Exhibit 10.1

 

LEHMAN BROTHERS HOLDINGS INC.

 

SUPPLEMENTAL RETIREMENT PLAN

 

(Effective as of October 19, 1998, amended and restated effective November 8,
2007)

 

PREAMBLE

 

The Lehman Brothers Holdings Inc. Supplemental Retirement Plan (as amended and
restated effective November 8, 2007) (the “Plan”) is established by Lehman
Brothers Holdings Inc. (the “Company”) for the sole purpose of providing the
Chairman and employees of the Company or its subsidiaries who are the Members of
the Company’s non-Board Executive Committee (the “Executive Committee”) and
other key employees of the Company as determined in the sole discretion of the
Committee (as defined below) with supplemental retirement payments. The Plan was
originally effective as of October 19, 1998, was amended and restated effective
December 10, 2003 and was further amended and restated effective November 8,
2007. This document describes the benefits provided under the Plan. The Plan
reads as follows:

 

ARTICLE 1

 

DEFINITIONS

 

1.1           Benefit Commencement Date:  The date on which payment of Full or
Prorata Benefits shall begin, as described under Section 4.3 of the Plan.

 

1.2           Board:  The Board of Directors of the Company.

 

1.3           Cause:  A material breach by a Participant of an employment
contract between the Participant and the Company or any of its subsidiaries,
failure by the Participant to devote substantially all business time exclusively
to the performance of his duties for Company or any subsidiary, willful
misconduct, dishonesty related to the business and affairs of Company or any
subsidiary, conviction of a felony or of a misdemeanor constituting a statutory
disqualification under U.S. securities laws (or failure to contest prosecution
for a felony or such a misdemeanor), habitual or gross negligence in the
performance of a Participant’s duties, solicitation of employees of the Company
or any subsidiary to work at another company, improper use or disclosure of
confidential information, the violation of policies and practices adopted by the
Company or any subsidiary including, but not limited to the Code of Conduct,
engaging in Competitive Activity or Detrimental Activity or a material violation
of the conflict of interest, proprietary information or business ethics policies
of the Company or any subsidiary, or such other circumstances as may be
determined in the sole discretion of the Committee. For avoidance of doubt, for
purposes of the preceding sentence, a material breach of an employment contract
or violation of policies would include, as applicable, the Participant’s
violation of any policy or employment agreement relating to the obligation to
provide advance notice of resignation from the Company or any subsidiary.

 

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Following the occurrence of a Change in Control, “Cause” shall mean (i) the
substantial and continuing failure by a Participant to perform the Participant’s
duties for the Company (other than any such failure resulting from incapacity
due to physical or mental illness), at least thirty (30) days after a written
demand for performance is delivered to the Participant by the Board which
specifically identifies the manner in which the Board believes that the
Participant has not performed the Participant’s duties, (ii) conviction of, or
plea of guilty or nolo contendere to, a felony or of or to a misdemeanor
constituting a statutory disqualification under U.S. securities laws or (iii)
engaging in willful misconduct which is demonstrably injurious to the Company.

 

Any act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chairman or based upon
the advice of counsel for the Company shall be conclusively presumed not to
constitute either willful misconduct or Detrimental Activity. Following the
occurrence of a Change in Control, the cessation of employment of the
Participant shall not be deemed to be for Cause unless and until there shall
have been duly adopted by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board (excluding the Participant if the
Participant is a member of the Board) at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Participant and the
Participant is given an opportunity, together with counsel, to be heard before
the Board) a resolution finding that, in the good faith opinion of the Board,
the Participant has committed the conduct described in (i) or (ii) above, and
specifying the particulars thereof in detail.

 

1.4           Chairman:  Chairman of the Executive Committee as of October 19,
1998.

 

1.5           Change in Control:  The occurrence during the term of the Plan of
any of the following events:

 

(i)            An acquisition (other than directly from the Company, but
including any acquisition in connection with any merger, consolidation,
recapitalization or reorganization involving the Company) of the Company’s
outstanding shares of capital stock having ordinary voting power in the election
of directors (“Voting Securities”) by any “Person” (as the term “person” is used
for purposes of Section 13(d) or 14(d) of the Exchange Act) immediately after
which such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the combined voting power
of the Company’s then outstanding Voting Securities (or 30% or more of the
combined voting power of the Company’s outstanding Voting Securities acquired in
a consecutive twelve month period); provided, however, in determining whether a
Change in Control has occurred, Voting Securities that are acquired in a
“Non-Control Acquisition” (as hereinafter defined) shall not constitute an
acquisition that would cause a Change in Control. A “Non-Control Acquisition”
shall mean an acquisition by (A) an employee benefit plan (or a trust forming a
part thereof or a trustee thereof acting solely in its capacity as trustee)
maintained by (I) the Company or (II) any corporation or other Person of which a
majority of its voting power or its voting equity securities or equity interest
is

 

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owned, directly or indirectly, by the Company (for purposes of this definition,
a “Subsidiary Entity”), (B) the Company or any of its Subsidiary Entities, or
(C) any Person who files in connection with such acquisition a Schedule 13D that
expressly disclaims any intention to seek control of the Company and does not
expressly reserve the right to seek such control; provided, however, that any
amendment to such statement of intent that either indicates an intention or
reserves the right to seek control shall be deemed an “acquisition” of the
securities of the Company reported in such filing as beneficially owned by such
Person for purposes of this paragraph (i);

 

(ii)           Any merger, consolidation, recapitalization or reorganization
involving the Company, unless such merger, consolidation, recapitalization or
reorganization is a “Non-Control Transaction”; i.e., meets each of the
requirements described in subparagraphs (A), (B) and (C) below:

 

(A)          the stockholders of the Company, immediately before such merger,
consolidation, recapitalization or reorganization, own, directly or indirectly,
immediately following such merger, consolidation, recapitalization or
reorganization, at least 50% of the combined voting power of the outstanding
voting securities of the Company, the corporation resulting from such merger,
consolidation, recapitalization or reorganization, or any parent thereof (the
“Surviving Corporation”) in substantially the same proportion as their ownership
of the Voting Securities immediately before such merger, consolidation,
recapitalization or reorganization;

 

(B)           the individuals who were members of the Board immediately prior to
the execution of the agreement providing for such merger, consolidation,
recapitalization or reorganization constitute at least 50% of the members of the
board of directors of the Surviving Corporation immediately following the
consummation of such merger, consolidation, recapitalization or reorganization;
and

 

(C)           no Person other than the Company, any Subsidiary Entity, any
employee benefit plan (or any trust forming a part thereof or a trustee thereof
acting solely in its capacity as trustee) maintained by the Company, the
Surviving Corporation, or any Subsidiary Entity, or any Person who, immediately
prior to such merger, consolidation, recapitalization or reorganization had
Beneficial Ownership of 30% or more of the then outstanding Voting Securities
has Beneficial Ownership of 30% or more of the combined voting power of the
Surviving Corporation’s then outstanding voting securities immediately following
the consummation of such merger, consolidation, recapitalization or
reorganization;

 

(iii)          Replacement within a consecutive twelve month period of a
majority of the individuals who are members of the Board with individuals

 

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(“Replacement Board Members”) who do not receive endorsement by a majority of
the Board before the date of the appointment or election of such Replacement
Board Member; or

 

(iv)          Sale or other disposition (other than a transfer to a Subsidiary
Entity) of all or substantially all of the assets of the Company to any Person,
or any Person acquires such amount of assets in any consecutive twelve-month
period ending on the most recent acquisition by such Person.

 

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the “Subject Person”) acquired Beneficial Ownership
of more than the permitted percentage set forth in paragraph (i) of the
outstanding Voting Securities as a result of the acquisition of Voting
Securities by the Company that, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares Beneficially Owned by
the Subject Person, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Voting
Securities by the Company, and thereafter such Subject Person acquires any
additional Voting Securities which increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur. In addition, notwithstanding the foregoing a
Change in Control shall not be deemed to occur unless such transaction or
occurrence constitutes a change in ownership or effective control within the
meaning of Section 409A(a)(2)(A)(v) of the Code.

 

1.6           Code:  The Internal Revenue Code of 1986, as amended.

 

1.7           Committee:  The Compensation and Benefits Committee of the Board.

 

1.8           Company:  Lehman Brothers Holdings Inc. and except as otherwise
specified in this Plan in a particular context, any successor thereto, whether
by merger, consolidation or acquisition of substantially all of its assets.

 

1.9           Competitive Activity:  Involvement (whether as an employee,
proprietor, consultant or otherwise) with any person or entity (including any
company and its affiliates) engaged in any business activity which is materially
competitive with any business carried on by the Company or any of its
subsidiaries on the date of termination of a Participant’s employment with the
Company and any of its subsidiaries, as determined in the sole discretion of the
Committee. Following the occurrence of a Change in Control, the determination of
whether a Participant has engaged in “Competitive Activity” shall be made by a
resolution duly adopted by the affirmative vote of three-quarters (3/4) of the
entire membership of the Board (excluding the Participant if the Participant is
a member of the Board) at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to the Participant and the
Participant is given an opportunity, together with counsel, to be heard before
the Board) finding that, in the good faith opinion of the Board, the Participant
has committed the conduct described in the preceding sentence and that such
conduct is demonstrably injurious to the Company.

 

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1.10         Detrimental Activity:  means at any time (i) using information
received during a person’s employment with the Company or any subsidiary , their
affiliates or clients, in breach of such person’s undertakings to keep such
information confidential; (ii) directly or indirectly persuading or attempting
to persuade, by any means, any employee of the Company or any subsidiary to
terminate his employment with the foregoing or to breach any of the terms of his
employment with the foregoing; (iii) directly or indirectly making any statement
that is, or could be, disparaging of the Company, its subsidiaries or
affiliates, or any of their employees (except as necessary to respond truthfully
to any inquiry from applicable regulatory authorities or to provide information
pursuant to legal process); or (iv) directly or indirectly engaging in any
activity (other than Competitive Activity) that is, or could be, substantially
injurious to the financial condition, reputation, or goodwill of the Company or
its subsidiaries or affiliates, in each case as determined in the sole
discretion of the Committee. Following the occurrence of a Change in Control,
the determination of whether a Participant has engaged in “Detrimental Activity”
shall be made by a resolution duly adopted by the affirmative vote of
three-quarters (3/4) of the entire membership of the Board (excluding the
Participant if the Participant is a member of the Board) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Participant and the Participant is given an opportunity, together with
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Participant has committed the conduct described in (i), (ii),
(iii), or (iv) above and that such conduct is demonstrably injurious to the
Company.

 

1.11         Disability:  A disability as described in Section 409A(a)(2)(C) of
the Code.

 

1.12         Domestic Partner:  An individual is a “Domestic Partner” with
respect to a Participant for purposes of this Plan if such individual and the
Participant have a currently registered domestic partnership with a governmental
body pursuant to state or local law authorizing such registration. In the
absence of a formal registration, a Participant can register his domestic
partnership with another individual by filing an affidavit with the Lehman
Brothers Benefits Service Center, and such individual shall qualify as a
Domestic Partner of such Participant for purposes of this Plan for so long as
such domestic partnership shall remain in effect.

 

1.13         Full Benefits:  Benefits under the Plan as described under Section
4.1 and payable pursuant to Section 4.3.

 

1.14         Good Reason:  The occurrence following a Change in Control of any
of the following without either Cause or a Participant’s express written
consent:

 

(I)            A MATERIAL ADVERSE CHANGE IN A PARTICIPANT’S TITLE, POSITION,
AUTHORITY OR KEY RESPONSIBILITIES AS COMPARED TO THE PARTICIPANT’S TITLE,
POSITION, AUTHORITY OR KEY RESPONSIBILITIES IMMEDIATELY PRIOR TO THE CHANGE IN
CONTROL, EXCLUDING FOR THIS PURPOSE AN ACTION NOT TAKEN IN BAD FAITH AND WHICH
IS REMEDIED BY THE COMPANY PROMPTLY AFTER RECEIPT OF NOTICE THEREOF GIVEN BY THE
PARTICIPANT;

 

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(II)           A MATERIAL REDUCTION IN A PARTICIPANT’S ANNUAL BASE SALARY OR
INCENTIVE COMPENSATION OPPORTUNITIES AS COMPARED TO THE PARTICIPANT’S ANNUAL
BASE SALARY AND INCENTIVE COMPENSATION OPPORTUNITIES AS IN EFFECT IMMEDIATELY
PRIOR TO THE CHANGE IN CONTROL; OR

 

(III)          ANY REQUIREMENT THAT THE EXECUTIVE (A) BE BASED ANYWHERE MORE
THAN FIFTY (50) MILES FROM THE OFFICE WHERE THE EXECUTIVE WAS LOCATED
IMMEDIATELY PRIOR TO THE CHANGE IN CONTROL OR (B) TRAVEL ON COMPANY BUSINESS TO
AN EXTENT SUBSTANTIALLY GREATER THAN THE EXECUTIVE’S TRAVEL OBLIGATIONS
IMMEDIATELY PRIOR TO THE CHANGE IN CONTROL.

 

1.15         Member:  Any person who is serving on the Executive Committee as of
October 19, 1998, but who is not the Chairman.

 

1.16         Participant:  Each Member and the Chairman and any other person who
is subsequently designated as a participant in the Plan pursuant to Section 3.1.

 

1.17         Present Value:  The discounted present value of a payment or stream
of payments to be made at a future date, as determined by the actuary of the
Qualified Plan using the interest rate applicable under the Qualified Plan to
determine lump sum payments made at such time.

 

1.18         Prorata Benefits:  Benefits under the Plan as described under
Section 4.2 and payable pursuant to Section 4.3.

 

1.19         Qualified Plan:  The Lehman Brothers Holdings Inc. Retirement Plan
as from time to time in effect.

 

1.20         Spouse:  The individual to whom a Participant is legally married on
the date of his death. An individual shall be treated as the Spouse of a
Participant and as legally married to such Participant for such period as such
individual shall qualify as the Domestic Partner of such Participant.

 

1.21         Trust:  The trust or trusts described in Section 2.3.

 

1.22         Trustee:  The trustee of the Trust.

 

1.23         Years of Service:  A Participant’s “years of vesting service” as
determined under the Qualified Plan.

 

Usage. Whenever applicable, the masculine gender, when used in the Plan, will
include the feminine gender, and the singular will include the plural.

 

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ARTICLE 2

 

COMPANY FUNDING OBLIGATIONS

 

2.1           In General. The Company shall have no obligation under the Plan to
make any payments or cause any payments to be made except as explicitly provided
under this Plan.

 

2.2           Unfunded Plan. The Plan is intended to constitute an unfunded plan
for a select group of management or highly compensated employees as defined in
sections 201(2), 301(a)(3) and 401(a)(1) of  the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”). All amounts payable under the Plan
shall be paid out of the general assets of the Company, and any individuals
entitled to have payments made on their behalf under the Plan shall have no
rights to payment greater than the rights of general unsecured creditors of the
Company.

 

2.3           Rabbi Trust. The Company shall establish promptly a revocable
trust to hold assets, subject to the claims of the Company’s creditors in the
event of the Company’s insolvency, for the purpose of the payment of the
benefits hereunder, which shall become irrevocable upon the first to occur of
any of the events described in Section 1.5(i), (ii) or (iii), or upon the
consummation of a merger, consolidation, reorganization, complete liquidation or
dissolution, or agreement for sale or other disposition of all or substantially
all of the assets of the Company as described in Section 1.5(iv). The Company
shall contribute to the Trust cash in such amounts and at such times as are
specified in this Plan and in the Trust. Amounts paid to Participants from the
Trust shall discharge the obligations of the Company hereunder to the
Participants to the extent of the payments so made.

 

ARTICLE 3

 

PARTICIPATION AND ELIGIBILITY

 

3.1           Participation. Participation in the Plan is limited initially to
the Chairman and the Members. The Committee, in its sole discretion, may extend
the benefits of this Plan to other key employees of the Company.

 

3.2           Eligibility for Full Benefits. A Participant is eligible to
receive Full Benefits as described in Section 4.1 under the Plan if:

 

(I)            (X) HIS EMPLOYMENT TERMINATES ON OR AFTER HE ATTAINS AGE SIXTY
(60) OR THE COMBINATION OF HIS AGE AND NUMBER OF YEARS OF SERVICE EXCEEDS
EIGHTY-FIVE (85), AND (Y) HE HAS NOT OTHERWISE FORFEITED HIS BENEFITS UNDER
SECTION 4.5 OF THIS PLAN;

 

(II)           (X) HE IS A PARTICIPANT OTHER THAN A MEMBER OR THE CHAIRMAN AND
RETIRES AFTER FULFILLING ANY COMBINATION OF ELIGIBILITY CRITERIA OTHER THAN AS
SPECIFIED IN PARAGRAPH 3.2(I), IF ANY, THAT HAS BEEN COMMUNICATED TO SUCH
PARTICIPANT IN WRITING BY THE COMMITTEE IN CONNECTION WITH SUCH PARTICIPANT’S
INITIAL

 

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PARTICIPATION IN THE PLAN, AND (Y) HE HAS NOT OTHERWISE FORFEITED HIS BENEFITS
UNDER SECTION 4.5 OF THIS PLAN; OR

 

(III)          (X) WITHIN THREE (3) YEARS FOLLOWING THE OCCURRENCE OF A CHANGE
IN CONTROL, HIS EMPLOYMENT IS TERMINATED BY THE COMPANY WITHOUT CAUSE OR THE
PARTICIPANT TERMINATES HIS EMPLOYMENT WITH GOOD REASON, AND (Y) HE HAS NOT
OTHERWISE FORFEITED HIS BENEFITS UNDER SECTION 4.5 OF THIS PLAN.

 

(A)          NOTWITHSTANDING THE FOREGOING, IF ALL OR ANY PORTION OF THE ABOVE
PAYOUTS, EITHER ALONE OR TOGETHER WITH OTHER PAYMENTS AND BENEFITS A PARTICIPANT
RECEIVES OR IS THEN ENTITLED TO RECEIVE FROM THE COMPANY AND ITS SUBSIDIARIES,
WOULD CONSTITUTE A PAYMENT DESCRIBED IN SECTION 280G(B)(2) (OR ITS SUCCESSORS)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), THE PAYMENTS AND
BENEFITS PROVIDED TO THE PARTICIPANT HEREUNDER SHALL BE REDUCED TO THE EXTENT
NECESSARY SO THAT NO PORTION THEREOF SHALL BE SUBJECT TO THE EXCISE TAX IMPOSED
BY SECTION 4999 OF THE CODE; BUT ONLY IF, BY REASON OF SUCH REDUCTION, THE NET
AFTER TAX BENEFIT TO THE PARTICIPANT SHALL EXCEED THE NET AFTER TAX BENEFIT IF
SUCH REDUCTION WERE NOT MADE. FOR THIS PURPOSE, THE DETERMINATION AS TO WHETHER
SUCH PAYMENTS AND BENEFITS CONSTITUTE A PAYMENT DESCRIBED IN CODE SECTION
280G(B)(2) AND AS TO THE AMOUNT OF SUCH REDUCTION, IF ANY, NECESSARY TO AVOID
THE EXCISE TAX SHALL BE BASED UPON THE AGREEMENT OF THE COMPANY AND THE
PARTICIPANT, OR IN THE ABSENCE OF SUCH AGREEMENT, A DETERMINATION BY THE
ACCOUNTING FIRM AS DESCRIBED IN (B) BELOW.

 

(B)           “NET AFTER TAX BENEFIT” SHALL MEAN THE SUM OF (I) THE TOTAL
PAYMENTS PAYABLE TO THE PARTICIPANT HEREUNDER, PLUS (II) ALL OTHER PAYMENTS AND
BENEFITS WHICH THE PARTICIPANT RECEIVES OR IS THEN ENTITLED TO RECEIVE FROM THE
COMPANY AND ITS SUBSIDIARIES THAT WOULD CONSTITUTE A PAYMENT DESCRIBED IN
SECTION 280G(B)(2) OF THE CODE, LESS (III) THE AMOUNT OF FEDERAL, STATE AND
LOCAL INCOME TAXES PAYABLE WITH RESPECT TO THE FOREGOING CALCULATED AT THE
MAXIMUM MARGINAL INCOME TAX RATE FOR EACH YEAR IN WHICH THE FOREGOING SHALL BE
PAID TO THE PARTICIPANT (BASED UPON THE RATE IN EFFECT FOR SUCH YEAR AS SET
FORTH IN THE CODE AT THE TIME OF TERMINATION OF THE PARTICIPANT’S EMPLOYMENT),
LESS (IV) THE AMOUNT OF EXCISE TAXES IMPOSED WITH RESPECT TO THE PAYMENTS AND
BENEFITS DESCRIBED IN (I) AND (II) ABOVE BY SECTION 4999 OF THE CODE. THE
FOREGOING CALCULATIONS SHALL BE MADE, AT THE COMPANY’S EXPENSE, BY THE COMPANY
AND THE PARTICIPANT. IF NO AGREEMENT ON THE CALCULATIONS IS REACHED, THE
PARTICIPANT AND THE COMPANY SHALL AGREE TO THE SELECTION OF AN ACCOUNTING FIRM
TO MAKE THE CALCULATIONS. IF NO AGREEMENT CAN BE REACHED REGARDING THE SELECTION
OF AN ACCOUNTING FIRM, THE COMPANY SHALL SELECT A NATIONALLY RECOGNIZED
ACCOUNTING FIRM OTHER THAN THE COMPANY’S INDEPENDENT AUDITORS. THE DETERMINATION
OF ANY SUCH FIRM SELECTED SHALL BE CONCLUSIVE AND BINDING ON ALL PARTIES.

 

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(C)           IN THE EVENT A DETERMINATION IS MADE AS DESCRIBED IN (A) AND (B)
ABOVE THAT ANY SUCH PAYOUTS ARE TO BE REDUCED AND IF SUCH DETERMINATION OCCURS
AFTER THE PARTICIPANT HAS RECEIVED ACCELERATED AWARDS AS DESCRIBED ABOVE WITHOUT
SUCH REDUCTION HAVING BEEN MADE, THE AMOUNT BY WHICH SUCH PAYMENT IS TO BE
REDUCED AS PROVIDED ABOVE SHALL BE DEEMED TO BE A LOAN FROM THE COMPANY TO THE
PARTICIPANT AND SHALL BE DUE AND PAYABLE BY THE PARTICIPANT TO THE COMPANY THREE
DAYS FOLLOWING NOTIFICATION BY THE COMPANY TO THE PARTICIPANT OF SUCH
DETERMINATION AND THE AMOUNT OWING. NO INTEREST SHALL BE DUE ON SUCH AMOUNT AND
THE COMPANY SHALL HOLD THE PARTICIPANT HARMLESS, ON AN AFTER-TAX BASIS, FROM ANY
EXCISE TAX OR INCOME TAX (INCLUDING INTEREST OR PENALTIES WITH RESPECT THERETO)
IMPOSED WITH RESPECT TO SUCH AMOUNT OR WITH RESPECT TO ANY IMPUTED INCOME WITH
RESPECT TO SUCH ADVANCE.

 

3.3           Eligibility for Prorata Benefits. A Participant is eligible to
receive Prorata Benefits as described in Section 4.2 under the Plan if:

 

(I)            HIS EMPLOYMENT TERMINATES (A) AFTER ATTAINING AGE FORTY-FIVE (45)
OR HAVING COMPLETED FIVE (5) YEARS OF SERVICE (BUT BEFORE HE ATTAINS AGE SIXTY
(60) OR THE COMBINATION OF HIS AGE AND NUMBER OF YEARS OF SERVICE EXCEED
EIGHTY-FIVE (85)) OR (B) IF HE IS A PARTICIPANT OTHER THAN A MEMBER OR THE
CHAIRMAN, AFTER FULFILLING ANY COMBINATION OF ELIGIBILITY CRITERIA OTHER THAN AS
SPECIFIED IN CLAUSE (A) OF THIS PARAGRAPH, IF ANY, THAT HAS BEEN COMMUNICATED TO
SUCH PARTICIPANT IN WRITING BY THE COMMITTEE IN CONNECTION WITH SUCH
PARTICIPANT’S INITIAL PARTICIPATION IN THE PLAN, AND

 

(II)           HE HAS NOT OTHERWISE FORFEITED HIS BENEFITS UNDER SECTION 4.5 OF
THIS PLAN.

 

ARTICLE 4

 

BENEFITS

 

4.1           Amount of Full Benefit. In accordance with the payment provisions
of Section 4.3, a Participant who meets the eligibility requirements under
Section 3.2 shall be eligible to receive Full Benefits under the Plan. Full
Benefits shall be equal to (i) twenty-five (25) annual payments of up to
$700,000 for Participants other than the Chairman and (ii) twenty-five (25)
annual payments of $1,250,000 for the Chairman.

 

4.2           Amount of Prorata Benefit. In accordance with the payment
provisions of Section 4.3, a Participant who meets the eligibility requirements
under Section 3.3 shall be eligible to receive Prorata Benefits under the Plan.
Prorata Benefits shall be equal to (i) twenty-five (25) annual payments of up to
$700,000 for Participants other than the Chairman and (ii) twenty-five (25)
annual payments of $1,250,000 for the Chairman, multiplied by the ratio of (A)
the Participant’s Years of Service at termination or retirement to (B) the
projected Years of Service the Participant would have had at age sixty (60) (or,
if the Participant is other than a Member or the Chairman, at such other age

 

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for eligibility for Full Benefits that is communicated to such Participant in
writing by the Committee at the time of such Participant’s initial participation
in the Plan) had his employment not terminated. Notwithstanding the foregoing,
with respect to Years of Service beginning on or after December 1, 2007, the
Committee, in its sole discretion, shall have the ability to exclude Years of
Service for purposes of the immediately foregoing ratio for any year in which
such Participant is no longer a Member or for any year in which such Participant
is no longer serving on the Executive Committee.

 

4.3           PAYMENT OF BENEFITS. EXCEPT AS PROVIDED IN SECTION 4.4, FULL AND
PRORATA BENEFITS UNDER THE PLAN SHALL COMMENCE THE FIRST DAY OF THE FIRST MONTH
COINCIDENT WITH OR NEXT FOLLOWING THE LATER OF (I) THE MONTH THAT A PARTICIPANT
ATTAINS AGE SIXTY (60), OR (II) THE MONTH A PARTICIPANT RETIRES OR TERMINATES
EMPLOYMENT WITH THE COMPANY (THE “BENEFIT COMMENCEMENT DATE”).

 

4.4           BENEFITS ON DEATH OR DISABILITY. IN THE EVENT OF THE DEATH OR
DISABILITY OF A PARTICIPANT, (I) THE COMMITTEE MAY, IN ITS SOLE DISCRETION,
INCREASE THE PARTICIPANT’S PRORATA BENEFIT UP TO A MAXIMUM OF THE FULL BENEFIT
AND (II) PAYMENT OF THE PRESENT VALUE OF THE PARTICIPANT’S FULL OR PRORATA
BENEFITS SHALL OCCUR AS SOON AS PRACTICABLE BUT IN NO EVENT MORE THAN 90 DAYS
FOLLOWING DISABILITY OR DEATH, AS APPLICABLE, AND SHALL BE MADE IN ONE LUMP SUM.

 

4.5           FORFEITURE AND CESSATION OF PAYMENTS. A PARTICIPANT SHALL FORFEIT
ALL RIGHTS TO FULL OR PRORATA BENEFITS (INCLUDING THE RIGHT TO ANY SUCH BENEFITS
AFTER THE BENEFIT COMMENCEMENT DATE) IF (I) HE ENGAGES IN COMPETITIVE ACTIVITY
AT ANY TIME OTHER THAN FOLLOWING TERMINATION OF HIS EMPLOYMENT (A) BY THE
COMPANY WITHOUT CAUSE WITHIN THREE (3) YEARS FOLLOWING A CHANGE IN CONTROL OR
(B) BY THE PARTICIPANT WITH GOOD REASON WITHIN THREE (3) YEARS FOLLOWING A
CHANGE IN CONTROL, (II) HE ENGAGES IN DETRIMENTAL ACTIVITY AT ANY TIME, (III)
HIS EMPLOYMENT IS TERMINATED WITH CAUSE, OR (IV) HE IS A PARTICIPANT OTHER THAN
A MEMBER OR THE CHAIRMAN AND HIS EMPLOYMENT TERMINATES FOR A REASON OTHER THAN
DEATH OR DISABILITY BEFORE THE EARLIER OF (A) THE DATE DETERMINED BY THE
COMMITTEE IN CONNECTION WITH SUCH PARTICIPANT’S INITIAL PARTICIPATION IN THE
PLAN AND (B) A CHANGE IN CONTROL.

 

4.6           WITHHOLDING. ALL PAYMENTS AND BENEFITS UNDER THE PLAN SHALL BE
SUBJECT TO ANY APPLICABLE WITHHOLDING REQUIREMENTS IMPOSED BY ANY TAX OR OTHER
LAW. THE COMPANY SHALL HAVE THE RIGHT TO SATISFY ANY WITHHOLDING OBLIGATION
AGAINST ANY OTHER PAYMENTS, INCLUDING REGULAR WAGES, DUE THE PARTICIPANT.

 

ARTICLE 5

 

AMENDMENT AND TERMINATION

 

5.1           AMENDMENT AND TERMINATION. SUBJECT TO SECTION 5.2, THE COMPANY, BY
ACTION OF THE COMMITTEE, MAY AT ANY TIME AMEND THE PLAN, RETROACTIVELY OR
OTHERWISE, IN ANY RESPECT OR TERMINATE THE PLAN; PROVIDED, HOWEVER, THAT NO SUCH
AMENDMENT OR TERMINATION SHALL REDUCE THE AMOUNT OF  FULL OR PRORATA BENEFIT FOR
WHICH A PARTICIPANT WAS ELIGIBLE UNDER THE PLAN IN EFFECT IMMEDIATELY PRIOR TO
THE DATE OF SUCH AMENDMENT OR

 

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TERMINATION (DETERMINED AS THOUGH THE PARTICIPANT’S EMPLOYMENT WITH THE COMPANY
HAD THEN TERMINATED BUT WITHOUT REGARD TO THE REQUIREMENT OF SECTION 4.5
RELATING TO EMPLOYMENT ON JULY 1, 2001, OR SUCH DATE AS SPECIFIED BY THE
COMMITTEE WITH RESPECT TO A PARTICIPANT WHO IS NEITHER A MEMBER NOR THE
CHAIRMAN); AND FURTHER PROVIDED THAT NO AMENDMENT MADE WITHIN SIX (6) MONTHS
BEFORE A CHANGE IN CONTROL OR AT ANY TIME AFTER A CHANGE IN CONTROL THAT REDUCES
OR OTHERWISE ADVERSELY AFFECTS A PARTICIPANT’S RIGHTS WITH RESPECT TO FULL OR
PRORATA BENEFITS SHALL BE GIVEN EFFECT.

 

5.2           RESTRICTIONS ON COMPANY’S ACTION. WITHOUT THE EXPRESS WRITTEN
CONSENT OF THE PARTICIPANT, NO ACTION TAKEN BY THE COMPANY SHALL ADVERSELY
AFFECT A PARTICIPANT’S (OR HIS SPOUSE’S) RIGHT TO RECEIVE A FULL OR PRORATA
BENEFIT UPON SATISFACTION BY THE PARTICIPANT OF THE CONDITIONS PRECEDENT TO
ENTITLEMENT TO SUCH A BENEFIT AS THEY EXIST UNDER THE TERMS OF THE PLAN IN
EFFECT IMMEDIATELY PRIOR TO SUCH ACTION, AND AT THE TIME AND ON THE TERMS THEN
IN EFFECT.

 

5.3           NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE PROVISIONS OF
THIS ARTICLE 5 MAY NOT BE AMENDED WITHOUT THE EXPRESS WRITTEN CONSENT OF EACH
PARTICIPANT.

 

ARTICLE 6

 

ADMINISTRATION; FUNDING OF TRUST

 

6.1           COMMITTEE. THE PLAN SHALL BE ADMINISTERED BY THE COMMITTEE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE COMMITTEE SHALL HAVE THE
POWER AND DISCRETION:

 

(I)            TO MAKE AND ENFORCE RULES AND REGULATIONS AND TO PRESCRIBE THE
USE OF FORMS NECESSARY OR ADVISABLE FOR EFFICIENT ADMINISTRATION OF THE PLAN;

 

(II)           TO INTERPRET THE PLAN, TO RESOLVE AMBIGUITIES, INCONSISTENCIES
AND OMISSIONS AND TO DECIDE QUESTIONS CONCERNING THE ELIGIBILITY OF ANY PERSON
TO RECEIVE BENEFITS UNDER THE PLAN, SUCH INTERPRETATIONS, RESOLUTIONS AND
DECISIONS TO BE FINAL AND CONCLUSIVE ON ALL PERSONS;

 

(III)          TO DIRECT PAYMENT OF AMOUNTS DUE WITH RESPECT TO EACH PARTICIPANT
UNDER THE PLAN;

 

(IV)          TO DELEGATE AUTHORITY TO AGENTS AND OTHER PERSONS TO ACT ON ITS OR
HIS BEHALF IN CARRYING OUT THE PROVISIONS AND ADMINISTRATION OF THE PLAN AND TO
TAKE OR DIRECT ANY ACTION REQUIRED OR ADVISABLE WITH RESPECT TO THE
ADMINISTRATION OF THE PLAN AND TRUST; AND

 

(V)           TO PERFORM ANY OTHER ACTS AS THE COMMITTEE DEEMS NECESSARY OR
APPROPRIATE FOR THE PROPER ADMINISTRATION OF THIS PLAN.

 

6.2           CLAIMS PROCEDURE. IF ANY CLAIM FOR BENEFITS UNDER THE PLAN IS
DENIED, THE COMMITTEE SHALL FOLLOW PROCEDURES SIMILAR TO THOSE THEN IN EFFECT
UNDER THE QUALIFIED

 

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PLAN FOR NOTIFYING THE APPLICANT OF SUCH DENIAL AND FOR AFFORDING THE APPLICANT
AN OPPORTUNITY TO APPEAL SUCH DENIAL.

 

6.3           SERVICE OF PROCESS. THE COMPANY OR SUCH OTHER PERSON AS MAY FROM
TIME TO TIME BE DESIGNATED BY THE COMMITTEE SHALL BE THE AGENT FOR SERVICE OF
PROCESS UNDER THE PLAN.

 

6.4           NO BOND REQUIRED. NO BOND OR OTHER SECURITY SHALL BE REQUIRED OF
ANY INDIVIDUAL OR THE COMMITTEE EXCEPT AS MAY BE REQUIRED BY LAW.

 

6.5           LIMITATION OF LIABILITY; INDEMNITY. EXCEPT TO THE EXTENT OTHERWISE
PROVIDED BY LAW, IF ANY DUTY OR RESPONSIBILITY OF THE COMMITTEE HAS BEEN
ALLOCATED OR DELEGATED TO ANY OTHER PERSON IN ACCORDANCE WITH ANY PROVISION OF
THE PLAN, THEN THE COMMITTEE SHALL NOT BE LIABLE FOR ANY ACT OR OMISSION OF SUCH
PERSON IN CARRYING OUT SUCH DUTY OR RESPONSIBILITY. THE COMPANY SHALL INDEMNIFY
AND SAVE EACH PERSON WHO IS A MEMBER OF THE COMMITTEE AND EACH EMPLOYEE OR
DIRECTOR OF THE COMPANY HARMLESS AGAINST ANY AND ALL LOSS, LIABILITY, CLAIM,
DAMAGE, COST AND EXPENSE WHICH MAY ARISE BY REASON OF, OR BE BASED UPON, ANY
MATTER CONNECTED WITH OR RELATED TO THE PLAN OR THE ADMINISTRATION OF THE PLAN
(INCLUDING, BUT NOT LIMITED TO, ANY AND ALL EXPENSES WHATSOEVER REASONABLY
INCURRED IN INVESTIGATING, PREPARING OR DEFENDING AGAINST ANY LITIGATION,
COMMENCED OR THREATENED, OR IN SETTLEMENT OF ANY SUCH CLAIM WHATSOEVER) TO THE
FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW.

 

6.6           POWERS OF THE COMMITTEE. NOTWITHSTANDING ANY OTHER PROVISIONS OF
THIS PLAN OR THE TRUST TO THE CONTRARY, THE COMMITTEE MAY, SUBJECT TO SECTION
7.10:

 

(I)            ACCELERATE A PARTICIPANT’S ELIGIBILITY FOR PRORATA OR FULL
BENEFITS UNDER THE PLAN;

 

(II)           PAY IN ONE LUMP SUM THE PRESENT VALUE OF ANY FULL OR PRORATA
BENEFIT UPON TERMINATION OF THE PLAN (TO THE EXTENT PERMITTED UNDER SECTION 409A
OF THE CODE);

 

(III)          ESTABLISH ELIGIBILITY CRITERIA FOR ANY PARTICIPANT OTHER THAN A
MEMBER OR THE CHAIRMAN TO RECEIVE FULL AND PRORATA BENEFITS, PROVIDED SUCH
CRITERIA ARE COMMUNICATED TO EACH SUCH PARTICIPANT IN WRITING BY THE COMMITTEE
AT THE TIME OF SUCH PARTICIPANT’S INITIAL PARTICIPATION IN THE PLAN; AND

 

(IV)          CAUSE THE COMPANY TO FUND THE TRUST AT ANY TIME BY DETERMINING
EACH PARTICIPANT’S FULL OR PRORATA BENEFIT AND CAUSING THE COMPANY TO CONTRIBUTE
TO A SEPARATE ACCOUNT MAINTAINED FOR EACH PARTICIPANT UNDER THE TRUST, IN CASH,
AN AMOUNT EQUAL TO THE PRESENT VALUE OF SUCH PARTICIPANT’S FULL OR PRORATA
BENEFIT (OR, IF ANNUAL PAYMENTS HAVE ALREADY COMMENCED, THE PRESENT VALUE OF THE
REMAINING BENEFIT) LESS ANY AMOUNT CREDITED TO SUCH PARTICIPANT’S ACCOUNT UNDER
THE TRUST AS OF THE DATE OF THE CONTRIBUTION.

 

Notwithstanding the provisions of paragraph (iv), the Committee shall upon the
occurrence of a Change in Control determine each Participant’s Full or Prorata
Benefit as

 

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of the end of such Participant’s latest completed month of service. Within five
(5) days following such a Change in Control (or, if later, on the date when
every Participant’s Full or Prorata Benefit has been determined), the Company
shall contribute to a separate account maintained for each Participant under the
Trust, in cash, an amount equal to 110% of the Present Value of each such
Participant’s Full or Prorata Benefit (or, if annual payments have already been
made, the Present Value of the remaining payments) less any amount credited to
such Participant’s account under the Trust as of the date of the contribution.
Within five (5) days of each anniversary of the Change in Control (or, if later,
on the date when each Participant’s benefit that has accrued as of the date of
such anniversary has been determined), the Company shall make an additional
contribution to the Trust, in cash, such that the amount maintained in each
Participant’s account shall equal at least 110% of the then Present Value of
each such Participant’s Full or Prorata Benefit (or, if annual payments have
already been made, the Present Value of the remaining payments) less any amount
credited to such Participant’s account under the Trust as of the date of such
additional contribution. Notwithstanding anything in this Plan to the contrary,
as of each anniversary of the Change in Control, the Company shall be entitled
to receive, if it so elects, a payment from the Trust such that after such
payment, the assets credited to each Participant’s account equal at least 120%
of the then Present Value of the Participant’s Full or Prorata Benefit (or, if
annual payments have already been made, the Present Value of the remaining
payments). For purposes of determining the Present Value of amounts described in
this paragraph for Participants who have not commenced receiving benefits under
the Plan, the Company shall assume that each Participant’s Benefit Commencement
Date will occur at age sixty (60), or if a Participant has already attained age
sixty (60), will occur immediately.

 

6.7           LEGAL FEES AND INTEREST. IF AFTER THE OCCURRENCE OF A CHANGE IN
CONTROL, (I) A DISPUTE ARISES WITH RESPECT TO THE ENFORCEMENT OF A PARTICIPANT’S
RIGHTS UNDER THIS PLAN, OR (II) ANY LEGAL OR ARBITRATION PROCEEDING SHALL BE
BROUGHT TO ENFORCE OR INTERPRET ANY PROVISION CONTAINED HEREIN OR TO RECOVER
DAMAGES FOR BREACH HEREOF AND THE PARTICIPANT PREVAILS IN WHOLE OR IN PART, IN
EITHER CASE SO LONG AS THE PARTICIPANT IS NOT ACTING IN BAD FAITH, THE
PARTICIPANT SHALL RECOVER FROM THE COMPANY ANY REASONABLE ATTORNEYS’ FEES AND
NECESSARY COSTS AND DISBURSEMENTS INCURRED AS A RESULT OF SUCH DISPUTE, LEGAL OR
ARBITRATION PROCEEDING (“EXPENSES”), AND PREJUDGMENT INTEREST ON ANY MONEY
JUDGMENT OR ARBITRATION AWARD OBTAINED BY THE PARTICIPANT CALCULATED AT THE
PRIME RATE OF INTEREST AS REPORTED BY THE WALL STREET JOURNAL FROM THE DATE THAT
PAYMENTS TO THE PARTICIPANT SHOULD HAVE BEEN MADE UNDER THIS PLAN. WITHIN TEN
(10) DAYS AFTER THE PARTICIPANT’S WRITTEN REQUEST THEREFOR, THE COMPANY SHALL
PAY TO SUCH PARTICIPANT, OR SUCH OTHER PERSON OR ENTITY AS SUCH PARTICIPANT MAY
DESIGNATE IN WRITING TO THE COMPANY, THE PARTICIPANT’S EXPENSES.

 

ARTICLE 7

 

MISCELLANEOUS

 

7.1           PAYMENT TO INCOMPETENT. IF ANY PERSON ENTITLED TO BENEFITS UNDER
THIS PLAN SHALL BE A MINOR OR SHALL BE EITHER PHYSICALLY OR MENTALLY INCOMPETENT
IN THE JUDGMENT OF THE COMMITTEE, SUCH BENEFITS MAY BE PAID PURSUANT TO THE SAME
PROCEDURES AS SPECIFIED

 

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FROM TIME TO TIME UNDER THE QUALIFIED PLAN. IN THE EVENT OF SUCH PAYMENT THE
COMPANY AND THE TRUST SHALL BE DISCHARGED FROM ALL FURTHER LIABILITY FOR SUCH
PAYMENT.

 

7.2           SPENDTHRIFT CLAUSE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, (I) NO
BENEFIT, DISTRIBUTION OR PAYMENT UNDER THE PLAN MAY BE ANTICIPATED, ASSIGNED
(EITHER AT LAW OR IN EQUITY), ALIENATED OR SUBJECT TO ATTACHMENT, GARNISHMENT,
LEVY, EXECUTION OR OTHER LEGAL OR EQUITABLE PROCESS, WHETHER PURSUANT TO A
“QUALIFIED DOMESTIC RELATIONS ORDER”, AS DEFINED IN SECTION 414(P) OF THE CODE,
OR OTHERWISE; AND (II) THE PLAN SHALL IN NO MANNER BE LIABLE FOR OR SUBJECT TO
THE DEBTS OR LIABILITIES OF ANY PARTICIPANT.

 

7.3           DATA. ANY PARTICIPANT OR SPOUSE ENTITLED TO BENEFITS UNDER THE
PLAN MUST FURNISH TO THE COMMITTEE SUCH DOCUMENTS, EVIDENCE OR INFORMATION AS
THE COMMITTEE CONSIDERS NECESSARY OR DESIRABLE FOR THE PURPOSE OF ADMINISTERING
THE PLAN, OR TO PROTECT THE COMMITTEE; AND IT IS A CONDITION OF THE PLAN THAT
EACH SUCH PARTICIPANT OR SPOUSE MUST FURNISH PROMPTLY TRUE AND COMPLETE DATA,
EVIDENCE OR INFORMATION AND SIGN SUCH DOCUMENTS AS THE COMMITTEE MAY REQUIRE
BEFORE ANY BENEFITS BECOME PAYABLE UNDER THE PLAN.

 

7.4           SEPARABILITY. IF ANY PROVISION OF THE PLAN IS HELD INVALID OR
UNENFORCEABLE, ITS INVALIDITY OR UNENFORCEABILITY WILL NOT AFFECT ANY OTHER
PROVISIONS OF THE PLAN, AND THE PLAN WILL BE CONSTRUED AND ENFORCED AS IF SUCH
PROVISION HAD NOT BEEN INCLUDED THEREIN.

 

7.5           CAPTIONS. THE CAPTIONS CONTAINED HEREIN ARE INSERTED ONLY AS A
MATTER OF CONVENIENCE AND FOR REFERENCE AND IN NO WAY DEFINE, LIMIT, ENLARGE OR
DESCRIBE THE SCOPE OR INTENT OF THE PLAN NOR SHALL, IN ANY WAY, AFFECT THE PLAN
OR THE CONSTRUCTION OF ANY PROVISION THEREOF.

 

7.6           RIGHT OF DISCHARGE RESERVED. THE ESTABLISHMENT OF THE PLAN SHALL
NOT BE CONSTRUED TO CONFER UPON ANY PARTICIPANT ANY LEGAL RIGHT TO BE RETAINED
IN THE EMPLOY OF THE COMPANY OR GIVE ANY PARTICIPANT OR ANY OTHER PERSON ANY
RIGHT TO BENEFITS, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED FOR HEREUNDER. ALL
PARTICIPANTS WILL REMAIN SUBJECT TO DISCHARGE TO THE SAME EXTENT AS IF THE PLAN
HAD NEVER BEEN ADOPTED, AND MAY BE TREATED WITHOUT REGARD TO THE EFFECT SUCH
TREATMENT MIGHT HAVE UPON THEM UNDER THE PLAN.

 

7.7           NOT COMPENSATION FOR OTHER PLANS. NO COMPENSATION PAYABLE AS A
CONSEQUENCE OF PARTICIPATION IN THE PLAN SHALL BE CONSIDERED IN CALCULATING OR
DETERMINING BENEFITS, COVERAGE OR CONTRIBUTIONS UNDER ANY OTHER EMPLOYEE BENEFIT
PLAN OR PROGRAM, UNLESS OTHERWISE EXPLICITLY PROVIDED UNDER SUCH PLAN OR PROGRAM
OR AS OTHERWISE REQUIRED BY APPLICABLE LAW.

 

7.8           ARBITRATION. PRIOR TO A CHANGE IN CONTROL, ANY DISPUTE,
CONTROVERSY OR CLAIM BETWEEN A PARTICIPANT AND THE COMPANY ARISING OUT OF OR
RELATING TO OR CONCERNING THE PROVISIONS OF THE PLAN SHALL BE FINALLY SETTLED BY
ARBITRATION IN THE CITY OF NEW YORK BEFORE, AND IN ACCORDANCE WITH, THE
COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION (“AAA”).
IF, AFTER THE OCCURRENCE OF A CHANGE IN CONTROL, ANY DISPUTE, CONTROVERSY OR
CLAIM ARISES BETWEEN A PARTICIPANT AND THE COMPANY OUT OF OR RELATING TO OR
CONCERNING THE PROVISIONS OF THE PLAN, SUCH DISPUTE, CONTROVERSY OR CLAIM

 

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SHALL BE FINALLY SETTLED BY A COURT OF COMPETENT JURISDICTION IN THE CITY OF NEW
YORK WHICH, NOTWITHSTANDING THE PROVISIONS OF ARTICLE 6 OR ANY OTHER PROVISION
OF THE PLAN, SHALL APPLY A DE NOVO STANDARD OF REVIEW TO ANY DETERMINATION MADE
BY THE COMPANY, THE BOARD OR THE COMMITTEE.

 

7.9           GOVERNING LAW AND LIMITATIONS ON ACTIONS. THE PLAN IS INTENDED TO
CONSTITUTE AN ARRANGEMENT THAT IS UNFUNDED AND MAINTAINED PRIMARILY FOR THE
PURPOSE OF PROVIDING DEFERRED COMPENSATION FOR A SELECT GROUP OF MANAGEMENT OR
HIGHLY COMPENSATED EMPLOYEES, ALL WITHIN THE MEANING OF  ERISA, AS AMENDED. TO
THAT EXTENT, RIGHTS UNDER THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH RULES OF FEDERAL LAW APPLICABLE TO SUCH PLANS. TO THE EXTENT
THAT SUCH RULES OF FEDERAL LAW ARE NOT APPLICABLE, THE PLAN SHALL BE CONSTRUED,
AND ALL PROVISIONS HEREOF SHALL BE ENFORCED AND ADMINISTERED, ACCORDING TO THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW;
PROVIDED, HOWEVER, THAT ANY DETERMINATION OF WHETHER A CHANGE IN CONTROL HAS
OCCURRED FOR PURPOSES OF THIS PLAN SHALL BE DETERMINED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW. NO
ACTION (WHETHER AT LAW, IN EQUITY OR OTHERWISE) OR ARBITRATION CLAIM SHALL BE
BROUGHT BY OR ON BEHALF OF ANY PARTICIPANT OR SPOUSE FOR OR WITH RESPECT TO
BENEFITS DUE UNDER THIS PLAN UNLESS THE PERSON BRINGING SUCH ACTION HAS TIMELY
EXHAUSTED THE PLAN’S CLAIM REVIEW PROCEDURE. ANY ACTION (WHETHER AT LAW, IN
EQUITY OR OTHERWISE) OR ARBITRATION CLAIM MUST BE COMMENCED WITHIN THREE YEARS.
THIS THREE YEAR PERIOD SHALL BE COMPUTED FROM THE EARLIER OF (I) THE DATE A
FINAL DETERMINATION DENYING SUCH BENEFIT, IN WHOLE OR IN PART, IS ISSUED UNDER
THE PLAN’S CLAIM REVIEW PROCEDURE AND (II) THE DATE SUCH INDIVIDUAL’S CAUSE OF
ACTION FIRST ACCRUED (AS DETERMINED UNDER THE LAWS OF THE STATE OF NEW YORK OR
THE STATE OF DELAWARE, AS APPLICABLE, WITHOUT REGARD TO PRINCIPLES OF CHOICE OF
LAWS).

 

7.10         COMPLIANCE WITH THE PROVISIONS OF CODE SECTION 409A.
NOTWITHSTANDING ANYTHING IN THIS PLAN TO THE CONTRARY, PAYMENT UNDER THE PLAN TO
ANY PARTICIPANT SHALL BE DEFERRED, IF NECESSARY, UNTIL THE FIRST DATE THAT SUCH
PAYMENT COULD BE MADE WITHOUT SUBJECTING THE PARTICIPANT TAXES IMPOSED BY CODE
SECTION 409A. FOR THE AVOIDANCE OF DOUBT, NOTWITHSTANDING ANY OTHER PROVISION OF
THIS PLAN, IN THE EVENT THAT IT IS DETERMINED BY THE COMMITTEE THAT, AS A RESULT
OF SECTION 409A OF THE CODE, A PARTICIPANT IS DEEMED TO BE A “SPECIFIED
EMPLOYEE” (WITHIN THE MEANING OF SECTION 409A(A)(2)(B)(I) OF THE CODE), 
PAYMENTS HEREUNDER 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 ALL ITS SUBSIDIARIES, DETERMINED IN ACCORDANCE WITH SECTION 409A OF THE CODE
AND THE REGULATIONS PROMULGATED THEREUNDER, AND AS SOON AS PRACTICABLE, BUT NOT
LATER THAN THIRTY (30) DAYS FOLLOWING THE EXPIRATION OF SUCH SIX (6) MONTH
PERIOD, THE COMPANY WILL MAKE SUCH PAYMENTS REQUIRED HEREUNDER.

 

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IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC. has caused this instrument to
be executed by its duly authorized officers, and its corporate seal to be
hereunto affixed, this 8th day of November, 2007.

 

 

LEHMAN BROTHERS HOLDINGS INC.

 

 

 

By:

/s/ Tracy A. Binkley

 

 

Title:

Vice President and

 

 

Director of Global Human Resources

 

 

ATTEST:

 

 

 

/s/ Madeline L. Shapiro

 

 

Madeline L. Shapiro

 

Assistant Secretary

 

 

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