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Notes to Consolidated Financial Statements
94 GOLDMAN SACHS 2003 ANNUAL REPORT
note 12
EMPLOYEE INCENTIVE PLANS
Stock Incentive Plan
The firm sponsors a stock incentive plan, The Goldman
Sachs Amended and Restated Stock Incentive Plan (the
Amended SIP), which provides for grants of incentive
stock options, nonqualified stock options, stock appreci-
ation rights, dividend equivalent rights, restricted stock,
restricted stock units and other stock-based awards. In
the second quarter of fiscal 2003, the Amended SIP was
approved by the firm’s shareholders, effective for grants
after April 1, 2003, and no further awards were or will
be made under the original plan after that date, although
awards granted under the original plan prior to that date
remain outstanding.
The total number of shares of common stock that may
be issued under the Amended SIP through fiscal 2008
may not exceed 250 million shares and, in each fiscal
year thereafter, may not exceed 5% of the issued and
outstanding shares of common stock, determined as of
the last day of the immediately preceding fiscal year,
increased by the number of shares available for awards in
previous fiscal years but not covered by awards granted
in such years. As of November 2003, 236.8 million
shares were available for grant under the Amended SIP,
after taking into account stock-based compensation
awards that were issued subsequent to year end, as part
of year-end compensation.
As of November 2002, 128.6 million shares were available
for grant under the original plan, after taking into account
stock-based compensation awards that were issued subse-
quent to year end, as part of year-end compensation.
Restricted Stock Units
The firm issued restricted stock units to employees under
the stock incentive plan, primarily in connection with its
initial public offering, acquisitions and as part of year-
end compensation. Of the total restricted stock units out-
standing as of November 2003 and November 2002, (i)
24.5 million units and 29.9 million units, respectively,
required future service as a condition to the delivery of
the underlying shares of common stock and (ii) 23.3 mil-
lion units and 18.3 million units, respectively, did not
require future service.
In all cases, delivery of the underlying shares of common stock is conditioned on the grantee’s satisfying certain other
requirements outlined in the award agreements. The activity related to these restricted stock units is set forth below:
RESTRICTED STOCK UNITS OUTSTANDING
NO FUTURE FUTURE
SERVICE SERVICE
REQUIRED REQUIRED
Outstanding, November 2000 33,502,219 46,335,940
Granted 116,968 1,638,536
Forfeited (975,713) (3,065,731)
Delivered (10,253,224) —
Vested 3,239,683 (3,239,683)
Outstanding, November 2001 25,629,933 41,669,062
Granted(1) 1,484,153 4,855,553
Forfeited (591,957) (3,135,134)
Delivered (21,700,672) —
Vested 13,494,481 (13,494,481)
Outstanding, November 2002 18,315,938 29,895,000
Granted(1) 3,615,366 9,357,593
Forfeited (179,708) (1,886,420)
Delivered (11,261,989) —
Vested 12,824,458 (12,824,458)
Outstanding, November 2003 23,314,065 24,541,715
(1) Includes restricted stock units granted to employees subsequent to year end as part of year-end compensation.
Total employee stock compensation expense, net of forfei-
tures, was $711 million, $645 million and $798 million
for the years ended November 2003, November 2002
and November 2001, respectively.