Exhibit 10.4
200
STOCK OPTION AWARD
AGREEMENT
EVIDENCING A GRANT OF A
NON-QUALIFIED STOCK OPTION
1. GRANT OF
OPTION . Pursuant to the Lehman Brothers Holdings
Inc. (“Holdings”) 2005 Stock Incentive Plan (the
“Plan”), you are hereby granted, as of
,
200 , a nonqualified stock option to purchase the number
of common shares (par value $0.10 per share) of Holdings
(“Shares”) set forth on the award statement delivered
to you herewith (the “Award Statement”) (which number
of Shares may be adjusted pursuant to Paragraph 6 below) with an
exercise price of $
per Share as specified in the Award Statement (the “Option
Exercise Price”).
2. ADDITIONAL DOCUMENTS;
DEFINITIONS . You have been provided with a copy of
the Plan, which is incorporated in this instrument by reference and
made a part hereof, and a copy of the Plan prospectus. The Plan and
the prospectus then in effect should be carefully examined before
any decision is made to exercise the option. In the event of any
conflict or ambiguity between this instrument and the Plan, the
terms of the Plan shall govern. All capitalized terms not defined
herein or in Annex A attached hereto shall have the meaning
ascribed to such terms under the Plan.
3.
EXERCISABILITY . Subject to the provisions of
this Agreement and the applicable provisions of the Plan, you may
exercise this option as follows:
(a) No
part of this option may be exercised after
,
200 (the “Expiration Date”).
(b) You
may first exercise this option on the later of (i)
or (ii) any date on which the Fair Market Value of a Share exceeds
$ , but this option
will first become exercisable in any event no later than
,
regardless of the Fair Market Value of a Share.
This option may not be exercised for a fraction
of a Share.
4. CONDITIONS TO
EXERCISE . This option may not be exercised unless
all of the following conditions are met:
(a)
Legal counsel for Holdings must be satisfied at the time of
exercise that the issuance of Shares upon exercise will be in
compliance with the Securities Act of 1933, as amended, and
applicable U.S. federal, state, local and foreign laws;
(b) You
(or your permitted transferee under paragraph 5) must pay at the
time of exercise the full option price for the Shares being
acquired hereunder, by (i) paying in United States dollars by cash
(which may be in the form of a certified check), (ii) subject to
Holdings’ prior consent, tendering Shares owned by you which
have a Fair Market Value on the day of exercise equal to the full
purchase price for the Shares being acquired, (iii) subject to the
Company’s prior consent, by withholding from those Shares
that would otherwise be
obtained upon exercise a number of Shares having a Fair Market
Value equal to the option price and/or required withholding taxes,
(iv) subject to Holdings’ prior consent, by delivery of a
properly executed exercise notice together with irrevocable
instructions to a securities broker (or, in the case of pledges,
lender) approved by Holdings to (a) sell shares of Common Stock
subject to the option and to deliver promptly to Holdings a portion
of the proceeds of such sale transaction on behalf of the
exercising Participant to pay the option price, or (b) pledge
shares of Common Stock subject to the option to a margin account
maintained with such broker or lender, as security for a loan, and
such broker or lender, pursuant to irrevocable instructions,
delivers to Holdings loan proceeds at the time of exercise to pay
the option price, or (v) by any combination of (i), (ii), (iii) or
(iv) above; and
(c) You
must, unless otherwise provided below, at all times during the
period beginning with
,
200 and ending on the date of such exercise, (x) have
been employed by Holdings or a Subsidiary thereof or (y) not have
engaged in Detrimental Activity.
(i)
Termination before
, 200 . In the
event of your Termination for any reason
before ,
200 , this option shall be forfeited and canceled.
(ii)
Voluntary Termination with Competitive Activity .
In the event of your voluntary Termination with Competitive
Activity on or after
,
200 , this option shall be forfeited and canceled.
(iii)
Voluntary Termination without Competitive
Activity . In the event of your voluntary
Termination without Competitive Activity on or after
,
200 , you will be permitted to exercise this option, to
the extent not previously exercised, until the Expiration Date,
provided you do not engage in Competitive Activity or Detrimental
Activity during that period of time. If you engage in Competitive
or Detrimental Activity, the portion of this option not previously
exercised shall expire immediately.
(iv)
Involuntary Termination with Cause . In the event
of your involuntary Termination with Cause, this option, to the
extent not previously exercised, shall be forfeited and canceled
immediately.
(v)
Involuntary Termination without Cause . In the
event of your involuntary Termination without Cause on or after
,
200 , you will be permitted to exercise this option, to
the extent not previously exercised, until the Expiration Date,
provided you do not engage in Detrimental Activity during that
period of time. If you engage in Detrimental Activity, the portion
of this option not previously exercised shall expire
immediately.
(vi)
Termination Due to Death; Disability . In the
event of the occurrence on or after
,
200 of your death or Disability, you (or in the event
of your death, your estate or any person who acquires the right
to
2
exercise this option by
bequest or inheritance or otherwise by reason of your death) will
be permitted to exercise this option, to the extent not previously
exercised, until the Expiration Date.
Any remaining portion
of this option, which is not exercisable pursuant to the provisions
of this subparagraph 4(c), shall be canceled by
Holdings.
5.
NON-ASSIGNMENT . This option may not be sold,
assigned, transferred, pledged, hypothecated or ot
