LPL INVESTMENT HOLDINGS INC. 2008 NONQUALIFIED DEFERRED COMPENSATION PLAN

LPL INVESTMENT HOLDINGS INC.

2008 NONQUALIFIED DEFERRED COMPENSATION PLAN

1.              Purpose .  The purpose of the LPL Investment Holdings Inc. 2008 Nonqualified Deferred Compensation Plan is to permit employees and former employees of LPL Investment Holdings Inc. and its subsidiaries holding stock options expiring in 2009 or 2010 issued under the Company’s 1999 Stock Option Plan, as amended, to accumulate capital through the deferral of certain compensation paid to them for their services.

2.              Definitions .

(a)            “ Account ” means the deferred compensation bookkeeping account established for the Participant pursuant to Section 5(a).

(b)            “ Administrator ” means the Board or, if one or more has been appointed, a committee of the Board.  The Administrator may delegate ministerial tasks to such persons as it deems appropriate.

(c)            “ Aggregate Dividend Amount ” has the meaning in Section 5(b).

(d)            “ Board ” means the Board of Directors of the Company.

(e)            “ Cause ” has the meaning ascribed to such term in any employment agreement other similar agreement between the Participant and the Company, or, if no such agreement exists or the provisions of such agreements conflict, a termination by the Company of the Participant’s employment or a termination by the Participant of the Participant’s employment, in either case following the occurrence of any of the following events: (i) the Participant’s willful and continued failure to perform, or gross negligence or willful misconduct in the performance of, his or her material duties with respect to the Company which, if curable, continues beyond ten business days after a written demand for substantial performance is delivered to the Participant by the Company; or (ii) Participant’s conviction of, or a plea of nolo contendere to, a crime constituting a felony under the laws of the United States or any state thereof; (iii) the Participant’s committing or engaging in any act of fraud, embezzlement, theft or other act of dishonesty against the Company or its subsidiaries that causes material injury, monetarily or otherwise, to the Company; or (iv) the Participant’s breach of his or her non-competition or non-solicitation obligations in any agreement with the Company that causes material injury, monetarily or otherwise, to the Company.

(f)             “Change in Control” means the consummation of (i) any consolidation or merger of the Company with or into any other Person, or any other corporate reorganization, transaction or transfer of securities of the Company by its stockholders, or series of related transactions (including the acquisition of capital stock of the Company), whether or not the Company is a party thereto, in which the stockholders of the Company immediately prior to such consolidation, merger, reorganization or transaction, own, directly or indirectly, capital stock either (A) representing directly or indirectly through one or more entities, less than fifty percent (50%) of the equity economic interests in or voting power of the Company or other surviving entity immediately after such consolidation, merger, reorganization or transaction or (B) that

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does not directly, or indirectly through one or more entities, have the power to elect a majority of the entire board of directors or other similar governing body of the Company or other surviving entity immediately after such consolidation, merger, reorganization or transaction, (ii) any transaction or series of related transactions, whether or not the Company is party thereto, after giving effect to which in excess of fifty percent (50%) of the Company’s voting power is owned directly, or indirectly through one or more entities, by any person and its “affiliates” or “associates” (as such terms are defined in the Exchange Act Rules) or any “group” (as defined in the Exchange Act Rules) other than, in each case, the Company or an affiliate of the Company immediately following the Closing, or (iii) a sale or other disposition of all or substantially all of the consolidated assets of the Company (each of the foregoing, a “ Business Combination ”), provided that, notwithstanding the foregoing, the following transactions shall in no event constitute a Change in Control: (A) a Business Combination following which the individuals or entities who were beneficial owners of the outstanding securities entitled to vote generally in the election of directors of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, fifty percent (50%) or more of the outstanding securities entitled to vote generally in the election of directors of the resulting, surviving or acquiring corporation in such transaction; provided, however, that in all events a change in control shall comply with the requirements of Treasury Regulations Section 1.409A-3.

(g)            “ Common Stock ” means the common stock of the Company, $0.001 par value per share.

(h)            “ Company ” means LPL Investment Holdings Inc. and its subsidiaries.

(i)             “ Disability ” means that the Company determines in its sole discretion that the Participant has been terminated as a result of the employee having become totally and permanently disabled. For this purpose, totally and permanently disabled means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be e