JEFFERIES GROUP, INC.
2003 INCENTIVE COMPENSATION PLAN
AS AMENDED AND RESTATED
RESTRICTED STOCK
AGREEMENT
AGREEMENT dated as
of [insert grant date] (the “Grant Date”), between
JEFFERIES GROUP, INC., a Delaware corporation (the
“Company”), and [insert employee name]
(“Employee”).
WHEREAS, the
Compensation Committee of the Board of Directors (the
“Committee”) has determined that the Company shall make
a grant of Restricted Stock to Employee under the Company’s
2003 Incentive Compensation Plan, as amended and restated (the
“2003 Plan”), in furtherance of the purposes of the
2003 Plan and in recognition of Employee’s service as an
employee of the Company and/or its subsidiaries; and
WHEREAS, the
Company desires to confirm the grant of Restricted Stock, and to
set forth the terms and conditions of such grant, and Employee
desires to accept such grant and agree to the terms and conditions
thereof, as set forth in this Restricted Stock Agreement (the
“Agreement”).
NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the parties
hereto agree as follows:
1. Grant
of Restricted Stock. The Company hereby confirms the grant,
under the 2003 Plan, to Employee on the Grant Date set forth above
of [insert number of shares] shares of Restricted Stock (the
“Restricted Stock”). The Restricted Stock is subject to
all of the terms and conditions set forth in this Agreement,
including the restrictions set forth in Section 3. The Company
shall issue in the name of Employee, as promptly as practicable,
one or more certificates representing the shares of Common Stock,
$.0001 par value (“Common Stock”), granted as
Restricted Stock or shall instruct its transfer agent to issue
Restricted Stock which shall be maintained in “book
entry” form on the books of the transfer agent. The
Restricted Stock shall bear the restrictive legend and be subject
to the other terms set forth in Section 3. For purposes of
this Agreement, each tranche of shares of Common Stock will remain
Restricted Stock until the expiration of the Restrictions (as
defined in Section 3) on such tranche or the forfeiture of the
Restricted Stock, without regard to extraordinary transactions
which may affect the Common Stock except as may be otherwise
provided under the 2003 Plan and determinations of the Committee
thereunder.
2.
Incorporation of 2003 Plan by Reference . The Restricted
Stock has been granted to Employee under the 2003 Plan. The 2003
Plan and information regarding the 2003 Plan, including documents
that constitute the “Prospectus” for the 2003 Plan
under the Securities Act of 1933, can be viewed and printed out
from the Company’s secure Intranet website,
www.corp.jefferies.com (go to Benefits & Policies, then to
Retirement/Fidelity/401k, then to Plan Documents and Related
Items). All of the terms, conditions, and other provisions of the
2003 Plan are hereby incorporated by reference into this Agreement.
Capitalized terms used in this Agreement but not defined herein
shall have the same meanings as in the 2003 Plan. If there is any
conflict between the provisions of this Agreement and the
provisions of the 2003 Plan, the provisions of the
2003 Plan shall
govern. Employee hereby acknowledges that the 2003 Plan and
information regarding the 2003 Plan has been made readily available
to him and agrees to be bound by all the terms and provisions
thereof (as presently in effect or hereafter amended), rules and
regulations adopted from time to time thereunder, and by all
decisions and determinations of the Committee made from time to
time thereunder.
3.
Restrictions on Restricted Stock and Related
Terms.
(a)
Restrictions Generally . Until they expire in accordance
with Section 3(b), the following restrictions (the
“Restrictions”) shall apply to the Restricted Stock:
(1) the Restricted Stock shall be subject to a risk of
forfeiture as set forth in Section 3(b) (the “Risk of
Forfeiture”), and (2) Employee shall not sell, transfer,
assign, pledge, margin, or otherwise encumber or dispose of the
Restricted Stock (except for transfers and forfeitures to the
Company). Upon issuance of certificates or the transfer agent
making the appropriate entry on its books representing the
Restricted Stock in the name of Employee, which shall occur as
promptly as practicable after the Grant Date, Employee shall be
entitled to receive dividends on the Restricted Stock as provided
in Section 3(e), shall be entitled to vote Restricted Stock on
any matter submitted to a vote of holders of Common Stock, and
shall have all other rights in connection with such Restricted
Stock as would a holder of Common Stock except as otherwise
expressly provided under this Section 3, and subject to the
Committee’s authority (including authority to make
adjustments to Awards) under the 2003 Plan.
(b) Risk
of Forfeiture and Expiration Thereof . Unless otherwise
determined by the Committee, if for any reason Employee’s
employment by the Company or a subsidiary terminates prior to the
expiration of the Restrictions, and immediately thereafter Employee
is not employed by the Company or any direct or indirect subsidiary
of Company (“Termination”), except as set forth below,
all Restricted Stock as to which the Restrictions have not expired
at or before the time of such Termination (and any related property
resulting from Section 3(e)(iii)) shall be forfeited at the
time of such Termination. Except as otherwise specifically set
forth herein, the Restrictions shall expire as to [insert
percentage to vest]% of the shares of Restricted Stock (and any
related property) on each of [insert vesting dates] (each being a
“Vesting Date,” at which date such Restricted Stock is
deemed “vested”).
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(i)
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Death or Disability.
If Employee dies or if
such Termination is by reason of Employee’s Disability (as
defined below), then such forfeiture shall not occur, and the
Restrictions as to all of the shares of Restricted Stock shall
immediately expire upon such death or Termination.
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(ii)
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Termination of Employment other than
for Cause (and not subject to Section 3(b)(iii))
. In the event of
Employee’s Termination of Employment (other than a
Termination not for Cause following a Change in Control or a
Termination by the Company for Cause), provided that the Employee
executes a separation agreement and release in such form as may be
requested by the Company within 21 days (or such longer period
as may be required by law) (and provided further that any period of
revocation required by law has expired without Employee exercising
his right to revoke his agreement to the separation agreement and
release), Restricted Stock not then or previously vested shall not
then be forfeited, but thereafter shall be forfeited
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if there occurs
a Forfeiture Event prior to the earlier of the Vesting Date for
such Restricted Stock or Employee’s death. A
“Forfeiture Event” shall be deemed to occur if,
following Employee’s Termination of Employment other than a
Termination by the Company for Cause, Employee renders services for
any organization or engages (either as owner, investor, partner,
stockholder, employer, employee, consultant, advisor, or director)
directly or indirectly, in any business which is or becomes
competitive with the Company, its subsidiaries or affiliates, or
otherwise engaged in conduct violating Section 7.4(a), 7.4(b)
or 7.4(c) of the Plan. However, following Employee’s
Termination of Employment other than a Termination by the Company
for Cause, it shall not constitute a Forfeiture Event if Employee
purchases stock or other securities of an organization or business
so long as the stock or other securities are listed upon a
recognized securities exchange or traded over-the-counter and such
investment does not represent a greater than five percent equity
interest in the organization or business. If Employee does not sign
a separation agreement and release within the time period requested
by the Company (or signs and then timely revokes his agreement to
the separation agreement and release), all Restricted Stock which
is not vested at the date of Termination will be
forfeited.
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(iii)
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Termination not for Cause Following
a Change in Control . If, following a Change in
Control, Employee’s employment is terminated not for Cause by
the Company or its successor, Restrictions on all of the
then-outstanding Restricted Stock not vested at the date of
Termination will immediately expire and such Restricted Stock will
immediately vest. If a Change in Control occurs followed by
Termination of Employment by the Company not for Cause and a
determination is made by the Company pursuant to Sections 280G
and 4999 of the Code that a “golden parachute” excise
tax will be payable in connection with compensation to Employee
hereunder, Employee’s right to accelerated vesting of the
shares upon the Change in Control, to the extent such right results
in “parachute payments” (as such term is defined in
Code Section 280G), shall be limited to the extent just
necessary to avoid the excise tax. This limitation shall be applied
in a manner that maximizes the number of shares as to which
accelerated vesting can apply (or, stated conversely, any
limitation on acceleration of vesting shall apply first to those
shares with the lengthiest remaining vesting period, which shares
would result in the highest “parachute
payments”).
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(iv)
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Termination by the Company for
Cause . In
the event of Employee’s Termination of Employment by the
Company for Cause, the portion of the then-outstanding Restricted
Stock not vested at the date of termination will be
forfeited.
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(c)
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Certain Definitions. The following
definitions apply for purposes of this Agreement:
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(i)
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“Cause” means
Employee’s:
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Neglect, failure or refusal to
timely perform the duties of Employee’s employment (other
than by reason of a physical or mental illness or impairment), or
Employee’s gross negligence in the performance of his or her
duties;
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Material breach of any agreements,
covenants and representations made in any employment agreement or
other agreement with the Company or any of its subsidiaries or
affiliates or violation of internal policies or procedures as are
in effect as of the date such action is taken, including but not
limited to the Company’s Code of Ethics, as amended from time
to time;
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Violation of any law, rule,
regulation or by-law of any governmental authority (state, federal
or foreign), any securities exchange or association or other
regulatory or self-regulatory body or agency applicable to
Employee, the Company, its subsidiaries or affiliates or any
material general policy or directive of the Company, its
subsidiaries or affiliates;
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Conviction of, or plea of guilty or
nolo contendere to, a crime involving moral turpitude, dishonesty,
fraud or unethical business conduct, or any felony of any nature
whatsoever;
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Failure to obtain or maintain any
registration, license or other authorization or approval that
Employee is required to maintain or that t
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