UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): July 21, 2003
LEHMAN BROTHERS HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-9466 13-3216325
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(State or other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
745 Seventh Avenue, New York, NY 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 526-7000
ITEM 5. Other Events.
On July 21, 2003, Lehman Brothers Holdings Inc. ("Lehman Brothers"), Ruby
Acquisition Company, a wholly owned subsidiary of Lehman Brothers ("Merger
Sub"), and Neuberger Berman Inc. ("Neuberger Berman") entered into an
Agreement and Plan of Merger (the "Merger Agreement"). Pursuant to the terms
and subject to the conditions set forth in the Merger Agreement, Neuberger
Berman will merge with and into Merger Sub with Merger Sub continuing as the
surviving corporation and a wholly owned subsidiary of Lehman Brothers (the
"Merger").
At the time the Merger becomes effective, each issued and outstanding
share of the common stock of Neuberger Berman (other than canceled shares and
dissenting shares) ("Neuberger Berman Common Stock") will be canceled and
converted into the right to receive $9.49 in cash and a fractional share of
common stock, par value $0.10 per share, of Lehman Brothers ("Lehman Brothers
Common Stock") determined pursuant to an exchange ratio based on the average
trading price of shares of Lehman Brothers Common Stock during a period of
time shortly prior to closing. Based upon yesterday's closing price for Lehman
Brothers Common Stock, the implied price per share of Neuberger Berman Common
Stock is $41.48, consisting of $9.49 in cash and 0.496 shares of Lehman
Brothers Common Stock. If the average price of a share of Lehman Brothers
Common Stock during the period shortly prior to closing is less than or equal
to $66.51, the exchange ratio will be 0.496 shares of Lehman Brothers Common
Stock for each share of Neuberger Berman Common Stock. If the average price of
a share of Lehman Brothers Common Stock during that period is greater than
$66.51 and less than or equal to $73.00, the exchange ratio will result in
each stockholder of Neuberger Berman receiving total consideration of $42.50
per share of Neuberger Berman Common Stock. If the average price is greater
than $73.00 and less than or equal to $82.19, the exchange ratio will be 0.452
shares of Lehman Brothers Common Stock for each share of Neuberger Berman
Common Stock. If the average price is greater than $82.19 but less than or
equal to $90.41, the exchange ratio will be adjusted so that stockholders of
Neuberger Berman will receive total consideration of $46.64 per share of
Neuberger Berman Common Stock. The exchange ratio shall be 0.411 if the
average price of a share of Lehman Brothers Common Stock is more than $90.41.
The Merger Agreement includes a downward pricing adjustment of 1.25% per
1.00% decline (excluding market changes) of, in general, asset-based fees of
Neuberger Berman's Private Asset Management ("PAM") clients below 15% from a
pre-signing base date, up to a maximum price reduction of 6.25%, with a Lehman
Brothers walk-away right at a 20% decline. In addition, the transaction is
subject to approval by Neuberger Berman's stockholders, the execution of
certain agreements and amendments related to the retention of employees, and
other customary closing conditions and regulatory approvals. Neuberger Berman
may terminate the Merger Agreement if the average price of a share of Lehman
Brothers Common Stock during a period of time shortly prior to closing is
below $61.51, subject to a "top-up" right of Lehman Brothers designed to
ensure that the aggregate consideration paid to stockholders of Neuberger
Berman is no less than $40.00 per share.
Under the Merger Agreement, Neuberger Berman is required to pay Lehman
Brothers a break-up fee of $95 million in certain customary circumstances,
including if Neuberger Berman terminates the Merger Agreement to accept a
superior proposal.
In connection with the execution of the Merger Agreement, Lehman Brothers
entered into a Voting Agreement, dated as of July 21, 2003 (the "Voting
Agreement"), with certain stockholders of Neuberger Berman, whereby those
stockholders have agreed to vote their shares of Neuberger Berman Common Stock
in favor of approving the Merger Agreement and the Merger, and against any
acquisition proposals from a third party.
A copy of the Merger Agreement is attached to this report as Exhibit 2.1.
A copy of the Voting Agreement is attached to this report as Exhibit 2.2. A
copy of the joint press release, dated July 22, 2003, relating to the Merger
is attached to this report as Exhibit 99.1. The Merger Agreement, the Voting
Agreement and the press release are incorporated herein by reference. The
above descriptions of the Merger Agreement, the Voting Agreement and the press
release, as well as the transactions contemplated by those documents, are not
complete and are qualified in their entirety by reference to those exhibits.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits.
The exhibits listed below and in the accompanying Exhibits Index are
filed as part of this Current Report on Form 8-K.
EXHIBIT NO. DESCRIPTION
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2.1 Agreement and Plan of Merger, dated as of July 21, 2003
among Lehman Brothers Holdings Inc., Ruby Acquisition
Company, and Neuberger Berman Inc.
2.2 Voting Agreement, dated as of July 21, 2003, by and
among Lehman Brothers Holdings Inc. and the parties
signatory thereto
99.1 Joint Press Release, dated July 22, 2003, of Lehman
Brothers Holdings Inc. and Neuberger Berman Inc.
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.
By: /s/ David Goldfarb
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Name: David Goldfarb
Title: Chief Financial Officer and Executive
Vice President
Date: July 22, 2003
EXHIBIT INDEX
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of July 21, 2003
among Lehman Brothers Holdings Inc., Ruby Acquisition
Company, and Neuberger Berman Inc.
2.2 Voting Agreement, dated as of July 21, 2003, by and
among Lehman Brothers Holdings Inc. and the parties
signatory thereto
99.1 Joint Press Release, dated July 22, 2003, of Lehman
Brothers Holdings Inc. and Neuberger Berman Inc.