Exhibit 10.11

 

1999 NEUBERGER BERMAN INC.

LONG-TERM INCENTIVE PLAN

RESTATED AS OF NOVEMBER 8, 2007

 

 

ARTICLE I

PURPOSES

 

The purposes of the 1999 Neuberger Berman Inc. Long-Term Incentive Plan (the
“Plan”) are to foster and promote the long-term financial success of the Company
and materially increase shareholder value by (a) motivating superior performance
by means of performance-related incentives, (b) encouraging and providing for
the acquisition of an ownership interest in the Company by Employees and
(c) enabling the Company to attract and retain the services of outstanding
employees upon whose judgment, interest and special effort the successful
conduct of its operations is largely dependent.

 

ARTICLE II

DEFINITIONS

 

2.1  Certain Definitions.  Capitalized terms used herein without definition
shall have the respective meanings set forth below:

 

“Act” means the Securities Exchange Act of 1934, as amended.

 

“Adjustment Event” means any stock dividend, stock split, share combination,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares or other
similar event affecting the Common Stock of the Company.

 

“Award” means any Option, Restricted Stock, Restricted Unit, Incentive Stock,
Incentive Unit, Deferred Share, Supplemental Unit or any combination thereof,
including Awards combining two or more types of Awards in a single grant.

 

“Board” means the Board of Directors of the Company.

 

“Cause” means any of:

 

(a)  the Participant’s having been convicted of, or entered a plea of nolo
contendere to, a crime that constitutes a felony or a misdemeanor involving
fraud, false statements or misleading omissions, perjury, embezzlement, bribery,
forgery or counterfeiting or other similar crime (or an equivalent charge in
jurisdictions that do not use such designations);

 

(b)  the willful failure by the Participant (other than due to physical or
mental illness) to perform substantially his duties as an employee of the
Company or any Subsidiary after reasonable notice to the Participant of such
failure;

 

 

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(c)  the Participant’s violation of any securities or commodities laws, any
rules or regulations issued pursuant to such laws, or the rules and regulations
of any securities or commodities exchange or association of which the Company or
any of its Subsidiaries or affiliates is a member;

 

(d)  the Participant’s violation of any Company policy concerning hedging or
confidential or proprietary information, or material violation of any other
Company policy as in effect from time to time;

 

(e)  the Participant’s engaging in any act or making any statement which
impairs, impugns, denigrates, disparages or negatively reflects upon the name,
reputation or business interests of the Firm; or

 

(f)  the Participant’s engaging in any conduct that is injurious to the Company
or any Subsidiary; or

 

(g)  the breach by the Participant of any written covenant or agreement with the
Company or any Subsidiary not to disclose any information pertaining to the
Company or any Subsidiary or not to compete or interfere with the Company or any
Subsidiary.

 

The determination as to whether “Cause” has occurred shall be made by the
Committee.  The Committee shall also have the authority to waive the
consequences under the Plan of the existence or occurrence of any of the events,
acts or omissions constituting “Cause.”

 

“Change in Control” means, with respect to any Award granted on or prior to
November 8, 2007, the occurrence of any of the following events:

 

(a)  the members of the Board at the beginning of any consecutive twenty-four
calendar month period (the “Incumbent Directors”) cease for any reason other
than due to death to constitute at least a majority of the members of the Board,
provided that any director whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a majority of the
members of the Board then still in office who were members of the Board at the
beginning of such twenty-four calendar month period other than as a result of a
proxy contest, or any agreement arising out of an actual or threatened proxy
contest, shall be treated as an Incumbent Director; or

 

(b)  any “person,” including a “group” (as such terms are used in Sections
13(d) and 14(d)(2) of the Act), but excluding the Company, any Subsidiary or any
employee benefit plan of the Company or any Subsidiary becomes the “beneficial
owner” (as defined in Rule 13(d)-3 under the Act), directly or indirectly, of
securities of the Company representing 50% or more of the

 

 

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combined voting power of the Company’s then outstanding securities; or

 

(c)  the stockholders of the Company shall approve a definitive agreement
(i) for the merger or other business combination of the Company with or into
another corporation, a majority of the directors of which were not directors of
the Company immediately prior to the merger and in which the stockholders of the
Company immediately prior to the effective date of such merger own a percentage
of the voting power in such corporation that is less than one-half of the
percentage of the voting power they owned in the Company immediately prior to
such transaction or (ii) for the sale or other disposition of all or
substantially all of the assets of the Company to any other entity; provided, in
each case, that such transaction shall have been consummated; or

 

(d)  the purchase of Common Stock pursuant to any tender or exchange offer made
by any “person,” including a “group” (as such terms are used in Sections
13(d) and 14(d)(2) of the Act), other than the Company, any Subsidiary, or an
employee benefit plan of the Company or any Subsidiary, for 50% or more of the
Common Stock of the Company; or

 

(e) an event that would constitute a “Change in Control” within the meaning of
Section 2(g) in the Lehman Brothers Holdings Inc. 2005 Stock Incentive Plan.

 

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to
occur in the event the Company files for bankruptcy, liquidation or
reorganization under the United States Bankruptcy Code.

 

“Change in Control” means, with respect to any Award granted after November 8,
2007, the occurrence of an event that would constitute a “Change in Control”
within the meaning of Section 2(g) in the Lehman Brothers Holdings Inc. 2005
Stock Incentive Plan.

 

“Change in Control Price” means the highest price per Share offered in
conjunction with any transaction resulting in a Change in Control (as determined
in good faith by the Committee (as constituted before the Change in Control) if
any part of the offered price is payable other than in cash) or, in the case of
a Change in Control occurring solely by reason of a change in the composition of
the Board, the highest Fair Market Value of the Stock on any of the 30 trading
days immediately preceding the date on which a Change in Control occurs.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.

 

“Committee” means the Compensation Committee of the Board, or when section
162(m) of the Code or Rule 16b promulgated under the Act would require action to
be taken by a committee of “outside directors” or “Non-

 

 

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Employee Directors,” as the case may be, the “Committee” shall be deemed to
refer to a subcommittee of the Compensation Committee that consist of two or
more members meeting such requirements, or the full Board in the absence of such
a subcommittee.

 

“Common Stock” means the common stock of the Company, par value $0.01 per share.

 

“Company” means Neuberger Berman Inc., a Delaware corporation, and any successor
thereto.

 

“Deferred Share” means the deferred share units that confer upon a Participant
the right to receive shares of Common Stock at the end of a specified deferral
period as set forth in Article VIII.

 

“Disability” means a total disability within the meaning of any long-term
disability plan maintained for the benefit of the Participant or, if the
Participant is not covered by such a disability plan, then as determined by the
Committee.

 

“Dividend Equivalents” means dividends paid by the Company with respect to
Shares corresponding to Awards awarded under the Plan.

 

“Employee” means any officer or employee of the Company or any Subsidiary.

 

“Executive Officer” means those persons who are officers of the Company within
the meaning of Rule 16a-1(f) promulgated under the Act.

 

“Fair Market Value” means, as of any date of determination, the closing price of
a Share on the New York Stock Exchange (or on such other recognized market or
quotation system on which the trading prices of Common Stock are traded or
quoted at the relevant time).  In the event that there are no Common Stock
transactions reported on such exchange or system on such date, Fair Market Value
shall mean the closing price of a Share on the immediately preceding day on
which Common Stock transactions were so reported.  Notwithstanding the
foregoing, with respect to any Award which becomes effective upon the closing of
the Initial Public Offering, Fair Market Value shall mean the initial price at
which a Share is offered to the public pursuant to the Initial Public Offering.

 

“Incentive Stock” shall mean an award of Common Stock that is forfeitable until
the completion of specified Performance Criteria as provided for in Section 7.1.

 

“Incentive Unit” shall mean a contractual right to receive Common Stock (or cash
based on the Fair Market Value of Common Stock) until the completion of
specified Performance Criteria as provided for in Section 7.1.

 

“Initial Public Offering” shall mean the first offering of the Common Stock to
the general public pursuant to an underwritten public offering.

 

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“Normal Retirement” means a termination of the Participant’s employment under
circumstances that the Committee determines as qualifying as retirement at
normal retirement age for purposes of the Plan and not inconsistent with the
treatment of the Participant under other Company plans.

 

“Option” means the right to purchase Common Stock at a stated price for a
specified period of time.

 

“Participant” means any director, Employee, or prospective Employee of, or any
consultant or advisor to, the Company designated by the Committee to receive an
Award under the Plan.

 

“Performance Period” means each calendar year or multi-year cycle as determined
by the Committee.

 

“Period of Restriction” means the period during which a Restricted Stock or
Restricted Unit is subject to forfeiture.

 

“Plan” means this 1999 Neuberger Berman Inc. Long-Term Incentive Plan, as the
same may be amended from time to time.

 

“Qualifying Termination of Employment” means a termination of a Participant’s
employment with the Company or any of its Subsidiaries by reason of the
Participant’s death, Disability, early retirement with the consent of the
Committee or Normal Retirement.

 

“Restricted Stock” means an award of Common Stock made pursuant to Section 6.1
that is forfeitable by the Participant until the completion of a specified
period of future service or until otherwise determined by the Committee or in
accordance with the terms of the Plan.

 

“Restricted Unit” means a contractual right to receive Common Stock, or cash
based on the Fair Market Value of Common Stock, made pursuant to Section 6.1
that is forfeitable by the Participant until the completion of a specified
period of future service or until otherwise determined by the Committee or in
accordance with the terms of the Plan.

 

“Retirement” means termination of a Participant’s employment on or after the
Normal Retirement Date or, with the Committee’s approval, on or after any early
retirement date established under any retirement plan maintained by the Company,
or any Subsidiary in which the Participant participates.

 

“Share” means a share of Common Stock.

 

“Subsidiary” means any corporation in which the Company owns, directly or
indirectly, stock representing 50% or more of the voting power of all classes of
stock entitled to vote and any other business organization, regardless of form,
in which the Company possesses directly or indirectly 50% or more of the total
combined equity interests in such organization.

 

 

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2.2  Additional Definitions.

 

“Alternative Award” has the meaning given in Section 9.2.

 

“Deferred Amount” has the meaning given in Section 8.1.

 

“ISOs” has the meaning given in Section 5.1.

 

“NSOs” has the meaning given in Section 5.1.

 

“Performance Restriction” has the meaning given in Section 7.2(a).

 

“Permitted Transferees” has the meaning given in Section 12.1.

 

“Reload Options” has the meaning given in Section 5.5.

 

“Supplemental Unit” has the meaning given in Section 8.1.

 

2.3  Gender and Number.  Except when otherwise indicated by the context, words
in the masculine gender used in the Plan shall include the feminine gender, the
singular shall include the plural, and the plural shall include the singular.

 

ARTICLE III

POWERS OF THE COMMITTEE

 

3.1  Power to Grant.  The Committee shall determine the Participants to whom
Awards shall be granted, the type or types of Awards to be granted and the terms
and conditions of any and all such Awards.  The Committee may establish
different terms and conditions for different types of Awards, for different
Participants receiving the same type of Award and for the same Participant for
each Award such Participant may receive, whether or not granted at different
times.

 

3.2  Administration.  The Committee shall be responsible for the administration
of the Plan, including, without limitation, determining which Participants
receive Awards, what kind of Awards are made under the Plan and for what number
of shares, and the other terms and conditions of each such Award.  The Committee
shall have the responsibility of construing and interpreting the Plan and of
establishing and amending such rules and regulations as it may deem necessary or
desirable for the proper administration of the Plan.  Any decision or action
taken or to be taken by the Committee, arising out of or in connection with the
construction, administration, interpretation and effect of the Plan and of its
rules and regulations, shall, to the greatest extent permitted by applicable
law, be within its absolute discretion (except as otherwise specifically
provided herein) and shall be conclusive and binding upon the Company and its
Subsidiaries, all Participants and any person claiming under or through any
Participant.  No term of this Plan relating to ISOs shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under section 422 of the Code.

 

3.3  Delegation by the Committee.  The Committee may delegate its authority
under this Plan; provided that the Committee shall in no event delegate its
authority with respect to the compensation of the Chief Executive Officer of the
Company, the four most highly compensated executive officers (as determined
under Section 162(m) of the Code and regulations thereunder) of the Company and
any other

 

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individual whose compensation the Board or Committee reasonably believes may
become subject to Section 162(m) of the Code.

 

ARTICLE IV

STOCK SUBJECT TO PLAN

 

4.1  Number.  Subject to the provisions of this Article IV, the number of Shares
subject to Awards under the Plan may not exceed 10,000,000 Shares, plus any
Shares that, after the effective date of the Plan, become available for Awards
under this Plan in accordance with Section 4.2 below.  Without limiting the
generality of the foregoing, whenever Shares are received by the Company in
connection with the exercise of or payment for any Award granted under the Plan
only the net number of Shares actually issued shall be counted against the
foregoing limit.  The

 

Shares to be delivered under the Plan may consist, in whole or in part, of
treasury stock or authorized but unissued Common Stock not reserved for any
other purpose.

 

4.2.  Canceled, Terminated, or Forfeited Awards.  Any Shares subject to any
Award granted hereunder which for any reason is canceled, terminated or
otherwise settled without the issuance of any Common Stock after the effective
date of this Plan shall be available for further Awards under the Plan.

 

4.3.  Adjustment in Capitalization.  In the event of any Adjustment Event such
that an adjustment is required to preserve, or to prevent enlargement of, the
benefits or potential benefits made available under this Plan, then the
Committee shall, in such manner as the Committee shall deem equitable, adjust
any or all of (a) the number and kind of Shares which thereafter may be awarded
or optioned and sold under the Plan (including, without termination, adjusting
the limits on the number and types of certain Awards that may be made under the
Plan), (b) the number and kinds of Shares subject to outstanding Options and
other Awards and (c) the grant, exercise or conversion price with respect to any
of the foregoing.  In addition, the Committee may make provisions for a cash
payment to a Participant or a person who has an outstanding Option or other
Award.  The number of Shares subject to any Option or other Award shall always
be a whole number.

 

ARTICLE V

STOCK OPTIONS

 

5.1  Grant of Options.  The Committee shall have the power to grant Options that
are “incentive stock options” within the meaning of section 422 of the Code
(“ISOs”) or that are non-statutory stock options (“NSOs”) to any Participant and
to determine (a) the number of ISOs and the number of NSOs to be granted to each
Participant and (b) the other terms and conditions of such Awards.  An Option
shall be an NSO unless otherwise specified by the Committee at the time of
grant.  The maximum number of Shares with respect to which Options may be
granted to any one Participant in any calendar year shall be 1,000,000, in the
case of 1999, and in the case of any subsequent year, 110% of the maximum
permitted for the immediately preceding calendar year.  Each Option shall be
evidenced by an Option agreement that shall specify (a) the type of Option
granted, (b) the number of Shares to which the Option pertains, (c) the exercise
price, (d) the period in which the Option may be exercised and

 

 

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(e) such terms and conditions not inconsistent with the Plan as the Committee
shall determine.

 

5.2  Exercise Price.  Unless otherwise determined by the Committee, Options
granted pursuant to the Plan shall have an exercise price that is not less than
the Fair Market Value of a Share on the date the Option is granted.

 

5.3  Exercisability.  Unless otherwise determined by the Committee, Options
awarded under the Plan shall vest and become exercisable in three equal annual
installments commencing on the second anniversary of the date such Options are
granted, subject to the Participant’s continuous employment with the Company or
a Subsidiary from the date of grant through the applicable vesting date.  No
Option shall be exercisable for more than 10 years after the date on which it is
granted.

 

5.4  Payment.  The Committee shall establish procedures governing the exercise
of Options.  Without limiting the generality of the foregoing, the Committee may
provide that payment of the exercise price may be made (a) in cash or its
equivalent,  (b) by exchanging Shares owned by the optionee (which are not the
subject of any pledge or other security interest), (c) through an arrangement
with a broker approved by the Company whereby payment of the exercise price is
accomplished with the proceeds of the sale of Common Stock or (d) by any
combination of the foregoing; provided that the combined value of all cash and
cash equivalents paid and the Fair Market Value of any such Common Stock so
tendered to the Company, valued as of the date of such tender, is at least equal
to such exercise price.  No Shares shall be delivered pursuant to any exercise
of an Option unless arrangements satisfactory to the Committee have been made to
assure full payment of the exercise price therefor and any required withholding
or other similar taxes or governmental charges.  Upon such terms and conditions
as the Committee may establish from time to time, a Participant may be permitted
to defer the receipt of Shares otherwise deliverable upon exercise of an Option.

 

5.5  Reload Options.  The Committee may provide that a Participant (or, if
applicable, his or her Permitted Transferee) who delivers Shares that have been
owned by such Participant (or Permitted Transferee) for any minimum period of
time specified by the Committee to exercise an Option (when the Fair Market
Value of Common Stock exceeds the exercise price of such Option) will
automatically be granted new Options (“Reload Options”) for a number of Shares
equal to the number of Shares so delivered.  Unless the Committee determines
otherwise, such Reload Options will be subject to the same terms and conditions
(including the same expiration date) as the related Option except (a) that the
exercise price shall initially be equal to the Fair Market Value of a Share on
the date such Reload Option is granted and (b) such Reload Option shall not be
exercisable prior to the six month anniversary of the date of grant and,
thereafter, shall be exercisable in full.

 

5.6  Termination of Employment.  Unless otherwise determined by the Committee at
or after the date of grant, in the event a Participant’s employment terminates
by reason of a Qualifying Termination of Employment, the Participant (or the
Participant’s beneficiary or legal representative) may exercise any Options
(regardless of whether then exercisable) until the earlier of (a) the
twelve-month anniversary of the date of such termination of employment and
(b) the date such Options would otherwise expire but for the operation of this
Section 5.6. Unless otherwise determined by the Committee at or after the date
of grant, in the event a

 

 

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Participant’s employment terminates for any reason other than a Qualifying
Termination of Employment, any Option granted to such Participant, whether or
not then exercisable, shall be forfeited and cancelled as of the date of such
termination of employment.

 

5.7  Buyout.  The Committee may at any time offer to buy out an Option
previously granted for a payment in cash, based on such terms and conditions as
the Committee shall establish and communicate to the optionee at the time that
such offer is made.

 

ARTICLE VI

RESTRICTED  STOCK AND RESTRICTED UNITS

 

6.1  Grant of Restricted Stock and Restricted Units.  The Committee shall have
the power to grant Restricted Stock or Restricted Units to any Participant and
to determine (a) the number of Shares of Restricted Stock and the number of
Restricted Units to be granted to each Participant, (b) the Restriction
Period(s) and (b) the other terms and conditions of such Awards. The Committee
shall require that the stock certificates evidencing any Restricted Stock or
Restricted Units be held in the custody of the Secretary of the Company until
the Period of Restriction lapses, and that, as a condition of any Restricted
Stock or Restricted Unit award, the Participant shall have delivered a stock
power, endorsed in blank, relating to the Share covered by such award.  Each
grant of Restricted Stock or Restricted Units shall be evidenced by a written
agreement setting forth the terms of such Award.

 

6.2  Vesting of Restricted Stock and Restricted Units.  Unless otherwise
determined by the Committee at or after the date of grant, Restricted Stock or
Restricted Units granted pursuant to Section 6.1 shall vest and become
nonforfeitable, and the Period of Restriction with respect to such Restricted
Stock or Restricted Units will lapse, in three equal annual installments
commencing on the second anniversary of the date of grant.

 

6.3  Dividend Equivalents.  (a)  Restricted Stock.  Unless otherwise determined
by the Committee at the time of grant, Participants holding outstanding
Restricted Stock shall be entitled to receive currently all Dividend Equivalents
paid with respect to such Shares of Restricted Stock.

 

(b)  Restricted Units.  The Committee will determine whether and to what extent
to credit to the account of, or to pay currently to, each recipient of a
Restricted Unit, any Dividend Equivalents.  To the extent provided by the
Committee at or after the date of grant, any cash Dividend Equivalents credited
to a Participant’s account shall be deemed to have been invested in Shares on
the record date established for the related dividend and, accordingly, a number
of Restricted Units shall be credited to such Participant’s account equal to the
greatest whole number which may be obtained by dividing (i) the value of such
Dividend Equivalent on the record date by (ii) the Fair Market Value of a Share
on such date.  Any additional Restricted Units credited in respect of Dividend
Equivalents shall become vested and nonforfeitable, if at all, on the same terms
and conditions as are applicable in respect of the Restricted Units with respect
to which such Dividend Equivalents were payable.

 

 

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6.4  Termination of Employment.  Unless otherwise determined by the Committee at
or after the date of grant, in the event a Participant’s employment terminates
by reason of a Qualifying Termination of Employment during the Period of
Restriction, a pro rata portion of any Shares related to a Restricted Stock or
Restricted Unit held by such Participant shall become nonforfeitable, based upon
the percentage of which the numerator is the portion of the Period of
Restriction that expired prior to the Participant’s termination and the
denominator is the number of days in the Period of Restriction. Unless otherwise
determined by the Committee at or after the date of grant, in the event a
Participant’s employment terminates for any reason other than a Qualifying
Termination of Employment during the Period of Restriction, any Restricted Stock
or Restricted Units held by such Participant shall be forfeited and cancelled as
of the date of such termination of employment.

 

6.5  Settlement of Restricted Units.  Unless the Committee determines otherwise
at or after the date of grant, when a Restriction Period with respect to an
Award of Restricted Units lapses and the Restricted Units become vested and
nonforfeitable, the Participant shall receive (i) one Share for each such
Restricted Unit (including additional Restricted Units credited in respect of
Dividend Equivalents) or (ii) if the Committee so determines, the Committee may
direct the Company to pay to the Participant the Fair Market Value of such
Shares as of such payment date.

 

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ARTICLE VII

INCENTIVE AWARDS

 

7.1  Grant of Incentive Stock and Incentive Units.  The Committee shall have the
authority to grant Incentive Stock or Incentive Units to any Participant and to
determine (a) the number of Incentive Stock and the number of Incentive Units to
be granted to each Participant, (b) the restrictions pursuant to which such
Award is subject to forfeiture by reason of the Performance Restriction
established by the Committee pursuant to Section 7.2 not being met in whole or
in part and (c) the other terms and conditions of such Awards.  Each grant of
Incentive Stock or Incentive Units shall be evidenced by a written agreement
setting forth the terms of such Award.

 

7.2  Performance Restriction.  (a)  Within 90 days after each Performance Period
begins (or such other date as may be required or permitted under Section 162(m),
if applicable), the Committee shall establish the performance objective or
objectives for the applicable Performance Period that must be satisfied in order
for an Award to be vested and nonforfeitable (the “Performance Restriction”). 
Any such Performance Restriction will be based upon the relative or comparative
achievement of one or more of the following criteria, as determined by the
Committee: (i) earnings per share on the Company’s Common Stock; (ii) growth in
the Company’s revenue; (iii) growth in the Company’s assets under management;
(iv) increase in the Company’s net income; (v) return on shareholder’s equity;
(vi) controlling expenses; and (vii) relative performance versus a peer group of
companies.

 

(b)  The Performance Restriction related to Incentive Stock or Incentive Units
shall lapse upon the determination by the Committee that the objective or
objectives for the applicable Performance Period have been attained, in whole or
in part. The Committee may provide at the time of grant that in the event the
objective or objectives are attained in part, a specified portion (which may be
zero) of the Award will vest and become nonforfeitable and the remaining portion
shall be forfeited.

 

7.3  Dividend Equivalents.  (a)  Incentive Stock.  Unless otherwise determined
by the Committee at or after the date of grant, Participants granted Incentive
Stock shall be entitled to receive cash Dividend Equivalents currently.

 

(b)  Incentive Units.  The Committee will determine whether and to what extent
to credit to the account of, or to pay currently to, each recipient of an
Incentive Unit, any Dividend Equivalents.  To the extent provided by the
Committee at or after the date of grant, any cash Dividend Equivalents with
respect to the Incentive Units credited to a Participant’s account shall be
deemed to have been invested in Shares on the record date established for the
related dividend and, accordingly, a number of Incentive Units, as the case may
be, shall be credited to such Participant’s account equal to the greatest whole
number which may be obtained by dividing (i) the value of such Dividend
Equivalent on the record date by (ii) the Fair Market Value of a Share on such
date.  Any additional Incentive Unit credited in respect of Dividend Equivalents
shall become vested and non-forfeitable, if at all, on the same terms and
conditions as are applicable in respect of the Incentive Unit with respect to
which such Dividend Equivalents were payable.

 

7.4  Termination of Employment.  Unless the Committee otherwise determines at or
after the date of grant, in the event that a Participant’s Employment

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terminates by reason of a Qualifying Termination of Employment during the
Performance Period, any award of Incentive Stock or Incentive Units shall become
vested and non-forfeitable at the end of the Performance Period as to that
number of such Incentive Stock or Incentive Units, as the case may be, that is
equal to that percentage, if any, of such Award that would have been earned had
the Participant’s employment not so terminated prior to the expiration of the
Performance Period times a fraction, the numerator of which is the number of
days employed during the Performance Period and the denominator of which is the
total number of days during the Performance Period.  Unless otherwise determined
by the Committee at or after the date of grant, in the event a Participant’s
employment terminates for any reason other than a Qualifying Termination of
Employment during the Performance Period, any Incentive Stock or Incentive Units
held by such Participant shall be forfeited and cancelled as of the date of such
termination of employment.

 

7.5  Settlement of Incentive Units.  Unless the Committee determines otherwise
at or after the date of grant, when a Performance Restriction with respect to an
Award of Incentive Units lapses and the Incentive Units become vested and
nonforfeitable, the Participant shall receive (i) one Share for each such
Incentive Unit (including additional Incentive Units credited in respect of
Dividend Equivalents) or (ii) if the Committee so determines, the Committee may
direct the Company to pay to the Participant the Fair Market Value of such
Shares as of such payment date.

 

 

ARTICLE VIII

DEFERRED SHARES

 

8.1  Deferred Share Awards.  The Committee shall have the  authority to grant
Deferred Shares to any Participant and to determine (i) the number of Deferred
Shares granted to each Participant, (ii) the date such Deferred Shares shall
become vested and (iii) the date such Deferred Shares will be payable to the
Participant.  In addition, on such date or dates as shall be established by the
Committee and subject to such terms and conditions as the Committee shall
determine, a Participant may be permitted to elect to defer receipt of all or a
portion of his annual compensation and/or annual incentive bonus (“Deferred
Amount”) payable by the Company or a Subsidiary and receive in lieu thereof a
number of Deferred Shares equal to the greatest whole number which may be
obtained by dividing (i) the Deferred Amount by (ii) the Fair Market Value of a
Share on the date such compensation or bonus would otherwise have been payable
to the Participant.  No Shares will be issued at the time an award of Deferred
Shares is made and the Company shall not be required to set aside a fund for the
payment of any such award.  The Company will establish a separate account for
the Participant and will record in such account the number of Deferred Shares
awarded to the Participant.  To the extent the Committee so determines, a
Participant who elects to defer receipt of his or her compensation or bonus and
receive Deferred Shares shall receive that number of supplemental Deferred
Shares (“Supplemental Units”) equal to the greatest whole number which may be
obtained by dividing (i) such percentage of the Deferred Amount as is determined
by the Committee by (ii) the Fair Market Value of a Share on the date of grant. 
Each grant of Deferred Shares and Supplemental Units shall be evidenced by a
written agreement setting forth the terms of such Award.

 

8.2  Vesting of Deferred Shares and Supplemental Units.  The portion of each
Deferred Shares, together with any Dividend Equivalents credited with respect
thereto, shall be fully vested at all times.  Unless the Committee provides

 

 

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otherwise at or after the date of grant, the Supplemental Units, together with
any Dividend Equivalents credited with respect thereto, will become vested in
equal annual installments on each of the second, third and fourth anniversary of
the date the corresponding Deferred Amount would have been paid absent the
Participant’s election to defer receipt thereof, subject to the Participant’s
continuous employment with the Company or a Subsidiary through such vesting
date.

 

8.3  Dividend Equivalents.  The Committee will determine whether and to what
extent Dividend Equivalents will be credited to the account of, or paid
currently to, a recipient of a Deferred Shares or Supplemental Units.  To the
extent provided by the Committee at or after the date of grant, any cash
Dividend Equivalents with respect to the Deferred Shares and Supplemental Units
deemed credited to a Participant’s account shall be deemed to have been invested
in Shares on the record date established for the related dividend and,
accordingly, a number of Deferred Shares or Supplemental Units, as the case may
be, shall be credited to such Participant’s account equal to the greatest whole
number which may be obtained by dividing (i) the amount of such Dividend
Equivalent on the record date by (ii) the Fair Market Value of a Share on such
date.

 

8.4  Termination of Employment.  Unless the Committee otherwise determines at or
after the date of grant, in the event that a Participant’s employment terminates
by reason of a Qualifying Termination of Employment during the Performance
Period, any Supplemental Units (and related Dividend Equivalents) granted to a
Participant shall become vested and non-forfeitable.  Unless otherwise
determined by the Committee at or after the date of grant, in the event a
Participant’s employment terminates for any reason other than a Qualifying
Termination of Employment during the Performance Period, any Supplemental Units
(and related Dividend Equivalents) held by such Participant shall be forfeited
and cancelled as of the date of such termination of employment.  In the event
that a Participant’s employment is terminated for Cause (or, following the date
the Participant’s employment terminates, the Committee determines that
circumstances exist such that the Participant’s employment could have been
terminated for Cause), any Supplemental Units (and related Dividend Equivalents)
granted to such Participant, whether or not then vested, shall be forfeited and
cancelled as of the date of such termination of employment.

 

8.5  Settlement of Deferred Shares.  Unless the Committee determines otherwise
at or after the date of grant, a Participant shall receive as of the date of
such Participant’s termination of employment (or such other date as may be
elected by the Participant in accordance with the rules and procedures of the
Committee) (i) one Share for each Deferred Share credited to such Participant’s
account and (ii) subject to Section 8.4, one Share for each Supplemental Unit
that shall have become vested.  The Committee may provide in the Award agreement
applicable to any Deferred Shares or Supplemental Units that, in lieu of issuing
Shares, the Committee may direct the Company to pay to the Participant the Fair
Market Value of such Shares as of such payment date.

 

 

ARTICLE IX

CHANGE IN CONTROL

 

9.1  Accelerated Vesting and Payment.  Subject to the provisions of Sections 9.2
below, in the event of a Change in Control, each Option shall be, at the

 

 

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discretion of the Committee, either canceled in exchange for a payment in cash
of an amount equal to the excess, if any, of the Change in Control Price over
the exercise price for such Option, or fully exercisable regardless of the
exercise schedule otherwise applicable to such Option and all other Awards shall
become nonforfeitable and be immediately transferable or payable, as the case
may be.

 

9.2  Alternative Awards.  Notwithstanding Section 9.1, no cancellation,
acceleration of exercisability, vesting, cash settlement or other payment shall
occur with respect to any Award or any class of Awards if the Committee
reasonably determines in good faith prior to the occurrence of a Change in
Control that such Award or Awards shall be honored or assumed, or new rights
substituted therefore (such honored, assumed or substituted award an
“Alternative Award”), by a Participant’s employer (or the parent or a Subsidiary
of such employer) immediately following the Change in Control, provided that any
such Alternative Award must:

 

(i)  be based on stock which is traded on an established securities market, or
which will be so traded within 60 days of the Change in Control;

 

(ii)  provide such Participant (or each Participant in a class of Participants)
with rights and entitlements substantially equivalent to or better than the
rights, terms and conditions applicable under such Award, including, but not
limited to, an identical or better exercise or vesting schedule and identical or
better timing and methods of payment;

 

(iii)  have substantially equivalent economic value to such Award (determined at
the time of the Change in Control);

 

(iv)  have terms and conditions which provide that in the event that the
Participant’s employment is involuntarily terminated or constructively
terminated, any conditions on a Participant’s rights under, or any restrictions
on transfer or exercisability applicable to, each such Alternative Award shall
be waived or shall lapse, as the case may be.

 

For this purpose, a constructive termination shall mean a termination by a
Participant following a material reduction in the Participant’s base salary or a
Participant’s incentive compensation opportunity or a material reduction in the
Participant’s responsibilities,  in either case without the Participants written
consent.

 

ARTICLE X

STOCKHOLDER RIGHTS

 

A Participant (or a Permitted Transferee) shall have no rights as a stockholder
with respect to any Shares covered by an Award until he or she shall have become
the holder of record of such Share(s), and no adjustments shall be made for
dividends in cash or other property or distribution or other rights in respect
to any such Shares, except as otherwise specifically provided for in this Plan.

 

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ARTICLE XI

AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN

 

The Board at any time may terminate or suspend the Plan, and from time to time
may amend or modify the Plan, provided that no amendment, modification, or
termination of the Plan shall in any manner adversely affect any Award
theretofore granted under the Plan, without the consent of the Participant. 
Unless earlier terminated, the Plan shall terminate on December 31 of the tenth
year following the year in which the Initial Public Offering occurs.

 

 

ARTICLE XII

MISCELLANEOUS PROVISIONS

 

12.1  Non-transferability of Awards.  No Award shall be assignable or
transferable except by will or the laws of descent and distribution; provided
that the Committee may permit (on such terms and conditions as it shall
establish) a Participant to transfer an Award for no consideration to the
Participant’s child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the Participant’s household (other
than a tenant or employee), a trust in which these persons have more than fifty
percent of the beneficial interest, a foundation in which these persons (or the
Participant) control the management of assets, and any other entity in which
these persons (or the Participant) own more than fifty percent of the voting
interests (“Permitted Transferees”).  Except to the extent required by law, no
right or interest of any Participant shall be subject to any lien, obligation or
liability of the Participant.  All rights with respect to Awards granted to a
Participant under the Plan shall be exercisable during the Participant’s
lifetime only by such Participant or, if applicable, his or her Permitted
Transferee(s).  The rights of a Permitted Transferee shall be limited to the
rights conveyed to such Permitted Transferee, who shall be subject to and bound
by the terms of the agreement or agreements between the Participant and the
Company.

 

12.2  Beneficiary Designation.  Each Participant under the Plan may from time to
time name any beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid or by whom any
right under the Plan is to be exercised in case of his death.  Each designation
will revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Committee during his lifetime.  In the absence
of any such designation, benefits remaining unpaid at the Participant’s death
shall be paid to or exercised by the Participant’s surviving spouse, if any, or
otherwise to or by his or her estate.

 

12.3  No Guarantee of Employment or Participation.  Nothing in the Plan shall
interfere with or limit in any way the right of the Company or any Subsidiary to
terminate any Participant’s employment at any time, nor to confer upon any
Participant any right to continue in the employ of the Company or any
Subsidiary.  No Employee shall have a right to be selected as a Participant, or,
having been so selected, to receive any future Awards.

 

12.4  Tax Withholding. The Company shall have the right to deduct from all
amounts paid to a Participant in cash (whether under this Plan or otherwise) any
taxes required by law to be withheld in respect of Awards under this Plan.  In
the case of any Award satisfied in the form of Shares, no shares shall be issued
unless and

 

 

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until arrangements satisfactory to the Committee shall have been made to satisfy
any withholding tax obligations applicable with respect to such Award.  Without
limiting the generality of the foregoing, the Company shall have the right to
retain, or the Committee may, subject to such terms and conditions as it may
establish from time to time, permit Participants to elect to tender, Shares
(including Shares issuable in respect of an Award) to satisfy, in whole or in
part, the amount required to be withheld (but no greater amount).

 

12.5  Compliance with Legal and Exchange Requirements.  The Plan, the granting
and exercising of Awards thereunder, and the other obligations of the Company
under the Plan, shall be subject to all applicable Federal and State laws,
rules, and regulations, and to such approvals by any regulatory or governmental
agency as may be required, and to any rules or regulations of any exchange on
which the Shares are listed.  The Company, in its discretion, may postpone the
granting and exercising of Awards, the issuance or delivery of Shares under any
Award or any other action permitted under the Plan to permit the Company, with
reasonable diligence, to complete such stock exchange listing or registration or
qualification of such Shares or other required action under any Federal or State
law, rule, or regulation and may require any Participant to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of Shares in compliance with applicable
laws, rules, and regulations.  The Company shall not be obligated by virtue of
any provision of the Plan to recognize the exercise of any Award or to otherwise
sell or issue Shares in violation of any such laws, rules, or regulations; and
any postponement of the exercise or settlement of any Award under this provision
shall not extend the term of such Awards, and neither the Company nor its
directors or officers shall have any obligation or liability to the Participant
with respect to any Award (or Shares issuable thereunder) that shall lapse
because of such postponement.

 

12.6  Indemnification.  Each person who is or shall have been a member of the
Committee or of the Board shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be made a party or in which he may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him in settlement thereof, with the
Company’s approval, or paid by him in satisfaction of any judgment in any such
action, suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf.  The foregoing right of
indemnification shall not be exclusive and shall be independent of any other
rights of indemnification to which such persons may be entitled under the
Company’s Articles of Incorporation or Bylaws, by contract, as a matter of law,
or otherwise.

 

12.7  Legend.  To the extent any stock certificate is issued to a Participant in
respect of shares of Restricted Stock prior to the expiration of the Period of
Restriction, such certificate shall be registered in the name of the Participant
and shall bear the following (or similar) legend:

 

“The shares of stock represented by this certificate are subject to the terms
and conditions contained in the 1999 Neuberger Berman Inc. Long-Term Incentive
Plan and the Award Agreement, dated as of                                
                                 , between the Company and the Participant,

 

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and may not be sold, pledged, transferred, assigned, hypothecated or otherwise
encumbered in any manner (except as provided in Section 12.1 of the Plan or in
such Award Agreement) until                                  .”

 

Upon the lapse of the Period of Restriction with respect to such Restricted
Stock, the Company shall issue or have issued in exchange for those certificates
previously issued new share certificates without the legend described herein in
respect of any shares that have become vested.

 

12.8  Effective Date.  The Plan shall be effective as of the date of the Initial
Public Offering.

 

12.9  No Limitation on Compensation.  Nothing in the Plan shall be construed to
limit the right of the Company to establish other plans or to pay compensation
to its employees, in cash or property, in a manner which is not expressly
authorized under the Plan.

 

12.10  Deferrals.  The Committee may postpone the exercising of Awards, the
issuance or delivery of Stock under any Award or any action permitted under the
Plan to prevent the Company or any Subsidiary from being denied a Federal income
tax deduction with respect to any Award other than an ISO.

 

12.11  Governing Law. The Plan shall be construed in accordance with and
governed by the laws of the State of New York, without reference to principles
of conflict of laws which would require application of the law of another
jurisdiction, except to the extent that the corporate law of the State of
Delaware specifically and mandatorily applies.

 

12.12  No Impact On Benefits.  Except as may otherwise be specifically stated
under any employee benefit plan, policy or program, no amount payable in respect
of any Award shall be treated as compensation for purposes of calculating a
Participant’s right under any such plan, policy or program.

 

 

12.13  No Constraint on Corporate Action.  Nothing in this Plan shall be
construed (a) to limit, impair or otherwise affect the Company’s right or power
to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure, or to merge or consolidate, or dissolve,
liquidate, sell, or transfer all or any part of its business or assets or (b) to
limit the right or power of the Company,  or any Subsidiary to take any action
which such entity deems to be necessary or appropriate.

 

12.14  Headings and Captions.  The headings and captions herein are provided for
reference and convenience only, shall not be considered part of this Plan, and
shall not be employed in the construction of this Plan.

 

12.15  Section 409A.  Notwithstanding other provisions of the Plan or any Award
agreements thereunder, no Award shall be granted, deferred, accelerated,
extended, paid out or modified under this Plan in a manner that would result in
the imposition of an additional tax under Section 409A of the Code upon a
Participant.  In the event that it is reasonably determined by the Committee
that, as a result of Section 409A of the Code, payments or deliveries of shares
in respect of any Award under the Plan may not be made at the time contemplated
by the terms of the Plan or the relevant Award agreement, as the case may be,
without causing the Participant holding such Award to be subject to taxation
under Section 409A of the Code, the Company will

 

 

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make such payment or delivery of shares on the first day that would not result
in the Participant incurring any tax liability under Section 409A of the Code. 
In the case of a Participant who is a “specified employee” (within the meaning
of Section 409A(a)(2)(B)(i) of the Code), payments and/or deliveries of shares
in respect of any Award subject to Section 409A of the Code that are linked to
the date of the Participant’s separation from service shall not be made prior to
the date which is six (6) months after the date of such Participant’s separation
from service from the Company and its affiliates, determined in accordance with
Section 409A of the Code and the regulations promulgated thereunder.  The
Company shall use commercially reasonable efforts to implement the provisions of
this Section 12.15 in good faith; provided that neither the Company, the
Committee nor any of the Company’s employees, directors or representatives shall
have any liability to Participants with respect to this Section 12.15.

 

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