Document:

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                                                                    Exhibit 10.1

                         YORK INTERNATIONAL CORPORATION

                         MANAGEMENT STOCK PURCHASE PLAN

                            EFFECTIVE AUGUST 1, 2003

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                         YORK INTERNATIONAL CORPORATION
                         MANAGEMENT STOCK PURCHASE PLAN

                                TABLE OF CONTENTS
<TABLE>
<S>                 <C>                                                                                       <C>
ARTICLE I                  PURPOSE AND EFFECTIVE DATE....................................................      1
     1.1.           Purpose..............................................................................      1
     1.2.           Effective Date.......................................................................      1

ARTICLE II                 DEFINITIONS...................................................................      1

ARTICLE III                ELIGIBILITY...................................................................      8
     3.1.           Eligibility..........................................................................      8
     3.2.           Participation and Deferral Agreements................................................      8

ARTICLE IV                 CONTRIBUTIONS.................................................................     10
     4.1.           Bonus Deferrals......................................................................     10
     4.2.           Matching Contributions...............................................................     11

ARTICLE V                  ACCOUNTING FOR RESTRICTED STOCK UNITS.........................................     11
     5.1.           Account Establishment................................................................     11
     5.2.           Dividends............................................................................     12
     5.3.           Stock Adjustments....................................................................     12

ARTICLE VI                 VESTING.......................................................................     13
     6.1.           Deferral RSUs and Dividend RSUs......................................................     13
     6.2.           Matching RSUs........................................................................     13
     6.3.           Change in Control....................................................................     14

ARTICLE VII                DISTRIBUTIONS.................................................................     14
     7.1.           Normal Distributions.................................................................     14
     7.2.           Deferral of Distributions............................................................     14
     7.3.           Distributions on Termination of Employment...........................................     14
     7.4.           Distributions Upon a Change in Control...............................................     15
     7.5.           Valuation and Manner of Distributions................................................     15
     7.6.           Hardship Withdrawals.................................................................     16

ARTICLE VIII               FUNDING.......................................................................     16

ARTICLE IX                 ADMINISTRATION................................................................     17
     9.1.           Administration.......................................................................     17
     9.2.           Administrative Review................................................................     18
     9.3.           General..............................................................................     18
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<TABLE>
<S>                                                                                                           <C>
ARTICLE X                  CLAIMS PROCEDURE..............................................................     19
     10.1.          Initial Claim........................................................................     19
     10.2.          Procedure for Review.................................................................     19
     10.3.          Claim Denial Procedure...............................................................     19
     10.4.          Appeal Procedure.....................................................................     20
     10.5.          Decision on Appeal...................................................................     21
     10.6.          Arbitration..........................................................................     22
     10.7.          Disputes:Enforcement of Rights.......................................................     22
     10.8.          No Stockholders' Rights..............................................................     22

ARTICLE XI                 AMENDMENT, DISCONTINUANCE AND TERMINATION.....................................     23

ARTICLE XII                MISCELLANEOUS.................................................................     23
     12.1.          Non-Guarantee of Employment..........................................................     23
     12.2.          Rights of Participants to Benefits...................................................     23
     12.3.          No Assignment........................................................................     24
     12.4.          Withholding..........................................................................     24
     12.5.          Account Statements...................................................................     24
     12.6.          Gender...............................................................................     24
     12.7.          Titles...............................................................................     24
     12.8.          Governing Law........................................................................     25
     12.9.          Other Plans..........................................................................     25
</TABLE>

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                         YORK INTERNATIONAL CORPORATION
                         MANAGEMENT STOCK PURCHASE PLAN

                                   ARTICLE I
                           PURPOSE AND EFFECTIVE DATE

         1.1.     PURPOSE. The Plan is intended to provide deferred compensation
for a select group of management or highly compensated employees of the
Employer. The Plan is an unfunded plan that is not intended to be (i) subject to
Parts 2, 3 or 4 of Title I, Subtitle B of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or (ii) qualified under section
401(a) of the Internal Revenue Code.

         1.2.     EFFECTIVE DATE. The Plan is effective August 1, 2003.

                                   ARTICLE II

                                   DEFINITIONS

         As used herein, the following terms shall have the following meanings:

         2.1.     ACCOUNT. The bookkeeping reserve account established and
maintained for each Participant pursuant to Article V for purposes of
determining the amount payable to the Participant pursuant to Article VII. Each
such Account shall consist of such subaccounts as are necessary or desirable to
the Administrative Committee for the convenient administration of the Plan.

         2.2.     ADMINISTRATIVE COMMITTEE. The Corporation's Pension Investment
Committee which shall be comprised of the individuals who shall from time to
time serve as the

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Corporation's Chief Financial Officer, Vice President of Human Resources and
General Counsel and any other individuals designated by the Board.

         2.3.     APPROVED DISTRIBUTION DATE. A date after a Participant's
Normal Distribution Date that has been approved by the Compensation Committee on
which distribution of the value of a Tranche of Restricted Stock Units will be
made in accordance with Section 7.2.

         2.4.     BENEFICIARY. The person(s), trust(s) or other entities, the
Participant designates, in accordance with procedures established by the
Administrative Committee, to receive any benefits under the Plan after the death
of the Participant. If the Participant has not designated a Beneficiary, or if
no Beneficiary survives the Participant, the aggregate amount then credited to
the Participant's Account shall be paid in a single sum to the Participant's
estate.

         2.5.     BOARD. The Board of Directors of the Corporation or, if the
Board so directs, the Compensation Committee of such Board acting on behalf of
the Board in the exercise of any and all powers and duties of the Board pursuant
to this Plan.

         2.6.     BONUS. The annual performance bonus payable by the Employer to
a Participant, and, at the discretion of the Compensation Committee, the
mid-term performance bonus payable by the Employer to a Participant.

         2.7.     BONUS DEFERRALS. Part or all of a Participant's Bonus, the
receipt of which is deferred by the Participant pursuant to Section 4.1.

         2.8.     CHANGE IN CONTROL. Each of the following will be a Change in
Control for purposes of the Plan:

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                  (a)      The acquisition by any individual, entity or group
(within the meaning of section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 30% or more of the then outstanding shares of Stock (the "Outstanding
Stock"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from the Corporation, (ii) any acquisition by the
Corporation, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any corporation controlled
by the Corporation, or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i) and (ii) of subsection (c) hereof;
or

                  (b)      Individuals who, as of the effective date of the
Plan, constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to such date whose election, or
nomination for election by the Corporation's shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person or
entity other than the Board; or

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                  (c)      Consummation of a reorganization, merger or
consolidation involving the Corporation or sale or other disposition of all or
substantially all of the assets of the Corporation (a "Business Combination"),
in each case, unless, following such Business Combination, (i) either (A) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Stock immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transactions owns the Corporation or all
or substantially all of the Corporation's assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Stock or (B)
at least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board as
of the effective date of the Plan, or at the time of the action of the Board,
providing for such Business Combination and (ii) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Corporation or such corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 30% or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination; or

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                  (d)      A complete liquidation or dissolution of the
Corporation.

         For avoidance of doubt, in no event shall any of the events enumerated
subsections (a) through (d) that occurs with respect to any Employer other than
the Corporation result in a Change in Control under the Plan.

         2.9.     CODE. The Internal Revenue Code of 1986, as amended.

         2.10.    COMPENSATION COMMITTEE. The compensation committee of the
Board.

         2.11.    CORPORATION. York International Corporation and any successor.

         2.12.    DISABILITY. A physical or mental condition of a Participant,
incurred while employed by the Employer, that would qualify the Participant for
disability benefits under the Social Security Act, but excluding a condition
resulting from service in the armed forces of any country other than the country
of which the Participant is a citizen, participation in a felonious criminal act
or intentional self-infliction. A Participant shall provide evidence of a
Disability, including the continued receipt of Social Security disability
benefits, if applicable, as the Administrative Committee may require from time
to time.

         2.13.    DEFERRAL AGREEMENT. The written agreement entered into between
the Participant and the Employer pursuant to Article III.

         2.14.    DEFERRED COMPENSATION PLAN. The York International Corporation
Executive Deferred Compensation Plan, as amended from time to time.

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         2.15.    EMPLOYER. The Corporation, its successors and assigns, any
subsidiary or affiliated organization of the Corporation, unless such subsidiary
or affiliated organization is otherwise excluded as a participating employer by
the Board, and any organization into which an Employer may be merged or
consolidated or to which all or substantially all of its assets may be
transferred.

         2.16.    FAIR MARKET VALUE. The closing price of the Stock on the
exchange where the Stock is principally traded. If the Stock is not traded on an
exchange, but is traded in the over-the-counter market, Fair Market Value on the
relevant date shall mean the last sale price reported by the National
Association of Securities Dealers Automated Quotation Systems ("NASDAQ"), if the
Stock is included in the National Market System or the average of the closing
bid and asked prices reported on the preceding day on which such prices were
reported. If the Stock is not traded on an exchange or reported by NASDAQ, the
Compensation Committee shall determine Fair Market Value.

         2.17.    MATCHING CONTRIBUTION. Amounts credited to a Participant's
Account pursuant to Section 4.2.

         2.18.    NORMAL DISTRIBUTION DATE. The third anniversary of the date on
which a Bonus would otherwise be payable to a Participant (or in the
Compensation Committee's sole discretion, such other date as it shall determine,
provided it notifies all affected Participants of such other date prior to the
beginning of the Plan Year with respect to which such Bonus is earned) on which
distribution of the value of a Tranche of Restricted Stock Units will be made in
accordance with Section 7.2.

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         2.19.    OMNIBUS STOCK PLAN. The York International Corporation 2002
Amended and Restated Omnibus Stock Plan, as amended from time to time.

         2.20.    PARTICIPANT. An individual who is eligible to participate in
the Plan pursuant to Article III and who has delivered an executed Deferral
Agreement to the Administrative Committee in accordance with the provisions of
Article III.

         2.21.    PLAN. The York International Corporation Management Stock
Purchase Plan as set forth herein and as amended from time to time.

         2.22.    PLAN YEAR. The calendar year.

         2.23.    RESTRICTED STOCK UNIT OR RSU. A notional entry that is entered
in a Participant's Account which represents a right to one share of Stock in
accordance with the terms of this Plan. Restricted Stock Units will be
designated as follows:

                  (a)      DEFERRAL RSU. A Restricted Stock Unit which has been
credited to a Participant's Account in accordance with Article V solely on the
basis of a Participant's Bonus Deferrals.

                  (b)      DIVIDEND RSU. A Restricted Stock Unit which has been
credited to a Participant's Account in accordance with Article V solely on the
basis of dividends paid with respect to RSUs already held in a Participant's
Account (whether such RSUs are Deferral RSUs or Matching RSUs).

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                  (c)      MATCHING RSU. A Restricted Stock Unit which has been
credited to a Participant's Account in accordance with Article V solely on the
basis of Matching Contributions made by the Employer.

         2.24.    STOCK. The common stock of York International Corporation.

         2.25.    TRANCHE. The amount of Restricted Stock Units credited to a
Participant's Account during any one Plan Year.

         2.26.    VALUATION DATE. The business day used for purposes of valuing
the Restricted Stock Units credited to a Participant's Account prior to a
distribution described in Article VII.

                                   ARTICLE III

                                   ELIGIBILITY

         3.1.     ELIGIBILITY. Each highly compensated employee or member of
management of the Employer who is selected by the Compensation Committee shall
be eligible to become a Participant as of the date designated by the
Compensation Committee. An eligible employee shall remain eligible until such
time as the Compensation Committee affirmatively revokes such employee's
eligibility.

         3.2.     PARTICIPATION AND DEFERRAL AGREEMENTS.

         In order to become a Participant in the Plan for purposes of having
Bonus Deferrals credited to such Participant's Account, an eligible employee
must deliver an executed

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Deferral Agreement to the Administrative Committee in accordance with the
following provisions:

                  (a)      NEWLY ELIGIBLE EMPLOYEES.

                           (i)      Each newly eligible employee must deliver an
executed Deferral Agreement to the Administrative Committee by the later of (A)
March 31 of the Plan Year in which the employee first becomes eligible or (B)
within thirty days of first becoming eligible, in order to elect Bonus Deferrals
pursuant to Section 4.1 with respect to a Bonus that may become payable for
services rendered during the Plan Year in which such individual first becomes
eligible.

                           (ii)     Notwithstanding Section 3.2(a)(i), if an
employee first becomes eligible for the Plan anytime during the last quarter of
a Plan Year, such individual may elect Bonus Deferrals pursuant to Section 4.1
only with respect to the Bonus that may become payable for services to be
rendered during the Plan Year next following the Plan Year in which such
employee first becomes eligible and for subsequent Plan Years (i.e., no Bonus
Deferrals may be elected for the Plan Year in which such employee first becomes
eligible).

                  (b)      PREVIOUSLY ELIGIBLE EMPLOYEES. Except as provided in
Section 3.2(a) above, an eligible employee may make a Bonus Deferral election
with respect to a subsequent Plan Year by delivering an executed Deferral
Agreement to the Administrative Committee by March 31 of each such Plan Year to
which the Bonus Deferral election is to apply.

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                  (c)      SUBSEQUENT ELECTIONS. A Participant's executed
Deferral Agreement with respect to Bonus Deferrals shall be effective only with
respect to the specific Plan Year to which such Deferral Agreement applies and
shall not be effective for any subsequent Plan Year.

                                   ARTICLE IV

                                  CONTRIBUTIONS

         4.1.     BONUS DEFERRALS.

                  (a)      A Participant may elect to defer the receipt of all
or any portion of any Bonus the Participant might be awarded with respect to the
Participant's services performed during a Plan Year. The amount of such Bonus
Deferral must be specified in an executed Deferral Agreement delivered to the
Administrative Committee in accordance with the provisions of Section 3.2. A
Bonus Deferral election is irrevocable once the applicable executed Deferral
Agreement is delivered to the Administrative Committee.

                  (b)      The amount of any Bonus deferred with respect to any
Plan Year shall reduce the amount of such Bonus otherwise payable to the
Participant as of the date such payment otherwise would have been made, and the
amount of such reduction shall be allocated to the Participant's Account
effective as of the date the applicable Bonus would otherwise have been payable.

                  (c)      In determining the percentage amount of any Bonus
Deferral, the Participant's full Bonus shall be considered without regard to any
deferrals made under the

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Deferred Compensation Plan. In no event shall a Participant be permitted to make
Bonus Deferrals and deferrals under the Deferred Compensation Plan which exceed
100% of his or her Bonus.

         4.2.     MATCHING CONTRIBUTIONS.

         For each Plan Year, the Administrative Committee shall allocate to each
Participant's Account an amount equal to at least twenty-five percent (25%) of
the Participant's Bonus Deferrals for such Plan Year or, in the Compensation
Committee's sole discretion, such lower percentage as it shall determine,
provided that it notifies all affected Participants of such lower percentage
prior to the beginning of such Plan Year. Matching Contributions shall be
allocated to a Participant's Account at the same time as such Participant's
Bonus Deferrals are allocated to his or her Account.

                                   ARTICLE V

                      ACCOUNTING FOR RESTRICTED STOCK UNITS

         5.1.     ACCOUNT ESTABLISHMENT. The Administrative Committee shall
establish an Account on behalf of each Participant which shall be credited with
Restricted Stock Units. The number of Restricted Stock Units credited to a
Participant's Account shall be equal to the Participant's total Bonus Deferral
for a Plan Year plus the total of his or her Matching Contributions for such
Plan Year divided by the Fair Market Value of the Stock on the date such amounts
are allocated to his or her Account. Partial Restricted Stock Units may be
credited to a Participant's Account. The establishment of an Account shall not
require segregation of any

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funds of the Corporation or the Employer or provide any Participant with any
rights to any assets of the Corporation or the Employer, except as a general
creditor thereof. A Participant shall have no right to receive payment of any
amount credited to the Participant's Account except as expressly provided in
Article VI of this Plan.

         5.2.     DIVIDENDS. If during the period of time a Participant's
Account is credited with Restricted Stock Units, the Corporation pays a dividend
with respect to its Stock, the Participant shall be credited with additional
Restricted Stock Units in accordance with this Section. The number of additional
Restricted Stock Units credited to a Participant's Account pursuant to this
Section shall be calculated by dividing (a) the product of (i) the whole number
of Restricted Stock Units held in the Participant's Account as of the date the
dividend is paid times (ii) the amount of such dividend with respect to each
share of Stock, by (b) the Fair Market Value of the Stock on the date such
dividend is paid. Restricted Stock Units shall be credited to a Participant's
Account under this Section as of the date the applicable dividend is paid.

         5.3.     STOCK ADJUSTMENTS. The Administrative Committee shall adjust
each Participant's Account as appropriate to reflect any stock dividend, stock
split, combination of shares, merger, share exchange, consolidation or any other
change in the corporate structure of the Corporation or the Stock.

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                                   ARTICLE VI

                                     VESTING

         6.1.     DEFERRAL RSUs AND DIVIDEND RSUs. Deferral RSUs and Dividend
RSUs (but not Matching RSUs) credited to a Participant's Account shall be fully
vested at all times.

         6.2.     MATCHING RSUs. Except as provided below, each Tranche of
Matching RSUs shall become vested on the applicable Normal Distribution Date,
provided the Participant remains in the continuous employment of the Employer
until such date. If a Participant terminates employment due to death or
Disability prior to the applicable Normal Distribution Date with respect to a
Tranche of Matching RSUs, such Tranche shall become fully vested. If a
Participant terminates employment due to retirement or is involuntarily
terminated by the Employer without Cause prior to the applicable Normal
Distribution Date with respect to a Tranche of Matching RSUs, such Tranche shall
become vested on a pro-rata basis. Such pro rata amount shall be calculated
based upon the Participant's fully completed months of employment with the
Employer from the time such Tranche was credited to the Participant's Account
compared to the months of employment that would have been completed from the
time such Tranche was credited to the Participant's Account until the applicable
Normal Distribution Date. If a Participant voluntarily terminates employment
(other than for retirement) or is terminated by the Employer for Cause prior to
the applicable Normal Distribution Date with respect to a Tranche of Matching
RSUs, such Tranche shall be forfeited and the Participant shall have no rights
with respect to such Matching RSUs.

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         6.3.     CHANGE IN CONTROL. Upon a Change in Control, all Matching RSUs
credited to a Participant's Account shall become immediately fully vested.

                                  ARTICLE VII

                                 DISTRIBUTIONS

         7.1.     NORMAL DISTRIBUTIONS. Subject to Section 7.3 and 7.4, and in
accordance with Section 7.5, the value of a Tranche of Restricted Stock Units
shall be distributed on the Normal Distribution Date, unless the Administrative
Committee has approved a subsequent distribution date in accordance with Section
7.2; provided, however, that the Compensation Committee may determine in its
sole and absolute discretion to delay payment commencement to any Participant if
necessary to avoid application of the deduction limitation of section 162(m) of
the Code to the Employer.

         7.2.     DEFERRAL OF DISTRIBUTIONS. On or before December 31 of the
Plan Year prior to the Plan Year in which the applicable Normal Distribution
Date for a Tranche of Restricted Stock Units will occur, a Participant may
request that the Administrative Committee approve a distribution from his or her
Account be paid on an Approved Distribution Date elected in accordance with
procedures established by the Committee The Approved Distribution Date shall be
applicable to an entire Tranche of Restricted Stock Units, whether they are
Deferral RSUs, Dividend RSUs or Matching RSUs.

         7.3.     DISTRIBUTIONS ON TERMINATION OF EMPLOYMENT. Upon a
Participant's termination of employment from the Employer for any reason, the
value of all vested Restricted

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Stock Units shall be distributed to the Participant (or in the case of a
Participant's death to his or her Beneficiary) in accordance with Section 7.5 as
soon as practicable.

         7.4.     DISTRIBUTIONS UPON A CHANGE IN CONTROL. Upon a Change in
Control, the value of all Restricted Stock Units shall be distributed to the
Participant in accordance with Section 7.5 as soon as practicable.

         7.5.     VALUATION AND MANNER OF DISTRIBUTIONS.

                  (a)      The Valuation Date for distributions made on a Normal
Distribution Date or an Approved Distribution Date in accordance with Sections
7.1 and 7.2 shall be such Normal Distribution Date or Approved Distribution
Date, as applicable.

                  (b)      The Valuation Date for distributions made upon
termination of employment or Change in Control in accordance with Sections 7.3
or 7.4, respectively, shall be the date of the Participant's termination of
employment or Change in Control, as applicable.

                  (c)      Except as provided below, distributions from this
Plan shall be made in Stock issued under the Omnibus Stock Plan or in cash if
Stock is not available under the Omnibus Stock Plan. Notwithstanding the
foregoing, the Compensation Committee may, in its sole discretion, determine
that all or part of a Participant's distribution shall be in cash (including for
reasons of payment of any applicable withholding taxes); provided, however, that
no partial shares of Stock shall be distributed and in lieu thereof cash shall
be distributed. Distributions in Stock shall be made by issuing Stock
certificates for a number of shares equal to the vested Restricted Stock Units
to be distributed on the applicable Valuation Date. Distributions in cash

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from a Participant's Account shall be in an amount equal to the number of vested
full and partial Restricted Share Units in a Participant's Account, which were
not distributed in Stock in accordance with the prior sentence, times the Fair
Market Value of the Stock on the Valuation Date. Upon Distribution all rights to
any Restricted Stock Units shall be cancelled.

         7.6.     HARDSHIP WITHDRAWALS. The Administrative Committee shall
establish procedures under which a Participant may request a withdrawal of some
or all of the Participant's Account in the event of an unforeseeable severe
financial emergency. In general, an unforeseeable severe financial emergency
would include circumstances resulting from a sudden and unexpected illness or
accident of the Participant or of the Participant's spouse or dependent, loss of
the Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant and for which the resulting financial hardship cannot be
reasonably relieved through other sources of funds or by cessation of deferrals
under this Plan. The Compensation Committee, in its sole and absolute
discretion, shall determine whether any such financial emergency warrants a
withdrawal from the Participant's Account and shall determine the amount of such
withdrawal so as to limit the withdrawal to that amount which is needed to
satisfy the emergency need.

                                  ARTICLE VIII

                                     FUNDING

         The obligations of the Corporation and the Employer to distribute
benefits under this Plan shall be interpreted solely as an unfunded, contractual
obligation to distribute only those amounts credited to the Participant's
Account pursuant to Article V in the manner and

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under the conditions prescribed in Articles VI and VII. Any assets set aside,
including any assets transferred to a rabbi trust or purchased by the
Corporation or the Employer with respect to amounts payable under the Plan,
shall be subject to the claims of the Corporation's or the Employer's general
creditors, and no person other than the Corporation or the Employer shall, by
virtue of the provisions of the Plan, have any interest in such assets. All
amounts deferred pursuant to this Plan may, in the Compensation Committee's
discretion, be transferred to an irrevocable rabbi trust as soon as practicable
after such amounts are allocated to a Participant's Account pursuant to Article
IV.

                                   ARTICLE IX

                                 ADMINISTRATION

         9.1.     ADMINISTRATION. The Plan will be administered by the
Administrative Committee. The Administrative Committee shall be the named
fiduciary for purposes of the claims procedure pursuant to Article IX and shall
have authority to act to the full extent of its absolute discretion to:

                  (a)      interpret the Plan;

                  (b)      resolve and determine all disputes or questions
arising under the Plan subject to the provisions of Article IX, including the
power to determine the rights of Participants and Beneficiaries, and their
respective benefits, and to remedy any ambiguities, inconsistencies or omissions
in the Plan;

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                  (c)      create and revise rules and procedures for the
administration of the Plan and prescribe such forms as may be required for
Participants to make elections under, and otherwise participate in, the Plan;
and

                  (d)      take any other actions and make any other
determinations as it may deem necessary and proper for the administration of the
Plan.

Any expenses incurred in the administration of the Plan will be paid by the
Corporation or the Employer.

         9.2.     ADMINISTRATIVE REVIEW. Except as the Compensation Committee
may otherwise determine (and subject to the claims procedure set forth in
Article IX), all decisions and determinations by the Administrative Committee
shall be final and binding upon all Participants and Beneficiaries.

         9.3.     GENERAL. No member of the Administrative Committee or the
Compensation Committee shall participate in any matter involving any questions
relating solely to his or her own participation or benefits under the Plan. The
Administrative Committee and Compensation Committee shall be entitled to rely
conclusively upon, and shall be fully protected in any action or omission taken
by it in good faith reliance upon the advice or opinion of any persons, firms or
agents retained by it, including but not limited to accountants, actuaries,
counsel and other specialists. Nothing in this Plan shall preclude the
Corporation or any Employer from indemnifying the members of the Administrative
Committee and Compensation

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Committee for all actions under this Plan, or from purchasing liability
insurance to protect such persons with respect to the Plan.

                                    ARTICLE X

                                CLAIMS PROCEDURE

         The Administrative Committee shall administer a claims procedure as
follows:

         10.1.    INITIAL CLAIM. A Participant or Beneficiary who believes
himself entitled to benefits under the Plan (the "Claimant"), or the Claimant's
authorized representative acting on behalf of such Claimant, must make a claim
for those benefits by submitting a written notification of his or her claim of
right to such benefits. Such notification must be on the form and in accordance
with the procedures established by the Administrative Committee. No benefit
shall be paid under the Plan until a proper claim for benefits has been
submitted.

         10.2.    PROCEDURE FOR REVIEW. The Administrative Committee shall
establish administrative processes and safeguards to ensure that all claims for
benefits are reviewed in accordance with the Plan document and that, where
appropriate, Plan provisions have been applied consistently to similarly
situated Claimants. Any notification to a Claimant required hereunder may be
provided in writing or by electronic media, provided that any electronic
notification shall comply with the applicable standards imposed under 29 C.F.R.
Section 2520.104b-1(c).

         10.3.    CLAIM DENIAL PROCEDURE. If a claim is wholly or partially
denied, the Administrative Committee shall notify the Claimant within a
reasonable period of time, but not

                                      -19-

<PAGE>

later than 90 days after receipt of the claim, unless the Administrative
Committee determines that special circumstances require an extension of time for
processing the claim. If the Administrative Committee determines that an
extension of time for processing is required, written notice of the extension
shall be furnished to the Claimant prior to the termination of the initial
90-day period. In no event shall such extension exceed a period of 180 days from
receipt of the claim. The extension notice shall indicate: (i) the special
circumstances necessitating the extension and (ii) the date by which the
Administrative Committee expects to render a benefit determination. A benefit
denial notice shall be written in a manner calculated to be understood by the
Claimant and shall set forth: (i) the specific reason or reasons for the denial,
(ii) the specific reference to the Plan provisions on which the denial is based,
(iii) a description of any additional material or information necessary for the
Claimant to perfect the claim, with reasons therefor, and (iv) the procedure for
reviewing the denial of the claim and the time limits applicable to such
procedures, including a statement of the Claimant's right to bring a legal
action under section 502(a) of ERISA following an adverse benefit determination
on review.

         10.4.    APPEAL PROCEDURE. In the case of an adverse benefit
determination, the Claimant or his or her representative shall have the
opportunity to appeal to the Compensation Committee for review thereof by
requesting such review in writing to the Compensation Committee within 60 days
of receipt of notification of the denial. Failure to submit a proper application
for appeal within such 60 day period will cause such claim to be permanently
denied. The Claimant or his or her representative shall be provided, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to the claim. A document, record or other
information shall be deemed "relevant" to a claim in

                                      -20-

<PAGE>

accordance with 29 C.F.R. Section 2560.503-1(m)(8). The Claimant or his or her
representative shall also be provided the opportunity to submit written
comments, documents, records and other information relating to the claim for
benefits. The Compensation Committee shall review the appeal taking into account
all comments, documents, records and other information submitted by the Claimant
or his or her representative relating to the claim, without regard to whether
such information was submitted or considered in the initial benefit
determination.

         10.5.    DECISION ON APPEAL. The Compensation Committee shall notify a
Claimant of its decision on appeal within a reasonable period of time, but not
later than 60 days after receipt of the Claimant's request for review, unless
the Compensation Committee determines that special circumstances require an
extension of time for processing the appeal. If the Compensation Committee
determines that an extension of time for processing is required, written notice
of the extension shall be furnished to the Claimant prior to the termination of
the initial 60-day period. In no event shall such extension exceed a period of
60 days from the end of the initial period. The extension notice shall indicate:
(i) the special circumstances necessitating the extension and (ii) the date by
which the Compensation Committee expects to render a benefit determination. An
adverse benefit decision on appeal shall be written in a manner calculated to be
understood by the Claimant and shall set forth: (i) the specific reason or
reasons for the adverse determination, (ii) the specific reference to the Plan
provisions on which the denial is based, (iii) a statement that the Claimant is
entitled to receive, upon request and free of charge, reasonable access to and
copies of all documents, records, and other information relevant to the
Claimant's claim (the relevance of a document, record or other information will

                                      -21-

<PAGE>

be determined in accordance with 29 C.F.R. Section 2560-1(m)(8)) and (iv) a
statement of the Claimant's right to bring a legal action under section 502(a)
of ERISA.

         10.6.    ARBITRATION. Following a decision on appeal with respect to a
claim, any further dispute or controversy arising under or in connection with
the Plan shall be settled exclusively in arbitration in Philadelphia,
Pennsylvania in accordance with the rules of the American Arbitration
Association then in effect; provided, however, that the evidentiary standards
set forth in the Plan shall apply. Judgment may be entered on the arbitrator's
award in any court having jurisdiction In order to operate and administer the
claims procedure in a timely and efficient manner, any Claimant who desires to
commence arbitration under this Section with respect to his or her claim, must
commence such arbitration action within 90 days of receipt of notification of
denial of his or her claim. Failure to file such action by the prescribed time
will forever bar the commencement of such action.

         10.7.    DISPUTES: ENFORCEMENT OF RIGHTS. All reasonable legal and
other fees and expenses incurred by the Claimant in connection with any disputed
claim regarding any right or benefit provided for in this Plan shall be paid by
the Corporation, to the extent permitted by law, provided that the Claimant
prevails on the merits of his or her claim in material part as the result of
arbitration or settlement.

         10.8.    NO STOCKHOLDERS' RIGHTS. The allocation of a Participant's
Account in Restricted Stock Units shall not give any Participant any right or
interest in any shares of Stock that may be held from time to time in a rabbi
trust incident to the Plan or otherwise.

                                      -22-

<PAGE>

                                   ARTICLE XI

                    AMENDMENT, DISCONTINUANCE AND TERMINATION

         The Board or the Compensation Committee shall have the right to modify
or amend the Plan at any time and from time to time, and the Board shall have
the right to discontinue or terminate the Plan at any time and from time to
time; provided, however, that no modification, amendment, discontinuance or
termination shall adversely affect the rights of Participants to amounts
credited to the Accounts maintained on their behalf before such modification,
amendment, discontinuance or termination. In the case of termination of the
Plan, any amounts credited to the Account of a Participant may, in the sole
discretion of the Compensation Committee, be distributed in full to such
Participant as soon as reasonably practicable following such termination.

                                  ARTICLE XII

                                 MISCELLANEOUS

         12.1.    NON-GUARANTEE OF EMPLOYMENT. Participation in the Plan does
not give any person any right to be retained in the service of the Employer. The
right and power of the Employer to terminate any employee is expressly reserved.

         12.2.    RIGHTS OF PARTICIPANTS TO BENEFITS. All rights of a
Participant under the Plan to amounts credited to the Participant's Account are
mere unsecured contractual rights of the Participant (or his or her Beneficiary)
against the Employer. Each Employer shall be primarily responsible for payment
of benefits hereunder to the Participants it employs and the

                                      -23-

<PAGE>

Beneficiaries of such Participants. In the event an Employer fails to pay any
amount due under this Plan for any reason, the Corporation shall be jointly and
severally liable for the payment of such amount.

         12.3.    NO ASSIGNMENT. No amounts credited to Accounts nor any rights
or benefits under the Plan shall be subject in any way to voluntary or
involuntary alienation, sale, transfer, assignment, pledge, attachment,
garnishment, execution, or encumbrance, and any attempt to accomplish the same
shall be void.

         12.4.    WITHHOLDING. The Corporation shall have the right to deduct
from any distribution made hereunder any taxes required by law to be withheld
from a Participant with respect to such payment, and, shall have the right, in
accordance with Section 7.6(c), to require that a portion of a Participant's
Account distribution be paid in cash in order to satisfy such withholding
obligations.

         12.5.    ACCOUNT STATEMENTS. Periodically (as determined by the
Administrative Committee), each Participant shall receive a statement indicating
the amounts credited to and payable from the Participant's Account.

         12.6.    GENDER. The masculine shall be read in the feminine, the
singular in the plural, and vice versa, whenever the context shall so require.

         12.7.    TITLES. The titles to articles and sections in this Plan are
placed herein for convenience of reference only, and the Plan is not to be
construed by reference thereto.

                                      -24-

<PAGE>

         12.8.    GOVERNING LAW. Except to the extent preempted by applicable
federal laws, the Plan shall be construed according to the laws of the state of
Delaware, other than its conflict of laws principles.

         12.9.    OTHER PLANS. Except as specifically provided herein, nothing
in this Plan shall be construed to affect the rights of a Participant, a
Participant's Beneficiaries, or a Participant's estate to receive any retirement
or death benefit under any tax-qualified or nonqualified pension plan, deferred
compensation agreement, insurance agreement or other retirement plan of the
Corporation or the Employer.

         IN WITNESS WHEREOF, the Corporation has caused this Plan to be executed
by a duly authorized officer on the ___________ day of __________, 2003.

WITNESS:                                       YORK INTERNATIONAL CORPORATION

___________________________________________    By:______________________________

Corporate Secretary                            Title:___________________________

[SEAL]

                                      -25-EXHIBIT 4.1

==============================================================================

                  AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

                         Dated as of October 31, 2003

==============================================================================

<PAGE>

                               TABLE OF CONTENTS

                                                                       Page

ARTICLE I LIMITATIONS ON TRANSFER OF SHARES..................................2

         Section 1.1.      Transfers Generally...............................2
         Section 1.2.      Transfers Following Death Or Disability...........2
         Section 1.3.      Transfers with the Consent of Board of
                           Directors.........................................2
         Section 1.4.      Compliance with Law and Regulations...............3
         Section 1.5.      Legend on Certificates; Entry of Stop Transfer
                           Orders............................................3
         Section 1.6.      Certificates to Be Held by Company................3
         Section 1.7.      Transfers in Violation of Agreement Void..........4

ARTICLE II [Intentionally omitted]...........................................4

ARTICLE III No Harmful Activity..............................................4

         Section 3.1.      Covenant not to Engage in Harmful Activity;
                           Liquidated Damages................................4
         Section 3.2.      Notice of Harmful Activity........................6

ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................6

         Section 4.1.      Representations and Warranties of the Founder
                           Stockholders......................................6
         Section 4.2.      Representations and Warranties of the Company.....7

ARTICLE V DEFINITIONS........................................................7

ARTICLE VI MISCELLANEOUS....................................................12

         Section 6.1.      Notices..........................................12
         Section 6.2.      Term of the Agreement............................12
         Section 6.3.      Amendments; Waivers..............................13
         Section 6.4.      Adjustment Upon Changes in Capitalization and
                           Extraordinary Transactions.......................13
         Section 6.5.      Disinterested Board Members to Make
                           Determinations...................................13
         Section 6.6.      Severability.....................................13
         Section 6.7.      Representatives, Successors and Assigns..........14
         Section 6.8.      GOVERNING LAW....................................14
         Section 6.9.      Specific Performance.............................14
         Section 6.10.     Arbitration......................................14
         Section 6.11.     Submission to Jurisdiction; Waiver of Immunity...15
         Section 6.12.     Further Assurances...............................15
         Section 6.13.     Execution in Counterparts........................15
         Section 6.14.     Entire Agreement.................................15

                                     -i-
<PAGE>

         Section 6.15.     Effectiveness....................................15

Schedule I

Schedule II

                                     -ii-

<PAGE>

                  AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

         This AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement")
is dated as of October 31, 2003, by and among (i) Lehman Brothers Holdings
Inc. (the "Company"), (ii) Neuberger Berman Inc., a Delaware corporation
("Neuberger"), (iii) the Principals (as defined below) listed on Schedule I
hereto and (iv) the Family Affiliates (as defined below) listed on Schedule II
hereto (the Principals and their Family Affiliates, collectively, the "Founder
Stockholders"). Initially capitalized terms used herein have their respective
meanings set forth in Article V of this Agreement.

                             W I T N E S S E T H :

         WHEREAS, Neuberger and each Founder Stockholder is a party to that
certain Stockholders Agreement, dated as of August 2, 1999 (the "Original
Stockholders Agreement");

         WHEREAS, the Company, Ruby Acquisition Company, a Delaware
corporation and a wholly-owned subsidiary of the Company ("Merger Sub"), and
Neuberger entered into an Agreement and Plan of Merger, dated as of July 21,
2003, as amended by the First Amendment to Agreement and Plan of Merger, dated
as of September 22, 2003 (as amended, the "Merger Agreement"), pursuant to
which Neuberger will be merged with and into Merger Sub (the "Merger") with
Merger Sub continuing as the surviving corporation (the "Surviving
Corporation") and a wholly-owned subsidiary of the Company;

         WHEREAS, pursuant to the Merger Agreement, among other things, each
share of common stock, par value $0.01 per share, of Neuberger ("Neuberger
Stock") owned by each Founder Stockholder will be converted into an amount in
cash and a number of shares of common stock, par value $0.10 per share, of the
Company ("Common Stock");

         WHEREAS, as a condition precedent under the Merger Agreement to the
Company's obligation to consummate the Merger, the Company, Neuberger (with
the approval of its Board of Directors) and the Founder Stockholders that Own
a majority of the "Founder Shares" (as defined in the Original Stockholders
Agreement) subject to the Original Stockholders Agreement as of immediately
prior to the consummation of the Merger have entered into those several
Amendments and Agreements in the form attached to the Merger Agreement
(collectively, the "Amendment") pursuant to which, among other things, the
Original Stockholders Agreement has been amended in the manner set forth in
the Amendment; and

         WHEREAS, pursuant to the Amendment, the Original Stockholders
Agreement is being restated in its entirety as set forth herein to reflect the
amendments thereto effected by the Amendment.

         NOW THEREFORE, in consideration of the premises and of the mutual
agreements, covenants and provisions herein contained and for good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:

<PAGE>

                                  ARTICLE I

                       LIMITATIONS ON TRANSFER OF SHARES

     Section 1.1. Transfers Generally. Each Founder Stockholder agrees that,
in addition to any restrictions imposed by law, no Founder Stockholder shall
Transfer any Founder Shares Owned by such Founder Stockholder, except that:

     (a) Subject to Section 1.1(c), each Principal, together with his or her
Family Affiliates, may in the aggregate Transfer, (x) at any time, any Initial
Unrestricted Founder Shares held by such Persons, and (y) in each calendar
year commencing January 1, 2004, an additional number of Founder Shares not to
exceed 10% of the aggregate Number of Initial Restricted Founder Shares Owned
by such Principal and Family Affiliates, provided that, in the case of each of
the preceding clauses (x) and (y):

          (i) [intentionally omitted]; and

          (ii) [intentionally omitted]; and

          (iii) Any Founder Shares in respect of which the Company has
     exercised its right of purchase pursuant to Article III hereof may only
     be Transferred in accordance with Article III.

From and after a Principal's Employment Termination Date, such Principal and
his or her Family Affiliates shall remain subject to the Transfer restrictions
set forth in this Section 1.1(a). Any number of Founder Shares eligible to be
Transferred in any calendar year under this Section 1.1(a) but not so
Transferred may be Transferred in any future calendar year without any
restriction imposed by this Section 1.1(a).

     (b) [intentionally omitted]

     (c) Notwithstanding Section 1.1(a), no Principal nor any of his or her
Family Affiliates may Transfer Founder Shares during the pendency of any
dispute between the Company and such Principal or any of his or her Family
Affiliates regarding the obligations under this Agreement, the Amendment or
the Non-Competition Agreement of such Principal or any of his or her Family
Affiliates.

     Section 1.2. Transfers Following Death Or Disability. Notwithstanding any
other provisions of this Agreement, upon the death or Disability of any
Principal, such Principal (or his or her estate) and his or her Family
Affiliates may Transfer Founder Shares free of any provisions of this
Agreement.

     Section 1.3. Transfers with the Consent of Board of Directors.
Notwithstanding any other provisions of this Agreement, a Founder Stockholder
may Transfer any number of Founder Shares at any time with the prior written
consent of the Board of Directors, which consent may be withheld or delayed,
or granted on such terms and conditions as it may determine, in its sole
discretion.

                                     -2-
<PAGE>

     Section 1.4. Compliance with Law and Regulations. Each Founder
Stockholder agrees that any Transfer of Founder Shares by such Founder
Stockholder shall be in compliance with any applicable constitution, rule or
regulation of, or any applicable policy of, the NASD, any of the exchanges or
associations or other institutions with which the Company Group has membership
or other privileges (including, without limitation, the NYSE), federal and
state securities laws, and any applicable law, rule or regulation of the
Commission or any other governmental agency having jurisdiction.

     Section 1.5. Legend on Certificates; Entry of Stop Transfer Orders. (a)
Each Founder Stockholder agrees that each outstanding certificate representing
any Founder Shares that are subject to this Agreement shall bear an
endorsement noted conspicuously on each such certificate reading substantially
as follows:

          "The securities represented by this certificate were
          issued without registration under the Securities Act
          of 1933. No transfer of such securities may be made
          without an opinion of counsel, satisfactory to the
          Company, that such transfer may properly be made without
          registration under the Securities Act of 1933 or that such
          securities have been so registered under a registration
          statement which is in effect at the date of such transfer.

          The securities represented by this certificate are subject
          to the provisions of an agreement dated as of October 31,
          2003 among the Company and certain persons listed on
          Schedules I and II to such agreement, a copy of which is on
          file at the principal executive office of the Company, and
          such securities may be sold, assigned, pledged or otherwise
          transferred only in accordance with such agreement."

     (b) Each Founder Stockholder agrees to the entry of stop transfer orders
against the transfer of legended certificates representing shares of Common
Stock except in compliance with this Agreement.

     Section 1.6. Certificates to Be Held by Company. (a) Each Founder
Stockholder agrees that the certificates representing such Founder
Stockholder's Founder Shares shall be issued in the name of a nominee holder
to be designated by the Company and shall be held in custody by the Company.
Subject to Section 1.6(c), the Company shall, upon the request of any such
Founder Stockholder or the estate of any Founder Stockholder, as the case may
be, in writing addressed to the Secretary of the Company or any officer
designated by the Secretary (which request shall include a representation by
such Founder Stockholder or estate thereof that such Founder Stockholder is
then permitted to Transfer a specified number of Founder Shares under the
provisions of this Agreement), promptly release from custody the certificates
representing such specified number of Founder Stockholder's Founder Shares
which are then permitted to be Transferred under the provisions of this
Agreement.

     (b) Subject to Section 1.6(c), so long as the Founder Stockholders have
provided appropriate written direction to the Company, whenever the nominee
holder shall receive any

                                     -3-
<PAGE>

cash dividend or other cash distribution upon any Founder Shares deposited
pursuant to Section 1.6(a), the Company shall cause the nominee holder to
distribute promptly such cash dividend or other distribution (by sale or any
other manner that it may determine, net of its charges and expenses in
effecting such conversion), by checks drawn on a bank in the United States, to
the Founder Stockholders in proportion to the number of Founder Shares Owned
by each of them respectively; provided that the Company shall cause the
nominee holder to make appropriate adjustments in the amounts so distributed
in respect of any amounts required to be withheld by the nominee holder from
any distribution on account of taxes. The nominee holder shall distribute only
such amount as can be distributed without distributing to any Founder
Stockholder a fraction of one cent, and any balance not so distributable shall
be held by the nominee holder (without liability for interest thereon) and
shall be added to and become part of the next sum received by the nominee
holder for distribution to the Founder Stockholders.

     (c) Notwithstanding Section 1.6(b), during the pendency of any dispute
between the Company and any Principal or any of his or her Family Affiliates
regarding the obligations under this Agreement, the Amendment or the
Non-Competition Agreement of such Principal or any of his or her Family
Affiliates, all cash dividends and other cash distributions received by the
nominee holder in respect of the Founder Shares of such Principal and his or
her Family Affiliates shall be retained by the nominee holder and shall not be
distributed until the final resolution of such dispute. Each Principal and his
or her Family Affiliates hereby irrevocably (i) authorizes the Company, upon
any amount becoming payable by such Principal or his or her Family Affiliates
in connection with any such dispute, to set off and apply against such amount
an equal amount of any cash dividends or other cash distributions in respect
of such the Founder Shares of such Principal and his or her Family Affiliates
then retained by the nominee holder and (ii) instructs the nominee holder to
distribute such amounts to the Company.

     Section 1.7. Transfers in Violation of Agreement Void. Any attempted
Transfer of Founder Shares not made in accordance with the provisions of this
Agreement shall be void, and the Company shall not register, or cause or
permit the registry, of Common Stock Transferred in violation of this
Agreement.

                                  ARTICLE II

                            [Intentionally omitted]

                                 ARTICLE III

                              No Harmful Activity

     Section 3.1. Covenant not to Engage in Harmful Activity; Liquidated
Damages. (a) Each Principal covenants and agrees with the Company that it will
not, prior to the third anniversary of the Employment Termination Date of such
Principal, engage in any Harmful Activity (other than to the extent expressly
permitted under any waivers granted by Neuberger prior to the date of the
Merger Agreement and disclosed in Neuberger's disclosure schedules to the
Merger Agreement).

                                     -4-
<PAGE>

     (b) It is expressly understood and agreed that although each Principal
and the Company consider the restrictions contained in this Section 3.1 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against such Principal, the
provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that any
restriction contained in this Agreement is unenforceable, and such restriction
cannot be amended so as to make it enforceable, such finding shall not affect
the enforceability of any of the other restrictions contained herein. Each
Principal understands that the provisions of this Section 3.1 may limit such
Principal's ability to earn a livelihood in a business similar to the business
of the Company Group.

     (c) In addition to any other remedies that the Company may have at law or
in equity for any breach by any Principal of this Section 3.1, if, on or prior
to the third anniversary of the Employment Termination Date of any Principal
(including during such Principal's employment with the Company Group), the
Board of Directors determines in its good faith judgment that such Principal
has engaged in Harmful Activity prohibited by this Section 3.1, the Company
shall have the right to purchase, at any time or from time to time, from such
Principal (or, to the extent a Principal does not Own sufficient Founder
Shares Subject to Repurchase (as defined below) to satisfy his or her
obligations under this Section 3.1 (including, without limitation, because
such Founder Shares Subject to Repurchase have been Transferred in violation
of the transfer restrictions contained in Section 1.1), to purchase from his
or her Family Affiliates pro rata in accordance with the number of Founder
Shares Subject to Repurchase Owned by such Family Affiliates on the Notice
Date) that number of Founder Shares equal to the number of Founder Shares
Owned by such Principal and his or her Family Affiliates that could not have
been Transferred by such Founder Stockholders in accordance with Section 1.1
prior to the Notice Date (such shares, "Founder Shares Subject to
Repurchase"); provided, however, that the Company's right to recover monetary
damages from a Principal and his or her Family Affiliates in respect of a
breach by such Principal of this Section 3.1 shall be limited to the Company's
right to repurchase Founder Shares Subject to Repurchase pursuant to this
Section 3.1(c) (and to obtain the liquidated damages provided for in Section
3.1(e) below, to the extent such Principal and his or her Family Affiliates
are unable for any reason to deliver Founder Shares Subject to Repurchase to
the Company in accordance with this Section 3.1(c)), provided that nothing
contained in this proviso or in Section 3.1(e) shall in any way be deemed to
limit the Company's right to obtain equitable relief for such breach
(including without limitation in the manner described in Section 6.9 below).
The purchase price of each Founder Share Subject to Repurchase (the "Purchase
Price") purchased by the Company pursuant to this Section 3.1 shall equal the
quotient of $1.33 divided by the Applicable Exchange Ratio.

     (d) The Company may exercise its right to purchase Founder Shares under
this Section 3.1 in accordance with the following procedures:

          (i) The Company shall give notice to the Founder Stockholder that
     Owns the Founder Shares subject to such right of purchase not later than
     the close of business on the third anniversary of the Employment
     Termination Date of such Principal (the "Notice Date"), advising such
     Founder Stockholder of the Company's election to exercise such

                                     -5-
<PAGE>

     right, stating the number of Founder Shares to be so purchased, the
     Purchase Price, closing arrangements and a closing date at which payment
     of the consideration for such Founder Shares will be made, which date
     shall be not less than five days nor more than 90 days after the Notice
     Date.

          (ii) On the closing date, the Company and such Founder Stockholder
     shall cause the nominee holding the Founder Shares being so purchased to
     deliver the certificates representing such Founder Shares, properly
     endorsed for transfer by such Founder Stockholder or his, her or its
     attorney-in-fact, to the Company at its principal place of business and
     the Company shall deliver to such Founder Stockholder the consideration
     therefor (it being understood and confirmed that NB LLC has been
     appointed attorney-in-fact for such Founder Stockholder pursuant to the
     Exchange Agreement to take all such actions, to make such endorsements
     and to execute such documents as may be required to consummate the sale
     under this Section 3.1 of Founder Shares to the Company).

          (e) If a Principal and his or her Family Affiliates are unable to
     satisfy their obligations under this Section 3.1 to deliver to the
     Company such Founder Shares Subject to Repurchase for any reason
     (including, without limitation, because such Founder Shares Subject to
     Repurchase have been Transferred in violation of the transfer
     restrictions contained in Section 1.1), such Principal shall be liable to
     the Company, as liquidated damages and not as a penalty, for an amount
     equal to the product of (i) the number of Founder Shares Subject to
     Repurchase that should have been sold to the Company under this Section
     3.1 but were not so sold and (ii) the excess, if any, of the Market Value
     of such shares as of the Notice Date over the Purchase Price.

     Section 3.2. Notice of Harmful Activity. Prior to the third anniversary
of such Principal's Employment Termination Date (including during such
Principal's employment with the Company Group), each Principal who engages (or
intends to engage) in Harmful Activity agrees (a) to notify the Company in
writing in reasonable detail at least 30 days prior to engaging in such
Harmful Activity, (b) to respond to such questions and furnish such additional
information as the Company may request with respect to such Harmful Activity
and (c) to update such written notice or inquiries promptly in the event of
any circumstances that would cause any notices or responses to be inaccurate
or incomplete.

                                  ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES

     Section 4.1. Representations and Warranties of the Founder Stockholders.
Each Founder Stockholder severally represents and warrants as of the date of
this Agreement to the Company and to each other Founder Stockholder that (a)
in the case of a Founder Stockholder who is not a natural person, such Founder
Stockholder is duly authorized to execute, deliver and perform this Agreement;
(b) this Agreement has been duly executed by such Founder Stockholder or his,
her or its attorney-in-fact on behalf of such Founder Stockholder and is a
valid and binding agreement of such Founder Stockholder, enforceable against
such Founder Stockholder in accordance with its terms; (c) the execution,
delivery and performance by such

                                     -6-
<PAGE>

Founder Stockholder of this Agreement does not violate or conflict with or
result in a breach of or constitute (or with notice or lapse of time or both
constitute) a default under any agreement to which such Founder Stockholder is
a party; and (d) such Founder Stockholder has good and marketable title to its
Founder Shares, free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind, other than pursuant to this
Agreement.

     Section 4.2. Representations and Warranties of the Company. The Company
represents and warrants as of the date of this Agreement to the Founder
Stockholders that (a) the Company is duly authorized to execute, deliver and
perform this Agreement; (b) this Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms; and (c)
the execution, delivery and performance by the Company of this Agreement does
not violate or conflict with or result in a breach by the Company of or
constitute (or with notice or lapse of time or both constitute) a default by
the Company under its Certificate of Incorporation or By-Laws, any existing
applicable law, rule, regulation, judgment, order, or decree of any
government, governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or its property including the requirements of
the NYSE, or any agreement or instrument to which the Company is a party or by
which the Company or its property may be bound.

                                  ARTICLE V

                                  DEFINITIONS

         For purposes of this Agreement, the following terms shall have the
following meanings:

         "Agreement" has the meaning set forth in the preamble to this
Agreement.

         "Amendment" has the meaning set forth in the recitals to this
Agreement.

         "Applicable Exchange Ratio" means 0.6104.

         "AMEX" has the meaning set forth in Section 6.10(b).

         "Board of Directors" means the Board of Directors of the Company or,
to the extent expressly authorized by the Board of Directors to exercise the
powers of the Board of Directors under this Agreement, (i) any committee of
such Board of Directors or (ii) any board of directors or committee of any
Subsidiary of the Company.

         "Business Day" means a day on which the principal national securities
exchange on which shares of Common Stock are listed or admitted to trading is
open for the transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, a Monday,
Tuesday, Wednesday, Thursday or Friday on which banking institutions in the
Borough of Manhattan, City and State of New York are not authorized or
obligated by law or executive order to close.

                                     -7-
<PAGE>

         "Cause" means, with respect to any Principal:

         (a) gross negligence or willful misconduct in the performance of his
or her duties as an employee of the Company Group or willful and repeated
failure to perform his or her duties after written notice specifying such
failure and a reasonable time having been afforded to correct such failure;

         (b) conviction of, or entering a plea of NOLO CONTENDERE to, a felony
(other than for a traffic violation) or a misdemeanor involving fraud,
embezzlement, forgery or perjury;

         (c) dishonesty that has resulted in damage to the property, business
or reputation of the Company and its Subsidiaries, misappropriation of, or
intentional damage to, the property, business or reputation of the Company and
its Subsidiaries, perpetration of fraud on the Company Group that has resulted
in damage to the property or business of the Company Group; or

         (d) a finding by the Commission or a court of competent jurisdiction
that he or she has committed an act that would cause such Founder Stockholder,
the Company or any of its affiliates to be disqualified in any manner under
section 9 of the Investment Company Act, if the Commission were not to grant
an exemptive order under section 9(c) thereof, or that would constitute
grounds for the Commission to deny, revoke or suspend registration of the
Company or any of its affiliates as an investment advisor, broker-dealer or
transfer agent, as applicable, with the Commission.

         "Closing Price" means, on any day, the last sales price, regular way,
per share of Common Stock on such day, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, as
reported in the principal consolidated transaction reporting system covering
securities listed or admitted to trading on the NYSE or, if shares of Common
Stock are not listed or admitted to trading on the NYSE, as reported in the
principal consolidated transaction reporting system covering securities listed
on the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Quotation Bureau, Inc., or a similar reporting
service designated by the Board of Directors.

         "Commission" means the Securities and Exchange Commission.

         "Common Stock" has the meaning set forth in the recitals to this
Agreement.

         "Company" has the meaning set forth in the preamble to this Agreement
and any successors thereof, whether by operation of law or otherwise.

         "Company Group" means the Company and its Subsidiaries, including
without limitation the Surviving Corporation and its Subsidiaries.

         "Confidential Information" means information developed by or for the
Company Group that has a significant business purpose related to the business
of the Company Group and that is

                                     -8-
<PAGE>

not generally available in the investment Founder industry or the public
generally, but only for so long as such information continues to have a
significant business purpose for the Company Group.

         "Disability" means disability as that term is defined under the
Company's long-term disability plan in effect at the date of such
determination, or any other plan or definition designated by the Board of
Directors for the purpose of this provision.

         "Employment Termination Date" means, with respect to any Principal,
the date of termination of such Principal's employment with the Company Group
for any reason, (whether or not terminated by action of the Company Group), as
determined by the Board of Directors in its sole and absolute discretion.

         "Exchange" means the contribution of interests in NB LLC to Neuberger
in exchange for shares of Neuberger Stock, as consummated pursuant to the
Exchange Agreement.

         "Exchange Agreement" means the Plan of Merger and Exchange Agreement,
dated as of August 2, 1999, pursuant to which, among other things, the
Exchange was consummated.

         "Family Affiliates" means, as the context requires, (a) the Persons
listed on Schedule II hereto or (b) with respect to any Principal, (i) the
Persons listed on Schedule II hereto to whom such Principal transferred a
limited liability company interest prior to the Exchange and (ii) any Person
to whom such Principal Transfers Founder Shares with the written consent of
the Board of Directors in accordance with Section 1.3 and who agrees in
writing to be subject to the terms and provisions of this Agreement as a
Family Affiliate.

         "Founder Shares" means (i) with respect to any Founder Stockholder
that was a party to the Original Stockholders Agreement, the shares of Common
Stock received by such Founder Stockholder in the Merger in respect of such
Founder Stockholder's Founder Shares (as such term was defined in the Original
Stockholders Agreement without giving effect to the Amendment) Owned as of
immediately prior to the Merger Effective Time, and (ii) with respect to any
Founder Stockholder that becomes a party to this Agreement after the
consummation of the Merger by an amendment to Schedule I or II hereof, the
shares of Common Stock designated on such Schedule as such Founder
Stockholder's Founder Shares.

         "Founder Shares Subject to Repurchase" has the meaning set forth in
Section 3.1(c).

         "Founder Stockholders" has the meaning set forth in the recitals to
this Agreement.

         "Harmful Activity" by a Principal means such Principal, directly or
indirectly, either individually or as owner, partner, agent, employee,
consultant or otherwise:

         (a) solicits or accepts business from (i) any Person who was a client
of the Company Group during the one year period prior to such Principal's
Employment Termination Date (or, in the case of an action taken during such
Principal's employment with the Company Group, during the one-year period
immediately prior to such action) or (ii) any prospective client of the
Company Group who, within the one year period prior to such Employment
Termination Date (or, in the case of an action taken during such Principal's
employment with the Company Group,

                                     -9-
<PAGE>

within the one-year period immediately prior to such action), had been
directly solicited by such Principal or where, directly or indirectly, in
whole or in part, such Principal supervised or participated in the Company
Group's solicitation activities related to such prospective client;

         (b) solicits or accepts business from or through, or engages in any
sales or marketing activities with, any financial intermediary (including,
without limitation, any broker-dealer, bank, insurance company, financial
planner or other financial institution), or any person employed by or
associated with a financial intermediary, with whom such Principal had
business contact during the one year period prior to such Principal's
Employment Termination Date;

         (c) (i) employs any current or former employee or consultant of the
Company Group (other than clerical, secretarial and other similar support
personnel) or (ii) recruits, solicits or induces (or in any way assists
another in recruiting, soliciting or inducing) any such Person to terminate
his or her employment or consultantship with the Company Group, unless, in the
case of (i) or (ii), such person shall have ceased to be employed by or a
consultant to the Company Group for a period of at least one year prior to the
time of such employment, recruitment, solicitation or inducement;

         (d) markets, promotes or otherwise trades on or (other than solely in
connection with seeking new employment) claims (or in any way, other than in
connection with the business of the Company Group, assists any Person in
marketing, promoting or otherwise trading on or claiming) as such Principal's
(or such other Person's), the investment performance record (including without
limitation performance ratings or rankings provided by any rating or ranking
service) of any mutual fund, client account or group of mutual funds or client
accounts with which such Principal was associated while employed with the
Company Group;

         (e) discloses to any person, firm or corporation any Confidential
Information that is known to the Principal as a result of his or her
employment or professional association with the Company Group or uses the same
in any way other than in connection with the business of the Company Group; or

         (f) publicly makes disparaging or derogatory comments regarding (i)
the Company Group or any member of the Company Group or (ii) any current or
former Principal, employee or consultant of the Company Group in their
capacity as a Principal, employee or consultant or with the effect of damaging
the business or reputation of the Company Group.

         "Initial Unrestricted Founder Shares" means, respect to a Principal
and his or her Family Affiliates, all shares of Common Stock received by such
Persons in the Merger in respect of shares of Neuberger Stock, Owned by such
Principal and his or her Family Affiliates other than Restricted NB Founder
Shares.

         "Investment Company Act" means the Investment Company Act of 1940, as
amended, and the rules and regulations promulgated thereunder.

         "Market Value" means the average of the daily Closing Prices for the
ten consecutive Business Days ending on the Business Day immediately prior to
the date of determination.

         "Merger" has the meaning set forth in the recitals to this Agreement.

                                     -10-
<PAGE>

         "Merger Agreement" has the meaning set forth in the recitals to this
Agreement.

         "Merger Effective Time" means the effective time of the Merger.

         "Merger Sub" has the meaning set forth in the recitals to this
Agreement.

         "NASD" means the National Association of Securities Dealers, Inc.

         "NB LLC" means Neuberger Berman, LLC, a Delaware limited liability
company and wholly owned subsidiary of Neuberger.

         "Neuberger" has the meaning set forth in the preamble to this
Agreement.

         "Neuberger Stock" has the meaning set forth in the recitals to this
Agreement.

         "Non-Competition Agreement" means the Non-Competition Agreement,
dated as of August 2, 1999, between Neuberger and the Principals.

         "Notice Date" has the meaning set forth in Section 3.1(d)(i).

         "Number of Initial Restricted Founder Shares" means, with respect to
a Principal and his or her Family Affiliates, that number of shares of Common
Stock equal to the product of (a) the number of Restricted NB Founders Shares
Owned by such Persons immediately prior to the Merger Effective Time,
multiplied by (b) the Applicable Exchange Ratio.

         "NYSE" means the New York Stock Exchange, Inc.

         "Original Stockholders Agreement" has the meaning set forth in the
recitals to this Agreement.

         "Own" means to own of record or beneficially, whether directly,
through a nominee designated by the Company pursuant to Section 1.6 or through
any other Person.

         "Person" means any natural person or any firm, partnership, limited
liability partnership, association, corporation, limited liability company,
trust, business trust, governmental authority or other entity.

         "Principals" means the natural persons listed on Schedule I hereto.

         "Purchase Price" has the meaning set forth in Section 3.1(c).

         "Restricted NB Founder Shares" means, with respect to a Principal and
his or her Family Affiliates, those shares of Neuberger Stock Owned by such
Principal and his or her Family Affiliates that were subject to the transfer
restrictions set forth in Section 1.1 of the Original Stockholders Agreement
as of immediately prior to the Merger Effective Time (for the avoidance of
doubt, after giving effect to any waivers of such transfer restrictions that
were granted by Neuberger prior to the date of the Merger Agreement and were
disclosed in Neuberger's disclosure schedules to the Merger Agreement).

                                     -11-
<PAGE>

         "Subsidiary" means a corporation, limited liability company or other
entity of which the Company, directly or indirectly, has the power, whether
through the ownership of voting securities, equity interests, contract or
otherwise, (i) to elect at least a majority of the members of such entity's
board of directors or other governing body or (ii) in the absence of a
governing body, to control the business affairs of such entity.

         "Surviving Corporation" has the meaning set forth in the recitals to
this Agreement.

         "Transfer" means, with respect to any Founder Shares, directly or
indirectly, (i) to sell, assign, transfer, pledge (including in margin
transactions), convey, distribute, mortgage, encumber, hypothecate or
otherwise dispose, whether by gift, for consideration or for no consideration
and (ii) to grant any right to vote, whether by proxy, voting agreement,
voting trust or otherwise.

                                  ARTICLE VI

                                 MISCELLANEOUS

     Section 6.1. Notices. (a) All notices, requests, demands, waivers and
other communications to be given by any party hereunder shall be in writing
and shall be (i) mailed by first-class, registered or certified mail, postage
prepaid, (ii) sent by hand delivery or reputable overnight delivery service or
(iii) transmitted by telecopy (provided that a copy is also sent by reputable
overnight delivery service) addressed, in the case of any Principal, to him or
her at the address set forth on Schedule I, in the case of any Family
Affiliate, to it at the address set forth on Schedule II or, in the case of
the Company, to Lehman Brothers Holdings Inc., 399 Park Avenue-11th Floor, New
York, NY 10022, Attention: Secretary, or, in each case, to such other address
as may be specified in writing to the other parties hereto.

     (b) All such notices, requests, demands, waivers and other communications
shall be deemed to have been given and received (i) if by personal delivery or
telecopy, on the day of such delivery, (ii) if by first-class, registered or
certified mail, on the fifth Business Day after the mailing thereof or (iii)
if by reputable overnight delivery service, on the day delivered.

     Section 6.2. Term of the Agreement. (a) This Agreement shall terminate on
the earlier to occur of (i) the first date on which there are no Founder
Stockholders who remain bound by its terms and (ii) the date on which the
Company and all Founder Stockholders who are then bound by its terms agree to
terminate this Agreement.

     (b) Unless this Agreement is theretofore terminated pursuant to Section
6.2(a) hereof, a Founder Stockholder shall be bound by its terms until all
Founder Shares Owned by such Founder Stockholder are free of the provisions of
Articles I and III hereof.

     Section 6.3. Amendments; Waivers. (a) This Agreement may be amended or
modified, and any provision in this Agreement may be waived, if such
amendment, modification or waiver is approved by the Board of Directors,
provided that any amendment that would materially adversely affect any Founder
Stockholder (other than an amendment that, in the good faith judgment of the
Board of Directors, is intended to cure any ambiguity or correct or supplement
any provisions of this Agreement that may be incomplete or inconsistent with
any

                                     -12-
<PAGE>

other provision contained herein) must be approved by the Founder Stockholders
that Own a majority of the Founder Shares subject to this Agreement as of the
date of such amendment or modification, provided, further, that, without the
consent of any Person, the Board of Directors may permit any Person who
executes and delivers a counterpart of this Agreement to become a party to
this Agreement by amending Schedule I or II hereto, as the case may be.

     (b) The failure of any party at any time or times to require performance
of any provision of this Agreement shall in no manner affect the rights at a
later time to enforce the same. No waiver by any party of the breach of any
term contained in this Agreement, whether by conduct or otherwise, in any one
or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such breach or the breach of any other term of this
Agreement.

     Section 6.4. Adjustment Upon Changes in Capitalization and Extraordinary
Transactions. In the event of (x) any change in the outstanding shares of the
Company by reason of stock dividends, split-ups, recapitalizations,
combinations, exchanges of shares and the like, or (y) any conversion or
exchange of Common Stock pursuant to an acquisition of or other business
combination involving, the Company (whether by merger, recapitalization,
combination or otherwise), in each case the term "shares of Common Stock"
shall refer to and include the securities received or resulting therefrom and
the terms and provisions of this Agreement, including without limitation the
terms "Founder Shares" and "Purchase Price," shall be appropriately adjusted
so that each Founder Stockholder will thereafter continue to have and be
subject to, to the greatest extent practicable, the same rights and
obligations he, she or it had been subject to prior to such change, and in
respect of that new security.

     Section 6.5. Disinterested Board Members to Make Determinations. In the
event that any Founder Stockholder breaches its obligations under this
Agreement, then the Board of Directors shall have the exclusive right to make
(on behalf of the Company) any and all determinations that may be necessary or
appropriate under this Agreement, including without limitation, determinations
relating to the exercise and enforcement of remedies hereunder. If a Founder
Stockholder who is also a member of the Board of Directors breaches his or her
obligations under this Agreement, such Founder Stockholder must refrain from
exercising his or her vote at meetings of the Board and general meetings of
the Company to give effect to this Section 6.5.

     Section 6.6. Severability. If the final determination of a court of
competent jurisdiction declares, after the expiration of the time within which
judicial review (if permitted) of such determination may be perfected, that
any term or provision hereof is invalid or unenforceable, (a) the remaining
terms and provisions hereof shall be unimpaired and (b) the invalid or
unenforceable term or provision shall be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.

     Section 6.7. Representatives, Successors and Assigns. Each Principal
shall cause his or her Family Affiliate to comply with the terms and
provisions of this Agreement. This Agreement shall be binding upon and inure
to the benefit of the respective parties hereto and their respective legatees,
legal representatives, successors and assigns; provided that Founder

                                     -13-
<PAGE>

Stockholders may not assign, delegate or otherwise transfer any of their
rights or obligations under this Agreement except with the written consent of
the Board of Directors.

     Section 6.8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD
TO THE CONFLICT OF LAWS PRINCIPLES OR RULES THEREOF).

     Section 6.9. Specific Performance. Each of the parties hereto
acknowledges that it will be impossible to measure in money the damage to the
Company or the Founder Stockholders if any party hereto fails, or threatens to
fail, to comply with the provisions of Article I or III and each party hereto
agrees that in the event of any such failure or threatened failure, neither
the Company nor any Founder Stockholder will have an adequate remedy at law.
Therefore, in the event of such failure or threatened failure, the Company
(without posting any bond) and each Founder Stockholder, in addition to all of
the other remedies which may be available, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which
may be then available. All claims for specific performance of one or more
provisions of this Agreement shall be resolved exclusively by litigation
before a court of competent jurisdiction located in the State of New York.

     Section 6.10. Arbitration. Except for claims for specific performance
brought in accordance with Section 6.9, all disputes, differences, and
controversies arising out of or in any way related to this Agreement shall be
submitted:

     (a) to the NYSE to be heard and decided under the terms of this Agreement
and the then applicable rules of the NYSE or, if those rules as interpreted by
the NYSE do not permit the disputes, differences and controversies to be
submitted to the NYSE for arbitration; then

     (b) to the American Stock Exchange (the "AMEX") in New York, New York, to
be heard and decided under the terms of this Agreement and the then applicable
rules of the AMEX or, if those rules as interpreted by the AMEX do not permit
the disputes, differences and controversies to be submitted to the AMEX for
arbitration; then

     (c) to the NASD in New York, New York, to be heard and decided under the
terms of this Agreement and the then applicable rules of the NASD or, if the
disputes, differences and controversies are not eligible for submission to the
NASD for arbitration under those rules as interpreted by the NASD; then

     (d) to the American Arbitration Association in New York, New York;

to be heard and decided under the terms of this Agreement and in accordance
with the then applicable rules of the hearing body by a panel of three
arbitrators (unless the rules of the hearing body shall require a different
number of arbitrators) chosen in accordance with the then applicable rules of
the hearing body. The decision of the arbitrators shall be final and binding
upon the parties, and an order may be entered upon the award of the
arbitrators in any court of competent jurisdiction.

                                     -14-
<PAGE>

     Section 6.11. Submission to Jurisdiction; Waiver of Immunity. Each
Founder Stockholder, for itself and its successors and assigns, hereby
irrevocably waives (a) any objection, and agrees not to assert, as a defense
in any arbitration or legal or equitable action, suit or proceeding against
such Founder Stockholder arising out of or relating to this Agreement or any
transaction contemplated hereby or the subject matter of any of the foregoing,
that (i) it is not subject thereto or that such action, suit or proceeding may
not be brought or is not maintainable before such arbitral body or in said
courts, (ii) the venue thereof may not be appropriate and (iii) the internal
laws of the State of New York do not govern the validity, interpretation or
effect of this Agreement, (b) any immunity from jurisdiction to which it might
otherwise be entitled in any such arbitration, action, suit or proceeding
which may be instituted before any state or federal court in the State of New
York in accordance with Section 6.9 or before any arbitral body in accordance
with Section 6.10 and (c) any immunity from the maintaining of an action
against it to enforce any judgment for money obtained in any such arbitration,
action, suit or proceeding and, to the extent permitted by applicable law, any
immunity from execution.

     Section 6.12. Further Assurances. Each Founder Stockholder agrees to
execute such additional documents and take such further action as may be
requested by the Company to effect the provisions of this Agreement.

     Section 6.13. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, but
all such counterparts shall together constitute but one and the same
instrument.

     Section 6.14. Entire Agreement. This Agreement, including the Schedules
hereto, contains the entire understanding of the parties with respect to the
subject matter hereof, and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof.

     Section 6.15. Effectiveness. This Agreement shall become effective and be
binding upon the Company, Neuberger and all Founder Stockholders upon approval
of the Board of Directors of Neuberger, execution of a counterpart hereof by a
duly authorized officer of each of the Company and Neuberger and of
counterparts of the Amendment by Founder Stockholders that Own a majority of
the "Founder Shares" (as defined in the Original Stockholders Agreement)
subject to the Original Stockholders Agreement as of immediately prior to the
Merger Effective Time.

                      [Rest of page intentionally blank.]

                                     -15-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

                            NEUBERGER BERMAN INC.

                            By:    /s/ Jeffrey B. Lane
                                   -------------------------------------------
                                   Name:  Jeffrey B. Lane
                                   Title: President and Chief Executive Officer

                            LEHMAN BROTHERS HOLDINGS INC.

                            By:    /s/ James Rosenthal
                                   -------------------------------------------
                                   Name:  James Rosenthal
                                   Title: Vice President

<PAGE>

                                 SCHEDULE I

                                      TO

                            STOCKHOLDERS AGREEMENT

Name and Address* of Principal

Herbert W. Ackerman                                Harold J. Newman
Robert J. Appel                                    Daniel P. Paduano
John J. Barker                                     Norman H. Pessin
Howard R. Berlin                                   Leslie M. Pollack
Jeffrey Bolton                                     William A. Potter
Richard A. Cantor                                  Janet W. Prindle
Vincent T. Cavallo                                 Kevin L. Risen
Lawrence J. Cohn                                   Daniel H. Rosenblatt
Robert W. D'Alelio                                 J. Curt Schnackenberg, Jr.
Salvatore D'Elia                                   Marvin C. Schwartz
Stanley Egener                                     Jennifer K. Silver
Michael N. Emmerman                                Kent C. Simons
Robert D. English                                  R. Edward Spilka
Jack M. Ferraro                                    Gloria H. Spivak
Gregory P. Francfort                               Heidi S. Steiger
Howard L. Ganek                                    Fred Stein
Robert T. Gendelman                                Eleanor M. Sterne
Theodore P. Giuliano                               Stephanie J. Stiefel
Mark R. Goldstein                                  Philip A. Straus
Lee H. Idleman                                     Peter Strauss
Alan L. Jacobs                                     Peter E. Sundman
Kenneth M. Kahn                                    Allan D. Sutton
Michael W. Kamen                                   Richard J. Sweetnam Jr.
Michael M. Kassen                                  Judith M. Vale
Mark P. Kleiman                                    Beth Owen Wade
Lee P. Klingenstein                                David I. Weiner
Irwin Lainoff                                      Michael J. Weiner
Jeffrey B. Lane                                    Dietrich Weismann
Joseph R. Lasser                                   Leslie J. Werkstell
Richard S. Levine                                  Allan R. White, III
Christopher J. Lockwood                            Lawrence Zicklin
Robert Matza
Robert R. McComsey
Martin McKerrow
Martin E. Messinger
Roy R. Neuberger

*        Unless otherwise indicated, the address of each Principal is c/o
         Neuberger Berman, LLC, 605 Third Avenue, New York, New York 10158.

<PAGE>

                                  SCHEDULE II

                                      TO

                            STOCKHOLDERS AGREEMENT

Name and Address** of Family Affiliate

Herbert W. Ackerman Associates, L.P.
Berlin Associates, L.P.
Bolton Associates, L.P.
Cantor Associates, L.P.
Cavallo Associates, L.P.
Egener Associates, L.P.
Egener 2003 Grat Trust
Ganek Associates, L.P.
Giuliano Associates, L.P.
Goldstein Associates, L.P.
Kamen Associates, L.P.
Michael M. Kassen Associates, L.P.
Michael M. Kassen 2002 Grantor Retained Annuity Trust
Michael M. Kassen 2003 Grantor Retained Annuity Trust
Klingenstein Associates, L.P.
Lasser Associates, L.P.
McKerrow Associates, L.P.
Messinger Associates, L.P.
Messinger 2003 Annuity Trust
Neuberger Associates, L.P.
Newman Associates, L.P.
Paduano Associates, L.P.
Paduano Associates Inc.
Daniel J. Paduano 2003 Irrevocable Trust
Daniel J. Paduano Descendants Exempt Irrevocable Trust
John P. Paduano 2003 Irrevocable Trust
John P. Paduano Descendants Exempt Irrevocable Trust
Pollack 1998 Trust A
Potter Associates, L.P.
Schwartz CS Associates, L.P.
Schwartz ES Associates, L.P.
Marvin Schwartz Family 2003 GRAT
Kent Simons 2002 Grat
Kent Simons Grat #2
Kent Simons Grat #3
The Spilka 1998 Trust
Steiger Associates, L.P.
Stiefel Associates, L.P.
Strauss 1998 Trust
Sundman Associates, L.P.
Allan D. Sutton 1998 Grantor Retained Annuity Trust

<PAGE>

Sutton 1998 GST Trust F/B/O Nancy Sutton-Finley
Sutton 1998 GST Trust F/B/O Peggy Lynn Sutton
Weismann Associates, L.P.
The Dietrich Weismann Revocable Trust
Lawrence Zicklin 2003 Grantor Retained Annuity Trust
Zicklin Associates, L.P.

**       Unless otherwise indicated, the address of each Family Affiliate is
         c/o Neuberger & Berman Trust Company of Delaware, 919 Market Street,
         Suite 506, Wilmington, Delaware 19801.

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