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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LEHMAN BROTHERS HOLDINGS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-3216325
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3 WORLD FINANCIAL CENTER 10285
NEW YORK, NEW YORK (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
EMPLOYEE INCENTIVE PLAN
1996 MANAGEMENT OWNERSHIP PLAN
(FULL TITLE OF THE PLANS)
------------------------
THOMAS A. RUSSO, ESQ.
CHIEF LEGAL OFFICER
LEHMAN BROTHERS HOLDINGS INC.
3 WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10285
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(212) 526-7000
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
KAREN M. MULLER, ESQ.
LEHMAN BROTHERS HOLDINGS INC.
THREE WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10285
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
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PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED PER SHARE(A) PRICE(A) FEE(A)
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Common Stock, $.10 par value per
share(b)........................ 20,000,000 $23.44 $23.44 $161,655.17
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Common Stock, $.10 par value per
share(c)........................ 10,000,000 $23.44 $23.44 $80,827.59
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</TABLE>
(a) Pursuant to Rule 457(h) under the Securities Act of 1933, the proposed
maximum offering price per share, the proposed maximum aggregate offering
price and the amount of registration fee have been computed on the basis of
the average high and low prices per share of Common Stock on the New York
Stock Exchange on July 9, 1996.
(b) Represents Common Stock issuable under the Employee Incentive Plan.
(c) Represents Common Stock issuable under the 1996 Management Ownership Plan.
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<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, previously filed by Lehman Brothers Holdings Inc.
(the "Registrant") with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act") or Rule 424 under the Securities Act of 1933, as amended (the "Act"), are
hereby incorporated by reference in this Registration Statement.
(a) the Registrant's Annual Report on Form 10-K for the fiscal year ended
November 30, 1995;
(b) the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended February 29, 1996;
(c) the Registrant's Current Reports on Form 8-K dated January 4, 1996;
March 20, 1996 and June 20, 1996;
(d) the description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A dated April 29, 1994
All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Registration Statement and
prior to the filing of a post-effective amendment to this Registration Statement
indicating that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be part hereof from the date
of filing such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Required.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Karen C. Manson, Esq., Senior Vice President, Secretary and Senior Counsel
of Lehman Brothers Inc. and counsel to the Registrant, has rendered an opinion
to the effect that, under applicable state law, the other shares of Common Stock
to which this Registration Statement relates will be, when issued, validly
issued, fully paid and nonassessable.
The consolidated financial statements and financial statement schedules of
the Registrant for the year ended November 30, 1995, for the eleven month period
ended November 30, 1994 and for the year ended December 31, 1993 incorporated by
reference in this Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements and
schedule are, and audited financial statements included in subsequently filed
documents will be, incorporated herein by reference in reliance upon the reports
of Ernst & Young LLP pertaining to such financial statements (to the extent
covered by consents filed with the Commission) given upon the authority of such
firm as experts in accounting and auditing.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation of the Registrant authorizes the
Registrant to indemnify its directors and officers to the fullest extent
permitted by Delaware General Corporation Law from time to time. In addition,
the directors of the Registrant are insured under officers' and directors'
liability insurance policies purchased by the Registrant.
Section 145 of the Delaware General Corporation Law provides for
indemnification of directors and officers in certain circumstances, which may
include indemnification for liabilities arising under the Securities Act of 1933
(the "1933 Act").
II-1
<PAGE> 3
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The Exhibit Index beginning of page E-1 is hereby incorporated by
reference.
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3, Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference
in this Registration Statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the forgoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on this the 9th day of
July, 1996.
LEHMAN BROTHERS HOLDINGS INC.
(Registrant)
By: /s/ KAREN M. MULLER
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Karen M. Muller
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
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<C> <S> <C>
* Chairman of the Board, July 9, 1996
- ------------------------------------------ Chief Executive Officer and
Richard S. Fuld, Jr. Director (principal executive
officer)
* President and Director July 9, 1996
- ------------------------------------------
T. Christopher Pettit
* Chief Financial Officer (principal July 9, 1996
- ------------------------------------------ financial officer)
Charles B. Hintz
* Controller July 9, 1996
- ------------------------------------------
David Goldfarb
* Director July 9, 1996
- ------------------------------------------
John F. Akers
* Director July 9, 1996
- ------------------------------------------
Roger S. Berlind
* Director July 9, 1996
- ------------------------------------------
Katsumi Funaki
* Director July 9, 1996
- ------------------------------------------
Henry Kaufman
* Director July 9, 1996
- ------------------------------------------
John D. Macomber
* Director July 9, 1996
- ------------------------------------------
Dina Merrill
* Director July 9, 1996
- ------------------------------------------
Masataka Shimasaki
*By /s/ KAREN M. MULLER
- ------------------------------------------
Karen M. Muller
(Attorney-in-Fact)
</TABLE>
II-3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT FILED HEREWITH (--) OR
NUMBER DESCRIPTION INCORPORATED BY REFERENCE TO
- ------ ---------------------------------------------------- -------------------------------
<C> <S> <C>
4.1 Form of Restated Certificate of Incorporation of the Restated Certificate of
Registrant Incorporation of the Registrant
dated May 27, 1994
(incorporated by reference to
Exhibit 3.1 of the Registrant's
Transition Report on Form 10-K
for the eleven months ended
November 30, 1994)
4.2 Restated By-Laws of the Registrant By-Laws of the Registrant
amended as of October 24, 1995
(incorporated by reference to
Exhibit 3(b) of the
Registrant's Registration
Statement on Form S-3 (Reg. No.
33-64899)
4.3 Employee Incentive Plan --
4.4 1996 Management Ownership Plan --
5 Opinion of Karen C. Manson, Counsel to the --
Registrant
23.1 Consent of Ernst & Young, Independent Auditors of --
the Registrant
23.2 Consent of Karen C. Manson (included in Exhibit 5) --
24 Powers of Attorney --
</TABLE>
<PAGE> 1
EXHIBIT 4.3
<PAGE> 2
EMPLOYEE INCENTIVE PLAN
SECTION 1 -- PURPOSE
The purpose of the 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 twenty 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 one 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.
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
<PAGE> 3
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 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.
<PAGE> 4
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 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
<PAGE> 5
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 appreication 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 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.
<PAGE> 6
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 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.
<PAGE> 7
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 1934 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 eighty percent (80%) 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;
<PAGE> 8
(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 two-thirds
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).
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 after such
Beneficial Owner of 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 share 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.
(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.
(l) "Total Disability" shall mean a physical or mental incapacity, which
would entitle the individual to benefits under the long-term disability program
sponsored by the Company employing such individual; provided, however, that if
an individual is not covered under the applicable program, the Committee shall
determine whether the individual has incurred a Total Disability by utilizing
the criteria of such program and provided further that for incentive stock
options the definition of Total Disability shall be as set forth in Section
22(e)(3) of the Code.
<PAGE> 1
EXHIBIT 4.4
<PAGE> 2
1996 MANAGEMENT OWNERSHIP PLAN
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 ten 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 one 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) and 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 "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
<PAGE> 3
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 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.
<PAGE> 4
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 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
<PAGE> 5
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), 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
distribution, or as otherwise set forth in the Award agreement.
SECTION 13 -- NO RIGHT TO EMPLOYMENT OR CONTINUED PARTICIPATION IN 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.
<PAGE> 6
(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 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.
<PAGE> 7
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 1934 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 eighty percent (80%) 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 consti-
<PAGE> 8
tute at least two-thirds 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).
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 after such Beneficial Owner of 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 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 share 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, the Operating Committee or a 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.
(m) "Total Disability" shall mean a physical or mental incapacity, which
would entitle the individual to benefits under the long-term disability program
sponsored by the Company employing such individual; provided, however, that if
an individual is not covered under the applicable program, the Committee shall
determine whether the individual has incurred a Total Disability by utilizing
the criteria of such program and provided further that for incentive stock
options the definition of Total Disability shall be as set forth in Section
22(e)(3) of the Code.
<PAGE> 1
EXHIBIT 5
<PAGE> 2
LEHMAN BROTHERS
July 9, 1996
Lehman Brothers Holdings Inc.
Three World Financial Center
New York, New York 10285
Re: Lehman Brothers Holdings Inc.
Common Stock
------------------------
Ladies and Gentlemen:
I am Senior Vice President, Secretary and Senior Counsel of Lehman Brothers
Inc. and I have acted as counsel to Lehman Brothers Holdings Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933 (the "1933 Act"), of up to 30,000,000 shares of
authorized and unissued or issued Common Stock (the "Shares") to be distributed
from time to time to senior officers of the Company under the Company's 1996
Management Ownership Plan (the "1996 Plan") and the Employee Incentive Plan (the
"EIP", and together with the 1996 Plan, the "Plans").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K.
In connection with this opinion, I or members of my staff have examined (i)
the Registration Statement filed with the Securities and Exchange Commission
(the "Commission") on July 9, 1996 under the 1933 Act; (ii) the Certificate of
Incorporation and the By-laws of the Company, in each case as amended to the
date hereof, (iii) certain resolutions of the Board of Directors of the Company
relating to issuance of the shares; (iv) certain resolutions of the Board of
Directors approving the terms and provisions of the Plans; (v) a specimen
certificate evidencing the Common Stock; (vi) the Plans; and (vii) such other
documents as I have deemed necessary or appropriate as a basis for the opinions
set forth below.
In such examination, I have assumed the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all the documents
submitted to me as original, the conformity to original documents as certified
or photostatic copies and the authenticity of the originals of such copies. As
to any facts material to the opinions expressed herein which were not
independently established or verified, I have relied upon oral or written
statements and representations of officers and other representatives of the
Company and others.
I am admitted to the Bar in the State of New York and I express no opinion
as to laws of any jurisdiction other than the laws of the State of New York, the
General Corporation Law of the State of Delaware, and the laws of the United
States of America.
Based upon and subject to the foregoing, I am of the opinion that:
The issuance by the Company of the Shares have been duly authorized and
when the Shares are duly issued in accordance with the terms of the Plans, such
shares will be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Legal
Matters" in the prospectus which is issued under the Registration Statement. In
giving such consent, I do not thereby admit that I am in the category of persons
whose consent is required under Section 7 of the 1933 Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/ KAREN C. MANSON
Karen C. Manson
<PAGE> 1
EXHIBIT 23.1
<PAGE> 2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-8 and the related Prospectus [not filed with
registrant] and to the incorporation by reference in such Registration Statement
and Prospectus of our report dated January 10, 1996, with respect to the
consolidated financial statements and schedule of Lehman Brothers Holdings Inc.
and Subsidiaries included in its Annual Report on Form 10-K for the year ended
November 30, 1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
July 9, 1996
<PAGE> 1
EXHIBIT 24
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Thomas A. Russo, Karen M. Muller, and Michael R.
Milversted, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and her and in his or her
name, place and stead, in any and all capacities, to sign the Registration
Statement on Form S-8 of Lehman Brothers Holdings Inc., and any and all
amendments and supplements thereto, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or any of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Dated: As of July 9, 1996
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ ----------------------------------- --------------
<C> <S> <C>
Chief Executive Officer and July 9, 1996
- ------------------------------------------ Chairman of the Board of
Richard S. Fuld, Jr. Directors
(principal executive officer)
- ------------------------------------------ President and Director July 9, 1996
T. Christopher Pettit
Chief Financial Officer, July 9, 1996
- ------------------------------------------ (principal financial officer)
Charles B. Hintz
Controller July 9, 1996
- ------------------------------------------
David Goldfarb
Director July 9, 1996
- ------------------------------------------
John F. Akers
Director July 9, 1996
- ------------------------------------------
Roger S. Berlind
Director July 9, 1996
- ------------------------------------------
Katsumi Funaki
Director July 9, 1996
- ------------------------------------------
Henry Kaufman
Director July 9, 1996
- ------------------------------------------
John D. Macomber
Director July 9, 1996
- ------------------------------------------
Dina Merrill
Director July 9, 1996
- ------------------------------------------
Masataka Shimasaki
</TABLE>
