transfer +Restrictions will cease to apply as soon as practicable after the date of +death and after such documentation as may be requested by the Committee is +provided to the Committee. + +O THER TERMS, CONDITIONS AND AGREEMENTS + +13. Additional Terms, Conditions and Agreements . + +(a) You Must Satisfy Applicable Tax Withholding Requirements. Delivery of +RSU Shares is conditioned on your satisfaction of any applicable withholding +taxes in accordance with Section 3.2 of the Plan, which includes the Firm +deducting or withholding amounts from any payment or distribution to you. In +addition, to the extent permitted by applicable law, the Firm, in its sole +discretion, may require you to provide amounts equal to all or a portion of +any Federal, state, local, foreign or other tax obligations imposed on you or +the Firm in connection with the grant[, Vesting] or delivery of this Award by +requiring you to choose between remitting the amount (i) in cash (or through +payroll deduction or otherwise) or (ii) in the form of proceeds from the +Firm's executing a sale of RSU Shares delivered to you under this Award. In no +event, however, does this Paragraph 13(a) give you any discretion to determine +or affect the timing of the delivery of RSU Shares or the timing of payment of +tax obligations. + +(b) Firm May Deliver Cash or Other Property Instead of RSU Shares. In +accordance with Section 1.3.2(i) of the Plan, in the sole discretion of the +Committee, in lieu of all or any portion of the RSU Shares, the Firm may +deliver cash, other securities, other awards under the Plan or other property, +and all references in this Award Agreement to deliveries of RSU Shares will +include such deliveries of cash, other securities, other awards under the Plan +or other property. + +(c) Amounts May Be Rounded to Avoid Fractional Shares. RSU Shares that +become deliverable on a Delivery Date and RSU Shares subject to Transfer +Restrictions may, in each case, be rounded to avoid fractional Shares. + +(d) You May Be Required to Become a Party to the Shareholders' Agreement. +Your rights to your RSUs are conditioned on your becoming a party to any +shareholders' agreement to which other similarly situated employees ( e.g., +employees with a similar title or position) of the Firm are required to be a +party. + +(e) Firm May Affix Legends and Place Stop Orders on Restricted RSU Shares. +GS Inc. may affix to Certificates representing RSU Shares any legend that the +Committee determines to be necessary or advisable (including to reflect any +restrictions to which you may be subject under a separate agreement). GS Inc. +may advise the transfer agent to place a stop order against any legended RSU +Shares. + +(f) You Agree to Certain Consents, Terms and Conditions. By accepting this +Award you understand and agree that: + +(i) You Agree to Certain Consents as a Condition to the Award. You have +expressly consented to all of the items listed in Section 3.3.3(d) of the +Plan, including the Firm's supplying to any third-party recordkeeper of the +Plan or other person such personal information of yours as the Committee deems +advisable to administer the Plan, and you agree to provide any additional +consents that the Committee determines to be necessary or advisable; + +(ii) You Are Subject to the Firm's Policies, Rules and Procedures. You are +subject to the Firm's policies in effect from time to time concerning trading +in RSU Shares and hedging or pledging RSU Shares and equity-based compensation +or other awards (including, without limitation, the "Firmwide Policy with +Respect to Personal Transactions Involving GS Securities and GS Equity Awards" +or any successor policies), and confidential or proprietary information, and +you will effect sales of RSU Shares in accordance with such rules and +procedures as may be adopted from time to time (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); + +(iii) You Are Responsible for Costs Associated with Your Award. You will be +responsible for all brokerage costs and other fees or expenses associated with +your RSUs, including those related to the sale of RSU Shares; + +(iv) You Will Be Deemed to Represent Your Compliance with All the Terms of +Your Award if You Accept Delivery of, or Sell, RSU Shares. You will be deemed +to have represented and certified that you have complied with all of the terms +of the Plan and this Award Agreement when RSU Shares are delivered to you[, +you receive payment in respect of Dividend Equivalent Rights] and you request +the sale of RSU Shares following the release of Transfer Restrictions; + +(v) Firm May Deliver Your Award into an Escrow Account. The Firm may +establish and maintain an escrow account on such terms (which may include your +executing any documents related to, and your paying for any costs associated +with, such account) as it may deem necessary or appropriate, and the delivery +of RSU Shares (including Shares at Risk) or the payment of cash (including +dividends) [and payments under Dividend Equivalent Rights]) or other property +may initially be made into and held in that escrow account until such time as +the + +Committee has received such documentation as it may have requested or until +the Committee has determined that any other conditions or restrictions on +delivery of RSU Shares, cash or other property required by this Award +Agreement have been satisfied; + +(vi) You May Be Required to Certify Compliance with Award Terms; You Are +Responsible for Providing the Firm with Updated Address and Contact +Information After Your Departure from the Firm. If your Employment terminates +while you continue to hold RSUs or Shares at Risk, from time to time, you may +be required to provide certifications of your compliance with all of the terms +of the Plan and this Award Agreement as described in Paragraph 9(b)(iv). You +understand and agree that (A) your address on file with the Firm at the time +any certification is required will be deemed to be your current address, (B) +it is your responsibility to inform the Firm of any changes to your address to +ensure timely receipt of the certification materials, (C) you are responsible +for contacting the Firm to obtain such certification materials if not received +and (D) your failure to return properly completed certification materials by +the specified deadline (which includes your failure to timely return the +completed certification because you did not provide the Firm with updated +contact information) will result in the forfeiture of all of your RSUs and +Shares at Risk and subject previously delivered amounts to repayment under +Paragraph 9(b)(iv); + +(vii) You Authorize the Firm to Register, in Its or Its Designee's Name, Any +Shares at Risk and Sell, Assign or Transfer Any Forfeited Shares at Risk. You +are granting to the Firm the full power and authority to register any Shares +at Risk in its or its designee's name and authorizing the Firm or its designee +to sell, assign or transfer any Shares at Risk if you forfeit your Shares at +Risk; + +(viii) You Must Comply with Applicable Deadlines and Procedures to Appeal +Determinations Made by the Committee, the SIP Committee or SIP +Administrators. If you disagree with a determination made by the Committee, +the SIP Committee, the SIP Administrators, or any of their delegates or +designees and you wish to appeal such determination, you must submit a written +request to the SIP Committee for review within 180 days after the +determination at issue. You must exhaust your internal administrative remedies +( i.e. , submit your appeal and wait for resolution of that appeal) before +seeking to resolve a dispute through arbitration pursuant to Paragraph 16 and +Section 3.17 of the Plan; and + +(ix) You Agree that Covered Persons Will Not Have Liability. In addition to +and without limiting the generality of the provisions of Section 1.3.5 of the +Plan, neither the Firm nor any Covered Person will have any liability to you +or any other person for any action taken or omitted in respect of this or any +other Award. + +14. Non-transferability . Except as otherwise may be provided in +this Paragraph 14 or as otherwise may be provided by the Committee, the +limitations on transferability set forth in Section 3.5 of the Plan will apply +to this Award. Any purported transfer or assignment in violation of the +provisions of this Paragraph 14 or Section 3.5 of the Plan will be void. The +Committee may adopt procedures pursuant to which some or all recipients of +RSUs may transfer some or all of their RSUs and/or Shares at Risk (which will +continue to be subject to Transfer Restrictions until the [applicable] +Transferability Date) through a gift for no consideration to any immediate +family member, a trust or other estate planning vehicle approved by the +Committee or SIP Committee in which the recipient and/or the recipient's +immediate family members in the aggregate have 100% of the beneficial +interest. + +15. Right of Offset . Except as provided in Paragraph 18[(f)][(g)], +the obligation to deliver RSU Shares, to pay dividends [or payments under +Dividend Equivalent Rights] or to remove the Transfer + +Restrictions under this Award Agreement is subject to Section 3.4 of the Plan, +which provides for the Firm's right to offset against such obligation any +outstanding amounts you owe to the Firm and any amounts the Committee deems +appropriate pursuant to any tax equalization policy or agreement. + +A RBITRATION, CHOICE OF FORUM AND GOVERNING LAW + +16. Arbitration; Choice of Forum . + +(a) B Y ACCEPTING THIS AWARD, YOU ARE INDICATING THAT YOU UNDERSTAND AND +AGREE THAT THE ARBITRATION AND CHOICE OF FORUM PROVISIONS SET FORTH IN +SECTION 3.17 OF THE PLAN WILL APPLY TO THIS AWARD. THESE +PROVISIONS, WHICH ARE EXPRESSLY INCORPORATED HEREIN BY REFERENCE, PROVIDE +AMONG OTHER THINGS THAT ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN THE FIRM AND +YOU ARISING OUT OF OR RELATING TO OR CONCERNING THE PLAN OR THIS AWARD +AGREEMENT WILL BE FINALLY SETTLED BY ARBITRATION IN NEW YORK CITY, PURSUANT TO +THE TERMS MORE FULLY SET FORTH IN SECTION 3.17 OF THE PLAN; +PROVIDED THAT NOTHING HEREIN SHALL PRECLUDE YOU FROM FILING A CHARGE WITH OR +PARTICIPATING IN ANY INVESTIGATION OR PROCEEDING CONDUCTED BY ANY GOVERNMENTAL +AUTHORITY, INCLUDING BUT NOT LIMITED TO THE SEC, THE EQUAL EMPLOYMENT +OPPORTUNITY COMMISSION AND A STATE OR LOCAL HUMAN RIGHTS AGENCY, AS WELL AS +LAW ENFORCEMENT. + +(b) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider class, collective or representative claims, to order +consolidation or to join different claimants or grant relief other than on an +individual basis to the individual claimant involved. + +(c) Notwithstanding any applicable forum rules to the contrary, to the extent +there is a question of enforceability of this Award Agreement arising from a +challenge to the arbitrator's jurisdiction or to the arbitrability of a claim, +it will be decided by a court and not an arbitrator. + +(d) The Federal Arbitration Act governs interpretation and enforcement of all +arbitration provisions under the Plan and this Award Agreement, and all +arbitration proceedings thereunder. + +(e) Nothing in this Award Agreement creates a substantive right to bring a +claim under U.S. Federal, state, or local employment laws. + +(f) By accepting your Award, you irrevocably appoint each General Counsel of +GS Inc., or any person whom the General Counsel of GS Inc. designates, as your +agent for service of process in connection with any suit, action or proceeding +arising out of or relating to or concerning the Plan or any Award which is not +arbitrated pursuant to the provisions of Section 3.17.1 of the Plan, who shall +promptly advise you of any such service of process. + +(g) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider any claim as to which you have not first exhausted +your internal administrative remedies in accordance with Paragraph +13(f)(viii). + +17. Governing Law . T HIS AWARD WILL BE GOVERNED BY AND CONSTRUED +IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO +PRINCIPLES OF CONFLICT OF LAWS. + +C ERTAIN TAX PROVISIONS + +18. Compliance of Award Agreement and Plan with Section + +409A . The provisions of this Paragraph 18 apply to you only if you +are a U.S. taxpayer. + +(a) This Award Agreement and the Plan provisions that apply to this Award are +intended and will be construed to comply with Section 409A (including the +requirements applicable to, or the conditions for exemption from treatment as, +409A Deferred Compensation), whether by reason of short-term deferral +treatment or other exceptions or provisions. The Committee will have full +authority to give effect to this intent. To the extent necessary to give +effect to this intent, in the case of any conflict or potential inconsistency +between the provisions of the Plan (including Sections 1.3.2 and 2.1 thereof) +and this Award Agreement, the provisions of this Award Agreement will govern, +and in the case of any conflict or potential inconsistency between this +Paragraph 18 and the other provisions of this Award Agreement, this Paragraph +18 will govern. + +(b) Delivery of RSU Shares will not be delayed beyond the date on which all +applicable conditions or restrictions on delivery of RSU Shares required by +this Agreement (including those specified in Paragraphs 6, 7, 11, 12(c) and 13 +and the consents and other items specified in Section 3.3 of the Plan) are +satisfied. To the extent that any portion of this Award is intended to satisfy +the requirements for short-term deferral treatment under Section 409A, +delivery for such portion will occur by the March 15 coinciding with the last +day of the applicable "short-term deferral" period described in Reg. +1.409A-1(b)(4) in order for the delivery of RSU Shares to be within the short- +term deferral exception unless, in order to permit all applicable conditions +or restrictions on delivery to be satisfied, the Committee elects, pursuant to +Reg. 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted in accordance with +Section 409A, to delay delivery of RSU Shares to a later date within the same +calendar year or to such later date as may be permitted under Section 409A, +including Reg. 1.409A-3(d). For the avoidance of doubt, if the Award includes +a "series of installment payments" as described in Reg. 1.409A-2(b)(2)(iii), +your right to the series of installment payments will be treated as a right to +a series of separate payments and not as a right to a single payment. + +(c) Notwithstanding the provisions of Paragraph 13(b) and Section 1.3.2(i) of +the Plan, to the extent necessary to comply with Section 409A, any securities, +other Awards or other property that the Firm may deliver in respect of your +RSUs will not have the effect of deferring delivery or payment, income +inclusion, or a substantial risk of forfeiture, beyond the date on which such +delivery, payment or inclusion would occur or such risk of forfeiture would +lapse, with respect to the RSU Shares that would otherwise have been +deliverable (unless the Committee elects a later date for this purpose +pursuant to Reg. 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted under +Section 409A, including and to the extent applicable, the subsequent election +provisions of Section 409A(a)(4)(C) of the Code and Reg. 1.409A-2(b)). + +(d) Notwithstanding the timing provisions of Paragraph 12(c), the delivery of +RSU Shares referred to therein will be made after the date of death and during +the calendar year that includes the date of death (or on such later date as +may be permitted under Section 409A). + +(e) The timing of delivery or payment pursuant to Paragraph 12(a) will occur +on the earlier of (i) the Delivery Date or (ii) a date that is within the +calendar year in which the termination of Employment occurs; provided , +however , that, if you are a "specified employee" (as defined by the Firm in +accordance with Section 409A(a)(2)(i)(B) of the Code), delivery will occur on +the earlier of the Delivery Date or (to the extent required to avoid the +imposition of + +additional tax under Section 409A) the date that is six months after your +termination of Employment (or, if the latter date is not during a Window +Period, the first trading day of the next Window Period). For purposes of +Paragraph 12(a), references in this Award Agreement to termination of +Employment mean a termination of Employment from the Firm (as defined by the +Firm) which is also a separation from service (as defined by the Firm in +accordance with Section 409A). + +(f) [Notwithstanding any provision of Paragraph 8 or Section 2.8.2 of the Plan +to the contrary, the Dividend Equivalent Rights with respect to each of your +Outstanding RSUs will be paid to you within the calendar year that includes +the date of distribution of any corresponding regular cash dividends paid by +GS Inc. in respect of a share of Common Stock the record date for which occurs +on or after the Date of Grant. The payment will be in an amount (less +applicable withholding) equal to such regular dividend payment as would have +been made in respect of the RSU Shares underlying such Outstanding RSUs.] + +(g) The timing of delivery or payment referred to in Paragraph 12(b)(i) will +be the earlier of (i) the Delivery Date or (ii) a date that is within the +calendar year in which the Committee receives satisfactory documentation +relating to your Conflicted Employment, provided that such delivery or +payment will be made, and any Committee action referred to in Paragraph +12(b)(ii) will be taken, only at such time as, and if and to the extent that +it, as reasonably determined by the Firm, would not result in the imposition +of any additional tax to you under Section 409A. + +(h) Paragraph 15 and Section 3.4 of the Plan will not apply to Awards that are +409A Deferred Compensation except to the extent permitted under Section 409A. + +(i) Delivery of RSU Shares in respect of any Award may be made, if and to the +extent elected by the Committee, later than the Delivery Date or other date or +period specified hereinabove (but, in the case of any Award that constitutes +409A Deferred Compensation, only to the extent that the later delivery is +permitted under Section 409A). + +(j) You understand and agree that you are solely responsible for the payment +of any taxes and penalties due pursuant to Section 409A, but in no event will +you be permitted to designate, directly or indirectly, the taxable year of the +delivery. + +C OMMITTEE AUTHORITY, AMENDMENT, CONSTRUCTION AND REGULATORY REPORTING + +19. Committee Authority . The Committee has the authority to +determine, in its sole discretion, that any event triggering forfeiture or +repayment of your Award will not apply, to limit the forfeitures and +repayments that result under Paragraphs 9 and 10 and to remove Transfer +Restrictions before the [applicable] Transferability Date. [In addition, the +Committee, in its sole discretion, may determine whether Paragraph 11 will +apply upon a termination of Employment.] + +20. Amendment . The Committee reserves the right at any time to +amend the terms of this Award Agreement, and the Board may amend the Plan in +any respect; provided that, notwithstanding the foregoing and Sections +1.3.2(f), 1.3.2(h) and 3.1 of the Plan, no such amendment will materially +adversely affect your rights and obligations under this Award Agreement +without your consent; and provided further that the Committee expressly +reserves its rights to amend the Award Agreement and the Plan as described in +Sections 1.3.2(h)(1), (2) and (4) of the Plan. A modification that impacts the +tax consequences of this Award or the timing of delivery of RSU Shares will +not be an amendment that + +materially adversely affects your rights and obligations under this Award +Agreement. Any amendment of this Award Agreement will be in writing. + +21. Construction, Headings . Unless the context requires otherwise, +(a) words describing the singular number include the plural and vice versa, +(b) words denoting any gender include all genders and (c) the words "include," +"includes" and "including" will be deemed to be followed by the words "without +limitation." The headings in this Award Agreement are for the purpose of +convenience only and are not intended to define or limit the construction of +the provisions hereof. References in this Award Agreement to any specific Plan +provision will not be construed as limiting the applicability of any other +Plan provision. + +22. Providing Information to the Appropriate Authorities . In +accordance with applicable law, nothing in this Award Agreement (including the +forfeiture and repayment provisions in Paragraphs 9 and 10) or the Plan +prevents you from providing information you reasonably believe to be true to +the appropriate governmental authority, including a regulatory, judicial, +administrative, or other governmental entity; reporting possible violations of +law or regulation; making other disclosures that are protected under any +applicable law or regulation; or filing a charge or participating in any +investigation or proceeding conducted by a governmental authority. For the +avoidance of doubt, governmental authority includes federal, state and local +government agencies such as the SEC, the Equal Employment Opportunity +Commission and any state or local human rights agency ( e.g. , the New York +State Division of Human Rights, the New York City Commission on Human Rights, +the California Department of Fair Employment and Housing), as well as law +enforcement. + +IN WITNESS WHEREOF , GS Inc. has caused this Award Agreement to be duly +executed and delivered as of the Date of Grant. + +THE GOLDMAN SACHS GROUP, INC. + +[ U.K. M ATERIAL RISK TAKER APPENDIX + +This Appendix supplements Paragraph 9 and sets forth additional events that +result in forfeiture of up to all of your RSUs and Shares at Risk and may +require repayment to the Firm of up to all other amounts previously delivered +or paid to you under your Award in accordance with Paragraph 10. As with the +events described in Paragraph 9, more than one event may apply, in no case +will the occurrence of one event limit the forfeiture and repayment +obligations as a result of the occurrence of any other event and the Firm +reserves the right to (a) suspend delivery of RSU Shares or release of +Transfer Restrictions, (b) deliver any RSU Shares or dividends into an escrow +account in accordance with Paragraph 13(f)(v) or (c) apply Transfer +Restrictions to any RSU Shares in connection with any investigation of whether +any of the events that result in forfeiture under this Appendix have occurred. + +With respect to the events described in this Appendix, the Committee will +consider certain factors to determine whether and what portion of your Award +will terminate, including the reason for the "Loss Event" (as defined below) +or "Risk Event" (as defined below) and the extent to which: (1) you +participated in the Loss Event or Risk Event, (2) your compensation for + may or may not have been adjusted to take into account the risk +associated with the Loss Event, Risk Event, your "Serious Misconduct" (as +defined below) or the Serious Misconduct of a "Supervised Employee" (as +defined below) and (3) your compensation may be adjusted for the year in which +the Loss Event, Risk Event, your Serious Misconduct or a Supervised Employee's +Serious Misconduct is discovered. + +[Paragraphs (a), (b) and (c) of this Appendix apply to your Additional and +Supplemental RSUs. Paragraph (d) of this Appendix applies to your Additional +RSUs only and does not apply to your Supplemental RSUs.] + +(a) A Loss Event Occurs Prior to Delivery. If a Loss Event occurs prior to +the delivery of RSU Shares, your rights in respect of all or a portion of your +RSUs which are scheduled to deliver on the next Delivery Date immediately +following the date that the Loss Event is identified (or, if not practicable, +then the next following Delivery Date) will terminate, and no RSU Shares will +be delivered in respect of such RSUs. + +(i) A " Loss Event " means (A) an annual pre-tax loss at GS Inc. or (B) +annual negative revenues in one or more reporting segments as disclosed in the +Firm's Form 10-K other than the Asset Management segment, or annual negative +revenues in the Asset Management segment of $5 billion or more, provided in +either case that you are employed in a business within such reporting segment. + +(b) A Risk Event Occurs . If a Risk Event occurs +, (i) your rights in respect of all or a portion of your RSUs +will terminate and no RSU Shares will be delivered in respect of such RSUs, +(ii) your rights to all or a portion of any Shares at Risk will terminate and +such Shares at Risk will be cancelled and (iii) you will be obligated +immediately upon demand therefor to pay the Firm an amount not in excess of +the greater of the Fair Market Value of the RSU Shares (plus any dividend +payments) delivered in respect of the Award (without reduction for any amount +applied to satisfy tax withholding or other obligations) determined as of (A) +the date the Risk Event occurred and (B) the date that the repayment request +is made. + +(i) A " Risk Event " means there occurs a loss of 5% or more of firmwide +total capital from a reportable operational risk event determined in +accordance with the firmwide Reporting Operational Risk Events Policy. + +(c) You Engage in Serious Misconduct . If you engage in +Serious Misconduct , you will be obligated immediately upon +demand therefor to pay the Firm an amount not in excess of the greater of the +Fair Market Value of the RSU Shares (plus any dividend payments) delivered in +respect of the Award (without reduction for any amount applied to satisfy tax +withholding or other obligations) determined as of (i) the date the Serious +Misconduct occurred and (ii) the date that the repayment request is made. + +(i) " Serious Misconduct " means that you engage in conduct that the Firm +reasonably considers, in its sole discretion, to be misconduct sufficient to +justify summary termination of employment under English law. + +(d) A Supervised Employee Engages in Serious Misconduct. If the Committee +determines that it is appropriate to hold you accountable in whole or in part +for Serious Misconduct related to compliance, control or risk that occurred +during by a Supervised Employee, your rights in respect of all or a +portion of your RSUs will terminate and no RSU Shares will be delivered in +respect of such RSUs and your rights to all or a portion of any Shares at Risk +will terminate and such Shares at Risk will be cancelled. + +(i) " Supervised Employee " means an individual with respect to whom the +Committee determines you had supervisory responsibility as a result of direct +or indirect reporting lines or your management responsibility for an office, +division or business. + +Notwithstanding any provision in the Plan, this Award Agreement or any other +agreement or arrangement you may have with the Firm, the parties agree that to +the extent that there is any dispute arising out of or relating to the payment +required by Paragraphs (b) and (c) of this Appendix (including your refusal to +remit payment) the parties will submit to arbitration in accordance with +Paragraph 16 of this Award Agreement and Section 3.17 of the Plan as the sole +means of resolution of such dispute (including the recovery by the Firm of the +payment amount).] + +[ GSBE M ATERIAL RISK TAKER APPENDIX + +This Appendix supplements Paragraph 9 and sets forth additional events that +result in forfeiture of up to all of your RSUs and Shares at Risk and may +require repayment to the Firm of up to all other amounts previously delivered +or paid to you under your Award in accordance with Paragraph 10. As with the +events described in Paragraph 9, more than one event may apply, in no case +will the occurrence of one event limit the forfeiture and repayment +obligations as a result of the occurrence of any other event and the Firm +reserves the right to (a) suspend vesting of Outstanding RSUs, delivery of RSU +Shares or release of Transfer Restrictions, (b) deliver any RSU Shares or +dividends into an escrow account in accordance with Paragraph 12(f)(v) or (c) +apply Transfer Restrictions to any RSU Shares in connection with any +investigation of whether any of the events that result in forfeiture under +this Appendix have occurred. + +With respect to the events described in this Appendix, the Committee will +consider certain factors to determine whether and what portion of your Award +will terminate, including the reason for the "Adjustment Event" (as defined +below). + +Notwithstanding any provision in the Plan, this Award Agreement or any other +agreement or arrangement you may have with the Firm, the parties agree that to +the extent that there is any dispute arising out of or relating to the payment +required by this Appendix (including your refusal to remit payment) the +parties will submit to arbitration in accordance with Paragraph 15 of this +Award Agreement and Section 3.17 of the Plan as the sole means of resolution +of such dispute (including the recovery by the Firm of the payment amount). + +(a) An Adjustment Event Occurs . If an "Adjustment Event" (as defined +below) occurs , (i) your rights in respect of all or a portion of +your RSUs will terminate and no RSU Shares will be delivered in respect of +such RSUs, (ii) your rights to all or a portion of any Shares at Risk will +terminate and such Shares at Risk will be cancelled, and (iii) you will be +obligated immediately upon demand therefor to pay the Firm an amount not in +excess of the greater of the Fair Market Value of the RSU Shares (plus any +dividend payments) delivered in respect of the Award (without reduction for +any amount applied to satisfy tax withholding or other obligations) determined +as of (A) the date the Adjustment Event occurred and (B) the date that the +repayment request is made. + +(i) " Adjustment Event " means that one of the following has occurred: + +A. you significantly contributed to, or were responsible for, any conduct that +resulted in a loss of 0.75% or more of the total capital of GS Inc.; + +B. a material regulatory sanction for the Firm comprising one or more of the +following: + +a moratorium pursuant to sec. 46g of the German Banking Act, + +a measure in case of danger pursuant to sec. 46 of the German Banking Act, + +the revocation of appointment of a manager pursuant to sec. 36 German Banking +Act, + +a fine pursuant to sec. 56 of the German Banking Act or a threatened penalty +payment, if the fine or penalty payment amounts to 0.75% or more of the total +capital of GS Inc., + +the cancellation of the banking permit pursuant to sec. 35 of the German +Banking Act, + +an order to increase the capital requirements Goldman Sachs Bank Europe SE +(GSBE) by at least 0.5% pursuant to sec. 10 of the German Banking Act, + +a measure in case of organizational deficiencies, + +a comparable regulatory order, or + +a material supervisory measure; or + +C. you acted in serious violation of relevant external or internal rules with +respect to suitability and conduct, provided that a violation is considered +serious if it suitable to justify a termination of employment for cause +pursuant to sec. 626 German Civil Code or a termination of employment for +misconduct pursuant to sec. 1 German Termination Protection Act. + +The determination as to whether an Adjustment Event has occurred shall be made +by the Committee in its sole discretion.] + +D EFINITIONS APPENDIX + +The following capitalized terms are used in this Award Agreement with the +following meanings: + +(a) " 409A Deferred Compensation " means a "deferral of compensation" or +"deferred compensation" as those terms are defined in the regulations under +Section 409A. + +(b) " Associate With a Covered Enterprise " means that you (i) form, or +acquire a 5% or greater equity ownership, voting or profit participation +interest in, any Covered Enterprise or (ii) associate in any capacity +(including association as an officer, employee, partner, director, consultant, +agent or advisor) with any Covered Enterprise. Associate With a Covered +Enterprise may include, as determined in the discretion of either the +Committee or the SIP Committee, (i) becoming the subject of any publicly +available announcement or report of a pending or future association with a +Covered Enterprise and (ii) unpaid associations, including an association in +contemplation of future employment. "Association With a Covered Enterprise" +will have its correlative meaning. + +(c) " Conflicted Employment " means your employment at any U.S. Federal, +state or local government, any non-U.S. government, any supranational or +international organization, any self-regulatory organization, or any agency or +instrumentality of any such government or organization, or any other employer +(other than an "Accounting Firm" within the meaning of SEC Rule 2-01(f)(2) of +Regulation S-X or any successor thereto) determined by the Committee, if, as a +result of such employment, your continued holding of any Outstanding RSUs and +Shares at Risk would result in an actual or perceived conflict of interest. + +(d) " Covered Enterprise " means a Competitive Enterprise and any other +existing or planned business enterprise that: (i) offers, holds itself out as +offering or reasonably may be expected to offer products or services that are +the same as or similar to those offered by the Firm or that the Firm +reasonably expects to offer ("Firm Products or Services") or (ii) engages in, +holds itself out as engaging in or reasonably may be expected to engage in any +other activity that is the same as or similar to any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage +("Firm Activities"). For the avoidance of doubt, Firm Activities include any +activity that requires the same or similar skills as any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage, +irrespective of whether any such financial activity is in furtherance of an +advisory, agency, proprietary or fiduciary undertaking. + +The enterprises covered by this definition include enterprises that offer, +hold themselves out as offering or reasonably may be expected to offer Firm +Products or Services, or engage in, hold themselves out as engaging in or +reasonably may be expected to engage in Firm Activities directly, as well as +those that do so indirectly by ownership or control ( e.g. , by owning, +being owned by or by being under common ownership with an enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +Firm Products or Services or that engages in, holds itself out as engaging in +or reasonably may be expected to engage in Firm Activities). The definition of +Covered Enterprise includes, solely by way of example, any enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +any product or service, or engages in, holds itself out as engaging in or +reasonably may be expected to engage in any activity, in any case, associated +with investment banking; public or private finance; lending; financial +advisory services; private investing for anyone other than you or your family +members (including, for the avoidance of doubt, any type of proprietary +investing or trading); private wealth management; private banking; consumer or +commercial cash management; consumer, digital or commercial banking; merchant +banking; asset, portfolio or hedge fund management; insurance or reinsurance +underwriting or brokerage; property management; or securities, futures, +commodities, energy, derivatives, currency or digital asset brokerage, sales, +lending, custody, clearance, settlement or trading. + +An enterprise that offers, holds itself out as offering or reasonably may be +expected to offer Firm Products or Services, or engages in, holds itself out +as engaging in or reasonably may be expected to engage in Firm Activities is a +Covered Enterprise , irrespective of whether the enterprise is a customer, +client or counterparty of the Firm or is otherwise associated with the Firm +and, because the Firm is a global enterprise, irrespective of where the +Covered Enterprise is physically located. + +(e) " Failed to Consider Risk " means that you participated (or otherwise +oversaw or were responsible for, depending on the circumstances, another +individual's participation) in the structuring or marketing of any product or +service, or participated on behalf of the Firm or any of its clients in the +purchase or sale of any security or other property, in any case without +appropriate consideration of the risk to the Firm or the broader financial +system as a whole (for example, where you have improperly analyzed such risk +or where you have failed sufficiently to raise concerns about such risk) and, +as a result of such action or omission, the Committee determines there has +been, or reasonably could be expected to be, a material adverse impact on the +Firm, your business unit or the broader financial system. + +(f) " Qualifying Termination After a Change in Control " means that the Firm +terminates your Employment other than for Cause or you terminate your +Employment for Good Reason, in each case, within 18 months following a Change +in Control. + +(g) [" Sarbanes-Oxley " means the Sarbanes-Oxley Act of 2002, as amended.] + +(h) " SEC " means the U.S. Securities and Exchange Commission. + +(i) " Selected Firm Personnel " means any individual who is or in the three +months preceding the conduct prohibited by Paragraph 9([a][b])(ii) was (i) a +Firm employee or consultant with whom you personally worked while employed by +the Firm, (ii) a Firm employee or consultant who, at any time during the year +preceding the date of the termination of your Employment, worked in the same +division in which you worked or (iii) an Advisory Director, a Managing +Director or a Senior Advisor of the Firm. + +(j) " Shares at Risk " means RSU Shares subject to Transfer Restrictions. + +The following capitalized terms are used in this Award Agreement with the +meanings that are assigned to them in the Plan. + +(a) " Account " means any brokerage account, custody account or similar +account, as approved or required by GS Inc. from time to time, into which +shares of Common Stock, cash or other property in respect of an Award are +delivered. + +(b) " Award Agreement " means the written document or documents by which +each Award is evidenced, including any related Award Statement and signature +card. + +(c) " Award Statement " means a written statement that reflects certain +Award terms. + +(d) " Board " means the Board of Directors of GS Inc. + +(e) " 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. + +(f) " Cause " means (i) the Grantee's conviction, whether following trial or +by plea of guilty or nolo contendere (or similar plea), in a criminal +proceeding (A) on a misdemeanor charge involving fraud, false statements or +misleading omissions, wrongful taking, embezzlement, bribery, forgery, +counterfeiting or extortion, or (B) on a felony charge, or (C) on an +equivalent charge to those in clauses (A) and (B) in jurisdictions which do +not use those designations, (ii) the Grantee's engaging in any conduct which +constitutes an employment disqualification under applicable law (including +statutory disqualification as defined under the Exchange Act), (iii) the +Grantee's willful failure to perform the Grantee's duties to the Firm, (iv) +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, (v) 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, (vi) the +Grantee's engaging in any act or making any statement which impairs, impugns, +denigrates, disparages or negatively reflects upon the name, reputation or +business interests of the Firm or (vii) 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 may have under any other agreement with a Grantee or at law or +in equity. + +(g) " Certificate " means a stock certificate (or other appropriate document +or evidence of ownership) representing shares of Common Stock. + +(h) " 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 shareholders +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: (i) 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 (A) 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 (B) 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 (ii) 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 (A) were members of the +Board on the Effective Date or (B) 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). + +(i) " 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. + +(j) " Code " means the Internal Revenue Code of 1986, as amended from time +to time, and the applicable rulings and regulations thereunder. + +(k) " 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 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. + +(l) " Common Stock " means common stock of GS Inc., par value $0.01 per +share. + +(m) " Competitive Enterprise " means an existing or planned business +enterprise that (i) engages, or may reasonably be expected to engage, in any +activity; (ii) owns or controls, or may reasonably be expected to own or +control, a significant interest in any entity that engages in any activity or +(iii) is, or may reasonably be expected to be, owned by, or a significant +interest in which is, or may reasonably be expected to be, owned or controlled +by, any entity that engages in any activity that, in any case, competes or +will compete 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 (including for the avoidance of +doubt, any type of proprietary investing or trading); private wealth +management; private banking; consumer or commercial cash management; consumer, +digital or commercial banking; merchant banking; asset, portfolio or hedge +fund management; insurance or reinsurance underwriting or brokerage; property +management; or securities, futures, commodities, energy, derivatives, currency +or digital asset brokerage, sales, lending, custody, clearance, settlement or +trading. + +(n) " Covered Person " means a member of the Board or the Committee or any +employee of the Firm. + +(o) " Date of Grant " means the date specified in the Grantee's Award +Agreement as the date of grant of the Award. + +(p) " 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. + +(q) [" 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.] + +(r) " Effective Date " means the date this Plan is approved by the +shareholders of GS Inc. pursuant to Section 3.15 of the Plan. + +(s) " 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 +(i) 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), (ii) whether and when a change in a +Grantee's association with the Firm results in a termination of Employment and +(iii) 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. + +(t) " Exchange Act " means the Securities Exchange Act of 1934, as amended +from time to time, and the applicable rules and regulations thereunder. + +(u) " 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. + +(v) " Firm " means GS Inc. and its subsidiaries and affiliates. + +(w) " 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). + +(x) " Grantee " means a person who receives an Award. + +(y) " GS Inc. " means The Goldman Sachs Group, Inc., and any successor +thereto. + +(z) " 1999 SIP " means The Goldman Sachs 1999 Stock Incentive Plan, as in +effect prior to the effective date of the 2003 SIP + +(aa) " 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. + +(bb) " Restricted Share " means a share of Common Stock delivered under the +Plan that is subject to Transfer Restrictions, forfeiture provisions and/or +other terms and conditions specified herein and in the Restricted Share Award +Agreement or other applicable Award Agreement. All references to Restricted +Shares include "Shares at Risk." + +(cc) " RSU " means a restricted stock unit 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. + +(dd) " RSU Shares " means shares of Common Stock that underlie an RSU. + +(ee) " Section 409A " means Section 409A of the Code, including any +amendments or successor provisions to that Section and any regulations and +other administrative guidance thereunder, in each case as they, from time to +time, may be amended or interpreted through further administrative guidance. + +(ff) " 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. + +(gg) " SIP Committee " means the persons who have been delegated certain +authority under the Plan by the Committee. + +(hh) " Solicit " means any direct or indirect communication of any kind +whatsoever, regardless of by whom initiated, inviting, advising, suggesting, +encouraging or requesting any person or entity, in any manner, to take or +refrain from taking any action. The terms "Solicited," "Soliciting" and +"Solicitation" will have their correlative meanings. + +(ii) " Transfer Restrictions " means restrictions that prohibit the sale, +exchange, transfer, assignment, pledge, hypothecation, fractionalization, +hedge or other disposal (including through the use of any cash-settled +instrument), whether voluntarily or involuntarily by the Grantee, of an Award +or any shares of Common Stock, cash or other property delivered in respect of +an Award. + +(jj) " Transferability Date " means the date Transfer Restrictions on a +Restricted Share will be released. Within 30 Business Days after the +applicable Transferability Date, GS Inc. shall take, or shall cause to be +taken, such steps as may be necessary to remove Transfer Restrictions. + +(kk) " 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. + +(ll) " 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). + +EX-10.43 8 d192225dex1043.htm EX-10.43 EX-10.43 + +Exhibit 10.43 + +T HE GOLDMAN SACHS GROUP, INC. + +Y EAR-END RSU AWARD + +This Award Agreement, together with The Goldman Sachs Amended and Restated +Stock Incentive Plan (2021) (the "Plan"), governs your year-end award of +RSUs (your "Award"). You should read carefully this entire Award Agreement, +which includes the Award Statement, any attached Appendix and the signature +card. + +A CCEPTANCE + +1. You Must Decide Whether to Accept this Award Agreement . To be +eligible to receive your Award, you must by the date specified (a) +open and activate an Account and (b) agree to all the terms of your +Award by executing the related signature card in accordance with its +instructions. By executing the signature card, you confirm your agreement to + all of the terms of this Award Agreement, including the arbitration +and choice of forum provisions in Paragraph 16. + +D OCUMENTS THAT GOVERN YOUR AWARD; DEFINITIONS + +2. The Plan . Your Award is granted under the Plan, and the Plan's +terms apply to, and are a part of, this Award Agreement. + +3. Your Award Statement . The Award Statement delivered to you +contains some of your Award's specific terms. For example, it contains the +type and number of RSUs awarded to you and any applicable Vesting Dates, +Delivery Dates and Transferability Dates. [The portion of your RSUs that are +designated on the Award Statement as " Year-End Base RSUs" are referred to +in this Award Agreement as "Base RSUs." The portion of your RSUs that are +designated on the Award Statement as " Year-End Additional Base RSUs" are +referred to in this Award Agreement as "Additional Base RSUs." [The portion of +your RSUs that are designated on the Award Statement as " Year-End +Supplemental RSUs" are referred to in this Award Agreement as "Supplemental +RSUs."] All references to RSUs in this Award Agreement include the Base RSUs, +the Additional Base RSUs [and the Supplemental RSUs.]] + +4. Definitions . Unless otherwise defined herein, including in the +Definitions Appendix or any other Appendix, capitalized terms have the +meanings provided in the Plan. + +V ESTING OF YOUR RSUS + +5. Vesting . + +(a) On each Vesting Date listed on your Award Statement, you will become +Vested in the amount and type of RSUs listed next to that date. + +(b) When an RSU becomes Vested, it means only that your continued active +Employment is not required for delivery of that portion of RSU Shares. +Vesting does not mean you have a non-forfeitable right to the Vested portion +of your Award. The terms of this Award Agreement (including conditions to +delivery and any applicable Transfer Restrictions) continue to apply to Vested +RSUs, and you can still forfeit Vested RSUs and any RSU Shares. + +D ELIVERY OF YOUR RSU SHARES + +6. Delivery . Reasonably promptly (but no more than 30 Business +Days) after each Delivery Date listed on your Award Statement, RSU Shares +(less applicable withholding as described in Paragraph 13(a)) will be +delivered (by book entry credit to your Account) in respect of the amount of +Outstanding RSUs listed next to that date. The Committee or the SIP Committee +may select multiple dates within the 30-Business-Day period following the +Delivery Date to deliver RSU Shares in respect of all or a portion of the RSUs +with the same Delivery Date listed on the Award Statement, and all such dates +will be treated as a single Delivery Date for purposes of this Award. Until +such delivery, you have only the rights of a general unsecured creditor, and +no rights as a shareholder of GS Inc. Without limiting the Committee's +authority under Section 1.3.2(h) of the Plan, the Firm may accelerate any +Delivery Date by up to 30 days. + +T RANSFER RESTRICTIONS FOLLOWING DELIVERY + +7. Transfer Restrictions and Shares at Risk . + +(a) percent of the RSU Shares that are delivered on any date will be +Shares at Risk subject to Transfer Restrictions until the [applicable] +Transferability Date [listed on your Award Statement]. + +(b) Purported Transactions that Violate the Transfer Restrictions Are Void. +Any purported sale, exchange, transfer, assignment, pledge, hypothecation, +fractionalization, hedge or other disposition in violation of the Transfer +Restrictions on Shares at Risk will be void. + +(c) Removal of Transfer Restrictions. Within 30 Business Days after the +applicable Transferability Date (or any other date on which the Transfer +Restrictions are to be removed), GS Inc. will remove the Transfer +Restrictions. The Committee or the SIP Committee may select multiple dates +within such 30-Business-Day period on which to remove Transfer Restrictions +for all or a portion of the Shares at Risk with the same Transferability Date, +and all such dates will be treated as a single Transferability Date for +purposes of this Award. + +D IVIDENDS + +8. [Dividend Equivalent Rights and] Dividends . [Each RSU includes +a Dividend Equivalent Right, which entitles you to receive an amount (less +applicable withholding), at or after the time of distribution of any regular +cash dividend paid by GS Inc. in respect of a share of Common Stock, equal to +any regular cash dividend payment that would have been made in respect of an +RSU Share underlying your Outstanding RSUs for any record date that occurs on +or after the Date of Grant. In addition,] [y][Y]ou will be entitled to receive +on a current basis any regular cash dividend paid in respect of your Shares at +Risk. [The RSUs do not include Dividend Equivalent Rights.] + +F ORFEITURE OF YOUR AWARD + +9. How You May Forfeit Your Award . This Paragraph 9 sets forth the +events that result in forfeiture of up to all of your RSUs and Shares at Risk +and may require repayment to the Firm of up to all other amounts previously +delivered or paid to you under your Award in accordance with Paragraph 10. +More than one event may apply, and in no case will the occurrence of one event +limit the forfeiture and repayment obligations as a result of the occurrence +of any other event. In addition, the Firm reserves the right to (a) suspend +vesting of Outstanding RSUs, [payments under Dividend Equivalent Rights,] +delivery of RSU Shares or release of Transfer Restrictions, (b) deliver any +RSU Shares[,] [or] dividends [or payments under Dividend Equivalent Rights] +into an escrow account in accordance with Paragraph + +13(f)(v) or (c) apply Transfer Restrictions to any RSU Shares in connection +with any investigation of whether any of the events that result in forfeiture +under the Plan or this Paragraph 9 have occurred. Paragraph 11 (relating to +certain circumstances under which you will not forfeit your unvested RSUs upon +Employment termination) and Paragraph 12 (relating to certain circumstances +under which vesting, delivery and/or release of Transfer Restrictions may be +accelerated) provide for exceptions to one or more provisions of this +Paragraph 9. [[Each of] The [U.K. Material Risk Taker Appendix] [and the] +[GSBE Material Risk Taker Appendix] supplements this Paragraph 9 and sets +forth additional events that result in forfeiture of up to all of your RSUs +and may require repayment to the Firm as described in Paragraph 10 [and][,] +the [U.K. Material Risk Taker Appendix] [and the] [GSBE Material Risk Taker +Appendix].] + +(a) Unvested RSUs Forfeited if Your Employment Terminates. If your +Employment terminates for any reason or you are otherwise no longer actively +Employed with the Firm (which includes off-premises notice periods, "garden +leaves," pay in lieu of notice or any other similar status), your rights to +your Outstanding RSUs that are not Vested will terminate, and no RSU Shares +will be delivered in respect of such RSUs. + +(b) Vested and Unvested[ Base and Additional Base] RSUs Forfeited Upon +Certain Events. If any of the following occurs before the applicable Delivery +Date, your rights to all of your Outstanding[ Base and Additional Base] RSUs +(whether or not Vested) will terminate, and no RSU Shares will be delivered in +respect of such RSUs: + +(i) You Solicit Clients or Employees, Interfere with Client or Employee +Relationships or Participate in the Hiring of Employees. Either: + +(A) you, in any manner, directly or indirectly, (1) Solicit any Client to +transact business with a Covered Enterprise or to reduce or refrain from doing +any business with the Firm, (2) interfere with or damage (or attempt to +interfere with or damage) any relationship between the Firm and any Client, +(3) Solicit any person who is an employee of the Firm to resign from the Firm, +(4) Solicit any Selected Firm Personnel to apply for or accept employment (or +other association) with any person or entity other than the Firm or (5) +participate in the hiring of any Selected Firm Personnel by any person or +entity other than the Firm (including, without limitation, participating in +the identification of individuals for potential hire, and participating in any +hiring decision), whether as an employee or consultant or otherwise, or + +(B) Selected Firm Personnel are Solicited, hired or accepted into partnership, +membership or similar status by any entity where you have, or will have, +direct or indirect managerial responsibility for such Selected Firm Personnel, +unless the Committee determines that you were not involved in such +Solicitation, hiring or acceptance. + +(ii) [GS Inc. Fails to Maintain the Minimum Tier 1 Capital Ratio. GS Inc. +fails to maintain the required "Minimum Tier 1 Capital Ratio" as defined under +Federal Reserve Board Regulations applicable to GS Inc. for a period of 90 +consecutive business days.] + +(iii) [GS Inc. Is Determined to Be in Default. The Board of Governors of the +Federal Reserve or the Federal Deposit Insurance Corporation (the "FDIC") +makes a written recommendation under Title II (Orderly Liquidation Authority) +of the Dodd-Frank Wall Street Reform and Consumer Protection Act for the +appointment of the FDIC as a receiver of GS Inc. based on a determination that +GS Inc. is "in default" or "in danger of default."] + +(c) Vested and Unvested[ Base, Additional Base and Supplemental] RSUs and +Shares at Risk Forfeited upon Certain Events. If any of the following occurs +(i) your rights to all + +of your Outstanding RSUs (whether or not Vested) will terminate, and no RSU +Shares will be delivered in respect of such RSUs and (ii) your rights to all +of your Shares at Risk will terminate and your Shares at Risk will be +cancelled, in each case, as may be further described below: + +(i) You Failed to Consider Risk. You Failed to Consider Risk during . + +(ii) Your Conduct Constitutes Cause. Any event that constitutes Cause +[(including, for the avoidance of doubt, "Serious Misconduct" as defined in +the U.K. Material Risk Taker Appendix)] has occurred before the applicable +Delivery Date for RSUs or the applicable Transferability Date for Shares at +Risk. + +(iii) You Do Not Meet Your Obligations to the Firm. The Committee determines +that, before the applicable Delivery Date for RSUs or the applicable +Transferability Date for Shares at Risk, you failed to meet, in any respect, +any obligation under any agreement with the Firm, or any agreement entered +into in connection with your Employment or this Award, including the Firm's +notice period requirement applicable to you, any offer letter, employment +agreement or any shareholders' agreement relating to the Firm. Your failure to +pay or reimburse the Firm, on demand, for any amount you owe to the Firm will +constitute (A) failure to meet an obligation you have under an agreement, +regardless of whether such obligation arises under a written agreement, and/or +(B) a material violation of Firm policy constituting Cause. + +(iv) You Do Not Provide Timely Certifications or Comply with Your +Certifications. You fail to certify to GS Inc. that you have complied with +all of the terms of the Plan and this Award Agreement, or the Committee +determines that you have failed to comply with a term of the Plan or this +Award Agreement to which you have certified compliance. + +(v) You Do Not Follow Dispute Resolution/Arbitration Procedures. You attempt +to have any dispute under the Plan or this Award Agreement resolved in any +manner that is not provided for by Paragraph 16 or Section 3.17 of the Plan, +or you attempt to arbitrate a dispute without first having exhausted your +internal administrative remedies in accordance with Paragraph 13(f)(viii). + +(vi) You Bring an Action that Results in a Determination that Any Award +Agreement Term Is Invalid. As a result of any action brought by you, it is +determined that any term of this Award Agreement is invalid. + +(vii) You Receive Compensation in Respect of Your Award from Another +Employer. Your Employment terminates for any reason or you otherwise are no +longer actively Employed with the Firm and another entity grants you cash, +equity or other property (whether vested or unvested) to replace, substitute +for or otherwise in respect of any Outstanding RSUs or Shares at Risk; +provided , however , that your rights will only be terminated in respect +of the RSUs and Shares at Risk that are replaced, substituted for or otherwise +considered by such other entity in making its grant. + +R EPAYMENT OF YOUR AWARD + +10. When You May Be Required to Repay Your Award . If the Committee +determines that any term of this Award was not satisfied, you will be +required, immediately upon demand therefor, to repay to the Firm the +following: + +(a) Any RSU Shares (which, for the avoidance of doubt, includes any Shares at +Risk) for which the terms (including the terms for delivery) of the related +RSUs were not satisfied, in accordance with Section 2.6.3 of the Plan. + +(b) Any Shares at Risk for which the terms (including the terms for the +release of Transfer Restrictions) were not satisfied, in accordance with +Section 2.5.3 of the Plan. + +(c) Any RSU Shares that were delivered (but not subject to Transfer +Restrictions) at the same time any Shares at Risk that are cancelled or +required to be repaid were delivered. + +(d) [Any payments under Dividend Equivalent Rights for which the terms were +not satisfied (including any such payments made in respect of RSUs that are +forfeited or RSU Shares that are cancelled or required to be repaid), in +accordance with Section 2.8.3 of the Plan.] + +(e) Any dividends paid in respect of any RSU Shares that are cancelled or +required to be repaid. + +(f) Any amount applied to satisfy tax withholding or other obligations with +respect to any RSUs, RSU Shares[,] [and] dividend payments [and payments under +Dividend Equivalent Rights] that are forfeited or required to be repaid. + +E XCEPTIONS TO THE VESTING, DELIVERY AND/OR TRANSFERABILITY DATES + +11. Circumstances Under Which You Will Not Forfeit Your Unvested RSUs on +Employment Termination (but the Original Delivery Date and Transferability +Date Continue to Apply) . If your Employment terminates at a time when +you meet the requirements for Extended Absence, Retirement, "downsizing" or +Approved Termination, each as described below, then Paragraph 9(a) will not +apply, and your Outstanding RSUs will be treated as described in this +Paragraph 11. All other terms of this Award Agreement, including the other +forfeiture and repayment events in Paragraphs 9 and 10, continue to apply. + +(a) Extended Absence or Retirement and No Association With a Covered +Enterprise. + +(i) Generally. If your Employment terminates by Extended Absence or +Retirement, your Outstanding RSUs that are not Vested will become Vested. +However, your rights to any Outstanding RSU that becomes Vested by this +Paragraph 11(a)(i) will terminate and no RSU Share will be delivered in +respect of that RSU if you Associate With a Covered Enterprise on or before +the originally scheduled Vesting Date for that RSU. + +(ii) Special Treatment for Involuntary or Mutual Agreement Termination. The +second sentence of Paragraph 11(a)(i) (each relating to forfeiture if you +Associate With a Covered Enterprise) will not apply if (A) the Firm +characterizes your Employment termination as "involuntary" or by "mutual +agreement" (and, in each case, you have not engaged in conduct constituting +Cause) and (B) you execute a general waiver and release of claims and an +agreement to pay any associated tax liability, in each case, in the form the +Firm prescribes. No Employment termination that you initiate, including any +purported "constructive termination," a "termination for good reason" or +similar concepts, can be "involuntary" or by "mutual agreement." + +(b) Downsizing. If (i) the Firm terminates your Employment solely by reason +of a "downsizing" (and you have not engaged in conduct constituting Cause) and +(ii) you execute a general waiver and release of claims and an agreement to +pay any associated tax liability, in each + +case, in the form the Firm prescribes, your Outstanding RSUs that are not yet +Vested will become Vested. Whether or not your Employment is terminated solely +by reason of a "downsizing" will be determined by the Firm in its sole +discretion. + +(c) Approved Terminations of Fixed-Term Employees. If the Firm classifies +you as a "fixed-term" employee and your Employment terminates solely by reason +of an Approved Termination (and you have not engaged in conduct constituting +Cause), your Outstanding RSUs that are not yet Vested will become Vested. + +12. Accelerated Vesting, Delivery and/or Release of Transfer Restrictions +in the Event of a Qualifying Termination After a Change in Control, Conflicted +Employment or Death . In the event of your Qualifying Termination After +a Change in Control, Conflicted Employment or death, each as described below, +then Paragraph 9(a) will not apply, your Outstanding RSUs and Shares at Risk +will be treated as described in this Paragraph 12, and, except as set forth in +Paragraph 12(a), all other terms of this Award Agreement, including the other +forfeiture and repayment events in Paragraphs 9 and 10, continue to apply. + +(a) You Have a Qualifying Termination After a Change in Control. If your +Employment terminates when you meet the requirements of a Qualifying +Termination After a Change in Control, the RSU Shares underlying your +Outstanding RSUs (whether or not Vested) will be delivered, and any Transfer +Restrictions will cease to apply. In addition, the forfeiture events in +Paragraph 9 will not apply to your Award. + +(b) You Are Determined to Have Accepted Conflicted Employment. + +(i) Generally. Notwithstanding anything to the contrary in the Plan or +otherwise, for purposes of this Award Agreement, "Conflicted Employment" means +your employment at any U.S. Federal, state or local government, any non-U.S. +government, any supranational or international organization, any self- +regulatory organization, or any agency or instrumentality of any such +government or organization, or any other employer (other than an "Accounting +Firm" within the meaning of SEC Rule 2-01(f)(2) of Regulation S-X or any +successor thereto) determined by the Committee, if, as a result of such +employment, your continued holding of any Outstanding RSUs and Shares at Risk +would result in an actual or perceived conflict of interest. Unless prohibited +by applicable law or regulation, the following will apply as soon as +practicable after the Committee has received satisfactory documentation +relating to your Conflicted Employment. + +(A) Vesting. If your Employment terminates solely because you resign to +accept Conflicted Employment and you have completed at least three years of +continuous service with the Firm, your Outstanding RSUs will Vest; otherwise, +you will forfeit any Outstanding RSUs that are not Vested in accordance with +Paragraph 9(a). + +(B) Delivery and Release of Transfer Restrictions. If your Employment +terminates solely because you resign to accept Conflicted Employment or if, +following your termination of Employment, you notify the Firm that you are +accepting Conflicted Employment, RSU Shares will be delivered in respect of +your Outstanding Vested RSUs (including in the form of cash as described in +Paragraph 13(b)) and any Transfer Restrictions will cease to apply. + +(ii) You May Have to Take Other Steps to Address Conflicts of Interest. The +Committee retains the authority to exercise its rights under the Award +Agreement or the Plan + +(including Section 1.3.2 of the Plan) to take or require you to take other +steps it determines in its sole discretion to be necessary or appropriate to +cure an actual or perceived conflict of interest (which may include a +determination that the accelerated vesting, delivery and/or release of +Transfer Restrictions described in Paragraph 12(b)(i) will not apply because +such actions are not necessary or appropriate to cure an actual or perceived +conflict of interest). + +(c) Death. If you die, the RSU Shares underlying your Outstanding RSUs +(whether or not Vested) will be delivered to the representative of your estate +and any Transfer Restrictions will cease to apply as soon as practicable after +the date of death and after such documentation as may be requested by the +Committee is provided to the Committee. + +O THER TERMS, CONDITIONS AND AGREEMENTS + +13. Additional Terms, Conditions and Agreements . + +(a) You Must Satisfy Applicable Tax Withholding Requirements. Delivery of +RSU Shares is conditioned on your satisfaction of any applicable withholding +taxes in accordance with Section 3.2 of the Plan, which includes the Firm +deducting or withholding amounts from any payment or distribution to you. In +addition, to the extent permitted by applicable law, the Firm, in its sole +discretion, may require you to provide amounts equal to all or a portion of +any Federal, state, local, foreign or other tax obligations imposed on you or +the Firm in connection with the grant, Vesting or delivery of this Award by +requiring you to choose between remitting the amount (i) in cash (or through +payroll deduction or otherwise) or (ii) in the form of proceeds from the +Firm's executing a sale of RSU Shares delivered to you under this Award. In no +event, however, does this Paragraph 13(a) give you any discretion to determine +or affect the timing of the delivery of RSU Shares or the timing of payment of +tax obligations. + +(b) Firm May Deliver Cash or Other Property Instead of RSU Shares. In +accordance with Section 1.3.2(i) of the Plan, in the sole discretion of the +Committee, in lieu of all or any portion of the RSU Shares, the Firm may +deliver cash, other securities, other awards under the Plan or other property, +and all references in this Award Agreement to deliveries of RSU Shares will +include such deliveries of cash, other securities, other awards under the Plan +or other property. + +(c) Amounts May Be Rounded to Avoid Fractional Shares. RSUs that become +Vested on a Vesting Date, RSU Shares that become deliverable on a Delivery +Date and RSU Shares subject to Transfer Restrictions may, in each case, be +rounded to avoid fractional Shares. + +(d) You May Be Required to Become a Party to the Shareholders' Agreement. +Your rights to your RSUs are conditioned on your becoming a party to any +shareholders' agreement to which other similarly situated employees ( e.g., +employees with a similar title or position) of the Firm are required to be a +party. + +(e) Firm May Affix Legends and Place Stop Orders on Restricted RSU Shares. +GS Inc. may affix to Certificates representing RSU Shares any legend that the +Committee determines to be necessary or advisable (including to reflect any +restrictions to which you may be subject under a separate agreement). GS Inc. +may advise the transfer agent to place a stop order against any legended RSU +Shares. + +(f) You Agree to Certain Consents, Terms and Conditions. By accepting this +Award you understand and agree that: + +(i) You Agree to Certain Consents as a Condition to the Award. You have +expressly consented to all of the items listed in Section 3.3.3(d) of the +Plan, including the Firm's supplying to any third-party recordkeeper of the +Plan or other person such personal information of yours as the Committee deems +advisable to administer the Plan, and you agree to provide any additional +consents that the Committee determines to be necessary or advisable; + +(ii) You Are Subject to the Firm's Policies, Rules and Procedures. You are +subject to the Firm's policies in effect from time to time concerning trading +in RSU Shares and hedging or pledging RSU Shares and equity-based compensation +or other awards (including, without limitation, the "Firmwide Policy with +Respect to Personal Transactions Involving GS Securities and GS Equity Awards" +or any successor policies), and confidential or proprietary information, and +you will effect sales of RSU Shares in accordance with such rules and +procedures as may be adopted from time to time (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); + +(iii) You Are Responsible for Costs Associated with Your Award. You will be +responsible for all brokerage costs and other fees or expenses associated with +your RSUs, including those related to the sale of RSU Shares; + +(iv) You Will Be Deemed to Represent Your Compliance with All the Terms of +Your Award if You Accept Delivery of, or Sell, RSU Shares. You will be deemed +to have represented and certified that you have complied with all of the terms +of the Plan and this Award Agreement when RSU Shares are delivered to you[, +you receive payment in respect of Dividend Equivalent Rights] and you request +the sale of RSU Shares following the release of Transfer Restrictions; + +(v) Firm May Deliver Your Award into an Escrow Account. The Firm may +establish and maintain an escrow account on such terms (which may include your +executing any documents related to, and your paying for any costs associated +with, such account) as it may deem necessary or appropriate, and the delivery +of RSU Shares (including Shares at Risk) or the payment of cash (including +dividends [and payments under Dividend Equivalent Rights]) or other property +may initially be made into and held in that escrow account until such time as +the Committee has received such documentation as it may have requested or +until the Committee has determined that any other conditions or restrictions +on delivery of RSU Shares, cash or other property required by this Award +Agreement have been satisfied; + +(vi) You May Be Required to Certify Compliance with Award Terms; You Are +Responsible for Providing the Firm with Updated Address and Contact +Information After Your Departure from the Firm. If your Employment terminates +while you continue to hold RSUs or Shares at Risk, from time to time, you may +be required to provide certifications of your compliance with all of the terms +of the Plan and this Award Agreement as described in Paragraph 9(c)(iv). You +understand and agree that (A) your address on file with the Firm at the time +any certification is required will be deemed to be your current address, (B) +it is your responsibility to inform the Firm of any changes to your address to +ensure timely receipt of the certification materials, (C) you are responsible +for contacting the Firm to obtain such certification materials if not received +and (D) your failure to return properly completed certification materials by +the specified deadline (which includes your failure to timely return the +completed certification because you did not provide the Firm with updated +contact information) will result in the forfeiture of all of your RSUs and +Shares at Risk and subject previously delivered amounts to repayment under +Paragraph 9(c)(iv); + +(vii) You Authorize the Firm to Register, in Its or Its Designee's Name, Any +Shares at Risk and Sell, Assign or Transfer Any Forfeited Shares at Risk. You +are granting to the Firm the full power and authority to register any Shares +at Risk in its or its designee's name and authorizing the Firm or its designee +to sell, assign or transfer any Shares at Risk if you forfeit your Shares at +Risk; + +(viii) You Must Comply with Applicable Deadlines and Procedures to Appeal +Determinations Made by the Committee, the SIP Committee or SIP +Administrators. If you disagree with a determination made by the Committee, +the SIP Committee, the SIP Administrators, or any of their delegates or +designees and you wish to appeal such determination, you must submit a written +request to the SIP Committee for review within 180 days after the +determination at issue. You must exhaust your internal administrative remedies +( i.e. , submit your appeal and wait for resolution of that appeal) before +seeking to resolve a dispute through arbitration pursuant to Paragraph 16 and +Section 3.17 of the Plan; and + +(ix) You Agree that Covered Persons Will Not Have Liability. In addition to +and without limiting the generality of the provisions of Section 1.3.5 of the +Plan, neither the Firm nor any Covered Person will have any liability to you +or any other person for any action taken or omitted in respect of this or any +other Award. + +14. Non-transferability . Except as otherwise may be provided in +this Paragraph 14 or as otherwise may be provided by the Committee, the +limitations on transferability set forth in Section 3.5 of the Plan will apply +to this Award. Any purported transfer or assignment in violation of the +provisions of this Paragraph 14 or Section 3.5 of the Plan will be void. The +Committee may adopt procedures pursuant to which some or all recipients of +RSUs may transfer some or all of their RSUs and/or Shares at Risk (which will +continue to be subject to Transfer Restrictions until the applicable +Transferability Date) through a gift for no consideration to any immediate +family member, a trust or other estate planning vehicle approved by the +Committee or SIP Committee in which the recipient and/or the recipient's +immediate family members in the aggregate have 100% of the beneficial +interest. + +15. Right of Offset . Except as provided in Paragraph 18([g][h]), +the obligation to deliver RSU Shares, to pay dividends [or payments under +Dividend Equivalent Rights] or to remove the Transfer Restrictions under this +Award Agreement is subject to Section 3.4 of the Plan, which provides for the +Firm's right to offset against such obligation any outstanding amounts you owe +to the Firm and any amounts the Committee deems appropriate pursuant to any +tax equalization policy or agreement. + +A RBITRATION, CHOICE OF FORUM AND GOVERNING LAW + +16. Arbitration; Choice of Forum . + +(a) B Y ACCEPTING THIS AWARD, YOU ARE INDICATING THAT YOU UNDERSTAND AND +AGREE THAT THE ARBITRATION AND CHOICE OF FORUM PROVISIONS SET FORTH IN SECTION +3.17 OF THE PLAN WILL APPLY TO THIS AWARD. THESE PROVISIONS, WHICH ARE +EXPRESSLY INCORPORATED HEREIN BY REFERENCE, PROVIDE AMONG OTHER THINGS THAT +ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN THE FIRM AND YOU ARISING OUT OF OR +RELATING TO OR CONCERNING THE PLAN OR THIS AWARD AGREEMENT WILL BE FINALLY +SETTLED BY ARBITRATION IN NEW YORK CITY, PURSUANT TO THE TERMS MORE FULLY SET +FORTH IN SECTION 3.17 OF THE PLAN; PROVIDED THAT NOTHING HEREIN SHALL PRECLUDE +YOU FROM FILING A CHARGE WITH OR PARTICIPATING IN ANY INVESTIGATION OR +PROCEEDING CONDUCTED BY ANY GOVERNMENTAL AUTHORITY, INCLUDING BUT NOT + +LIMITED TO THE SEC, THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AND A STATE +OR LOCAL HUMAN RIGHTS AGENCY, AS WELL AS LAW ENFORCEMENT. + +(b) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider class, collective or representative claims, to order +consolidation or to join different claimants or grant relief other than on an +individual basis to the individual claimant involved. + +(c) Notwithstanding any applicable forum rules to the contrary, to the extent +there is a question of enforceability of this Award Agreement arising from a +challenge to the arbitrator's jurisdiction or to the arbitrability of a claim, +it will be decided by a court and not an arbitrator. + +(d) The Federal Arbitration Act governs interpretation and enforcement of all +arbitration provisions under the Plan and this Award Agreement, and all +arbitration proceedings thereunder. + +(e) Nothing in this Award Agreement creates a substantive right to bring a +claim under U.S. Federal, state, or local employment laws. + +(f) By accepting your Award, you irrevocably appoint each General Counsel of +GS Inc., or any person whom the General Counsel of GS Inc. designates, as your +agent for service of process in connection with any suit, action or proceeding +arising out of or relating to or concerning the Plan or any Award which is not +arbitrated pursuant to the provisions of Section 3.17.1 of the Plan, who shall +promptly advise you of any such service of process. + +(g) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider any claim as to which you have not first exhausted +your internal administrative remedies in accordance with Paragraph +13(f)(viii). + +17. Governing Law . T HIS AWARD WILL BE GOVERNED BY AND CONSTRUED +IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO +PRINCIPLES OF CONFLICT OF LAWS. + +C ERTAIN TAX PROVISIONS + +18. Compliance of Award Agreement and Plan with Section + +409A . The provisions of this Paragraph 18 apply to you only if you +are a U.S. taxpayer. + +(a) This Award Agreement and the Plan provisions that apply to this Award are +intended and will be construed to comply with Section 409A (including the +requirements applicable to, or the conditions for exemption from treatment as, +409A Deferred Compensation), whether by reason of short-term deferral +treatment or other exceptions or provisions. The Committee will have full +authority to give effect to this intent. To the extent necessary to give +effect to this intent, in the case of any conflict or potential inconsistency +between the provisions of the Plan (including Sections 1.3.2 and 2.1 thereof) +and this Award Agreement, the provisions of this Award Agreement will govern, +and in the case of any conflict or potential inconsistency between this +Paragraph 18 and the other provisions of this Award Agreement, this Paragraph +18 will govern. + +(b) Delivery of RSU Shares will not be delayed beyond the date on which all +applicable conditions or restrictions on delivery of RSU Shares required by +this Agreement + +(including those specified in Paragraphs 6, 7, 11(a)(ii), 11(b), 12(c) and 13 +and the consents and other items specified in Section 3.3 of the Plan) are +satisfied. To the extent that any portion of this Award is intended to satisfy +the requirements for short-term deferral treatment under Section 409A, +delivery for such portion will occur by the March 15 coinciding with the last +day of the applicable "short-term deferral" period described in Reg. +1.409A-1(b)(4) in order for the delivery of RSU Shares to be within the short- +term deferral exception unless, in order to permit all applicable conditions +or restrictions on delivery to be satisfied, the Committee elects, pursuant to +Reg. 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted in accordance with +Section 409A, to delay delivery of RSU Shares to a later date within the same +calendar year or to such later date as may be permitted under Section 409A, +including Reg. 1.409A-3(d). For the avoidance of doubt, if the Award includes +a "series of installment payments" as described in Reg. 1.409A-2(b)(2)(iii), +your right to the series of installment payments will be treated as a right to +a series of separate payments and not as a right to a single payment. + +(c) Notwithstanding the provisions of Paragraph 13(b) and Section 1.3.2(i) of +the Plan, to the extent necessary to comply with Section 409A, any securities, +other Awards or other property that the Firm may deliver in respect of your +RSUs will not have the effect of deferring delivery or payment, income +inclusion, or a substantial risk of forfeiture, beyond the date on which such +delivery, payment or inclusion would occur or such risk of forfeiture would +lapse, with respect to the RSU Shares that would otherwise have been +deliverable (unless the Committee elects a later date for this purpose +pursuant to Reg. 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted under +Section 409A, including and to the extent applicable, the subsequent election +provisions of Section 409A(a)(4)(C) of the Code and Reg. 1.409A-2(b)). + +(d) Notwithstanding the timing provisions of Paragraph 12(c), the delivery of +RSU Shares referred to therein will be made after the date of death and during +the calendar year that includes the date of death (or on such later date as +may be permitted under Section 409A). + +(e) The timing of delivery or payment pursuant to Paragraph 12(a) will occur +on the earlier of (i) the Delivery Date or (ii) a date that is within the +calendar year in which the termination of Employment occurs; provided , +however , that, if you are a "specified employee" (as defined by the Firm in +accordance with Section 409A(a)(2)(i)(B) of the Code), delivery will occur on +the earlier of the Delivery Date or (to the extent required to avoid the +imposition of additional tax under Section 409A) the date that is six months +after your termination of Employment (or, if the latter date is not during a +Window Period, the first trading day of the next Window Period). For purposes +of Paragraph 12(a), references in this Award Agreement to termination of +Employment mean a termination of Employment from the Firm (as defined by the +Firm) which is also a separation from service (as defined by the Firm in +accordance with Section 409A). + +(f) [Notwithstanding any provision of Paragraph 8 or Section 2.8.2 of the Plan +to the contrary, the Dividend Equivalent Rights with respect to each of your +Outstanding RSUs will be paid to you within the calendar year that includes +the date of distribution of any corresponding regular cash dividends paid by +GS Inc. in respect of a share of Common Stock the record date for which occurs +on or after the Date of Grant. The payment will be in an amount (less +applicable withholding) equal to such regular dividend payment as would have +been made in respect of the RSU Shares underlying such Outstanding RSUs.] + +(g) The timing of delivery or payment referred to in Paragraph 12(b)(i) will +be the earlier of (i) the Delivery Date or (ii) a date that is within the +calendar year in which the Committee receives satisfactory documentation +relating to your Conflicted Employment, + +provided that such delivery or payment will be made, and any Committee +action referred to in Paragraph 12(b)(ii) will be taken, only at such time as, +and if and to the extent that it, as reasonably determined by the Firm, would +not result in the imposition of any additional tax to you under Section 409A. + +(h) Paragraph 15 and Section 3.4 of the Plan will not apply to Awards that are +409A Deferred Compensation except to the extent permitted under Section 409A. + +(i) Delivery of RSU Shares in respect of any Award may be made, if and to the +extent elected by the Committee, later than the Delivery Date or other date or +period specified hereinabove (but, in the case of any Award that constitutes +409A Deferred Compensation, only to the extent that the later delivery is +permitted under Section 409A). + +(j) You understand and agree that you are solely responsible for the payment +of any taxes and penalties due pursuant to Section 409A, but in no event will +you be permitted to designate, directly or indirectly, the taxable year of the +delivery. + +C OMMITTEE AUTHORITY, AMENDMENT, CONSTRUCTION AND REGULATORY REPORTING + +19. Committee Authority . The Committee has the authority to +determine, in its sole discretion, that any event triggering forfeiture or +repayment of your Award will not apply, to limit the forfeitures and +repayments that result under Paragraphs 9 and 10 and to remove Transfer +Restrictions before the applicable Transferability Date. In addition, the +Committee, in its sole discretion, may determine whether Paragraphs 11(a)(ii) +and 11(b) will apply upon a termination of Employment and whether a +termination of Employment constitutes an Approved Termination under Paragraph +11(c). + +20. Amendment . The Committee reserves the right at any time to +amend the terms of this Award Agreement, and the Board may amend the Plan in +any respect; provided that, notwithstanding the foregoing and Sections +1.3.2(f), 1.3.2(h) and 3.1 of the Plan, no such amendment will materially +adversely affect your rights and obligations under this Award Agreement +without your consent; and provided further that the Committee expressly +reserves its rights to amend the Award Agreement and the Plan as described in +Sections 1.3.2(h)(1), (2) and (4) of the Plan. A modification that impacts the +tax consequences of this Award or the timing of delivery of RSU Shares will +not be an amendment that materially adversely affects your rights and +obligations under this Award Agreement. Any amendment of this Award Agreement +will be in writing. + +21. Construction, Headings . Unless the context requires otherwise, +(a) words describing the singular number include the plural and vice versa, +(b) words denoting any gender include all genders and (c) the words "include," +"includes" and "including" will be deemed to be followed by the words "without +limitation." The headings in this Award Agreement are for the purpose of +convenience only and are not intended to define or limit the construction of +the provisions hereof. References in this Award Agreement to any specific Plan +provision will not be construed as limiting the applicability of any other +Plan provision. + +22. Providing Information to the Appropriate Authorities . In +accordance with applicable law, nothing in this Award Agreement (including the +forfeiture and repayment provisions in Paragraphs 9 and 10) or the Plan +prevents you from providing information you reasonably believe to be true to +the appropriate governmental authority, including a regulatory, judicial, +administrative, or other governmental entity; reporting possible violations of +law or regulation; making other disclosures that are protected under any +applicable law or regulation; or filing a charge or participating in any +investigation or proceeding conducted by a governmental authority. For the +avoidance of doubt, governmental authority + +includes federal, state and local government agencies such as the SEC, the +Equal Employment Opportunity Commission and any state or local human rights +agency ( e.g. , the New York State Division of Human Rights, the New York +City Commission on Human Rights, the California Department of Fair Employment +and Housing), as well as law enforcement. + +IN WITNESS WHEREOF , GS Inc. has caused this Award Agreement to be duly +executed and delivered as of the Date of Grant. + +THE GOLDMAN SACHS GROUP, INC. + +[ U.K. M ATERIAL RISK TAKER APPENDIX + +This Appendix supplements Paragraph 9 and sets forth additional events that +result in forfeiture of up to all of your RSUs and Shares at Risk and may +require repayment to the Firm of up to all other amounts previously delivered +or paid to you under your Award in accordance with Paragraph 10. As with the +events described in Paragraph 9, more than one event may apply, in no case +will the occurrence of one event limit the forfeiture and repayment +obligations as a result of the occurrence of any other event and the Firm +reserves the right to (a) suspend vesting of Outstanding RSUs, delivery of RSU +Shares or release of Transfer Restrictions, (b) deliver any RSU Shares or +dividends into an escrow account in accordance with Paragraph 13(f)(v) or (c) +apply Transfer Restrictions to any RSU Shares in connection with any +investigation of whether any of the events that result in forfeiture under +this Appendix have occurred. + +With respect to the events described in this Appendix, the Committee will +consider certain factors to determine whether and what portion of your Award +will terminate, including the reason for the "Loss Event" (as defined below) +or "Risk Event" (as defined below) and the extent to which: (1) you +participated in the Loss Event or Risk Event, (2) your compensation for + may or may not have been adjusted to take into account the risk +associated with the Loss Event, Risk Event, your "Serious Misconduct" (as +defined below) or the Serious Misconduct of a "Supervised Employee" (as +defined below) and (3) your compensation may be adjusted for the year in which +the Loss Event, Risk Event, your Serious Misconduct or a Supervised Employee's +Serious Misconduct is discovered. + +[Paragraphs (a), (b) and (c) of this Appendix apply to your Additional and +Supplemental RSUs. Paragraph (d) of this Appendix applies to your Additional +RSUs only and does not apply to your Supplemental RSUs.] + +(a) A Loss Event Occurs Prior to Delivery. If a Loss Event occurs prior +to the delivery of RSU Shares, your rights in respect of all or a portion of +your RSUs (whether or not Vested) which are scheduled to deliver on the next +Delivery Date immediately following the date that the Loss Event is identified +(or, if not practicable, then the next following Delivery Date) will +terminate, and no RSU Shares will be delivered in respect of such RSUs. + +(i) A " Loss Event " means (A) an annual pre-tax loss at GS Inc. or (B) +annual negative revenues in one or more reporting segments as disclosed in the +Firm's Form 10-K other than the Asset Management segment, or annual negative +revenues in the Asset Management segment of $5 billion or more, provided in +either case that you are employed in a business within such reporting segment. + +(b) A Risk Event Occurs . If a Risk Event occurs , (i) your +rights in respect of all or a portion of your RSUs (whether or not Vested) +will terminate and no RSU Shares will be delivered in respect of such RSUs, +(ii) your rights to all or a portion of any Shares at Risk will terminate and +such Shares at Risk will be cancelled and (iii) you will be obligated +immediately upon demand therefor to pay the Firm an amount not in excess of +the greater of the Fair Market Value of the RSU Shares (plus any dividend +payments) delivered in respect of the Award (without reduction for any amount +applied to satisfy tax withholding or other obligations) determined as of (A) +the date the Risk Event occurred and (B) the date that the repayment request +is made. + +(i) A " Risk Event " means there occurs a loss of 5% or more of firmwide +total capital from a reportable operational risk event determined in +accordance with the firmwide Reporting Operational Risk Events Policy. + +(c) You Engage in Serious Misconduct . If you engage in Serious +Misconduct , you will be obligated immediately upon demand +therefor to pay the Firm an amount not in excess of the greater of the Fair +Market Value of the RSU Shares (plus any dividend payments) delivered in +respect of the Award (without reduction for any amount applied to satisfy tax +withholding or other obligations) determined as of (i) the date the Serious +Misconduct occurred and (ii) the date that the repayment request is made. + +(i) " Serious Misconduct " means that you engage in conduct that the Firm +reasonably considers, in its sole discretion, to be misconduct sufficient to +justify summary termination of employment under English law. + +(d) A Supervised Employee Engages in Serious Misconduct. If the Committee +determines that it is appropriate to hold you accountable in whole or in part +for Serious Misconduct related to compliance, control or risk that occurred +during by a Supervised Employee, your rights in respect of all or a +portion of your RSUs (whether or not Vested) will terminate and no RSU Shares +will be delivered in respect of such RSUs and your rights to all or a portion +of any Shares at Risk will terminate and such Shares at Risk will be +cancelled. + +(i) " Supervised Employee " means an individual with respect to whom the +Committee determines you had supervisory responsibility as a result of direct +or indirect reporting lines or your management responsibility for an office, +division or business. + +Notwithstanding any provision in the Plan, this Award Agreement or any other +agreement or arrangement you may have with the Firm, the parties agree that to +the extent that there is any dispute arising out of or relating to the payment +required by Paragraphs (b) and (c) of this Appendix (including your refusal to +remit payment) the parties will submit to arbitration in accordance with +Paragraph 16 of this Award Agreement and Section 3.17 of the Plan as the sole +means of resolution of such dispute (including the recovery by the Firm of the +payment amount).] + +[GSBE M ATERIAL RISK TAKER APPENDIX + +This Appendix supplements Paragraph 9 and sets forth additional events that +result in forfeiture of up to all of your RSUs and Shares at Risk and may +require repayment to the Firm of up to all other amounts previously delivered +or paid to you under your Award in accordance with Paragraph 10. As with the +events described in Paragraph 9, more than one event may apply, in no case +will the occurrence of one event limit the forfeiture and repayment +obligations as a result of the occurrence of any other event and the Firm +reserves the right to (a) suspend vesting of Outstanding RSUs, delivery of RSU +Shares or release of Transfer Restrictions, (b) deliver any RSU Shares or +dividends into an escrow account in accordance with Paragraph 13(f)(v) or (c) +apply Transfer Restrictions to any RSU Shares in connection with any +investigation of whether any of the events that result in forfeiture under +this Appendix have occurred. + +With respect to the events described in this Appendix, the Committee will +consider certain factors to determine whether and what portion of your Award +will terminate, including the reason for the "Adjustment Event" (as defined +below). + +Notwithstanding any provision in the Plan, this Award Agreement or any other +agreement or arrangement you may have with the Firm, the parties agree that to +the extent that there is any dispute arising out of or relating to the payment +required by this Appendix (including your refusal to remit payment) the +parties will submit to arbitration in accordance with Paragraph 16 of this +Award Agreement and Section 3.17 of the Plan as the sole means of resolution +of such dispute (including the recovery by the Firm of the payment amount). + +(a) An Adjustment Event Occurs . If an "Adjustment Event" (as +defined below) occurs , (i) your rights in respect of all or a +portion of your RSUs (whether or not Vested) will terminate and no RSU Shares +will be delivered in respect of such RSUs, (ii) your rights to all or a +portion of any Shares at Risk will terminate and such Shares at Risk will be +cancelled, and (iii) you will be obligated immediately upon demand therefor to +pay the Firm an amount not in excess of the greater of the Fair Market Value +of the RSU Shares (plus any dividend payments) delivered in respect of the +Award (without reduction for any amount applied to satisfy tax withholding or +other obligations) determined as of (A) the date the Adjustment Event occurred +and (B) the date that the repayment request is made. + +(i) " Adjustment Event " means that one of the following has occurred: + +A. you significantly contributed to, or were responsible for, any conduct that +resulted in a loss of 0.75% or more of the total capital of GS Inc.; + +B. a material regulatory sanction for the Firm comprising one or more of the +following: + +a moratorium pursuant to sec. 46g of the German Banking Act, + +a measure in case of danger pursuant to sec. 46 of the German Banking Act, + +the revocation of appointment of a manager pursuant to sec. 36 German Banking +Act, + +a fine pursuant to sec. 56 of the German Banking Act or a + +threatened penalty payment, if the fine or penalty payment amounts to 0.75% or +more of the total capital of GS Inc., + +the cancellation of the banking permit pursuant to sec. 35 of the German +Banking Act, + +an order to increase the capital requirements Goldman Sachs Bank Europe SE +(GSBE) by at least 0.5% pursuant to sec. 10 of the German Banking Act, + +a measure in case of organizational deficiencies, + +a comparable regulatory order, or + +a material supervisory measure; or + +C. you acted in serious violation of relevant external or internal rules with +respect to suitability and conduct, provided that a violation is considered +serious if it suitable to justify a termination of employment for cause +pursuant to sec. 626 German Civil Code or a termination of employment for +misconduct pursuant to sec. 1 German Termination Protection Act. + +The determination as to whether an Adjustment Event has occurred shall be made +by the Committee in its sole discretion.] + +D EFINITIONS APPENDIX + +The following capitalized terms are used in this Award Agreement with the +following meanings: + +(a) " 409A Deferred Compensation " means a "deferral of compensation" or +"deferred compensation" as those terms are defined in the regulations under +Section 409A. + +(b) " Approved Termination " means that you are classified by the Firm as a +"fixed-term employee" and you (i) successfully complete the fixed-term +engagement, as determined by the Firm in its sole discretion, including +remaining Employed through the completion date specified by the Firm, and (ii) +terminate Employment immediately after the completion date without any "stay- +on" or other agreement or understanding to continue Employment with the Firm. +If you agree to stay with the Firm as an employee after your fixed-term +engagement ends and then later terminate Employment, you will not have an +Approved Termination. + +(c) " Associate With a Covered Enterprise " means that you (i) form, or +acquire a 5% or greater equity ownership, voting or profit participation +interest in, any Covered Enterprise or (ii) associate in any capacity +(including association as an officer, employee, partner, director, consultant, +agent or advisor) with any Covered Enterprise. Associate With a Covered +Enterprise may include, as determined in the discretion of either the +Committee or the SIP Committee, (i) becoming the subject of any publicly +available announcement or report of a pending or future association with a +Covered Enterprise and (ii) unpaid associations, including an association in +contemplation of future employment. "Association With a Covered Enterprise" +will have its correlative meaning. + +(d) " Conflicted Employment " means your employment at any U.S. Federal, +state or local government, any non-U.S. government, any supranational or +international organization, any self-regulatory organization, or any agency or +instrumentality of any such government or organization, or any other employer +(other than an "Accounting Firm" within the meaning of SEC Rule 2-01(f)(2) of +Regulation S-X or any successor thereto) determined by the Committee, if, as a +result of such employment, your continued holding of any Outstanding RSUs and +Shares at Risk would result in an actual or perceived conflict of interest. + +(e) " Covered Enterprise " means a Competitive Enterprise and any other +existing or planned business enterprise that: (i) offers, holds itself out as +offering or reasonably may be expected to offer products or services that are +the same as or similar to those offered by the Firm or that the Firm +reasonably expects to offer ("Firm Products or Services") or (ii) engages in, +holds itself out as engaging in or reasonably may be expected to engage in any +other activity that is the same as or similar to any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage +("Firm Activities"). For the avoidance of doubt, Firm Activities include any +activity that requires the same or similar skills as any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage, +irrespective of whether any such financial activity is in furtherance of an +advisory, agency, proprietary or fiduciary undertaking. + +The enterprises covered by this definition include enterprises that offer, +hold themselves out as offering or reasonably may be expected to offer Firm +Products or Services, or engage in, hold themselves out as engaging in or +reasonably may be expected to engage in Firm Activities directly, as well as +those that do so indirectly by ownership or control ( e.g. , by owning, +being owned by or by being under common ownership with an enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +Firm Products or Services or that engages in, holds itself out as engaging in +or reasonably may be expected to engage in Firm Activities). The definition of +Covered Enterprise includes, solely by way of example, any enterprise that +offers, holds itself out as offering or reasonably may be + +expected to offer any product or service, or engages in, holds itself out as +engaging in or reasonably may be expected to engage in any activity, in any +case, associated with investment banking; public or private finance; lending; +financial advisory services; private investing for anyone other than you or +your family members (including, for the avoidance of doubt, any type of +proprietary investing or trading); private wealth management; private banking; +consumer or commercial cash management; consumer, digital or commercial +banking; merchant banking; asset, portfolio or hedge fund management; +insurance or reinsurance underwriting or brokerage; property management; or +securities, futures, commodities, energy, derivatives, currency or digital +asset brokerage, sales, lending, custody, clearance, settlement or trading. An +enterprise that offers, holds itself out as offering or reasonably may be +expected to offer Firm Products or Services, or engages in, holds itself out +as engaging in or reasonably may be expected to engage in Firm Activities is a +Covered Enterprise , irrespective of whether the enterprise is a customer, +client or counterparty of the Firm or is otherwise associated with the Firm +and, because the Firm is a global enterprise, irrespective of where the +Covered Enterprise is physically located. + +(f) " Failed to Consider Risk " means that you participated (or otherwise +oversaw or were responsible for, depending on the circumstances, another +individual's participation) in the structuring or marketing of any product or +service, or participated on behalf of the Firm or any of its clients in the +purchase or sale of any security or other property, in any case without +appropriate consideration of the risk to the Firm or the broader financial +system as a whole (for example, where you have improperly analyzed such risk +or where you have failed sufficiently to raise concerns about such risk) and, +as a result of such action or omission, the Committee determines there has +been, or reasonably could be expected to be, a material adverse impact on the +Firm, your business unit or the broader financial system. + +(g) " Qualifying Termination After a Change in Control " means that the Firm +terminates your Employment other than for Cause or you terminate your +Employment for Good Reason, in each case, within 18 months following a Change +in Control. + +(h) " SEC " means the U.S. Securities and Exchange Commission. + +(i) " Selected Firm Personnel " means any individual who is or in the three +months preceding the conduct prohibited by Paragraph 9(b)(i) was (i) a Firm +employee or consultant with whom you personally worked while employed by the +Firm, (ii) a Firm employee or consultant who, at any time during the year +preceding the date of the termination of your Employment, worked in the same +division in which you worked or (iii) an Advisory Director, a Managing +Director or a Senior Advisor of the Firm. + +(j) " Shares at Risk " means RSU Shares subject to Transfer Restrictions. + +The following capitalized terms are used in this Award Agreement with the +meanings that are assigned to them in the Plan. + +(a) " Account " means any brokerage account, custody account or similar +account, as approved or required by GS Inc. from time to time, into which +shares of Common Stock, cash or other property in respect of an Award are +delivered. + +(b) " Award Agreement " means the written document or documents by which +each Award is evidenced, including any related Award Statement and signature +card. + +(c) " Award Statement " means a written statement that reflects certain +Award terms. + +(d) " Board " means the Board of Directors of GS Inc. + +(e) " 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. + +(f) " Cause " means (i) the Grantee's conviction, whether following trial or +by plea of guilty or nolo contendere (or similar plea), in a criminal +proceeding (A) on a misdemeanor charge involving fraud, false statements or +misleading omissions, wrongful taking, embezzlement, bribery, forgery, +counterfeiting or extortion, or (B) on a felony charge, or (C) on an +equivalent charge to those in clauses (A) and (B) in jurisdictions which do +not use those designations, (ii) the Grantee's engaging in any conduct which +constitutes an employment disqualification under applicable law (including +statutory disqualification as defined under the Exchange Act), (iii) the +Grantee's willful failure to perform the Grantee's duties to the Firm, (iv) +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, (v) 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, (vi) the +Grantee's engaging in any act or making any statement which impairs, impugns, +denigrates, disparages or negatively reflects upon the name, reputation or +business interests of the Firm or (vii) 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 may have under any other agreement with a Grantee or at law or +in equity. + +(g) " Certificate " means a stock certificate (or other appropriate document +or evidence of ownership) representing shares of Common Stock. + +(h) " 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 shareholders +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: (i) 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 (A) 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 (B) 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 (ii) 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 (A) were members of the +Board on the Effective Date or (B) 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). + +(i) " 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. + +(j) " Code " means the Internal Revenue Code of 1986, as amended from time +to time, and the applicable rulings and regulations thereunder. + +(k) " 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 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. + +(l) " Common Stock " means common stock of GS Inc., par value $0.01 per +share. + +(m) " Competitive Enterprise " means an existing or planned business +enterprise that (i) engages, or may reasonably be expected to engage, in any +activity; (ii) owns or controls, or may reasonably be expected to own or +control, a significant interest in any entity that engages in any activity or +(iii) is, or may reasonably be expected to be, owned by, or a significant +interest in which is, or may reasonably be expected to be, owned or controlled +by, any entity that engages in any activity that, in any case, competes or +will compete 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 (including for the avoidance of +doubt, any type of proprietary investing or trading); private wealth +management; private banking; consumer or commercial cash management; consumer, +digital or commercial banking; merchant banking; asset, portfolio or hedge +fund management; insurance or reinsurance underwriting or brokerage; property +management; or securities, futures, commodities, energy, derivatives, currency +or digital asset brokerage, sales, lending, custody, clearance, settlement or +trading. + +(n) " Covered Person " means a member of the Board or the Committee or any +employee of the Firm. + +(o) " Date of Grant " means the date specified in the Grantee's Award +Agreement as the date of grant of the Award. + +(p) " 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. + +(q) " 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. + +(r) " Effective Date " means the date this Plan is approved by the +shareholders of GS Inc. pursuant to Section 3.15 of the Plan. + +(s) " 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 +(i) 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), (ii) whether and when a change in a +Grantee's association with the Firm results in a termination of Employment and +(iii) 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. + +(t) " Exchange Act " means the Securities Exchange Act of 1934, as amended +from time to time, and the applicable rules and regulations thereunder. + +(u) " 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. + +(v) " Firm " means GS Inc. and its subsidiaries and affiliates. + +(w) " 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). + +(x) " Grantee " means a person who receives an Award. + +(y) " GS Inc. " means The Goldman Sachs Group, Inc., and any successor +thereto. + +(z) " 1999 SIP " means The Goldman Sachs 1999 Stock Incentive Plan, as in +effect prior to the effective date of the 2003 SIP. + +(aa) " 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. + +(bb) " Restricted Share " means a share of Common Stock delivered under the +Plan that is subject to Transfer Restrictions, forfeiture provisions and/or +other terms and conditions specified herein and in the Restricted Share Award +Agreement or other applicable Award Agreement. All references to Restricted +Shares include "Shares at Risk." + +(cc) " Retirement " means termination of the Grantee's Employment (other +than for Cause) on or after the Date of Grant at a time when (i) (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 60 and (B) the Grantee has +completed at least 10 years of service with the Firm (as determined by the +Committee in its sole discretion) or, if earlier, (ii) (A) the Grantee has +attained age 50 and (B) the Grantee has completed at least five years of +service with the Firm (as determined by the Committee in its sole discretion). + +(dd) " RSU " means a restricted stock unit 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. + +(ee) " RSU Shares " means shares of Common Stock that underlie an RSU. + +(ff) " Section 409A " means Section 409A of the Code, including any +amendments or successor provisions to that Section and any regulations and +other administrative guidance thereunder, in each case as they, from time to +time, may be amended or interpreted through further administrative guidance. + +(gg) " 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. + +(hh) " SIP Committee " means the persons who have been delegated certain +authority under the Plan by the Committee. + +(ii) " Solicit " means any direct or indirect communication of any kind +whatsoever, regardless of by whom initiated, inviting, advising, suggesting, +encouraging or requesting any person or entity, in any manner, to take or +refrain from taking any action. The terms "Solicited," "Soliciting" and +"Solicitation" will have their correlative meanings. + +(jj) " Transfer Restrictions " means restrictions that prohibit the sale, +exchange, transfer, assignment, pledge, hypothecation, fractionalization, +hedge or other disposal (including through the use of any cash-settled +instrument), whether voluntarily or involuntarily by the Grantee, of an Award +or any shares of Common Stock, cash or other property delivered in respect of +an Award. + +(kk) " Transferability Date " means the date Transfer Restrictions on a +Restricted Share will be released. Within 30 Business Days after the +applicable Transferability Date, GS Inc. shall take, or shall cause to be +taken, such steps as may be necessary to remove Transfer Restrictions. + +(ll) " 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. + +(mm) " 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. + +(nn) " 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). + +EX-10.44 9 d192225dex1044.htm EX-10.44 EX-10.44 + +Exhibit 10.44 + +T HE GOLDMAN SACHS GROUP, INC. + +Y EAR-END SHORT-TERM RSU AWARD + +This Award Agreement, together with The Goldman Sachs Amended and Restated +Stock Incentive Plan (2021) (the "Plan"), governs your year-end award of +Short-Term RSUs (your "Award"). You should read carefully this entire Award +Agreement, which includes the Award Statement, any attached Appendix and the +signature card. + +A CCEPTANCE + +1. You Must Decide Whether to Accept this Award Agreement . To be +eligible to receive your Award, you must by the date specified (a) +open and activate an Account and (b) agree to all the terms of your +Award by executing the related signature card in accordance with its +instructions. By executing the signature card, you confirm your agreement to + all of the terms of this Award Agreement, including the arbitration +and choice of forum provisions in Paragraph 14. + +D OCUMENTS THAT GOVERN YOUR AWARD; DEFINITIONS + +2. The Plan . Your Award is granted under the Plan, and the Plan's +terms apply to, and are a part of, this Award Agreement. + +3. Your Award Statement . The Award Statement delivered to you +contains some of your Award's specific terms. For example, it contains the +number of Short-Term RSUs awarded to you and the Delivery Date. + +4. Definitions . Unless otherwise defined herein, including in the +Definitions Appendix or any other Appendix, capitalized terms have the +meanings provided in the Plan. + +V ESTING OF YOUR RSUS + +5. Vesting . All of your Short-Term RSUs are Vested. When an RSU is +Vested, it means only that your continued active Employment is not +required for delivery of that portion of RSU Shares. Vesting does not mean +you have a non-forfeitable right to the Vested portion of your Award. The +terms of this Award Agreement (including conditions to delivery) continue to +apply to Vested Short-Term RSUs, and you can still forfeit Vested Short-Term +RSUs and any RSU Shares. + +D ELIVERY OF YOUR RSU SHARES + +6. Delivery . Reasonably promptly (but no more than 30 Business +Days) after each Delivery Date listed on your Award Statement, RSU Shares +(less applicable withholding as described in Paragraph 11(a)) will be +delivered (by book entry credit to your Account) in respect of the amount of +Outstanding Short-Term RSUs listed next to that date. The Committee or the SIP +Committee may select multiple dates within the 30-Business-Day period +following the Delivery Date to deliver RSU Shares in respect of all or a +portion of the Short-Term RSUs with the same Delivery Date listed on the Award +Statement, and all such dates will be treated as a single Delivery Date for +purposes of this Award. Until such delivery, you have only the rights of a +general unsecured creditor, and no rights as a shareholder of GS Inc. Without +limiting the Committee's authority under Section 1.3.2(h) of the Plan, the +Firm may accelerate any Delivery Date by up to 30 days. + +D IVIDENDS + +7. Dividend Equivalent Rights and Dividends . Each Short-Term RSU +includes a Dividend Equivalent Right, which entitles you to receive an amount +(less applicable withholding), at or after the time of distribution of any +regular cash dividend paid by GS Inc. in respect of a share of Common Stock, +equal to any regular cash dividend payment that would have been made in +respect of an RSU Share underlying your Outstanding Short-Term RSUs for any +record date that occurs on or after the Date of Grant. + +F ORFEITURE OF YOUR AWARD + +8. How You May Forfeit Your Award . This Paragraph 8 sets forth the +events that result in forfeiture of up to all of your Short-Term RSUs and may +require repayment to the Firm of up to all other amounts previously delivered +or paid to you under your Award in accordance with Paragraph 9. More than one +event may apply, and in no case will the occurrence of one event limit the +forfeiture and repayment obligations as a result of the occurrence of any +other event. In addition, the Firm reserves the right to (a) suspend payments +under Dividend Equivalent Rights or delivery of RSU Shares, (b) deliver any +RSU Shares, dividends or payments under Dividend Equivalent Rights into an +escrow account in accordance with Paragraph 11(f)(v) or (c) apply Transfer +Restrictions to any RSU Shares in connection with any investigation of whether +any of the events that result in forfeiture under the Plan or this Paragraph 8 +have occurred. Paragraph 10 (relating to certain circumstances under which +delivery may be accelerated) provides for exceptions to one or more provisions +of this Paragraph 8. [[Each of] The [U.K. Material Risk Taker Appendix] [and +the] [GSBE Material Risk Taker Appendix] supplements this Paragraph 8 and sets +forth additional events that result in forfeiture of up to all of your Short- +Term RSUs and may require repayment to the Firm as described in Paragraph 9 +[and][,] the [U.K. Material Risk Taker Appendix] [and the] [GSBE Material Risk +Taker Appendix].] + +(a) Short-Term RSUs Forfeited Upon Certain Events. If any of the following +occurs, your rights to all of your Outstanding Short-Term RSUs will terminate, +and no RSU Shares will be delivered in respect of such RSUs, as may be further +described below: + +(i) You Failed to Consider Risk. You Failed to Consider Risk during + +(ii) Your Conduct Constitutes Cause. Any event that constitutes Cause +[(including, for the avoidance of doubt, "Serious Misconduct" as defined in +the U.K. Material Risk Taker Appendix)] has occurred before the Delivery Date. + +(iii) You Do Not Meet Your Obligations to the Firm. The Committee determines +that, before the Delivery Date, you failed to meet, in any respect, any +obligation under any agreement with the Firm, or any agreement entered into in +connection with your Employment or this Award, including the Firm's notice +period requirement applicable to you, any offer letter, employment agreement +or any shareholders' agreement relating to the Firm. Your failure to pay or +reimburse the Firm, on demand, for any amount you owe to the Firm will +constitute (A) failure to meet an obligation you have under an agreement, +regardless of whether such obligation arises under a written agreement, and/or +(B) a material violation of Firm policy constituting Cause. + +(iv) You Do Not Provide Timely Certifications or Comply with Your +Certifications. You fail to certify to GS Inc. that you have complied with +all of the terms of the Plan and this Award Agreement, or the Committee +determines that you have failed to comply with a term of the Plan or this +Award Agreement to which you have certified compliance. + +(v) You Do Not Follow Dispute Resolution/Arbitration Procedures. You attempt +to have any dispute under the Plan or this Award Agreement resolved in any +manner that is not provided for by Paragraph 14 or Section 3.17 of the Plan, +or you attempt to arbitrate a dispute without first having exhausted your +internal administrative remedies in accordance with Paragraph 11(f)(vii). + +(vi) You Bring an Action that Results in a Determination that Any Award +Agreement Term Is Invalid. As a result of any action brought by you, it is +determined that any term of this Award Agreement is invalid. + +(vii) You Receive Compensation in Respect of Your Award from Another +Employer. Your Employment terminates for any reason or you otherwise are no +longer actively Employed with the Firm and another entity grants you cash, +equity or other property (whether vested or unvested) to replace, substitute +for or otherwise in respect of any Outstanding Short-Term RSUs; provided , +however , that your rights will only be terminated in respect of the Short- +Term RSUs that are replaced, substituted for or otherwise considered by such +other entity in making its grant. + +R EPAYMENT OF YOUR AWARD + +9. When You May Be Required to Repay Your Award . If the Committee +determines that any term of this Award was not satisfied, you will be +required, immediately upon demand therefor, to repay to the Firm the +following: + +(a) Any RSU Shares for which the terms (including the terms for delivery) of +the related Short-Term RSUs were not satisfied, in accordance with Section +2.6.3 of the Plan. + +(b) Any payments under Dividend Equivalent Rights for which the terms were not +satisfied (including any such payments made in respect of Short-Term RSUs that +are forfeited or RSU Shares that are cancelled or required to be repaid), in +accordance with Section 2.8.3 of the Plan. + +(c) Any dividends paid in respect of any RSU Shares that are cancelled or +required to be repaid. + +(d) Any amount applied to satisfy tax withholding or other obligations with +respect to any Short-Term RSUs, RSU Shares, dividend payments and payments +under Dividend Equivalent Rights that are forfeited or required to be repaid. + +E XCEPTIONS TO THE DELIVERY DATE + +10. Accelerated Delivery in the Event of a Qualifying Termination After a +Change in Control, Conflicted Employment or Death . In the event of +your Qualifying Termination After a Change in Control, Conflicted Employment +or death, each as described below, your Outstanding Short-Term RSUs will be +treated as described in this Paragraph 10, and, except as set forth in +Paragraph 10(a), all other terms of this Award Agreement, including the other +forfeiture and repayment events in Paragraphs 8 and 9, continue to apply. + +(a) You Have a Qualifying Termination After a Change in Control. If your +Employment terminates when you meet the requirements of a Qualifying +Termination After a + +Change in Control, the RSU Shares underlying your Outstanding Short-Term RSUs +will be delivered. In addition, the forfeiture events in Paragraph 8 will not +apply to your Award. + +(b) You Are Determined to Have Accepted Conflicted Employment. + +(i) Generally. Notwithstanding anything to the contrary in the Plan or +otherwise, for purposes of this Award Agreement, "Conflicted Employment" means +your employment at any U.S. Federal, state or local government, any non-U.S. +government, any supranational or international organization, any self- +regulatory organization, or any agency or instrumentality of any such +government or organization, or any other employer (other than an "Accounting +Firm" within the meaning of SEC Rule 2-01(f)(2) of Regulation S-X or any +successor thereto) determined by the Committee, if, as a result of such +employment, your continued holding of any Outstanding Short-Term RSUs would +result in an actual or perceived conflict of interest. Unless prohibited by +applicable law or regulation, if your Employment terminates solely because you +resign to accept Conflicted Employment or if, following your termination of +Employment, you notify the Firm that you are accepting Conflicted Employment, +RSU Shares will be delivered in respect of your Outstanding Short-Term RSUs +(including in the form of cash as described in Paragraph 11(b)) as soon as +practicable after the Committee has received satisfactory documentation +relating to your Conflicted Employment. + +(ii) You May Have to Take Other Steps to Address Conflicts of Interest. The +Committee retains the authority to exercise its rights under the Award +Agreement or the Plan (including Section 1.3.2 of the Plan) to take or require +you to take other steps it determines in its sole discretion to be necessary +or appropriate to cure an actual or perceived conflict of interest (which may +include a determination that the accelerated delivery described in Paragraph +10(b)(i) will not apply because such actions are not necessary or appropriate +to cure an actual or perceived conflict of interest). + +(c) Death. If you die, the RSU Shares underlying your Outstanding Short-Term +RSUs will be delivered to the representative of your estate as soon as +practicable after the date of death and after such documentation as may be +requested by the Committee is provided to the Committee. + +O THER TERMS, CONDITIONS AND AGREEMENTS + +11. Additional Terms, Conditions and Agreements . + +(a) You Must Satisfy Applicable Tax Withholding Requirements. Delivery of +RSU Shares is conditioned on your satisfaction of any applicable withholding +taxes in accordance with Section 3.2 of the Plan, which includes the Firm +deducting or withholding amounts from any payment or distribution to you. In +addition, to the extent permitted by applicable law, the Firm, in its sole +discretion, may require you to provide amounts equal to all or a portion of +any Federal, state, local, foreign or other tax obligations imposed on you or +the Firm in connection with the grant or delivery of this Award by requiring +you to choose between remitting the amount (i) in cash (or through payroll +deduction or otherwise) or (ii) in the form of proceeds from the Firm's +executing a sale of RSU Shares delivered to you under this Award. In no event, +however, does this Paragraph 11(a) give you any discretion to determine or +affect the timing of the delivery of RSU Shares or the timing of payment of +tax obligations. + +(b) Firm May Deliver Cash or Other Property Instead of RSU Shares. In +accordance with Section 1.3.2(i) of the Plan, in the sole discretion of the +Committee, in lieu of all or any + +portion of the RSU Shares, the Firm may deliver cash, other securities, other +awards under the Plan or other property, and all references in this Award +Agreement to deliveries of RSU Shares will include such deliveries of cash, +other securities, other awards under the Plan or other property. + +(c) Amounts May Be Rounded to Avoid Fractional Shares. RSU Shares that +become deliverable on a Delivery Date may, in each case, be rounded to avoid +fractional Shares. + +(d) You May Be Required to Become a Party to the Shareholders' Agreement. +Your rights to your Short-Term RSUs are conditioned on your becoming a party +to any shareholders' agreement to which other similarly situated employees ( +e.g., employees with a similar title or position) of the Firm are required +to be a party. + +(e) Firm May Affix Legends and Place Stop Orders on Restricted RSU Shares. +GS Inc. may affix to Certificates representing RSU Shares any legend that the +Committee determines to be necessary or advisable (including to reflect any +restrictions to which you may be subject under a separate agreement). GS Inc. +may advise the transfer agent to place a stop order against any legended RSU +Shares. + +(f) You Agree to Certain Consents, Terms and Conditions. By accepting this +Award you understand and agree that: + +(i) You Agree to Certain Consents as a Condition to the Award. You have +expressly consented to all of the items listed in Section 3.3.3(d) of the +Plan, including the Firm's supplying to any third-party recordkeeper of the +Plan or other person such personal information of yours as the Committee deems +advisable to administer the Plan, and you agree to provide any additional +consents that the Committee determines to be necessary or advisable; + +(ii) You Are Subject to the Firm's Policies, Rules and Procedures. You are +subject to the Firm's policies in effect from time to time concerning trading +in RSU Shares and hedging or pledging RSU Shares and equity-based compensation +or other awards (including, without limitation, the "Firmwide Policy with +Respect to Personal Transactions Involving GS Securities and GS Equity Awards" +or any successor policies), and confidential or proprietary information, and +you will effect sales of RSU Shares in accordance with such rules and +procedures as may be adopted from time to time (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); + +(iii) You Are Responsible for Costs Associated with Your Award. You will be +responsible for all brokerage costs and other fees or expenses associated with +your Short-Term RSUs, including those related to the sale of RSU Shares; + +(iv) You Will Be Deemed to Represent Your Compliance with All the Terms of +Your Award if You Accept Delivery of, or Sell, RSU Shares. You will be deemed +to have represented and certified that you have complied with all of the terms +of the Plan and this Award Agreement when RSU Shares are delivered to you, and +you receive payment in respect of Dividend Equivalent Rights; + +(v) Firm May Deliver Your Award into an Escrow Account. The Firm may +establish and maintain an escrow account on such terms (which may include your +executing any documents related to, and your paying for any costs associated +with, such account) as it may deem necessary or appropriate, and the delivery +of RSU Shares or the payment of cash (including dividends and payments under +Dividend Equivalent Rights) or other property may initially be made into and +held in that escrow account until such time as the Committee has received such +documentation as it may have requested or until the Committee has determined +that any other conditions or restrictions on delivery of RSU Shares, cash or +other property required by this Award Agreement have been satisfied; + +(vi) You May Be Required to Certify Compliance with Award Terms; You Are +Responsible for Providing the Firm with Updated Address and Contact +Information After Your Departure from the Firm. If your Employment terminates +while you continue to hold Short-Term RSUs, from time to time, you may be +required to provide certifications of your compliance with all of the terms of +the Plan and this Award Agreement as described in Paragraph 8(a)(iv). You +understand and agree that (A) your address on file with the Firm at the time +any certification is required will be deemed to be your current address, (B) +it is your responsibility to inform the Firm of any changes to your address to +ensure timely receipt of the certification materials, (C) you are responsible +for contacting the Firm to obtain such certification materials if not received +and (D) your failure to return properly completed certification materials by +the specified deadline (which includes your failure to timely return the +completed certification because you did not provide the Firm with updated +contact information) will result in the forfeiture of all of your Short-Term +RSUs and subject previously delivered amounts to repayment under Paragraph +8(a)(iv); + +(vii) You Must Comply with Applicable Deadlines and Procedures to Appeal +Determinations Made by the Committee, the SIP Committee or SIP +Administrators. If you disagree with a determination made by the Committee, +the SIP Committee, the SIP Administrators, or any of their delegates or +designees and you wish to appeal such determination, you must submit a written +request to the SIP Committee for review within 180 days after the +determination at issue. You must exhaust your internal administrative remedies +( i.e. , submit your appeal and wait for resolution of that appeal) before +seeking to resolve a dispute through arbitration pursuant to Paragraph 14 and +Section 3.17 of the Plan; and + +(viii) You Agree that Covered Persons Will Not Have Liability. In addition +to and without limiting the generality of the provisions of Section 1.3.5 of +the Plan, neither the Firm nor any Covered Person will have any liability to +you or any other person for any action taken or omitted in respect of this or +any other Award. + +12. Non-transferability . Except as otherwise may be provided in +this Paragraph 12 or as otherwise may be provided by the Committee, the +limitations on transferability set forth in Section 3.5 of the Plan will apply +to this Award. Any purported transfer or assignment in violation of the +provisions of this Paragraph 12 or Section 3.5 of the Plan will be void. The +Committee may adopt procedures pursuant to which some or all recipients of +Short-Term RSUs may transfer some or all of their Short-Term RSUs through a +gift for no consideration to any immediate family member, a trust or other +estate planning vehicle approved by the Committee or SIP Committee in which +the recipient and/or the recipient's immediate family members in the aggregate +have 100% of the beneficial interest. + +13. Right of Offset . Except as provided in Paragraph 16(h), the +obligation to deliver RSU Shares or to make payments under Dividend Equivalent +Rights under this Award Agreement is subject to Section 3.4 of the Plan, which +provides for the Firm's right to offset against such obligation any + +outstanding amounts you owe to the Firm and any amounts the Committee deems +appropriate pursuant to any tax equalization policy or agreement. + +A RBITRATION, CHOICE OF FORUM AND GOVERNING LAW + +14. Arbitration; Choice of Forum . + +(a) B Y ACCEPTING THIS AWARD, YOU ARE INDICATING THAT YOU UNDERSTAND AND +AGREE THAT THE ARBITRATION AND CHOICE OF FORUM PROVISIONS SET FORTH IN SECTION +3.17 OF THE PLAN WILL APPLY TO THIS AWARD. THESE PROVISIONS, WHICH ARE +EXPRESSLY INCORPORATED HEREIN BY REFERENCE, PROVIDE AMONG OTHER THINGS THAT +ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN THE FIRM AND YOU ARISING OUT OF OR +RELATING TO OR CONCERNING THE PLAN OR THIS AWARD AGREEMENT WILL BE FINALLY +SETTLED BY ARBITRATION IN NEW YORK CITY, PURSUANT TO THE TERMS MORE FULLY SET +FORTH IN SECTION 3.17 OF THE PLAN; PROVIDED THAT NOTHING HEREIN SHALL PRECLUDE +YOU FROM FILING A CHARGE WITH OR PARTICIPATING IN ANY INVESTIGATION OR +PROCEEDING CONDUCTED BY ANY GOVERNMENTAL AUTHORITY, INCLUDING BUT NOT LIMITED +TO THE SEC, THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AND A STATE OR LOCAL +HUMAN RIGHTS AGENCY, AS WELL AS LAW ENFORCEMENT. + +(b) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider class, collective or representative claims, to order +consolidation or to join different claimants or grant relief other than on an +individual basis to the individual claimant involved. + +(c) Notwithstanding any applicable forum rules to the contrary, to the extent +there is a question of enforceability of this Award Agreement arising from a +challenge to the arbitrator's jurisdiction or to the arbitrability of a claim, +it will be decided by a court and not an arbitrator. + +(d) The Federal Arbitration Act governs interpretation and enforcement of all +arbitration provisions under the Plan and this Award Agreement, and all +arbitration proceedings thereunder. + +(e) Nothing in this Award Agreement creates a substantive right to bring a +claim under U.S. Federal, state, or local employment laws. + +(f) By accepting your Award, you irrevocably appoint each General Counsel of +GS Inc., or any person whom the General Counsel of GS Inc. designates, as your +agent for service of process in connection with any suit, action or proceeding +arising out of or relating to or concerning the Plan or any Award which is not +arbitrated pursuant to the provisions of Section 3.17.1 of the Plan, who shall +promptly advise you of any such service of process. + +(g) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider any claim as to which you have not first exhausted +your internal administrative remedies in accordance with Paragraph 11(f)(vii). + +15. Governing Law . T HIS AWARD WILL BE GOVERNED BY AND CONSTRUED +IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO +PRINCIPLES OF CONFLICT OF LAWS. + +C ERTAIN TAX PROVISIONS + +16. Compliance of Award Agreement and Plan with Section + +409A . The provisions of this Paragraph 16 apply to you only if you +are a U.S. taxpayer. + +(a) This Award Agreement and the Plan provisions that apply to this Award are +intended and will be construed to comply with Section 409A (including the +requirements applicable to, or the conditions for exemption from treatment as, +409A Deferred Compensation), whether by reason of short-term deferral +treatment or other exceptions or provisions. The Committee will have full +authority to give effect to this intent. To the extent necessary to give +effect to this intent, in the case of any conflict or potential inconsistency +between the provisions of the Plan (including Sections 1.3.2 and 2.1 thereof) +and this Award Agreement, the provisions of this Award Agreement will govern, +and in the case of any conflict or potential inconsistency between this +Paragraph 16 and the other provisions of this Award Agreement, this Paragraph +16 will govern. + +(b) Delivery of RSU Shares will not be delayed beyond the date on which all +applicable conditions or restrictions on delivery of RSU Shares required by +this Agreement (including those specified in Paragraphs 6, 10(c) and 11 and +the consents and other items specified in Section 3.3 of the Plan) are +satisfied. To the extent that any portion of this Award is intended to satisfy +the requirements for short-term deferral treatment under Section 409A, +delivery for such portion will occur by the March 15 coinciding with the last +day of the applicable "short-term deferral" period described in Reg. +1.409A-1(b)(4) in order for the delivery of RSU Shares to be within the short- +term deferral exception unless, in order to permit all applicable conditions +or restrictions on delivery to be satisfied, the Committee elects, pursuant to +Reg. 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted in accordance with +Section 409A, to delay delivery of RSU Shares to a later date within the same +calendar year or to such later date as may be permitted under Section 409A, +including Reg. 1.409A-3(d). For the avoidance of doubt, if the Award includes +a "series of installment payments" as described in Reg. 1.409A-2(b)(2)(iii), +your right to the series of installment payments will be treated as a right to +a series of separate payments and not as a right to a single payment. + +(c) Notwithstanding the provisions of Paragraph 11(b) and Section 1.3.2(i) of +the Plan, to the extent necessary to comply with Section 409A, any securities, +other Awards or other property that the Firm may deliver in respect of your +Short-Term RSUs will not have the effect of deferring delivery or payment, +income inclusion, or a substantial risk of forfeiture, beyond the date on +which such delivery, payment or inclusion would occur or such risk of +forfeiture would lapse, with respect to the RSU Shares that would otherwise +have been deliverable (unless the Committee elects a later date for this +purpose pursuant to Reg. 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted +under Section 409A, including and to the extent applicable, the subsequent +election provisions of Section 409A(a)(4)(C) of the Code and Reg. +1.409A-2(b)). + +(d) Notwithstanding the timing provisions of Paragraph 10(c), the delivery of +RSU Shares referred to therein will be made after the date of death and during +the calendar year that includes the date of death (or on such later date as +may be permitted under Section 409A). + +(e) The timing of delivery or payment pursuant to Paragraph 10(a) will occur +on the earlier of (i) the Delivery Date or (ii) a date that is within the +calendar year in which the termination of Employment occurs; provided , +however , that, if you are a "specified employee" (as defined by the Firm in +accordance with Section 409A(a)(2)(i)(B) of the Code), delivery will occur on +the earlier of the Delivery Date or (to the extent required to avoid the +imposition of + +additional tax under Section 409A) the date that is six months after your +termination of Employment (or, if the latter date is not during a Window +Period, the first trading day of the next Window Period). For purposes of +Paragraph 10(a), references in this Award Agreement to termination of +Employment mean a termination of Employment from the Firm (as defined by the +Firm) which is also a separation from service (as defined by the Firm in +accordance with Section 409A). + +(f) Notwithstanding any provision of Paragraph 7 or Section 2.8.2 of the Plan +to the contrary, the Dividend Equivalent Rights with respect to each of your +Outstanding Short-Term RSUs will be paid to you within the calendar year that +includes the date of distribution of any corresponding regular cash dividends +paid by GS Inc. in respect of a share of Common Stock the record date for +which occurs on or after the Date of Grant. The payment will be in an amount +(less applicable withholding) equal to such regular dividend payment as would +have been made in respect of the RSU Shares underlying such Outstanding Short- +Term RSUs. + +(g) The timing of delivery or payment referred to in Paragraph 10(b)(i) will +be the earlier of (i) the Delivery Date or (ii) a date that is within the +calendar year in which the Committee receives satisfactory documentation +relating to your Conflicted Employment, provided that such delivery or +payment will be made, and any Committee action referred to in Paragraph +10(b)(ii) will be taken, only at such time as, and if and to the extent that +it, as reasonably determined by the Firm, would not result in the imposition +of any additional tax to you under Section 409A. + +(h) Paragraph 13 and Section 3.4 of the Plan will not apply to Awards that are +409A Deferred Compensation except to the extent permitted under Section 409A. + +(i) Delivery of RSU Shares in respect of any Award may be made, if and to the +extent elected by the Committee, later than the Delivery Date or other date or +period specified hereinabove (but, in the case of any Award that constitutes +409A Deferred Compensation, only to the extent that the later delivery is +permitted under Section 409A). + +(j) You understand and agree that you are solely responsible for the payment +of any taxes and penalties due pursuant to Section 409A, but in no event will +you be permitted to designate, directly or indirectly, the taxable year of the +delivery. + +C OMMITTEE AUTHORITY, AMENDMENT, CONSTRUCTION AND REGULATORY REPORTING + +17. Committee Authority . The Committee has the authority to +determine, in its sole discretion, that any event triggering forfeiture or +repayment of your Award will not apply and to limit the forfeitures and +repayments that result under Paragraphs 8 and 9. + +18. Amendment . The Committee reserves the right at any time to +amend the terms of this Award Agreement, and the Board may amend the Plan in +any respect; provided that, notwithstanding the foregoing and Sections +1.3.2(f), 1.3.2(h) and 3.1 of the Plan, no such amendment will materially +adversely affect your rights and obligations under this Award Agreement +without your consent; and provided further that the Committee expressly +reserves its rights to amend the Award Agreement and the Plan as described in +Sections 1.3.2(h)(1), (2) and (4) of the Plan. A modification that impacts the +tax consequences of this Award or the timing of delivery of RSU Shares will +not be an amendment that materially adversely affects your rights and +obligations under this Award Agreement. Any amendment of this Award Agreement +will be in writing. + +19. Construction, Headings . Unless the context requires otherwise, +(a) words describing the singular number include the plural and vice versa, +(b) words denoting any gender include all genders and (c) the words "include," +"includes" and "including" will be deemed to be followed by the words "without +limitation." The headings in this Award Agreement are for the purpose of +convenience only and are not intended to define or limit the construction of +the provisions hereof. References in this Award Agreement to any specific Plan +provision will not be construed as limiting the applicability of any other +Plan provision. + +20. Providing Information to the Appropriate Authorities. In accordance +with applicable law, nothing in this Award Agreement (including the forfeiture +and repayment provisions in Paragraphs 8 and 9) or the Plan prevents you from +providing information you reasonably believe to be true to the appropriate +governmental authority, including a regulatory, judicial, administrative, or +other governmental entity; reporting possible violations of law or regulation; +making other disclosures that are protected under any applicable law or +regulation; or filing a charge or participating in any investigation or +proceeding conducted by a governmental authority. For the avoidance of doubt, +governmental authority includes federal, state and local government agencies +such as the SEC, the Equal Employment Opportunity Commission and any state or +local human rights agency ( e.g. , the New York State Division of Human +Rights, the New York City Commission on Human Rights, the California +Department of Fair Employment and Housing), as well as law enforcement. + +IN WITNESS WHEREOF , GS Inc. has caused this Award Agreement to be duly +executed and delivered as of the Date of Grant. + +THE GOLDMAN SACHS GROUP, INC. + +[ U.K. M ATERIAL RISK TAKER APPENDIX + +This Appendix supplements Paragraph 8 and sets forth additional events that +result in forfeiture of up to all of your Short-Term RSUs and may require +repayment to the Firm of up to all other amounts previously delivered or paid +to you under your Award in accordance with Paragraph 9. As with the events +described in Paragraph 8, more than one event may apply, in no case will the +occurrence of one event limit the forfeiture and repayment obligations as a +result of the occurrence of any other event and the Firm reserves the right to +(a) suspend payments under Dividend Equivalent Rights or delivery of RSU +Shares, (b) deliver any RSU Shares, dividends or payments under Dividend +Equivalent Rights into an escrow account in accordance with Paragraph 11(f)(v) +or (c) apply Transfer Restrictions to any RSU Shares in connection with any +investigation of whether any of the events that result in forfeiture under +this have occurred. + +With respect to the events described in this Appendix, the Committee will +consider certain factors to determine whether and what portion of your Award +will terminate, including the reason for the "Risk Event" (as defined below) +and the extent to which: (1) you participated in the Risk Event, (2) your +compensation for may or may not have been adjusted to take into +account the risk associated with the Risk Event or your "Serious Misconduct" +(as defined below) and (3) your compensation may be adjusted for the year in +which the Risk Event or your Serious Misconduct is discovered. + +(a) A Risk Event Occurs . If a Risk Event occurs + , (i) your rights in respect of all or a portion of your +Short-Term RSUs will terminate and no RSU Shares will be delivered in respect +of such Short-Term RSUs and (ii) you will be obligated immediately upon demand +therefor to pay the Firm an amount not in excess of the greater of the Fair +Market Value of the RSU Shares (plus any dividend payments and payments under +Dividend Equivalent Rights) delivered in respect of the Award (without +reduction for any amount applied to satisfy tax withholding or other +obligations) determined as of (A) the date the Risk Event occurred and (B) the +date that the repayment request is made. + +(i) A " Risk Event " means there occurs a loss of 5% or more of firmwide +total capital from a reportable operational risk event determined in +accordance with the firmwide Reporting Operational Risk Events Policy. + +(b) You Engage in Serious Misconduct . If you engage in +Serious Misconduct , you will be obligated immediately +upon demand therefor to pay the Firm an amount not in excess of the greater of +the Fair Market Value of the RSU Shares (plus any dividend payments and +payments under Dividend Equivalent Rights) delivered in respect of the Award +(without reduction for any amount applied to satisfy tax withholding or other +obligations) determined as of (i) the date the Serious Misconduct occurred and +(ii) the date that the repayment request is made. + +(i) " Serious Misconduct " means that you engage in conduct that the Firm +reasonably considers, in its sole discretion, to be misconduct sufficient to +justify summary termination of employment under English law. + +Notwithstanding any provision in the Plan, this Award Agreement or any other +agreement or arrangement you may have with the Firm, the parties agree that to +the extent that there is any dispute arising out of or relating to the payment +required by Paragraphs (a) and (b) of this Appendix (including your refusal to +remit payment) the parties will submit to arbitration in accordance with +Paragraph 14 of this Award Agreement and Section 3.17 of the Plan as the sole +means of resolution of such dispute (including the recovery by the Firm of the +payment amount).] + +[GSBE M ATERIAL RISK TAKER APPENDIX + +This Appendix supplements Paragraph 8 and sets forth additional events that +result in forfeiture of up to all of your Short-Term RSUs and may require +repayment to the Firm of up to all other amounts previously delivered or paid +to you under your Award in accordance with Paragraph 9. As with the events +described in Paragraph 8, more than one event may apply, in no case will the +occurrence of one event limit the forfeiture and repayment obligations as a +result of the occurrence of any other event and the Firm reserves the right to +(a) suspend payments under Dividend Equivalent Rights or delivery of RSU +Shares, (b) deliver any RSU Shares, dividends or payments under Dividend +Equivalent Rights into an escrow account in accordance with Paragraph 11(f)(v) +or (c) apply Transfer Restrictions to any RSU Shares in connection with any +investigation of whether any of the events that result in forfeiture under +this Appendix have occurred. + +With respect to the events described in this Appendix, the Committee will +consider certain factors to determine whether and what portion of your Award +will terminate, including the reason for the "Adjustment Event" (as defined +below). + +Notwithstanding any provision in the Plan, this Award Agreement or any other +agreement or arrangement you may have with the Firm, the parties agree that to +the extent that there is any dispute arising out of or relating to the payment +required by this Appendix (including your refusal to remit payment) the +parties will submit to arbitration in accordance with Paragraph 14 of this +Award Agreement and Section 3.17 of the Plan as the sole means of resolution +of such dispute (including the recovery by the Firm of the payment amount). + +(a) An Adjustment Event Occurs . If an "Adjustment Event" (as +defined below) occurs , (i) your rights in respect of all or a +portion of your Short-Term RSUs will terminate and no RSU Shares will be +delivered in respect of such Short-Term RSUs, and (ii) you will be obligated +immediately upon demand therefor to pay the Firm an amount not in excess of +the greater of the Fair Market Value of the RSU Shares (plus any dividend +payments) delivered in respect of the Award (without reduction for any amount +applied to satisfy tax withholding or other obligations) determined as of (A) +the date the Adjustment Event occurred and (B) the date that the repayment +request is made. + +(i) " Adjustment Event " means that one of the following has occurred: + +A. you significantly contributed to, or were responsible for, any conduct that +resulted in a loss of 0.75% or more of the total capital of GS Inc.; + +B. a material regulatory sanction for the Firm comprising one or more of the +following: + +a moratorium pursuant to sec. 46g of the German Banking Act, + +a measure in case of danger pursuant to sec. 46 of the German Banking Act, + +the revocation of appointment of a manager pursuant to sec. 36 German Banking +Act, + +a fine pursuant to sec. 56 of the German Banking Act or a + +threatened penalty payment, if the fine or penalty payment amounts to 0.75% +or more of the total capital of GS Inc., + +the cancellation of the banking permit pursuant to sec. 35 of the German +Banking Act, + +an order to increase the capital requirements Goldman Sachs Bank Europe SE +(GSBE) by at least 0.5% pursuant to sec. 10 of the German Banking Act, + +a measure in case of organizational deficiencies, + +a comparable regulatory order, or + +a material supervisory measure; or + +C. you acted in serious violation of relevant external or internal rules with +respect to suitability and conduct, provided that a violation is considered +serious if it suitable to justify a termination of employment for cause +pursuant to sec. 626 German Civil Code or a termination of employment for +misconduct pursuant to sec. 1 German Termination Protection Act. + +The determination as to whether an Adjustment Event has occurred shall be made +by the Committee in its sole discretion.] + +D EFINITIONS APPENDIX + +The following capitalized terms are used in this Award Agreement with the +following meanings: + +(a) " 409A Deferred Compensation " means a "deferral of compensation" or +"deferred compensation" as those terms are defined in the regulations under +Section 409A. + +(b) " Conflicted Employment " means your employment at any U.S. Federal, +state or local government, any non-U.S. government, any supranational or +international organization, any self-regulatory organization, or any agency or +instrumentality of any such government or organization, or any other employer +(other than an "Accounting Firm" within the meaning of SEC Rule 2-01(f)(2) of +Regulation S-X or any successor thereto) determined by the Committee, if, as a +result of such employment, your continued holding of any Outstanding Short- +Term RSUs would result in an actual or perceived conflict of interest. + +(c) " Failed to Consider Risk " means that you participated (or otherwise +oversaw or were responsible for, depending on the circumstances, another +individual's participation) in the structuring or marketing of any product or +service, or participated on behalf of the Firm or any of its clients in the +purchase or sale of any security or other property, in any case without +appropriate consideration of the risk to the Firm or the broader financial +system as a whole (for example, where you have improperly analyzed such risk +or where you have failed sufficiently to raise concerns about such risk) and, +as a result of such action or omission, the Committee determines there has +been, or reasonably could be expected to be, a material adverse impact on the +Firm, your business unit or the broader financial system. + +(d) " Qualifying Termination After a Change in Control " means that the Firm +terminates your Employment other than for Cause or you terminate your +Employment for Good Reason, in each case, within 18 months following a Change +in Control. + +(e) " SEC " means the U.S. Securities and Exchange Commission. + +The following capitalized terms are used in this Award Agreement with the +meanings that are assigned to them in the Plan. + +(a) " Account " means any brokerage account, custody account or similar +account, as approved or required by GS Inc. from time to time, into which +shares of Common Stock, cash or other property in respect of an Award are +delivered. + +(b) " Award Agreement " means the written document or documents by which +each Award is evidenced, including any related Award Statement and signature +card. + +(c) " Award Statement " means a written statement that reflects certain +Award terms. + +(d) " Board " means the Board of Directors of GS Inc. + +(e) " 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. + +(f) " Cause " means (i) the Grantee's conviction, whether following trial or +by plea of guilty or nolo contendere (or similar plea), in a criminal +proceeding (A) on a misdemeanor charge involving fraud, false statements or +misleading omissions, wrongful taking, embezzlement, bribery, forgery, +counterfeiting or extortion, or (B) on a felony charge, or (C) on an +equivalent charge to those in clauses (A) and (B) in jurisdictions which do +not use those designations, (ii) the Grantee's engaging in any conduct which +constitutes an employment disqualification under applicable law (including +statutory disqualification as defined under the Exchange Act), (iii) the +Grantee's willful failure to perform the Grantee's duties to the Firm, (iv) +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, (v) 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, (vi) the +Grantee's engaging in any act or making any statement which impairs, impugns, +denigrates, disparages or negatively reflects upon the name, reputation or +business interests of the Firm or (vii) 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 may have under any other agreement with a Grantee or at law or +in equity. + +(g) " Certificate " means a stock certificate (or other appropriate document +or evidence of ownership) representing shares of Common Stock. + +(h) " 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 shareholders +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: (i) 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 (A) 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 (B) 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 (ii) 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 (A) were members of the +Board on the Effective Date or (B) 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). + +(i) " 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. + +(j) " Code " means the Internal Revenue Code of 1986, as amended from time +to time, and the applicable rulings and regulations thereunder. + +(k) " 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 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. + +(l) " Common Stock " means common stock of GS Inc., par value $0.01 per +share. + +(m) " Covered Person " means a member of the Board or the Committee or any +employee of the Firm. + +(n) " Date of Grant " means the date specified in the Grantee's Award +Agreement as the date of grant of the Award. + +(o) " 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. + +(p) " 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. + +(q) " Effective Date " means the date this Plan is approved by the +shareholders of GS Inc. pursuant to Section 3.15 of the Plan. + +(r) " 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 +(i) 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), (ii) whether and when a change in a +Grantee's association with the Firm results in a termination of Employment and +(iii) 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. + +(s) " Exchange Act " means the Securities Exchange Act of 1934, as amended +from time to time, and the applicable rules and regulations thereunder. + +(t) " Firm " means GS Inc. and its subsidiaries and affiliates. + +(u) " 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). + +(v) " Grantee " means a person who receives an Award. + +(w) " GS Inc. " means The Goldman Sachs Group, Inc., and any successor +thereto. + +(x) " 1999 SIP " means The Goldman Sachs 1999 Stock Incentive Plan, as in +effect prior to the effective date of the 2003 SIP. + +(y) " 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. + +(z) " RSU " means a restricted stock unit 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. + +(aa) " RSU Shares " means shares of Common Stock that underlie an RSU. + +(bb) " Section 409A " means Section 409A of the Code, including any +amendments or successor provisions to that Section and any regulations and +other administrative guidance thereunder, in each case as they, from time to +time, may be amended or interpreted through further administrative guidance. + +(cc) " 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. + +(dd) " SIP Committee " means the persons who have been delegated certain +authority under the Plan by the Committee. + +(ee) " Transfer Restrictions " means restrictions that prohibit the sale, +exchange, transfer, assignment, pledge, hypothecation, fractionalization, +hedge or other disposal (including through the use of any cash-settled +instrument), whether voluntarily or involuntarily by the Grantee, of an Award +or any shares of Common Stock, cash or other property delivered in respect of +an Award. + +(ff) " 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. + +(gg) " 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). + +EX-10.51 10 d192225dex1051.htm EX-10.51 EX-10.51 + +Exhibit 10.51 + +T HE GOLDMAN SACHS GROUP, INC. + +Y EAR-END PERFORMANCE-BASED RSU AWARD + +This Award Agreement, together with The Goldman Sachs Amended and Restated +Stock Incentive Plan (2021) (the "Plan"), governs your award of performance- +based RSUs (your "Award" or "PSUs"). You should read carefully this entire +Award Agreement, which includes the Award Statement, any attached Appendix and +the signature card. + +A CCEPTANCE + +1. You Must Decide Whether to Accept this Award Agreement . To be +eligible to receive your Award, you must by the date specified (a) +open and activate an Account and (b) agree to all the terms of your +Award by executing the related signature card in accordance with its +instructions. By executing the signature card, you confirm your agreement to + all of the terms of this Award Agreement, including the arbitration +and choice of forum provisions in Paragraph 16. + +D OCUMENTS THAT GOVERN YOUR AWARD; DEFINITIONS + +2. The Plan . Your Award is granted under the Plan, and the Plan's +terms apply to, and are a part of, this Award Agreement. + +3. Your Award Statement . The Award Statement delivered to you +contains some of your Award's specific terms. For example, it contains the +number of PSUs subject to this Award, the Performance Period and the +Performance Goal applicable to your Award. It also contains the Determination +Date and [the] [any applicable] Settlement Date[s] for your Award and the [any +applicable] Transferability Date[s] for any Shares at Risk that may be +delivered to you in respect of any Settlement Amount that you may earn. The +number of PSUs on your Award Statement is not necessarily the number of PSUs +in respect of which the Settlement Amount will be earned, but is merely the +basis for determining the amount (if any) that will be delivered to you. + +4. Definitions . Unless otherwise defined herein, including in the +Definitions Appendix or any other Appendix, capitalized terms have the +meanings provided in the Plan. + +V ESTING OF YOUR PSUS + +5. Vesting . Your PSUs are Vested. When a PSU is Vested, it means +only that your continued active Employment is not required to earn +delivery in respect of that PSU. Vesting does not mean you have a non- +forfeitable right to the Vested portion of your Award. The terms of this Award +Agreement (including conditions to delivery, satisfaction of the Performance +Goal and any applicable Transfer Restrictions) continue to apply to your +Award, and failure to meet such terms may result in the termination of this +Award (as a result of which no delivery in respect of such Vested PSUs would +be made) and you can still forfeit Vested PSUs and Shares at Risk. + +P ERFORMANCE GOAL + +6. Performance . The Settlement Amount is dependent, and may vary +based, on achievement of the Performance Goal over the Performance Period. On +the Determination Date, the Firm will determine whether or not, and to what +extent, the Performance Goal for that Performance Period has been satisfied. +All your rights with respect to the Settlement Amount [(and any Dividend +Equivalent Payments)] are dependent on the extent to which the Performance +Goal is achieved, and any rights to delivery in respect of your Outstanding +PSUs immediately will terminate and no Settlement Amount will + +be delivered in respect of such PSUs upon the Committee's determination, in +its sole discretion, that the Performance Goal has not been satisfied to the +extent necessary to result in delivery in respect of the PSUs. + +S ETTLEMENT AMOUNT + +7. Settlement . + +(a) In General. Subject to satisfaction of the terms of this Award, +including satisfaction of the Performance Goal, on the Settlement Date, you +will receive delivery (less applicable withholding as described in Paragraph +13(a)) of the Settlement Amount [and payment of any Dividend Equivalent +Payments] as further described in this Award Agreement and in your Award +Statement. Until such delivery [and payment], you have only the rights of a +general unsecured creditor and you do not have any rights as a shareholder of +GS Inc. with respect to either the PSUs or the Settlement Amount. Without +limiting the Committee's authority under Section 1.3.2(h) of the Plan, the +Firm may accelerate any Settlement Date by up to 30 days. + +(b) Form of Delivery. The Settlement Amount will be delivered on the +Settlement Date as follows: + +(i) [% in the form of cash ]. + +(ii) [% in the form of Shares [at Risk] (by book entry credit to your +Account)]. + +(c) Shares at Risk. percent of the Shares delivered to you in respect of +the Settlement Amount will be Shares at Risk subject to Transfer Restrictions +until the [applicable] Transferability Date [listed on your Award Statement]. +Any purported sale, exchange, transfer, assignment, pledge, hypothecation, +fractionalization, hedge or other disposition in violation of the Transfer +Restrictions on Shares at Risk will be void. Within 30 Business Days after the +Transferability Date listed on your Award Statement (or any other date on +which the Transfer Restrictions are to be removed), GS Inc. will remove the +Transfer Restrictions. The Committee or the SIP Committee may select multiple +dates within such 30-Business-Day period on which to remove Transfer +Restrictions for all or a portion of the Shares at Risk with the same +Transferability Date and all such dates will be treated as a single +Transferability Date for purposes of this Award. + +[D IVIDEND EQUIVALENT RIGHTS] [DIVIDENDS] + +8. [ Dividend Equivalent Rights .] [ Dividends ]. +[To the extent described in your Award Statement, each PSU will include a +Dividend Equivalent Right, which will be subject to the provisions of Section +2.8 of the Plan. Accordingly, for each of your Outstanding PSUs with respect +to which delivery is made under the Settlement Amount, you will be entitled to +payments under Dividend Equivalent Rights equal to any regular cash dividend +paid by GS Inc. in respect of a Share the record date for which occurs on or +after the Date of Grant. The payment to you of amounts under Dividend +Equivalent Rights (less applicable withholding as described in Paragraph +13(a)) is conditioned upon the delivery under the Settlement Amount in respect +of the PSUs to which such Dividend Equivalent Rights relate, and you will have +no right to receive any Dividend Equivalent Payments relating to PSUs for +which you do not receive delivery under the Settlement Amount (including, +without limitation, due to a failure to satisfy the Performance Goal). +Dividend Equivalent Payments will be paid on the Settlement Date.] [You will +be entitled to receive on a current basis any regular cash dividend paid in +respect of your Shares at Risk. The PSUs do not include Dividend Equivalent +Rights.] + +F ORFEITURE OF YOUR AWARD + +9. How You May Forfeit Your Award . This Paragraph 9 sets forth the +events that result in forfeiture of up to all of your PSUs and Shares at Risk +and may require repayment to the Firm of up to all amounts previously paid or +delivered to you under your PSUs in accordance with Paragraph 10. More than +one event may apply, and in no case will the occurrence of one event limit the +forfeiture and repayment obligations as a result of the occurrence of any +other event. In addition, the Firm reserves the right to (a) suspend delivery +of the Settlement Amount [and payment of any Dividend Equivalent Payments] or +release of Transfer Restrictions on Shares at Risk or (b) [pay cash][deliver +the Settlement Amount] (including Dividend Equivalent Payments or dividends) +[or deliver Shares at Risk] into an escrow account in accordance with +Paragraph 13(f)(v) [or (c) [apply Transfer Restrictions to any Shares] in +connection with any investigation of whether any of the events that result in +forfeiture under the Plan or this Paragraph 9 have occurred. Paragraph 12] +(relating to certain circumstances under which release of Transfer +Restrictions may be accelerated) provides for exceptions to one or more +provisions of this Paragraph 9. [The U.K. Material Risk Taker Appendix +supplements this Paragraph 9 and sets forth additional events that result in +forfeiture of up to all of your PSUs and Shares at Risk and may require +repayment to the Firm as described in Paragraph 10 and the U.K. Material Risk +Taker Appendix.] + +(a) PSUs Forfeited Upon Certain Events. If any of the following occurs, your +rights to all of your Outstanding PSUs will terminate, and no Settlement +Amount will be delivered in respect thereof, as may be further described +below: + +(i) You Associate With a Covered Enterprise. You Associate With a Covered +Enterprise during the Performance Period. + +(ii) You Solicit Clients or Employees, Interfere with Client or Employee +Relationships or Participate in the Hiring of Employees. Before the +[applicable] Settlement Date, either: + +(A) you, in any manner, directly or indirectly, (1) Solicit any Client to +transact business with a Covered Enterprise or to reduce or refrain from doing +any business with the Firm, (2) interfere with or damage (or attempt to +interfere with or damage) any relationship between the Firm and any Client, +(3) Solicit any person who is an employee of the Firm to resign from the Firm, +(4) Solicit any Selected Firm Personnel to apply for or accept employment (or +other association) with any person or entity other than the Firm or (5) +participate in the hiring of any Selected Firm Personnel by any person or +entity other than the Firm (including, without limitation, participating in +the identification of individuals for potential hire, and participating in any +hiring decision), whether as an employee or consultant or otherwise, or + +(B) Selected Firm Personnel are Solicited, hired or accepted into partnership, +membership or similar status by any entity where you have, or will have, +direct or indirect managerial responsibility for such Selected Firm Personnel, +unless the Committee determines that you were not involved in such +Solicitation, hiring or acceptance. + +(iii) You Failed to Consider Risk. You Failed to Consider Risk during + +(iv) Your Conduct Constitutes Cause. Any event that constitutes Cause +[(including, for the avoidance of doubt, "Serious Misconduct" as defined in +the U.K. Material Risk Taker Appendix)] has occurred before the [applicable] +Settlement Date. + +(v) You Do Not Meet Your Obligations to the Firm. The Committee determines +that, before the [applicable] Settlement Date, you failed to meet, in any +respect, any obligation under any + +agreement with the Firm, or any agreement entered into in connection with your +Employment or this Award, including the Firm's notice period requirement +applicable to you, any offer letter, employment agreement or any shareholders' +agreement relating to the Firm. Your failure to pay or reimburse the Firm, on +demand, for any amount you owe to the Firm will constitute (A) failure to meet +an obligation you have under an agreement, regardless of whether such +obligation arises under a written agreement, and/or (B) a material violation +of Firm policy constituting Cause. + +(vi) You Do Not Provide Timely Certifications or Comply with Your +Certifications. You fail to certify to GS Inc. that you have complied with +all of the terms of the Plan and this Award Agreement, or the Committee +determines that you have failed to comply with a term of the Plan or this +Award Agreement to which you have certified compliance. + +(vii) You Do Not Follow Dispute Resolution/Arbitration Procedures. You +attempt to have any dispute under the Plan or this Award Agreement resolved in +any manner that is not provided for by Paragraph 16 or Section 3.17 of the +Plan, or you attempt to arbitrate a dispute without first having exhausted +your internal administrative remedies in accordance with Paragraph +13(f)(viii). + +(viii) You Bring an Action that Results in a Determination that Any Award +Agreement Term Is Invalid. As a result of any action brought by you, it is +determined that any term of this Award Agreement is invalid. + +(ix) You Receive Compensation in Respect of Your Award from Another +Employer. Your Employment terminates for any reason or you otherwise are no +longer actively Employed with the Firm and another entity grants you cash, +equity or other property (whether vested or unvested) to replace, substitute +for or otherwise in respect of your Outstanding PSUs. + +(x) GS Inc. Fails to Maintain the Minimum Tier 1 Capital Ratio. Before the +[applicable] Settlement Date, GS Inc. fails to maintain the required "Minimum +Tier 1 Capital Ratio" as defined under Federal Reserve Board Regulations +applicable to GS Inc. for a period of 90 consecutive business days. + +(xi) GS Inc. Is Determined to Be in Default. Before the [applicable] +Settlement Date, the Board of Governors of the Federal Reserve or the FDIC +makes a written recommendation under Title II (Orderly Liquidation Authority) +of the Dodd-Frank Wall Street Reform and Consumer Protection Act for the +appointment of the FDIC as a receiver of GS Inc. based on a determination that +GS Inc. is "in default" or "in danger of default." + +(xii) [Accounting Restatement Required Under Sarbanes-Oxley. GS Inc. is +required to prepare an accounting restatement due to GS Inc.'s material +noncompliance, as a result of misconduct, with any financial reporting +requirement under the securities laws as described in Section 304(a) of +Sarbanes-Oxley; provided , however , that your rights with respect to the +PSUs will only be terminated to the same extent that would be required under +Section 304(a) of Sarbanes-Oxley had you been a "chief executive officer" or +"chief financial officer" of GS Inc. (regardless of whether you actually hold +such position at the relevant time).] + +(b) Shares at Risk Forfeited upon Certain Events. To the extent you receive +delivery of Shares at Risk in connection with any Settlement Amount, if any of +the following occurs your rights to all of your Shares at Risk will terminate +and your Shares at Risk will be cancelled, in each case, as may be further +described below: + +(i) You Failed to Consider Risk. You Failed to Consider Risk during + +(ii) Your Conduct Constitutes Cause. Any event that constitutes Cause +[(including, for the avoidance of doubt, "Serious Misconduct" as defined in +the U.K. Material Risk Taker Appendix)] has occurred before the [applicable] +Transferability Date. + +(iii) You Do Not Meet Your Obligations to the Firm. The Committee determines +that, before the [applicable] Transferability Date, you failed to meet, in any +respect, any obligation under any agreement with the Firm, or any agreement +entered into in connection with your Employment or this Award, including the +Firm's notice period requirement applicable to you, any offer letter, +employment agreement or any shareholders' agreement relating to the Firm. Your +failure to pay or reimburse the Firm, on demand, for any amount you owe to the +Firm will constitute (A) failure to meet an obligation you have under an +agreement, regardless of whether such obligation arises under a written +agreement and/or (B) a material violation of Firm policy constituting Cause. + +(iv) You Do Not Provide Timely Certifications or Comply with Your +Certifications. You fail to certify to GS Inc. that you have complied with +all of the terms of the Plan and this Award Agreement, or the Committee +determines that you have failed to comply with a term of the Plan or this +Award Agreement to which you have certified compliance. + +(v) You Do Not Follow Dispute Resolution/Arbitration Procedures. You attempt +to have any dispute under the Plan or this Award Agreement resolved in any +manner that is not provided for by Paragraph 16 or Section 3.17 of the Plan, +or you attempt to arbitrate a dispute without first having exhausted your +internal administrative remedies in accordance with Paragraph 13(f)(viii). + +(vi) You Bring an Action that Results in a Determination that Any Award +Agreement Term Is Invalid. As a result of any action brought by you, it is +determined that any term of this Award Agreement is invalid. + +(vii) You Receive Compensation in Respect of Your Award from Another +Employer. Your Employment terminates for any reason or you otherwise are no +longer actively Employed with the Firm and another entity grants you cash, +equity or other property (whether vested or unvested) to replace, substitute +for or otherwise in respect of any Shares at Risk; provided , however , +that your rights will only be terminated in respect of the Shares at Risk that +are replaced, substituted for or otherwise considered by such other entity in +making its grant. + +(viii) [Accounting Restatement Required Under Sarbanes-Oxley. GS Inc. is +required to prepare an accounting restatement due to GS Inc.'s material +noncompliance, as a result of misconduct, with any financial reporting +requirement under the securities laws as described in Section 304(a) of +Sarbanes-Oxley; provided , however , that your rights will only be +terminated in respect of Shares at Risk to the same extent that would be +required under Section 304(a) of Sarbanes-Oxley had you been a "chief +executive officer" or "chief financial officer" of GS Inc. (regardless of +whether you actually hold such position at the relevant time).] + +R EPAYMENT OF YOUR AWARD + +10. When You May Be Required to Repay Your Award . + +(a) Repayment, Generally. If the Committee determines that any term of this +Award was not satisfied, you will be required, immediately upon demand +therefor, to repay to the Firm the following: + +(i) Any Settlement Amount (including any Shares at Risk) for which the terms +(including the terms for delivery) of the related PSUs were not satisfied, in +accordance with Section 2.6.3 of the Plan. + +(ii) Any Shares at Risk for which the terms (including the terms for the +release of Transfer Restrictions) were not satisfied, in accordance with +Section 2.5.3 of the Plan. + +(iii) [Any Shares that were delivered (but not subject to Transfer +Restrictions) at the same time any Shares at Risk that are cancelled or +required to be repaid were delivered.] + +(iv) [Any Dividend Equivalent Payments for which the terms were not satisfied +(including any such payments made in respect of PSUs that are forfeited or any +Settlement Amount that is required to be repaid), in accordance with Section +2.8.3 of the Plan.] + +(v) Any dividends paid in respect of any [delivered Shares (including] Shares +at Risk[)] that are cancelled or required to be repaid. + +(vi) Any amount applied to satisfy tax withholding or other obligations with +respect to any PSUs, Settlement Amount (including Shares at Risk, dividend +payments or [Dividend Equivalent Payments] that are forfeited or required to +be repaid. + +(b) Repayment Upon Materially Inaccurate Financial Statements. If any +delivery is made under this Award Agreement based on materially inaccurate +financial statements (which includes, but is not limited to, statements of +earnings, revenues or gains) or other materially inaccurate performance +criteria, you will be obligated to repay to the Firm, immediately upon demand +therefor, any excess amount delivered, as determined by the Committee in its +sole discretion. + +(c) [Repayment Upon Accounting Restatement Required Under Sarbanes-Oxley. If +an event described in Paragraphs 9(a)(xii) and 9(b)(viii) (relating to a +requirement under Sarbanes-Oxley that GS Inc. prepare an accounting +restatement) occurs, any Settlement Amount [(including Shares at Risk)], +dividend payments, Dividend Equivalent Payments, cash or other property +delivered, paid or withheld in respect of this Award will be subject to +repayment as described in Paragraph 10(a) to the same extent that would be +required under Section 304(a) of Sarbanes-Oxley had you been a "chief +executive officer" or "chief financial officer" of GS Inc. (regardless of +whether you actually hold such position at the relevant time).] + +T ERMINATIONS OF EMPLOYMENT + +11. PSUs and Termination of Employment [or Death] . + +(a) Employment Termination Generally. Unless the Committee determines +otherwise, if your Employment terminates for any reason or you are otherwise +no longer actively Employed with the Firm (which includes off-premises notice +periods, "garden leaves," pay in lieu of notice or any other similar status), +the Performance Goal applicable to your Outstanding PSUs will continue to +apply and the determination of the Settlement Amount will continue to be +subject to whether or not, and to what extent, the Performance Goal has been +achieved, in each case, as provided in Paragraph 6. All other terms of this +Award Agreement, including the forfeiture and repayment events in Paragraphs 9 +and 10 [and the U.K. Material Risk Taker Appendix], continue to apply. + +(b) [Death. If you die before the Settlement Date, the representative of +your estate will, on the Settlement Date, receive delivery of the Settlement +Amount and payment of the Dividend Equivalent + +Payments that, in each case, would have otherwise been made pursuant to +Paragraph 6 and any Transfer Restrictions on Shares at Risk will cease to +apply in accordance with Paragraph 12(b), after such documentation as may be +requested by the Committee is provided to the Committee. All other terms of +this Award Agreement, including the forfeiture and repayment events in +Paragraphs 9 and 10 [and the U.K. Material Risk Taker Appendix], continue to +apply. + +12. Accelerated Release of Transfer Restrictions on Shares at Risk in the +Event of a ]Qualifying Termination After a Change in Control or Death . +[To the extent you receive delivery of Shares at Risk in connection with any +Settlement Amount,] [I][i]n the event of your Qualifying Termination After a +Change in Control or death, each as described below, your Shares at Risk [(and +delivery of your Settlement Amount in the case of death in certain +circumstances)] will be treated as described in this Paragraph 12, and, except +as set forth in Paragraph 12(a), all other terms of this Award Agreement, +including the other forfeiture and repayment events in Paragraphs 9 and 10 +[and the U.K. Material Risk Taker Appendix], continue to apply. [In each case, +the Performance Goal applicable to your Outstanding PSUs will continue to +apply and the determination of the Settlement Amount will continue to be +subject to whether or not, and to what extent, the Performance Goal has been +achieved, in each case, as provided in Paragraph 6.] + +(a) You Have a Qualifying Termination After a Change in Control. If your +Employment terminates when you meet the requirements of a Qualifying +Termination After a Change in Control, any Transfer Restrictions will cease to +apply to your Shares at Risk. In addition, the forfeiture events in Paragraph +9 will not apply to your Shares at Risk. + +(b) Death. If you die, any Transfer Restrictions will cease to apply to your +Shares at Risk as soon as practicable after the date of death and after such +documentation as may be requested by the Committee is provided to the +Committee[.][, unless prohibited by applicable law or regulation: + +(i) If you die prior to the Determination Date or an applicable Settlement +Date, the representative of your estate will receive delivery of any +undelivered portion of the Settlement Amount that would have otherwise been +made pursuant to Paragraph 6 as soon as practicable after the later of the +date of death and the Determination Date. + +(ii) Any Transfer Restrictions will cease to apply to your Shares at Risk.] + +O THER TERMS, CONDITIONS AND AGREEMENTS + +13. Additional Terms, Conditions and Agreements . + +(a) You Must Satisfy Applicable Tax Withholding Requirements. Delivery of +the Settlement Amount is conditioned on your satisfaction of any applicable +withholding taxes in accordance with Section 3.2 of the Plan, which includes +the Firm deducting or withholding amounts from any payment or distribution to +you. In addition, to the extent permitted by applicable law, the Firm, in its +sole discretion, may require you to provide amounts equal to all or a portion +of any Federal, state, local, foreign or other tax obligations imposed on you +or the Firm in connection with the grant or [payment][delivery] of this Award +by requiring you to choose between remitting the amount (i) in cash (or +through payroll deduction or otherwise) or (ii) in the form of proceeds from +the Firm's executing a sale of Shares delivered to you pursuant to this Award. +In no event, however, does this Paragraph 13(a) give you any discretion to +determine or affect the timing of delivery of the Settlement Amount or the +timing of payment of tax obligations. + +(b) Firm May Deliver Cash or Other Property in Respect of the Settlement +Amount. In accordance with Section 1.3.2(i) of the Plan, in the sole +discretion of the Committee, in lieu of all or any portion of the Settlement +Amount, the Firm may deliver cash, other securities, other awards under the +Plan or other property, and all references in this Award Agreement to delivery +of the Settlement Amount will include such deliveries of cash, other +securities, other awards under the Plan or other property. + +(c) Amounts May Be Rounded to Avoid Fractional Shares. Any amounts delivered +in respect of the Settlement Amount[, including Shares at Risk,] may be +rounded to avoid fractional Shares. + +(d) You May Be Required to Become a Party to the Shareholders' Agreement. +Your rights to your PSUs are conditioned on your becoming a party to any +shareholders' agreement to which other similarly situated employees ( e.g., +employees with a similar title or position) of the Firm are required to be a +party. + +(e) Firm May Affix Legends and Place Stop Orders on Shares. GS Inc. may +affix to Certificates representing Shares any legend that the Committee +determines to be necessary or advisable (including to reflect any restrictions +to which you may be subject under a separate agreement). GS Inc. may advise +the transfer agent to place a stop order against any legended Shares. + +(f) You Agree to Certain Consents, Terms and Conditions. By accepting this +Award you understand and agree that: + +(i) You Agree to Certain Consents as a Condition to the Award. You have +expressly consented to all of the items listed in Section 3.3.3(d) of the +Plan, including the Firm's supplying to any third-party recordkeeper of the +Plan or other person such personal information of yours as the Committee deems +advisable to administer the Plan, and you agree to provide any additional +consents that the Committee determines to be necessary or advisable; + +(ii) You Are Subject to the Firm's Policies, Rules and Procedures. You are +subject to the Firm's policies in effect from time to time concerning trading +in Shares and hedging or pledging Shares and equity-based compensation or +other awards (including, without limitation, the "Firmwide Policy with Respect +to Personal Transactions Involving GS Securities and GS Equity Awards" or any +successor policies), and confidential or proprietary information, and you will +effect sales of Shares in accordance with such rules and procedures as may be +adopted from time to time (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); + +(iii) You Are Responsible for Costs Associated with Your Award. You will be +responsible for all brokerage costs and other fees or expenses associated with +your Award, including those related to the sale of Shares; + +(iv) You Will Be Deemed to Represent Your Compliance with All the Terms of +Your Award if You Accept Delivery. You will be deemed to have represented and +certified that you have complied with all of the terms of the Plan and this +Award Agreement when any Settlement Amount [and Dividend Equivalent Payments] +[is][are] delivered to you, and you request the sale of Shares following the +release of Transfer Restrictions on Shares at Risk; + +(v) Firm May Deliver Your Award into an Escrow Account. The Firm may +establish and maintain an escrow account on such terms (which may include your +executing any documents related to, and your paying for any costs associated +with, such account) as it may deem necessary or appropriate, + +and the Settlement Amount may initially be delivered and any [Dividend +Equivalent Payments and] dividends may initially be [paid][delivered] into and +held in that escrow account until such time as the Committee has received such +documentation as it may have requested or until the Committee has determined +that any other conditions or restrictions on deliveries required by this Award +Agreement have been satisfied; + +(vi) You May Be Required to Certify Compliance with Award Terms; You Are +Responsible for Providing the Firm with Updated Address and Contact +Information After Your Departure from the Firm. If your Employment terminates +while you continue to hold PSUs [or Shares at Risk], from time to time, you +may be required to provide certifications of your compliance with all of the +terms of the Plan and this Award Agreement as described in Paragraphs 9(a)(vi) +and 9(b)(iv). You understand and agree that (A) your address on file with the +Firm at the time any certification is required will be deemed to be your +current address, (B) it is your responsibility to inform the Firm of any +changes to your address to ensure timely receipt of the certification +materials, (C) you are responsible for contacting the Firm to obtain such +certification materials if not received and (D) your failure to return +properly completed certification materials by the specified deadline (which +includes your failure to timely return the completed certification because you +did not provide the Firm with updated contact information) will result in the +forfeiture of all of your PSUs or Shares at Risk and subject previously +delivered amounts to repayment under Paragraphs 9(a)(vi) and 9(b)(iv); + +(vii) You Authorize the Firm to Register, in Its or Its Designee's Name, Any +Shares at Risk and Sell, Assign or Transfer Any Forfeited Shares at Risk. You +are granting to the Firm the full power and authority to register any Shares +at Risk in its or its designee's name and authorizing the Firm or its designee +to sell, assign or transfer any Shares at Risk if you forfeit your Shares at +Risk; + +(viii) You Must Comply with Applicable Deadlines and Procedures to Appeal +Determinations Made by the Committee. If you disagree with a determination +made by the Committee, the SIP Committee, the SIP Administrators, or any of +their delegates or designees and you wish to appeal such determination, you +must submit a written request to the SIP Committee for review within 180 days +after the determination at issue. You must exhaust your internal +administrative remedies ( i.e. , submit your appeal and wait for resolution +of that appeal) before seeking to resolve a dispute through arbitration +pursuant to Paragraph 16 and Section 3.17 of the Plan; and + +(ix) You Agree that Covered Persons Will Not Have Liability. In addition to +and without limiting the generality of the provisions of Section 1.3.5 of the +Plan, neither the Firm nor any Covered Person will have any liability to you +or any other person for any action taken or omitted in respect of this or any +other Award. + +14. Non-transferability . Except as otherwise may be provided in +this Paragraph 14 or as otherwise may be provided by the Committee, the +limitations on transferability set forth in Section 3.5 of the Plan will apply +to this Award. Any purported transfer or assignment in violation of the +provisions of this Paragraph 14 or Section 3.5 of the Plan will be void. The +Committee may adopt procedures pursuant to which some or all recipients of +PSUs and Shares at Risk may transfer some or all of their PSUs or Shares at +Risk (which will continue to be subject to Transfer Restrictions until the +Transferability Date) through a gift for no consideration to any immediate +family member, a trust or other estate planning vehicle approved by the +Committee or SIP Committee in which the recipient and/or the recipient's +immediate family members in the aggregate have 100% of the beneficial +interest. + +15. Right of Offset . Except as provided in Paragraph 18(d), the +obligation to deliver the Settlement Amount, pay dividends [or Dividend +Equivalent Payments] or release Transfer Restrictions under this Award +Agreement is subject to Section 3.4 of the Plan, which provides for the Firm's +right to + +offset against such obligation any outstanding amounts you owe to the Firm and +any amounts the Committee deems appropriate pursuant to any tax equalization +policy or agreement. + +A RBITRATION, CHOICE OF FORUM AND GOVERNING LAW + +16. Arbitration; Choice of Forum . + +(a) B Y ACCEPTING THIS AWARD, YOU ARE INDICATING THAT YOU UNDERSTAND AND +AGREE THAT THE ARBITRATION AND CHOICE OF FORUM PROVISIONS SET FORTH IN SECTION +3.17 OF THE PLAN WILL APPLY TO THIS AWARD. THESE PROVISIONS, WHICH ARE +EXPRESSLY INCORPORATED HEREIN BY REFERENCE, PROVIDE AMONG OTHER THINGS THAT +ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN THE FIRM AND YOU ARISING OUT OF OR +RELATING TO OR CONCERNING THE PLAN OR THIS AWARD AGREEMENT WILL BE FINALLY +SETTLED BY ARBITRATION IN NEW YORK CITY, PURSUANT TO THE TERMS MORE FULLY SET +FORTH IN SECTION 3.17 OF THE PLAN; PROVIDED THAT NOTHING HEREIN SHALL PRECLUDE +YOU FROM FILING A CHARGE WITH OR PARTICIPATING IN ANY INVESTIGATION OR +PROCEEDING CONDUCTED BY ANY GOVERNMENTAL AUTHORITY, INCLUDING BUT NOT LIMITED +TO THE SEC, THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AND A STATE OR LOCAL +HUMAN RIGHTS AGENCY, AS WELL AS LAW ENFORCEMENT. + +(b) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider class, collective or representative claims, to order +consolidation or to join different claimants or grant relief other than on an +individual basis to the individual claimant involved. + +(c) Notwithstanding any applicable forum rules to the contrary, to the extent +there is a question of enforceability of this Award Agreement arising from a +challenge to the arbitrator's jurisdiction or to the arbitrability of a claim, +it will be decided by a court and not an arbitrator. + +(d) The Federal Arbitration Act governs interpretation and enforcement of all +arbitration provisions under the Plan and this Award Agreement, and all +arbitration proceedings thereunder. + +(e) Nothing in this Award Agreement creates a substantive right to bring a +claim under U.S. Federal, state, or local employment laws. + +(f) By accepting your Award, you irrevocably appoint each General Counsel of +GS Inc., or any person whom the General Counsel of GS Inc. designates, as your +agent for service of process in connection with any suit, action or proceeding +arising out of or relating to or concerning the Plan or any Award which is not +arbitrated pursuant to the provisions of Section 3.17.1 of the Plan, who shall +promptly advise you of any such service of process. + +(g) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider any claim as to which you have not first exhausted +your internal administrative remedies in accordance with Paragraph +13(f)(viii). + +17. Governing Law . T HIS AWARD WILL BE GOVERNED BY AND CONSTRUED +IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO +PRINCIPLES OF CONFLICT OF LAWS. + +C ERTAIN TAX PROVISIONS + +18. Compliance of Award Agreement and Plan with Section + +409A . The provisions of this Paragraph 18 apply to you only if you +are a U.S. taxpayer. + +(a) This Award Agreement and the Plan provisions that apply to this Award are +intended and will be construed to comply with Section 409A (including the +requirements applicable to, or the conditions for exemption from treatment as, +409A Deferred Compensation), whether by reason of short-term deferral +treatment or other exceptions or provisions. The Committee will have full +authority to give effect to this intent. To the extent necessary to give +effect to this intent, in the case of any conflict or potential inconsistency +between the provisions of the Plan (including Sections 1.3.2 and 2.1 thereof) +and this Award Agreement, the provisions of this Award Agreement will govern, +and in the case of any conflict or potential inconsistency between this +Paragraph 18 and the other provisions of this Award Agreement, this Paragraph +18 will govern. + +(b) Settlement will not be delayed beyond the date on which all applicable +conditions or restrictions on settlement in respect of your PSUs required by +this Award Agreement (including the consents and other items specified in +Section 3.3 of the Plan) are satisfied. To the extent that any portion of this +Award is intended to satisfy the requirements for short-term deferral +treatment under Section 409A, settlement in respect of such portion will occur +by the March 15 coinciding with the last day of the applicable "short-term +deferral" period described in Reg. § 1.409A-1(b)(4) in order for settlement to +be within the short-term deferral exception unless, in order to permit all +applicable conditions or restrictions on settlement to be satisfied, the +Committee elects, pursuant to Reg. § 1.409A-1(b)(4)(i)(D) or otherwise as may +be permitted in accordance with Section 409A, to delay settlement to a later +date within the same calendar year or to such later date as may be permitted +under Section 409A, including Reg. § 1.409A-3(d). For the avoidance of doubt, +if the Award includes a "series of installment payments" as described in Reg. +§ 1.409A-2(b)(2)(iii), your right to the series of installment payments will +be treated as a right to a series of separate payments and not as a right to a +single payment. + +(c) Notwithstanding the provisions of Paragraph 13(b) and Section 1.3.2(i) of +the Plan, to the extent necessary to comply with Section 409A, any delivery or +payment [(including in the form of Shares at Risk or other property)] that the +Firm may make in respect of your PSUs will not have the effect of deferring +payment, delivery, income inclusion, or a substantial risk of forfeiture, +beyond the date on which such payment, delivery or inclusion would occur or +such risk of forfeiture would lapse, with respect to the payment or delivery +that would otherwise have been made (unless the Committee elects a later date +for this purpose pursuant to Reg. § 1.409A-1(b)(4)(i)(D) or otherwise as may +be permitted under Section 409A, including and to the extent applicable, the +subsequent election provisions of Section 409A(a)(4)(C) of the Code and Reg. § +1.409A-2(b)). + +(d) Paragraph 15 and Section 3.4 of the Plan will not apply to Awards that are +409A Deferred Compensation except to the extent permitted under Section 409A. + +(e) Settlement in respect of any portion of the Award may be made, if and to +the extent elected by the Committee, later than the relevant Settlement Date +or other date or period specified hereinabove (but, in the case of any Award +that constitutes 409A Deferred Compensation, only to the extent that the later +payment or delivery, as applicable, is permitted under Section 409A). + +(f) You understand and agree that you are solely responsible for the payment +of any taxes and penalties due pursuant to Section 409A, but in no event will +you be permitted to designate, directly or indirectly, the taxable year of the +delivery. + +C OMMITTEE AUTHORITY, AMENDMENT, CONSTRUCTION AND REGULATORY REPORTING + +19. Committee Authority . The Committee has the authority to +determine, in its sole discretion, that any event triggering forfeiture or +repayment of your Award will not apply, to limit the + +forfeitures and repayments that result under Paragraphs 9 and 10 and to remove +Transfer Restrictions before the [applicable] Transferability Date. + +20. Amendment . The Committee reserves the right at any time to +amend the terms of this Award Agreement, and the Board may amend the Plan in +any respect; provided that , notwithstanding the foregoing and Sections +1.3.2(f), 1.3.2(h) and 3.1 of the Plan, no such amendment will materially +adversely affect your rights and obligations under this Award Agreement +without your consent; and provided further that the Committee expressly +reserves its rights to amend the Award Agreement and the Plan as described in +Sections 1.3.2(h)(1), (2) and (4) of the Plan. A modification that impacts the +tax consequences of this Award or the timing of delivery will not be an +amendment that materially adversely affects your rights and obligations under +this Award Agreement. Any amendment of this Award Agreement will be in +writing. + +21. Construction, Headings . Unless the context requires otherwise, +(i) words describing the singular number include the plural and vice versa, +(ii) words denoting any gender include all genders and (iii) the words +"include," "includes" and "including" will be deemed to be followed by the +words "without limitation." The headings in this Award Agreement are for the +purpose of convenience only and are not intended to define or limit the +construction of the provisions hereof. References in this Award Agreement to +any specific Plan provision will not be construed as limiting the +applicability of any other Plan provision. + +22. Providing Information to the Appropriate Authorities . In +accordance with applicable law, nothing in this Award Agreement (including the +forfeiture and repayment provisions in Paragraphs 9 and 10) or the Plan +prevents you from providing information you reasonably believe to be true to +the appropriate governmental authority, including a regulatory, judicial, +administrative, or other governmental entity; reporting possible violations of +law or regulation; making other disclosures that are protected under any +applicable law or regulation; or filing a charge or participating in any +investigation or proceeding conducted by a governmental authority. For the +avoidance of doubt, governmental authority includes federal, state and local +government agencies such as the SEC, the Equal Employment Opportunity +Commission and any state or local human rights agency ( e.g. , the New York +State Division of Human Rights, the New York City Commission on Human Rights, +the California Department of Fair Employment and Housing), as well as law +enforcement + +IN WITNESS WHEREOF , GS Inc. has caused this Award Agreement to be duly +executed and delivered as of the Date of Grant. + +THE GOLDMAN SACHS GROUP, INC. + +[ U.K. M ATERIAL RISK TAKER APPENDIX + +Q UALITATIVE OVERLAY REDUCTION + +In addition to and without limiting the Firm's rights under the forfeiture and +repayment provisions set forth in Paragraphs 9 and 10 or in the "Forfeiture +and Repayment" section below, the Committee may determine to reduce the +Settlement Amount as described in the section entitled "Qualitative Overlay +Reduction" in the Award Statement. + +F ORFEITURE AND REPAYMENT + +This section supplements Paragraph 9 and sets forth additional events that +result in forfeiture of up to all of your PSUs and Shares at Risk and may +require repayment to the Firm of up to all other amounts previously delivered +or paid to you under your Award in accordance with Paragraph 10. As with the +events described in Paragraph 9, more than one event may apply, in no case +will the occurrence of one event limit the forfeiture and repayment +obligations as a result of the occurrence of any other event and the Firm +reserves the right to (a) suspend delivery of Shares or release of Transfer +Restrictions, (b) deliver any Shares or dividends into an escrow account in +accordance with Paragraph 13(f)(v) or (c) apply Transfer Restrictions to any +Shares in connection with any investigation of whether any of the events that +result in forfeiture under this Appendix have occurred. + +With respect to the events described in this Appendix, the Committee will +consider certain factors to determine whether and what portion of your Award +will terminate, including the reason for the "Loss Event" (as defined below) +or "Risk Event" (as defined below) and the extent to which: (1) you +participated in the Loss Event or Risk Event, (2) your compensation for + may or may not have been adjusted to take into account the risk +associated with the Loss Event, Risk Event, your "Serious Misconduct" (as +defined below) or the Serious Misconduct of a "Supervised Employee" (as +defined below) and (3) your compensation may be adjusted for the year in which +the Loss Event, Risk Event, your Serious Misconduct or a Supervised Employee's +Serious Misconduct is discovered. + +(a) A Loss Event Occurs Prior to Delivery. If a Loss Event occurs prior to +the delivery of any portion of the Settlement Amount, your rights in respect +of all or a portion of your PSUs which are scheduled to deliver on the next +Settlement Date immediately following the date that the Loss Event is +identified (or, if not practicable, then the next following Settlement Date) +will terminate, and no Shares will be delivered in respect of such PSUs. + +(i) A " Loss Event " means (A) an annual pre-tax loss at GS Inc. or (B) +annual negative revenues in one or more reporting segments as disclosed in the +Firm's Form 10-K other than the Asset Management segment, or annual negative +revenues in the Asset Management segment of $5 billion or more, provided in +either case that you are employed in a business within such reporting segment. + +(b) A Risk Event Occurs . If a Risk Event occurs , +(i) your rights in respect of all or a portion of your PSUs will terminate and +no Settlement Amount will be delivered in respect of such PSUs, (ii) your +rights to all or a portion of any Shares at Risk will terminate and such +Shares at Risk will be cancelled and (iii) you will be obligated immediately +upon demand therefor to pay the Firm an amount not in excess of the greater of +the Fair Market Value of the Shares (plus any dividend payments) delivered in +respect of the Award (without reduction for any amount applied to satisfy tax +withholding or other obligations) + +determined as of (A) the date the Risk Event occurred and (B) the date that +the repayment request is made. + +(i) A " Risk Event " means there occurs a loss of 5% or more of firmwide +total capital from a reportable operational risk event determined in +accordance with the firmwide Reporting Operational Risk Events Policy. + +(c) You Engage in Serious Misconduct . If you engage in Serious +Misconduct , you will be obligated immediately upon demand +therefor to pay the Firm an amount not in excess of the greater of the Fair +Market Value of the Shares (plus any dividend payments) delivered in respect +of the Award (without reduction for any amount applied to satisfy tax +withholding or other obligations) determined as of (i) the date the Serious +Misconduct occurred and (ii) the date that the repayment request is made. + +(i) " Serious Misconduct " means that you engage in conduct that the Firm +reasonably considers, in its sole discretion, to be misconduct sufficient to +justify summary termination of employment under English law. + +(d) A Supervised Employee Engages in Serious Misconduct. If the Committee +determines that it is appropriate to hold you accountable in whole or in part +for Serious Misconduct related to compliance, control or risk that occurred +during by a Supervised Employee, your rights in respect of all or a +portion of your PSUs will terminate and no Settlement Amount will be delivered +in respect of such PSUs and your rights to all or a portion of any Shares at +Risk will terminate and such Shares at Risk will be cancelled. + +(i) " Supervised Employee " means an individual with respect to whom the +Committee determines you had supervisory responsibility as a result of direct +or indirect reporting lines or your management responsibility for an office, +division or business. + +Notwithstanding any provision in the Plan, this Award Agreement or any other +agreement or arrangement you may have with the Firm, the parties agree that to +the extent that there is any dispute arising out of or relating to the payment +required by Paragraphs (b) and (c) of this Appendix (including your refusal to +remit payment) the parties will submit to arbitration in accordance with +Paragraph 16 of this Award Agreement and Section 3.17 of the Plan as the sole +means of resolution of such dispute (including the recovery by the Firm of the +payment amount).] + +D EFINITIONS APPENDIX + +The following capitalized terms are used in this Award Agreement with the +following meanings: + +(a) " 409A Deferred Compensation " means a "deferral of compensation" or +"deferred compensation" as those terms are defined in the regulations under +Section 409A. + +(b) " Associate With a Covered Enterprise " means that you (i) form, or +acquire a 5% or greater equity ownership, voting or profit participation +interest in, any Covered Enterprise or (ii) associate in any capacity +(including association as an officer, employee, partner, director, consultant, +agent or advisor) with any Covered Enterprise. Associate With a Covered +Enterprise may include, as determined in the discretion of the Committee, (i) +becoming the subject of any publicly available announcement or report of a +pending or future association with a Covered Enterprise and (ii) unpaid +associations, including an association in contemplation of future employment. +"Association With a Covered Enterprise" will have its correlative meaning. + +(c) " Covered Enterprise " means a Competitive Enterprise and any other +existing or planned business enterprise that: (i) offers, holds itself out as +offering or reasonably may be expected to offer products or services that are +the same as or similar to those offered by the Firm or that the Firm +reasonably expects to offer ("Firm Products or Services") or (ii) engages in, +holds itself out as engaging in or reasonably may be expected to engage in any +other activity that is the same as or similar to any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage +("Firm Activities"). For the avoidance of doubt, Firm Activities include any +activity that requires the same or similar skills as any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage, +irrespective of whether any such financial activity is in furtherance of an +advisory, agency, proprietary or fiduciary undertaking. + +The enterprises covered by this definition include enterprises that offer, +hold themselves out as offering or reasonably may be expected to offer Firm +Products or Services, or engage in, hold themselves out as engaging in or +reasonably may be expected to engage in Firm Activities directly, as well as +those that do so indirectly by ownership or control ( e.g. , by owning, +being owned by or by being under common ownership with an enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +Firm Products or Services or that engages in, holds itself out as engaging in +or reasonably may be expected to engage in Firm Activities). The definition of +Covered Enterprise includes, solely by way of example, any enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +any product or service, or engages in, holds itself out as engaging in or +reasonably may be expected to engage in any activity, in any case, associated +with investment banking; public or private finance; lending; financial +advisory services; private investing for anyone other than you or your family +members (including, for the avoidance of doubt, any type of proprietary +investing or trading); private wealth management; private banking; consumer or +commercial cash management; consumer, digital or commercial banking; merchant +banking; asset, portfolio or hedge fund management; insurance or reinsurance +underwriting or brokerage; property management; or securities, futures, +commodities, energy, derivatives, currency or digital asset brokerage, sales, +lending, custody, clearance, settlement or trading. An enterprise that offers, +holds itself out as offering or reasonably may be expected to offer Firm +Products or Services, or engages in, holds itself out as engaging in or +reasonably may be expected to engage in Firm Activities is a Covered +Enterprise , irrespective of whether the enterprise is a customer, client or +counterparty of the Firm or is otherwise associated with the Firm and, because +the Firm is a global enterprise, irrespective of where the Covered Enterprise +is physically located. + +(d) " Determination Date " means the date specified on your Award Statement +as the date on which the Committee will determine whether or not, and to what +extent, the Performance Goal was achieved for the Performance Period. + +(e) [" Dividend Equivalent Payments " means any payments made in respect of +Dividend Equivalent Rights.] + +(f) " FDIC " means the Federal Deposit Insurance Corporation or any +successor thereto. + +(g) " Failed to Consider Risk " means that you participated (or otherwise +oversaw or were responsible for, depending on the circumstances, another +individual's participation) in the structuring or marketing of any product or +service, or participated on behalf of the Firm or any of its clients in the +purchase or sale of any security or other property, in any case without +appropriate consideration of the risk to the Firm or the broader financial +system as a whole (for example, where you have improperly analyzed such risk +or where you have failed sufficiently to raise concerns about such risk) and, +as a result of such action or omission, the Committee determines there has +been, or reasonably could be expected to be, a material adverse impact on the +Firm, your business unit or the broader financial system. + +(h) " Performance Goal " means the performance goal determined by the +Committee that is specified on your Award Statement. + +(i) " Performance Period " means the performance period determined by the +Committee that is specified on your Award Statement. + +(j) " Qualifying Termination After a Change in Control " means that the Firm +terminates your Employment other than for Cause or you terminate your +Employment for Good Reason, in each case, within 18 months following a Change +in Control. + +(k) [" Sarbanes-Oxley " means the Sarbanes-Oxley Act of 2002, as amended.] + +(l) " SEC " means the U.S. Securities and Exchange Commission. + +(m) " Selected Firm Personnel " means any individual who is or in the three +months preceding the conduct prohibited by Paragraph 9(a)(ii) was (i) a Firm +employee or consultant with whom you personally worked while employed by the +Firm, (ii) a Firm employee or consultant who, at any time during the year +preceding the date of the termination of your Employment, worked in the same +division in which you worked or (iii) an Advisory Director, a Managing +Director or a Senior Advisor of the Firm. + +(n) " Settlement Amount " means an amount deliverable to you in respect of +your PSUs (determined as described in the Award Statement). + +(o) " Settlement Date " means each date specified on your Award Statement as +the date on which the Settlement Amount will be delivered, 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. + +(p) " Share " means a share of Common Stock. + +(q) " Shares at Risk " means Shares that are subject to Transfer +Restrictions. + +The following capitalized terms are used in this Award Agreement with the +meanings that are assigned to them in the Plan: + +(a) " Account " means any brokerage account, custody account or similar +account, as approved or required by GS Inc. from time to time, into which +shares of Common Stock, cash or other property in respect of an Award are +delivered. + +(b) " Award Agreement " means the written document or documents by which +each Award is evidenced, including any related Award Statement and signature +card. + +(c) " Award Statement " means a written statement that reflects certain +Award terms. + +(d) " Board " means the Board of Directors of GS Inc. + +(e) " 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. + +(f) " Cause " means (i) the Grantee's conviction, whether following trial or +by plea of guilty or nolo contendere (or similar plea), in a criminal +proceeding (A) on a misdemeanor charge involving fraud, false statements or +misleading omissions, wrongful taking, embezzlement, bribery, forgery, +counterfeiting or extortion, or (B) on a felony charge, or (C) on an +equivalent charge to those in clauses (A) and (B) in jurisdictions which do +not use those designations, (ii) the Grantee's engaging in any conduct which +constitutes an employment disqualification under applicable law (including +statutory disqualification as defined under the Exchange Act), (iii) the +Grantee's willful failure to perform the Grantee's duties to the Firm, (iv) +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, (v) 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, (vi) the +Grantee's engaging in any act or making any statement which impairs, impugns, +denigrates, disparages or negatively reflects upon the name, reputation or +business interests of the Firm or (vii) 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 may have under any other agreement with a Grantee or at law or +in equity. + +(g) " Certificate " means a stock certificate (or other appropriate document +or evidence of ownership) representing shares of Common Stock. + +(h) " 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 shareholders +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: (i) 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 (A) 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 (B) 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 (ii) 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 (A) were members of the Board on the Effective Date or (B) 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). + +(i) " 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. + +(j) " Code " means the Internal Revenue Code of 1986, as amended from time +to time, and the applicable rulings and regulations thereunder. + +(k) " 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 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. + +(l) " Common Stock " means common stock of GS Inc., par value $0.01 per +share. + +(m) " Competitive Enterprise " means an existing or planned business +enterprise that (i) engages, or may reasonably be expected to engage, in any +activity; (ii) owns or controls, or may reasonably be expected to own or +control, a significant interest in any entity that engages in any activity or +(iii) is, or may reasonably be expected to be, owned by, or a significant +interest in which is, or may reasonably be expected to be, owned or controlled +by, any entity that engages in any activity that, in any case, competes or +will compete 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 (including for the avoidance of +doubt, any type of proprietary investing or trading); private wealth +management; private banking; consumer or commercial cash management; consumer, +digital or commercial banking; merchant banking; asset, portfolio or hedge +fund management; insurance or reinsurance underwriting or brokerage; property +management; or securities, futures, commodities, energy, derivatives, currency +or digital asset brokerage, sales, lending, custody, clearance, settlement or +trading. + +(n) " Covered Person " means a member of the Board or the Committee or any +employee of the Firm. + +(o) " Date of Grant " means the date specified in the Grantee's Award +Agreement as the date of grant of the Award. + +(p) " 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. + +(q) " Effective Date " means the date this Plan is approved by the +shareholders of GS Inc. pursuant to Section 3.15 of the Plan. + +(r) " 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 +(i) 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), (ii) whether and when a change in a +Grantee's association with the Firm results in a termination of Employment and +(iii) 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. + +(s) " Exchange Act " means the Securities Exchange Act of 1934, as amended +from time to time, and the applicable rules and regulations thereunder. + +(t) " 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. + +(u) " Firm " means GS Inc. and its subsidiaries and affiliates. + +(v) " 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). + +(w) " Grantee " means a person who receives an Award. + +(x) " GS Inc. " means The Goldman Sachs Group, Inc., and any successor +thereto. + +(y) " 1999 SIP " means The Goldman Sachs 1999 Stock Incentive Plan, as in +effect prior to the effective date of the 2003 SIP. + +(z) " 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. + +(aa) " Restricted Share " means a share of Common Stock delivered under the +Plan that is subject to Transfer Restrictions, forfeiture provisions and/or +other terms and conditions specified herein and in the Restricted Share Award +Agreement or other applicable Award Agreement. All references to Restricted +Shares include "Shares at Risk." + +(bb) " RSU " means a restricted stock unit 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. + +(cc) " Section 409A " means Section 409A of the Code, including any +amendments or successor provisions to that Section and any regulations and +other administrative guidance thereunder, in each case as they, from time to +time, may be amended or interpreted through further administrative guidance. + +(dd) " 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. + +(ee) " SIP Committee " means the persons who have been delegated certain +authority under the Plan by the Committee. + +(ff) " Solicit " means any direct or indirect communication of any kind +whatsoever, regardless of by whom initiated, inviting, advising, suggesting, +encouraging or requesting any person or entity, in any manner, to take or +refrain from taking any action. The terms "Solicited," "Soliciting" and +"Solicitation" will have their correlative meanings. + +(gg) [" Transfer Restrictions " means restrictions that prohibit the sale, +exchange, transfer, assignment, pledge, hypothecation, fractionalization, +hedge or other disposal (including through the use of any cash-settled +instrument), whether voluntarily or involuntarily by the Grantee, of an Award +or any shares of Common Stock, cash or other property delivered in respect of +an Award.] + +(hh) [" Transferability Date " means the date Transfer Restrictions on a +Restricted Share will be released. Within 30 Business Days after the +applicable Transferability Date, GS Inc. shall take, or shall cause to be +taken, such steps as may be necessary to remove Transfer Restrictions.] + +(ii) " 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. + +(jj) " 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). + +EX-10.52 11 d192225dex1052.htm EX-10.52 EX-10.52 + +Exhibit 10.52 + +T HE GOLDMAN SACHS GROUP, INC. + +A WARD + +This Award Agreement, together with The Goldman Sachs Amended and Restated +Stock Incentive Plan (2021) (the "Plan"), governs your of +performance-based RSUs (your "Award" or "PSUs"). You should read carefully +this entire Award Agreement, which includes the Award Statement, any attached +Appendix and the signature card. + +A CCEPTANCE + +1. You Must Decide Whether to Accept this Award Agreement . To be +eligible to receive your Award, you must by the date specified (a) +open and activate an Account and (b) agree to all the terms of your +Award by executing the related signature card in accordance with its +instructions. By executing the signature card, you confirm your agreement to + all of the terms of this Award Agreement, including the arbitration +and choice of forum provisions in Paragraph 17. + +D OCUMENTS THAT GOVERN YOUR AWARD; DEFINITIONS + +2. The Plan . Your Award is granted under the Plan, and the Plan's +terms apply to, and are a part of, this Award Agreement. + +3. Your Award Statement . The Award Statement delivered to you +contains some of your Award's specific terms. For example, it contains the +number of PSUs subject to this Award, the Performance Period and the +Performance Goal[s] applicable to your Award. It also contains the Vesting +Date[s], the Determination Date and the Settlement Date for your Award and the +Transferability Date for any Shares at Risk that may be delivered to you in +respect of any Settlement Amount that you may earn. The number of PSUs on your +Award Statement is not necessarily the number of PSUs in respect of which the +Settlement Amount will be earned, but is merely the basis for determining the +amount (if any) that will be delivered to you. + +4. Definitions . Unless otherwise defined herein, including in the +Definitions Appendix or any other Appendix, capitalized terms have the +meanings provided in the Plan. + +V ESTING OF YOUR PSUS + +5. Vesting . On each Vesting Date listed on your Award Statement, +you will become Vested in the amount of Outstanding PSUs listed next to that +date. When a PSU becomes Vested, it means only that your continued active +Employment is not required to earn delivery in respect of that PSU. Vesting +does not mean you have a non-forfeitable right to the Vested portion of your +Award. The terms of this Award Agreement (including conditions to delivery, +satisfaction of the Performance Goal[s] and any applicable Transfer +Restrictions) continue to apply to your Award, and failure to meet such terms +may result in the termination of this Award (as a result of which no delivery +in respect of such Vested PSUs would be made) and you can still forfeit Vested +PSUs and Shares at Risk. + +P ERFORMANCE GOAL[S] + +6. Performance . The Settlement Amount is dependent, and may vary +based, on achievement of the Performance Goal[s] over the Performance Period. +On the Determination Date, the Firm will determine whether or not, and to what +extent, the Performance Goal[s] for that Performance Period [has][have] been +satisfied. All your rights with respect to the Settlement Amount [(and any +Dividend Equivalent Payments)] are dependent on the extent to which the +Performance Goal[s] [is][are] + +achieved, and any rights to delivery in respect of your Outstanding PSUs +immediately will terminate and no Settlement Amount will be delivered in +respect of such PSUs upon the Committee's determination, in its sole +discretion, that the Performance Goal[s] [has][have] not been satisfied to the +extent necessary to result in delivery in respect of the PSUs. + +S ETTLEMENT AMOUNT + +7. Settlement . + +(a) In General. Subject to satisfaction of the terms of this Award, +including satisfaction of the Performance Goal[s], on the Settlement Date, you +will receive delivery (less applicable withholding as described in Paragraph +14(a)) of the Settlement Amount [and payment of any Dividend Equivalent +Payments] as further described in this Award Agreement and in your Award +Statement. Until such delivery and payment, you have only the rights of a +general unsecured creditor and you do not have any rights as a shareholder of +GS Inc. with respect to either the PSUs or the Settlement Amount. Without +limiting the Committee's authority under Section 1.3.2(h) of the Plan, the +Firm may accelerate any Settlement Date by up to 30 days. + +(b) Form of Delivery. The Settlement Amount will be delivered in the form of +Shares (by book entry credit to your Account). + +(c) Shares at Risk. percent of the Shares delivered to you in respect of +the Settlement Amount will be Shares at Risk subject to Transfer Restrictions +until the [applicable] Transferability Date [listed on your Award Statement]. +Any purported sale, exchange, transfer, assignment, pledge, hypothecation, +fractionalization, hedge or other disposition in violation of the Transfer +Restrictions on Shares at Risk will be void. Within 30 Business Days after the +[applicable] Transferability Date [listed on your Award Statement] (or any +other date on which the Transfer Restrictions are to be removed), GS Inc. will +remove the Transfer Restrictions. The Committee or the SIP Committee may +select multiple dates within such 30-Business-Day period on which to remove +Transfer Restrictions for all or a portion of the Shares at Risk with the same +Transferability Date listed on the Award Statement, and all such dates will be +treated as a single Transferability Date for purposes of this Award. + +(d) [ Voluntary Deferral of Settlement Date. Subject to any procedures and +agreement terms adopted by the Committee to govern any such election, at least +12 months prior to the last day of the original Performance Period set forth +on the Award Statement (or such other date as may be permitted under Section +409A), you may make an irrevocable election to defer the Settlement Date[s] +(and the delivery of the Settlement Amount [and payment of any Dividend +Equivalent Payments, each] determined as of the Determination Date) until the +fifth anniversary of the originally scheduled Settlement Date[s] set forth on +the Award Statement (or such other date as may be permitted by Section 409A). +Any such election will be in accordance with the subsequent election +provisions of Section 409A(a)(4)(C) of the Code and Reg. § 1.409A-2(b) or +otherwise as may be permitted under Section 409A.] + +[D IVIDEND EQUIVALENT RIGHTS][DIVIDENDS] + +8. [Dividend Equivalent Rights][Dividends] . [To the extent +described in your Award Statement, each PSU will include a Dividend Equivalent +Right, which will be subject to the provisions of Section 2.8 of the Plan. +Accordingly, for each of your Outstanding PSUs with respect to which delivery +is made under the Settlement Amount, you will be entitled to payments under +Dividend Equivalent Rights equal to any regular cash dividend paid by GS Inc. +in respect of a Share the record date for which occurs on or after the Date of +Grant. The payment to you of amounts under Dividend Equivalent Rights (less + +applicable withholding as described in Paragraph 14(a)) is conditioned upon +the delivery under the Settlement Amount in respect of the PSUs to which such +Dividend Equivalent Rights relate, and you will have no right to receive any +Dividend Equivalent Payments relating to PSUs for which you do not receive +delivery under the Settlement Amount (including, without limitation, due to a +failure to satisfy the Performance Goal[s]). Dividend Equivalent Payments will +be paid on the Settlement Date.] [You will be entitled to receive on a current +basis any regular cash dividend paid in respect of your Shares at Risk. The +PSUs do not include Dividend Equivalent Rights.] + +F ORFEITURE OF YOUR AWARD + +9. How You May Forfeit Your Award . This Paragraph 9 sets forth the +events that result in forfeiture of up to all of your PSUs and Shares at Risk +and may require repayment to the Firm of up to all amounts previously paid or +delivered to you under your PSUs in accordance with Paragraph 10. More than +one event may apply, and in no case will the occurrence of one event limit the +forfeiture and repayment obligations as a result of the occurrence of any +other event. In addition, the Firm reserves the right to (a) suspend vesting +of Outstanding PSUs, delivery of the Settlement Amount [and payment of any +Dividend Equivalent Payments] or release of Transfer Restrictions on Shares at +Risk, (b) deliver the Settlement Amount, [any Dividend Equivalent Payments] or +dividends into an escrow account in accordance with Paragraph 14(f)(v) or (c) +apply Transfer Restrictions to any Shares in connection with any investigation +of whether any of the events that result in forfeiture under the Plan or this +Paragraph 9 have occurred. Paragraph 12 (relating to [certain circumstances +under which you will not forfeit your unvested PSUs upon Employment +termination][Extended Absence and Qualified Termination]) and Paragraph 13 +(relating to [certain circumstances under which vesting and/or release of +Transfer Restrictions may be accelerated][Change in Control and death]) +provide for exceptions to one or more provisions of this Paragraph 9. [The +U.K. Material Risk Taker Appendix supplements this Paragraph 9 and sets forth +additional events that result in forfeiture of up to all of your PSUs and +Shares at Risk and may require repayment to the Firm as described in Paragraph +10 and the U.K. Material Risk Taker Appendix.] + +(a) Unvested PSUs Forfeited if Your Employment Terminates. If your +Employment terminates for any reason or you are otherwise no longer actively +Employed with the Firm (which includes off-premises notice periods, "garden +leaves," pay in lieu of notice or any other similar status), your rights to +your Outstanding PSUs that are not Vested will terminate, and no Settlement +Amount will be delivered in respect thereof. + +(b) Vested and Unvested PSUs Forfeited Upon Certain Events. If any of the +following occurs, your rights to all of your Outstanding PSUs (whether or not +Vested) will terminate, and no Settlement Amount will be delivered in respect +thereof, as may be further described below: + +(i) You Associate With a Covered Enterprise. You Associate With a Covered +Enterprise during the Performance Period. + +(ii) You Solicit Clients or Employees, Interfere with Client or Employee +Relationships or Participate in the Hiring of Employees. Before the [First] +Settlement Date [listed on your Award Statement], either: + +(A) you, in any manner, directly or indirectly, (1) Solicit any Client to +transact business with a Covered Enterprise or to reduce or refrain from doing +any business with the Firm, (2) interfere with or damage (or attempt to +interfere with or damage) any relationship between the Firm and any Client, +(3) Solicit any person who is an employee of the Firm to resign from the Firm, +(4) Solicit any Selected Firm Personnel to apply for or accept employment (or +other association) with any person or + +entity other than the Firm or (5) participate in the hiring of any Selected +Firm Personnel by any person or entity other than the Firm (including, without +limitation, participating in the identification of individuals for potential +hire, and participating in any hiring decision), whether as an employee or +consultant or otherwise, or + +(B) Selected Firm Personnel are Solicited, hired or accepted into partnership, +membership or similar status by any entity where you have, or will have, +direct or indirect managerial responsibility for such Selected Firm Personnel, +unless the Committee determines that you were not involved in such +Solicitation, hiring or acceptance. + +(iii) You Failed to Consider Risk. You Failed to Consider Risk during + +(iv) Your Conduct Constitutes Cause. Any event that constitutes Cause +[(including, for the avoidance of doubt, "Serious Misconduct" as defined in +the U.K. Material Risk Taker Appendix)] has occurred before the [applicable] +Settlement Date. + +(v) You Do Not Meet Your Obligations to the Firm. The Committee determines +that, before the [applicable] Settlement Date, you failed to meet, in any +respect, any obligation under any agreement with the Firm, or any agreement +entered into in connection with your Employment or this Award, including the +Firm's notice period requirement applicable to you, any offer letter, +employment agreement or any shareholders' agreement relating to the Firm. Your +failure to pay or reimburse the Firm, on demand, for any amount you owe to the +Firm will constitute (A) failure to meet an obligation you have under an +agreement, regardless of whether such obligation arises under a written +agreement, and/or (B) a material violation of Firm policy constituting Cause. + +(vi) You Do Not Provide Timely Certifications or Comply with Your +Certifications. You fail to certify to GS Inc. that you have complied with +all of the terms of the Plan and this Award Agreement, or the Committee +determines that you have failed to comply with a term of the Plan or this +Award Agreement to which you have certified compliance. + +(vii) You Do Not Follow Dispute Resolution/Arbitration Procedures. You +attempt to have any dispute under the Plan or this Award Agreement resolved in +any manner that is not provided for by Paragraph 17 or Section 3.17 of the +Plan, or you attempt to arbitrate a dispute without first having exhausted +your internal administrative remedies in accordance with Paragraph +14(f)(viii). + +(viii) You Bring an Action that Results in a Determination that Any Award +Agreement Term Is Invalid. As a result of any action brought by you, it is +determined that any term of this Award Agreement is invalid. + +(ix) You Receive Compensation in Respect of Your Award from Another +Employer. Your Employment terminates for any reason or you otherwise are no +longer actively Employed with the Firm and another entity grants you cash, +equity or other property (whether vested or unvested) to replace, substitute +for or otherwise in respect of your Outstanding PSUs. + +(x) [GS Inc. Fails to Maintain the Minimum Tier 1 Capital Ratio. Before the +[applicable] Settlement Date, GS Inc. fails to maintain the required "Minimum +Tier 1 Capital Ratio" as defined under Federal Reserve Board Regulations +applicable to GS Inc. for a period of 90 consecutive business days.] + +(xi) [GS Inc. Is Determined to Be in Default. Before the [applicable] +Settlement Date, the Board of Governors of the Federal Reserve or the FDIC +makes a written recommendation under + +Title II (Orderly Liquidation Authority) of the Dodd-Frank Wall Street Reform +and Consumer Protection Act for the appointment of the FDIC as a receiver of +GS Inc. based on a determination that GS Inc. is "in default" or "in danger of +default."] + +(xii) [ Accounting Restatement Required Under Sarbanes-Oxley. GS Inc. is +required to prepare an accounting restatement due to GS Inc.'s material +noncompliance, as a result of misconduct, with any financial reporting +requirement under the securities laws as described in Section 304(a) of +Sarbanes-Oxley; provided , however , that your rights with respect to the +PSUs will only be terminated to the same extent that would be required under +Section 304(a) of Sarbanes-Oxley had you been a "chief executive officer" or +"chief financial officer" of GS Inc. (regardless of whether you actually hold +such position at the relevant time).] + +(c) Shares at Risk Forfeited upon Certain Events. To the extent you receive +delivery of Shares at Risk in connection with any Settlement Amount, if any of +the following occurs your rights to all of your Shares at Risk will terminate +and your Shares at Risk will be cancelled, in each case, as may be further +described below: + +(i) You Failed to Consider Risk. You Failed to Consider Risk during + +(ii) Your Conduct Constitutes Cause. Any event that constitutes Cause has +occurred before the [applicable] Transferability Date. + +(iii) You Do Not Meet Your Obligations to the Firm. The Committee determines +that, before the [applicable] Transferability Date, you failed to meet, in any +respect, any obligation under any agreement with the Firm, or any agreement +entered into in connection with your Employment or this Award, including the +Firm's notice period requirement applicable to you, any offer letter, +employment agreement or any shareholders' agreement relating to the Firm. Your +failure to pay or reimburse the Firm, on demand, for any amount you owe to the +Firm will constitute (A) failure to meet an obligation you have under an +agreement, regardless of whether such obligation arises under a written +agreement and/or (B) a material violation of Firm policy constituting Cause. + +(iv) You Do Not Provide Timely Certifications or Comply with Your +Certifications. You fail to certify to GS Inc. that you have complied with +all of the terms of the Plan and this Award Agreement, or the Committee +determines that you have failed to comply with a term of the Plan or this +Award Agreement to which you have certified compliance. + +(v) You Do Not Follow Dispute Resolution/Arbitration Procedures. You attempt +to have any dispute under the Plan or this Award Agreement resolved in any +manner that is not provided for by Paragraph 17 or Section 3.17 of the Plan, +or you attempt to arbitrate a dispute without first having exhausted your +internal administrative remedies in accordance with Paragraph 14(f)(viii). + +(vi) You Bring an Action that Results in a Determination that Any Award +Agreement Term Is Invalid. As a result of any action brought by you, it is +determined that any term of this Award Agreement is invalid. + +(vii) You Receive Compensation in Respect of Your Award from Another +Employer. Your Employment terminates for any reason or you otherwise are no +longer actively Employed with the Firm and another entity grants you cash, +equity or other property (whether vested or unvested) to replace, substitute +for or otherwise in respect of any Shares at Risk; provided , however , +that your rights will only be terminated in respect of the Shares at Risk that +are replaced, substituted for or otherwise considered by such other entity in +making its grant. + +(viii) [ Accounting Restatement Required Under Sarbanes-Oxley. GS Inc. is +required to prepare an accounting restatement due to GS Inc.'s material +noncompliance, as a result of misconduct, with any financial reporting +requirement under the securities laws as described in Section 304(a) of +Sarbanes-Oxley; provided , however , that your rights will only be +terminated in respect of Shares at Risk to the same extent that would be +required under Section 304(a) of Sarbanes-Oxley had you been a "chief +executive officer" or "chief financial officer" of GS Inc. (regardless of +whether you actually hold such position at the relevant time).] + +R EPAYMENT OF YOUR AWARD + +10. When You May Be Required to Repay Your Award . + +(a) Repayment, Generally. If the Committee determines that any term of this +Award was not satisfied, you will be required, immediately upon demand +therefor, to repay to the Firm the following: + +(i) Any Settlement Amount (including any Shares at Risk) for which the terms +(including the terms for delivery) of the related PSUs were not satisfied, in +accordance with Section 2.6.3 of the Plan. + +(ii) Any Shares at Risk for which the terms (including the terms for the +release of Transfer Restrictions) were not satisfied, in accordance with +Section 2.5.3 of the Plan. + +(iii) Any Shares that were delivered (but not subject to Transfer +Restrictions) at the same time any Shares at Risk that are cancelled or +required to be repaid were delivered. + +(iv) [Any Dividend Equivalent Payments for which the terms were not satisfied +(including any such payments made in respect of PSUs that are forfeited or any +Settlement Amount that is required to be repaid), in accordance with Section +2.8.3 of the Plan.] + +(v) Any dividends paid in respect of any delivered Shares (including Shares at +Risk) that are cancelled or required to be repaid. + +(vi) Any amount applied to satisfy tax withholding or other obligations with +respect to any PSUs, Settlement Amount [(including Shares at Risk)], [or] +dividend payments [or Dividend Equivalent Payments] that are forfeited or +required to be repaid. + +(b) Repayment Upon Materially Inaccurate Financial Statements. If any +delivery is made under this Award Agreement based on materially inaccurate +financial statements (which includes, but is not limited to, statements of +earnings, revenues or gains) or other materially inaccurate performance +criteria, you will be obligated to repay to the Firm, immediately upon demand +therefor, any excess amount delivered, as determined by the Committee in its +sole discretion. + +(c) [Repayment Upon Accounting Restatement Required Under Sarbanes-Oxley. If +an event described in Paragraphs 9(b)(xii) and 9(c)(viii) (relating to a +requirement under Sarbanes-Oxley that GS Inc. prepare an accounting +restatement) occurs, any Settlement Amount (including Shares at Risk), +dividend payments, [Dividend Equivalent Payments,] cash or other property +delivered, paid or withheld in respect of this Award will be subject to +repayment as described in Paragraph 10(a) to the same extent that would be +required under Section 304(a) of Sarbanes-Oxley had you been a "chief +executive officer" or "chief financial officer" of GS Inc. (regardless of +whether you actually hold such position at the relevant time).] + +T ERMINATIONS OF EMPLOYMENT + +11. Termination of Employment Generally . Unless the Committee +determines otherwise, if your Employment terminates for any reason or you are +otherwise no longer actively Employed with the Firm (which includes off- +premises notice periods, "garden leaves," pay in lieu of notice or any other +similar status), the Performance Goal[s] applicable to your Outstanding PSUs +will continue to apply with respect to your Vested PSUs [( e.g., PSUs that +become Vested in connection with Extended Absence, Qualified Termination, +Change in Control or death as described in Paragraphs 12 and 13)] and the +determination of the Settlement Amount will continue to be subject to whether +or not, and to what extent, the Performance Goal[s] [has][have] been achieved +with respect to your Vested PSUs, in each case, as provided in Paragraph 6. +All other terms of this Award Agreement, including the forfeiture and +repayment events in Paragraphs 9 and 10, continue to apply. + +12. [Circumstances Under Which You Will Not Forfeit Your Unvested PSUs on +Employment Termination (but the Performance Goal, Original Settlement Date and +Transferability Date Continue to Apply) . If your Employment terminates +at a time when you meet the requirements for Extended Absence or Retirement, +each as described below, then Paragraph 9(a) will not apply, and your +Outstanding PSUs will be treated as described in this Paragraph 12. The +Performance Goal applicable to your Outstanding PSUs will continue to apply +and the determination of the Settlement Amount will continue to be subject to +whether or not, and to what extent, the Performance Goal has been achieved, in +each case, as provided in Paragraph 6. All other terms of this Award +Agreement, including the other forfeiture and repayment events in Paragraphs 9 +and 10, continue to apply. + +(a) Extended Absence or Retirement. If your Employment terminates by +Extended Absence or Retirement, your Outstanding PSUs that are not Vested will +become Vested. For the avoidance of doubt, your rights to any Outstanding PSUs +will be terminated and no Settlement Amount will be delivered in respect +thereof if you Associate With a Covered Enterprise during the Performance +Period, as described in Paragraph 9(b)(i).] + +12. [Extended Absence or Qualified Termination . If your Employment +terminates at a time when you meet the requirements for Extended Absence or a +Qualified Termination, then Paragraph 9(a) will not apply to the extent +described in this Paragraph 12, and your Outstanding PSUs will be treated as +described in this Paragraph 12. All other terms of this Award Agreement, +including the other forfeiture and repayment events in Paragraphs 9 and 10, +continue to apply. In each case, the Performance Goals applicable to your +Outstanding PSUs will continue to apply, and the determination of the +Settlement Amount will continue to be subject to whether or not, and to what +extent, the Performance Goals have been achieved, as provided in Paragraph 6. + +(a) Extended Absence. If your Employment terminates by Extended Absence, +your Outstanding PSUs that are not Vested will become Vested. For the +avoidance of doubt, your rights to any Outstanding PSUs will be terminated and +no Settlement Amount will be delivered in respect thereof if you Associate +With a Covered Enterprise during the Performance Period, as described in +Paragraph 9(b)(i). + +(b) Qualified Termination. If the Firm terminates your Employment solely by +reason of a Qualified Termination and you execute a general waiver and release +of claims and an agreement to pay any associated tax liability in the form the +Firm prescribes, a pro rata portion of your Outstanding PSUs (based on the +portion of the Performance Period during which you were Employed) will become +Vested. For the avoidance of doubt, your rights to any Outstanding PSUs will +be terminated and no Settlement Amount will be delivered in respect thereof if +you Associate With a Covered Enterprise during the Performance Period, as +described in Paragraph 9(b)(i).] + +13. [Accelerated Vesting and/or Release of Transfer Restrictions in the +Event of a Qualifying Termination After a Change in Control or Death . +In the event of your Qualifying Termination After a Change in Control or +death, each as described below, Paragraph 9(a) will not apply, your +Outstanding PSUs or, to the extent you have received delivery in connection +with any Settlement Amount, your Shares at Risk, will be treated as described +in this Paragraph 13, and, except as set forth in Paragraph 13(a), all other +terms of this Award Agreement, including the other forfeiture and repayment +events in Paragraphs 9 and 10, continue to apply. In each case, the +Performance Goal applicable to your Outstanding PSUs will continue to apply +and the determination of the Settlement Amount will continue to be subject to +whether or not, and to what extent, the Performance Goal has been achieved, in +each case, as provided in Paragraph 6. + +(a) You Have a Qualifying Termination After a Change in Control. If your +Employment terminates when you meet the requirements of a Qualifying +Termination After a Change in Control, you will, on the Settlement Date, +receive delivery of the Settlement Amount and payment of the Dividend +Equivalent Payments that, in each case, would have otherwise been made +pursuant to Paragraph 6, and any Transfer Restrictions will cease to apply to +your Shares at Risk. In addition, the forfeiture events in Paragraph 9 will +not apply to your Shares at Risk. + +(b) Death. If you die, after such documentation as may be requested by the +Committee is provided to the Committee, (i) the representative of your estate +will receive delivery of the Settlement Amount and payment of the Dividend +Equivalent Payments on the Settlement Date that, in each case, would have +otherwise been made pursuant to Paragraph 6, and (ii) any Transfer +Restrictions will cease to apply to your Shares at Risk as soon as practicable +after the date of death. + +13. [Change in Control or Death . In the event of a Change in +Control or death, each as described below, your Outstanding PSUs will be +treated as described in this Paragraph 13. All other terms of this Award +Agreement, including the other forfeiture and repayment events in Paragraphs 9 +and 10, continue to apply. In each case, the Performance Goals applicable to +your Outstanding PSUs will continue to apply, and the determination of the +Settlement Amount will continue to be subject to whether or not, and to what +extent, the Performance Goals have been achieved, as provided in Paragraph 6. + +(a) Change in Control. + +(i) In the event of a Change in Control which would result in none of GS Inc., +its successors (including any surviving or acquiring entity or its affiliates) +or affiliates being listed or publicly traded on any national securities +exchange ("Delisting Change in Control"): (A) Paragraph 9(a) will not apply +and your PSUs that are not Vested will become Vested, (B) the last day of the +Performance + +Period will be deemed to be the effective date of the Change in Control, (C) +the Determination Date will be as soon as practicable after the effective date +of the Change in Control and (D) the Settlement Date[s] will occur as soon as +practicable following the Determination Date, but no later than March 15 +coinciding with the last day of the applicable "short-term deferral" period +described in Reg. § 1.409A-1(b)(4). Any Transfer Restrictions will cease to +apply to your Shares at Risk, and the forfeiture events in Paragraph 9 will +not apply to your Shares at Risk. + +(ii) If the Change in Control is not a Delisting Change in Control described +in Paragraph 13(a)(i) and if your Employment terminates when you meet the +requirements of a Qualifying Termination After a Change in Control, then (i) +Paragraph 9(a) will not apply and your PSUs that are not Vested will become +Vested, and (ii) you will receive delivery of the Settlement Amount [and +payment of the Dividend Equivalent Payments] on the [applicable] Settlement +Date that would have otherwise been made pursuant to Paragraph 6. Any Transfer +Restrictions will cease to apply to your Shares at Risk, and the forfeiture +events in Paragraph 9 will not apply to your Shares at Risk. + +(b) Death. If you die, after such documentation as may be requested by the +Committee is provided to the Committee, (i) Paragraph 9(a) will not apply and +your PSUs that are not Vested will become Vested, (ii) the representative of +your estate will receive delivery of the Settlement Amount [and payment of the +Dividend Equivalent Payments] on the [applicable] Settlement Date that would +have otherwise been made pursuant to Paragraph 6, and (iii) any Transfer +Restrictions will cease to apply to your Shares at Risk as soon as practicable +after the date of death.] + +O THER TERMS, CONDITIONS AND AGREEMENTS + +14. Additional Terms, Conditions and Agreements . + +(a) You Must Satisfy Applicable Tax Withholding Requirements. Delivery of +the Settlement Amount is conditioned on your satisfaction of any applicable +withholding taxes in accordance with Section 3.2 of the Plan, which includes +the Firm deducting or withholding amounts from any payment or distribution to +you. In addition, to the extent permitted by applicable law, the Firm, in its +sole discretion, may require you to provide amounts equal to all or a portion +of any Federal, state, local, foreign or other tax obligations imposed on you +or the Firm in connection with the grant, Vesting or delivery of this Award by +requiring you to choose between remitting the amount (i) in cash (or through +payroll deduction or otherwise) or (ii) in the form of proceeds from the +Firm's executing a sale of Shares delivered to you pursuant to this Award. In +no event, however, does this Paragraph 14(a) give you any discretion to +determine or affect the timing of delivery of the Settlement Amount or the +timing of payment of tax obligations. + +(b) Firm May Deliver Cash or Other Property in Respect of the Settlement +Amount. In accordance with Section 1.3.2(i) of the Plan, in the sole +discretion of the Committee, in lieu of all or any portion of the Settlement +Amount, the Firm may deliver cash, other securities, other awards under the +Plan or other property, and all references in this Award Agreement to delivery +of the Settlement Amount will include such deliveries of cash, other +securities, other awards under the Plan or other property. + +(c) Amounts May Be Rounded to Avoid Fractional Shares. PSUs that become +Vested on a Vesting Date and any amounts delivered in respect of the +Settlement Amount[, including Shares at Risk,] may be rounded to avoid +fractional Shares. + +(d) You May Be Required to Become a Party to the Shareholders' Agreement. +Your rights to your PSUs are conditioned on your becoming a party to any +shareholders' agreement to which other + +similarly situated employees ( e.g., employees with a similar title or +position) of the Firm are required to be a party. + +(e) Firm May Affix Legends and Place Stop Orders on Shares. GS Inc. may +affix to Certificates representing Shares any legend that the Committee +determines to be necessary or advisable (including to reflect any restrictions +to which you may be subject under a separate agreement). GS Inc. may advise +the transfer agent to place a stop order against any legended Shares. + +(f) You Agree to Certain Consents, Terms and Conditions. By accepting this +Award you understand and agree that: + +(i) You Agree to Certain Consents as a Condition to the Award. You have +expressly consented to all of the items listed in Section 3.3.3(d) of the +Plan, including the Firm's supplying to any third-party recordkeeper of the +Plan or other person such personal information of yours as the Committee deems +advisable to administer the Plan, and you agree to provide any additional +consents that the Committee determines to be necessary or advisable; + +(ii) You Are Subject to the Firm's Policies, Rules and Procedures. You are +subject to the Firm's policies in effect from time to time concerning trading +in Shares and hedging or pledging Shares and equity-based compensation or +other awards (including, without limitation, the "Firmwide Policy with Respect +to Personal Transactions Involving GS Securities and GS Equity Awards" or any +successor policies), and confidential or proprietary information, and you will +effect sales of Shares in accordance with such rules and procedures as may be +adopted from time to time (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); + +(iii) You Are Responsible for Costs Associated with Your Award. You will be +responsible for all brokerage costs and other fees or expenses associated with +your Award, including those related to the sale of Shares; + +(iv) You Will Be Deemed to Represent Your Compliance with All the Terms of +Your Award if You Accept Delivery. You will be deemed to have represented and +certified that you have complied with all of the terms of the Plan and this +Award Agreement when any Settlement Amount [and Dividend Equivalent Payments +are] [is] delivered to you, and you request the sale of Shares following the +release of Transfer Restrictions on Shares at Risk; + +(v) Firm May Deliver Your Award into an Escrow Account. The Firm may +establish and maintain an escrow account on such terms (which may include your +executing any documents related to, and your paying for any costs associated +with, such account) as it may deem necessary or appropriate, and the +Settlement Amount may initially be delivered[, and any Dividend Equivalent +Payments and dividends may initially be paid,] into and held in that escrow +account until such time as the Committee has received such documentation as it +may have requested or until the Committee has determined that any other +conditions or restrictions on deliveries required by this Award Agreement have +been satisfied; + +(vi) You May Be Required to Certify Compliance with Award Terms; You Are +Responsible for Providing the Firm with Updated Address and Contact +Information After Your Departure from the Firm. If your Employment terminates +while you continue to hold PSUs or Shares at Risk, from time to time, you may +be required to provide certifications of your compliance with all of the terms +of the Plan and this Award Agreement as described in Paragraphs 9(b)(vi) and +9(c)(iv). You understand and agree that (A) your address on file with the Firm +at the time any certification is required will be deemed to + +be your current address, (B) it is your responsibility to inform the Firm of +any changes to your address to ensure timely receipt of the certification +materials, (C) you are responsible for contacting the Firm to obtain such +certification materials if not received and (D) your failure to return +properly completed certification materials by the specified deadline (which +includes your failure to timely return the completed certification because you +did not provide the Firm with updated contact information) will result in the +forfeiture of all of your PSUs or Shares at Risk and subject previously +delivered amounts to repayment under Paragraphs 9(b)(vi) and 9(c)(iv); + +(vii) You Authorize the Firm to Register, in Its or Its Designee's Name, Any +Shares at Risk and Sell, Assign or Transfer Any Forfeited Shares at Risk. You +are granting to the Firm the full power and authority to register any Shares +at Risk in its or its designee's name and authorizing the Firm or its designee +to sell, assign or transfer any Shares at Risk if you forfeit your Shares at +Risk; + +(viii) You Must Comply with Applicable Deadlines and Procedures to Appeal +Determinations Made by the Committee. If you disagree with a determination +made by the Committee, the SIP Committee, the SIP Administrators, or any of +their delegates or designees and you wish to appeal such determination, you +must submit a written request to the SIP Committee for review within 180 days +after the determination at issue. You must exhaust your internal +administrative remedies ( i.e. , submit your appeal and wait for resolution +of that appeal) before seeking to resolve a dispute through arbitration +pursuant to Paragraph 17 and Section 3.17 of the Plan; and + +(ix) You Agree that Covered Persons Will Not Have Liability. In addition to +and without limiting the generality of the provisions of Section 1.3.5 of the +Plan, neither the Firm nor any Covered Person will have any liability to you +or any other person for any action taken or omitted in respect of this or any +other Award. + +15. Non-transferability . Except as otherwise may be provided in +this Paragraph 15 or as otherwise may be provided by the Committee, the +limitations on transferability set forth in Section 3.5 of the Plan will apply +to this Award. Any purported transfer or assignment in violation of the +provisions of this Paragraph 15 or Section 3.5 of the Plan will be void. The +Committee may adopt procedures pursuant to which some or all recipients of +PSUs and Shares at Risk may transfer some or all of their PSUs or Shares at +Risk (which will continue to be subject to Transfer Restrictions until the +[applicable] Transferability Date) through a gift for no consideration to any +immediate family member, a trust or other estate planning vehicle approved by +the Committee or SIP Committee in which the recipient and/or the recipient's +immediate family members in the aggregate have 100% of the beneficial +interest. + +16. Right of Offset . Except as provided in Paragraph 19(d), the +obligation to deliver the Settlement Amount, pay dividends [or Dividend +Equivalent Payments] or release Transfer Restrictions under this Award +Agreement is subject to Section 3.4 of the Plan, which provides for the Firm's +right to offset against such obligation any outstanding amounts you owe to the +Firm and any amounts the Committee deems appropriate pursuant to any tax +equalization policy or agreement. + +A RBITRATION, CHOICE OF FORUM AND GOVERNING LAW + +17. Arbitration; Choice of Forum . + +(a) B Y ACCEPTING THIS AWARD, YOU ARE INDICATING THAT YOU UNDERSTAND AND +AGREE THAT THE ARBITRATION AND CHOICE OF FORUM PROVISIONS SET FORTH IN +SECTION 3.17 OF THE PLAN WILL APPLY TO THIS AWARD. THESE +PROVISIONS, WHICH ARE EXPRESSLY INCORPORATED HEREIN BY REFERENCE, PROVIDE +AMONG OTHER THINGS THAT ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN THE FIRM AND +YOU ARISING OUT OF OR RELATING TO OR + +CONCERNING THE PLAN OR THIS AWARD AGREEMENT WILL BE FINALLY SETTLED BY +ARBITRATION IN NEW YORK CITY, PURSUANT TO THE TERMS MORE FULLY SET FORTH IN +SECTION 3.17 OF THE PLAN; PROVIDED THAT NOTHING HEREIN SHALL PRECLUDE YOU FROM +FILING A CHARGE WITH OR PARTICIPATING IN ANY INVESTIGATION OR PROCEEDING +CONDUCTED BY ANY GOVERNMENTAL AUTHORITY, INCLUDING BUT NOT LIMITED TO THE SEC, +THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AND A STATE OR LOCAL HUMAN RIGHTS +AGENCY, AS WELL AS LAW ENFORCEMENT. + +(b) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider class, collective or representative claims, to order +consolidation or to join different claimants or grant relief other than on an +individual basis to the individual claimant involved. + +(c) Notwithstanding any applicable forum rules to the contrary, to the extent +there is a question of enforceability of this Award Agreement arising from a +challenge to the arbitrator's jurisdiction or to the arbitrability of a claim, +it will be decided by a court and not an arbitrator. + +(d) The Federal Arbitration Act governs interpretation and enforcement of all +arbitration provisions under the Plan and this Award Agreement, and all +arbitration proceedings thereunder. + +(e) Nothing in this Award Agreement creates a substantive right to bring a +claim under U.S. Federal, state, or local employment laws. + +(f) By accepting your Award, you irrevocably appoint each General Counsel of +GS Inc., or any person whom the General Counsel of GS Inc. designates, as your +agent for service of process in connection with any suit, action or proceeding +arising out of or relating to or concerning the Plan or any Award which is not +arbitrated pursuant to the provisions of Section 3.17.1 of the Plan, who shall +promptly advise you of any such service of process. + +(g) To the fullest extent permitted by applicable law, no arbitrator will have +the authority to consider any claim as to which you have not first exhausted +your internal administrative remedies in accordance with Paragraph +14(f)(viii). + +18. Governing Law . T HIS AWARD WILL BE GOVERNED BY AND CONSTRUED +IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO +PRINCIPLES OF CONFLICT OF LAWS. + +C ERTAIN TAX PROVISIONS + +19. Compliance of Award Agreement and Plan with Section + +409A . The provisions of this Paragraph 19 apply to you only if you +are a U.S. taxpayer. + +(a) This Award Agreement and the Plan provisions that apply to this Award are +intended and will be construed to comply with Section 409A (including the +requirements applicable to, or the conditions for exemption from treatment as, +409A Deferred Compensation), whether by reason of short-term deferral +treatment or other exceptions or provisions. The Committee will have full +authority to give effect to this intent. To the extent necessary to give +effect to this intent, in the case of any conflict or potential inconsistency +between the provisions of the Plan (including Sections 1.3.2 and 2.1 thereof) +and this Award Agreement, the provisions of this Award Agreement will govern, +and in the case of any conflict or potential inconsistency between this +Paragraph 19 and the other provisions of this Award Agreement, this Paragraph +19 will govern. + +(b) Settlement will not be delayed beyond the date on which all applicable +conditions or restrictions on settlement in respect of your PSUs required by +this Award Agreement (including [those specified in Paragraph 12(b) (execution +of waiver and release of claims agreement to pay associated tax liability) +and] the consents and other items specified in Section 3.3 of the Plan) are +satisfied. To the extent that any portion of this Award is intended to satisfy +the requirements for short-term deferral treatment under Section 409A, +settlement in respect of such portion will occur by the March 15 coinciding +with the last day of the applicable "short-term deferral" period described in +Reg. § 1.409A-1(b)(4) in order for settlement to be within the short-term +deferral exception unless, in order to permit all applicable conditions or +restrictions on settlement to be satisfied, the Committee elects, pursuant to +Reg. § 1.409A-1(b)(4)(i)(D) or otherwise as may be permitted in accordance +with Section 409A, to delay settlement to a later date within the same +calendar year or to such later date as may be permitted under Section 409A, +including Reg. § 1.409A-3(d). For the avoidance of doubt, if the Award +includes a "series of installment payments" as described in Reg. § +1.409A-2(b)(2)(iii), your right to the series of installment payments will be +treated as a right to a series of separate payments and not as a right to a +single payment. + +(c) Notwithstanding the provisions of Paragraph 14(b) and Section 1.3.2(i) of +the Plan, to the extent necessary to comply with Section 409A, any delivery or +payment (including in the form of Shares at Risk or other property) that the +Firm may make in respect of your PSUs will not have the effect of deferring +payment, delivery, income inclusion, or a substantial risk of forfeiture, +beyond the date on which such payment, delivery or inclusion would occur or +such risk of forfeiture would lapse, with respect to the payment or delivery +that would otherwise have been made (unless the Committee elects a later date +for this purpose pursuant to Reg. § 1.409A-1(b)(4)(i)(D) or otherwise as may +be permitted under Section 409A, including and to the extent applicable, the +subsequent election provisions of Section 409A(a)(4)(C) of the Code and Reg. § +1.409A-2(b)). + +(d) Paragraph 16 and Section 3.4 of the Plan will not apply to Awards that are +409A Deferred Compensation except to the extent permitted under Section 409A. + +(e) Settlement in respect of any portion of the Award may be made, if and to +the extent elected by the Committee, later than the relevant Settlement Date +or other date or period specified hereinabove (but, in the case of any Award +that constitutes 409A Deferred Compensation, only to the extent that the later +payment or delivery, as applicable, is permitted under Section 409A). + +(f) You understand and agree that you are solely responsible for the payment +of any taxes and penalties due pursuant to Section 409A, but in no event will +you be permitted to designate, directly or indirectly, the taxable year of the +delivery. + +C OMMITTEE AUTHORITY, AMENDMENT, CONSTRUCTION AND REGULATORY REPORTING + +20. Committee Authority . The Committee has the authority to +determine, in its sole discretion, that any event triggering forfeiture or +repayment of your Award will not apply, to limit the forfeitures and +repayments that result under Paragraphs 9 and 10 and to remove Transfer +Restrictions before the [applicable] Transferability Date. [In addition, the +Committee, in its sole discretion, may determine whether Paragraph 12(b) will +apply upon a termination of Employment.] + +21. Amendment . The Committee reserves the right at any time to +amend the terms of this Award Agreement, and the Board may amend the Plan in +any respect; provided that , notwithstanding the foregoing and Sections +1.3.2(f), 1.3.2(h) and 3.1 of the Plan, no such amendment will materially +adversely affect your rights and obligations under this Award Agreement +without your consent; and provided further that the Committee expressly +reserves its rights to amend the Award Agreement and the Plan as described in +Sections 1.3.2(h)(1), (2) and (4) of the Plan. A modification that impacts the +tax + +consequences of this Award or the timing of delivery will not be an amendment +that materially adversely affects your rights and obligations under this Award +Agreement. Any amendment of this Award Agreement will be in writing. + +22. Construction, Headings . Unless the context requires otherwise, +(a) words describing the singular number include the plural and vice versa, +(b) words denoting any gender include all genders and (c) the words "include," +"includes" and "including" will be deemed to be followed by the words "without +limitation." The headings in this Award Agreement are for the purpose of +convenience only and are not intended to define or limit the construction of +the provisions hereof. References in this Award Agreement to any specific Plan +provision will not be construed as limiting the applicability of any other +Plan provision. + +23. Providing Information to the Appropriate Authorities . In +accordance with applicable law, nothing in this Award Agreement (including the +forfeiture and repayment provisions in Paragraphs 9 and 10) or the Plan +prevents you from providing information you reasonably believe to be true to +the appropriate governmental authority, including a regulatory, judicial, +administrative, or other governmental entity; reporting possible violations of +law or regulation; making other disclosures that are protected under any +applicable law or regulation; or filing a charge or participating in any +investigation or proceeding conducted by a governmental authority. For the +avoidance of doubt, governmental authority includes federal, state and local +government agencies such as the SEC, the Equal Employment Opportunity +Commission and any state or local human rights agency ( e.g. , the New York +State Division of Human Rights, the New York City Commission on Human Rights, +the California Department of Fair Employment and Housing), as well as law +enforcement. + +IN WITNESS WHEREOF , GS Inc. has caused this Award Agreement to be duly +executed and delivered as of the Date of Grant. + +THE GOLDMAN SACHS GROUP, INC. + +[U.K. M ATERIAL RISK TAKER APPENDIX + +This Appendix supplements Paragraph 9 and sets forth additional events that +result in forfeiture of up to all of your PSUs and Shares at Risk and may +require repayment to the Firm of up to all other amounts previously delivered +or paid to you under your Award in accordance with Paragraph 10. As with the +events described in Paragraph 9, more than one event may apply, in no case +will the occurrence of one event limit the forfeiture and repayment +obligations as a result of the occurrence of any other event and the Firm +reserves the right to (a) suspend vesting of Outstanding PSUs, delivery of the +Settlement Amount or release of Transfer Restrictions, (b) deliver the +Settlement Amount or dividends into an escrow account in accordance with +Paragraph 14(f)(v) or (c) apply Transfer Restrictions to any Shares in +connection with any investigation of whether any of the events that result in +forfeiture under this Appendix have occurred. + +With respect to the events described in this Appendix, the Committee will +consider certain factors to determine whether and what portion of your Award +will terminate, including the reason for the "Loss Event" (as defined below) +or "Risk Event" (as defined below) and the extent to which: (1) you +participated in the Loss Event or Risk Event, (2) your compensation for + may or may not have been adjusted to take into account the risk +associated with the Loss Event, Risk Event, your "Serious Misconduct" (as +defined below) or the Serious Misconduct of a "Supervised Employee" (as +defined below) and (3) your compensation may be adjusted for the year in which +the Loss Event, Risk Event, your Serious Misconduct or a Supervised Employee's +Serious Misconduct is discovered. + +(a) A Loss Event Occurs Prior to Delivery. If a Loss Event occurs prior to +the delivery of the Settlement Amount, your rights in respect of all or a +portion of your PSUs (whether or not Vested) which are scheduled to deliver on +the next Settlement Date immediately following the date that the Loss Event is +identified (or, if not practicable, then the next following Settlement Date) +will terminate, and no Settlement Amount will be delivered in respect of such +PSUs. + +(i) A " Loss Event " means (A) an annual pre-tax loss at GS Inc. or (B) +annual negative revenues in one or more reporting segments as disclosed in the +Firm's Form 10-K other than the Asset Management segment, or annual negative +revenues in the Asset Management segment of $5 billion or more, provided in +either case that you are employed in a business within such reporting segment. + +(b) A Risk Event Occurs . If a Risk Event occurs , (i) +your rights in respect of all or a portion of your PSUs (whether or not +Vested) will terminate and no Settlement Amount will be delivered in respect +of such PSUs, (ii) your rights to all or a portion of any Shares at Risk will +terminate and such Shares at Risk will be cancelled and (iii) you will be +obligated immediately upon demand therefor to pay the Firm an amount not in +excess of the greater of the Fair Market Value of the Settlement Amount (plus +any dividend payments) delivered in respect of the Award (without reduction +for any amount applied to satisfy tax withholding or other obligations) +determined as of (A) the date the Risk Event occurred and (B) the date that +the repayment request is made. + +(i) A " Risk Event " means there occurs a loss of 5% or more of firmwide +total capital from a reportable operational risk event determined in +accordance with the firmwide Reporting Operational Risk Events Policy. + +(c) You Engage in Serious Misconduct . If you engage in Serious +Misconduct , you will be obligated immediately upon demand +therefor to pay the Firm an amount not in excess of the greater of the Fair +Market Value of the Settlement Amount (plus any dividend payments) delivered +in respect of the Award (without reduction for any amount applied to satisfy +tax withholding or other obligations) determined as of (i) the date the +Serious Misconduct occurred and (ii) the date that the repayment request is +made. + +(i) " Serious Misconduct " means that you engage in conduct that the Firm +reasonably considers, in its sole discretion, to be misconduct sufficient to +justify summary termination of employment under English law. + +(d) A Supervised Employee Engages in Serious Misconduct. If the Committee +determines that it is appropriate to hold you accountable in whole or in part +for Serious Misconduct related to compliance, control or risk that occurred +during by a Supervised Employee, your rights in respect of all or a +portion of your PSUs (whether or not Vested) will terminate and no Settlement +Amount will be delivered in respect of such PSUs and your rights to all or a +portion of any Shares at Risk will terminate and such Shares at Risk will be +cancelled. + +(i) " Supervised Employee " means an individual with respect to whom the +Committee determines you had supervisory responsibility as a result of direct +or indirect reporting lines or your management responsibility for an office, +division or business. + +Notwithstanding any provision in the Plan, this Award Agreement or any other +agreement or arrangement you may have with the Firm, the parties agree that to +the extent that there is any dispute arising out of or relating to the payment +required by Paragraphs (b) and (c) of this Appendix (including your refusal to +remit payment) the parties will submit to arbitration in accordance with +Paragraph 17 of this Award Agreement and Section 3.17 of the Plan as the sole +means of resolution of such dispute (including the recovery by the Firm of the +payment amount).] + +D EFINITIONS APPENDIX + +The following capitalized terms are used in this Award Agreement with the +following meanings: + +(a) " 409A Deferred Compensation " means a "deferral of compensation" or +"deferred compensation" as those terms are defined in the regulations under +Section 409A. + +(b) " Associate With a Covered Enterprise " means that you (i) form, or +acquire a 5% or greater equity ownership, voting or profit participation +interest in, any Covered Enterprise or (ii) associate in any capacity +(including association as an officer, employee, partner, director, consultant, +agent or advisor) with any Covered Enterprise. Associate With a Covered +Enterprise may include, as determined in the discretion of the Committee, (i) +becoming the subject of any publicly available announcement or report of a +pending or future association with a Covered Enterprise and (ii) unpaid +associations, including an association in contemplation of future employment. +"Association With a Covered Enterprise" will have its correlative meaning. + +(c) " Covered Enterprise " means a Competitive Enterprise and any other +existing or planned business enterprise that: (i) offers, holds itself out as +offering or reasonably may be expected to offer products or services that are +the same as or similar to those offered by the Firm or that the Firm +reasonably expects to offer ("Firm Products or Services") or (ii) engages in, +holds itself out as engaging in or reasonably may be expected to engage in any +other activity that is the same as or similar to any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage +("Firm Activities"). For the avoidance of doubt, Firm Activities include any +activity that requires the same or similar skills as any financial activity +engaged in by the Firm or in which the Firm reasonably expects to engage, +irrespective of whether any such financial activity is in furtherance of an +advisory, agency, proprietary or fiduciary undertaking. + +The enterprises covered by this definition include enterprises that offer, +hold themselves out as offering or reasonably may be expected to offer Firm +Products or Services, or engage in, hold themselves out as engaging in or +reasonably may be expected to engage in Firm Activities directly, as well as +those that do so indirectly by ownership or control ( e.g. , by owning, +being owned by or by being under common ownership with an enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +Firm Products or Services or that engages in, holds itself out as engaging in +or reasonably may be expected to engage in Firm Activities). The definition of +Covered Enterprise includes, solely by way of example, any enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +any product or service, or engages in, holds itself out as engaging in or +reasonably may be expected to engage in any activity, in any case, associated +with investment banking; public or private finance; lending; financial +advisory services; private investing for anyone other than you or your family +members (including, for the avoidance of doubt, any type of proprietary +investing or trading); private wealth management; private banking; consumer or +commercial cash management; consumer, digital or commercial banking; merchant +banking; asset, portfolio or hedge fund management; insurance or reinsurance +underwriting or brokerage; property management; or securities, futures, +commodities, energy, derivatives, currency or digital asset brokerage, sales, +lending, custody, clearance, settlement or trading. An enterprise that offers, +holds itself out as offering or reasonably may be expected to offer Firm +Products or Services, or engages in, holds itself out as engaging in or +reasonably may be expected to engage in Firm Activities is a Covered +Enterprise , irrespective of whether the enterprise is a customer, client or +counterparty of the Firm or is otherwise associated with the Firm and, because +the Firm is a global enterprise, irrespective of where the Covered Enterprise +is physically located. + +(d) " Determination Date " means the date specified on your Award Statement +as the date on which the Committee will determine whether or not, and to what +extent, the Performance Goal[s] [was][were] achieved for the Performance +Period. + +(e) " Dividend Equivalent Payments " means any payments made in respect of +Dividend Equivalent Rights. + +(f) " FDIC " means the Federal Deposit Insurance Corporation or any +successor thereto. + +(g) " Failed to Consider Risk " means that you participated (or otherwise +oversaw or were responsible for, depending on the circumstances, another +individual's participation) in the structuring or marketing of any product or +service, or participated on behalf of the Firm or any of its clients in the +purchase or sale of any security or other property, in any case without +appropriate consideration of the risk to the Firm or the broader financial +system as a whole (for example, where you have improperly analyzed such risk +or where you have failed sufficiently to raise concerns about such risk) and, +as a result of such action or omission, the Committee determines there has +been, or reasonably could be expected to be, a material adverse impact on the +Firm, your business unit or the broader financial system. + +(h) " Performance Goal " means the performance goal determined by the +Committee that is specified on your Award Statement. + +(i) " Performance Period " means the performance period determined by the +Committee that is specified on your Award Statement. + +(j) [" Qualified Termination " means the termination of your Employment by +the Firm where none of the forfeiture and repayment events described in +Paragraphs 9 and 10 has occurred. No Employment termination that you initiate, +including any purported "constructive termination," a "termination for good +reason" or similar concepts, can be a Qualified Termination.] + +(k) " Qualifying Termination After a Change in Control " means that the Firm +terminates your Employment other than for Cause or you terminate your +Employment for Good Reason, in each case, within 18 months following a Change +in Control. + +(l) [" Sarbanes-Oxley " means the Sarbanes-Oxley Act of 2002, as amended.] + +(m) " SEC " means the U.S. Securities and Exchange Commission. + +(n) " Selected Firm Personnel " means any individual who is or in the three +months preceding the conduct prohibited by Paragraph 9(b)(ii) was (i) a Firm +employee or consultant with whom you personally worked while employed by the +Firm, (ii) a Firm employee or consultant who, at any time during the year +preceding the date of the termination of your Employment, worked in the same +division in which you worked or (iii) an Advisory Director, a Managing +Director or a Senior Advisor of the Firm. + +(o) " Settlement Amount " means an amount deliverable to you in respect of +your PSUs (determined as described in the Award Statement). + +(p) " Settlement Date " means each date specified on your Award Statement as +the date on which the Settlement Amount will be delivered, 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. + +(q) " Share " means a share of Common Stock. + +(r) " Shares at Risk " means Shares that are subject to Transfer +Restrictions. + +The following capitalized terms are used in this Award Agreement with the +meanings that are assigned to them in the Plan: + +(a) " Account " means any brokerage account, custody account or similar +account, as approved or required by GS Inc. from time to time, into which +shares of Common Stock, cash or other property in respect of an Award are +delivered. + +(b) " Award Agreement " means the written document or documents by which +each Award is evidenced, including any related Award Statement and signature +card. + +(c) " Award Statement " means a written statement that reflects certain +Award terms. + +(d) " Board " means the Board of Directors of GS Inc. + +(e) " 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. + +(f) " Cause " means (i) the Grantee's conviction, whether following trial or +by plea of guilty or nolo contendere (or similar plea), in a criminal +proceeding (A) on a misdemeanor charge involving fraud, false statements or +misleading omissions, wrongful taking, embezzlement, bribery, forgery, +counterfeiting or extortion, or (B) on a felony charge, or (C) on an +equivalent charge to those in clauses (A) and (B) in jurisdictions which do +not use those designations, (ii) the Grantee's engaging in any conduct which +constitutes an employment disqualification under applicable law (including +statutory disqualification as defined under the Exchange Act), (iii) the +Grantee's willful failure to perform the Grantee's duties to the Firm, (iv) +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, (v) 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, (vi) the +Grantee's engaging in any act or making any statement which impairs, impugns, +denigrates, disparages or negatively reflects upon the name, reputation or +business interests of the Firm or (vii) 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 may have under any other agreement with a Grantee or at law or +in equity. + +(g) " Certificate " means a stock certificate (or other appropriate document +or evidence of ownership) representing shares of Common Stock. + +(h) " 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 shareholders +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: (i) 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 (A) 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 (B) 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 (ii) 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 (A) were members of the Board on the Effective Date or (B) 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). + +(i) " 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. + +(j) " Code " means the Internal Revenue Code of 1986, as amended from time +to time, and the applicable rulings and regulations thereunder. + +(k) " 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 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. + +(l) " Common Stock " means common stock of GS Inc., par value $0.01 per +share. + +(m) " Competitive Enterprise " means an existing or planned business +enterprise that (i) engages, or may reasonably be expected to engage, in any +activity; (ii) owns or controls, or may reasonably be expected to own or +control, a significant interest in any entity that engages in any activity or +(iii) is, or may reasonably be expected to be, owned by, or a significant +interest in which is, or may reasonably be expected to be, owned or controlled +by, any entity that engages in any activity that, in any case, competes or +will compete 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 (including for the avoidance of +doubt, any type of proprietary investing or trading); private wealth +management; private banking; consumer or commercial cash management; consumer, +digital or commercial banking; merchant banking; asset, portfolio or hedge +fund management; insurance or reinsurance underwriting or brokerage; property +management; or securities, futures, commodities, energy, derivatives, currency +or digital asset brokerage, sales, lending, custody, clearance, settlement or +trading. + +(n) " Covered Person " means a member of the Board or the Committee or any +employee of the Firm. + +(o) " Date of Grant " means the date specified in the Grantee's Award +Agreement as the date of grant of the Award. + +(p) " 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. + +(q) " Effective Date " means the date this Plan is approved by the +shareholders of GS Inc. pursuant to Section 3.15 hereof. + +(r) " 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 +(i) 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), (ii) whether and when a change in a +Grantee's association with the Firm results in a termination of Employment and +(iii) 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. + +(s) " Exchange Act " means the Securities Exchange Act of 1934, as amended +from time to time, and the applicable rules and regulations thereunder. + +(t) " 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. + +(u) " Firm " means GS Inc. and its subsidiaries and affiliates. + +(v) " 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). + +(w) " Grantee " means a person who receives an Award. + +(x) " GS Inc. " means The Goldman Sachs Group, Inc., and any successor +thereto. + +(y) " 1999 SIP " means The Goldman Sachs 1999 Stock Incentive Plan, as in +effect prior to the effective date of the 2003 SIP. + +(z) " 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. + +(aa) " Restricted Share " means a share of Common Stock delivered under the +Plan that is subject to Transfer Restrictions, forfeiture provisions and/or +other terms and conditions specified herein and in the Restricted Share Award +Agreement or other applicable Award Agreement. All references to Restricted +Shares include "Shares at Risk." + +(bb) " Retirement " means termination of the Grantee's Employment (other +than for Cause) on or after the Date of Grant at a time when (i) (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 60 and (B) the Grantee has +completed at least 10 years of service with the Firm (as determined by the +Committee in its sole discretion) or, if earlier, (ii) (A) the Grantee has +attained age 50 and (B) the Grantee has completed at least five years of +service with the Firm (as determined by the Committee in its sole discretion). + +(cc) " RSU " means a restricted stock unit 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. + +(dd) " Section 409A " means Section 409A of the Code, including any +amendments or successor provisions to that Section and any regulations and +other administrative guidance thereunder, in each case as they, from time to +time, may be amended or interpreted through further administrative guidance. + +(ee) " 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. + +(ff) " SIP Committee " means the persons who have been delegated certain +authority under the Plan by the Committee. + +(gg) " Solicit " means any direct or indirect communication of any kind +whatsoever, regardless of by whom initiated, inviting, advising, suggesting, +encouraging or requesting any person or entity, in any manner, to take or +refrain from taking any action. The terms "Solicited," "Soliciting" and +"Solicitation" will have their correlative meanings. + +(hh) " Transfer Restrictions " means restrictions that prohibit the sale, +exchange, transfer, assignment, pledge, hypothecation, fractionalization, +hedge or other disposal (including through the use of any cash-settled +instrument), whether voluntarily or involuntarily by the Grantee, of an Award +or any shares of Common Stock, cash or other property delivered in respect of +an Award. + +(ii) " Transferability Date " means the date Transfer Restrictions on a +Restricted Share will be released. Within 30 Business Days after the +applicable Transferability Date, GS Inc. shall take, or shall cause to be +taken, such steps as may be necessary to remove Transfer Restrictions. + +(jj) " 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. + +(kk) " 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. + +(ll) 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). + +EX-10.54 12 d192225dex1054.htm EX-10.54 EX-10.54 + +Exhibit 10.54 + +The Goldman Sachs Group, Inc. + +SIGNATURE CARD FOR AWARDS + +AND CONSENT TO RECEIVE ELECTRONIC DELIVERY + +[IMPORTANT: PLEASE REVIEW, EXECUTE AND RETURN THIS FORM TO: + +YOU MUST PROPERLY EXECUTE THIS FORM TO ACKNOWLEDGE ACCEPTANCE OF THE TERMS +AND CONDITIONS OF + +YOUR AWARD(S) AND RELATED MATTERS.] + +1. I have received and agree to be bound by The Goldman Sachs Amended and +Restated Stock Incentive Plan (2021) (the "SIP") and the Award Agreement(s) +applicable to me in connection with the +Award(s) (the "Award(s)") that I have been granted by the Firm (as defined in +the SIP). I confirm that I am accepting the Award(s) subject to the terms and +conditions contained in the SIP, the Award Agreement(s), and this signature +card (the "Signature Card"), including, but not limited to, the requirement +that certain disputes be decided through arbitration in New York City and be +governed by New York law. For the avoidance of doubt, references to a "share" +or "Share" herein mean a share of the common stock of The Goldman Sachs Group, +Inc. ("GS Inc.") and, where applicable, deliveries of cash or other property +in lieu thereof. + +For the avoidance of doubt, I understand and agree that to be eligible to +receive any award under the SIP or any predecessor plan, I must not have +engaged in any conduct constituting "Cause" (as defined in the SIP) prior to +the grant of the award, and by accepting this Award, I represent and warrant +that I have not engaged in any conduct constituting Cause. + +As a condition of this grant, I understand that the Award(s) (as well as any +other award that the Firm may grant to me under the SIP) is/are subject to +governing law provisions as outlined in this Signature Card or in the +applicable Award Agreement(s), and, as a condition to receiving such awards, I +agree to be bound thereby. As a condition of this grant, I agree to provide +upon request an appropriate certification regarding my U.S. tax status on Form +W-8BEN, Form W-9, or other appropriate form, and I understand that failure to +supply a required form may result in the imposition of backup withholding on +certain payments I receive pursuant to this grant. + +I irrevocably grant full power and authority to GS Inc. to register in its +name, or that of any designee, any and all Restricted Shares (as defined in +the applicable Award Agreement), Shares at Risk (as defined in the applicable +Award Agreement) or other shares of GS Inc. common stock that have been or may +be delivered to me subject to transfer restrictions or forfeiture provisions, +and I irrevocably authorize GS Inc., or its designee, to sell, assign or +transfer such shares to GS Inc. or such other persons as it may determine in +the event of a forfeiture of such shares pursuant to any agreement with GS +Inc. + +Further, as a condition of this grant, if I am a person who has worked in the +United Kingdom at any time during the earnings period relating to any award +under the SIP, as determined by the Firm, when requested and as directed by +the Firm, I will agree to a Joint Election under s431 ITEPA 2003 of the laws +of the United Kingdom for full or partial disapplication of Chapter 2 Income +Tax (Earnings and Pension) Act 2003 under the laws of the United Kingdom and +will sign and return such election in respect of all future deliveries of +Shares underlying the Award(s) and any previous grants made to me under the +SIP and understand that the Firm intends to meet its delivery obligations in +Shares with respect to my Award(s), except as may be prohibited by law or +described in the accompanying Award Agreement(s) or supplementary materials. + +If I have worked in Switzerland at any time during the earnings period +relating to the Award(s) granted to me as determined by the Firm, (i) I +acknowledge that my Award(s) are subject to tax in accordance with the rulings +and method of calculation of taxable values to be agreed by the Firm with the +Federal and/or Zurich/Geneva cantonal/communal tax authorities or as otherwise +directed by the Firm, and (ii) I hereby agree to be bound by any rulings +agreed by the Firm in respect of any Award(s), which is expected to result in +taxation at the time of delivery of Shares, and (iii) I undertake to declare +and make a full and accurate income tax declaration in respect of my Award(s) +in accordance with the above ruling or as directed by the Firm. + +2. I have read and understand the Firm's "Notice Periods for Recipients of +Year-End Equity-Based Awards" policy, or any successor policy (the "Notice +Policy"), available on GSWeb > My HCM Policies link under the Policies tab > +Leaving the Firm link under Career and Performance or as otherwise provided +to me, pursuant to which I am required to provide certain specified advance +notice of my intent to leave employment with the Firm. I understand that the +Notice Policy will also apply with respect to my One-Time Awards (with the +references to "Year-End" deemed to be references to "One-Time" in this +context). By executing this form, I am agreeing to be bound by the Notice +Policy as in effect from time to time and, where applicable, am agreeing to a +permanent change in the terms and conditions of my employment. I agree to this +change in consideration of my continued employment with the Firm and the +Firm's offer of the Award(s). I understand that the Notice Policy requires me, +among other things, to provide my employing entity with advance written notice +of my intention to leave employment with the Firm as follows: + +In the Americas: 60 days in advance of my termination date; + +In Europe, the Middle East, Africa and India: 90 days in advance of my +termination date; and + +In Japan and Asia Ex-Japan (including Australia and New Zealand and excluding +India): 90 days in advance of my termination date if I am a Vice President or +an Executive Director; 60 days in advance of my termination date in all other +cases. + +If, under local law or a written contract with the Firm (for example, a +Managing Director Agreement or Non-Competition Agreement), I have a notice +requirement that is longer than those specified above, I understand that the +longer notice period will apply. I also understand that if my employment is +subject to a probation period, the Notice Policy applies only if notice of +termination is given after the probation period has ended. + +I understand that if I fail to comply in any respect with the Notice Policy, I +will have failed to meet an obligation I have under an agreement with the +Firm, as a result of which the Firm may have certain legal and equitable +rights and remedies, including, without limitation, forfeiture of the Award(s) +and any other awards granted to me under the SIP. The Firm may forfeit such +Award(s) for violation of the Notice Policy irrespective of whether this +agreement constitutes a legally recognized permanent change to my terms and +conditions of employment, and irrespective of whether applicable law permits +me to make a payment in lieu of notice. In addition, the Firm may seek an +order or injunction from a court or arbitration panel to stop a breach and may +also seek other permissible remedies. The Firm may hold me personally liable +for any damages it suffers as a result of the breach. + +This agreement concerning my notice period is being made for and on behalf of +my Goldman Sachs employing entity, and implementation of the Notice Policy +does not create an employment relationship between me and GS Inc. + +3. I have read and understand the Firm's hedging and pledging policies +(including, without limitation, the "Firmwide Policy with Respect to Personal +Transactions Involving GS Securities and GS Equity Awards"), and agree to be +bound by them (with respect to the Award(s) and any prior awards under the +SIP), both during and following my employment with the Firm. + +4. As a condition to this grant, I agree to open and activate any brokerage, +trust, sub-trust, custody or similar account (an "Account"), as required or +approved by the Firm in its sole discretion. I agree to access, review, +execute and be bound by any agreements that govern any such Account, including +any provisions that provide for the applicable restrictions on transfers, +pledges and withdrawals of Shares, permitting the Firm to monitor any such +Account, and the limitations on the liability of the party (which may not be +affiliated with the Firm) providing the Account and the Firm. I understand and +agree that the Firm may direct the transfer of securities, cash or other +assets in my Account to the Firm in connection with any indebtedness or any +other obligation that I have to the Firm, as determined by the Firm in its +sole discretion, however such obligation may have arisen. I also agree to open +an Account with any other custodian, broker, trustee, transfer agent or +similar party selected by the Firm, if the Firm, in its sole discretion, +requires me to open an account with such custodian, broker, trustee, transfer +agent or similar party as a condition to delivery of Shares underlying the +Award(s). + +5. If the Firm advanced or loaned me funds to pay certain taxes (including +income taxes and Social Security, or similar contributions) in connection with +the Award(s) (or does so in the future), and if I have not signed a separate +loan agreement governing repayment, I authorize the Firm to withhold from my +compensation any amounts required to reimburse it for any such advance or loan +to the extent permitted by applicable law. + +I understand and agree that, if I leave the Firm, I am required immediately to +repay any outstanding amount. I further understand and agree that the Firm has +the right to offset, to the extent permitted by the Award Agreement and +applicable law (including Section 409A of the U.S. Internal Revenue Code of +1986, as amended, which limits the Firm's ability to offset in the case of +United States taxpayers under certain circumstances), any outstanding amounts +that I then owe the Firm against its delivery obligations under the Award(s), +against any obligations to remove restrictions and/or other terms and +conditions in respect of any Restricted Shares or Shares at Risk (each as +defined in the applicable Award Agreement) or against any other amounts the +Firm then owes me, including payments of dividends or dividend equivalent +payments. I understand that the delivery of Shares pursuant to the Award(s) is +conditioned on my satisfaction of any applicable taxes or Social Security +contributions (collectively referred to as "tax" or "taxes" for purposes of +the SIP and all related documents) in accordance with the SIP. To the extent +permitted by applicable law, the Firm, in its sole discretion, may require me +to provide amounts equal to all or a portion of any Federal, State, local, +foreign or other tax obligations imposed on me or the + +Firm in connection with the grant, vesting or delivery of the Award(s) by +requiring me to choose between remitting such amount (i) in cash (or through +payroll deduction or otherwise), (ii) in the form of proceeds from the Firm's +executing a sale of Shares delivered to me pursuant to the Award(s) or (iii) +as otherwise permitted in the Award Agreement(s). However, in no event +shall any such choice determine, or give me any discretion to affect, the +timing of the delivery of Shares or payment of tax obligations. + +6. In connection with any Award Agreement or other interest I may receive in +the SIP or any Shares that I may receive in connection with the Award(s) or +any award I have previously received or may receive, or in connection with any +amendment or variation thereof or any documents listed in paragraph 7, I +hereby consent to (a) the acceptance by me of the Award(s) electronically, (b) +the giving of instructions in electronic form whether by me or the Firm, and +(c) the receipt in electronic form at my email address maintained at Goldman +Sachs or via Goldman Sachs' intranet site (or, if I am no longer employed by +the Firm, at such other email address as I may specify, or via such other +electronic means as the Firm and I may agree) all notices and information that +the Firm is required by law to send to me in connection therewith including, +without limitation, any document (or part thereof) constituting part of a +prospectus covering securities that have been registered under the U.S. +Securities Act of 1933, the information contained in any such document and any +information required to be delivered to me under Rule 428 of the U.S. +Securities Act of 1933, including, for example, the annual report to security +holders or the annual report on Form 10-K of GS Inc. for its latest fiscal +year, and that all prior elections that I may have made relating to the +delivery of any such document in physical form are hereby revoked and +superseded. I agree to check Goldman Sachs' intranet site (or, if I am no +longer employed by the Firm, such other electronic site as notified to me by +the Firm) periodically as I deem appropriate for any new notices or +information concerning the SIP. I understand that I am not required to consent +to the receipt of such documents in electronic form in order to receive the +Award(s) and that I may decline to receive such documents in electronic form +by contacting, which will provide me with +hard copies of such documents upon request. I also understand that this +consent is voluntary and may be revoked at any time on three business days' +written notice. + +7. I hereby acknowledge that I have received in electronic form in accordance +with my consent in paragraph 6 the following documents: + +The Goldman Sachs Amended and Restated Stock Incentive Plan (2021); + +Summary of The Goldman Sachs Amended and Restated Stock Incentive Plan (2021); + +The annual report on Form 10-K for The Goldman Sachs Group, Inc. for the +fiscal year ended ; + +The Award Agreement(s); and + +Summaries of the Award(s) ("Award Summary"). + +8. I expressly authorize any appropriate representative of the Firm to make +any notifications, filings or remittances of funds that may be required in +connection with the SIP or otherwise on my behalf. Further, if I am an +employee who is resident in South Africa at a relevant time, by accepting my +Award(s), I expressly authorize any appropriate representative of the Firm to +make any required notification on my behalf to the Financial Surveillance +Department of the South African Reserve Bank (or its authorized dealer) in +relation to my participation in the SIP and to any acquisition of Shares for +no consideration under the SIP or other similar filing that may otherwise be +required in South Africa. I acknowledge that any such authorization is +effective from the date of acceptance of my Award(s) until such time as I +expressly revoke the authorization by written notice to any appropriate +representative of the Firm. I understand that this authorization does not +create any obligation on the Firm to deal with any such notifications, filings +or remittances of funds that I may be required to make in connection with the +SIP and I accept full responsibility in this regard. + +9. The granting of the Award(s), the delivery of the underlying Shares +and any subsequent dividends or dividend equivalent payments, and the receipt +of any proceeds in connection with the Award(s) may result in legal or +regulatory requirements in some jurisdictions. I understand and agree that it +is my responsibility to ensure that I comply with any legal or regulatory +requirements in respect of the Award(s). + +10. I confirm that I have filed all tax returns that I am required to file +and paid all taxes I am required to pay with respect to awards previously +granted to me by the Firm, and I agree, with respect to both the Award(s) as +well as awards previously granted to me by the Firm, to file all tax returns I +am required to file in connection with the Award(s) and any sales of any +Shares or other property delivered pursuant to the Award(s) and to pay all +taxes I am required to pay. + +11. The goodwill associated with the relationships between the Firm and its +clients and prospective clients is a valuable asset of the Firm that is built +and preserved through the combined services and efforts of the Firm and all of +its personnel. The Firm provides its employees with a unique platform of +financial products and services, confidential and proprietary information, +professional training, access to specialized expertise, research, analytical, +operational, and business development support, travel and entertainment +expenses and other valuable resources to build and enhance the goodwill +associated with the relationships between the Firm and its clients, as well as +to foster and establish such relationships with prospective clients. +Accordingly, I acknowledge and + +agree that (i) because the Firm contributes valuable resources to build and +enhance client relationships, including those for which I provide services, it +has a legitimate and essential business interest in protecting the goodwill +associated with those relationships; (ii) by my continued employment, I +confirm that I have assigned and will assign to the Firm all goodwill I have +developed or will develop with persons or entities with whom I interact while +at the Firm and/or who are or will become clients or prospective clients of +the Firm in connection with my employment with the Firm, even if I did +business with such persons or entities prior to joining the Firm; and (iii) +while at the Firm I do not have and will not acquire any property, +proprietary, contractual or other legal right or interest whatsoever in or to +any client or prospective client with whom I interact or conduct business +while employed by the Firm or (except to the extent otherwise provided in a +written agreement between the Firm and me that governs my compensation) to any +current or prospective revenues associated with such client or prospective +client (all such interests being referred to herein as "Intangible +Interests"). For the avoidance of doubt, I am hereby assigning all Intangible +Interests to the Firm. I acknowledge and agree that my compensation during the +term of my employment with the Firm is adequate financial consideration in +this regard, and that no further consideration is necessary (including in +respect of obligations applicable to me after my employment with the Firm has +ended). + +12. I understand and agree that the terms of any award granted to me under +the SIP or any predecessor plan that provide for accelerated vesting, delivery +or transferability as a result of Conflicted Employment (as defined in the +applicable Award Agreement) may be limited to the extent prohibited by +applicable law or regulation. + +Data Collection, Processing and Transfers: + +Grantees residing outside of the European Economic Area ("EEA") and PRC +(defined below): If I am located outside of the EEA and PRC, I consent to the +processing of my personal data in accordance with the information set out +below. + +Grantees residing in the EEA or the UK: If I am located in the EEA or the +UK, my personal data will be processed in accordance with the information set +out below and in the GS HCM - Fair Processing Notice which can be found at +inconsistency, the GS HCM - Fair Processing Notice shall prevail over this +section. + +Grantees residing in the People's Republic of China ("PRC") (which, for the +purpose of this section, excludes Hong Kong Special Administrative Region, +Macau Special Administrative Region and Taiwan): If I am located in the PRC, I +give my consent to the processing of my personal data as follows by signing +this signature card: + +The Firm will process my personal data as set out in this section. I consent +to such use. + +The Firm will process and retain my sensitive personal data as set out in +this section and underlined. I consent to such use. + +The Firm will transfer my personal data to third parties within the PRC, as +described by this section and the hyperlinks within it. I consent to such +transfers. + +The Firm will transfer my personal data to third parties outside the PRC, as +described by this section and the hyperlinks within it. I consent to such +transfers. + +In connection with the SIP and any other Firm benefit plan (the "Programs"), +to the extent permitted under the laws of the applicable jurisdiction, the +Firm may process (including, where applicable, collecting, +transferring/transmitting internationally and/or domestically, disclosing, +using and storing) various data that is personal to me, and my data might be +deemed sensitive personal data in certain jurisdictions, including but not +limited to my name, address, work location, hire date, Social Security or +Social Insurance or taxpayer identification number (required for tax +purposes), type and amount of SIP or other benefit plan award , citizenship +or residency (required for tax purposes) and other similar information +reasonably necessary for the administration of such Programs (collectively +referred to as "Information") and provide such Information to its affiliates, +Computershare Limited and its affiliates (collectively "Computershare") and +Fidelity Stock Plan Services, LLC, Fidelity Personal Trust Company, FSB and +any of their affiliates (collectively "Fidelity") or any other service +provider, whether in the United States or elsewhere, as is reasonably +necessary for the administration of the Programs and under the laws of these +jurisdictions. In certain circumstances and subject to any applicable +restrictions regarding cross-border data transfers in the jurisdiction where +you reside, where required by law, foreign courts, law enforcement agencies or +regulatory agencies may be entitled to access the Information. Unless I + +explicitly authorize otherwise, the Firm, its affiliates and its service +providers (through their respective employees in charge of the relevant +electronic and manual processing) will process this Information only for +purposes of administering the Programs. In the United States and in other +countries to which such Information may be transferred for the administration +of the Programs, the level of data protection is not equivalent to data +protection standards in the member states of the EEA, Switzerland, Canada or +certain Canadian provinces or my home country and U.S. public authorities may +potentially access such Information. If I am employed in Argentina, the PRC, +Peru or Turkey, I have also read the text in bold in the respective Argentina, +the PRC, Peru and Turkey legal notices below (the "Argentina Clause", the "PRC +Clause", the "Peru Clause" or the "Turkey Clause") in conjunction with this +Data Collection, Processing and Transfers section, and I acknowledge that such +text forms part of this section and that in the event of any inconsistency the +Argentina Clause, PRC Clause, Peru Clause or Turkey Clause, as applicable, +shall prevail over this section. Upon request to Equity Compensation (division +of HCM), 200 West Street, 19 th Floor, New York, NY 10282, telephone (212) +357-1444, email EquityCompensation@ny.email.gs.com, to the extent required +under the laws of the applicable jurisdiction, I may have access to and obtain +communication of the Information and may exercise any of my rights in respect +of such Information, in each case free of charge, including objecting to any +type of processing of the Information and requesting that the Information be +updated or corrected (if wrong), completed or clarified (if incomplete or +equivocal), or erased (if it cannot legally be collected or kept). Upon +request, to the extent required under the laws of the applicable jurisdiction, +Equity Compensation (division of HCM) will also provide me, free of charge, +with a list of all the service providers used in connection with the Programs +at the time of request. There is no legal obligation for me to provide the +Firm with the Information and any Information is provided at my own will and +consent. If I refuse to authorize the processing of the Information consistent +with the above, I may not benefit from the Programs. The processing of the +Information will be consistent with the above for the period of administration +of the Programs. In particular (within the limits described above): (i) the +Firm will process data (Firm means GS Inc. and any of its subsidiaries and +affiliates); (ii) Fidelity or Computershare will process data; (iii) the +Firm's other service providers will process data; and (iv) data will be +transferred to the United States and other countries, as described above for +the purposes set forth herein. A list of the Firm's international offices and +countries to which data that is personal to me can be transferred is set forth +at http://www2.goldmansachs.com/who-we-are/locations/index.html. The +Information may be retained by the aforementioned persons beyond the period of +administration of the Programs to the extent permitted under the laws of the +applicable jurisdiction. + +Other Legal Notices: + +By accepting (whether expressly or by implication) any benefit granted to me +by the Firm, including, without limitation, my Award(s), I acknowledge and +agree to each of the following: + +No Public Offer: Awards under the SIP and the Firm's other compensation +and benefit programs are strictly limited to eligible participants and are not +intended to constitute a public offer in any jurisdiction, nor intended for +registration in any jurisdiction outside of the U.S. I must keep all Award- +related documents confidential and I may not reproduce, distribute or +otherwise make public any part of such documents without the Firm's express +written consent. If I have received any such documents and I am not the +intended recipient, I will disregard and destroy them. + +Transferability: Any provisions permitting transfers to a third party in +the Award documents will not apply to me (i) to the extent that the +applicability of those provisions would affect the availability of relevant +exemptions or tax favorable treatment, or (ii) otherwise in circumstances +determined by the Firm in its sole discretion from time to time. + +Adequate Information: I acknowledge that (i) I have been provided with +all relevant information and materials with respect to the Firm's operations +and financial conditions and the terms and conditions of my Award(s), (ii) I +have read and understood such information and materials, (iii) I am fully +aware and knowledgeable of the terms and conditions of my Award(s), and (iv) I +completely and voluntarily agree to the terms and conditions of my Award(s). + +Independent Advice Recommended: The information provided by the Firm or +its service providers in respect of an Award does not take into account the +individual circumstances of recipients and does not constitute investment +advice. Awards under the SIP involve certain risks and I should exercise +caution. The Firm recommends that I consult my own independent legal, +financial and tax advisors in all + +cases, and I acknowledge that I am provided with adequate opportunity to do +so. + +No Employer Involvement: Except to the extent required by applicable +law, all Awards are offered, issued and administered by GS Inc., a Delaware +corporation, and my employer (if it is not GS Inc.) is not involved in the +grant of my Award(s) or any other GS Inc. equity compensation. All documents +related to the Awards, including the SIP, the Award Agreement, this Signature +Card and the link by which I access these documents, are originated and +maintained in the United States. + +No Effect on Employment-Related Rights: Any compensation I receive (even +on a regular and repeated basis) in connection with the SIP is discretionary +and does not constitute part of my base or normal salary or wages. It does not +affect my rights and obligations under the terms of my employment and it will +not be taken into account (except to the extent otherwise required by +applicable law) in determining any other employment-related rights I may have, +including, without limitation, rights in relation to severance, redundancy or +end-of-service payments, bonuses, long-service awards, pension or retirement +benefits. In particular, I waive any and all rights to compensation or damages +in consequence of the termination of my employment for any reason whatsoever +insofar as those rights arise or may arise from me ceasing to have rights +under, or be entitled to receive payment in respect of, the SIP as a result of +such termination, or from the loss or diminution in value of such rights or +entitlements. This waiver applies whether or not such termination amounts to +wrongful or unfair dismissal. + +No Additional Entitlements: The grant of an Award is strictly +discretionary and voluntary and neither this Award (even if Award grants are +made to me on a regular and repeated basis) nor my employment contract implies +any expectation or right in relation to (i) the grant of any Award or similar +compensation in the future, (ii) the terms, conditions and amount of any Award +or similar compensation that the Firm may decide to grant in the future, or +(iii) continued employment in connection with any Award. + +Translations: The official Award documents (including contracts and +communications) are in the English language. I am responsible for ensuring +that I fully understand these documents. The English version of the documents +will always prevail in the event of any inconsistency with translated or +interpreted documents. + +Severability: If any provision (in whole or in part) of this Signature +Card or the other Award documents is to any extent illegal, otherwise invalid, +or incapable of being enforced, that provision will be excluded to the extent +(only) of such invalidity or unenforceability. All other provisions will +remain in full effect and, to the extent possible, the invalid or +unenforceable provision will be deemed replaced by a provision that is valid +and enforceable and that comes closest to expressing the intention of such +invalid or unenforceable provision. + +Country-Specific Legal Notices: I have read the country-specific legal +notices below that pertain to my place of employment and/or residence (and +also the location of my employer, if different), if any, and understand that +they apply throughout the term of my Award(s). + +[NON-COMPETITION AND NON-SOLICITATION RESTRICTIONS FOR EMPLOYEES PROVIDING +SERVICES IN ASIA + +In addition to and without limiting any provisions in the SIP or the +applicable Award Agreement(s) (including without limitation the Award vesting, +delivery, forfeiture, termination or repayment provisions) unless provided +otherwise in the Restrictions, if I am providing services to the Firm in Asia +or to BGH, in view of my importance to the Firm and/or BGH, I hereby agree to +and acknowledge the following: + +(a) I hereby agree that the Firm or BGH would likely suffer significant harm +if I associate with a Covered Enterprise during my employment and for some +period of time after my employment ends. Accordingly, I hereby agree that I +will not, without the written consent of the Firm or BGH, during the +Restricted Period in the Geographic Area: + +(i) form, or acquire a 5% or greater equity ownership, voting or profit +participation interest in, any Covered Enterprise; or + +(ii) associate (including, but not limited to, association as an officer, +employee, partner, director, consultant, agent or advisor) with any Covered +Enterprise and in connection with such association engage in, or directly or +indirectly manage or supervise personnel engaged in, any activity: + +A. which is similar or substantially related to any activity in which I was +engaged, in whole or in part, at the Firm or BGH, + +B. for which I had direct or indirect managerial or supervisory responsibility +at the Firm or BGH, or + +C. which calls for the application of the same or similar specialized +knowledge or skills as those utilized by me in my activities with the Firm or +BGH, + +each such activity being determined with reference to the one-year period +immediately prior to the end of the Asia Service Period, and, in each such +case, irrespective of the purpose of the activity or whether the activity is +or was in furtherance of advisory, agency, proprietary or fiduciary business +of either the Firm or BGH or the Covered Enterprise. + +(By way of example only, this provision precludes an "advisory" investment +banker from joining a leveraged-buyout firm, a research analyst from becoming +a proprietary trader or joining a hedge fund, or an information systems +professional from joining a management or other consulting firm and providing +information technology consulting services or advice to any Covered +Enterprise, in each case without the written consent of the Firm or BGH.) + +(b) I hereby agree that during the Restricted Period, I will not, in any +manner, directly or indirectly, (1) Solicit a Client to transact business with +a Covered Enterprise or to reduce or refrain from doing any business with the +Firm or BGH, or (2) interfere with or damage (or attempt to interfere with or +damage) any relationship between the Firm or BGH and a Client. + +(c) I hereby agree that during the Restricted Period, I will not, in any +manner, directly or indirectly: + +(i) Solicit any Selected Firm Personnel to resign from the Firm or BGH; + +(ii) Solicit any Selected Firm Personnel to apply for or accept employment (or +other association) with any person or entity other than the Firm; or + +(iii) participate in the hiring of any Selected Firm Personnel (whether as an +employee, consultant or otherwise) by any person or entity other than the +Firm, including, without limitation, participating in the identification of +individuals for potential hire, and participating in any hiring decision. + +I acknowledge and agree that I will be presumed to have violated this +provision if, during the Restricted Period, any Selected Firm Personnel are +Solicited or hired by any entity where I have, or will have, direct or +indirect managerial responsibility for such Selected Firm Personnel; provided, +however, that if I demonstrate to the Firm's reasonable satisfaction that I +was not involved in the solicitation or the hiring of the Selected Firm +Personnel, I will not be presumed to have violated this Section (c). + +(d) I acknowledge and agree that these Restrictions form part of my terms and +conditions of employment. I also acknowledge and agree that these Restrictions +supersede any part of any other agreement (which, for the avoidance of doubt, +excludes the SIP and the Award Agreement(s)), written or oral, that I am +subject to in respect of the same subject matter unless I am notified in +writing to the contrary. + +(e) Prior to accepting employment with any other person or entity during the +Restricted Period, I will provide any prospective employer with written notice +of the Restrictions with a copy containing the prospective employer's name and +contact information delivered simultaneously to the Firm. + +(f) I understand that the Restrictions may limit my ability to earn a +livelihood in a business similar to the business of the Firm or BGH. I +acknowledge that a violation on my part of any of the Restrictions would cause +immeasurable and irreparable damage to the Firm or BGH. Accordingly, I agree +that the Firm and/or BGH will be entitled to injunctive relief in any court of +competent jurisdiction for any actual or threatened violation of any of the +Restrictions in addition to any other remedies it or they may have. In the +event that I violate any of the Restrictions, I acknowledge that the +Restricted Period shall automatically be extended by the period of time that I +was in violation of the said Restriction(s). I also acknowledge that a +violation of any of the Restrictions would constitute my failure to meet an +obligation I have under an agreement between me and the Firm that was entered +into in connection with my employment with the Firm and/or BGH, may be +detrimental to the Firm and/or BGH and would constitute "Cause" for purposes +of any equity-based awards granted to me by the Firm and/or BGH and will +result in my forfeiting such equity-based awards. + +(g) If any provision (or part of a provision) of the Restrictions is held by a +court of competent jurisdiction to be invalid, illegal or unenforceable +(whether in whole or in part), such provision will be deemed modified to the +extent, but only to the extent, of such invalidity, illegality or +unenforceability and the remaining such provisions will not be affected +thereby; provided, however, that if any of the Restrictions are held by a +court of competent jurisdiction to be invalid, illegal or unenforceable +because it exceeds the maximum time period such court determines is acceptable +to permit such provision to be enforceable, such Restrictions will be deemed +to be modified to the minimum extent necessary to modify such time period in +order to make such provision enforceable hereunder. + +(h) The promises contained in the Restrictions are provided by me for the +benefit of each Firm entity and BGH and I acknowledge and agree that each + +such entity may independently enforce the Restrictions against me. Any benefit +that I give or am deemed to have given by virtue of the Restrictions is +received jointly and severally by each Firm entity (including, for the +avoidance of doubt, any Firm entity to which I provide services from time to +time) and BGH. + +(i) For the purposes of the Restrictions, GS Inc. enters into the SIP and +Award Agreement(s) applicable to me in connection with the Award(s) in its own +capacity and as agent for each other Firm entity and BGH. The consideration +for the promises in these Restrictions is given to me by GS Inc. on its own +behalf and on behalf of each other Firm entity (including, for the avoidance +of doubt, any Firm entity to which I provide services from time to time) and +BGH. + +(j) I acknowledge that the Restrictions set out in this clause are reasonable +and necessary for the protection of the legitimate interests of the Firm +and/or BGH, and that, having regard to those interests, such restrictions do +not impose an unreasonable burden on me. + +(k) The Restrictions shall remain in full force and effect and survive the +termination of my employment for any reason whatsoever. + +(l) If I am subject to the Non-Competition and Non-Solicitation Agreement for +Select Employees in the Equities Division, or a Managing Director subject to a +Goldman Sachs Group, Inc. Managing Director Agreement, the Restrictions shall +not apply to me. + +(m) If I am a Private Wealth Management employee subject to an Employee +Agreement Regarding Confidential and Proprietary Information and Materials and +Non-Solicitation, I will be subject to the restrictions contained in clause +(a) of the Restrictions but will not be subject to the restrictions contained +in clauses (b) and (c) of the Restrictions. Nothing in the Restrictions will +affect the operation of the Employee Agreement Regarding Confidential and +Proprietary Information and Materials and Non-Solicitation. + +(n) For the purposes of the Restrictions only, the following terms have the +following meanings: + +"Asia" means each state and territory in Australia, Brunei, Hong Kong +SAR, India, Indonesia, Japan, Korea, Labuan, Macau SAR, Malaysia, Mongolia, +New Zealand, Papua New Guinea, the Philippines, the PRC, Singapore, Taiwan, +Thailand and Vietnam. + +"Asia Service Period" means the period during which I am located in Asia +and contracted to provide services to a member of the Firm in Asia or BGH. For +the avoidance of doubt, the Asia Service Period does not end when I transfer +to another member of the Firm in Asia or BGH. + +"BGH" means Beijing Gao Hua Securities Company Limited, its subsidiaries +and affiliates, and its or their respective successors. + +" Client " means any client or prospective client of the Firm +or BGH (i) to whom I provided services at any time during the one year period +immediately prior to the end of the Asia Service Period, or (ii) for whom I +transacted business or solicited at any time during the one year period +immediately prior to the end of the Asia Service Period, or (iii) whose +identity became known to me in connection with my employment by the Firm or +BGH at any time during the one year period immediately prior to the end of the +Asia Service Period. + +"Competitive Enterprise" means an existing or planned business +enterprise that (i) engages, or may reasonably be expected to engage, in any +activity, (ii) owns or controls, or may reasonably be expected to own or +control, a significant interest in or (iii) is, or may reasonably be expected +to be, owned by, or a significant interest in which is, or may reasonably +expected to be, owned or controlled by, any entity that engages in any +activity that, in any case, competes or will compete anywhere with any +activity in which the Firm or BGH 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 me and members of my 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. + +"Covered Enterprise" means a Competitive Enterprise and any other +existing or planned business enterprise that: (i) offers, holds itself out as +offering or reasonably may be expected to offer products or services that are +the same as or similar to those offered by the Firm or BGH or that the Firm or +BGH reasonably expects to offer ("Firm Products or Services") or (ii) engages +in, holds itself out as engaging in or reasonably may be expected to engage in +any other activity that is the same as or similar to any financial activity +engaged in by the Firm or BGH or in which the Firm or BGH reasonably expects +to engage ("Firm Activities"). For the avoidance of doubt, Firm Activities +include any activity that requires the same or similar skills as any financial +activity engaged in by the Firm or BGH or in which the Firm or BGH reasonably +expects to engage, irrespective of whether any such financial activity is in +furtherance of an advisory, agency, proprietary or fiduciary undertaking. + +The enterprises covered by this definition include enterprises that offer, +hold themselves out as offering or reasonably may be expected to offer Firm +Products or Services, or engage in, hold themselves out as engaging in or +reasonably may be expected to engage in Firm Activities directly, as well as +those that do so indirectly by ownership or control ( e.g. , by owning, +being owned by or by being under common ownership with an enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +Firm Products or Services or that engages in, holds itself out as engaging in +or reasonably may be expected to engage in Firm Activities). The definition of +Covered Enterprise includes, solely by way of example, any enterprise that +offers, holds itself out as offering or reasonably may be expected to offer +any product or service, or engages in, holds itself out as engaging in or +reasonably may be expected to engage in any activity, in any case, associated +with investment banking; public or private finance; lending; financial +advisory services; private investing for anyone other than me or members of my +family (including, for the avoidance of doubt, any type of proprietary +investing or trading); private wealth management; private banking; consumer or +commercial cash management; consumer, digital, or commercial banking; merchant +banking; asset, portfolio or hedge fund management; insurance or reinsurance +underwriting or brokerage; property management; or securities, futures, +commodities, energy, derivatives, currency or digital asset brokerage, sales, +lending, custody, clearance, settlement or trading. An enterprise that offers, +holds itself out as offering or reasonably may be expected to offer Firm +Products or Services, or engages in, holds itself out as engaging in or +reasonably may be expected to engage in Firm Activities is a Covered +Enterprise , irrespective of whether the enterprise is a customer, client or +counterparty of the Firm or BGH or is otherwise associated with the Firm or +BGH and, because each of the Firm and BGH is a global enterprise, irrespective +of where the Covered Enterprise is physically located. + +"Covered Extended Absence" means my absence from active employment for +at least 180 days in any 12-month period as a result of my incapacity due to +mental or physical illness, as determined by the Firm or BGH (as applicable). + +" Effective Date " means (i) if the termination is for +cause or Covered Extended Absence, the date on which such termination occurs; +or (ii) if I repudiate my employment contract, the date of repudiation as +determined by the Firm or BGH (as applicable); or (iii) if I fail to return to +work on the agreed date from an unpaid leave of absence, the day after I was +due to return to work. + +"Firm" means GS Inc., its subsidiaries and affiliates and its and their +respective successors. + +"Geographic Area" means (i) the jurisdiction in Asia in which I am +located as of the date of execution of the Signature Card; and/or (ii) any +other jurisdiction in Asia in relation to which I have substantial product +and/or geographical market responsibilities in the one year period immediately +prior to the end of the Asia Service Period; and/or (iii) any other +jurisdiction in Asia in relation to which I have substantial employee +managerial responsibilities in the one year period immediately prior to the +end of the Asia Service Period; and/or (iv) any other jurisdiction in Asia in +relation to which I provided services in the one year period immediately prior +to the end of the Asia Service Period. + +"PRC" means, for the purpose of the Restrictions, the People's Republic +of China, excluding Hong Kong SAR, Macau SAR and Taiwan. + +"Restricted Period" means (i) in the event of the termination of my +employment with the Firm in Asia or BGH, the Asia Service Period including any +notice period applicable under the Notice Policy or, in the event I repudiate +my notice requirement or exercise any statutory right to shorten the notice +period or if my employment is terminated without notice or if the Firm elects +to shorten the notice period in whole or in part with or without pay in lieu +for any period of notice that has been waived or reduced, the Asia Service +Period and the period of time equivalent to my notice requirement commencing +from the Effective Date; or (ii) in the event of my employment with the Firm +in Asia or BGH ending by reason of the transfer of my employment to another +member of the Firm outside Asia, the Asia Service Period and the period of +time equivalent to my notice requirement commencing from the conclusion of the +Asia Service Period; or (iii) in the event of the termination of my secondment +to the Firm in Asia or BGH and assignment or transfer of my employment to +another member of the Firm outside Asia, the Asia Service Period and the +period of time equivalent to my notice requirement commencing from the +conclusion of the Asia Service Period. + +"Restrictions" means the non-competition and non-solicitation +restrictions for employees providing services in Asia as set out in (a) to (o) +of this section of the Signature Card. + +"Selected Firm Personnel" means any individual: + +(i) who at any point in the 12 months preceding the conduct prohibited by (c) +of this section of the Signature Card was a Firm or BGH employee or +consultant; and + +(ii) (a) with whom I have personally worked at any point during my employment +with the Firm; (b) who, on or at any time during the 12-month period +immediately prior to the end of the Asia Service Period, worked in the + +same division(s) in which I worked; or (c) who holds or has ever held the +title of Advisory Director, Managing Director, or Senior Advisor of the Firm. + +"Solicit" means making any direct or indirect communication of any kind +whatsoever, regardless of by whom initiated, inviting, advising, suggesting, +encouraging or requesting any person or entity, in any manner, to take or +refrain from taking any action. The terms "Solicited," "Soliciting" and +"Solicitation" will have their correlative meanings. + +(o) Notwithstanding paragraph 1 of this Signature Card, the Restrictions shall +be governed by and construed in accordance with the laws of the jurisdiction +in which I am located and providing services to the Firm at the date of +execution of the Signature Card. If I am located and providing services to the +Firm in a state or territory in Australia, the laws of the jurisdiction shall +be New South Wales. Notwithstanding paragraph 1, any Firm entity (including, +for the avoidance of doubt, any Firm entity to which I provide services from +time to time) or BGH may at any time elect to enforce the Restrictions in any +competent court of any jurisdiction determined by such entity.] + +FOR EMPLOYEES IN CERTAIN EUROPEAN UNION JURISDICTIONS (BELGIUM, DENMARK, +FRANCE, GERMANY, IRELAND, LUXEMBOURG AND SWEDEN) + +You are being offered Award(s) under the SIP in order to provide an additional +incentive and to encourage employee share ownership and to increase your +interest in GS Inc.'s success. The Award(s) are offered to you by GS Inc. in +accordance with the terms of the SIP which are summarized in the Award +Summary. Further details on the rights attaching to your Award(s) can be found +in the Award Summary. More information about GS Inc. is available at +www.gs.com. + +The shares subject to the Award(s) are new or existing ordinary shares in GS +Inc. and information on the total maximum number of shares which can be +offered under the SIP rules can be found in the section entitled Shares +Available for Awards in the SIP. The obligation to publish a prospectus does +not apply because of Article 1(4)(i) of the EU Prospectus Regulation + +If applicable, you should also refer to any additional specific notices below +in relation to these jurisdictions. + +FOR ARGENTINA EMPLOYEES ONLY + +Your Award(s) are being offered to you in your capacity as an employee of the +Firm and not aimed at the general public. By receiving and accepting your +Award(s), you are deemed to (i) acknowledge that the Firm has not made, and +will not make, any application to obtain an authorization from the National +Securities Commission ( Comisión Nacional de Valores) for the public +offering of the underlying Shares in Argentina, or otherwise taken any action +that would permit a public offering of the underlying Shares in Argentina +within the meaning of Argentine Capital Markets Law No. 26,831, as amended, +supplemented or otherwise modified from time to time (the "CML") and of the +Argentine Securities Exchange Commission General Resolution No. 622/2013, as +amended, supplemented or otherwise modified from time to time, and ancillary +regulations; (ii) acknowledge that the Argentine Securities Exchange +Commission has not approved the offering of the underlying Shares nor any +document relating to its offering; and (iii) agree that you will not sell or +offer to sell any Shares acquired upon settlement of your Award(s) in +Argentina other than pursuant to transactions that would not qualify as a +public offering under Section 2 of the CML. + +The Award documents are being delivered to you in your capacity as an employee +of the Firm. Accordingly, receipt and acceptance of the Award documents +constitute your agreement that the information contained in the Award +documents may not be (i) reproduced or used, in whole or in part, for any +purpose whatsoever other than as a representation of your holding of Shares, +or (ii) furnished to or discussed with any person (other than your personal +advisors on a confidential basis) without the express written permission of GS +Inc. + +You acknowledge that the Access to Public Information Agency, as the enforcing +authority of Act 25.326, has the power to attend the reports and claims from +those who are affected in their rights consequence of non-fulfilment of data +protection provisions. (La Agencia de Acceso a la Información Pública, en su +carácter de Órgano de Control de la Ley Nº 25.326, tiene la atribución de +atender las denuncias y reclamos que interpongan quienes resulten afectados en +sus derechos por incumplimiento de las normas vigentes en materia de +protección de datos personales.) + +Additional data protection information for Argentina employees (which should +be read in conjunction with, and forms part of, the Data Collection, +Processing and Transfers section above): + +You understand that your data may be stored in a database duly registered +with the Argentine National Data Protection Agency, under the name and +responsibility of GS Inc. or one of its subsidiaries or affiliates. + +FOR AUSTRALIA EMPLOYEES ONLY + +GS Inc. undertakes that it will, within a reasonable period of you so +requesting and at no charge, provide you with a copy of the rules of the SIP. +The market price of a Share can be accessed at the following link: +price can be ascertained by applying the prevailing USD/AUD exchange rate +published by the Reserve Bank of Australia, which can be accessed at the +following link: http://www.rba.gov.au/statistics/frequency/exchange- +rates.html. + +Any advice given by GS Inc. in connection with the SIP is general advice only. +The documentation does not take into account the objectives, financial +situation or needs of any particular person. Before acting on the information +contained in the documentation, or making a decision to participate, you +should consider obtaining your own financial product advice from a person who +is licensed by the Australian Securities and Investments Commission (ASIC) to +give such advice. + +Throughout the period in which you hold a dividend equivalent right you may +obtain copies of all information filed by GS Inc. with the U.S. Securities and +Exchange Commission (SEC) which is accessible by GS Inc.'s shareholders and +the general public ("shareholder information") by going to the SEC's website ( +aware that shareholder information can affect the value of your dividend +equivalent rights from time to time. + +The actual value you receive in respect of the Shares acquired by you will +depend on the number of Shares you receive, the market value of a Share, the +value of any dividend and dividend equivalent payments made in respect of a +Share, and the USD/AUD exchange rate. + +There are risks associated with an investment in Shares and the value of any +Shares you receive may be less than the value of those Shares today. Some of +those risks are specific to GS Inc.'s business activities while others are of +a more general nature. For more detail on those risks, please refer to GS +Inc.'s most recent annual report. Individually or in combination, those risks +may affect the value of Shares. + +Fidelity Personal Trust Company, FSB ("Trustee") will hold Shares that are the +subject of Award(s). Subject to the terms and conditions of the Award(s), any +Shares, and income gained, held on your behalf may only be dealt with by the +Trustee with your direction. You may direct the Trustee on the exercise of any +applicable voting rights that you hold in respect of such Shares. GS Inc. +undertakes that it will, within a reasonable period of you so requesting and +at no charge, provide you with a copy of the trust deed. + +FOR BRAZIL EMPLOYEES ONLY + +The Award(s) referred to in this document and the underlying Shares have not +been and will not be publicly issued, placed, distributed, offered or +negotiated in the Brazilian capital markets and, as a result, will not be +registered with the Brazilian Securities Commission ( Comissão de Valores +Mobiliários ). The Award(s) and the underlying Shares will not be offered or +sold in Brazil under any circumstances that constitute a public offering, +placement, distribution or negotiation under the Brazilian capital markets +regulation. + +By accepting the Award(s), you agree and acknowledge that (i) neither your +employer nor any person or entity acting on behalf of your employer has +provided you with financial advice with respect to your Award(s) or the Shares +acquired upon settlement of your Award(s); and (ii) your employer does not +guarantee a specified level of return on your Award(s) or the registered +Shares. + +According to Brazilian regulations, individuals resident in Brazil must inform +the Central Bank of Brazil yearly the amounts of any nature, the assets and +rights (including cash and other deposits) held outside of the Brazilian +territory. Please consult your own legal counsel on the terms and conditions +for presentation of such information. + +By accepting the Award(s), you acknowledge that the Firm has provided you with +Portuguese translations of the Award Summary, Award Agreement and Signature +Card, but that the original English versions of these documents control. (Ao +aceitar esta outorga, Você reconhece que a Empresa Ihe disponibilizou a versão +em português do Award Summary, do Award Agreement e do Signature Card; porém a +versão original em inglês desses documentos prevalecerá.) + +FOR CHILE EMPLOYEES ONLY + +By accepting the Signature Card connected to your Award, you acknowledge that +this legend applies to all Award-related documents and communications. + +General Warning + +Neither GS Inc., the SIP nor the Shares have been registered in the Registro +de Valores (Securities Registry) or in the Registro de Valores Extranjeros +(Foreign Securities Registry) of the Comisión para el Mercado Financiero +(Chilean Commission for the Financial Market or CMF) and they are not subject +to the control of the CMF. If such securities are offered within Chile, they +will be offered and sold only pursuant to Norma de Carácter General 336 +(General Regulation 336) of the CMF, an exemption to the registration +requirements, or in circumstances which do not constitute a public offer of +securities in Chile within the meaning of Article 4 of the Chilean Securities +Market Law 18,045. As the Shares are not registered, the issuer has no +obligation under Chilean law to deliver public information regarding the +Shares in Chile. The Shares shall not be subject to public offering in Chile +unless they are registered in the Foreign Securities Registry of the CMF. The +commencement date of the offer is the date on which these documents were first +provided to you via email. + +Statement by Investors (Grantees) + +Pursuant to General Regulation 336 (as amended), you are required to inform GS +Inc. whether or not you are a "Qualified Investor" as defined in Norma de +Carácter General 216 (General Regulation 216) of the CMF. By accepting the +Signature Card connected to your Award, you state to GS Inc. that you are not +a Qualified Investor, or if you are a Qualified Investor, that you have +provided a separate statement acknowledging this to GS Inc. (please note that +any such statement may be emailed to GS Inc. at +EquityCompensation@ny.email.gs.com). By accepting the Signature Card connected +to your Award, you further state to GS Inc. that you acknowledge: + +(i) that the securities acquired in connection with the SIP will not be +registered in the CMF Securities Registry or Foreign Securities Registry and, +therefore, such securities may not be publicly offered in Chile; and + +(ii) that since GS Inc. is not registered in the registries kept by the CMF, +GS Inc. will not be subject to the CMF's oversight nor to the ongoing +disclosure obligations imposed by the law and regulation on registered +issuers. + +English Language + +You declare that you read and understand English and that the fact that the +official SIP documents are in the English language does not represent any +inconvenience or prejudice to you. If you do not understand their content, +please contact your HCM contact in order to obtain a Spanish version. + +Accessibility of Award Documents + +The Firm undertakes to provide you with a copy of the key documents pertaining +to your Award in a form that remains accessible even if your employment is +terminated. + +SÓLO PARA EMPLEADOS DE CHILE + +Al aceptar la "Signature Card" relacionada con su plan, usted reconoce que +esta leyenda se aplica a todos los documentos y comunicaciones relacionados +con el SIP. + +Advertencia General + +Ni GS Inc., ni el SIP, ni las Acciones, han sido registradas en el Registro +de Valores o Registro de Valores Extranjeros que lleva la Comisión para el +Mercado Financiero ("CMF") y ninguno de ellos está sujeto a la fiscalización +de la CMF. Si dichos valores son ofrecidos dentro de Chile, serán ofrecidos y +colocados sólo de acuerdo a la Norma de Carácter General 336 de la CMF, una +excepción a la obligación de registro, o en circunstancias que no constituyan +una oferta pública de valores en Chile según lo definido por el Artículo 4 de +la Ley 18.045 de Mercado de Valores de Chile. Por tratarse de valores no +inscritos, el emisor de las Acciones no tiene obligación bajo la ley chilena +de entregar en Chile información pública acerca de las Acciones. Las Acciones +no pueden ser ofrecidas públicamente en Chile en tanto éstas no se registren +en el Registro de Valores Extranjeros de la CMF. Se informa que la fecha de +inicio de la presente oferta será aquella en que estos documentos fueron +entregados a usted por primera vez vía email. + +Declaración de los Inversionistas (Destinatarios) + +De conformidad con la Norma de Carácter General N°336 (modificada), se +requiere que usted informe a GS Inc. si califica como "Inversionista +Calificado" en los términos de la Norma de Carácter General N°216 de la CMF. +Por medio de la aceptación de la Signature Card referida a su Plan, usted +declara a GS Inc, que no califica como "Inversionista Calificado", o que si +califica como "Inversionista Calificado", usted ha enviado por separado una +declaración reconociendo dicha circunstancia a GS Inc. (favor tenga en cuenta +que cualquier declaración puede ser enviada a GS Inc., al correo +EquityCompensation@ny.email.gs.com). Por medio de la aceptación de la +Signature Card referida a su plan, usted declara a GS Inc, que está en +conocimiento de que: + +(i) los valores adquiridos en conexión con el SIP no estarán inscritos en el +Registro de Valores o en el Registro de Valores Extranjeros de la CMF y, por +lo tanto, dichos valores no podrán ser públicamente ofrecidos en Chile; y + +(ii) dado que GS Inc. no está inscrita en los registros mantenidos por la +CMF, GS Inc. no estará sujeta a la fiscalización de la CMF ni a las +obligaciones de información continua impuestas por la ley y la regulación a +los emisores inscritos. + +Idioma Inglés + +Usted declara que lee y entiende el idioma inglés, de manera que el hecho de +que los documentos oficiales del SIP se encuentren en idioma inglés no +representa ningún inconveniente o perjuicio para usted. En caso de que usted +no entienda el contenido de estos documentos, por favor comuníquese con su +encargado de recursos humanos, a fin de obtener una versión en español. + +Accesibilidad a los Documentos del Plan + +La empresa se obliga a entregarle una copia de los documentos clave relativos +al plan de forma tal que permanezcan accesibles a usted incluso luego de +terminada su relación laboral con ésta. + +FOR THE PEOPLE'S REPUBLIC OF CHINA EMPLOYEES ONLY + +All documentation in relation to the Award(s) is intended for your personal +use and in your capacity as an employee of the Firm (and/or its affiliate) and +is being given to you solely for the purpose of providing you with information +concerning the Award(s) which the Firm may grant to you as an employee of the +Firm (and/or its affiliate) in accordance with the terms of the SIP, this +documentation and the applicable Award Agreement(s). The grant of the Award(s) +has not been and will not be registered with the China Securities Regulatory +Commission of the People's Republic of China pursuant to relevant securities +laws and regulations, and the Award(s) may not be offered or sold within the +mainland of the People's Republic of China by means of any of the +documentation in relation to the Award(s) through a public offering or in +circumstances which require a registration or approval of the China Securities +Regulatory Commission of the People's Republic of China in accordance with the +relevant securities laws and regulations. + +You agree that notwithstanding anything to the contrary under the SIP or the +Award Agreement(s), the Award(s) may be settled in cash in Renminbi or such +other currency, payable by your employing entity in the mainland of the +People's Republic of China or such other entity, in each case, as may be +determined by the Firm in its sole discretion. + +Additional data protection information for the People's Republic of China +employees (which should be read in conjunction with, and forms part of, the +Data Collection, Processing and Transfers section above): + +You have the ability to request the name, contact information, processing +purpose and processing methods for any onshore data controller to which the +Firm discloses your personal data in connection with your Award. You also have +the ability to request the information listed in the preceding sentence, as +well as information on the procedures that you may follow to exercise your +data rights, in relation to any foreign party to which the Firm discloses your +personal data in connection with your Award. The Firm will respond to any such +request by you as soon as is reasonably practicable for the Firm. + +FOR FRANCE EMPLOYEES ONLY + +By accepting the Award(s), you acknowledge that the Firm has provided you with +French translations of the Award Summary, Award Agreement and Signature Card, +but that the original English versions of these documents control. + +The provisions of the Award Agreement will apply only in respect of the year +to which the Award Agreement relates and will not in any circumstances create +any right or entitlement to you for any future fiscal years. + +En acceptant cet octroi, vous reconnaissez que la Société vous a transmis une +version française de l'Award Summary (Résumé de l'Octroi), l'Award Agreement +(Contrat d'Octroi) et de la Signature Card (Carte de Signature), mais que +seule la version originale en langue anglaise fait foi. + +Les dispositions de l'Accord de prime s'appliquent uniquement à l'année +concernée par l'Accord de prime et ne créent en aucune circonstance tous +droits ou habilitations s'agissant des années fiscales à venir. + +FOR HONG KONG EMPLOYEES ONLY + +WARNING: + +The contents of this document have not been reviewed by any regulatory +authority in Hong Kong. You are advised to exercise caution in relation to +this Award(s). If you are in doubt about any of the contents of this document, +you should obtain independent professional advice. + +This document has not been, and will not be, registered as a "prospectus" in +Hong Kong under the Companies (Winding Up and Miscellaneous Provisions) +Ordinance (Cap 32) nor has it been authorised by the Securities and Futures +Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap +571) of the Laws of Hong Kong. This document does not constitute an offer or +invitation to the public in Hong Kong to acquire any securities nor an +advertisement of securities in Hong Kong. This document is distributed on a +confidential basis. + +By accepting the Award(s), you acknowledge and agree that you will not be +permitted to transfer awards to persons who fall outside the definition of +'qualifying persons' in the Companies (Winding Up and Miscellaneous +Provisions) Ordinance (Cap 32) (i.e., a person who is not a current or former +director, employee, officer, consultant of the Firm or a person other than the +offeree's wife, husband, widow, widower, child or step-child under the age of +18 years, or as otherwise defined), even if otherwise permitted under the SIP +or any of the related documents. + +FOR INDIA EMPLOYEES ONLY + +The Award documents (including any related website) do not invite offers from +the public for subscription or purchase of the securities of any body +corporate under any law for the time being in force in India. The documents +are not a prospectus under the applicable laws for the time being in force in +India. GS Inc. does not intend to market, promote, invite offers for +subscription or purchase of the securities of any body corporate by these +documents. The information provided in the documents is for the record only. +Any person who subscribes or purchases securities of any body corporate should +consult their own investment advisors before making any investments. GS Inc. +shall not be liable or responsible for any such investment decision made by +any person. + +FOR INDONESIA EMPLOYEES ONLY + +By accepting the Award(s), you acknowledge that the Firm has provided you with +Bahasa Indonesia translations of the Award Summary, Award Agreement and +Signature Card, but that the original English versions of these documents +control. Dengan menerima Putusan, Anda menyatakan bahwa Perusahaan telah +memberikan Anda terjemahan Bahasa Indonesia dari Ikhtisar Putusan, Perjanjian +Putusan dan Perjanjian dengan Tanda Tangan, tapi versi asli dalam Bahasa +Inggris dari dokumen-dokumen ini tetap mengendalikan. + +FOR ITALY EMPLOYEES ONLY + +The current Award(s) are offered to fewer than 150 natural persons in Italy +and therefore the obligation to produce a prospectus in connection with the +Award(s) does not apply because of Article 1(4)(b) of the EU Prospectus +Regulation 2017/1129. + +No person resident or located in Italy other than the original recipient of +this document and any other document related to the Award(s) may rely on such +documents or their content. The offer of the Award(s) under the SIP (and the +delivery of the underlying Shares) is exempted from prospectus requirements +under Italian securities legislation. + +Under Italian rules, Italian taxpayers generally must report in their annual +tax return the value of any financial instruments held abroad at year-end +(such as financial and real estate assets). Please consult your own advisors +regarding the terms and conditions of this reporting obligation. + +FOR NEW ZEALAND EMPLOYEES ONLY + +GS Inc. is offering you an Award(s) under the SIP in reliance upon clause 8 of +Schedule 1 of the Financial Markets Conduct Act 2013 (offers under employee +share purchase schemes) ( Exclusion ). In accordance with the requirements +of the Exclusion, the following information has been made available to you: + +GS Inc.'s most recent annual report via https://www.goldmansachs.com/investor- +relations/index.html. + +The SIP documentation (which constitutes the current rules of the employee +share purchase scheme for the purposes of the Exclusion) on + +A copy of the Award Agreement on https://hcm.web.gs.com/newaward. + +GS Inc.'s most recent published audited and unaudited financial statements on + +A copy of the auditor's report on the above financial statements (if any) at + +You may obtain a copy of the documents listed above by electronic means from +the internet site addresses given in each case. You may request hard copies of + +the documents listed above free of charge from Head of Securities Compliance - +Goldman Sachs Australia Pty Ltd. + +For further information, including the form, dividend payments, vesting, +delivery, and transfer restrictions of the Awards, please refer to the +documents listed above. + +Warning + +The Award(s) is an offer of Shares (although the Award may in limited +circumstances be settled in cash or other property). The Shares give you a +stake in the ownership of GS Inc. You may receive a return if dividends are +paid. + +If GS Inc. runs into financial difficulties and is wound up, you will be paid +only after all creditors and holders of any preference shares have been paid. +You may lose some or all of your investment. + +New Zealand law normally requires people who offer financial products to give +information to investors before they invest. This information is designed to +help investors to make an informed decision. + +The usual rules do not apply to this offer because it is made under an +employee share purchase scheme. As a result, you may not be given all the +information usually required. You will also have fewer other legal protections +for this investment. + +Ask questions, read all documents carefully, and seek independent financial +advice before committing yourself. + +The Shares are quoted on a stock exchange. GS Inc. intends to quote these +Shares on the New York Stock Exchange ( NYSE ). This means you may be able +to sell them on the NYSE if there are interested buyers. You may get less than +you invested. The price will depend on the demand for the Shares. + +FOR PERU EMPLOYEES ONLY + +If you are employed in Peru, the following statement is hereby made part of +the SIP documents: the Shares which may be issued upon settlement of your +Award have not been registered with the Public Registry of the Securities +Market administered by the Peruvian Securities Market Superintendence ( +Superintendencia del Mercado de Valores - SMV) and may not be offered or +sold publicly in Peru. In addition, the contents of the SIP documents have not +been reviewed by any Peruvian regulatory authority. + +Additional data protection information for Peru employees (which should be +read in conjunction with, and forms part of, the Data Collection, Processing +and Transfers section above): + +GS Inc., identified by Tax ID Number (EIN) No. 134019460, with registered +office at 200 West Street, New York 10282 - United States, will use, collect, +transfer and store your following personal data for the purpose of accessing +the SIP: name, address, work location, hire date, Social Security or Social +Insurance or taxpayer identification number (required for tax purposes), type +and amount of SIP Awards or other benefit plan award, citizenship or residency +(required for tax purposes). Your personal data is necessary for the execution +of the SIP, therefore if you express your refusal to provide it, GS Inc. will +not be able to execute the SIP. Your personal data will be stored in a data +bank owned by GS Inc., the identity of which can be obtained upon your +request, for the time necessary to complete the SIP and/or until the +fulfillment of legal obligations provided by the applicable regulations are +applicable to GS Inc. Your personal data could be sent to GS Inc. affiliates, +detailed in http://www2.goldmansachs.com/who-we-are/locations/index.html ; +including, Computershare Limited and its affiliates and Fidelity Stock Plan +Services, LLC, Fidelity Personal Trust Company, FSB and any of their +affiliates; or any other service provider necessary for the administration of +the SIP, which will be communicated to you by GS Inc. You may exercise your +rights of access, rectification and cancellation through +EquityCompensation@ny.email.gs.com. + +FOR RUSSIA EMPLOYEES ONLY + +None of the information contained in this Signature Card or the documents that +you received in electronic form (as listed in this Signature Card) constitutes +an advertisement of the Award(s) in Russia and must not be passed on to third +parties or otherwise be made publicly available in Russia. The Award(s) have +not been and will not be registered in Russia and are not intended for +"placement" or "public circulation" in Russia. + +You understand and agree that the Firm may, in its sole discretion or where +required by legal or regulatory requirements, grant Awards as cash-settled +instruments or settle Awards in cash and that you will not have any rights to +the Shares underlying your Award(s) (if any). Your Award(s) will remain +subject to the terms and conditions contained in the SIP, the Award +Agreement(s), and this Signature Card. + +FOR SAUDI ARABIA EMPLOYEES ONLY + +The Award(s) are offered to you on behalf of Goldman Sachs Saudi Arabia, +Commercial Registration Number 1010256672, 25th Floor, Kingdom Tower, Post +Office Box 52969, Riyadh 11573, Saudi Arabia. The SIP documents may not be +distributed in the Kingdom except to such persons as are permitted under the +Rules on the Offer of Securities and Continuing Obligations issued by the +Capital Market Authority. The Capital Market Authority does not make any +representation as to the accuracy or completeness of the SIP documents, and +expressly disclaims any liability whatsoever for any loss arising from, or +incurred in reliance upon, any part of the SIP documents. Prospective +purchasers of the securities offered hereby should conduct their own due +diligence on the accuracy of the information relating to the securities. If +you do not understand the contents of the SIP documents you should consult an +authorized financial adviser. + +FOR SINGAPORE EMPLOYEES ONLY + +The Award(s) are prescribed capital markets products (as defined in the +Securities and Futures (Capital Markets Products) Regulations 2018) and +Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on +the Sale of Investment Products and MAS Notice FAA-N16: Notice on +Recommendations on Investment Products). + +The Shares or the Award(s) may not be offered or sold, or be made the subject +of an invitation for subscription or purchase, whether directly or indirectly, +to persons in Singapore other than pursuant to, and in accordance with the +conditions of, an exemption under any provision of Subdivision (4) of Division +1 of Part XIII of the Securities and Futures Act, Chapter 289 of Singapore. + +FOR SPAIN EMPLOYEES ONLY + +Please note that the offer of an Award under the SIP does not constitute a +public offer in Spain, and therefore it is not subject to registration with +the Spanish authorities. The Award(s) are offered to you by GS Inc. in +accordance with the terms and conditions set forth in the SIP and the Award +Agreement(s). The grantees may be subject to certain reporting obligations for +the acquisition or disposal of Shares under the SIP, the opening of cash or +brokerage bank accounts abroad and the transfer or receipt of funds. Please +consult your own advisors regarding these and other legal or tax obligations +that may be applicable. + +FOR TURKEY EMPLOYEES ONLY + +This offer is not a public offering in terms of the Turkish Capital Markets +legislation and the information provided herein cannot be construed as a +public offering. The grant of the Award(s) should not be construed as a public +offering or a private placement and is made to you as an employee of the Firm. +You are not obligated to accept your Award(s). Your decision to accept or +reject the Award(s) is entirely up to you and will have no impact on your +employment or your career, either positive or negative. The grant of your +Award(s) does not change or supplement the terms of your employment in any +way. The Award documents do not constitute an employee handbook or an +employment contract between you and the Firm. + +The information set forth in the Award documents is solely for informative +reasons and the Firm is not hereby giving you nor purports to be giving you +investment or other financial advice. The Firm reserves the right to suspend, +change, amend or supplement the terms of the Award documents, in whole or in +part, for any reason at any time. If you are in doubt about the merits of the +Award documents, you should contact your financial advisor. + +Additional data protection information for Turkey employees (which should be +read in conjunction with, and forms part of, the Data Collection, Processing +and Transfers section above): + +In terms of the Law on the Protection of Personal Data No. 6698 and its +relevant legislation, GOLDMAN SACHS TK DANIŞMANLIK HİZMETLERİ ANONİM ŞİRKETİ +acts as the data controller regarding your personal data in Turkey. + +FOR UK EMPLOYEES ONLY + +This document does not have regard to the specific investment objectives, +financial situation and particular needs of any specific person who may +receive it. Recipients should seek their own financial advice. + +The Award(s) are subject to the terms and conditions set forth in the SIP and +the Award Agreement(s). The price of Shares and the income from such Shares +(if any) can fluctuate and may be affected by changes in the exchange rate for +U.S. dollars. Past performance will not necessarily be repeated. Levels and +bases of taxation may change from time to time. Investors should consult their +own tax advisors in order to understand tax consequences. GS Inc. has (and its +associates may have) a material interest in the Shares and the investments +that are the subject of this document. + +You are being offered Award(s) under the SIP in order to provide an additional +incentive and to encourage employee share ownership and to increase your +interest in GS Inc.'s success. The Award(s) are offered to you by GS Inc. in +accordance with the terms of the SIP which are summarized in the Award +Summary. Further details on the rights attaching to your Award(s) can be found +in the Award Summary. More information about GS Inc. is available at +www.gs.com. + +The shares subject to the Award(s) are new or existing ordinary shares in GS +Inc. and information on the total maximum number of shares which can be +offered under the SIP rules can be found in the section entitled Shares +Available for Awards in the SIP. The obligation to publish a prospectus does +not apply because of Section 86(aa) of the Financial Services and Markets Act +2000 (as amended, supplemented or substituted by any UK legislation enacted in +connection with the UK's exit from the European Union). + +EX-21.1 13 d192225dex211.htm EX-21.1 EX-21.1 + +Exhibit 21.1 + +Significant Subsidiaries of the Registrant + +The following are significant subsidiaries of The Goldman Sachs Group, Inc. as +of December 31, 2021 and the states or jurisdictions in which they are +organized. Each subsidiary is indented beneath its principal parent. The +Goldman Sachs Group, Inc. owns, directly or indirectly, at least 99% of the +voting securities of substantially all of the subsidiaries included below. The +names of particular subsidiaries have been omitted because, considered in the +aggregate as a single subsidiary, they would not constitute, as of the end of +the year covered by this report, a "significant subsidiary" as that term is +defined in Rule 1-02(w) of Regulation S-X under the Securities Exchange Act of + +Name State or Jurisdiction of + +Organization of Entity + +The Goldman Sachs Group, Inc. + +Delaware + +Goldman Sachs & Co. LLC + +New York + +Goldman Sachs Funding LLC + +Delaware + +GS European Funding S.A R.L. + +Luxembourg + +MTGLQ Investors, L.P. + +Delaware + +Goldman Sachs (UK) L.L.C. + +Delaware + +Goldman Sachs UK Funding Limited + +United Kingdom + +Goldman Sachs Group UK Limited + +United Kingdom + +Goldman Sachs International Bank + +United Kingdom + +Goldman Sachs International + +United Kingdom + +Goldman Sachs Group Holdings (U.K.) Limited + +United Kingdom + +ELQ Investors VIII Ltd + +United Kingdom + +J. Aron & Company LLC + +New York + +GSAM Holdings LLC + +Delaware + +GSAMI Holdings I Ltd + +United Kingdom + +GSAMI Holdings II Ltd + +United Kingdom + +Goldman Sachs Asset Management International Holdings Ltd + +United Kingdom + +Goldman Sachs Asset Management International + +United Kingdom + +Goldman Sachs Asset Management, L.P. + +Delaware + +Goldman Sachs Asset Management International Holdings L.L.C. + +Delaware + +Goldman Sachs Asset Management Co., Ltd. + +Japan + +Goldman Sachs (Asia) Corporate Holdings L.L.C. + +Delaware + +Goldman Sachs Holdings (Asia Pacific) Limited + +Hong Kong + +Goldman Sachs (Japan) Ltd. + +British Virgin Islands + +Goldman Sachs Japan Co., Ltd. + +Japan + +Goldman Sachs Holdings (Hong Kong) Limited + +Hong Kong + +Goldman Sachs Holdings (Singapore) Pte. Ltd. + +Singapore + +J. Aron & Company (Singapore) Pte. + +Singapore + +Goldman Sachs Holdings ANZ Pty Limited + +Australia + +Goldman Sachs Financial Markets Pty Ltd + +Australia + +Goldman Sachs Australia Pty Ltd + +Australia + +GS Lending Partners Holdings LLC + +Delaware + +Goldman Sachs Lending Partners LLC + +Delaware + +Goldman Sachs Bank USA + +New York + +Goldman Sachs Bank Europe SE + +Germany + +Goldman Sachs Mortgage Company + +New York + +Name State or Jurisdiction of + +Organization of Entity + +GS Financial Services II, LLC + +Delaware + +GS Funding Europe VI Ltd + +United Kingdom + +GS Funding Europe I Ltd. + +Cayman Islands + +GS Funding Europe V Limited + +United Kingdom + +GSSG Holdings LLC + +Delaware + +Special Situations Investing Group II, LLC + +Delaware + +Special Situations Investing Group III, Inc. + +Delaware + +GS Asian Venture (Delaware) L.L.C. + +Delaware + +Asia Investing Holdings Pte. Ltd. + +Singapore + +Mercer Investments (Singapore) Pte. Ltd. + +Singapore + +Goldman Sachs Asia Strategic Pte. Ltd. + +Singapore + +ALQ Holdings (Del) LLC + +Delaware + +GLQ International Partners LP + +United Kingdom + +GLQ Broad Street Holdings Ltd. + +Cayman Islands + +Broad Street Brazil Ltd + +Jersey + +Broad Street Credit Investments Europe S.A R.L. + +Luxembourg + +BSCH III Designated Activity Company + +Ireland + +GLQ International Holdings Ltd + +Jersey + +GLQ Holdings (UK) Ltd + +United Kingdom + +ELQ Investors VI Ltd + +United Kingdom + +ELQ Investors II Ltd + +United Kingdom + +ELQ Lux Holding S.A R.L. + +Luxembourg + +GLQL S.A R.L. + +Luxembourg + +GLQC II Designated Activity Company + +Ireland + +Goldman Sachs Asia Strategic II Pte. Ltd. + +Singapore + +Broad Street Equity Investments Europe Ltd + +United Kingdom + +Goldman Sachs Specialty Lending Group, L.P. + +Delaware + +Broad Street Principal Investments Superholdco LLC + +Delaware + +Broad Street Principal Investments, L.L.C. + +Delaware + +Broad Street Credit Holdings LLC + +Delaware + +GS Fund Holdings, L.L.C. + +Delaware + +Broad Street Principal Credit Strategies, L.P. + +Delaware + +Goldman Sachs PSI Global Holdings, LLC + +DelawareEX-23.1 14 d192225dex231.htm EX-23.1 EX-23.1 + +Exhibit 23.1 + +CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM + +We hereby consent to the incorporation by reference in the Registration +Statements on Form S-3 (File No. 333-253421), on Form S-4 (No. 333-260413) and +on Form S-8 (File Nos. 333-80839, 333-42068, 333-106430, 333-120802, +333-235973 and 333-261673) of The Goldman Sachs Group, Inc. of our report +dated February 24, 2022 relating to the financial statements and the +effectiveness of internal control over financial reporting, which appears in +Part II, Item 8 of this Form 10-K. + +/s/ PricewaterhouseCoopers LLP + +New York, New York + +February 24, 2022EX-31.1 15 d192225dex311.htm EX-31.1 EX-31.1 + +Exhibit 31.1 + +CERTIFICATIONS + +I, David Solomon, certify that: + +I have reviewed this Annual Report on Form 10-K for the year ended December +31, 2021 of The Goldman Sachs Group, Inc.; + +Based on my knowledge, this report does not contain any untrue statement of a +material fact or omit to state a material fact necessary to make the +statements made, in light of the circumstances under which such statements +were made, not misleading with respect to the period covered by this report; + +Based on my knowledge, the financial statements, and other financial +information included in this report, fairly present in all material respects +the financial condition, results of operations and cash flows of the +registrant as of, and for, the periods presented in this report; + +The registrant's other certifying officer(s) and I are responsible for +establishing and maintaining disclosure controls and procedures (as defined in +Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over +financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) +for the registrant and have: + +a) + +Designed such disclosure controls and procedures, or caused such disclosure +controls and procedures to be designed under our supervision, to ensure that +material information relating to the registrant, including its consolidated +subsidiaries, is made known to us by others within those entities, +particularly during the period in which this report is being prepared; + +b) + +Designed such internal control over financial reporting, or caused such +internal control over financial reporting to be designed under our +supervision, to provide reasonable assurance regarding the reliability of +financial reporting and the preparation of financial statements for external +purposes in accordance with generally accepted accounting principles; + +c) + +Evaluated the effectiveness of the registrant's disclosure controls and +procedures and presented in this report our conclusions about the +effectiveness of the disclosure controls and procedures, as of the end of the +period covered by this report based on such evaluation; and + +d) + +Disclosed in this report any change in the registrant's internal control over +financial reporting that occurred during the registrant's most recent fiscal +quarter (the registrant's fourth fiscal quarter in the case of an annual +report) that has materially affected, or is reasonably likely to materially +affect, the registrant's internal control over financial reporting; and + +The registrant's other certifying officer(s) and I have disclosed, based on +our most recent evaluation of internal control over financial reporting, to +the registrant's auditors and the audit committee of the registrant's board of +directors (or persons performing the equivalent functions): + +a) + +All significant deficiencies and material weaknesses in the design or +operation of internal control over financial reporting which are reasonably +likely to adversely affect the registrant's ability to record, process, +summarize and report financial information; and + +b) + +Any fraud, whether or not material, that involves management or other +employees who have a significant role in the registrant's internal control +over financial reporting. + +Date: February 24, 2022 + +/s/ + +David Solomon + +David Solomon + +Title: + +Chief Executive Officer + +CERTIFICATIONS + +I, Denis P. Coleman III, certify that: + +I have reviewed this Annual Report on Form 10-K for the year ended December +31, 2021 of The Goldman Sachs Group, Inc.; + +Based on my knowledge, this report does not contain any untrue statement of a +material fact or omit to state a material fact necessary to make the +statements made, in light of the circumstances under which such statements +were made, not misleading with respect to the period covered by this report; + +Based on my knowledge, the financial statements, and other financial +information included in this report, fairly present in all material respects +the financial condition, results of operations and cash flows of the +registrant as of, and for, the periods presented in this report; + +The registrant's other certifying officer(s) and I are responsible for +establishing and maintaining disclosure controls and procedures (as defined in +Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over +financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) +for the registrant and have: + +a) + +Designed such disclosure controls and procedures, or caused such disclosure +controls and procedures to be designed under our supervision, to ensure that +material information relating to the registrant, including its consolidated +subsidiaries, is made known to us by others within those entities, +particularly during the period in which this report is being prepared; + +b) + +Designed such internal control over financial reporting, or caused such +internal control over financial reporting to be designed under our +supervision, to provide reasonable assurance regarding the reliability of +financial reporting and the preparation of financial statements for external +purposes in accordance with generally accepted accounting principles; + +c) + +Evaluated the effectiveness of the registrant's disclosure controls and +procedures and presented in this report our conclusions about the +effectiveness of the disclosure controls and procedures, as of the end of the +period covered by this report based on such evaluation; and + +d) + +Disclosed in this report any change in the registrant's internal control over +financial reporting that occurred during the registrant's most recent fiscal +quarter (the registrant's fourth fiscal quarter in the case of an annual +report) that has materially affected, or is reasonably likely to materially +affect, the registrant's internal control over financial reporting; and + +The registrant's other certifying officer(s) and I have disclosed, based on +our most recent evaluation of internal control over financial reporting, to +the registrant's auditors and the audit committee of the registrant's board of +directors (or persons performing the equivalent functions): + +a) + +All significant deficiencies and material weaknesses in the design or +operation of internal control over financial reporting which are reasonably +likely to adversely affect the registrant's ability to record, process, +summarize and report financial information; and + +b) + +Any fraud, whether or not material, that involves management or other +employees who have a significant role in the registrant's internal control +over financial reporting. + +Date: February 24, 2022 + +/s/ + +Denis P. Coleman III + +Denis P. Coleman III + +Title: + +Chief Financial OfficerEX-32.1 16 d192225dex321.htm EX-32.1 EX-32.1 + +Exhibit 32.1 + +CERTIFICATION + +Pursuant to 18 U.S.C. § 1350, the undersigned officer of The Goldman Sachs +Group, Inc. (the Company) hereby certifies that the Company's Annual Report on +Form 10-K for the year ended December 31, 2021 (the Report) fully complies +with the requirements of Section 13(a) or 15(d), as applicable, of the +Securities Exchange Act of 1934 and that the information contained in the +Report fairly presents, in all material respects, the financial condition and +results of operations of the Company. + +Dated: February 24, 2022 + +/s/ + +David Solomon + +David Solomon + +Title: + +Chief Executive Officer + +The foregoing certification is being furnished solely pursuant to 18 U.S.C. § +1350 and is not being filed as part of the Report or as a separate disclosure +document. + +CERTIFICATION + +Pursuant to 18 U.S.C. § 1350, the undersigned officer of The Goldman Sachs +Group, Inc. (the Company) hereby certifies that the Company's Annual Report on +Form 10-K for the year ended December 31, 2021 (the Report) fully complies +with the requirements of Section 13(a) or 15(d), as applicable, of the +Securities Exchange Act of 1934 and that the information contained in the +Report fairly presents, in all material respects, the financial condition and +results of operations of the Company. + +Dated: February 24, 2022 + +/s/ + +Denis P. Coleman III + +Denis P. Coleman III + +Title: + +Chief Financial Officer + +The foregoing certification is being furnished solely pursuant to 18 U.S.C. § +1350 and is not being filed as part of the Report or as a separate disclosure +document. +