{"id":41661,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/plan-of-incorporation-goldman-sachs-group-lp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"plan-of-incorporation-goldman-sachs-group-lp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/formation\/plan-of-incorporation-goldman-sachs-group-lp.html","title":{"rendered":"Plan of Incorporation &#8211; Goldman Sachs Group LP"},"content":{"rendered":"<pre>\n                              AMENDED AND RESTATED\n\n                              PLAN OF INCORPORATION\n\n                                       OF\n\n                          THE GOLDMAN SACHS GROUP, L.P.\n   2\n         THIS PLAN OF INCORPORATION IS BEING MADE AVAILABLE ON A CONFIDENTIAL\nBASIS SOLELY FOR THE PURPOSES DESCRIBED HEREIN. BY ACCEPTING ACCESS TO THIS PLAN\nOF INCORPORATION, EACH RECIPIENT AGREES NOT TO COPY ALL OR ANY PORTION OF IT AND\nTO KEEP ITS CONTENTS CONFIDENTIAL.\n\n\n                                       -2-\n   3\n                                Table of Contents\n\n                  Introduction\n\nSection 1         General Description of Proposed Transactions\n\nSection 2         Common Stock that PLPs will Receive\n\nSection 3         Treatment of Other Constituencies under this Plan\n\nSection 4         Ongoing Equity Incentives\n\nSection 5         Employment Agreement\n\nSection 6         Hedging\n\nSection 7         Certain Transfer Restrictions on Shares\n\nSection 8         Shareholders' Agreement\n\nSection 9         Noncompetition and Related Arrangements\n\nSection 10        Arrangements Concerning Goldman Sachs-Sponsored Funds\n\nSection 11        Release and Indemnification Arrangements\n\nSection 12        Consequences of an Election to Retire\n\nSection 13        Amendments to this Plan\n\nSection 14        Tax Consequences\n\nSection 15        Management of GS Inc.\n\nSection 16        Other\n\nSection 17        Documents PLPs and RLPs are Being Asked to Sign\n\nSection 18        Copies of this Plan and Contact Persons\n\nExhibit A-1       Incorporation Term Sheet and Organizational Charts\n\nExhibit A-2       Additional Information Concerning Proposed Merger Transactions\n\nExhibit B         Amended and Restated Certificate of Incorporation of The\n                  Goldman Sachs Group, Inc.\n\nExhibit C         By-Laws of The Goldman Sachs Group, Inc.\n\nExhibit D         Form S-1 Registration Statement Incorporated by Reference\n\nExhibit E         Term Sheet for Junior Subordinated Nontransferable Debentures\n                  to be Issued to Schedule I Limited Partners\n\nExhibit F         Form of Employment Agreement\n\nExhibit G         Hedging Restrictions\n\nExhibit H         Shareholders' Agreement\n\nExhibit I         Agreement Regarding Noncompetition and other Covenants\n                  (attaching form of Pledge Agreement as Exhibit A)\n\nExhibit J         Indemnification Agreement - General\n\nExhibit K         Indemnification Agreement - Tax\n\n   \nExhibit L         Indemnification Agreement - Registration Statements and\n                  Matters Relating to the IPO\n    \n\nExhibit M         Representations and Warranties\n\nExhibit N         Registration Arrangements\n\nExhibit O         Section 262 of the Delaware General Corporation Law (Appraisal\n                  Rights)\n\nExhibit P         Letter Agreement with Sumitomo Bank Capital Markets, Inc.\n\n\n                                       -i-\n   4\nExhibit Q         Letter Agreement with Kamehameha Activities Association\n\n\n                                      -ii-\n   5\n                                  INTRODUCTION\n\nGENERAL\n\n         This is the Amended and Restated Plan of Incorporation (this \"Plan\") of\nThe Goldman Sachs Group, L.P. (\"GS Group\"), pursuant to Article I, Section 14 of\nthe GS Group Memorandum of Agreement (the \"GS Group Partnership Agreement\") to\nfacilitate, among other matters, an initial public offering (the \"IPO\") of the\ncommon stock (\"Common Stock\") of The Goldman Sachs Group, Inc. (\"GS Inc.\"),\nwhich will be the corporate successor to GS Group. The Board of Directors of The\nGoldman Sachs Corporation (\"GS Corp.\"), acting as the general partner (the\n\"General Partner\") of GS Group, unanimously approved this Plan and its\nsubmission to the Schedule II Limited Partners (the \"PLPs\") of GS Group for a\nvote in accordance with the GS Group Partnership Agreement. If approved by the\nPLPs in accordance with the GS Group Partnership Agreement, this Plan shall\nconstitute (a) an agreement among GS Group, GS Corp., as the General Partner, GS\nInc., the PLPs and the other participants herein to implement this Plan and all\nthe transactions and agreements related hereto described herein and (b) an\namendment to the GS Group Partnership Agreement.\n\n         A MEETING OF THE PLPS WILL BE HELD AT 7:00 A.M., NEW YORK CITY TIME, ON\nMONDAY, MARCH 8, 1999, AT WHICH THE PLPS WILL BE ASKED TO CONSENT TO THIS PLAN.\nThe approval of PLPs having 51% in interest in the profits of GS Group allocable\nto the PLPs as set forth in Schedule II to the GS Group Partnership Agreement is\nrequired to approve this Plan and authorize the General Partner to implement\nthis Plan.\n\nCHOICES AVAILABLE TO PLPS\n\n         In connection with this Plan, each PLP will have three choices:\n\n         1.       CONSENT TO THIS PLAN AND, IF THIS PLAN IS ADOPTED, THEREBY\n                  ELECT TO PARTICIPATE IN THIS PLAN. Participation in this Plan\n                  includes receiving Common Stock in exchange for the PLP's\n                  interests in GS Group and its affiliates, and becoming bound\n                  by all other aspects of this Plan including, but not limited\n                  to, the employment agreement (unless otherwise notified by GS\n                  Inc.), the agreement regarding noncompetition and other\n                  covenants, the pledge agreement, the shareholders' agreement\n                  and certain applicable release and indemnification\n                  arrangements (each of which is described herein and is\n                  attached as an exhibit hereto).\n\n         2.       WITHHOLD CONSENT TO THIS PLAN AND, IF THIS PLAN IS NONETHELESS\n                  ADOPTED, ELECT TO PARTICIPATE IN THIS PLAN WITH THE EFFECTS\n                  NOTED IN CLAUSE 1 ABOVE.\n   6\n         3.       WITHHOLD CONSENT TO THIS PLAN AND, IF THIS PLAN IS NONETHELESS\n                  ADOPTED, ELECT NOT TO PARTICIPATE IN THIS PLAN. In this event\n                  the PLP will not be bound by the terms of this Plan and the\n                  PLP will be treated as having elected to retire from GS Group\n                  immediately prior to the consummation of the Incorporation\n                  Transactions (as defined below) or such other time specified\n                  by the General Partner. Such PLP will be entitled to payment\n                  in respect of the value of such PLP's interests in GS Group\n                  and its affiliates (including dated account interests (after\n                  the dated account interests have been valued at their fair\n                  value) and without giving effect to any adjustment for firm\n                  goodwill) in accordance with the GS Group Partnership\n                  Agreement. \"Dated account interests\" means the interest of a\n                  partner in GS Group's principal investments and real estate\n                  principal investments and other dated account interests.\n\nACTION REQUIRED BY PLPS\n\n         These choices are provided for in the Consent Document for Plan of\nIncorporation and Power of Attorney (the \"Consent Document and Power of\nAttorney\"), which will be distributed at the March 8 meeting. (A sample copy of\nthe Consent Document and Power of Attorney is attached to this Plan). If a PLP\ndoes not timely complete and deliver the Consent Document and Power of Attorney,\nsuch PLP will be deemed to have withheld consent to this Plan and if it is\nnonetheless adopted, to have selected the option described in Clause 3 above and\nwill be treated as having elected to retire from GS Group.\n\n         PLPs who hold any part of their interest in GS Group through an entity\nPLP must execute two Consent Documents and Powers of Attorney in order to accept\nthis Plan -- one on behalf of such PLP and one on behalf of such entity. If only\none related PLP consents, both PLPs will be deemed to have selected the option\ndescribed in Clause 3 above and will be treated as having elected to retire from\nGS Group.\n\n         Each PLP who or which elects to participate in this Plan will become a\nparty to this Plan.\n\nCHOICES AVAILABLE TO RLPS\n\n         If this Plan is adopted, the General Partner will make available to\nSchedule I Limited Partners of GS Group (\"RLPs\") the alternatives provided for\nin this Plan as described in Section 3.\n\n                                     * * * *\n\n         UNDER THE TERMS OF THE GS GROUP PARTNERSHIP AGREEMENT, EACH PARTNER OF\nGS GROUP (WHETHER OR NOT CONSENTING) HAS IRREVOCABLY WAIVED ANY RIGHT TO CONTEST\nTHE TERMS OF THIS PLAN, WHETHER ON THE GROUNDS OF UNEQUAL OR DISPARATE\nTREATMENT, INCONSISTENCY OR\n\n\n                                       -2-\n   7\nCONFLICT WITH THE TERMS AND PROVISIONS OF THE GS GROUP PARTNERSHIP AGREEMENT,\nUNFAIRNESS OR FOR ANY OTHER REASON.\n\n\n                                       -3-\n   8\n                 1. GENERAL DESCRIPTION OF PROPOSED TRANSACTIONS\n\n         The incorporation of GS Group will be accomplished by having (1) GS\nCorp., the general partner of GS Group, merge into GS Inc., (2) all of the other\npartners in GS Group (other than the holders of Senior Limited Partnership\nInterests (\"SLPs\") and PLPs and RLPs who do not participate in this Plan) either\n(a) with respect to certain entities that are wholly-owned by PLPs or RLPs,\nmerge with and into GS Inc. or (b) with respect to all other partners, transfer\ntheir partnership interests in GS Group to GS Inc., in each case, in exchange\nfor, (i) in the case of PLPs and Kamehameha Activities Association (\"KAA\") (an\naffiliate of The Estate of Bernice Pauahi Bishop (the \"Bishop Estate\") through\nwhich the Bishop Estate holds its partnership interest), Common Stock, (ii) in\nthe case of Sumitomo Bank Capital Markets, Inc. (\"SBCM\"), Common Stock (voting\nand nonvoting), and (iii) in the case of RLPs, cash, Common Stock and\/or GS Inc.\nsubordinated debentures, and (3) GS Group, after all of the interests in GS\nGroup have been transferred to GS Inc., merge into GS Inc. The transactions\ndescribed in the preceeding sentence are referred to herein to as the\n\"Incorporation Transactions.\" Prior to the Incorporation Transactions, among\nother transactions, the SLPs' interests will be redeemed for cash and PLPs and\nRLPs who do not participate in the Plan will retire and receive the distribution\nprovided for in the GS Group Partnership Agreement. Immediately following the\nIncorporation Transactions, GS Inc. will consummate an initial public offering\nof its common stock (the \"IPO\"). The transactions described in this paragraph\nare referred to herein collectively as the \"Proposed Transactions.\" Exhibit A\ncontains a more detailed summary of each of the significant steps of the\nProposed Transactions, in each case as currently contemplated. The General\nPartner will have the right under this Plan to vary the Proposed Transactions if\nit deems any changes to be necessary or desirable.\n\n         GS Inc. is a Delaware corporation organized to be the corporate\nsuccessor to GS Group. GS Inc. has not conducted any business operations prior\nto the date of this Plan. Drafts of the proposed Amended and Restated\nCertificate of Incorporation and By-Laws of GS Inc. are attached as Exhibits B\nand C, respectively.\n\n         No PLP or RLP will be permitted to sell any shares of Common Stock in\nthe IPO. The Form S-1 Registration Statement of GS Inc. for the IPO on file with\nthe Securities and Exchange Commission is incorporated by reference herein as\nExhibit D.\n\n\n                     2. COMMON STOCK THAT PLPS WILL RECEIVE\n\n         Each PLP who elects to participate in this Plan will receive Common\nStock in exchange for such PLP's interests in GS Group and its affiliates. A\ndescription of the capital stock of GS Inc. is contained in the Registration\nStatement incorporated by reference herein as Exhibit D.\n\n         Prior to the March 8, 1999 meeting of the PLPs, the General Partner\nwill develop a valuation of GS Inc. and its affiliates for purposes of\nallocating shares of Common Stock under\n\n\n                                       -4-\n   9\nthis Plan on a pro forma basis giving effect to this Plan and the IPO (the\n\"Allocation Valuation\"). Based upon the Allocation Valuation and the number of\nshares of Common Stock expected to be outstanding after consummation of the IPO,\na per common share price will be established (the \"Per Share Price\").\n\n         Based on the Allocation Valuation and the Per Share Price, a\ndetermination will then be made as to the number of shares of Common Stock (i)\nexpected to be sold in the IPO and (ii) to be (a) allocated to constituencies\nother than the PLPs, SBCM and KAA (e.g., the RLPs and the non-PLP employees)\nunder this Plan and (b) reserved for purposes of Sections 10 (Arrangements\nConcerning Goldman Sachs-Sponsored Funds) and 16 (Other - Right of General\nPartner or GS Inc. to Make Special Arrangements) of this Plan (such reserved\nshares, the \"Unallocated Shares\"). The remaining shares expected to be\noutstanding after the IPO (the \"Participating Partner Shares\") will be allocated\namong the PLPs, SBCM and KAA as follows:\n\n                  (i) SBCM will be allocated Common Stock (voting and\n         non-voting, as described below) representing approximately 11.34% of\n         the Participating Partner Shares and KAA will be allocated Common Stock\n         representing approximately 9.28% of the Participating Partner Shares;\n\n                  (ii) each PLP who participates in this Plan will first be\n         allocated shares of Common Stock with an aggregate value (based upon\n         the Per Share Price) equal to 100% of such PLP's Adjusted Capital (as\n         defined below); and\n\n                  (iii) each PLP who participates in this Plan will then be\n         allocated shares of Common Stock constituting such PLP's portion of the\n         balance of the Participating Partner Shares available after the\n         allocation of Common Stock under clauses (i) and (ii) (the \"Profit\n         Shares\") calculated by multiplying the number of Profit Shares by the\n         ratio of the profits interest of such PLP (as set forth in Schedule II\n         to the GS Group Partnership Agreement) to the aggregate profits\n         interests of all PLPs who participate in this Plan.\n\n         Any Unallocated Shares not necessary for purposes of Section 10\n(Arrangements Concerning Goldman Sachs-Sponsored Funds) or 16 of this Plan\n(Other - Right of General Partner or GS Inc. to Make Special Arrangements) will\nbe allocated to SBCM, KAA and the PLPs in accordance with clauses (i) and (iii)\nabove.\n\n         The foregoing computations will permit the calculation of the expected\nnumber of shares of Common Stock that will be issued under this Plan to each PLP\nwho participates in this Plan. The General Partner will inform each PLP of the\nactual number of shares of Common Stock to be issued to such PLP who or which\nparticipates in this Plan on or prior to the date of the consummation of the IPO\n(the \"IPO Date\").\n\n         \"Adjusted Capital\" for a PLP will be determined as of the opening of\nbusiness, New York City time, on November 28, 1998, with the adjustments set\nforth below. The Adjusted Capital of\n\n\n                                       -5-\n   10\na PLP will reflect (a) the value of such PLP's dated account interests valued at\ntheir fair value as of the opening of business, New York City time, on November\n28, 1998 (provided that dispositions of publicly-traded securities (and, in the\nsole discretion of the General Partner, other assets) reflected in dated\naccounts effected between the opening of business, New York City time, on\nNovember 28, 1998 and the close of business, New York City time, on February 26,\n1999 at prices more or less favorable than such fair value as of November 28,\n1998 will be reflected at their disposition price and publicly-traded securities\n(and, in the sole discretion of the General Partner, other assets) reflected in\ndated accounts will be valued at their market value as of the close of business,\nNew York City time, on February 26, 1999), (b) fiscal 1999 withdrawals from the\nPLP's capital account (unless otherwise determined by the General Partner), (c)\nthe creation of and adjustments to certain reserves and the related tax effects,\n(d) capital contributions made by PLPs after the opening of business, New York\nCity time, on November 28, 1998, and (e) other adjustments that the General\nPartner may deem appropriate in its sole discretion.\n\n         The General Partner may, in its sole discretion, select a different Per\nShare Price and\/or a later date for determining Adjusted Capital and\/or the\nAllocation Valuation and establish the number of shares of Common Stock to be\nissued using such different Per Share Price and\/or such later determination of\nAdjusted Capital and\/or the Allocation Valuation.\n\n         The General Partner generally has the right, in its sole discretion, to\namend this Plan in any respect that it deems appropriate. See \"Section 13 -\nAmendments to this Plan\" for a discussion of those changes to this Plan that may\ngive a PLP who or which has previously elected to participate in this Plan the\nright to retire from GS Group and receive payment in accordance with the GS\nGroup Partnership Agreement. None of the changes described in the preceding\nparagraph would afford a PLP a retirement right.\n\n\n              3. TREATMENT OF OTHER CONSTITUENCIES UNDER THIS PLAN\n\n         Classes of partners in GS Group other than PLPs and other members of\nthe Goldman Sachs community will be treated as follows under this Plan:\n\nSCHEDULE I LIMITED PARTNERS\n\n         A.       Each RLP may accept this Plan and elect to receive with\n                  respect to such RLP's Adjusted Capital:\n\n                  1.       Shares of Common Stock with an aggregate value (based\n                           upon the Per Share Price) equal to 130% (150% in the\n                           case of an RLP who retired as a PLP at the end of\n                           fiscal year 1998 (a \"1998 RLP\")) of such RLP's\n                           Adjusted Capital; or\n\n\n                                       -6-\n   11\n                  2.       Junior subordinated nontransferable debentures of GS\n                           Inc. with a principal amount equal to 100% of such\n                           RLP's Adjusted Capital, bearing interest at 12% per\n                           annum, with a maturity in November 2006 (longer\n                           maturities will be made available to RLPs who\n                           currently have longer-dated capital); such debentures\n                           having the other terms set forth in the Term Sheet\n                           for Junior Subordinated Nontransferable Debentures\n                           attached as Exhibit E; or\n\n                  3.       Cash in an amount equal to 130% (150% in the case of\n                           a 1998 RLP) of such RLP's Adjusted Capital; or\n\n                  4.       Any combination of the foregoing.\n\n                  Except as described below, Adjusted Capital for an RLP will be\n                  determined as of the same time and using the same valuations\n                  of assets, liabilities, reserves and contingencies as those\n                  used for calculating Adjusted Capital for the PLPs. For\n                  purposes of computing an RLP's Adjusted Capital, all capital\n                  awaiting settlement (\"CAS\") will be treated as part of such\n                  RLP's Adjusted Capital. In the 1999 fiscal year, certain RLPs\n                  have been permitted to contribute additional amounts to their\n                  capital accounts. These amounts will not be included in\n                  Adjusted Capital and will be repaid prior to the Incorporation\n                  Transactions.\n\n                  The General Partner may, in its sole discretion, select a\n                  different Per Share Price and\/or a later date for determining\n                  Adjusted Capital and\/or the Allocation Valuation and establish\n                  the number of shares of Common Stock to be issued using such\n                  different Per Share Price and\/or such later determination of\n                  Adjusted Capital and\/or the Allocation Valuation.\n\n                  The General Partner generally has the right, in its sole\n                  discretion, to amend this Plan in any respect that it deems\n                  appropriate. See \"Section 13 - Amendments to this Plan\" for a\n                  discussion of those changes to this Plan that may give an RLP\n                  who or which has previously elected to participate in this\n                  Plan the right to retire from GS Group, with the effect set\n                  forth in Alternative B below. None of the changes described in\n                  the preceding paragraph would afford an RLP a retirement\n                  right.\n\n         B.       Any RLP may alternatively not accept this Plan and, prior to\n                  the Incorporation Transactions, receive the distribution\n                  provided for in the GS Group Partnership Agreement (cash or\n                  junior subordinated nontransferable debentures issued pursuant\n                  to the GS Group Partnership Agreement in an amount equal to\n                  (i) the RLP's capital contribution less adjustments to\n                  reserves to that date and (ii) the value of the RLP's pro rata\n                  share of items omitted from settlement with such RLP,\n                  including amounts attributable to dated account interests).\n\n\n                                       -7-\n   12\n         By acceptance of this Plan, an RLP who chooses to take Common Stock\nwill agree to (i) the terms of the underwriters' lock-up restriction in\nconnection with the IPO, (ii) a one-year lock-up restriction for all shares of\nCommon Stock issued in respect of up to 50% of such RLP's Adjusted Capital\n(provided that to the extent that an individual RLP owns an interest in GS Group\ndirectly and is affiliated with an entity RLP that also owns an interest in GS\nGroup (e.g., an individual RLP and the individual RLP's family limited\npartnership), the individual RLP may allocate among the individual RLP and the\naffiliated entity RLP the shares of Common Stock subject to the one-year lock-up\nrestriction provided in this clause (ii) and the three-year lock-up restriction\nprovided in clause (iii) below in his or her discretion as long as no more than\nthe number of shares of Common Stock issued in respect of 50% of the aggregate\nAdjusted Capital of such RLPs is subject to the one-year lock-up restriction\nprovided in this clause (ii)), (iii) a three-year lock-up restriction for all\nother shares of Common Stock issued in respect of such RLP's Adjusted Capital,\nand (iv) the hedging restrictions described in Section 6 hereof. Each RLP who\nparticipates in this Plan will execute a confidentiality agreement which is\nbased on the confidentiality provisions in the GS Group Partnership Agreement.\nShares of Common Stock allocable to an RLP will be held in the record name of a\ncustodian or other agent selected by GS Inc. pursuant to a custodial agreement\nuntil the lapse of the lock-up restrictions described above.\n\n         In order for an RLP to accept the offer outlined in Alternative A, such\nRLP must agree to be bound by all aspects of this Plan. Each RLP who or which\naccepts this Plan will become a party to this Plan. An RLP who selects\nAlternative A will have the benefit of the indemnification arrangements provided\nbelow under \"Release and Indemnification Arrangements\" in Section 11. An RLP who\nselects Alternative B will not have the benefit of the indemnification\narrangements and will retain all personal liabilities such RLP had as a partner\nin GS Group and its affiliates and their respective predecessors.\n\n         An RLP's election of Alternative A or Alternative B will not be\nrevocable or subject to amendment or alteration. RLPs shall not be permitted to\ntransfer interests in GS Group pending consummation of this Plan.\n\n         With respect to an RLP that is not an \"accredited investor\" (as defined\nin Rule 501 under the Securities Act of 1933, as amended) and as determined by\nthe General Partner in its sole discretion to be necessary or prudent to achieve\ncompliance with or expedite consummation of this Plan under applicable law, the\nvalue of such RLP's interest in GS Group may be paid to such RLP in accordance\nwith the provisions of the GS Group Partnership Agreement in lieu of permitting\nsuch RLP to participate in this Plan or the right to elect to retire as\ndescribed above.\n\nCAPITAL AWAITING SETTLEMENT, RESERVE BALANCES AND DEBENTURES\n\n         Under this Plan, the General Partner may, in its sole discretion, (a)\nmake offers to any former partners (i) with CAS, (ii) who are subject to\nreserves or (iii) who hold debentures of GS Group, on whatever terms and\nconditions the General Partner deems appropriate and (b) establish the manner of\nmaking any such offer.\n\n\n                                       -8-\n   13\nSENIOR LIMITED PARTNERS\n\n         It is expected that the interests of SLPs will be redeemed for cash\nprior to the Incorporation Transactions.\n\nSUMITOMO BANK CAPITAL MARKETS, INC.\n\n         SBCM is entitled under the GS Group Partnership Agreement to elect to\nreceive a combination of the following:\n\n         A.       Voting and\/or non-voting Common Stock (limited, as to voting\n                  stock, to 4.9% of the outstanding shares); and\n\n         B.       Convertible preferred stock of GS Inc.\n\n         It is expected that SBCM will elect to receive all Common Stock (i.e.,\nvoting and nonvoting). The Common Stock that SBCM will receive will represent\napproximately 11.34% of the Participating Partner Shares. The voting Common\nStock that SBCM will hold after the IPO Date will represent 4.9% of the\noutstanding voting Common Stock.\n\n         Attached as Exhibit P and deemed part of this Plan is the letter\nagreement with SBCM, as amended, that provides for, among other things, the\nissuance of Common Stock (voting and nonvoting) to SBCM, certain adjustments to\nand distribution of capital, SBCM's sale of Common Stock as part of the IPO, the\nhedging restrictions applicable to SBCM and certain amendments to SBCM's\nregistration rights. The Registration Statement incorporated by reference herein\nas Exhibit D sets forth a description of the rights of SBCM, including SBCM's\nregistration rights following the IPO. If this Plan is adopted, SBCM will become\na party to this Plan.\n\nKAMEHAMEHA ACTIVITIES ASSOCIATION\n\n         KAA is entitled to receive voting Common Stock under the GS Group\nPartnership Agreement. The Common Stock that KAA will receive will represent\napproximately 9.28% of the Participating Partner Shares. Attached as Exhibit Q\nand deemed part of this Plan is the letter agreement with KAA, as amended, that\nprovides for, among other things, certain adjustments to and distributions of\ncapital, KAA's sale of Common Stock as part of the IPO, the hedging restrictions\napplicable to KAA and certain amendments to KAA's registration rights. The\nRegistration Statement incorporated by reference herein as Exhibit D sets forth\na description of the rights of KAA, including KAA's registration rights\nfollowing the IPO. If this Plan is adopted, KAA will become a party to this\nPlan.\n\n\n                                       -9-\n   14\nNON-PLP EMPLOYEES\n\n         On the IPO Date, GS Inc. will make substantial awards of equity-based\ncompensation to the Firm's employees (including certain consultants and\nadvisors), other than PLPs. These awards are expected to consist of the\nfollowing elements:\n\n         A.       A formula-based award of restricted stock units (\"RSUs\") under\n                  which Common Stock generally will be delivered in equal\n                  installments on or about the first, second and third\n                  anniversaries of the IPO Date, unless the recipient engages in\n                  conduct detrimental to GS Inc. and its affiliates (together\n                  with their predecessors and successors, the \"Firm\") prior to\n                  delivery of the Common Stock. No future service is required to\n                  receive delivery of Common Stock. Conduct detrimental to the\n                  Firm would include conduct for which an employee could be\n                  terminated for cause, soliciting clients or employees of the\n                  Firm, engaging in competitive activities and violating Firm\n                  policy, including as to confidentiality and hedging. These\n                  awards will be made available to virtually all employees.\n\n         B.       A discretionary award of RSUs and stock options that generally\n                  will vest in equal installments on or about the third, fourth\n                  and fifth anniversaries of the IPO Date so long as prior to\n                  the relevant vesting date the employee's employment with the\n                  Firm has not been terminated for any reason and the employee\n                  has not engaged in conduct detrimental to the Firm on or prior\n                  to the relevant vesting date.\n\n         C.       A contribution of stock to a defined contribution plan (the\n                  \"DCP\") with the employees' rights to receive the stock\n                  generally vesting in equal installments on or about the third,\n                  fourth and fifth anniversaries of the IPO Date so long as\n                  prior to the relevant vesting date the employee's employment\n                  with the Firm has not been terminated for any reason and the\n                  employee has not engaged in conduct detrimental to the Firm on\n                  or prior to the relevant vesting date.\n\n         A further description of these awards is included in the Registration\nStatement incorporated by reference herein as Exhibit D.\n\nGOLDMAN SACHS FOUNDATION\n\n         It is currently expected that, after the consummation of the IPO and as\npart of this Plan, approximately $200 million in cash will be donated by GS Inc.\nto a charitable foundation established by the Firm.\n\n                                    * * * * *\n\n\n                                      -10-\n   15\n         The General Partner has the authority under this Plan not to offer\nsecurities of GS Inc. to or exchange securities of GS Inc. with any person if\nthe General Partner determines, in its sole discretion, that the making of such\noffer or the consummation of such exchange could violate any applicable laws or\nregulations, including securities laws.\n\n   \n         In the event that any interest in GS Group is held by two or more\nrelated persons (e.g., an individual and such individual's corporation, limited\nliability company, family limited partnership or revocable trust), all such\npersons must elect to participate in this Plan or not participate in this Plan\nand, if all elect to participate, must execute all necessary documents. If such\nelections are not made, such documents are not executed or such elections are\ninconsistent, the General Partner will determine that an election has been made\nby all related persons not to participate in this Plan.\n    \n\n\n                          4. ONGOING EQUITY INCENTIVES\n\n         GS Inc. will put in place ongoing equity incentives including RSU,\nrestricted stock and option programs. GS Inc. is also expected to have a Firm\nperformance-based compensation plan beginning in the 1999 fiscal year in which\ncertain employees (currently expected to include the existing PLPs who are\nemployed by the Firm immediately following the IPO) are expected to participate.\nParticipants in the Firm performance-based plan will be selected on a\ndiscretionary basis.\n\n         There is no assurance that any particular PLP will be eligible to\nparticipate in any of these ongoing equity incentives.\n\n\n                             5. EMPLOYMENT AGREEMENT\n\n         Each PLP who participates in this Plan will agree, unless otherwise\nrequested by GS Inc., to be bound by an employment agreement (the form of which\nis attached as Exhibit F). The employment agreement will provide that the PLP\nwill serve as a managing director for an initial term ending on November 24,\n2000 and thereafter for no set term. Under the employment agreement, the PLP\nwill have such duties and responsibilities as the Firm may from time to time\ndetermine and will devote such PLP's entire working time to the business and\naffairs of the Firm. The agreement will be terminable by the PLP or the Firm at\nany time upon 90 days' advance written notice and will require arbitration of\ndisputes. The Firm may elect to place a PLP on paid leave for all or part of\nsuch 90-day notice period.\n\n\n\n\n                                      -11-\n   16\n                                   6. HEDGING\n\n         Attached as Exhibit G are hedging restrictions relating to securities\nof GS Inc. and financial services companies, which, assuming this Plan is\nadopted, are effective as of March 4, 1999. The General Partner of GS Group\n(until the IPO Date) and the Board of Directors of GS Inc. (thereafter) are\nexpressly authorized to elaborate upon or change these restrictions from time to\ntime.\n\n\n                   7. CERTAIN TRANSFER RESTRICTIONS ON SHARES\n\n         Each PLP and RLP who participates in this Plan will be subject to the\nfollowing significant restrictions on the Transfer (as hereinafter defined) of\nCommon Stock received by such PLP or RLP from GS Inc. pursuant to this Plan.\nPLPs who participate in this Plan also will be parties to the Shareholders'\nAgreement described in Section 8 below, which will impose further restrictions\non Transfers of shares of Common Stock owned by each PLP.\n\n         For purposes of the restrictions described in this section and the\nShareholders' Agreement, the term \"Transfer\" generally includes any sale,\ntransfer, pledge or other disposition of securities of GS Inc., including any\ndisposition of the economic or other risks of ownership through hedging\ntransactions or derivatives involving GS Inc. securities, other than certain\nhedging transactions permitted under the Shareholders' Agreement.\n\nUNDERWRITERS' LOCK-UP AND FIRM-WIDE TRADING RESTRICTIONS\n\n         All shares of Common Stock which a PLP or an RLP receives pursuant to\nthis Plan will be subject to the underwriters' lock-up restriction in connection\nwith the IPO and, in the case of PLPs and RLPs employed by the Firm (including\nas consultants), to any trading restrictions applicable to Firm employees or\nconsultants.\n\nPLP RESTRICTIONS\n\n         Any shares of Common Stock that a PLP receives pursuant to this Plan\n(other than shares of Common Stock received in exchange for interests in the\nFunds as described in Section 10 and any other shares of Common Stock so\ndesignated by GS Inc. prior to the IPO Date to accommodate particular situations\nsuch as those referred to under \"Section 16 -- Other--Right of General Partner\nto Make Special Arrangements\" (all such other shares, the \"Excluded Shares\"))\nmay be Transferred only as follows (the \"PLP Transfer Restrictions\"):\n\n         -        33 1\/3% of such shares may be Transferred at any time after\n                  the third anniversary of the IPO Date.\n\n         -        An additional 33 1\/3% of such shares may be Transferred at any\n                  time after the fourth anniversary of the IPO Date.\n\n\n                                      -12-\n   17\n         -        All of such shares may be Transferred at any time after the\n                  fifth anniversary of the IPO Date.\n\n         The PLP Transfer Restrictions may generally be waived or terminated\nonly by action of the Shareholders' Committee established pursuant to the\nShareholders' Agreement. In the case of a third-party tender or exchange offer,\nhowever, the PLP Transfer Restrictions may be waived only by 66 2\/3% of the\noutstanding Voting Interests (as defined below) if the Board of Directors of GS\nInc. is recommending rejection of the tender or exchange offer, and only by a\nmajority of the outstanding Voting Interests if the Board of Directors of GS\nInc. is recommending acceptance of the tender or exchange offer or is not making\nany recommendation with respect to acceptance. In the case of a tender or\nexchange offer by GS Inc., the PLP Transfer Restrictions may be waived either by\nthe Shareholders' Committee or a majority of the outstanding Voting Interests.\nThe PLP Transfer Restrictions as to a PLP will terminate upon the death of such\nPLP, although the underwriters' lock-up restrictions in the IPO will continue to\napply. If the Shareholders' Agreement is terminated prior to the expiration or\ntermination of the PLP Transfer Restrictions, the PLP Transfer Restrictions will\ncontinue to apply unless waived or terminated by the Board of Directors of GS\nInc.\n\nRLP RESTRICTIONS\n\n         Any shares of Common Stock that an RLP receives pursuant to this Plan\n(other than Excluded Shares) may be Transferred only as follows (the \"RLP\nTransfer Restrictions\"):\n\n         -        Shares issued in respect of 50% or less of an RLP's Adjusted\n                  Capital may be Transferred at any time after the first\n                  anniversary of the IPO Date.\n\n         -        All of such shares may be Transferred at any time after the\n                  third anniversary of the IPO Date.\n\n         The RLP Transfer Restrictions may be waived or terminated only by the\nBoard of Directors of GS Inc. The RLP Transfer Restrictions as to an RLP will\nterminate upon the death of such RLP, although the underwriters' lock-up\nrestrictions in the IPO will continue to apply.\n\nCUSTODY ARRANGEMENTS\n\n         All shares of Common Stock issued to a PLP or an RLP must be held in a\nbrokerage, custody or similar account maintained at Goldman, Sachs &amp; Co. or\nanother firm as GS Inc. may determine. GS Inc. will be entitled to monitor all\nactivity in each PLP's or RLP's account and to enforce applicable transfer and\nhedging restrictions, any Firm trading restrictions applicable to employees and\nconsultants as in effect from time to time and (in the case of PLPs) the pledge\narrangements described in Section 9 below. Any Common Stock held in such an\naccount may be held of record by a custodian or nominee. GS Inc. may require\neach PLP or RLP to execute an account agreement with the custodian or other\nfirm, in such form as GS Inc. may determine\n\n\n                                      -13-\n   18\n(which may include customary provisions relating to indemnification of the\ncustodian or other firm and an undertaking to arbitrate custody-related\ndisputes).\n\n\n                           8. SHAREHOLDERS' AGREEMENT\n\n         Each PLP who participates in this Plan will be subject to the\nprovisions of a Shareholders' Agreement which is also expected to include as\nparties all managing directors of GS Inc. and its affiliates. A copy of the\nShareholders' Agreement is attached as Exhibit H.\n\nCOVERED PERSONS AND COVERED SHARES\n\n         Each PLP who participates in this Plan and each other person who is a\nmanaging director on the IPO Date or becomes a managing director thereafter will\nbe a party to the Shareholders' Agreement (collectively, the \"Covered Persons\").\n\n         The shares covered by the Shareholders' Agreement (the \"Covered\nShares\") generally will be all shares of Common Stock acquired from GS Inc. by a\nCovered Person and beneficially owned by the Covered Person at the time in\nquestion. Covered Shares will include any shares of Common Stock received by the\nPLPs pursuant to this Plan except for Excluded Shares (as defined in \"Section 7\n-- Certain Restrictions on Shares\"). Thus, Covered Shares will include shares of\nCommon Stock (i) received by Covered Persons pursuant to the plans and awards\ndescribed under \"Non-PLP Employees\" in Section 3, above and (ii) received by\nCovered Persons from the Firm through any other employee compensation, benefit\nor similar plan. Covered Shares will not include any shares of Common Stock\npurchased by a Covered Person in the open market or in a subsequent underwritten\npublic offering or other shares excluded from the definition of Covered Shares\nby action of the Board of Directors of GS Inc. prior to the IPO or, in the case\nof a deferred compensation plan, at any time.\n\n         The Shareholders' Agreement will require that all Covered Shares be\nheld in a custody account until released for Transfer in accordance with the\nprovisions of the Shareholders' Agreement and this Plan.\n\nTRANSFER RESTRICTIONS AND WAIVERS\n\n         Covered Shares will be subject to transfer restrictions under the\nShareholders' Agreement. Each Covered Person will agree in the Shareholders'\nAgreement to:\n\n         -        retain Sole Beneficial Ownership (as defined in the\n                  Shareholders' Agreement) of Covered Shares at least equal to\n                  25% of the total number of Covered Shares beneficially owned\n                  by such Covered Person at the time such Covered Person became\n                  a Covered Person or acquired by such Covered Person thereafter\n                  and with no reduction for any shares\n\n\n                                      -14-\n   19\n                  Transferred (the \"General Transfer Restrictions\"), for so long\n                  as he or she is a Covered Person and an employee of GS Inc.\n                  (an \"Employee Covered Person\");\n\n         -        comply with the underwriters' 180-day lockup arrangement in\n                  the IPO with respect to all Common Stock;\n\n         -        comply with respect to all Common Stock with certain\n                  \"black-out\" restrictions related to future primary or\n                  secondary offerings of Common Stock if requested to do so by\n                  GS Inc.; and\n\n         -        comply with restrictions that may be imposed by GS Inc. from\n                  time to time to enable GS Inc. or another party to account for\n                  a business combination using the pooling-of-interests method\n                  of accounting.\n\n         Each PLP will also be subject to the PLP Transfer Restrictions\ndescribed above under \"Section 7--Certain Transfer Restrictions on Shares.\"\n\n         The General Transfer Restrictions (and the other provisions of the\nShareholders' Agreement) may generally be waived by a majority of the\noutstanding Voting Interests. In the case of a third-party tender or exchange\noffer, the General Transfer Restrictions may be waived or amended only by 66\n2\/3% of the outstanding Voting Interests if the Board of Directors of GS Inc. is\nrecommending rejection of the tender or exchange offer, and only by a majority\nof the outstanding Voting Interests if the Board of Directors of GS Inc. is\nrecommending acceptance of the tender or exchange offer or is not making any\nrecommendation with respect to acceptance. The Shareholders' Committee also has\nthe power to waive the General Transfer Restrictions to permit Covered Persons\nto:\n\n         -        participate as sellers in underwritten public offerings of\n                  Common Stock and tender or exchange offers and share\n                  repurchase programs by GS Inc.;\n\n         -        Transfer Covered Shares to charities, including charitable\n                  foundations;\n\n         -        Transfer Covered Shares held in employee benefit plans; and\n\n         -        Transfer Covered Shares in specific transactions (for example,\n                  to immediate family members and trusts).\n\n         The General Transfer Restrictions may be waived, in connection with any\ntender or exchange offer by GS Inc., by the affirmative vote of a majority of\nthe outstanding Voting Interests.\n\n\n                                      -15-\n   20\nVOTING\n\n         Prior to any vote of the shareholders of GS Inc., the Shareholders'\nAgreement will require a separate, preliminary vote of the Voting Interests on\neach matter upon which a vote of the shareholders of GS Inc. is proposed to be\ntaken (a \"Preliminary Vote\"). In general, each Covered Share held by an Employee\nCovered Person and other Covered Shares which cannot then be Transferred without\nviolating the PLP Transfer Restrictions (\"Voted Covered Shares\") will be voted\nin accordance with the majority of the votes cast by the Voting Interests in the\nPreliminary Vote. In elections of directors, each Voted Covered Share will be\nvoted in favor of the election of those persons, equal in number to the number\nof such positions to be filled, receiving the highest numbers of votes cast by\nthe Voting Interests in the Preliminary Vote. \"Voting Interests\" are all Covered\nShares beneficially owned by all Covered Persons through December 31, 2000 and\nthereafter are all Covered Shares beneficially owned by all Employee Covered\nPersons. The Shareholders' Agreement contains an irrevocable proxy and\npower-of-attorney authorizing the Shareholders' Committee to vote the Voted\nCovered Shares.\n\nOTHER RESTRICTIONS\n\n         The Shareholders' Agreement will also prevent Covered Persons from\nengaging in certain activities with any person that is not a Covered Person or a\ndirector, officer or employee of GS Inc. acting in his or her capacity as such\n(a \"Restricted Person\"). Among other things, a Covered Person may not\nparticipate in a proxy solicitation to or with a Restricted Person; deposit any\nCovered Shares in a voting trust or subject any Covered Shares to any voting\nagreement or arrangement that includes any Restricted Person; form, join or in\nany way participate in a \"group\" with any Restricted Person; or, together with\nany Restricted Person, propose certain transactions with GS Inc. or seek the\nremoval of any directors of GS Inc. or any change in the composition of the\nBoard of Directors of GS Inc.\n\nTERM, AMENDMENT AND CONTINUATION\n\n         The Shareholders' Agreement will continue in effect until the earlier\nof January 1, 2050 and the time it is terminated by the vote of 66 2\/3% of the\nVoting Interests. The Shareholders' Agreement can be amended only by a majority\n(66 2\/3% with respect to certain provisions) of the outstanding Voting\nInterests. In the event of any transaction in which a third party succeeds to\nthe business of GS Inc. and in which Covered Persons hold securities of such\nthird party, unless otherwise terminated, the Shareholders' Agreement will\nremain in full force and effect as to the securities of such third party, and\nsuch third party shall succeed to the rights and obligations of GS Inc. under\nthe Shareholders' Agreement.\n\n\n                                      -16-\n   21\nADMINISTRATION\n\n         A Shareholders' Committee will be formed to administer the terms and\nprovisions of the Shareholders' Agreement. The Shareholders' Committee will\ngenerally act through a majority of its members at meetings of the Shareholders'\nCommittee and unanimously if acting by written consent. The Shareholders'\nCommittee initially will consist of those Covered Persons who are employees of\nthe Firm and members of the Board of Directors of GS Inc. If there are fewer\nthan three such individuals, the Shareholders' Committee shall include other\nCovered Persons who are employees of the Firm and are selected pursuant to\nprocedures established by the Shareholders' Committee.\n\n\n                   9. NONCOMPETITION AND RELATED ARRANGEMENTS\n\n         Each PLP who participates in this Plan will be bound by an agreement of\nnoncompetition and other covenants (the \"noncompetition agreement\") which is a\nsuccessor to, and substantially similar (other than with respect to liquidated\ndamages and the pledge) to, the comparable provision in the GS Group Partnership\nAgreement. The principal features of this agreement are:\n\n         A.       Confidential information concerning the business, operations,\n                  financial affairs, organizational and personnel matters,\n                  policies, procedures and other non-public matters of the Firm\n                  and of third parties (including the existence of and any\n                  information concerning any dispute between a PLP and the\n                  Firm), will not be permitted to be disclosed.\n\n   \n         B.       While employed by the Firm and for a period ending 12 months\n                  after the later of the IPO Date or the date the PLP is no\n                  longer employed by the Firm, a PLP will not, without the prior\n                  written consent of GS Inc., be permitted to (a) form, or\n                  acquire a 5% or greater equity ownership, voting or profit\n                  participation interest in, any Competitive Enterprise (as\n                  defined below), or (b) associate (including, but not limited\n                  to, association as an officer, employee, partner, director,\n                  consultant, agent or advisor) with any Competitive Enterprise\n                  and in connection with such association engage in, or directly\n                  or indirectly manage or supervise personnel engaged in, any\n                  activity (i) which is similar or substantially related to any\n                  activity in which the PLP was engaged, in whole or in part, at\n                  the Firm, or (ii) for which the PLP had direct or indirect\n                  managerial or supervisory responsibility at the Firm, or (iii)\n                  which calls for the application of the same or similar\n                  specialized knowledge or skills as those utilized by the PLP\n                  in his or her activities with the Firm, at any time during the\n                  one-year period immediately prior to termination of such\n                  PLP's employment (or, in the case of actions while employed,\n                  the one-year period prior to such actions) and irrespective of\n                  the purpose of the activity or whether the activity is or was\n                  in furtherance of advisory, agency, proprietary or fiduciary\n                  business of either the Firm or the Competitive Enterprise. (By\n                  way of example only, this provision would\n    \n\n\n                                      -17-\n   22\n                  preclude an \"advisory\" investment banker from joining a\n                  leveraged buy-out firm or a research analyst from becoming a\n                  proprietary trader or joining a hedge fund).\n\n                  The term \"Competitive Enterprise\" means a business enterprise\n                  that (i) engages in any activity, or (ii) owns or controls a\n                  significant interest in any entity that engages in any\n                  activity, that, in either case, competes anywhere with any\n                  activity in which the Firm is engaged. The activities covered\n                  by the previous sentence include, without limitation,\n                  financial services such as investment banking, public or\n                  private finance, lending, financial advisory services, private\n                  investing (for anyone other than the PLP or member of the\n                  PLP's family), merchant banking, asset or hedge fund\n                  management, insurance or reinsurance underwriting or\n                  brokerage, property management, or securities, futures,\n                  commodities, energy, derivatives or currency brokerage, sales,\n                  lending, custody, clearance, settlement or trading).\n\n         C.       While employed by the Firm and for a period ending 18 months\n                  after the later of the IPO Date or the date the PLP is no\n                  longer employed by the Firm, a PLP will not be permitted, in\n                  any manner, to directly or indirectly, (i) Solicit (as defined\n                  below) any Client (as defined below) to transact business with\n                  a Competitive Enterprise or to reduce or refrain from doing\n                  any business with the Firm, or (ii) interfere with or damage\n                  (or attempt to interfere with or damage) any relationship\n                  between the Firm and any such Client.\n\n                  The term \"Solicit\" means any direct or indirect communication\n                  of any kind whatsoever, regardless of by whom initiated,\n                  inviting, advising, encouraging or requesting any person, in\n                  any manner, to take or refrain from taking any action.\n\n                  The term \"Client\" means any client or prospective client of\n                  the Firm to whom the PLP provided services, or for whom the\n                  PLP transacted business, or whose identity became known to the\n                  PLP in connection with the PLP's relationship with or\n                  employment by the Firm.\n\n         D.       While employed by the Firm and for a period ending 18 months\n                  after the later of the IPO Date or the date the PLP is no\n                  longer employed by the Firm, a PLP will not be permitted, in\n                  any manner, to directly or indirectly, Solicit any person who\n                  is an employee of the Firm to apply for or to accept\n                  employment with any Competitive Enterprise.\n\n         E.       Each PLP will agree, if such PLP's employment is terminated by\n                  the PLP or the Firm, to take all actions and do all things\n                  during a 90-day cooperation period reasonably requested by the\n                  Firm to maintain for the Firm the business, goodwill and\n                  business relationships with the Firm's clients with whom the\n                  PLP worked during the term of such PLP's employment.\n\n\n                                      -18-\n   23\n         F.       Prior to accepting employment with any other person or entity\n                  during the PLP's employment with the Firm and for a period\n                  ending 18 months after the later of the IPO Date or the date\n                  the PLP is no longer employed by the Firm, the PLP will\n                  provide such prospective employer with written notice of the\n                  terms of the noncompetition agreement (and simultaneously send\n                  a copy of that notice to GS Inc.).\n\n         G.       Without limiting the Firm's ability to obtain injunctive\n                  relief relating to any breach of the noncompetition agreement,\n                  the noncompetition agreement will provide for liquidated\n                  damages due upon a breach, as determined by the Board of\n                  Directors of GS Inc. in its good faith judgment, of the\n                  provisions of the noncompetition agreement described in\n                  clauses B through D above (the \"noncompetition provisions\") at\n                  any time prior to the fifth anniversary of the IPO Date. The\n                  amount of liquidated damages represents an attempt to estimate\n                  the harm that would be incurred by GS Inc. if a PLP violates\n                  such PLP's obligations under the noncompetition provisions.\n                  There will be two levels of liquidated damages. For PLPs who\n                  initially will serve as members of the Board of Directors of\n                  GS Inc. or on one of the other management committees of the\n                  Firm (e.g., the equivalent of the current Management Committee\n                  or Partnership Committee), the liquidated damages will be set\n                  at $15 million. For all other PLPs, the amount will be $10\n                  million. Following the fifth anniversary of the IPO Date,\n                  there will be no liquidated damages and, in the event of a\n                  breach of the noncompetition agreement by a PLP, the Firm will\n                  be entitled to such relief as may be awarded by an arbitrator\n                  or court. By participating in this Plan, each PLP agrees to\n                  the liquidated damages amount applicable to such PLP. Pursuant\n                  to a pledge agreement (the \"pledge agreement\") to be entered\n                  into on the IPO Date, Common Stock (or other collateral\n                  acceptable to GS Inc. with an equal or greater market value)\n                  will be pledged by the PLP as security for the payment of the\n                  liquidated damages. The Common Stock (or other acceptable\n                  collateral) initially pledged will have a market value (based\n                  upon the initial public offering price in the IPO) equal to\n                  100% of the required liquidated damages amount at the IPO\n                  Date. At no time may a PLP substitute collateral unless the\n                  value of substitute collateral is greater than or equal to the\n                  value of the released collateral. Absent any breach, all of\n                  the collateral will be released on the earliest of (i) the\n                  fifth anniversary of the IPO Date, (ii) the PLP's death, or\n                  (iii) the expiration of the 24-month period following the\n                  later of (A) the termination of the PLP's employment with the\n                  Firm or (B) the IPO Date. No collateral will be released if\n                  there are pending disputes with the PLP as to the existence of\n                  a breach of the noncompetition agreement or GS Inc.'s exercise\n                  of its remedies thereunder, including realization against the\n                  collateral. The liquidated damages in the noncompetition\n                  agreement are in addition to, and not in lieu of, any\n                  forfeitures of awards (required pursuant to the terms of any\n                  such awards) that may be granted to the PLP in the future\n                  under one or more of the Firm's compensation, benefit or\n                  similar plans.\n\n\n\n                                      -19-\n   24\n         Pursuant to the GS Group Partnership Agreement, any partner in GS Group\nwho does not participate in this Plan will continue to be bound by the\nconfidentiality, noncompetition, nonsolicitation and cooperation provisions of\nthe GS Group Partnership Agreement as currently in effect.\n\n         A copy of the PLP noncompetition agreement and the pledge agreement are\nattached as Exhibit I.\n\n\n                           10. ARRANGEMENTS CONCERNING\n                          GOLDMAN SACHS-SPONSORED FUNDS\n\n         A PLP who participates in this Plan and an RLP or other person who\nparticipates in this Plan and elects to receive shares of Common Stock and, in\neach case, who has interests in Goldman Sachs-sponsored funds (the \"Funds\"),\nincluding, without limitation, the Stone Street Funds, the Bridge Street Funds\nand the Managing Directors' Investment Funds, shall, if requested by the General\nPartner, be required to choose one of the following actions (at the election of\nsuch PLP, RLP or other person):\n\n         A.       Transfer interests in the Funds to a wholly-owned corporation;\n                  or\n\n         B.       Transfer interests in the Funds to such person's spouse.\n\n                  If the General Partner determines to require a PLP, RLP or\nother person to choose one of the above actions, the General Partner will notify\nsuch affected person when he or she is required to make the choice. If the\naffected person is notified that he or she must choose to take one of the\nactions and fails to make the election in the time specified in the notice from\nthe General Partner, the General Partner will elect to (i) require the affected\nperson to transfer interests in the relevant Funds to GS Inc. as part of this\nPlan in exchange for Common Stock (which will be subject to the underwriters'\nlock-up in the IPO, to the hedging restrictions referred to in Section 6 above\nand to applicable securities laws and Firm-imposed transfer restrictions, but\nwill not be subject to the Shareholders' Agreement or to the other transfer\nrestrictions described in Section 7), (ii) require the affected person to\ntransfer interests in the relevant Funds to the general partner of the relevant\nFund (or another affiliate of GS Group designated by GS Group) in exchange for\ncash or (iii) a combination of the foregoing, in each case, in the sole\ndiscretion of the General Partner.\n\n\n                  11. RELEASE AND INDEMNIFICATION ARRANGEMENTS\n\n         In connection with this Plan, GS Inc. will provide the following\nrelease and indemnification arrangements covering liabilities, if any, in\nrelation to tax and non-tax claims:\n\n\n\n                                      -20-\n   25\n         A.       Release and Indemnification (Other than for Taxes). GS Inc.\n                  will release and indemnify each PLP and RLP who participates\n                  in this Plan and certain former partners, as well as SBCM and\n                  KAA, with respect to specified liabilities and will assume the\n                  obligations of those participants in this Plan who are\n                  indemnifying parties under the indemnification agreement dated\n                  as of November 30, 1996. This indemnification is attached as\n                  Exhibit J.\n\n         B.       Tax Indemnification. GS Inc. will indemnify each PLP and RLP\n                  who participates in this Plan and certain former partners, as\n                  well as SBCM and KAA, against increased tax liabilities\n                  resulting from adjustments to tax returns filed by GS Group or\n                  any affiliate (or by an indemnitee to the extent of items\n                  attributable to GS Group or an affiliate) for open periods\n                  prior to the Incorporation Transactions (other than certain\n                  specified periods). The amount of any increased taxes with\n                  respect to which a PLP (or other indemnitee) has received a\n                  payment from GS Inc. and which are subsequently refunded or\n                  credited to such PLP (or other indemnitee) will, to the extent\n                  not taken into account in determining the amount of the\n                  indemnity, be reimbursed to GS Inc. by such PLP (or other\n                  indemnitee). GS Inc. will gross-up payments under the tax\n                  indemnification to the extent that indemnified taxes exceed a\n                  fixed amount for each of the indemnitees that will be\n                  specified by GS Inc. (in its sole discretion). This\n                  indemnification is attached as Exhibit K.\n\n\n                    12. CONSEQUENCES OF AN ELECTION TO RETIRE\n\n         As noted in the Introduction, one of the choices available to a PLP and\nan RLP under the GS Group Partnership Agreement will be to elect to retire as a\npartner in GS Group. Each PLP withholding consent to the adoption of this Plan\nand each RLP will have until 5:00 p.m., New York City time, on March 15, 1999 to\nmake this election. A PLP may make this election through the Consent Document\nand Power of Attorney, which will be distributed at the March 8 meeting. An RLP\nmay make this election through the Acceptance Document and Power of Attorney,\nwhich is being sent to the RLPs. The effectiveness of any election to retire\nreceived prior to the approval of this Plan by the PLPs will be conditioned upon\napproval of this Plan by the PLPs.\n\n         If a PLP elects or has been deemed to elect to retire, such retirement\nwill occur immediately prior to the Incorporation Transactions. Upon retirement\nas a partner, the PLP will become entitled to receive payment of such PLP's\ninterest in GS Group and its affiliates valued in the manner provided in the GS\nGroup Partnership Agreement as if such PLP had retired and not elected to become\nan RLP. Thus, a retiring PLP will be entitled only to payment in respect of the\nvalue of such PLP's interests in GS Group and its affiliates (including such\nPLP's dated account interests (after the dated account interests have been\nvalued at their fair value) and without giving effect to any adjustment for firm\ngoodwill) in accordance with the GS Group Partnership Agreement. In addition,\nthe retiring PLP will not have the benefit of the indemnification arrangements\ndescribed in\n\n\n                                      -21-\n   26\n\"Section 11 -- Release and Indemnification Arrangements\" and will retain\nwhatever personal liabilities such PLP had as a partner in GS Group and its\naffiliates and their respective predecessors.\n\n         For a discussion of the consequences of an RLP's election to retire,\nsee \"Section 3 --Treatment of Other Constituencies under this Plan -- Schedule I\nLimited Partners.\"\n\n\n                           13. AMENDMENTS TO THIS PLAN\n\n         The General Partner, in its sole discretion, may amend this Plan in any\nrespect prior to the consummation of this Plan, including making any amendments\nto the Exhibits to this Plan, provided that (i) an amendment shall not be\nbinding upon a PLP if it would (a) change the employment agreement or the\nnoncompetition or pledge agreements provided for in this Plan to make any such\nagreements materially more burdensome to the PLP (which would include increasing\nthe amount of liquidated damages), (b) change this Plan or the Shareholders'\nAgreement to lengthen or otherwise change in a manner materially adverse to such\nPLP the Transfer Restrictions described therein, or (c) change the method for\nallocating Participating Partner Shares among the PLPs set forth in clauses (ii)\nand (iii) of Section 2 above (it being understood that the selection of a\ndifferent Per Share Price and\/or a later date for determining Adjusted Capital\nand\/or the Allocation Valuation shall not be such a change in the method for\nallocating Participating Partner Shares among the PLPs) in a manner that is\nmaterially adverse to such PLP without, in each case referred to in clause (a),\n(b) or (c), either (A) obtaining the consent of such PLP or (B) offering such\nPLP the opportunity (in lieu of accepting such change) to elect to retire from\nGS Group immediately prior to the consummation of the Incorporation Transactions\nand receive payment in respect of the value of such PLP's interests in\naccordance with the GS Group Partnership Agreement, (ii) an amendment shall not\nbe binding upon an RLP if it would (a) change the percentages of Adjusted\nCapital used for calculating the number of shares of Common Stock, principal\namount of debentures or amount of cash to be received by such RLP under clauses\n1 through 4 of Section 3.A above, (b) change the provisions of any Junior\nSubordinated Nontransferable Debentures to be received by such RLP from those\nset forth in Exhibit E, or (c) change this Plan to lengthen or otherwise change\nthe RLP Transfer Restrictions, in each case referred to in clause (a), (b) or\n(c), in a manner that is materially adverse to such RLP without either (A)\nobtaining the consent of such RLP or (B) offering such RLP the opportunity (in\nlieu of accepting such change) to elect to retire from GS Group immediately\nprior to the consummation of the Incorporation Transactions and receive payment\nin respect of the value of such RLP's interests in accordance with the GS Group\nPartnership Agreement, (iii) an amendment to this Plan shall not be binding on\nSBCM if such amendment (a) effects a modification to this Plan that makes this\nPlan, as so modified, inconsistent with Section 5 of Article II of the GS Group\nPartnership Agreement (which provides for terms upon which a plan for the\nincorporation of the business of GS Group may be adopted without the consent of\nSBCM), without obtaining the consent of SBCM or (b) effects a modification to\nSection 11 (Release and Indemnification Arrangements) or Section 16 (Other --\nRelease) hereof that (A) materially and adversely effects SBCM's rights under\nthis Plan and (B) is not of general applicability to all parties who are subject\nto the Section modified, and (iv) an amendment to this Plan shall not be binding\non KAA if such amendment (a)\n\n\n                                      -22-\n   27\neffects a modification to this Plan that makes this Plan, as so modified,\ninconsistent with Section 5 of Article VI and Section 5 of Article II of the GS\nGroup Partnership Agreement (which provides for terms upon which a plan for the\nincorporation of the business of GS Group may be adopted without the consent of\nKAA), without obtaining the consent of KAA or (b) effects a modification to\nSection 11 (Release and Indemnification Arrangements) or Section 16 (Other --\nRelease) hereof that (A) materially and adversely effects KAA's rights under\nthis Plan and (B) is not of general applicability to all parties who are subject\nto the Section modified.\n\n         Following consummation of the Plan, the Board of Directors of GS Inc.\nmay waive or amend any aspect of the Plan that has not yet been completed or\nreflected in a separate agreement but any such amendment shall not be binding\nupon a PLP or an RLP if it would be materially adverse to such PLP or RLP unless\nthe consent of such PLP or RLP has been obtained. The PLP Transfer Restrictions\nand RLP Transfer Restrictions may be waived as provided in \"Section 7 - Certain\nTransfer Restrictions on Shares.\"\n\n\n                              14. TAX CONSEQUENCES\n\nTREATMENT OF PLPS WHO PARTICIPATE IN THIS PLAN\n\n         The Incorporation Transactions have been structured so that a PLP who\nreceives solely Common Stock in exchange for such PLP's interest in GS Group and\nits affiliates will not recognize income, gain or loss for U.S. federal income\ntax purposes, except in certain limited circumstances described below. The\ncontributions of interests in GS Group and its affiliates to GS Inc. for Common\nStock will qualify as tax-free contributions to a controlled corporation under\nSection 351 of the United States Internal Revenue Code of 1986, as amended (the\n\"Code\"), and the mergers of GS Corp. and certain corporations that are PLPs into\nGS Inc. for Common Stock will qualify as tax-free reorganizations under Section\n368 of the Code. As a result, the following U.S. federal income tax consequences\nwill apply to a PLP that participates in this Plan:\n\n         Exchange of GS Group Interest for Common Stock. A PLP who exchanges\nsuch PLP's directly-held interests in GS Group and its affiliates solely for\nCommon Stock will not recognize gain or loss, subject to the discussion below\nregarding indemnification payments and certain consequences to nonresident alien\nPLPs. The PLP's basis in the Common Stock will be equal to the PLP's basis in\nthe interests transferred (calculated without regard to the PLP's share of any\nliabilities of GS Group or the affiliate).\n\n         Treatment of PLPs Who Hold Interests in GS Group through Corporations.\nA PLP who holds a PLP interest in GS Group through a wholly-owned corporation\nthat merges into GS Inc. (a \"PLP Corporation\") will not recognize gain or loss\non the exchange of such PLP's shares in the PLP Corporation for Common Stock.\nThe PLP's basis in the Common Stock will be the same as such PLP's basis in the\nshares of the PLP Corporation.\n\n\n                                      -23-\n   28\n         Exchange of Common or Preferred Stock in GS Corp. for Common Stock. A\nPLP who exchanges common or preferred stock in GS Corp. for Common Stock will\nnot recognize gain or loss on the exchange. The PLP's basis in the Common Stock\nwill be equal to the PLP's basis in the common or preferred stock of GS Corp.\nthat is exchanged therefor. PLPs who hold both common and preferred stock of GS\nCorp. will receive two separate lots of Common Stock so that the appropriate tax\nbasis may be assigned to each lot of Common Stock.\n\n         Treatment of Indemnification Payments. A PLP who receives an\nindemnification payment for a personal liability (such as income taxes) will be\nsubject to tax on such payment, generally at the time it is received. A portion\nof the payment will be treated as interest (determined by discounting the\npayment back to the IPO Date), and the remainder generally will be treated as\ncapital gain.\n\n         Treatment of Certain Nonresident Alien PLPs. A PLP who is a nonresident\nalien and who exchanges a directly-held interest in GS Group or an affiliate\nsolely for Common Stock will be subject to U.S. tax on the portion of such PLP's\ngain that is attributable to such PLP's proportionate share of the U.S. real\nproperty interests held by GS Group and its lower-tier partnerships or the\naffiliate. The gain generally will be taxable as capital gain.\n\nNONRESIDENT PLPS\n\n         A PLP who is not a resident of the United States may be subject to\ndifferent tax treatment in such PLP's residence country.\n\nTAX OPINION\n\n         Consummation of this Plan will be conditioned upon receipt of an\nopinion of Sullivan &amp; Cromwell to the effect that a PLP who receives solely\nCommon Stock in exchange for such PLP's interests in GS Group and, if\napplicable, its affiliates will not recognize income, gain or loss for U.S.\nfederal income tax purposes in respect of the transfers of those interests to GS\nInc., except to the extent described above with respect to certain nonresident\nalien PLPs and the treatment of indemnification payments.\n\nTAX REPRESENTATIONS\n\n         In order to ensure compliance with requirements for tax-free treatment,\nall PLPs who or which participate in this Plan are required to make the\nrepresentations set forth in Exhibit M, including representations to the effect\nthat (1) the PLP does not currently have any agreement, whether written or oral,\nto dispose of the Common Stock, (2) at the time of the Incorporation\nTransactions, the PLP will not have any agreement, whether written or oral, to\ndispose of the Common Stock and (3) for all tax purposes, the PLP will treat the\nexchange of the PLP's interest in GS Group and, if applicable, its affiliates\nfor Common Stock as a transaction governed by Section 351 of the Code, the\nmerger of GS Corp. into GS Inc. as a transaction governed by Section 368 of\n\n\n                                      -24-\n   29\nthe Code and, if the PLP owns an interest in GS Group through a PLP Corporation\nthat is merging into GS Inc., the merger of the PLP Corporation into GS Inc. as\na transaction governed by Section 368 of the Code. The other constituencies,\nincluding RLPs, who or which participate in this Plan will be required to make\nsimilar representations.\n\nTREATMENT OF PLPS WHO DO NOT PARTICIPATE IN THIS PLAN\n\n         A PLP interested in the tax consequences of not fully participating in\nthis Plan and retiring as a partner in GS Group should contact Esta Stecher in\nthe Tax Department.\n\nFURTHER INFORMATION\n\n         Any PLP with questions concerning the tax treatment of this Plan or who\nwould like a more detailed explanation of the tax consequences (including the\nconsequences under the tax laws of any state or foreign country) should contact\nEsta Stecher in the Tax Department.\n\n\n                            15. MANAGEMENT OF GS INC.\n\n         The Amended and Restated Certificate of Incorporation of GS Inc. will\nprovide for a classified Board of Directors consisting of three classes. It is\nanticipated that at the IPO Date a majority of the Board will be drawn from the\ncurrent members of the Board of Directors of GS Corp. Beginning in 2000, at each\nannual meeting of shareholders, directors will be elected for three-year terms\nand until their respective successors have been elected and qualified. A\ndirector may be removed only for cause and only by the affirmative vote of the\nholders of not less than 80% of the outstanding shares of capital stock entitled\nto vote in the election of directors.\n\n         GS Inc. will enter into an indemnification agreement in the form\nattached as Exhibit L with each director of GS Inc. and each officer of GS Inc.\nwho signs the registration statement for the IPO and the other registration\nstatements to be filed by GS Inc., to indemnify them for actions taken in\nconsummating the transactions contemplated by this Plan..\n\n\n                                    16. OTHER\n\nARBITRATION\n\n         Without diminishing the finality and conclusive effect of any\ndetermination by the General Partner (or its Board of Directors) or by GS Inc.\n(or its Board of Directors) of any matter under this Plan which is provided\nherein to be determined by the General Partner (or its Board of Directors) or by\nGS Inc. (or its Board of Directors) or of the waiver referred under \"Section 16\n- Other Waiver\", any dispute, controversy or claim arising out of or relating to\nor concerning the provisions of this Plan or any of the Exhibits to this Plan\n(other than any Exhibit that contains its own\n\n\n                                      -25-\n   30\nprovisions for the resolution of disputes and other than Exhibit B (Amended and\nRestated Certificate of Incorporation of GS Inc.) and Exhibit C (By-Laws of GS\nInc.), shall be finally settled by arbitration in New York City before, and in\naccordance with the rules then obtaining of, the New York Stock Exchange, Inc.\n(\"NYSE\") or, if the NYSE declines to arbitrate the matter, the American\nArbitration Association (\"AAA\") in accordance with the commercial arbitration\nrules of the AAA; provided, however, that, (i) notwithstanding the foregoing, in\naddition to the right to compel arbitration of any dispute or controversy, GS\nInc., GS Corp. or GS Group may bring an action or special proceeding in a state\nor federal court of competent jurisdiction sitting in New York City, whether or\nnot an arbitration proceeding has theretofore been or is ever initiated, for the\npurpose of temporarily, preliminarily, or permanently enforcing the provisions\nof this Plan or to enforce an arbitration award and, for the purposes of this\nprovision, each participant in this Plan expressly consents to the jurisdiction\nof any such court in respect of any such action and waives to the fullest extent\npermitted by applicable law any objection to personal jurisdiction or to the\nlaying of venue of any such suit, action or proceeding in such court, agrees\nthat proof shall not be required that monetary damages for breach of the\nprovisions of this Plan would be difficult to calculate and that remedies at law\nwould be inadequate and irrevocably appoints the General Counsel of GS Inc. and\nGS Corp., as the participant's agent for service of process in connection with\nany such action or proceeding, who shall promptly advise such participant in\nthis Plan of any such service of process and (ii) any dispute between GS Group\nand SBCM or KAA which is subject to the provisions of Article II, Section 9,\nArticle VI, Section 9 or Article VII, Section 9 of the GS Group Partnership\nAgreement shall be resolved as provided in the applicable section.\n\nDETERMINATIONS UNDER PLAN\n\n         Each person participating in this Plan agrees that the Board of\nDirectors of GS Corp. and, following the merger of GS Corp. into GS Inc., the\nBoard of Directors of GS Inc. shall have the right to make all determinations\nunder this Plan and each Exhibit to this Plan and each Annex to the notice of\nsubmission of this Plan to RLPs (other than matters reserved for the\ndetermination of the Shareholders' Committee under the Shareholders' Agreement).\n\nGS GROUP PARTNERSHIP AGREEMENT\n\n         If adopted, this Plan shall constitute an amendment to the GS Group\nPartnership Agreement and the provisions of this Plan, to the extent that they\nare inconsistent with the GS Group Partnership Agreement will control. The\nprovisions of the GS Group Partnership Agreement will continue to apply to all\npartners until the IPO Date. Moreover, the covenants in the GS Group Partnership\nAgreement which apply to RLPs and PLPs will continue to apply to such RLPs and\nPLPs until the expiration of any applicable time period specified therein. These\ncovenants include provisions relating to confidentiality, noncompetition and\nnonsolicitation. PLPs and RLPs who retire as partners in GS Group rather than\nparticipate in this Plan will continue to be subject to the relevant provisions\nof the GS Group Partnership Agreement as currently in effect. For all purposes\nhereof, a deceased PLP (or the estate of a deceased PLP) will continue to be\ntreated as a PLP under this Plan.\n\n\n\n                                      -26-\n   31\nABANDONMENT AND TERMINATION OF PLAN\n\n         This Plan may be abandoned at any time by the General Partner. If the\nIPO has not been consummated by November 24, 2000, unless re-approved, this Plan\nwill be automatically abandoned and will be of no further force and effect.\n\nWAIVER\n\n         Under the terms of the GS Group Partnership Agreement, each partner in\nGS Group (whether or not consenting), has irrevocably waived any right to\ncontest the terms of this Plan, whether on the grounds of unequal or disparate\ntreatment, inconsistency or conflict with the terms and provisions of the GS\nGroup Partnership Agreement, unfairness or for any other reason.\n\nRELEASE\n\n         Each person (other than GS Inc., GS Corp. and GS Group) participating\nin this Plan will, by virtue of such participation, irrevocably release GS Inc.,\nGS Corp., GS Group, each and every affiliate, shareholder, subsidiary, partner,\nofficer, member, director and employee of GS Inc., GS Corp. and GS Group and\ntheir affiliates in their capacities as such and each other person who\nparticipates in this Plan (\"Releasees\") from any claims, liabilities, costs,\nexpenses, actions, suits or demands however arising, whether at law or in\nequity, contingent, known or unknown, which any such person may have or assert,\nin respect of any interest in GS Group and its affiliates or arising out of any\npartnership or employment relationship with GS Group and its affiliates that\nsuch person or such person's heirs, successors or assigns had with any such\nperson on or prior to the IPO Date; provided that this release shall not extend\nto (i) indebtedness owing to a person participating in this Plan by any\nReleasee, (ii) representations or warranties made or agreements entered into by\na Releasee in connection with the Plan, and (iii) any conduct that resulted from\na Releasee's bad faith, fraud or criminal act or omission.\n\nREPRESENTATIONS AND WARRANTIES\n\n         Each person participating in this Plan will, by virtue of such\nparticipation, be deemed to make certain representations and warranties with\nrespect to: (a) such person's intention regarding ownership of the stock and\ncertain other matters upon which tax counsel can rely in rendering its opinion\nregarding the tax consequences of this Plan; (b) certain securities law matters;\n(c) ownership of partnership interests by such person and (d) other matters,\nwhich are attached as Exhibit M for PLPs and are annexed to the notice of\nsubmission for RLPs. Each person who elects to participate in this Plan agrees,\nif so requested by the General Partner, to make additional representations and\nwarranties.\n\n\n\n                                      -27-\n   32\nRIGHT OF GENERAL PARTNER OR GS INC. TO MAKE SPECIAL ARRANGEMENTS\n\n         The transactions included in this Plan have been structured in a manner\nthat is expected not to result in a significantly disproportionate tax or other\nburden to any partner participating in this Plan in any jurisdiction. If it\ndevelops that the consummation of this Plan would, in fact, have (or had) such\nan impact, the General Partner and GS Inc. will have the right, but not the\nobligation, at any time either before or after the IPO Date to make special\narrangements with any person participating in this Plan or such person's estate\nor legal representative (including special payments) to ameliorate, in whole or\nin part, such adverse impact. Each person participating in this Plan recognizes,\nacknowledges and agrees that this paragraph shall not create any right on the\npart of such person to any such special arrangement or accommodation.\n\n         Each person participating in this Plan hereby waives, and each future\nstockholder of GS Inc. will be deemed to have waived, any right to object to a\ndecision by the General Partner or the Board of Directors of GS Inc. to make\nsuch special arrangements.\n\nREGISTRATION OF CERTAIN SECURITIES FOR RESALE\n\n         As part of this Plan, GS Inc. proposes to issue certain securities\nwhich have not been registered under the Securities Act of 1933 and recognizes\nthat in certain circumstances it may be desirable that some or all of such\nsecurities and other securities be registered for sale or resale under such Act.\nA term sheet relating to the undertakings of GS Inc. under such circumstances is\nattached as Exhibit N. Accordingly, it is acknowledged as part of this Plan that\nif GS Inc. determines to so register such securities under such Act, GS Inc.\nwill undertake responsibility for representations and warranties, covenants,\npayment of expenses, satisfaction of closing conditions and indemnification and\ncontribution which are customarily found in registration rights agreements. The\nobligation of GS Inc. to assume responsibility for the matters referred to in\nthe preceding sentence shall be subject, however, to the determination by GS\nInc. in its sole discretion to register such securities in the first instance.\n\n         Each person participating in this Plan hereby waives, and each future\nstockholder of GS Inc. will be deemed to have waived, any right to object to a\ndecision by the General Partner or the Board of Directors of GS Inc. to assume\nsuch responsibilities.\n\nBENEFIT\n\n         Nothing in this Plan, express or implied, is intended or shall be\nconstrued to confer upon or give to any person other than GS Group, GS Corp., GS\nInc. and, to the extent expressly provided herein, the PLPs, the RLPs, any other\nperson participating in this Plan, SBCM and KAA, any remedy or claim under or by\nreason of this Plan or any term, covenant or condition hereof, all of which\nshall be for the sole and exclusive benefit of the parties mentioned above in\nthis paragraph; except that the provision set forth above in this Section 16\nunder \"Release\" shall be enforceable by the Releasee's mentioned therein.\n\n\n                                      -28-\n   33\nHEADINGS\n\n         The headings of the Sections of this Plan are inserted as a matter of\nconvenience and for reference purposes only, are of no binding effect, and in no\nrespect define, limit or describe the scope of this Plan or the intent of any\nSection.\n\nNOTICES\n\n         Any notices, demands, requests and other communications required or\npermitted to be given to a PLP, RLP, SBCM, KAA or other participant in this Plan\nshall be deemed duly given if communicated directly or if sent to the address of\nsuch party as set forth on the records of GS Group, GS Corp. or GS Inc.\n\nEXHIBITS\n\n         All Exhibits to this Plan shall be deemed part of this Plan and\nincorporated herein, where applicable, as if fully set forth herein.\n\nENTIRE AGREEMENT\n\n         This Agreement, including the Exhibits hereto, represents the entire\nunderstanding and agreement among GS Group, GS Corp., GS Inc., the PLPs, the\nRLPs, SBCM, KAA and the other participants herein with respect to the subject\nmatter hereof, and supersedes all prior negotiations among such parties hereto\nwith respect to such subject matter. Each PLP consenting to this Plan and RLP or\nother person who accepts this Plan expressly agrees that none of GS Group, GS\nCorp. or GS Inc. has made any representations, warranties, promises or\ninducements in connection with this Plan other than as provided herein.\n\nGOVERNING LAW\n\n         THIS PLAN WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS\nOF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS,\nEXCEPT TO THE EXTENT THAT THIS PLAN REPRESENTS AN AMENDMENT TO THE GS GROUP\nPARTNERSHIP AGREEMENT, IN WHICH EVENT SUCH AMENDMENT WILL BE GOVERNED BY\nDELAWARE LAW, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. THE GENERAL\nPARTNER IS EXPRESSLY AUTHORIZED TO MAKE ANY CHANGES TO THIS GOVERNING LAW\nPROVISION AND THE GOVERNING LAW PROVISIONS OF ANY EXHIBIT AS IT SHALL DEEM\nNECESSARY OR DESIRABLE PRIOR TO THE IPO DATE.\n\nGS INC. TO BE BOUND BY PLAN\n\n         By executing a copy of this Plan, GS Inc. agrees to be bound by all of\nthe provisions of this Plan (and related documents and agreements) applicable to\nit, either directly or as a result of the mergers of GS Corp. and GS Group into\nGS Inc. It is further agreed as part of this Plan that GS Inc.\n\n\n                                      -29-\n   34\nshall have the benefit of and shall be entitled to enforce all of its rights\nunder this Plan (and related documents and agreements) applicable to it, either\ndirectly or as a result of the mergers of GS Corp. and GS Group into GS Inc.\n\n\n               17. DOCUMENTS PLPs AND RLPs ARE BEING ASKED TO SIGN\n\nGENERAL POWER OF ATTORNEY\n\n         Each PLP will be furnished a Consent Document and Power of Attorney and\neach RLP will be furnished an Acceptance Document and Power of Attorney (each, a\n\"Document\"). For each PLP, the applicable Document is the document by which such\nPLP will cast such PLP's vote on whether this Plan should be adopted and, if\nthis Plan is adopted, by which such PLP may elect to participate in this Plan,\nor, alternatively, to retire under the GS Group Partnership Agreement. For each\nRLP, the applicable Document is the document by which such RLP may elect to\nparticipate in this Plan, or, alternatively, to retire under the GS Group\nPartnership Agreement. Each PLP and each RLP who elects to participate in this\nPlan by executing the applicable Document will thereby become a party to this\nPlan.\n\n         In addition, for those PLPs and RLPs who do not elect to retire, the\napplicable Document includes their power of attorney authorizing designated\nofficers of the Firm to take all actions on their behalf to implement this Plan\nand related arrangements and execute Exhibits and other documents on their\nbehalf.\n\n         Each PLP and RLP electing to participate in this Plan must execute the\napplicable Document. If, as GS Corp. anticipates, this Plan is adopted and a PLP\nor RLP fails to execute and deliver the applicable Document by 5:00 p.m., New\nYork City time, on March 15, 1999, such PLP or RLP, as the case may be, will be\ntreated the same as a PLP or RLP who elects to retire.\n\nPARTNER, STOCKHOLDER AND MEMBER ACTION\n\n         Without limiting the authority conferred above under \"General Power of\nAttorney\", each PLP, each RLP and each other person participating in this Plan\nin the capacity as a partner, stockholder, member or other owner of an entity\nwhich is the subject of this Plan hereby authorizes such attorney-in-fact under\nthe applicable foregoing Document to take all action on the following matters to\nthe extent such action is required (references are to portions of this Plan or\nan Exhibit where information on such matter may be found):\n\n                  a) Each of the actions, transactions and mergers listed on the\n         documents included as part of Exhibit A;\n\n                  b) Each of the actions listed in the applicable Document; and\n\n\n                                      -30-\n   35\n                  c) Approval of the Goldman Sachs employee benefit plans\n         described in Exhibit D under the caption \"Management.\"\n\nAGREEMENT TO ASSIST IN CONSUMMATING TRANSACTIONS\n\n         In addition to signing the applicable Document, each person\nparticipating in this Plan agrees that such person will execute and deliver, or\ncause to be executed and delivered, or to obtain and provide such additional\ninformation, documents, instruments and agreements as the General Partner or GS\nInc. may request in order to implement this Plan. Among other things, the\nGeneral Partner and GS Inc. may require additional information and documentation\nin connection with interests and securities held in trust or by related entities\nand in connection with transfers having a relationship to community property\njurisdictions.\n\n\n                   18. COPIES OF DOCUMENTS AND CONTACT PERSONS\n\n         From Friday, March 5 through Friday, March 12, copies of this Plan\n(including the current draft Form S-1 Registration Statement and all other\nexhibits hereto) will be made available for inspection by PLPs and RLPs at the\nfollowing times:\n\n          Weekdays from 9:00 a.m. (local time) until 5:00 p.m. (local time)\n\n          Weekends from noon (local time) until 5:00 p.m. (local time)\n\n(and otherwise by prior arrangement) at the following locations:\n\n                              Goldman, Sachs &amp; Co.\n                                   12th Floor\n                                 85 Broad Street\n                            New York, New York 10004\n                                c\/o James McHugh\n                                   (902-5738)\n\n                           Goldman Sachs International\n                                    3rd Floor\n                                  Daniel House\n                                140 Fleet Street\n                            London, EC4A 2BJ, England\n                               c\/o Therese Miller\n                                   (774-1315)\n\n                           Goldman Sachs (Japan) Ltd.\n                            ARK Mori Bldg. 6th Floor\n                             12-32, Akasaka 1-chome\n\n\n                                      -31-\n   36\n                           Minato-ku, Tokyo 107, Japan\n                               c\/o Haruko Watanuki\n                                   (3589-7091)\n\n                           Goldman Sachs (Asia) L.L.C.\n                      35th Floor Asia Pacific Finance Tower\n                                 Citibank Plaza\n                                  3 Garden Road\n                                Central Hong Kong\n                                 c\/o Pamela Root\n                                   (2978-0655)\n\n\n         Financial, tax, legal and other personnel will be available at the PLP\nmeeting on Monday, March 8 and the RLP meetings on Tuesday, March 9 and\nThursday, March 11 to answer questions concerning this Plan.\n\n         UNLESS OTHERWISE DESIGNATED, THE SECURITIES OF GS INC. TO BE\nDISTRIBUTED OTHER THAN IN THE IPO HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER\nTHE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES OR BLUE SKY LAWS\nOF ANY STATE OR OTHER JURISDICTION NOR HAS THE SECURITIES AND EXCHANGE\nCOMMISSION OR THE REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION PASSED\nUPON THE ACCURACY OR ADEQUACY OF THIS PLAN OR ANY OTHER DOCUMENT IN CONNECTION\nHEREWITH OR RECOMMENDED THE APPROVAL OF THIS PLAN OR THE ACQUISITION OF ANY SUCH\nSECURITIES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.\n\n         IN MAKING A DECISION TO PARTICIPATE IN THIS PLAN AND ACQUIRE GS\nINC. SECURITIES, PLPS AND RLPS MUST RELY ON THEIR OWN EXAMINATION OF\nGS INC.\n\n\n\n                                      -32-\n   37\n                            AMENDMENT AND RESTATEMENT\n\n         On April   , 1999 this Plan was amended and restated. In effecting such\namendment and restatement provisions which spoke prospectively at the time this\nPlan was originally submitted to the PLPs were not generally revised to reflect\nthe taking or omission of actions or the occurrence of events subsequent to the\nsubmission of the Plan to the PLPs or to reflect changes in the terms of any\nExhibit the provisions of which are described or summarized in the Plan. The\namendment and restatement is not intended to create any implication that actions\nor events which had not been taken or had not occurred at the time of such\nsubmission and that are referred to in this amended and restated Plan as to have\nbeen taken or to occur prospectively were not taken or did not occur prior to\nsuch amendment and restatement. Similarly, where such actions were taken or did\noccur, the existence of the prospective references in this amended and restated\nPlan shall not create any implication that such actions or events must or are\nexpected to be retaken or to occur again following the date of this amended and\nrestated Plan. Moreover, the terms and provisions of each Exhibit in the form\nultimately adopted, executed or delivered supercede the terms and provisions of\nany previous form of such Exhibit and any description or summary of such terms\nor provisions contained in the Plan or the Plan as amended or restated.\n\n\n                                      -33-\n   38\n                                      * * *\n\n                                 ACKNOWLEDGEMENT\n\n\n         By executing this Plan, the undersigned agree that this Plan shall\nconstitute an agreement among GS Group, GS Corp., as General Partner of GS\nGroup, GS Inc. the PLPs consenting to this Plan, SBCM, KAA, the RLPs and certain\nformer partners accepting this Plan and, as provided above, an amendment to the\nGS Group Partnership Agreement.\n\n                                       THE GOLDMAN SACHS CORPORATION\n\n   \n                                       By: \/s\/ Gregory K. Palm\n                                          _________________________________\n                                             Name: Gregory K. Palm\n                                             Title: General Counsel\n\n\n                                       THE GOLDMAN SACHS GROUP, L.P.\n\n                                       By: The Goldman Sachs Corporation\n\n\n                                                By: \/s\/ Gregory K. Palm\n                                                   ____________________________\n                                                      Name: Gregory K. Palm\n                                                      Title: General Counsel\n\n\n                                       THE GOLDMAN SACHS GROUP, INC.\n\n\n                                       By: \/s\/ Gregory K. Palm\n                                          _________________________________\n                                             Name: Gregory K. Palm\n                                             Title: General Counsel\n    \n\n\n\n                                      -34-\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7660],"corporate_contracts_industries":[9418],"corporate_contracts_types":[9573,9575],"class_list":["post-41661","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-goldman-sachs-group-inc","corporate_contracts_industries-financial__securities","corporate_contracts_types-formation","corporate_contracts_types-formation__incorporation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41661"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41661"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41661"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}