Restricted Stock Unit Plan - Bear Stearns Companies Inc.
THE BEAR STEARNS COMPANIES INC.
RESTRICTED STOCK UNIT PLAN
(Amended and Restated as of March 31, 2004)
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THE BEAR STEARNS COMPANIES INC.
RESTRICTED STOCK UNIT PLAN
(Amended and Restated as of March 31, 2004)
1. Purpose. The purpose of The Bear Stearns Companies Inc.
Restricted Stock Unit Plan (the "Plan") is to secure for The Bear Stearns
Companies Inc. and its successors and assigns (the "Company") and its
stockholders the benefits of the additional incentive inherent in the ownership
of the Company's common stock, par value $1.00 per share (the "Common Stock"),
by selected employees of the Company and its subsidiaries who are important to
the success and growth of the business of the Company and its subsidiaries and
to help the Company and its subsidiaries secure and retain the services of such
persons. The Plan provides for discretionary grants of stock units ("Restricted
Stock Units") to or for the benefit of participating employees of the Company
and its subsidiaries, which grants shall be subject to the terms and conditions
set forth in the Plan and in the agreement evidencing such Award. Such units can
be granted by the Committee, as hereinafter defined, based upon both future and
past services.
2. Committee.
2.1 Administration. The Plan shall be administered by the
Compensation Committee (the "Committee") of the Board of Directors of the
Company (the "Board of Directors"). Any vacancy on the Committee, whether due to
action of the Board of Directors or due to any other cause, may be filled by
resolution adopted by the Board of Directors. The full Board of Directors may
perform any function of the Committee hereunder, in which case the term
"Committee" shall refer to the Board. The express grant of any specific power to
the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee may
delegate to officers or managers of the Company or any subsidiary or affiliate,
or committees thereof, authority, other than authority to make grants under the
Plan, to perform such functions as the Committee may determine, including
administrative functions, subject to such terms as the Committee shall
determine.
2.2 Interpretation. The Committee shall have full power and
authority to interpret the provisions of the Plan and any agreement evidencing
or relating to an award of Restricted Stock Units ("Award") under the Plan, and
to determine any and all questions arising under the Plan, and its decisions
shall be final and binding on all participants in the Plan.
3. Shares Subject to Grants.
3.1 Number of Shares. Subject to the adjustment provisions of
Section 3.3, the number of shares of Common Stock that may be issued or
delivered in connection with awards of Restricted Stock Units under the Plan
shall not exceed 15,000,000 shares. The Committee may adopt reasonable counting
procedures to ensure appropriate counting, avoid double counting and make
adjustments if the number of shares actually delivered differs from the number
of shares previously counted in connection with an Award. Shares subject to an
Award that is canceled, expired, forfeited, settled in cash or otherwise
terminated without a delivery of shares to the participant will again be
available for Awards, and shares withheld or surrendered
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in payment of the taxes relating to an Award shall be deemed to constitute
shares not delivered to the participant and shall be deemed again to be
available for Awards under the Plan.
3.2 Character of Shares; Reservation of Shares. Shares of Common
Stock delivered under the Plan shall be issued Common Stock held in the
Company's treasury. At all times, there shall be reserved for award under the
Plan a number of shares of Common Stock equal to the maximum number of shares
set forth in Section 3.1, reduced by such number of shares that have been
previously issued or delivered as a result of this Plan.
3.3 Adjustments. In the event that any large, special and
non-recurring dividend or other distribution (whether in the form of cash or
property other than Common Stock), recapitalization, forward or reverse split,
stock dividend, reorganization, merger, consolidation, spin-off, combination,
repurchase, share exchange, liquidation, dissolution or other similar corporate
transaction or event affects the Common Stock such that an adjustment is
determined by the Committee to be appropriate under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of the number
and kind of shares reserved and available for Awards under the Plan and the
number and kind of shares subject to outstanding Restricted Stock Units.
4. Employees Eligible. Awards may be granted to or for the benefit
of any employee who holds the position of a managing director or below, whom the
Committee selects for participation for a given performance year. Employees who
hold the position of senior managing director or above shall not be eligible to
be granted Awards under the Plan. An individual receiving any Award under the
Plan is referred to herein as a "participant." Any reference herein to the
employment of a participant by the Company shall include his or her employment
by the Company or any of its subsidiaries.
5. Restricted Stock Units.
5.1 In General. For the fiscal 2000 performance year and each
performance year thereafter during which the Plan remains in effect (each, a
"Performance Year"), each eligible employee selected to participate shall be
granted an award of Restricted Stock Units. Each Award shall be evidenced by an
agreement which shall set forth the terms and conditions of such Award,
including without limitation, the date or dates upon which such Award shall vest
and the circumstances (including, without limitation, Termination of Employment,
as defined in Section 6.2, or failure to satisfy one or more restrictive
covenants or other ongoing obligations) under which such Award shall not vest.
The Award shall also be subject to such other terms and conditions not
inconsistent herewith as the Committee shall determine.
5.2 Nature of Restricted Stock Units; Accounts. Each Restricted
Stock Unit represents a right for one share of Common Stock to be delivered upon
settlement at the end of the Deferral Period (as defined below), subject to a
risk of cancellation and to the other terms and conditions set forth in the
Plan, the agreement evidencing the Award and any additional terms and conditions
set by the Committee. The Company shall establish and maintain an account for
the participant to record Restricted Stock Units and transactions and events
affecting
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such units. Restricted Stock Units and other items reflected in the account will
represent only bookkeeping entries by the Company to evidence unfunded
obligations of the Company.
5.3 Deferral Period and Settlement Date. Except as otherwise
provided in this Section 5.3, Section 6 or Section 7, Restricted Stock Units (if
not previously cancelled) will be automatically settled on or about the date or
dates set forth in the agreement evidencing the Awards. The period from the date
of the Award through the date of settlement is referred to as the "Deferral
Period." The Committee may permit the participant to elect to further defer
settlement (thereby extending the Deferral Period), subject to such terms and
conditions as the Committee may specify. In addition, unless otherwise
determined by the Committee, if the Committee reasonably determines that any
settlement of Restricted Stock Units would result in payment of compensation to
a participant which is not deductible by the Company under Code Section 162(m),
such settlement shall be automatically deferred to the extent necessary to avoid
payment of such non-deductible compensation, with this automatic deferral of
each Restricted Stock Unit continuing only until such date as settlement can be
effected without loss of deductibility by the Company under Section 162(m).
5.4 Vesting of Restricted Stock Units. Unless otherwise
determined by the Committee or unless otherwise provided in the agreement
evidencing the Award, in the event of the participant's Termination of
Employment (as defined in Section 6.2), the participant's Restricted Stock Units
which are not vested as of the date of such Termination of Employment, shall not
vest and shall be immediately cancelled for no value.
5.5 Dividend Equivalents. Restricted Stock Units granted to a
participant shall be credited with dividend equivalents as provided in this
Section 5.5. Dividend equivalents shall be subject to the terms and conditions
set forth in the agreement evidencing the Award.
(i) Cash Dividends. If the Company declares and pays a cash dividend
on Common Stock, then a number of additional Restricted Stock Units shall
be credited to the participant as of the payment date for such dividend
equal to (A) the number of Restricted Stock Units credited to the
participant as of the record date for such dividend, multiplied by (B) the
amount of cash actually paid as a dividend on each share at such payment
date, divided by (C) the Fair Market Value of a share of Common Stock at
the ex-dividend date.
(ii) Non-Stock Dividends. If the Company declares and pays a dividend
on Common Stock in the form of property other than shares of Common Stock,
then a number of additional Restricted Stock Units shall be credited to the
participant as of the payment date for such dividend equal to (A) the
number of Restricted Stock Units credited to the participant as of the
record date for such dividend, multiplied by (B) the fair market value of
any property other than shares actually paid as a dividend on each share at
such payment date, divided by (C) the Fair Market Value of a share of
Common Stock at the ex-dividend date.
(iii) Modifications to Dividend Equivalents Policy. Other provisions
of this Section 5.5 notwithstanding, the Committee may modify the manner of
payment or
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crediting of dividend equivalents hereunder, in order to coordinate the
value of a participant's accounts with any trust holding shares established
under Section 5.10, for administrative convenience, or for any other
reason.
5.6 Vesting, Settlement and Other Terms Applicable to Restricted
Stock Units Resulting from Dividends. Additional Restricted Stock Units credited
under Section 5.5 will be subject to the same terms, including terms governing
vesting, cancellation and Deferral Periods, as the underlying Restricted Stock
Units.
5.7 Restriction on Transferability During Deferral Period. During
the Deferral Period, the participant shall not be permitted to sell, transfer,
pledge, or otherwise encumber the Restricted Stock Units or the shares issuable
in settlement thereof, except to the extent specifically approved by the
Committee or as provided in the agreement evidencing the Award.
5.8 Delivery of Shares in Settlement of Restricted Stock Units;
Fractional Shares. The Company may make delivery of shares hereunder in
settlement of Restricted Stock Units by either delivering one or more
certificates representing such shares to the participant, registered in the name
of the participant (and any joint name, if so directed by the participant), by
depositing such shares into an account maintained for the participant (or of
which the participant is a joint owner, with the consent of the participant) by
a broker-dealer affiliated with the Company or any such account established in
connection with any Company plan or arrangement providing for investment in
Common Stock and under which the participant's rights are similar in nature to
those under a stock brokerage account or by delivering such shares to the
Trustee ("Trustee") of a pension plan of which the participant is a member. If
the Committee determines to settle Restricted Stock Units by making a deposit of
shares into such an account, the Company may settle any fractional Restricted
Stock Unit by means of such deposit. In other circumstances or if so determined
by the Committee, the Company shall instead pay cash in lieu of fractional
shares, on such basis as the Committee may determine. In no event will the
Company in fact issue fractional shares. The Committee may determine whether,
prior to settlement, Restricted Stock Units will be reflected as whole units
only or include fractional units, and related terms.
5.9 Definition of "Fair Market Value." Unless otherwise
determined by the Committee, "Fair Market Value" of a share of Common Stock on
any date means (i), if the Common Stock is listed on a national securities
exchange or quotation system reporting last-sale information, the closing sales
price on such exchange or quotation system on such date or, in the absence of
reported sales on such date, the closing sales price on the immediately
preceding date on which sales were reported; (ii), if the Common Stock is not
listed on a national securities exchange or quotation system providing last-sale
information, the mean between the bid and offered prices as quoted by in the
Nasdaq System for such date; or (iii), if the fair market value cannot be
determined under clause (i) or (ii) hereof, the fair value as determined by such
other method as the Committee determines in good faith to be reasonable.
5.10 Trusts. The Committee may, in its discretion, establish one
or more trusts and deposit therein amounts of cash, Common Stock, or other
property not exceeding the amount of the Company's anticipated obligations with
respect to a participant's account
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established under this Section 5. In such case, the amounts of hypothetical
income and appreciation and depreciation in value of such account shall be equal
to the actual income on, and appreciation and depreciation of, the assets in
such trust(s). Other provisions of the Plan notwithstanding, the timing of
allocations and other events relating to assets in such account may be varied to
reflect the timing of allocations and events relating to actual investments of
the assets of such trust(s).
6. Certain Termination Provisions. In the event of a participant's
Termination of Employment by reason of death, the following provisions shall
apply. The consequences of a participant's Termination of Employment for any
other reason shall be as set forth in the agreement evidencing the Award.
6.1 Death. In the event of a participant's Termination of
Employment due to death Restricted Stock Units shall become fully vested at the
date of such Termination of Employment, and the Deferral Period applicable to
such Restricted Stock Units shall end and such units shall be settled in full by
delivery of shares as promptly as practicable following such Termination of
Employment.
6.2 For purposes of this Plan: "Termination of Employment" means
the event by which participant ceases to be employed by the Company or any
subsidiary of the Company and, immediately thereafter, is not employed by or
providing substantial services to any of the Company or a subsidiary of the
Company. Neither (i) a transfer of an employee from the Company to a subsidiary
or other affiliate of the Company to another, nor (ii) a duly authorized leave
of absence, shall be deemed a Termination of Employment.
7. Change in Control.
7.1 Effect of a Change in Control. In the event of a Change in
Control of the Company, as defined below, the Committee may, in its sole
discretion, provide that any of the following actions shall be taken as a
result, or in anticipation, of any such event to assure fair and equitable
treatment of participants:
(i) acceleration of vesting of the Restricted Stock Units and/or
acceleration of the termination of the Deferral Period and settlement of
Restricted Stock Units under the Plan;
(ii) offer to purchase any outstanding Restricted Stock Units under
the Plan from the participant or the Trustee for the award's equivalent
cash value, as determined by the Committee, as of the date of the Change in
Control or another specified date; or
(iii) make adjustments or modifications, such as providing for the
assumption of the Restricted Stock Units by an acquiror and conversion of
the underlying Common Stock to securities of the acquiror, as the Committee
deems appropriate to maintain and protect the rights and interests of the
participants following such Change in Control.
Any such action approved by the Committee shall be conclusive and binding on the
Company, its subsidiaries and all participants.
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7.2 Definitions Relating to Change in Control. To the extent not
otherwise defined in this Plan, the following terms used in this Section 7 shall
have the following meanings:
"Affiliate" of a Person means any other person or entity which
controls, is controlled by, or under common control with, the Person.
"Associate" of a Person means (a) any corporation or organization of
which such Person is an officer or partner or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of equity securities, (b) any trust
or other estate in which such Person has a substantial beneficial interest or as
to which such Person serves as trustee or in a similar fiduciary capacity and
(c) any relative or spouse of such Person, or any relative of such spouse, who
has the same home as such Person or who is a director or officer of such Person
or any of its parents or subsidiaries.
"Beneficial Owner" has the meaning ascribed thereto in Rule 13d-3
under the Exchange Act, except that, in any case, a Person shall be deemed the
Beneficial Owner of any securities owned, directly or indirectly, by the
Affiliates and Associates of such Person.
"Change in Control" means (a) a majority of the Board of Directors
ceases to consist of Continuing Directors; (b) any Person is or becomes the
Beneficial Owner of 50% or more of the outstanding voting power of the Company
unless such acquisition is approved by a majority of the Continuing Directors;
(c) there is consummated a merger or consolidation of the Company or any direct
or indirect subsidiary of the Company with any other corporation, other than a
merger or consolidation with respect to which requirements of clauses (A) and
(B) below are satisfied: (A) the voting securities of the Company outstanding
immediately prior to such merger or consolidation continue to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) more than 50% of the combined voting
power of the securities of the Company or such surviving entity or any parent
thereof (as the case may be) outstanding immediately after such merger or
consolidation and (B) individuals who constitute the Board of Directors
immediately prior to the execution of the definitive agreement pertaining to
such merger or consolidation continue immediately following such merger or
consolidation to represent at least a majority of the membership of the Board of
Directors of the Company or such surviving entity or any parent thereof (as the
case may be); (d) the stockholders of the Company approve an agreement to
dispose of all or substantially all of the assets of the Company, unless such
disposition is approved by a majority of the Continuing Directors.
"Continuing Director" means any member of the Board of Directors who
is a member on the effective date of the Plan or who is elected to the Board of
Directors after such date upon the recommendation or with the approval of a
majority of the Continuing Directors at the time of such recommendation or
approval.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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"Person" means an individual, a corporation, a partnership, an
association, a joint stock company, a trust, any unincorporated organization or
a government or a political subdivision thereof.
8. General Provisions.
8.1 Limitation on Rights Conferred Under Plan. Neither the Plan
nor any action taken hereunder shall be construed as (i) giving any eligible
employee or participant the right to continue in the employ or service of the
Company or a subsidiary or affiliate, (ii) interfering in any way with the right
of the Company or a subsidiary or affiliate to terminate such eligible
employee's or participant's employment or service at any time, (iii) giving an
eligible employee or participant any claim to be granted any Award under the
Plan or to be treated uniformly with other participants and employees, or (iv)
conferring on a participant any of the rights of a stockholder of the Company
unless and until the participant is duly issued or transferred shares of Common
Stock in accordance with the terms of an Award. Except as expressly provided in
the Plan and an Award agreement, neither the Plan nor any Award agreement shall
confer on any person other than the Company and the participant any rights or
remedies thereunder.
8.2 Committee May impose Conditions; Right of Setoff. The Company
or any subsidiary may, to the extent permitted by applicable law, deduct from
and set off against any amounts the Company or a subsidiary or affiliate may owe
to a participant from time to time pursuant to any Award under the Plan, any
amounts owed by the participant to the Company or any subsidiary or affiliate,
although the participant shall remain liable for any part of the participant's
payment obligation not satisfied through such deduction and setoff.
8.3 Tax Withholding Obligation. Whenever under the Plan a
participant or a Trustee incurs federal income tax liability, obligations with
respect to Social Security and Medicare taxes, or other tax obligations in
connection with an Award, whether at the time of grant, vesting or settlement of
Restricted Stock Units, the Company shall be entitled to require, as a condition
of grant, vesting, or settlement of the award, that the participant remit or, in
appropriate cases, agree to remit when due an amount sufficient to satisfy all
federal, state and local withholding tax requirements relating thereto. At the
election of the Company, such mandatory withholding amounts may be remitted by
check payable to the Company, in shares of Common Stock, by the Company's
withholding of shares of Common Stock issuable or deliverable hereunder, or any
combination thereof; provided, however, that in no event may shares be withheld
to satisfy a tax obligation of a participant in excess of the mandatory tax
withholding obligations arising in connection with the participant's Award. If
so determined by the Committee, a participant may be permitted to elect from
among alternative methods of satisfying withholding obligations.
8.4 Certain Limitations Relating to Accounting Treatment of
Awards. Other provisions of the Plan notwithstanding, if any right under this
Plan would cause a transaction to be ineligible for pooling-of-interests
accounting that would, but for the right hereunder, be eligible for such
accounting treatment, such right shall be automatically adjusted so that
pooling-of-interests accounting shall be available, including by substituting
Common
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Stock having a fair market value equal to any cash otherwise payable in
respect of any right which would cause the transaction to be ineligible for
pooling-of-interests accounting.
8.5 Governing Law. The validity, construction, and effect of the
Plan, any rules and regulations relating to the Plan and any Award agreement
shall be determined in accordance with the laws of the State of New York,
without giving effect to principles of conflicts of laws, and applicable
provisions of federal law.
8.6 Nonexclusivity of the Plan. The adoption of the Plan by the
Board of Directors shall not be construed as creating any limitations on the
power of the Board of Directors or a committee thereof to adopt such other
incentive arrangements, apart from the Plan, as it may deem desirable, and such
other arrangements may be either applicable generally or only in specific cases.
8.7 Changes to the Plan and Awards. The Board of Directors may
amend, suspend or terminate the Plan or the Committee's authority to grant
Awards under the Plan without the consent of participants; provided, however,
that, without the consent of an affected participant, no such Board action may
materially and adversely affect the rights of such participant under any
outstanding Award. The Committee may amend any outstanding Award without the
consent of the affected participant; provided, however, that, without such
consent, no such action may materially and adversely affect the rights of such
participant under any outstanding Award. For purposes of this Section 8.7,
accelerated settlement of an Award shall not be considered a materially adverse
affect on the rights of a participant, regardless of the tax consequences to
such participant.
8.8 Compliance with Legal and Other Requirements. The Company
may, to the extent deemed necessary or advisable by the Committee, postpone the
issuance or delivery of shares or payment of other benefits under any Award
until completion of registration or qualification of the Common Stock or other
required action under any federal or state law, rule or regulation, listing or
other required action with respect to any stock exchange or automated quotation
system upon which the Common Stock or other securities of the Company are listed
or quoted, or compliance with any other obligation of the Company, as the
Committee may consider appropriate, and may require any participant to make such
representations, furnish such information and comply with or be subject to such
other conditions as it may consider appropriate in connection with the issuance
or delivery of shares or payment of other benefits in compliance with applicable
laws, rules, and regulations, listing requirements, or other obligations.
9. Plan Effective Date and Termination. The Plan became effective on
November 29, 2000. Unless earlier terminated by action of the Board of
Directors, the Plan will remain in effect until such time as no shares of Common
Stock remain available for delivery under the Plan and the Company has no
further rights or obligations with respect to outstanding Awards under the Plan.
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