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                                                                  EXHIBIT 10.07

                          LEHMAN BROTHERS HOLDINGS INC.
                         1996 MANAGEMENT OWNERSHIP PLAN
                        AS AMENDED THROUGH MARCH 31, 2001

SECTION 1 -- PURPOSE

   The purpose of the Lehman Brothers Holdings Inc. 1996 Management Ownership
Plan (the "Plan") is to strengthen Lehman Brothers Holdings Inc. (the "Company")
by providing selected employees of the Company with the opportunity to acquire a
proprietary and vested interest in the growth and performance of the Company,
thus generating an increased incentive to contribute to the Company's future
success and prosperity, enhancing the value of the Company for the benefit of
stockholders, and enhancing the Company's ability to attract and retain
individuals of exceptional talent.

   The purposes of the Plan are to be achieved through the grant of various
types of stock-based awards.

SECTION 2 -- DEFINITIONS

   For purposes of the Plan, the capitalized terms shall have the meanings
ascribed to them in Exhibit A hereof.

SECTION 3 -- SHARES SUBJECT TO THE PLAN

   (a) Shares of Common Stock which may be issued under the Plan may be either
authorized and unissued shares of Common Stock or authorized and issued shares
of Common Stock held in the Company's treasury, or any combination thereof.
Subject to adjustment as provided in Section 14, the number of shares of Common
Stock with respect to which Awards (whether distributable in shares of Common
Stock or in cash) may be granted under the Plan shall be 42 million shares. The
maximum number of shares of Common Stock available for stock options, stock
appreciation rights or Other Stock-based Awards that may be granted to a
Participant during a calendar year shall not exceed two million.

   (b) Notwithstanding the last sentence of Section 3(a), to the extent that the
number of shares of Common Stock with respect to which Awards may be granted
under the Plan to an individual in any calendar year exceeds the number of
shares of Common Stock with respect to which Awards were granted under the Plan
during that calendar year, such excess shall be available for grant under the
Plan in succeeding calendar years.

   (c) In the event that any other Award subject to repurchase or forfeiture
rights is reacquired by the Company or if any Award is canceled, terminates or
expires unexercised (except with respect to a stock option which terminates on
the exercise of a stock appreciation right) for any reason under the Plan, any
Common Stock allocated in connection with such Award shall thereafter again be
available for grant pursuant to the Plan.

SECTION 4 -- ELIGIBILITY

   Members of the Corporate Management Committee and the Operating Committee
(and successor entities of such committees), all Senior Vice Presidents, all
Managing Directors and officers holding a title senior to Managing Director are
eligible to be Participants in the Plan.

SECTION 5 -- ADMINISTRATION

   The Plan shall be administered by the Committee, which shall have the power
to select those Participants who shall receive Awards and to determine the terms
of such Awards. As to the selection of, and the terms of Awards granted to,
Participants who are not Executive Officers, the Committee may delegate any or
all of its responsibilities to officers or employees of the Company. With
respect to any

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"Covered Employee" (as such term is defined in Section 162(m) of the Code), the
Committee shall administer the Plan in such a manner as to comply with the
requirements for deductibility under Section 162(m) of the Code.

   The Committee's authority hereunder shall include, without limitation, the
establishment of vesting schedules or exercisability in installments with
respect to Awards. The Committee may, in its sole discretion, accelerate or
waive vesting or exercise periods or the lapse of restrictions on all or any
portion of any Award, or extend the exercisability (including to extend or
provide for post-termination exercisability) of stock options or stock
appreciation rights; provided that such exercisability shall not extend past ten
years from the date of grant of any incentive stock options.

   Subject to the provisions of the Plan, the Committee shall be authorized to
interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, to determine the terms and provisions of any agreements
entered into hereunder, and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in any
Award in the manner and to the extent it shall deem desirable to carry the Plan
or any such Award into effect. The determinations of the Committee in the
administration of the Plan, as described herein, shall be final and conclusive.

   The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the laws
of the State of Delaware and applicable Federal law.

SECTION 6 -- STOCK OPTIONS

   (a) Any stock options granted under the Plan shall be in such form as the
Committee may from time to time approve and shall be subject to the terms and
conditions provided herein and such additional terms and conditions not
inconsistent with the terms of the Plan as the Committee shall deem desirable.

   (b) Stock options may be granted to any Participant. Each grant of stock
options shall specify whether the underlying options are intended to be
incentive stock options or non-incentive stock options. In the case of incentive
stock options, the terms and conditions of such grants shall be subject to and
comply with such requirements as may be prescribed by Section 422(b) of the
Code, as from time to time amended, and any implementing regulations, including,
but not limited to, the requirement that such stock options are exercisable
during the Participant's lifetime only by such Participant. The Committee shall
establish the option price at the time each stock option is granted, which price
shall not be less than 100 percent of the Fair Market Value of the Common Stock
on the date of grant.

   (c) No stock options may be exercisable later than ten years after their date
of grant. The option price of each share of Common Stock as to which a stock
option is exercised shall be paid in full at the time of such exercise. Such
payment may be made at the sole discretion of the Committee, pursuant to and in
accordance with criteria and guidelines established by the Committee (which
criteria and guidelines may be different for Executive Officers and for other
Participants), as the same may be modified from time to time, (i) in cash, (ii)
by tender of shares of Common Stock already owned by the Participant, valued at
Fair Market Value as of the date of exercise, (iii) if authorized by the
Committee, by withholding pursuant to the election of the Participant, which
election is subject to the disapproval of the Committee, from those shares that
would otherwise be obtained upon exercise of the option a number of shares
having a Fair Market Value equal to the option price, (iv) if authorized by the
Committee, and in combination with services rendered by the exercising
Participant, by delivery of a properly executed exercise notice together with
irrevocable instructions to a securities broker (or, in the case of pledges,
lender) approved by the Company to, (a) sell shares of Common Stock subject to
the option and to deliver promptly to the Company a portion of the proceeds of
such sale transaction on behalf of the exercising Participant to pay the option
price, or (b) pledge shares of Common Stock subject to the option to a margin
account maintained with such broker or lender, as security for a loan, and such
broker or lender, pursuant to irrevocable instructions, delivers to the Company
the loan proceeds, at the time of exercise to pay the option price, (v) by any
combination of (i), (ii), (iii) or (iv) above or (vi) by other means that the
Committee deems appropriate.

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   (d) A stock option holder may, in the discretion of the Committee, have the
right to surrender a stock option or any portion thereof to the Company within
30 days following a Change in Control and to receive from the Company in
exchange therefor a cash payment in an amount equal to (a) the number of
unexercised shares of Common Stock under the option which are being surrendered
multiplied by (b) the excess of (i) the greater of (A) the highest price per
share of Common Stock paid in connection with the Change in Control or (B) the
highest Fair Market Value per share of Common Stock in the 90-day period
preceding such Change in Control, over (ii) the purchase price of the option as
set forth in the underlying option agreement (the foregoing, a "Limited SAR").

SECTION 7 -- STOCK APPRECIATION RIGHTS

   (a) Stock appreciation rights may be granted independent of any stock option
or in conjunction with all or any part of any stock option granted under the
Plan, either at the same time as the stock option is granted or at any later
time during the term of the option. Stock appreciation rights shall be subject
to such terms and conditions as determined by the Committee, not inconsistent
with the provisions of the Plan.

   (b) Upon exercise, a stock appreciation right shall entitle the Participant
to receive from the Company an amount equal to the excess of the Fair Market
Value of a share of Common Stock on the date of exercise of the stock
appreciation right over the per share grant or option price, as applicable (or
such lesser amount as the Committee may determine at the time of grant),
multiplied by the number of shares of Common Stock with respect to which the
stock appreciation right is exercised. Upon the exercise of a stock appreciation
right granted in connection with a stock option, the stock option shall be
canceled to the extent of the number of shares as to which the stock
appreciation right is exercised, and upon the exercise of a stock option granted
in connection with a stock appreciation right or the surrender of such stock
option, the stock appreciation right shall be canceled to the extent of the
number of shares as to which the stock option is exercised or surrendered. The
Committee shall determine whether the stock appreciation right shall be settled
in cash, Common Stock or a combination of cash and Common Stock.

   (c) A holder of a stock appreciation right may, in the discretion of the
Committee, have the right to surrender the stock appreciation right or any
portion thereof to the Company within 30 days following a Change in Control and
to receive from the Company in exchange therefor a cash payment in an amount
equal to (a) the number of shares of Common Stock under the stock appreciation
right which are being exercised, multiplied by (b) the excess of (i) the greater
of (A) the highest price per share of Common Stock paid in connection with the
Change in Control or (B) the highest Fair Market Value per share of Common Stock
in the 90 day period preceding such Change in Control, over (ii) the per share
grant price of the stock appreciation right as set forth in the underlying
agreement.

SECTION 8 -- OTHER STOCK-BASED AWARDS

   (a) Other Awards of Common Stock and Awards that are valued in whole or in
part by reference to, or otherwise based on, the Fair Market Value of Common
Stock (all such Awards being referred to herein as "Other Stock-based Awards"),
may be granted under the Plan in the discretion of the Committee. Other
Stock-based Awards shall be in such form as the Committee shall determine,
including without limitation, (i) the right to purchase shares of Common Stock,
(ii) shares of Common Stock subject to restrictions on transfer until the
completion of a specified period of service, the occurrence of an event or the
attainment of performance objectives, each as specified by the Committee, and
(iii) shares of Common Stock issuable upon the completion of a specified period
of service, the occurrence of an event or the attainment of performance
objectives, each as specified by the Committee. Other Stock-based Awards may be
granted alone or in addition to any other Awards made under the Plan. All
references in the preceding sentence to "specified period of service," in the
case of Other Stock-based Awards which (i) are not in lieu of cash compensation
to employees generally, (ii) are not paid to recruit a new employee in an amount
of less than 5% of the total awards available for grant under the Plan or (iii)
are not subject to the attainment of performance objectives, shall provide that
vesting, restrictions on transfer or some other comparable restriction which
incents continued performance of the recipient, will be for a period of not less
than three years (although vesting or lapsing may occur in tranches over the
three years), unless there is a Change in Control or the recipient retires,
becomes disabled or dies. Subject to the provisions of the Plan, the

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Committee shall have sole and absolute discretion to determine to whom and when
such Other Stock-based Awards will be made, the number of shares of Common Stock
to be awarded under (or otherwise related to) such Other Stock-based Awards and
all other terms and conditions of such Awards. The Committee shall determine
whether Other Stock-based Awards shall be settled in cash, Common Stock or a
combination of cash and Common Stock.

   (b) With respect to any restricted stock units granted under the Plan, the
obligations of the Company or any Subsidiary are limited solely to the delivery
of shares of Common Stock on the date when such shares of Common Stock are due
to be delivered under each Agreement, and in no event shall the Company or any
Subsidiary become obligated to pay cash in respect of such obligation (except
that the Company or any Subsidiary may pay to Participants amounts in cash in
respect of a restricted stock unit equal to cash dividends paid to a holder of
shares of Common Stock, for fractional shares or for any amounts payable in cash
upon the occurrence of a Change in Control).

   (c) The Committee shall establish the performance objective that must be
attained in order for the Company to grant other Other Stock-based Awards.
Accordingly, unless the Committee determines at the time of grant not to qualify
the award as performance based compensation under Section 162(m) of the Code,
the performance objectives for awards made under the Plan will be based upon one
or more of the following criteria: (i) before or after tax net income; (ii)
earnings per share; (iii) book value per share; (iv) stock price; (v) return on
Stockholders' equity; (vi) the relative performance of peer group companies;
(vii) expense management; (viii) return on investment; (ix) improvements in
capital structure; (x) profitability of an identifiable business unit or
product; (xi) profit margins; (xii) budget comparison; and (xiii) total return
to Stockholders. Participants who have primary responsibility for a business
unit of the Company may be measured on business unit operating profit, business
unit operating profit as a percent of revenue, and/or measures related to
business unit profitability above its cost of capital, in place of some or all
of the corporate performance measures. The Committee must certify as to the
attainment of the applicable performance goals prior to payment of any Other
Stock-based Awards and may reduce the amount of any Other Stock-based Award.

SECTION 9 -- DIVIDENDS, EQUIVALENTS AND VOTING RIGHTS

   Awards other than stock options and stock appreciation rights may, at the
discretion of the Committee, provide the Participant with dividends or dividend
equivalents and voting rights prior to either vesting or earnout.

SECTION 10 -- AWARD AGREEMENTS

   Each Award under the Plan shall be evidenced by an agreement setting forth
the terms and conditions, not inconsistent with the provisions of the Plan, as
determined by the Committee, which shall apply to such Award.

SECTION 11 -- WITHHOLDING

   The Company shall have the right to deduct from all amounts paid to any
Participant in cash (whether under this Plan or otherwise) any taxes required by
law to be withheld therefrom. In the case of payments of Awards in the form of
Common Stock, at the Committee's discretion, the Participant may be required to
pay to the Company the amount of any taxes required to be withheld with respect
to such Common Stock, or, in lieu thereof, the Company shall have the right to
retain the number of shares of Common Stock the Fair Market Value of which
equals the amount required to be withheld. Without limiting the foregoing, the
Committee may, in its discretion and subject to such conditions as it shall
impose, permit share withholding to be done at the Participant's election.

SECTION 12 -- NON-TRANSFERABILITY

   No Award shall be assignable or transferable, and no right or interest of any
Participant in any Award shall be subject to any lien, obligation or liability
of the Participant, except by will, the laws of descent and

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distribution, or as otherwise set forth in the Award agreement.

SECTION 13 -- NO RIGHT TO EMPLOYMENT OR CONTINUED PARTICIPATION IN PLAN/NO
RIGHTS AS STOCKHOLDERS

   (a) No person shall have any claim or right to the grant of an Award, and the
grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of the Company or to be eligible for any subsequent
Awards. Further, the Company expressly reserves the right at any time to dismiss
a Participant free from any liability or any claim under the Plan, except as
provided herein or in any agreement entered into hereunder.

   (b) The grant of an Award shall not be construed as giving a Participant the
rights of a stockholder of Common Stock unless and until shares of Common Stock
have been issued to Participants pursuant to Awards hereunder.

SECTION 14 -- ADJUSTMENT OF AND CHANGES IN COMMON STOCK

   In the event of any change in the outstanding shares of Common Stock by
reason of any Common Stock dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other corporate
exchange, or any distribution to stockholders of Common Stock other than regular
cash dividends, the Committee shall make a substitution or adjustment to the
number or kind of shares of Common Stock or other securities issued or reserved
for issuance pursuant to the Plan, and to outstanding Awards, as well as the
option price or other affected terms of such Awards as in its judgment shall be
necessary to preserve the Participant's rights substantially proportionate to
the rights existing prior to such event.

   Unless otherwise provided in an award agreement, after a merger of one or
more corporations into the Company or after a consolidation of the Company and
one or more corporations (a "Merger Event") in which the Company shall be the
surviving or resulting corporation, an Award holder shall, where applicable, at
the same cost, be entitled upon the exercise of an Award, to receive (subject to
any action required by Stockholders) such securities of the surviving or
resulting corporation as shall be equivalent to the shares underlying such Award
as nearly as practicable to the nearest whole number and class of shares of
stock or other securities.

   Unless otherwise provided in an award agreement, if the Company enters into
any agreement with respect to any transaction which would, if consummated,
result in a Merger Event in which the Company will not be the surviving
corporation, the Committee in its sole discretion and without liability to any
person shall determine what actions shall be taken with respect to outstanding
Awards, if any, including, without limitation, the payment of a cash amount in
exchange for the cancellation of an Award or the requiring of the issuance of
substitute Awards that will substantially preserve the value, rights and
benefits of any affected Awards previously granted hereunder as of the date of
the consummation of the Merger Event.

SECTION 15 -- AMENDMENT

   The Committee or the Board may amend, suspend or terminate the Plan or any
portion hereof at any time, provided that no amendment shall be made without
approval of the stockholders of the Company which shall (i) increase (except as
provided in Section 14 hereof) the total number of shares or the percentage of
shares reserved for issuance pursuant to the Plan; (ii) change the class of
Employees eligible to be Participants; or (iii) extend the date after which
Awards cannot be granted under the Plan.

SECTION 16 -- UNFUNDED STATUS OF PLAN

   The Plan is intended to constitute an "unfunded" plan for long-term incentive
compensation. With respect to any payments not yet made to a Participant,
including any Participant optionee, by the Company, nothing herein contained
shall give any Participant any rights that are greater than those of a general

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creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or payments in lieu thereof or with respect to
options, stock appreciation rights and other Awards under the Plan; provided,
however, that the existence of such trusts or other arrangements is consistent
with the unfunded status of the Plan.

SECTION 17 -- EFFECTIVE DATE

   Subject to approval of the Stockholders of the Company, in accordance with
Rule 16b-3 under the Securities Exchange Act of 1934, and Code Sections 162(m)
and 422, this Plan shall be effective on April 10, 1996. No Awards may be
granted under the Plan on or after January 10, 2006.

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                                    EXHIBIT A

   (a) "Award" shall mean any type of stock-based award granted pursuant to the
Plan.

   (b) "Board" shall mean the Board of Directors of the Company; provided,
however, that any action taken by a duly authorized committee of the Board
within the scope of authority delegated to such committee by the Board shall be
considered an action of the Board for purposes of this Plan.

   (c) "Change in Control" shall mean 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 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 the Applicable Minimum Percentage (as defined below) 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

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         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 the
         Applicable Minimum Proportion (as defined below) of the members of the
         board of directors of the Surviving 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).

     With respect to paragraph (d)(i) above, "Applicable Minimum Percentage"
   means (1) eighty percent (80%) with respect to Awards made prior to December
   11, 2000, and (2) fifty percent (50%) with respect to Awards made on or after
   December 11, 2000; and "Applicable Minimum Proportion" means (1) two-thirds
   with respect to Awards made prior to December 11, 2000, and (2) a majority
   with respect to Awards made on or after December 11, 2000.

     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.

   (d) "Code" shall mean the Internal Revenue Code of 1986, as from time to time
amended.

   (e) "Committee" shall mean the Compensation and Benefits Committee of the
Company.

   (f) "Common Stock" shall mean the common stock of the Company, $.10 par
value.

   (g) "Company" shall mean Lehman Brothers Holdings Inc. and, except as
otherwise specified in this Plan in a particular context, any successor thereto,
whether by merger, consolidation, purchase of substantially all its assets or
otherwise.

   (h) "Executive Officer" shall mean a Participant who is subject to the
requirements of Sections 16(a) and 16(b) of the Securities Exchange Act of 1934.

   (i) "Fair Market Value" on any date means the closing price of the shares on
such date on the principal national securities exchange on which such shares are
listed or admitted to trading (or, if such exchange is not open on such date,
the immediately preceding date on which such exchange is open), the arithmetic
mean of the per share closing bid price and per share closing asked price on
such date as quoted

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on the National Association of Securities Dealers Automated Quotation System, or
such other market in which such prices are regularly quoted, or, if there have
been no published bid or asked quotations with respect to such shares on such
date, the Fair Market Value shall be the value established by the Committee in
good faith and, in the case of an incentive stock option, in accordance with
Section 422 of the Code.

   (j) "Other Stock-based Award" shall mean any of those Awards described in
Section 8 hereof.

   (k) "Participant" shall mean a member of the Corporate Management Committee
or the Operating Committee (and successor entities of such committees), a Senior
Vice President, a Managing Director or an officer holding a title senior to
Managing Director who is selected by the Committee to receive an Award under the
Plan.

   (l) "Subsidiary" shall mean any corporation which at the time qualifies as a
subsidiary of the Company under the definition of "subsidiary corporation" in
Section 424(f) of the Code, as amended from time to time.

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                                                                   EXHIBIT 10.10

                          LEHMAN BROTHERS HOLDINGS INC.
                             EMPLOYEE INCENTIVE PLAN
                        AS AMENDED THROUGH MARCH 31, 2001

SECTION 1 -- PURPOSE

   The purpose of the Lehman Brothers Holdings Inc. Employee Incentive Plan (the
"Plan") is to strengthen Lehman Brothers Holdings Inc. (the "Company") by
providing selected employees of the Company with the opportunity to acquire a
proprietary and vested interest in the growth and performance of the Company,
thus generating an increased incentive to contribute to the Company's future
success and prosperity, enhancing the value of the Company for the benefit of
stockholders, and enhancing the Company's ability to attract and retain
individuals of exceptional talent.

   The purposes of the Plan are to be achieved through the grant of various
types of stock-based awards.

SECTION 2 -- DEFINITIONS

   For purposes of the Plan, the capitalized terms shall have the meanings
ascribed to them in Exhibit A hereof.

SECTION 3 -- SHARES SUBJECT TO THE PLAN

   (a) Shares of Common Stock which may be issued under the Plan may be either
authorized and unissued shares of Common Stock or authorized and issued shares
of Common Stock held in the Company's treasury, or any combination thereof.
Subject to adjustment as provided in Section 14, the number of shares of Common
Stock with respect to which Awards (whether distributable in shares of Common
Stock or in cash) may be granted under the Plan shall be 156 million shares. The
maximum number of shares of Common Stock available for stock options, stock
appreciation rights or Other Stock-based Awards that may be granted to a
Participant during a calendar year shall not exceed two million.

   (b) Notwithstanding the last sentence of Section 3(a), to the extent that the
number of shares of Common Stock with respect to which Awards may be granted
under the Plan to an individual in any calendar year exceeds the number of
shares of Common Stock with respect to which Awards were granted under the Plan
during that calendar year, such excess shall be available for grant under the
Plan in succeeding calendar years.

   (c) In the event that any other Award subject to repurchase or forfeiture
rights is reacquired by the Company or if any Award is canceled, terminates or
expires unexercised (except with respect to a stock option which terminates on
the exercise of a stock appreciation right) for any reason under the Plan, any
Common Stock allocated in connection with such Award shall thereafter again be
available for grant pursuant to the Plan.

SECTION 4 -- ELIGIBILITY

   Selected employees, officers, directors and consultants to the Company and
its subsidiaries are eligible to be Participants in the Plan.

SECTION 5 -- ADMINISTRATION

   The Plan shall be administered by the Committee, which shall have the power
to select those Participants who shall receive Awards and to determine the terms
of such Awards. As to the selection of, and the terms of Awards granted the
Committee may delegate any or all of its responsibilities to officers or
employees of the Company.

<Page>

   The Committee's authority hereunder shall include, without limitation, the
establishment of vesting schedules or exercisability in installments with
respect to Awards. The Committee may, in its sole discretion, accelerate or
waive vesting or exercise periods or the lapse of restrictions on all or any
portion of any Award, or extend the exercisability (including to extend or
provide for post-termination exercisability) of stock options or stock
appreciation rights; provided that such exercisability shall not extend past ten
years from the date of grant of any incentive stock options.

   Subject to the provisions of the Plan, the Committee shall be authorized to
interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, to determine the terms and provisions of any agreements
entered into hereunder, and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in any
Award in the manner and to the extent it shall deem desirable to carry the Plan
or any such Award into effect. The determinations of the Committee in the
administration of the Plan, as described herein, shall be final and conclusive.

   The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the laws
of the State of Delaware and applicable Federal law.

SECTION 6 -- STOCK OPTIONS

   (a) Any stock options granted under the Plan shall be in such form as the
Committee may from time to time approve and shall be subject to the terms and
conditions provided herein and such additional terms and conditions not
inconsistent with the terms of the Plan as the Committee shall deem desirable.

   (b) Stock options may be granted to any Participant. Each grant of stock
options shall specify whether the underlying options are intended to be
incentive stock options or non-incentive stock options. In the case of incentive
stock options, the terms and conditions of such grants shall be subject to and
comply with such requirements as may be prescribed by Section 422(b) of the
Code, as from time to time amended, and any implementing regulations, including,
but not limited to, the requirement that such stock options are exercisable
during the Participant's lifetime only by such Participant. The Committee shall
establish the option price at the time each stock option is granted, which price
shall not be less than 100 percent of the Fair Market Value of the Common Stock
on the date of grant.

   (c) No stock options may be exercisable later than ten years after their date
of grant. The option price of each share of Common Stock as to which a stock
option is exercised shall be paid in full at the time of such exercise. Such
payment may be made at the sole discretion of the Committee, pursuant to and in
accordance with criteria and guidelines established by the Committee (which
criteria and guidelines may be different for executive officers and for other
Participants), as the same may be modified from time to time, (i) in cash, (ii)
by tender of shares of Common Stock already owned by the Participant, valued at
Fair Market Value as of the date of exercise, (iii) if authorized by the
Committee, by withholding pursuant to the election of the Participant, which
election is subject to the disapproval of the Committee, from those shares that
would otherwise be obtained upon exercise of the option a number of shares
having a Fair Market Value equal to the option price, (iv) if authorized by the
Committee, and in combination with services rendered by the exercising
Participant, by delivery of a properly executed exercise notice together with
irrevocable instructions to a securities broker (or, in the case of pledges,
lender) approved by the Company to, (a) sell shares of Common Stock subject to
the option and to deliver promptly to the Company a portion of the proceeds of
such sale transaction on behalf of the exercising Participant to pay the option
price, or (b) pledge shares of Common Stock subject to the option to a margin
account maintained with such broker or lender, as security for a loan, and such
broker or lender, pursuant to irrevocable instructions, delivers to the Company
the loan proceeds, at the time of exercise to pay the option price, (v) by any
combination of (i), (ii), (iii) or (iv) above or (vi) by other means that the
Committee deems appropriate.

   (d) A stock option holder may, in the discretion of the Committee, have the
right to surrender a stock option or any portion thereof to the Company within
30 days following a Change in Control and to receive from the Company in
exchange therefor a cash payment in an amount equal to (a) the number of
unexercised shares of Common Stock under the option which are being surrendered
multiplied by (b) the

                                       2
<Page>

excess of (i) the greater of (A) the highest price per share of Common Stock
paid in connection with the Change in Control or (B) the highest Fair Market
Value per share of Common Stock in the 90-day period preceding such Change in
Control, over (ii) the purchase price of the option as set forth in the
underlying option agreement (the foregoing, a "Limited SAR").

SECTION 7 -- STOCK APPRECIATION RIGHTS

   (a) Stock appreciation rights may be granted independent of any stock option
or in conjunction with all or any part of any stock option granted under the
Plan, either at the same time as the stock option is granted or at any later
time during the term of the option. Stock appreciation rights shall be subject
to such terms and conditions as determined by the Committee, not inconsistent
with the provisions of the Plan.

   (b) Upon exercise, a stock appreciation right shall entitle the Participant
to receive from the Company an amount equal to the excess of the Fair Market
Value of a share of Common Stock on the date of exercise of the stock
appreciation right over the per share grant or option price, as applicable (or
such lesser amount as the Committee may determine at the time of grant),
multiplied by the number of shares of Common Stock with respect to which the
stock appreciation right is exercised. Upon the exercise of a stock appreciation
right granted in connection with a stock option, the stock option shall be
canceled to the extent of the number of shares as to which the stock
appreciation right is exercised, and upon the exercise of a stock option granted
in connection with a stock appreciation right or the surrender of such stock
option, the stock appreciation right shall be canceled to the extent of the
number of shares as to which the stock option is exercised or surrendered. The
Committee shall determine whether the stock appreciation right shall be settled
in cash, Common Stock or a combination of cash and Common Stock.

   (c) A holder of a stock appreciation right may, in the discretion of the
Committee, have the right to surrender the stock appreciation right or any
portion thereof to the Company within 30 days following a Change in Control and
to receive from the Company in exchange therefor a cash payment in an amount
equal to (a) the number of shares of Common Stock under the stock appreciation
right which are being exercised, multiplied by (b) the excess of (i) the greater
of (A) the highest price per share of Common Stock paid in connection with the
Change in Control or (B) the highest Fair Market Value per share of Common Stock
in the 90 day period preceding such Change in Control, over (ii) the per share
grant price of the stock appreciation right as set forth in the underlying
agreement.

SECTION 8 -- OTHER STOCK-BASED AWARDS

   (a) Other Awards of Common Stock and Awards that are valued in whole or in
part by reference to, or otherwise based on, the Fair Market Value of Common
Stock (all such Awards being referred to herein as "Other Stock-based Awards"),
may be granted under the Plan in the discretion of the Committee. Other
Stock-based Awards shall be in such form as the Committee shall determine,
including without limitation, (i) the right to purchase shares of Common Stock,
(ii) shares of Common Stock subject to restrictions on transfer until the
completion of a specified period of service, the occurrence of an event or the
attainment of performance objectives, each as specified by the Committee, and
(iii) shares of Common Stock issuable upon the completion of a specified period
of service, the occurrence of an event or the attainment of performance
objectives, each as specified by the Committee. Other Stock-based Awards may be
granted alone or in addition to any other Awards made under the Plan. All
references in the preceding sentence to "specified period of service," in the
case of Other Stock-based Awards which (i) are not in lieu of cash compensation
to employees generally, (ii) are not paid to recruit a new employee in an amount
of less than 5% of the total awards available for grant under the Plan or (iii)
are not subject to the attainment of performance objectives, shall provide that
vesting, restrictions on transfer or some other comparable restriction which
incents continued performance of the recipient, will be for a period of not less
than three years (although vesting or lapsing may occur in tranches over the
three years), unless there is a Change in Control or the recipient retires,
becomes disabled or dies. Subject to the provisions of the Plan, the Committee
shall have sole and absolute discretion to determine to whom and when such Other
Stock-based Awards will be made, the number of shares of Common Stock to be
awarded under (or otherwise related to) such Other Stock-based Awards and all
other terms and conditions of such Awards. The Committee shall determine whether
Other Stock-based Awards shall be settled in cash, Common Stock or a

                                       3
<Page>

combination of cash and Common Stock.

   (b) With respect to any restricted stock units granted under the Plan, the
obligations of the Company or any Subsidiary are limited solely to the delivery
of shares of Common Stock on the date when such shares of Common Stock are due
to be delivered under each Agreement, and in no event shall the Company or any
Subsidiary become obligated to pay cash in respect of such obligation (except
that the Company or any Subsidiary may pay to Participants amounts in cash in
respect of a restricted stock unit equal to cash dividends paid to a holder of
shares of Common Stock, for fractional shares or for any amounts payable in cash
upon the occurrence of a Change in Control).

SECTION 9 -- DIVIDENDS, EQUIVALENTS AND VOTING RIGHTS

   Awards other than stock options and stock appreciation rights may, at the
discretion of the Committee, provide the Participant with dividends or dividend
equivalents and voting rights prior to either vesting or earnout.

SECTION 10 -- AWARD AGREEMENTS

   Each Award under the Plan shall be evidenced by an agreement setting forth
the terms and conditions, not inconsistent with the provisions of the Plan, as
determined by the Committee, which shall apply to such Award.

SECTION 11 -- WITHHOLDING

   The Company shall have the right to deduct from all amounts paid to any
Participant in cash (whether under this Plan or otherwise) any taxes required by
law to be withheld therefrom. In the case of payments of Awards in the form of
Common Stock, at the Committee's discretion, the Participant may be required to
pay to the Company the amount of any taxes required to be withheld with respect
to such Common Stock, or, in lieu thereof, the Company shall have the right to
retain the number of shares of Common Stock the Fair Market Value of which
equals the amount required to be withheld. Without limiting the foregoing, the
Committee may, in its discretion and subject to such conditions as it shall
impose, permit share withholding to be done at the Participant's election.

SECTION 12 -- NON-TRANSFERABILITY

   No Award shall be assignable or transferable, and no right or interest of any
Participant in any Award shall be subject to any lien, obligation or liability
of the Participant, except by will, the laws of descent and distribution, or as
otherwise set forth in the Award agreement.

SECTION 13 -- NO RIGHT TO EMPLOYMENT OR CONTINUED PARTICIPATION IN PLAN/NO
RIGHTS AS STOCKHOLDERS

   (a) No person shall have any claim or right to the grant of an Award, and the
grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of the Company or to be eligible for any subsequent
Awards. Further, the Company expressly reserves the right at any time to dismiss
a Participant free from any liability or any claim under the Plan, except as
provided herein or in any agreement entered into hereunder.

   (b) The grant of an Award shall not be construed as giving a Participant the
rights of a stockholder of Common Stock unless and until shares of Common Stock
have been issued to Participants pursuant to Awards hereunder.

SECTION 14 -- ADJUSTMENT OF AND CHANGES IN COMMON STOCK

   In the event of any change in the outstanding shares of Common Stock by
reason of any Common Stock dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or

                                       4
<Page>

other corporate exchange, or any distribution to stockholders of Common Stock
other than regular cash dividends, the Committee shall make a substitution or
adjustment to the number or kind of shares of Common Stock or other securities
issued or reserved for issuance pursuant to the Plan, and to outstanding Awards,
as well as the option price or other affected terms of such Awards as in its
judgment shall be necessary to preserve the Participant's rights substantially
proportionate to the rights existing prior to such event.

   Unless otherwise provided in an award agreement, after a merger of one or
more corporations into the Company or after a consolidation of the Company and
one or more corporations (a "Merger Event") in which the Company shall be the
surviving or resulting corporation, an Award holder shall, where applicable, at
the same cost, be entitled upon the exercise of an Award, to receive (subject to
any action required by Stockholders) such securities of the surviving or
resulting corporation as shall be equivalent to the shares underlying such Award
as nearly as practicable to the nearest whole number and class of shares of
stock or other securities.

   Unless otherwise provided in an award agreement, if the Company enters into
any agreement with respect to any transaction which would, if consummated,
result in a Merger Event in which the Company will not be the surviving
corporation, the Committee in its sole discretion and without liability to any
person shall determine what actions shall be taken with respect to outstanding
Awards, if any, including, without limitation, the payment of a cash amount in
exchange for the cancellation of an Award or the requiring of the issuance of
substitute Awards that will substantially preserve the value, rights and
benefits of any affected Awards previously granted hereunder as of the date of
the consummation of the Merger Event.

SECTION 15 -- AMENDMENT

   The Committee or the Board may amend, suspend or terminate the Plan or any
portion hereof at any time.

SECTION 16 -- UNFUNDED STATUS OF PLAN

   The Plan is intended to constitute an "unfunded" plan for long-term incentive
compensation. With respect to any payments not yet made to a Participant,
including any Participant optionee, by the Company, nothing herein contained
shall give any Participant any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or payments in lieu thereof or with respect to
options, stock appreciation rights and other Awards under the Plan; provided,
however, that the existence of such trusts or other arrangements is consistent
with the unfunded status of the Plan.

SECTION 17 -- EFFECTIVE DATE

   This Plan shall be effective on April 5, 1995. No Awards may be granted under
the Plan on or after April 4, 2005.

                                       5
<Page>

                                    EXHIBIT A

   (a) "Award" shall mean any type of stock-based award granted pursuant to the
Plan.

   (b) "Board" shall mean the Board of Directors of the Company; provided,
however, that any action taken by a duly authorized committee of the Board
within the scope of authority delegated to such committee by the Board shall be
considered an action of the Board for purposes of this Plan.

   (c) "Change in Control" shall mean 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 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 the
      Applicable Minimum Percentage (as defined below) 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

                                       6
<Page>

      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 the Applicable Minimum
      Proportion (as defined below) of the members of the board of directors of
      the Surviving 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).

   With respect to paragraph (d)(i) above, "Applicable Minimum Percentage" means
(1) eighty percent (80%) with respect to Awards made prior to November 14, 2000,
and (2) fifty percent (50%) with respect to Awards made on or after November 14,
2000; and "Applicable Minimum Proportion" means (1) two-thirds with respect to
Awards made prior to November 14, 2000, and (2) a majority with respect to
Awards made on or after November 14, 2000.

   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.

   (d) "Code" shall mean the Internal Revenue Code of 1986, as from time to time
amended.

   (e) "Committee" shall mean the Compensation and Benefits Committee of the
Company.

   (f) "Common Stock" shall mean the common stock of the Company, $.10 par
value.

   (g) "Company" shall mean Lehman Brothers Holdings Inc. and, except as
otherwise specified in this Plan in a particular context, any successor thereto,
whether by merger, consolidation, purchase of substantially all its assets or
otherwise.

   (h) "Fair Market Value" on any date means the closing price of the shares on
such date on the principal national securities exchange on which such shares are
listed or admitted to trading (or, if such exchange is not open on such date,
the immediately preceding date on which such exchange is open), the arithmetic
mean of the per share closing bid price and per share closing asked price on
such date as quoted on the National Association of Securities Dealers Automated
Quotation System, or such other market in which such prices are regularly
quoted, or, if there have been no published bid or asked quotations with respect
to such shares on such date, the Fair Market Value shall be the value
established by the Committee in good faith and, in the case of an incentive
stock option, in accordance with Section 422 of the Code.

                                       7
<Page>

   (i) "Other Stock-based Award" shall mean any of those Awards described in
Section 8 hereof.

   (j) "Participant" shall mean an employee, officer, director or consultant of
the Company.

   (k) "Subsidiary" shall mean any corporation which at the time qualifies as a
subsidiary of the Company under the definition of "subsidiary corporation" in
Section 424(f) of the Code, as amended from time to time.

                                       8

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