UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 7, 2005
Lehman Brothers Holdings Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-9466 13-3216325
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(Commission File Number) (IRS Employer Identification No.)
745 Seventh Avenue
New York, New York 10019
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(Address of Principal Executive Offices) (Zip Code)
(212) 526-7000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On June 7, 2005, the Board of Directors of Lehman Brothers Holdings
Inc. (the "Company) approved the Amended and Restated Deferred Compensation Plan
for Non-Employee Directors (the "Amended and Restated Plan").
Section 409A to the U.S. Internal Revenue Code of 1986, as amended (the
"Code"), which was passed by Congress in 2004, provides that all nonqualified
deferred compensation will be considered income at the time of vesting
unless it meets certain conditions relating to elective deferrals, timing
of distributions, and subordination to the claims of creditors. The Board of
Directors has amended the Company's Deferred Compensation Plan for Non-Employee
Directors (the "Plan") to comply with the new tax rules and to make certain
other changes. The principal amendments reflected in the Amended and Restated
Plan are as follows:
o changing the deadline for deferral elections to December 31 of
the year prior to the year in which compensation is being
deferred;
o changing the minimum deferral period to 2 years (or termination
of service, if elected);
o changing the hardship withdrawal definition to comply with
Section 409A of the Code; and
o changing the plan administrator from "the Secretary and the
President" to the Company's Compensation and Benefits Committee
(the "Compensation Committee").
The Compensation Committee previously approved the Plan in 1987. The Plan
is a nonqualified deferred compensation plan, which provides each non-employee
Director an opportunity to elect to defer receipt of cash compensation to be
earned for services on the Board of Directors. Each non-employee Director may
elect to defer all or a portion of his or her future cash compensation with
respect to one or more years. Such election can be revoked only by a showing of
financial hardship and with the consent of the Compensation Committee. Amounts
deferred are credited quarterly with interest, based upon the average 30-day
U.S. Treasury Bill rate, and compounded annually. Deferred amounts will be paid
in either a lump sum or in annual installments over a period not to exceed ten
years as elected by the non-employee Director. Payments commence as the
non-employee Director elects, at a specified date in the future or upon
termination of service as a non-employee Director. A copy of the Amended and
Restated Plan is filed herewith as Exhibit 10.1 and incorporated by reference
herein.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits.
10.1 Lehman Brothers Holdings Inc.'s Amended and Restated Deferred
Compensation Plan for Non-Employee Directors.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
LEHMAN BROTHERS HOLDINGS INC.
Date: June 10, 2005 By: /s/ James J. Killerlane III
_________________________
James J. Killerlane III
Vice President
Exhibit 10.1
LEHMAN BROTHERS HOLDINGS INC.
DEFERRED COMPENSATION PLAN FOR NON EMPLOYEE DIRECTORS
AMENDED AND RESTATED AS OF JANUARY 1, 2005
Section 1 Effective Date
The effective date of the Amended and Restated Plan is May 6, 1987.
Section 2 Eligibility
Any Director of Lehman Brothers Holdings Inc. ("Holdings") who is not an officer
or employee of Holdings or a subsidiary or affiliate thereof is eligible to
participate in the Amended and Restated Plan.
Section 3 Deferred Compensation Account
There shall be established for each participant a deferred compensation account
in the participant's name.
Section 4 Amount of Deferral
A participant may elect to defer receipt of specified percentage for any year of
either 1) all of the cash compensation payable to the Participant for serving on
the Board of Directors of Holdings (the "Board") and Committees thereof, or 2)
only the retainers (basic annual fees) payable to the participant for membership
on the Board and for serving as Chairperson of any Committee thereof.
Section 5 Interest on Deferred Amounts
The amount shown in the participant's deferred compensation account shall be
credited with interest quarterly, from the date of deferral to the date of
payment and compounded annually, at a rate equal to the average 30-day U.S.
Treasury Bill rate during each quarter of the deferral period.
Section 6 Payment of Deferred Amounts
The amount deferred plus interest credited under Section 5 shall be paid in
cash, in the form selected pursuant to Section 7, on, or as soon as practicable
after, (i) January 1 of a year selected by the participant, (which shall be at
least two years after the end of the year in which such deferred amounts would
otherwise have been paid) (ii) the participant's termination of service as a
Director or (iii) the earlier of (i) or (ii), in each case, as elected by the
participant at the time of deferral; provided, however, that the amount(s)
otherwise payable hereunder shall be deferred, if necessary, until the first
date that such amount(s) may be paid without subjecting the recipient to taxes
imposed by Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code").
Section 7 Form of Payment
A participant may elect to receive the compensation deferred under the Amended
and Restated Plan in either 1) a lump sum or 2) a number of substantially equal
annual installments, not to exceed ten (10) years, as specified by the
participant at the time of deferral.
Section 8 Death Prior to Receipt
In the event that a participant dies prior to receipt of any or all of the
amounts payable to him/her pursuant to this Amended and Restated Plan, any
amounts remaining in the participant's deferred compensation account shall be
paid to the participant's estate in a lump sum as soon as practicable after the
participant's death.
Section 9 Time of Election of Deferral
Effective as of January 1, 2005 an election to defer cash compensation must be
made by a Director by December 31 of the year prior to the year in which
services to which the compensation relates will be performed; provided that a
newly-elected Director may elect to defer cash compensation prior to the
thirtieth day after the date such Director becomes eligible to participate in
the Amended and Restated Plan, to the extent the amount to be deferred relates
to the performance of services after the Director makes the deferral election.
Section 10 Manner of Electing Deferral
A participant may elect to defer cash compensation by giving written notice to
the Secretary on a form provided by Holdings, which notice shall include the
amount to be deferred, the period of deferral, and the form of payment,
including the number of installments.
Section 11 Effect of Election
An election to defer cash compensation shall be irrevocable after the applicable
December 31 deadline prescribed by Section 9. An election covering more than one
year may be revoked or modified with respect to subsequent years by notifying
the Secretary of Holdings by the applicable December 31 deadline. Amounts
previously deferred hereunder may be distributed to the participant upon the
participant's request in the event of a severe financial hardship to the
participant resulting from an illness or accident of the participant, the
participant's spouse, or a dependent (as defined in Code Section 152(a)) of the
participant, loss of the participant's property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the participant. The amounts so distributed shall
not exceed the amounts necessary to satisfy such emergency plus amounts
necessary to pay taxes reasonably anticipated as a result of the distribution,
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after taking into account the extent to which such hardship is or may be
relieved through reimbursement or compensation by insurance or otherwise or by
liquidation of such assets (to the extent the liquidation of such assets would
not itself cause severe financial hardship).
Section 12 Participant's Rights Unsecured
The right of any participant to receive future payments under the provisions of
the Amended and Restated Plan shall be an unsecured claim against the general
assets of Holdings.
Section 13 Statement of Account
Statements will be sent to each participant by April 15 each year stating the
value of his/her deferred compensation account as of the end of the preceding
calendar year.
Section 14 Assignability
No right to receive payments hereunder shall be transferable or assignable by a
participant, except by will or by the laws of descent and distribution.
Section 15 Administration
This Amended and Restated Plan shall be administered by the Compensation and
Benefits Committee of the Board of Holdings, which shall have the authority to
adopt rules and regulations for carrying out the Amended and Restated Plan and
interpret, construe and implement the provisions of the Amended and Restated
Plan.
Section 16 Amendment
This Amended and Restated Plan may be amended, modified or terminated by the
Board. No amendment, modification or termination shall, without the consent of
the participant, adversely affect such participant's accruals in his/her
deferred compensation account.
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