Capital Accumulation Plan [Amendment] - Bear Stearns Companies Inc.
THE BEAR STEARNS COMPANIES INC.
AMENDMENTS TO THE CAPITAL ACCUMULATION PLAN
RESOLVED, that The Bear Stearns Companies Inc. Capital Accumulation Plan
for Senior Managing Directors, as amended and restated (the "Plan"), be, and
hereby is, amended as follows:
1. Section 5.3 shall be amended to read as follows:
"5.3 Quarterly Credits in Respect of Cash Balances. If there shall
exist a Cash Balance in the Cash Balance Account of any Participant
on the last day of any fiscal quarter of the Company, including the
last day of a Plan Year (a "Quarter End Date"), the Company shall
credit the Capital Accumulation Account of each such Participant, as
of such Quarter End Date, with a number of additional CAP Units
determined by dividing such Cash Balance by the Average Cost Per
Share of the Available Shares acquired by the Company and designated
by the Board Committee as being allocated to such period. If the
aggregate number of CAP Units required to be credited to the Capital
Accumulation Accounts of all such Participants pursuant to the
preceding sentence would exceed the number of Available Shares, then
the aggregate number of CAP Units to be credited shall be limited to
the number of Available Shares and such CAP Units shall be allocated
on a pro rata basis, based on the respective Cash Balances of each
Participant. In connection with any crediting of CAP Units pursuant
to this Section 5.3, the Cash Balance of each such Participant shall
be reduced by debiting to his Cash Balance Account an amount equal
to the product of the number of CAP Units credited to his Capital
Accumulation Account and the Average Cost Per Share of the Available
Shares acquired by the Company during the annual or quarterly period
specified by the Board Committee."
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2. The definition of "Available Shares" shall be amended to read as
follows:
"`Available Shares' means, with respect to any Fiscal Year or
portion thereof, the sum of (a) the number of shares of Common Stock
purchased by the Company in the open market or in private
transactions or otherwise during such period that have not been
previously allocated under the Plan and designated by the Board
Committee at the time of purchase as having been purchased for
issuance under the Plan with respect to the Fiscal Year or portion
thereof specified by the Board Committee and (b) shares of Common
Stock purchased prior to such period that were designated as
Available Shares but were not allocated under the Plan which the
Company makes available to the Plan subsequent to the period in
which such shares were purchased and the Board Committee thereafter
designates as Available Shares for issuance under the Plan with
respect to the Fiscal Year or portion thereof specified by the Board
Committee."
3. Section 5.5 shall be amended to read as follows:
"5.5 Book Value Adjustment. For purposes of calculating the Net
Earnings Adjustment with respect to any Deferral Year pursuant to
Section 5.10, the Book Value Adjustment shall equal the sum of (1)
the amount maintained in the Book Value Adjustment Carry Forward
Account pursuant to Section 5.10(a), if any, and (2) the product of
(a) the total number of CAP Units credited to the Capital
Accumulation Account of each Participant as of the last day of such
Deferral Year but without including any CAP Units credited on such
date pursuant to Sections 5.1, 5.3 and 5.10 multiplied by (b) the
difference between Adjusted Book Value Per Share as of the last day
of the Deferral Year and Adjusted Book Value Per Share as of the
last day of the preceding Deferral Year."
4. Section 5.4(g) shall be amended to read as follows:
"(g) finally, (i) if the sum (or net amount) of the amounts
determined for a Participant in
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subparagraphs (a), (b) and (c) above is a positive number and such
sum (or net amount) exceeds the aggregate of the charges, if any,
determined for such Participant pursuant to subparagraphs (d), (e)
and (f) above, then the Earnings Adjustment shall equal such sum (or
net amount), as determined for purposes of this Section 5.4, or (ii)
if the net amount of the amounts determined for a Participant in
subparagraphs (a), (b) and (c) less the aggregate of the charges, if
any, determined pursuant to subparagraphs (d), (e) and (f) is a
negative number (an "Earnings Charge") and such Participant has a
positive Cash Balance, then (A) such Cash Balance first shall be
reduced by an amount equal to such Earnings Charge (provided that no
such reduction shall be made to the extent the Earnings Charge
relates to a negative result from sub-paragraph (b) or (c)) and (B)
if, after reducing such Cash Balance to zero, any amount determined
in accordance with the preceding clause (ii) (A) remains unapplied,
or if such Participant has no Cash Balance, then the Earnings
Adjustment shall be zero."
5. Section 5.10(a) shall be amended to read as follows:
"(a) After making any credits to the Capital Accumulation Accounts
of the Participants in respect of the fourth fiscal quarter of such
Deferral Year pursuant to Section 5.3, each Participant's Account
shall be adjusted, effective as of the last day of such Deferral
Year, as provided in this Section 5.10(a). The Company shall credit
the Capital Accumulation Account of each Participant with an
additional number of CAP Units (a "Net Earnings Adjustment") equal
to the quotient of (i) the difference between the Earnings
Adjustment calculated in accordance with Section 5.4 and the Book
Value Adjustment calculated in accordance with Section 5.5 for such
Deferral Year, divided by (ii) the Average Cost Per Share of the
Available Shares acquired by the Company and designated by the Board
Committee as being allocated to such period. Notwithstanding the
foregoing, however, if (i) the Earnings Adjustment is a negative
number or (ii) the Book Value Adjustment exceeds the Earnings
Adjustment
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then no CAP Units shall be credited to the Accounts of any
Participants and the amounts of each of such Book Value Adjustment
and Earnings Adjustment shall be disregarded and shall not be taken
into account for purposes of the Plan in any subsequent Deferral
Year."