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20__ 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, as amended (the
“Plan”), you are hereby granted, as of __________,
20__, 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 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 __________, 20__ (the “Expiration
Date”).
(b) This option shall become vested and
exercisable in accordance with the following schedule:
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__ % shall become vested and exercisable on
_________, 20___.
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__ % shall become vested and exercisable on
_________, 20___.
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__ % shall become vested and exercisable on
_________, 20___.
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__ % shall become vested and exercisable on
_________, 20___.
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The remaining __ % shall become vested and
exercisable on _________, 20___.
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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, 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, 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,
with such broker or lender, pursuant to irrevocable
instructions, delivering 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 __________, 20__ 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)
Voluntary Termination In the event of your voluntary
Termination, you will be permitted to exercise the vested
portion of this option, if any, to the extent not previously
exercised, until the earlier of (a) the Expiration Date, or (b)
__ days following your Termination, 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.
(ii)
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.
(iii)
Involuntary Termination without Cause In the event of
your involuntary Termination without Cause, you will be
permitted to exercise the vested portion of this option, if any,
to the extent not previously exercised, until the earlier of (a) the Expiration Date, or (b) __ days
following your Termination, 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.
(iv)
Termination Due to Death ; Disability In the event of
your death or Disability, you (or in the event of your death,
your estate or any person who acquires the right to exercise
this option by bequest or inheritance or otherwise by reason of
your 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 does not become exercisable pursuant to the
provisions of this sub
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