Document:

QuickLinks
 -- Click here to rapidly navigate through this document
  

 
 

EXHIBIT 10.47    
    

OFFICE/SHOWROOM/WAREHOUSE

LEASE AGREEMENT
  ("Lease") 

        This
Lease is entered into by and between the Landlord and Tenant named below as of the last date shown on the signature page. This Lease consists of the following: this document and any
attached exhibits (including floor plans, legal descriptions, site plans, premises layouts, guarantees or other items) and any amendments or addendums that are now or in the future executed by the
parties. 

        1.    Definitions and Basic Provisions.    The following definitions
and basic provisions shall be used in conjunction with this Lease: 

        (a)    "Landlord":    Walnut Hill /DBI Ventures, I, LP,
a Texas limited partnership 

        (b)    "Tenant":    E F Johnson Company 

        (c)    "Full Premises":    1440 Corporate Dr., Irving, TX 75038 

        The
Full Premises are as described at Exhibit "A." The Full Premises consist of forty thousand (40,000) square feet of net leasable area. In determining net leasable area,
all measurements are from underneath the roofline, except interior party walls where measurements are from centerline. Notwithstanding the above-described definition of the Full Premises, Tenant shall
occupy portions of the Full Premises in accordance with the schedule listed below, and whatever the then existing area of the Full Premises shall be the "Premises" for purposes under this Lease
regardless of the square footage occupied by Tenant in accordance with the take-down schedule below. 

        The
Premises shall be: 

	For the period of:
	 	Square Feet

	December 17, 2003 to March 31, 2004	 	8,000
	April 1, 2004 to June 30, 2004	 	12,000
	July 1, 2004 to September 30, 2004	 	18,000
	October 1, 2004 to December 31, 2004	 	25,000
	January 1, 2005 to March 31, 2005	 	31,000
	April 1, 2005 to June 30, 2005	 	35,000
	July 1, 2005 to December 31, 2008	 	40,000
	January 1, 2009 to December 31, 2013	 	40,000

        (d)    "Lease term":    Ten (10) years
and sixteen (16) days as follows: 

	•
	Commencement date: December 17, 2003

 
	•
	 Expiration date: December 31, 2013

        (e)    "Basic Rental" shall be:    

	•
	Six
Thousand, Six Hundred, Seventy Dollars ($6,670.00) per month for period December 15, 2003 to March 31, 2004;

	•
	Ten
Thousand Dollars ($10,000.00) per month for period April 1, 2004 to June 30, 2004;

	•
	Fifteen
Thousand Dollars ($15,000.00) per month for period July 1, 2004 to September 30, 2004;

	•
	Twenty
Thousand, Eight Hundred, Forty Dollars ($20,840.00) per month for period October 1, 2004 to December 31, 2004;

	•
	Twenty-Five
Thousand, Eight Hundred, Forty Dollars ($25,840.00) per month for period January 1, 2005 to March 31, 2005;

	•
	Twenty-Nine
Thousand, One Hundred, Seventy Dollars ($29,170.00) per month for period April 1, 2005 to June 30, 2005;

	•
	Thirty-Three
Thousand, Three Hundred, Forty Dollars ($33,340.00) per month for period July 1, 2005 to December 31, 2008; 

Page 1

 

	•
	Thirty-Three
Thousand, Three Hundred, Seventy Dollars ($36,370.00) per month for period January 1, 2009 to December 31, 2013 

        (f)    "Security deposit":    Fifty Thousand Dollars ($50,000.00) to
be returned to Tenant at earlier of expiration of lease (as per paragraph 3) or closing and funding under the Purchase Option, as per paragraph 1(h). 

        (g)    "Permitted use":    Operation of a Land Mobile Radio Company 

        (h)    "Purchase Option":    From December 17, 2003 until
August 15, 2005, so long as Tenant is not in material default of any provision of this Agreement at time of exercise, Tenant, and/or its parent company, EFJ, Inc, shall have the option to
purchase the Premises for Three Million, Four Hundred Thousand Dollars ($3,400,000.00), plus any amounts payable under Section 6 below. 

        (i)    Addresses and contact information of the parties:    

	LANDLORD:	 	 
	 	Management Office:	 	Walnut Hill/DBI Ventures I, LP

c/o David Berndt Interests

5605 N. MacArthur Blvd., Suite 210

Irving, TX 75038
	

TENANT:	
 	

 
	 	 	E F Johnson

299 Johnson Ave.

P.O. Box 1249

Waseca, MN 56093-0514

        2.    Lease Grant.    Landlord, in
consideration of: (i) the Basic Rental, (ii) all other sums to be paid by Tenant under this Lease ("Additional Rental") and (iii) the other covenants and agreements to be
performed by Tenant; hereby leases, demises and lets to Tenant the Premises (as defined in paragraph 1(c)) on the terms and conditions stated in this Lease commencing on the commencement date
(as defined in paragraph 1(d), or as adjusted as provided below) and ending on the expiration date, unless sooner terminated as provided in this Lease. If this Lease is executed before the
Premises become vacant, or otherwise available and ready for occupancy, or if any present tenant or occupant of the Premises holds over, and Landlord cannot acquire possession of the Premises prior to
the commencement date of this Lease, Landlord shall not be deemed to be in default hereunder, and Tenant agrees to accept possession of the Premises at such time as Landlord is able to tender the same
and such date shall be deemed to be the commencement date and this Lease shall continue for the lease term described in paragraph 1(d) above. Landlord waives payment of rent covering any period
prior to the rendering of possession of the Premises to Tenant. If Tenant occupies the Premises prior to the commencement date specified in paragraph 1(d), the commencement date shall be
altered to coincide with said occupancy and the ending date of the Lease remaining unchanged. Tenant is responsible for obtaining, at its expense, a certificate of occupancy for the Premises. Tenant
shall promptly apply for the certificate of occupancy and diligently pursue all necessary approvals required to occupy and use the Premises for the purpose set out in this Lease. By occupying the
Premises, Tenant shall be deemed to have acknowledged that the Premises (i) are suitable for Tenant's intended purpose (ii) are in good operating condition and (iii) comply fully
with Landlord's obligations under this Lease. 

        3.    Rent.    Tenant shall pay Basic Rental to Landlord without
demand, deduction or set off, for each month of the entire Lease term. Until further notice, payments are due at the address set out in this Lease document. Tenant shall, contemporaneously with the
execution of this Lease, pay Landlord the following: (i) the security deposit set out in paragraph 1(f) above and (ii) an initial
one-and-one-half months installment of rent (as defined in paragraph 1(e)). A monthly installment in the amounts defined in paragraphs 1(e) above shall be
due and payable on or before the first day of each succeeding calendar month during the Lease term. Rent for any fractional month at the beginning or end of the Lease term shall be prorated. The
security deposit shall be held by Landlord without liability for interest and as security for the performance by Tenant of Tenant's covenants and obligations under this Lease, it being expressly
understood that the deposit shall not be considered an advance payment of any rental or a measure of Landlord's damages in case of default by Tenant. If Tenant fails to timely pay any sums due under
this Lease or defaults in its obligations under this Lease, Landlord may, from time to time, without prejudice to any other remedy, use the security deposit to the extent necessary to make good any
arrearages of Basic Rental or any damage, injury, expenses or liability to Landlord. Following any such application of the security deposit, Tenant shall immediately pay to Landlord, on demand, the
amount so applied in order to 

Page 2

 

restore
the security deposit to its original amount. 30 days after termination of this Lease and vacating of the Premises by Tenant, Landlord shall return any remaining balance of the security
deposit to Tenant so long as Tenant has full performed its obligations under this Lease and provided Landlord with written notice of its forwarding address. If Landlord transfers its interest in the
Premises during the Lease term, Landlord may assign the security deposit to the transferee and thereafter shall have no further liability for the return of such security deposit. 

        Time
is of the essence as to all required payments by Tenant under any provision of this Lease. If any monthly installment of Basic Rental is not received by the Landlord on or before
the 5th day of the month for which said monthly rental installment is due, a service charge of 10% of the delinquent installment shall become due and payable in addition to the monthly installment
owed. The date that a check is dated or mailed is not relevant in determining Tenant's liability for a late fee; Landlords accounting records are the determining record of the date of receipt of a
rent payment. The service charge is for the purpose of reimbursing Landlord for the extra costs and expenses incurred in connection with the handling and processing of late monthly rental. If the
delinquent amount is not paid by the 1st day of the following month, then the delinquent amount (not including the service charge) shall bear interest at the lesser of: (1) 18 per cent per
annum, or (2) the maximum lawful contract rate. Such interest shall begin to accrue on the 1st of the month following the delinquency and continue until payment of the delinquent amount is
made. 

        If
any check that is tendered to Landlord by Tenant for any charges due under this Lease is returned to Landlord by Tenants financial institution for any reason (including but not
limited to absence of Tenants signature, insufficient funds, stop payment, or closed account) then, in addition to any other liability of Tenant for the amount of the check, Tenant shall be liable to
Landlord for a service fee of $50.00 for each returned check. Landlord has no obligation to redeposit any check that is returned for any reason and Tenant shall immediately cure the
non-payment that has resulted from the returned check. If Landlord receives 2 or more returned checks during the term of this Lease, then Landlord may require that all future payments from
Tenant be made by cashiers check. 

        4.    Common Area Maintenance Fee.    

        (a)    Intentionally Deleted.    

        (b)    Intentionally Deleted.    

        (c)    Intentionally Deleted.    

        (d)    Intentionally Deleted.    

        (e)    Intentionally Deleted.    

        5.    Utilities and Services.    

        (a)   Utilities include the following: Water, wastewater, storm water, trash removal, gas, and electrical power. Tenant is
responsible for paying the cost of all utilities. 

        (b)    Intentionally Deleted.    

        (c)   Landlord shall have no liability for any impairment of any utility or other services to the Premises resulting from any
stoppage, interruption or inadequacy. If there is any such impairment of utility or other services, Landlord shall not be liable for any resulting damages to either person, property or business
operations and the impairment shall not: (i) constitute an eviction of Tenant, or (ii) entitle Tenant to any abatement or reduction of Tenant's obligations under this Lease. 

        6.    Leasehold Improvements.    Leasehold improvements shall be made
at the direction of the Tenant, subject to approval of Landlord not to be unreasonably withheld. The first Six Hundred Thousand Dollars ($600,000.00) of such improvements shall be paid by Landlord,
and Basic Rental, per paragraph 1(e) shall not be altered in any manner as a result of such improvements. Any improvements exceeding this Six Hundred Thousand Dollar ($600,000.00) cap shall be
the sole responsibility of the Tenant. In the event that Tenant exercises the Purchase Option in paragraph 1(h), the amount that improvements paid for by Landlord exceeds Two Hundred Thousand
Dollars ($200,000.00) shall be added to the option price in paragraph 1(h). 

        7.    Use.    Tenant shall use the Premises only for the permitted use
(as defined in paragraph 1(g)). Tenant will not occupy or use the Premises, or permit any portion of the Premises to be occupied or used for any business or purpose other than the permitted use
or for any use or purpose which is unlawful in part or in whole or deemed 

Page 3

 

to
be disreputable in any manner or extra hazardous on account of fire, nor permit anything to be done which will in any way increase the rate of fire insurance on the Building (as defined in
Exhibit "B") or contents. If Tenants occupancy causes any increase in the rate of insurance on the Premises Tenant agrees to pay to Landlord the amount of such increase on demand and such
increase shall be Additional Rental. Tenant will conduct its business and control its vendors; subcontractors; agents; employees and invitees in such a manner as not to create any nuisance, nor
interfere with, annoy or disturb other tenants (if any), the Landlord or any property owners adjacent to the Project (as defined in Exhibit "B"). Tenant will maintain the Premises in a clean,
healthful and safe condition and will comply with all laws, ordinances, orders, rules and regulations (state, federal, municipal and other agencies or bodies having any jurisdiction thereof), or
property owners' associations with reference to use, condition or occupancy of Premises. Tenant shall not, without the prior express written consent of the Landlord do any of the following:
(i) install or remove: partitions, electrical system components, or any part of the ceiling system (except for replacing damaged ceiling tiles), (ii) alter the plumbing fixtures,
(iii) install or modify HVAC components (except for any required repairs), (iv) paint, install lighting or decoration, or install any signs, window or door lettering or advertising media
of any type on or about the Premises. Access to the roof of the Premises is strictly limited to maintenance and repair activity by Landlord or qualified repair contractors approved in advance by
Landlord. Tenant (including its employees, vendors, subcontractors, agent and invitees) shall make no penetrations of the roof, party walls or exterior walls for any reason without Landlords advance
written consent. All alterations to the Premises that are approved by Landlord shall be maintained in good repair and operating condition. 

        8.    Repairs and Maintenance.    

        (a)    By Landlord:    Except for reasonable wear and tear Landlord
shall, at its expense, maintain in good repair and condition only the following portions of the Building: the foundation, and the structural soundness of the exterior walls (excluding all windows,
window glass, plate glass, and all doors). Repairs to the roof and replacement of the roof are Landlord expense responsibility, except if such repairs are due to any act, omission, negligence or
violation of this Lease by Tenant or its employees, vendors, subcontractors, agent and invitees. Tenant shall give immediate written notice to Landlord of any apparent need for repairs by Landlord of
the items that Landlord is obligated to repair under this Lease; Landlord shall promptly perform any such repairs that Landlord in its reasonable judgment determines are necessary. Tenant shall have
no claim for abatement of rent or damages (to persons, property or business operations) on account of the failure of or repair to any item that is Landlords obligation under this Lease. Landlord's
liability for repairs shall be limited to the direct cost of the repair work. 

        (b)    By Tenant:    Tenant shall at its expense and risk continuously
maintain all other parts of the Full Premises, the Building and other improvements in the Project in good repair and condition, promptly comply with all laws, ordinances, requirements, orders,
directions, rules or regulations of any governmental authority or property owners' association having jurisdiction over Tenant or the Project. Landlord shall not be required to make any alterations,
improvements or repairs of any kind or nature whatsoever to the Premises or any portion thereof or any other improvements or any personalty within the Premises (except as expressly provided for above)
at all times during the term of this Lease, including but not limited to: pest control, repairs (including all necessary replacements) to the plumbing, windows, window glass, plate glass, electrical
fixtures (such as lights, plugs, switches, wiring and breaker panels), interior and exterior doors (including hardware and locks), heating, ventilation and air-conditioning equipment, fire
protection sprinkler system (if installed), and the interior of the Premises in general (such as walls, carpets, and ceiling tiles). Tenant shall pay before delinquency all charges for gas, water,
electricity and any other utility services used in, on or for the Project during the term
hereof by Tenant. All warranties and guarantees in effect on any of the items mentioned above will be for Tenant or Landlord's use as applicable. If any item for which Tenant is responsible is
inoperable for any reason, Tenant shall promptly repair the item without regard to whether or not the items operation is currently essential to the particular use of the Premises by Tenant. If Tenant
fails to properly and promptly maintain the Premises, Landlord may, after 10 days notice, elect to cause repairs or corrections to be made for the account of Tenant and the resulting costs be
payable by Tenant to Landlord as Additional Rental on the next rental installment date. No notice is required if Landlord, in its sole judgment, determines that immediate repair action is necessary. 

        (c)    Tenant, at Tenant's sole cost and expense, shall during the term of this Lease and any extensions
thereof maintain a preventative maintenance service agreement on the HVAC system for the Premises with a HVAC contractor from time to time designated by
Landlord.    The service agreement, shall, at a minimum, provide for filter replacement (on a frequency recommended by the contractor, but at least monthly) and
inspection of belts and safety controls; bi-annual cleaning of the condenser coils (or more frequently if dictated by 

Page 4

 

local
conditions and experience, adjustment and calibration of thermostats and checking of refrigerant operating pressures and temperatures; and annual checking of heating systems and checking,
adjusting and lubricating of bearings and drives as required. A copy of the service agreement shall be provided to Landlord. 

        9.    Alterations and Improvements.    At the end or other termination
of this Lease, Tenant shall deliver up the Premises with all improvements, equipment, fixtures and property (except as otherwise provided in this Lease) in good repair and condition, reasonable wear
and tear excepted, and shall deliver to Landlord all keys and security system codes and accounts to the Premises. Tenant shall pay the cost of any repair necessary to restore the Premises to the
condition in which they are to be delivered by Landlord. Tenant will not make or allow to be made any alterations or physical additions in or to the Premises without the prior written consent of
Landlord. All alterations, additions or improvements (whether temporary or permanent in character) made in or upon the Premises either by Landlord or by Tenant with Landlord's consent shall be
Landlord's property on termination of this Lease and shall remain on the Premises without compensation to Tenant; provided however, that if Landlord has specified that such alterations, additions or
improvements shall be removed at the end of the lease term, then Tenant shall do so. All furniture, moveable trade fixtures and equipment installed by Tenant may be removed by Tenant at the
termination of this Lease if Tenant so elects and shall be so removed if required by Landlord, or if not so removed shall, at the option of the Landlord, become the property of Landlord or Landlord
may require removal at Tenant's risk and expense. All such installations, removals and restoration shall be accomplished in a good workmanlike manner so as not to damage the Premises or the
foundation, structure, roof, walls, interior partitions, utility lines, plumbing, electrical lines or other utilities. 

        10.    Reimbursement of Insurance and Taxes and Assessments.    Tenant
shall pay, as Additional Rental, any and all insurance charges incurred by Landlord in relation to the Premises, the Building located thereon, and the Project. Tenant shall make any such payment on or
before the later of (i) the date that is thirty (30) days prior to the due date thereof or (ii) thirty (30) days after Landlord provides Tenant with an invoice for such
insurance charges. "Real Property Taxes and Assessments" shall mean the taxes and assessments imposed by municipal, county, state and district governmental authorities and any property owners'
association(s), against the owner of real property, including, but not limited to, as a result of and relating to the ownership or use of the Premises or any rentals received therefrom. Tenant shall
pay, as Additional Rental, any and all Real Property Taxes and Assessments relating to the Premises during the term of this Lease. Tenant shall make any such payment on or before the later of
(i) the date that is thirty (30) days prior to the due date thereof or (ii) thirty (30) days after Landlord provides Tenant with an invoice for such Real Property Taxes and
Assessments. 

        11.    Assignments and Subletting.    Tenant shall not assign this
Lease or sublet all or any part of the Premises without the prior written consent of the Landlord, which consent shall not be unreasonably withheld, conditioned or delayed if the proposed assignee or
subtenant is of equal or greater creditworthiness than the Tenant and the use is not incompatible with the Building. Notwithstanding the foregoing, however, Tenant may assign or sublet this Lease,
without Landlord's prior written consent, to any corporation or other entity which controls Tenant, which Tenant controls or is direct or directly controlled by or under common control with the Tenant
or merges with Tenant. 

        12.    Indemnity.    Landlord shall not be liable for and Tenant will
indemnify and save harmless Landlord of and from all fines, suits, claims, demands, losses and actions (including attorneys' fees) for any injury, loss or damage to person or property on or about the
Premises caused by: (i) the negligence, gross negligence, recklessness, intentional misconduct or breach of this Lease by Tenant; (ii) Tenant's vendors, agents, employees, subtenants,
invitees or by any other person entering the Premises or the Building under express or implied invitation of Tenant; or (iii) arising out of or related to Tenant's use of the Premises. Landlord
shall not be liable or responsible for any loss or damage to any property or bodily or personal injury to any person occasioned by: theft; fire; storm; flood; Act of God; public enemy; injunction;
riot; strike; insurrection; war; court order; requisition by governmental body or authority; other tenants of the Premises; or any other matter beyond control of Landlord. Landlord shall not be liable
for any injury, damage or inconvenience which may arise from: (i) repair or alteration of any part of the Premises, (ii) failure to make repairs, or (iii) any cause whatever
except Landlord's recklessness. To the extent necessary to allow for indemnification of Landlord by Tenant in connection with bodily injury to employees of Tenant, Tenant waives it right to claim that
a workers compensation recovery is the sole liability of Tenant to any third party with respect to the injury of an employee arising within the scope of their employment. 

        13.    Mortgages.    Tenant accepts the Premises subject to:
(i) any deeds of trust, security interests or mortgages which might now or in the future constitute a lien on all or part of the Premises or the Project (ii) all 

Page 5

 

governmental
regulations relating to the use of the Premises (including zoning ordinances, building and fire codes, and all laws or regulations that apply to environmental compliance. Tenant shall at
any time following execution of this Lease execute any agreements, instruments, releases or other documents (subordination agreements) that may be required by any lender to Landlord for the purpose of
subjecting and subordinating this Lease (and any interest of Tenant in the Premises) to the lien of any deed of trust, security interest or mortgage affecting the Premises. Such subordination
agreements may, at lenders election, include a provision providing for continuation of this Lease following the lenders exercise of any remedy against Landlord and further providing that lenders
liability under this Lease will be limited to times following its taking title or possession of the Premises. Subordination Agreements shall be signed by Tenant and returned to Landlord or any lender
within 10 business days after being requested. Tenant hereby appoints Landlord as its agent for purpose of executing, on behalf of Tenant, any such Subordination Agreements. Landlord, at its sole
option, may waive the applicability of this paragraph 13 so that this Lease will not be subject and subordinate to any such deed of trust, security interest or mortgage. 

        14.    Required Insurance.    Landlord shall maintain insurance
policies that insure the improvements on the Project (including the Premises) against loss due to fire and such other hazards as Landlord may determine from time to time. Such insurance may be in
amounts and have deductibles that Landlord may from time to time elect. Landlord shall not be obligated to insure any personal property, fixtures, trade equipment, or inventory that may be placed from
time to time on the Premises. In addition, Landlord has no obligation to insure any improvements that Tenant may make to the Premises such as initial tenant space finishes (including carpet, drop
ceiling, interior partitions, etc.) or subsequent additions or improvements by Tenant (whether or not approved by Landlord). 

        Tenant
shall, at its sole cost and expense, procure and maintain throughout the term of this Lease a Commercial General Liability insuring both Tenant and Landlord against property
damage, bodily injury, personal injury or medical expenses occasioned by or arising out of or in connection with the use or occupancy of the Premises. The policy shall (i) be in an amount not
less than $1,000,000.00 combined single limit (ii) be written on an occurrences basis, (iii) contain an endorsement that deletes any contractual liability exclusion, (iv) be
evidenced by a certificate of insurance satisfactory to Landlord that obligates the insurer to provide Landlord at least ten (10) days prior to cancellation or non renewal of such insurance. 

        Tenant
shall at all times maintain workers compensation and employers liability insurance on all its employees. The coverage shall comply with current statutory requirements and contain
a waiver of subrogation provision with respect to Landlord and its lenders. 

        15.    Right of Entry.    Landlord and its representatives shall have
the right to enter into and upon any and all parts of Premises at reasonable hours to (i) inspect, (ii) clean or (iii) make repairs, alterations or additions that Landlord may
deem advisable, (iv) show the Premises to prospective insurers, tenants, purchasers or lenders. Such entry shall not entitle Tenant to any abatement or reduction of rent and shall not be deemed
to be an actual or constructive eviction. In addition, Landlord may enter the Premises at any time (by having the locks picked if necessary) if necessary in Landlords sole discretion in order to deal
with emergency situations or enforce its right of entry to regain possession due to any Tenant default. Landlords right of entry under this paragraph does not imply any duty on the part of Landlord to
take any actions whatsoever with regard to the Premises; such obligations, if any, are set out elsewhere in this Lease. 

        16.    Condemnation.    During the term of this Lease (including any
extension or renewal), if all or part of the Premises or the Project are taken for any public or quasi-public use under any governmental law, ordinance or regulation or by right of eminent domain
(including private purchase in lieu of condemnation) this Lease shall terminate and the rent shall be abated for the balance of the Lease term, effective on the date physical possession is taken by
the condemning authority. Tenant shall have no claim against Landlord for the value of any remaining term of this Lease. 

        If
a portion but not all of the Premises or Project shall be taken as described above and the partial taking or condemnation renders the Premises reasonably unsuitable for Tenant's
business, then Landlord may, in its sole discretion, elect to either (i) terminate this Lease or (ii) at Landlord's sole risk and expense, restore and reconstruct the Premises or Project
to the extent necessary to make same reasonably tenantable. If Landlord elects to restore the Premises or Project, this Lease shall continue in full force and effect with the rent payable during the
remaining portion of the term being adjusted to such an extent as may be fair and reasonable under the circumstances. Tenant shall have no claim against Landlord for the damage, injury or impaired
leasehold value that results from any interrupted portion of this Lease. 

Page 6

 

        In
the event of any total or partial condemnation or taking Tenant shall not be entitled to any part of the award or price paid in lieu thereof, and Landlord shall receive the full
amount of such award or price. Tenant hereby expressly waives any right or claim to any part of the condemnation proceeds or payments made in connection with a sale in lieu of condemnation. 

        17.    Fires or Other Casualty.    Tenant shall promptly notify
Landlord of any damage to the Premises or the Project by reason of vandalism, break in, storm, fire or any other casualty. If the Premises or Project are (i) totally destroyed by fire, tornado,
wind storm or other casualty or (ii) so damaged that rebuilding or repairs cannot be completed within ninety (90) days after the date of such damage, either Landlord or Tenant may, at
its option, terminate this Lease. Such election must be made within 15 days after the scope of the casualty is determined and termination shall be effective as of the date of the casualty and
rent shall abate as of that date. If Landlord's insurance covers the damage, and either (i) rebuilding or repairs can be completed within ninety (90) days after the date of such damage,
or (ii) the repairs require longer than 90 days (but both Landlord nor Tenant have waived the right to terminate this Lease), then Landlord shall, within (30) days after the date
of such damage, commence to rebuild or repair the Premises or the Project. The restoration shall proceed with reasonable diligence to restore the Premises or Project to substantially the same
condition in which it was immediately prior to the casualty, but Landlord shall not be obligated to rebuild, repair or replace any part of the furniture, equipment, fixtures and other improvements
which may have been placed by Tenant or other tenants within the Project or the Premises. Landlord shall allow Tenant a prorated diminution of Basic Rental based on (i) the number of days and
(ii) percentage of the leased area are not that are not available for Tenants use. 

        If
any deed of trust, security agreement or mortgage on the Premises or the Project requires that the insurance proceeds be used to retire the mortgage debt, Landlord shall have no
obligation to rebuild and this Lease shall terminate upon notice to Tenant. Any insurance that may be carried by Landlord or Tenant against loss or damage to the Project or to the Premises shall be
for the sole benefit of the party carrying such insurance and under its sole control. 

        18.    Holding Over.    After the expiration of the term of this Lease
if Tenant, or any of its successors in interest, continues to occupy any portion of the Premises then a tenancy from month to month will be created. Monthly rent during the holdover period will be
150% of the monthly Basic Rental in effect prior to the end of the Lease term. Nothing in this paragraph or otherwise constitutes an agreement by Landlord to permit any holding over after the end of
the term. 

        19.    Taxes on Tenant's Property.    Tenant shall be liable for all
taxes levied or assessed against personal property, furniture, or fixtures placed by Tenant in the Premises. If any such taxes for which Tenant is liable are levied or assessed against Landlord or
Landlord's property and if Landlord elects to pay the same or if the assessed value of Landlord's property is increased by inclusion of personal property, furniture or fixtures placed by Tenant in the
Premises, and Landlord elects to pay the taxes based on such increase, Tenant shall pay to Landlord upon demand that part of such taxes for which Tenant is primarily liable. 

        20.    Events of Default.    The following events shall be deemed to
be events of default by Tenant under this Lease: 

        (a)   Tenant fails to pay any required installment of Basic Rental or any other charges due under this Lease and such failure
shall continue for a period of ten (10) calendar days. Payments are effective only when the check is actually received by Landlord without regard to the date on the check or the date the check
was mailed. 

        (b)   Tenant fails to comply with any term, provision or covenant of this Lease, other than the payments described in
subsection (a) above, and does not cure such failure within ten (10) calendar days after written notice of the noncompliance is sent to Tenant. Cure notices sent under this
paragraph 20 (b) are effective on the sooner of the following: (i) the date a notice sent by certified or registered mail is signed for or refused by the addressee or delivery of
such notice is not possible because the addressee has moved, (ii) the date that a notice is actually delivered to Tenant at the Premises or posted on the main entry to the Premises. 

        (c)   Tenant suffers material financial deterioration as evidenced by any of the following: 

	1.
	Tenant
makes an assignment for the benefit of creditors.

	2.
	Tenant
files a petition under any section or chapter of the National Bankruptcy Act, as amended, or under any similar law or statute of the United States or any state. 

Page 7

 

	3.
	Tenant
is adjudged bankrupt or insolvent in legal proceeding filed against Tenant and such adjudication is not be vacated or set aside within thirty (30) days.

	4.
	A
receiver or Trustee is appointed for all or substantially all of the assets of Tenant and such receivership is not terminated within thirty (30) days. 

        (d)   Tenant repudiates its obligations under this Lease or deserts, vacates or abandons any substantial portion of the
Premises for a period of five (5) or more days. 

        (e)   Tenant or any of the principals of Tenant has provided Landlord or any of its agents with false or incomplete information
on any application to rent the Premises. 

        The
following will be deemed to be a default by Landlord and a breach of this Lease: Landlord fails to perform any of Landlords obligations under this Lease within forty-five
(45) days after receipt of written notice from Tenant specifying the failure. No such failure, however, will be deemed to exist if Landlord has commenced to cure the default within such period
and provided such efforts are prosecuted to completion with reasonable diligence. Delay in curing a default will be excused if due to causes beyond the reasonable control of Landlord. If Landlord
remains in default beyond any applicable cure period then Tenant may as its sole and exclusive remedy, terminate this Lease and vacate the Premises. Upon such termination, Tenants obligation for rent
(and other charges such as Additional Rental, increases in operating expenses and utility services) shall cease. Tenants remedies described in this paragraph are the sole remedies for any Landlord
default or breach of this Lease by Landlord. Tenant waives any other remedies for damages (whether special, general or consequential) or specific performance. 

        21.    Remedies.    Upon the occurrence of any event of default by
Tenant specified in paragraph 20, Landlord shall have the option to pursue any one or more of the following remedies without any notice or demand whatsoever: 

        (a)   Terminate this Lease in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to
do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession and expel or remove Tenant and any other person who
may be occupying all or part of the Premises, by force if necessary, without being liable for prosecution or any claim of damages. Tenant agrees to pay to Landlord on demand the amount of all loss and
damage which Landlord may suffer by reason of such termination, whether through inability to rent the Premises on satisfactory terms or otherwise, including the loss of rental for the remainder of the
Lease term. 

        (b)   Enter upon and take possession of the Premises and expel or remove Tenant and any other person occupying all or part of
the Premises, by force if necessary, without being liable for prosecution or any claim for damages, but without terminating this Lease. If Landlord reenters the Premises and takes possession by
changing the locks, Tenant remains liable for all required payments under this Lease. If Landlord takes possession of the Premises by locking Tenant out under the terms of this Lease, Landlord has no
obligation to make new keys available other than during the Landlord's normal business hours and Tenant shall have no right to regain the new keys to the Premises or the right of possession unless
approved in writing by Landlord on terms acceptable to Landlord in its sole discretion. If Landlord elects, it may lease the Premises to a replacement tenant on such terms as Landlord shall deem
advisable and receive all resulting rent. Tenant agrees to pay to Landlord on demand any deficiency that may arise by reason of such releasing for the remainder of the Lease term. In determining such
deficiency, Landlord shall be entitled to charge Tenant with all related costs and damages including but not limited to the following: (i) all costs of reentry, cleaning, repair, restoration or
redecoration necessary to prepare the Premises for the releasing, (ii) all brokers commissions due in connection with releasing, (iii) attorneys fees charged in connection with the
Tenants default, and (iv) all Basic Rental and other charges due under this Lease. Credit will be given toward Tenant's delinquency to the extent of net cash proceeds of the releasing only to
the extent actually received by Landlord for a period of time that is within the term of this Lease. 

        (c)   Enter upon the Premises by force if necessary, without being liable for prosecution or any claim for damages, and do
whatever Tenant is obligated to do under the terms of this Lease; and Tenant agrees to reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant's
obligations under this Lease, and Tenant further agrees that Landlord shall not be liable for any damages resulting to the Tenant from such action. 

Page 8

 

        No
re-entry or taking possession of the Premises by Landlord shall be construed as an election on its part to terminate this Lease, unless an express written notice of such
intention is given to Tenant. Notwithstanding any such re-entry or taking possession and releasing, Landlord may at any time thereafter elect to terminate this Lease for a previous
default. Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies listed in this Lease or any other remedies provided by law. Pursuit of any remedy under this
Lease shall not constitute a forfeiture or waiver of any rent due to Landlord or of any damages accruing to Landlord by reason of the violation of any portion of this Lease. Landlord's acceptance of
any payment following an event of default shall not be construed as Landlord's waiver of such event of default and shall not constitute a reinstatement of this Lease or of the right to possession
unless Landlord specifically states in writing the election to do so. No waiver by Landlord of any violation or breach of this Lease shall constitute a waiver of any other violation or breach of this
Lease. Forbearance by Landlord to enforce one or more of its rights under this Lease shall not be deemed or construed to constitute a waiver of any other violation, default or breach of this Lease. If
Landlord at any time terminates this Lease or the right to possession for any
default, in addition to any other remedy Landlord may have, Landlord may recover from Tenant all damages Landlord may incur by reason of such default including the cost of recovering the Premises and
the loss of rental for the remainder of the Lease term. 

        22.    Surrender of Premises.    No act or thing done by the Landlord
or its agents during the term of this Lease shall be deemed an acceptance of a surrender of the Premises or a cancellation of this Lease, and no agreement to accept a surrender of the Premises or
cancellation of this Lease shall be valid unless it is in a writing signed by the Landlord and specifically stated to be an acceptance of surrender of the Premises or Lease cancellation. 

        23.    Attorney's Fees.    If Landlord elects to utilize an attorney
to enforce any of Tenants obligations under this Lease then Tenant agrees in each and any such case to pay to Landlord the reasonable attorneys fees in connection with the matter. Matters for which an
attorney may be employed include the following: (i) Collection of any sum owed under this Lease such as Basic Rental; (ii) eviction or removal of Tenant from the Premises;
(iii) action to compel Tenant to comply with the terms of this Lease; (iv) actions to perfect and enforce Landlord's Liens. 

        24.    Landlord's Lien.    In addition to the statutory Landlord's
lien, Landlord shall have, at all times, a valid security interest to secure payment of: (i) all rentals and other sums of money due from Tenant under this Lease, (ii) any damages or
loss which Landlord may suffer by reason of the breach by Tenant of this Lease. Landlord's lien shall apply to (i) all equipment, fixture, furniture and improvements of Tenant now or later
situated on the Premises (subject to any purchase money security interests for such items), and (ii) all proceeds from such property. In event of default, all property subject to Landlords lien
shall not be removed from the Premises without the consent of Landlord until the default is fully cured. In event of default, Landlord may, in addition to any other remedies in this Lease, enter the
Premises and take possession of any and all property subject to Landlords lien, without liability for trespass or conversion. After taking possession of such property, Landlord may sell the same at
public or private sale, (whether or not the property is present at the sale), after giving Tenant reasonable notice of the time and location of any such sale is to be conducted. Landlord or its
agents, vendors or assigns may purchase the property at the sale. Unless otherwise mandated by law, and without excluding any other manner of giving Tenant reasonable notice, the requirement of
reasonable notice shall be met if such notice is given in the manner prescribed in paragraph 27 of this Lease at least five (5) days before the time of sale. The proceeds from any such
disposition, less any and all expenses connected with the taking of possession, holding and selling of the property (including reasonable attorneys' fees and other expenses), shall be applied as a
credit against the Tenants financial obligations under this Lease. Any surplus shall be paid to Tenant or as otherwise required by law; Tenant shall promptly pay any deficiencies. Upon request by
Landlord, Tenant agrees to execute and deliver to Landlord a financing statement in form sufficient to perfect the security interest of Landlord in the aforementioned property under the provisions of
the Uniform Commercial Code in force in the State of Texas. Landlord retains its statutory lien in addition to the lien created by this paragraph. 

        25.    Mechanic's Liens:    Tenant will not permit any mechanic's lien
or liens to be placed on any part of the Premises as a result of any work performed, materials furnished or obligation incurred by or at the request of Tenant. Tenant shall cause any such lien to be
removed within twenty (20) days after written notice from Landlord. If Tenant does not timely clear any such lien, Landlord, at its sole option, may pay whatever sums are necessary to discharge
the lien. Any amounts so paid (including expenses and interest), shall be immediately due from Tenant to Landlord as Additional Rental. Interest shall accrue on amounts so paid by Landlord until
repaid by Tenant at the lesser of the maximum lawful contract rate, or 18% per annum. Landlord has no obligation to inquire into the validity of any lien or the amounts of the underlying obligation
that is the basis of the lien. 

Page 9

 

        26.    Waiver of Subrogation.    Anything in this Lease to the
contrary notwithstanding, Tenant waives all rights of recovery, claim, action or cause of action, against Landlord, its agents, officers, and employees, for any loss or damage that may occur to
Tenants property, by reason of any other cause which could be insured against under the terms of the insurance policies required to be maintained by Tenant under this Lease. This waiver includes
Tenants' insurance carriers right of subrogation and applies regardless of the negligence of either party. 

        27.    Notices.    Each provision of this Lease, or of any applicable
governmental laws, ordinances, regulations, and other requirements with reference to the sending, mailing or delivery of any notice, or with reference to the making of any payment by Tenant to
Landlord or performance of any obligation under this Lease, shall be deemed to be complied with when and if the following steps are taken: 

        (a)   All notices or document required or permitted to be delivered under this Lease shall be sent to the addresses set forth
in paragraph 1, or at such other address as Landlord or Tenant may specify from time to time by written notice delivered in accordance with this paragraph; 

        (b)   Any notice or document required or permitted to be delivered under this Lease must be sent to the parties at the
addresses set out below, or to any new address that either party may from time to time specify in accordance with this paragraph. Such notices and documents shall be deemed to be delivered as of the
sooner of the following: (i) If sent by certified or registered mail (return receipt requested), the sooner of the date the letter is signed for by addressee, returned to sender as
undeliverable, or the date that delivery is refused by addressee; (ii) the date that notice is actually delivered to Landlords leasing office during normal business hours and signed for by an
employee of Landlord, (iii) the date that Landlord either delivers a notice to Tenant at the Premises and an employee of Tenant signs for the notice, or the date that Landlord posts such notice
on the main entrance of the Premises. 

        28.    Force Majeure.    Whenever a period of time is herein
prescribed for action to be taken by Landlord, the Landlord shall not be liable or responsible for, and there shall be excluded from the computation for any such period of time, any delays due to
strikes, riots, Acts of God, Shortages of labor or materials, war, governmental laws, regulations or restrictions or any other causes of any kind whatsoever which are beyond the control of Landlord. 

        29.    Severability.    If any clause or provision of this Lease is
illegal, invalid or unenforceable under present or future laws effective during the term of this Lease, then the remainder of this Lease shall not be affected. In lieu of the unenforceable provision
there will be added as a part of this Lease a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and
enforceable. It is the intent of the parties that the basic business bargain and allocation of risks under this Lease be restored to the state that existed prior to the determination of the
unenforceability of the provision. 

        30.    Entire Agreement; Amendments; Binding Effect.    This Lease
contains the entire agreement between the parties and may not be altered, changed or amended, except by instrument in writing signed by both parties. No provision of this Lease shall be deemed to have
been waived by Landlord unless such waiver is in writing signed by Landlord and addressed to Tenant. Custom, practice, or course of dealing between the parties during the term of this Lease shall not
be construed to waive or lessen Landlord right to insist on Tenants strict performance of all obligations under this Lease. The terms, provisions, covenants and conditions contained in this Lease
shall apply to inure to the benefit of, and be binding upon the parties, and upon their respective successors in interest and legal representatives, except as otherwise herein expressly provided.
Nothing in the preceding sentence shall entitle
Tenant to make any assignment, sublet or other transfer of this Lease or Tenants right to possess any part of the Premises without full compliance with the terms of the paragraph on Assignment and
Subletting. 

        31.    Quiet Enjoyment.    Provided Tenant has performed all of the
terms, covenants, agreements and conditions of this Lease, including the payment of Basic Rental and Additional Rental, to be performed by Tenant, Tenant shall peaceably and quietly hold and enjoy the
Premises for the term of this Lease, without hindrance from Landlord, subject to the terms and conditions of this Lease. 

        32.    Rules and Regulations.    Tenant and Tenant's agents,
employees, and invitees will comply fully with all requirements of the rules and regulations of the Premises which are attached as "Exhibit "B", and made a part of this Lease. Landlord may
change such rules and regulations or to promulgate other rules and regulations in such reasonable manner as may be deemed advisable for safety, care, good order or cleanliness of the Premises. All
changes and amendments to the rules and regulations will be forwarded to Tenant in writing and shall be promptly carried out and observed by Tenant. Tenant shall have no entitlement to compensation or
other modification of its obligations under this Lease as a result of any changes in rules and regulations. Tenant shall further be responsible 

Page 10

 

for
the compliance with current rules and regulations by the vendors, employees, servants, agents, visitors and invitees of Tenant. 

        33.    Broker's or Agent's Commission.    Tenant represents and
warrants that it has dealt with no broker other than Landlord's broker, Stream Realty Partners, L.P. There are no claims for brokerage commissions or finder's fees in connection with the
execution of this Lease, except as related to Landlord's aforementioned broker. Tenant agrees to indemnify and hold harmless Landlord against all liabilities and costs arising from such claims,
including without limitation attorneys' fees in connection therewith. 

        34.    Gender.    Words of any gender used in this Lease shall be held
and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires. 

        35.    Joint and Several Liability.    If there is more than one
Tenant, the obligations under this Lease imposed upon Tenant shall be joint and several. If there is a guarantor of Tenant's obligations hereunder, the obligations imposed upon Tenant shall be the
joint and several obligations of Tenant and such guarantor. Landlord need not first proceed against the Tenant before proceeding against such guarantor. A guarantor shall not be released from its
guaranty for any reason whatsoever, including without limitation, any amendment, waiver or failure to give notice. 

        36.    Captions.    The captions contained in this Lease are for
convenience of reference only, and in no way limit or enlarge the terms and conditions of this Lease. 

        37.    No Reservation.    The submission of this document for review
and execution by the Tenant does not constitute a reservation of the Premises for Tenant. Landlord is bound by the terms of this Lease only after its signature is entered on this document and a copy
of the fully signed agreement is tendered to the possession of Tenant. 

        38.    Effect of Sale.    A sale, conveyance or assignment of the
Building or the Lease shall not release the new Landlord from any liability, included, but not limited by, the Purchase Option, from and after the effective date of such sale, conveyance or assignment
of the covenants, terms and condition of this Lease, express or implied. Landlord express covenants that the Tenant's Purchase Option transfers to any future entity by means of a sale, conveyance or
assignment of the Building or Lease. 

        39.    Environmental Reports.    On or before March 30, 2004,
Landlord' shall at Landlord's sole cost and expense deliver to Tenant a Phase I Site Assessment and, if recommended in accordance with the Phase I Report, a Phase II Site
Assessment, which reports will be not more than six (6) months old ("Reports"). The Reports will be prepared by a qualified third party consultant and such reports will meet the guidelines for
such reports established by the American Society for Testing and Materials. Landlord represents that it has no knowledge of any toxic or hazardous substances or wastes, pollutants or contaminants
(including, without limitation, asbestos, urea formaldehyde, the group or organic compounds known as polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil and various
constituents of such products, and any hazardous substances as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") 41 U.S.C. 9601-9657,
as amended) or any similar state or local laws relating to any such substances, wastes, pollutants or contaminants (collectively "Hazardous Substances") have been generated, treated, stored, released
or disposed of, or otherwise placed, deposited in or located on the Real Property. 

        41.    Current Improvements.    Landlord is the sole owner of
significant office build out furniture and IT infrastructure which is current on the Premise ("Current Improvements"). All Current Improvements, including office furniture, will be deeded to the
Tenant in the event that Tenant exercises its Option to Purchase. During the term of the lease, Landlord will allow Tenant use of the Current Improvements. 

        42.    Additional Terms.    Notwithstanding anything to the contrary,
Tenant shall have the option to renew the Lease for two additional five (5) year periods at an increase of $1.00 per square foot in the Premises at the time 

Page 11

 

of
the commencement of each of the renewal Term. Tenant agrees to notify Landlord at least six (6) months prior to the end of the current Term of the Lease if it wishes to renew for an
additional five (5) year period. 

        EXECUTED as of the last date set out below.  

	 	LANDLORD: Walnut Hill/DBI Ventures I, L.P.
	

 	

/s/  DAVID BERNDT      

	 	BY:	 	David Berndt Interests, its general partner
	 	DATE:	 	December 17, 2003

	

 	

TENANT: E F Johnson Company
	

 	

/s/  MICHAEL E. JALBERT      

	 	BY:	 	Michael E. Jalbert, President & CEO
	 	DATE:	 	December 17, 2003

Page 12

QuickLinks

EXHIBIT 10.47EXHIBIT
10.12

 

Lehman Brothers Holdings Inc.

SUPPLEMENTAL RETIREMENT PLAN

 

(Effective as of October 19, 1998, amended and restated effective
December 10, 2003)

 

PREAMBLE

 

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

 

ARTICLE
1

 

DEFINITIONS

 

1.1                                 Benefit
Commencement Date:  The date on
which payment of Full or Prorata Benefits shall begin, as described under
Section 4.3.1 of the Plan.

 

1.2                                 Board:  The Board of Directors of the Company.

 

1.3                                 Cause:  A material breach by a Participant of an
employment contract or other agreement, if any, between the Participant and the
Company and any of its subsidiaries, failure by a Participant to devote
substantially all business time exclusively to the performance of his duties
for the Company or its subsidiaries, willful misconduct, dishonesty related to
the business and affairs of the Company or any subsidiary, conviction of, or a
plea of nolo contendere to, a felony or of a misdemeanor constituting a
statutory disqualification under U.S. securities laws (or failure to contest
prosecution for such a felony or such a misdemeanor), habitual or gross
negligence in the performance of a Participant’s duties, the violation of
policies and practices adopted by the Company or any subsidiary including, but
not limited to the Code of Conduct, engaging in Competitive Activity or
Detrimental Activity, or such other circumstances as may be determined by the
Committee in its sole discretion. 
Following the occurrence of a Change in Control, “Cause” shall mean (i)
the substantial and continuing failure by a Participant to perform the
Participant’s duties for the Company (other than any such failure resulting
from incapacity due to physical or mental illness), at least thirty (30) days
after a written demand for performance is delivered to the Participant by the
Board which specifically identifies the manner in which the Board believes that
the Participant

 

 

has not performed the Participant’s duties, (ii)
conviction of, or plea of guilty or nolo contendere to, a felony or of or to a
misdemeanor constituting a statutory disqualification under U.S. securities
laws or (iii) engaging in willful misconduct which is demonstrably injurious to
the Company.

 

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

 

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

 

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

 

(a)                                  The
commencement (within the meaning of Rule 14d-2 under the Securities Exchange
Act of 1934 (the “Exchange Act”)) of a tender offer for more than 20% of the
Company’s outstanding shares of capital stock having ordinary voting power in
the election of directors (the “Voting Securities”);

 

(b)                                 An
acquisition (other than directly from the Company) of any voting securities of
the Company by any “Person” (as the term person is used for purposes of Section
13(d) or 14(d) of the Exchange Act) immediately after which such Person has
“Beneficial Ownership” (within, the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the combined voting power of the Company’s then
outstanding Voting Securities; provided, however, in determining whether a
Change in Control has occurred, Voting Securities which are acquired in a
“Non-Control Acquisition” (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control.  A “Non-Control Acquisition” shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof or a trustee thereof
acting solely in its capacity as trustee) maintained by (A) the Company or (B)
any corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly,
by the Company (for purposes of this definition, a “Subsidiary”), (ii) the
Company or its Subsidiaries, or (iii) any

 

2

 

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

 

(c)                                  The
individuals who, as of the effective date of the 1994 initial public trading in
Company shares, are members of the Board (the “Incumbent Board”), ceasing for
any reason to constitute at least a majority of the members of the Board;
provided, however, that if the election, or nomination for election by the
Company’s common stockholders, of any new director was approved by a vote of at
least two-thirds of the Incumbent Board, such new director shall, for purposes
of this Plan, be considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened “Election Contest” (as described in Rule 14a-11
promulgated under the Exchange Act or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
“Proxy Contest”) including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or

 

(d)                                 Approval
by stockholders of the Company of:

 

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

 

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

 

(B)                                the
individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement providing for such merger, consolidation or reorganization
constitute at least a majority of the members of the board of directors of the
Surviving

 

3

 

Corporation immediately following the
consummation  of such merger,
consolidation or reorganization; and

 

(C)                                no
Person other than the Company, any Subsidiary, any employee benefit plan (or
any trust forming a part thereof or a trustee thereof acting solely in its
capacity as trustee) maintained by the Company, the Surviving Corporation, or
any Subsidiary, or any Person who, immediately prior to such merger,
consolidation or reorganization had Beneficial Ownership of 20% or more of the
then outstanding Voting Securities has Beneficial Ownership of 20% or more of
the combined voting power of the Surviving 
Corporation’s then outstanding voting securities immediately  following the consummation of such merger,
consolidation or reorganization.

 

(ii)                                  A
complete liquidation or dissolution of the Company; or

 

(iii)                               An
agreement for the sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a Subsidiary).

 

Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because any Person (the “Subject  Person”) acquired Beneficial Ownership of
more than the permitted amount of the outstanding Voting Securities as a result
of the acquisition of Voting Securities by the Company which, by reducing the
number of Voting Securities outstanding, increases the proportional number of
shares Beneficially Owned by the Subject Persons, provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Company and thereafter such Beneficial
Owner acquires any additional Voting Securities which increases the percentage
of the then outstanding Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.

 

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

 

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

 

1.8                                 Competitive
Activity:  Involvement (whether as
an employee, proprietor, consultant or otherwise) with any person or entity
(including any company and its affiliates) engaged in any business activity
which is materially competitive with any business carried on by the Company or
any of its subsidiaries on the date of termination of a Participant’s
employment with the Company and any of its subsidiaries, as determined in the
sole discretion of the Committee. 
Following the occurrence of a Change in Control, the determination of
whether a Participant has engaged in

 

4

 

“Competitive Activity” shall be made by a resolution
duly adopted by the affirmative vote of three-quarters (3/4) of the entire
membership of the Board (excluding the Participant if the Participant is a
member of the Board) at a meeting of the Board called and held for such purpose
(after reasonable notice is provided to the Participant and the Participant is
given an opportunity, together with counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, the Participant has committed the
conduct described in the preceding sentence and that such conduct is
demonstrably injurious to the Company.

 

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

 

1.10                           Disability:  A disability under the Company’s Long-Term
Disability Plan or any other condition, which in the sole discretion of the
Committee constitutes a disability for purposes of this Plan.

 

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

 

5

 

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

 

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

 

(a)                                  a
material adverse change in a Participant’s title, position, authority or key
responsibilities as compared to the Participant’s title, position, authority or
key responsibilities immediately prior to the Change in Control, excluding for
this purpose an action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Participant;

 

(b)                                 a
material reduction in a Participant’s annual base salary or incentive
compensation opportunities as compared to the Participant’s annual base salary
and incentive compensation opportunities as in effect immediately prior to the
Change in Control; or

 

(c)                                  any
requirement that the Executive (A) be based anywhere more than fifty (50) miles
from the office where the Executive was located immediately prior to the Change
in Control or (B) travel on Company business to an extent substantially greater
than the Executive’s travel obligations immediately prior to the Change in
Control.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

1.21                           Trustee:  The trustee of the Trust.

 

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

 

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

 

ARTICLE
2

 

COMPANY
FUNDING OBLIGATIONS

 

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

 

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

 

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

 

ARTICLE
3

 

PARTICIPATION
AND ELIGIBILITY

 

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

 

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

 

7

 

(a)                                  (i)  he retires on or after he attains age sixty
(60) or the combination of his age and number of Years of Service exceeds
eighty-five (85), and (ii) he has not otherwise forfeited his benefits under
Section 4.5 of this Plan;

 

(b)                                 (i)  he is a Participant other than a Member or
the Chairman and retires after fulfilling any combination of eligibility
criteria other than as specified in paragraph 3.2(a), if any, that has been
communicated to such Participant in writing by the Committee in connection with
such Participant’s initial participation in the Plan, and (ii) he has not
otherwise forfeited his benefits under Section 4.5 of this Plan; or

 

(c)                                  (i)
within three (3) years following the occurrence of a Change in Control, his
employment is terminated by the Company without Cause or the Participant
terminates his employment with Good Reason, and (ii) he has not otherwise
forfeited his benefits under Section 4.5 of this Plan.

 

(1)                                  Notwithstanding
the foregoing, if all or any portion of the above payouts, either alone or
together with other payments and benefits a Participant receives or is then
entitled to receive from the Company and its subsidiaries, would constitute a
payment described in Section 280G(b)(2) (or its successors) of the Internal
Revenue Code of 1986, as amended (the “Code”), such payments and benefits
provided to the Participant shall be reduced to the extent necessary so that no
portion thereof shall be subject to the excise tax imposed by Section 4999 of
the Code; but only if, by reason of such reduction, the net after tax benefit
to the Participant shall exceed the net after tax benefit if such reduction
were not made.  For this purpose, the
determination as to whether such payments and benefits constitute a payment
described in Code Section 280G(b)(2) and as to the amount of such reduction, if
any, necessary to avoid the excise tax shall be based upon the agreement of the
Company and the Participant, or in the absence of such agreement, a
determination by the accounting firm as described in (2) below.  In the event of a determination that such
reduction is to take place, the Participant shall be entitled to designate
which payments and benefits shall be reduced, but in the event the Participant
fails to make such designation within 15 days following notification of such
determination, the Company shall allocate the reduction among such payments and
benefits in its sole discretion; provided, however, that the payments provided
pursuant to the Plan shall be the last payments to be reduced.

 

(2)                                  “Net
after tax benefit” shall mean the sum of (A) the total payments payable to the
Participant hereunder, plus (B) all other payments and benefits which the
Participant receives

 

8

 

or is then entitled to
receive from the Company and its subsidiaries that would constitute a payment
described in Section 280G(b)(2) of the Code, less (C) the amount of federal,
state and local income taxes payable with respect to the foregoing calculated
at the maximum marginal income tax rate for each year in which the foregoing
shall be paid to the Participant (based upon the rate in effect for such year
as set forth in the Code at the time of termination of the Participant’s
employment), less (D) the amount of excise taxes imposed with respect to the
payments and benefits described in (A) and (B) above by Section 4999 of the
Code.  The foregoing calculations shall
be made, at the Company’s expense, by the Company and the Participant.  If no agreement on the calculations is
reached, the Participant and the Company shall agree to the selection of an
accounting firm to make the calculations. 
If no agreement can be reached regarding the selection of an accounting
firm, the Company shall select a nationally recognized accounting firm other
than the Company’s independent auditors. 
The determination of any such firm selected shall be conclusive and
binding on all parties.

 

(3)                                  In
the event a determination is made as described in (1) and (2) above that any
such payouts are to be reduced and if such determination occurs after the
Participant has received accelerated awards as described above without such
reduction having been made, the amount by which such payment is to be reduced
as provided above shall be deemed to be a loan from the Company to the
Participant and shall be due and payable by the Participant to the Company
three days following notification by the Company to the Participant of such
determination and the amount owing.  No
interest shall be due on such amount and the Company shall hold the Participant
harmless, on an after-tax basis, from any excise tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such amount
or with respect to any imputed income with respect to such advance.

 

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

 

(a)                                  he
terminates his employment (i) after attaining age forty-five (45) or having
completed five (5) Years of Service (but before he attains age sixty (60) or
the combination of his age and number of Years of Service exceed eighty-five
(85)) or (ii) if he is a Participant other than a Member or the Chairman, after
fulfilling any combination of eligibility criteria other than as specified in
clause (i) of this paragraph, if any, that has been communicated to

 

9

 

such Participant in writing by the Committee in
connection with such Participant’s initial participation in the Plan, and

 

(b)                                 he
has not otherwise forfeited his benefits under Section 4.5 of this Plan.

 

ARTICLE
4

 

BENEFITS

 

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

 

4.2                                 Amount
of Prorata Benefit.  In accordance
with the payment provisions of Section 4.3, a Participant who meets the
eligibility requirements under Section 3.3 shall be eligible to receive Prorata
Benefits under the Plan.  Prorata
Benefits shall be equal to (a) twenty-five (25) annual payments of $700,000 for
Participants other than the Chairman and (b) twenty-five (25) annual payments
of $1,250,000 for the Chairman, multiplied by the ratio of (A) the
Participant’s Years of Service at termination or retirement to (B) the
projected Years of Service the Participant would have had at age sixty (60)
(or, if the Participant is other than a Member or the Chairman, at such other
age for eligibility for Full Benefits that is communicated to such Participant
in writing by the Committee at the time of such Participant’s initial
participation in the Plan) had his employment not terminated.

 

4.3                                 Payment
of Benefits.

 

4.3.1                        Except as provided in Section
4.4, Full and Prorata Benefits under the Plan shall commence the first day of
the first month coincident with or next following the later of (a) the month
that a Participant attains age sixty (60), or (b) the month a Participant
retires or terminates employment with the Company (the “Benefit Commencement
Date”).

 

4.3.2                        Prior to the occurrence of a
Change in Control, each Participant shall be entitled to make an election
pursuant to which, in the event such Participant’s employment is terminated
within three (3) years following a Change in Control either by the Company
without Cause or by the Participant for Good Reason, he shall be entitled to
receive in one lump sum payment the Present Value of his Full or Prorata
Benefits, as applicable, as soon as practicable after such termination of
employment.

 

 

10

 

4.4                                 Benefits
on Death or Disability.

 

4.4.1                        In the event of the death of
the Participant after the Benefit Commencement Date, his Spouse, if any, shall
receive annually the remainder of the Participant’s annual payments under the
Plan.  If the Spouse shall die before
all annual payments have been paid (or if the Participant has no Spouse on the
date of his death), the Present Value of the remaining payments shall be paid
in one lump sum to such Spouse’s estate (or the Participant’s estate, as the
case may be) as soon as practicable following the date of death of such Spouse
(or of the Participant, as the case may be).

 

4.4.2                        In the event of the death of a
Participant prior to the Benefit Commencement Date, payments of any Full
Benefits (if the Participant had then satisfied the requirements of Section
3.2) or Prorata Benefits (if the Participant had then satisfied the
requirements of Section 3.3) shall be paid annually to the Participant’s Spouse
commencing on the later of (i) the first day of the month immediately following
the Participant’s death or (ii) the first day of the month coincident with or
next following the month during which the Participant would have attained age
sixty (60).  If the Spouse shall die
before all annual payments have been paid or before benefit payment commences
(or if the Participant has no Spouse on the date of his death), the Present
Value of the remaining payments shall be paid in one lump sum to such Spouse’s
estate (or the Participant’s estate, as the case may be) as soon as practicable
following the date of death of such Spouse (or of the Participant, as the case
may be).

 

4.4.3                        In the event of the death or
Disability of a Participant, the Committee may, in its sole discretion, (i)
increase the Participant’s Prorata Benefit up to a maximum of the Full Benefit,
(ii) accelerate the date on which payment of Full or Prorata Benefits commences
to any date prior to the otherwise applicable Benefit Commencement Date, and
(iii) provide that the Present Value of the Participant’s Prorata or Full
Benefit (or the Present Value of the remaining payments, as applicable) shall
be paid immediately in one lump sum.

 

4.5                                 Forfeiture
and Cessation of Payments.  A
Participant shall forfeit all rights to Full or Prorata Benefits (including the
right to any such benefits after the Benefit Commencement Date) if (i) he
engages in Competitive Activity at any time other than following termination of
his employment (A) by the Company without Cause within three (3) years
following a Change in Control or (B) by the Participant with Good Reason within
three (3) years following a Change in Control, (ii) he engages in Detrimental
Activity at any time, (iii) his employment is terminated with Cause, (iv) he is
a Member or the Chairman and his employment terminates on or before July 1,
2001, or (v) he is a Participant other than a Member or the Chairman and his employment
terminates for a reason other than death or Disability before the earlier of
(x) the date determined by the Committee in connection with such Participant’s
initial participation in the Plan and (y) a Change in Control.

 

4.6                                 Withholding.  All payments and benefits under the Plan
shall be subject to any applicable withholding requirements imposed by any tax
or other law. The

 

11

 

Company shall have the right to satisfy any
withholding obligation against any other payments, including regular wages, due
the Participant.

 

ARTICLE
5

 

AMENDMENT
AND TERMINATION

 

5.1                                 Amendment
and Termination.  Subject to Section
5.2, the Company, by action of the Committee, may at any time amend the Plan,
retroactively or otherwise, in any respect or terminate the Plan; provided,
however, that no such amendment or termination shall reduce the amount of  Full or Prorata Benefit for which a
Participant was eligible under the Plan in effect immediately prior to the date
of such amendment or termination (determined as though the Participant’s
employment with the Company had then terminated but without regard to the
requirement of Section 4.5 relating to employment on July 1, 2001, or such
later date, as specified by the Committee with respect to a Participant who is
neither a Member nor the Chairman); and further provided that no amendment made
within six (6) months before a Change in Control or at any time after a Change
in Control that reduces or otherwise adversely affects a Participant’s rights
with respect to Full or Prorata Benefits shall be given effect.

 

5.2                                 Restrictions
on Company’s Action.  Without the
express written consent of the Participant, no action taken by the Company
shall adversely affect a Participant’s (or his Spouse’s) right to receive a
Full or Prorata Benefit upon satisfaction by the Participant of the conditions
precedent to entitlement to such a benefit as they exist under the terms of the
Plan in effect immediately prior to such action, and at the time and on the
terms then in effect.  Notwithstanding
the foregoing, the Company reserves the right to pay in one lump sum the
Present Value of any Full or Prorata Benefit upon termination of the Plan.

 

5.3                                 Notwithstanding
anything herein to the contrary, the provisions of this Article 5 may not be
amended without the express written consent of each Participant.

 

ARTICLE
6

 

ADMINISTRATION;
FUNDING OF TRUST

 

6.1                                 Committee.  The Plan shall be administered by the
Committee.  Without limiting the
generality of the foregoing, the Committee shall have the power and discretion:

 

(a)                                  to
make and enforce rules and regulations and to prescribe the use of forms
necessary or advisable for efficient administration of the Plan;

 

(b)                                 to
interpret the Plan, to resolve ambiguities, inconsistencies and omissions and
to decide questions concerning the eligibility of any person to

 

12

 

receive benefits under the Plan, such interpretations,
resolutions and decisions to be final and conclusive on all persons;

 

(c)                                  to
direct payment of amounts due with respect to each Participant under the Plan;

 

(d)                                 to
delegate authority to agents and other persons to act on its or his behalf in
carrying out the provisions and administration of the Plan and to take or
direct any action required or advisable with respect to the administration of
the Plan and Trust; and

 

(e)                                  to
perform any other acts as the Committee deems necessary or appropriate for the
proper administration of this Plan.

 

6.2                                 Claims
Procedure.  If any claim for
benefits under the Plan is denied, the Committee shall follow procedures
similar to those then in effect under the Qualified Plan for notifying the
applicant of such denial and for affording the applicant an opportunity to
appeal such denial.

 

6.3                                 Service
of Process.  The Company or such
other person as may from time to time be designated by the Committee shall be
the agent for service of process under the Plan.

 

6.4                                 No
Bond Required.  No bond or other
security shall be required of any individual or the Committee except as may be
required by law.

 

6.5                                 Limitation
of Liability; Indemnity.  Except to
the extent otherwise provided by law, if any duty or responsibility of the
Committee has been allocated or delegated to any other person in accordance
with any provision of the Plan, then the Committee shall not be liable for any
act or omission of such person in carrying out such duty or
responsibility.  The Company shall
indemnify and save each person who is a member of the Committee and each
employee or director of the Company harmless against any and all loss,
liability, claim, damage, cost and expense which may arise by reason of, or be
based upon, any matter connected with or related to the Plan or the
administration of the Plan (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or in settlement of any such claim
whatsoever) to the fullest extent permitted under applicable law.

 

6.6                                 Powers
of the Committee.  Notwithstanding
any other provisions of this Plan or the Trust to the contrary, the Committee
may:

 

(a)                                  accelerate
a Participant’s eligibility for Prorata or Full Benefits under the Plan;

 

13

 

(b)                                 pay
the Present Value of any Full or Prorata Benefit in one lump sum cash payment;

 

(c)                                  establish
eligibility criteria for any Participant other than a Member or the Chairman to
receive Full and Prorata Benefits, provided such criteria are communicated to
each such Participant in writing by the Committee at the time of such
Participant’s initial participation in the Plan; and

 

(d)                                 cause
the Company to fund the Trust at any time by determining each Participant’s
Full or Prorata Benefit and causing the Company to contribute to a separate
account maintained for each Participant under the Trust, in cash, an amount
equal to the Present Value of such Participant’s Full or Prorata Benefit (or,
if annual payments have already commenced, the Present Value of the remaining
benefit) less any amount credited to such Participant’s account under the Trust
as of the date of the contribution.

 

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

 

6.7                                 Legal
Fees and Interest.  If after the
occurrence of a Change in Control, (i) a dispute arises with respect to the
enforcement of a Participant’s rights under

 

14

 

this Plan, or (ii) any legal or arbitration proceeding
shall be brought to enforce or interpret any provision contained herein or to
recover damages for breach hereof and the Participant prevails in whole or in
part, in either case so long as the Participant is not acting in bad faith, the
Participant shall recover from the Company any reasonable attorneys’ fees and
necessary costs and disbursements incurred as a result of such dispute, legal
or arbitration proceeding (“Expenses”), and prejudgment interest on any money
judgment or arbitration award obtained by the Participant calculated at the
prime rate of interest as reported by The
Wall Street Journal from the date that payments to the Participant
should have been made under this Plan. 
Within ten (10) days after the Participant’s written request therefor,
the Company shall pay to such Participant, or such other person or entity as
such Participant may designate in writing to the Company, the Participant’s
Expenses.

 

ARTICLE
7

 

MISCELLANEOUS

 

7.1                                 Payment
to Incompetent.  If any person
entitled to benefits under this Plan shall be a minor or shall be either
physically or mentally incompetent in the judgment of the Committee, such
benefits may be paid pursuant to the same procedures as specified from time to
time under the Qualified Plan.  In the
event of such payment the Company and the Trust shall be discharged from all
further liability for such payment.

 

7.2                                 Doubt
as to Right to Payment.  If any doubt
exists as to the right of any person to any benefits under this Plan or the
amount of time of payment of such benefits (including, without limitation, any
case of doubt as to identity, or any case in which any notice has been received
from any other person claiming any interest in amounts payable hereunder, or
any case in which a claim from other persons may exist by reason of community
property or similar laws), the Committee will be entitled, in its discretion,
to direct that payment of such benefits be deferred until such right or amount
or time is determined or until order of a court of competent jurisdiction, or
to pay such sum into court in accordance with appropriate rules of law in such
case then provided, or to make payment only upon receipt of a bond or similar
indemnification (in such amount and in such form as is satisfactory to the
Committee).

 

7.3                                 Spendthrift
Clause.  To the maximum extent
permitted by law, (a) no benefit, distribution or payment under the Plan may be
anticipated, assigned (either at law or in equity), alienated or subject to
attachment, garnishment, levy, execution or other legal or equitable process,
whether pursuant to a “qualified domestic relations order”, as defined in
section 414(p) of the Code, or otherwise; and (b) the Plan shall in no manner
be liable for or subject to the debts or liabilities of any Participant.

 

7.4                                 Data.  Any Participant or Spouse entitled to
benefits under the Plan must furnish to the Committee such documents, evidence
or information as the Committee considers necessary or desirable for the
purpose of administering the Plan, or

 

15

 

to protect the Committee; and it is a condition of the
Plan that each such Participant or Spouse must furnish promptly true and
complete data, evidence or information and sign such documents as the Committee
may require before any benefits become payable under the Plan.

 

7.5                                 Separability.  If any provision of the Plan is held invalid
or unenforceable, its invalidity or unenforceability will not affect any other
provisions of the Plan, and the Plan will be construed and enforced as if such
provision had not been included therein.

 

7.6                                 Captions.  The captions contained herein are inserted
only as a matter of convenience and for reference and in no way define, limit,
enlarge or describe the scope or intent of the Plan nor shall, in any way,
affect the Plan or the construction of any provision thereof.

 

7.7                                 Right
of Discharge Reserved.  The
establishment of the Plan shall not be construed to confer upon any Participant
any legal right to be retained in the employ of the Company or give any
Participant or any other person any right to benefits, except to the extent
expressly provided for hereunder.  All
Participants will remain subject to discharge to the same extent as if the Plan
had never been adopted, and may be treated without regard to the effect such
treatment might have upon them under the Plan.

 

7.8                                 Not
Compensation for Other Plans.  No
compensation payable as a consequence of participation in the Plan shall be
considered in calculating or determining benefits, coverage or contributions
under any other employee benefit plan or program, unless otherwise explicitly
provided under such plan or program or as otherwise required by applicable law.

 

7.9                                 Arbitration.  Prior to a Change in Control, any dispute,
controversy or claim between a Participant and the Company arising out of or
relating to or concerning the provisions of the Plan shall be finally settled
by arbitration in the City of New York before, and in accordance with, the
commercial arbitration rules of the American Arbitration Association
(“AAA”).  If, after the occurrence of a
Change in Control, any dispute, controversy or claim arises between a
Participant and the Company out of or relating to or concerning the provisions
of the Plan, such dispute, controversy or claim shall be finally settled by a
court of competent jurisdiction in the City of New York which, notwithstanding
the provisions of Article 6 or any other provision of the Plan, shall apply a de
novo standard of review to any determination made by the Company, the
Board or the Committee.

 

7.10                           Governing
Law and Limitations on Actions.  The
Plan is intended to constitute an arrangement that is unfunded and maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees, all within the meaning of  ERISA, as amended.  To that extent, rights under this Plan shall be governed by and
construed in accordance with rules of Federal law applicable to such
plans.  To the extent that such rules of
Federal law are not

 

16

 

applicable, the Plan shall be construed, and all
provisions hereof shall be enforced and administered, according to the laws of
the State of New York without regard to principles of choice of law; provided,
however, that any determination of whether a Change in Control has occurred for
purposes of this Plan shall be determined in accordance with the laws of the
State of Delaware without regard to principles of choice of law.  No action (whether at law, in equity or
otherwise) or arbitration claim shall be brought by or on behalf of any
Participant or Spouse for or with respect to benefits due under this Plan
unless the person bringing such action has timely exhausted the Plan’s claim
review procedure.  Any action (whether
at law, in equity or otherwise) or arbitration claim must be commenced within
three years.  This three year period shall
be computed from the earlier of (a) the date a final determination denying such
benefit, in whole or in part, is issued under the Plan’s claim review procedure
and (b) the date such individual’s cause of action first accrued (as determined
under the laws of the State of New York or the State of Delaware, as
applicable, without regard to principles of choice of laws).

 

17

 

IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC. has
caused this instrument to be executed by its duly authorized officers, and its
corporate seal to be hereunto affixed, this 10th   day of December, 2003.

 

	
   

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tracy Binkley

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President and

  Director of Global Human Resources

  
	
  ATTEST:

  	
   

  
	
  /s/ Madeline L. Shapiro

  	
   

  	
   

  
	
  Assistant Secretary

  	
   

  
					

 

18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}]]