Exhibit 10.6
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600 Lexington Avenue, 6th Floor, New York, NY 10022
Phone:
212.759.4433
Fax:
212.759.5532
September 15, 2008
Lehman Brothers Holdings, Inc.
745 Seventh Avenue
New York, NY 10019
Dear Sir/Madam:
This letter confirms and sets forth the terms and conditions, subject to the
approval of the Bankruptcy Court, of the engagement between Alvarez & Marsal
North America, LLC ("A&M") and Lehman Brothers Holdings, Inc. (the "Company"),
including the scope of the services to be performed and the basis of
compensation for those services.
Upon execution of this letter by each of the
parties below and receipt of the retainer described below, this letter will
constitute an agreement between the Company and A&M.
1.
DESCRIPTION OF SERVICES
A.
PERSONNEL.
IN CONNECTION WITH THIS
ENGAGEMENT, A&M SHALL MAKE AVAILABLE TO THE COMPANY AND ITS SUBSIDIARIES:
(I)
BRYAN P. MARSAL TO SERVE AS THE CHIEF
RESTRUCTURING OFFICER (THE "CRO"); AND
(II)
UPON THE MUTUAL AGREEMENT OF A&M AND THE
BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD"), SUCH ADDITIONAL PERSONNEL (WHO
MAY BE EMPLOYEES OF AFFILIATES OF A&M WHICH AFFILIATES ARE WHOLLY-OWNED BY A&M'S
PARENT COMPANY AND EMPLOYEES) AS ARE NECESSARY TO ASSIST IN THE PERFORMANCE OF
THE DUTIES SET FORTH IN CLAUSE 1.B BELOW (THE "ADDITIONAL PERSONNEL").
UP TO
TWO OF SUCH ADDITIONAL PERSONNEL SHALL BE DESIGNATED BY THE COMPANY AS EXECUTIVE
OFFICERS (THE "ADDITIONAL OFFICERS").
B.
DUTIES.
(I)
THE CRO, TOGETHER WITH ANY ADDITIONAL
PERSONNEL, IN COOPERATION WITH THE CHIEF EXECUTIVE OFFICER OF THE COMPANY (THE
"CEO"), SHALL PERFORM A FINANCIAL REVIEW OF THE COMPANY, INCLUDING BUT NOT
LIMITED TO A REVIEW AND ASSESSMENT OF FINANCIAL INFORMATION THAT HAS BEEN, AND
THAT WILL BE, PROVIDED BY THE COMPANY TO ITS CREDITORS, INCLUDING WITHOUT
LIMITATION ITS SHORT AND LONG-TERM PROJECTED CASH FLOWS;
(II)
THE CRO AND ANY ADDITIONAL PERSONNEL SHALL ASSIST IN ASSET SALES,
THE IDENTIFICATION OF COST REDUCTION AND OPERATIONS IMPROVEMENT OPPORTUNITIES;
(III)
THE CRO AND ANY ADDITIONAL PERSONNEL SHALL ASSIST THE CEO IN
DEVELOPING FOR THE BOARD'S REVIEW POSSIBLE RESTRUCTURING PLANS OR STRATEGIC
ALTERNATIVES FOR MAXIMIZING THE ENTERPRISE VALUE OF THE COMPANY'S VARIOUS
BUSINESS LINES;
(IV)
THE CRO SHALL SERVE AS THE PRINCIPAL CONTACT WITH THE COMPANY'S
CREDITORS WITH RESPECT TO THE COMPANY'S FINANCIAL AND OPERATIONAL MATTERS; AND
(V)
THE CRO AND ANY ADDITIONAL PERSONNEL SHALL PERFORM SUCH OTHER
SERVICES IN CONNECTION WITH THE RESTRUCTURING PROCESS AS REASONABLY REQUESTED OR
DIRECTED BY THE BOARD, THE CEO, AND OTHER AUTHORIZED COMPANY PERSONNEL.
C.
REPORTING.
THE CRO AND ANY ADDITIONAL
PERSONNEL SHALL REPORT TO THE CEO AND TO THE BOARD.
D.
EMPLOYMENT BY A&M.
THE CRO AND ANY
ADDITIONAL PERSONNEL WILL CONTINUE TO BE EMPLOYED BY A&M AND WHILE RENDERING
SERVICES TO THE COMPANY WILL CONTINUE TO WORK WITH OTHER PERSONNEL AT A&M IN
CONNECTION WITH OTHER UNRELATED MATTERS, WHICH WILL NOT UNDULY INTERFERE WITH
SERVICES PURSUANT TO THIS ENGAGEMENT.
WITH RESPECT TO THE COMPANY, HOWEVER, THE
CRO AND ANY ADDITIONAL OFFICERS SHALL OPERATE UNDER THE DIRECTION OF THE BOARD
AND A&M SHALL HAVE NO LIABILITY TO THE