-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PsYlLmeJsYGTa1epwNVzflWY9KMG2H/q9fCDm8AhecSdtHyKHSE3BE95/fBhZM1A dJVDaOJ4SmBzM7eZ3JkXtg== 0000922423-02-000804.txt : 20020715 0000922423-02-000804.hdr.sgml : 20020715 20020715172446 ACCESSION NUMBER: 0000922423-02-000804 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020715 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEHMAN BROTHERS HOLDINGS INC CENTRAL INDEX KEY: 0000806085 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 133216325 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09466 FILM NUMBER: 02703341 BUSINESS ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 3 WORLD FINANCIAL CENTER CITY: NEW YORK STATE: NY ZIP: 10285 BUSINESS PHONE: 2125267000 MAIL ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 3 WORLD FINANCIAL CENTER CITY: NEW YORK STATE: NY ZIP: 10285 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 11-K 1 kl07027_11-k.txt FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 11-K ---------------- [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to ______________ -------------------------------- Commission file number 1-7657 -------------------------------- A. Full title of the plan and the address of the plan, if different from that of the issuer named below: LEHMAN BROTHERS SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: LEHMAN BROTHERS HOLDINGS INC. 745 Seventh Avenue NEW YORK, NY 10019 1 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Financial Statements and Supplemental Schedules Years ended December 31, 2001 and 2000 Contents Report of Independent Auditors....................................... 1 Financial Statements Statements of Net Assets Available for Plan Benefits................. 2 Statements of Changes in Net Assets Available for Plan Benefits........................................................... 3 Notes to Financial Statements........................................ 4 Supplemental Schedules Schedule H, Line 4(i)--Schedule of Assets Held at End of Year......... 11 Schedule H, Line 4(j)--Schedule of Reportable Transactions............ 13 1 [Letterhead of Ernst & Young LLP] [New York, New York] Report of Independent Auditors Employee Benefit Plans Committee Lehman Brothers Holdings Inc. We have audited the accompanying statements of net assets available for plan benefits of the Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) (the "Plan") as of December 31, 2001 and 2000, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 2001 and 2000, and the changes in its net assets available for plan benefits for the years then ended in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held at end of year as of December 31, 2001, and reportable transactions for the year then ended, are presented for purposes of additional analysis and not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP July 2, 2002 1 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Statements of Net Assets Available for Plan Benefits December 31, 2001 2000 -------- -------- (in thousands) Assets Investments, at fair value $582,217 $605,595 Cash and short-term investments 27 3,176 Participant loans 6,487 4,940 Other receivables 2,120 2,224 Interest and dividends receivable -- 19 -------- -------- Total assets 590,851 615,954 Liabilities Accrued and other liabilities -- 249 ------- -------- Net assets available for plan benefits $590,851 $615,705 ======== ======== See notes to financial statements. 2 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Statements of Changes in Net Assets Available for Plan Benefits Years ended December 31, 2001 2000 --------- ---------- (in thousands) Investment income: Interest and dividends $ 13,485 $ 15,375 Net realized and unrealized depreciation in fair value of investments (83,964) (18,417) --------- --------- (70,479) (3,042) Contributions: Employer 2,120 1,971 Participants 49,695 39,967 Rollovers 7,472 6,454 --------- --------- 59,287 48,392 Transfer-in from USA Plan 3,976 -- Transfer-in from Former Employees Plan 7,663 -- --------- --------- 11,639 -- Administrative fees (279) (699) Participant withdrawals (25,022) (44,019) --------- --------- (25,301) (44,718) Net (decrease)/increase (24,854) 632 Net assets available for plan benefits, beginning of year 615,705 615,073 --------- --------- Net assets available for plan benefits, end of year $ 590,851 $ 615,705 ========= ========= See notes to financial statements. 3 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Notes to Financial Statements (continued) December 31, 2001 1. Description of the Plan General The Lehman Brothers Savings Plan (the "Plan"), formerly know as Lehman Brothers Holdings Inc. Tax Deferred Savings Plan, is a defined contribution plan. The Plan became effective January 1, 1984 and was amended and restated March 29, 2001. Under the terms of the Plan, qualified employees of Lehman Brothers Holdings Inc. ("Lehman") and its participating subsidiaries (collectively, the "Company") are eligible to participate in the Plan as soon as administratively possible after their date of employment. Effective February 1, 2001 Fidelity Investments became the Recordkeeping, Trustee and Investment Services provider for the Plan. New services and enhancements became available to participants on March 29, 2001, including daily valuation of accounts, an expanded menu of investment options and access to on line financial planning tools. The E.F. Hutton & Company Universal Savings Account Plan (the "USA Plan") and the Lehman Brother Savings Plan for Former Employees of E.F. Hutton & Company Inc. (the "Former Employees Plan") were merged into the Plan on June 20, 2001. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). A complete description of the Plan is contained in the Plan document available to all participants from the Plan Administrator. Contributions Upon enrollment, a participant may elect to contribute, on a pre-tax basis, between one and fifteen percent of eligible compensation, as defined in the Plan document. The Company may make a contribution, in Lehman stock or cash, on behalf of eligible participants who have completed 12 months of service and are employees on the last day of the Plan year. The amount of the contribution, if any, will be determined by the Company's Board of Directors. If a Company contribution is made it will be allocated as follows: 1. Participants whose annual compensation is below $37,800 per year and are not Investment Representatives, Investment Representative Trainees, Branch Managers, or Institutional Salespeople will receive a Company contribution of $400 plus a matching contribution of 100 percent of the first $600 of the employee's before-tax contributions. 4 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Notes to Financial Statements (continued) 1. Description of the Plan (continued) 2. Participants whose annual compensation is between $37,800 and $100,000 per year will receive a matching contribution of up to 100 percent of the first $1,000 of the employee's before-tax contributions, only if there are funds remaining after contributions are made for participants making less than $37,800 per year. 3. Company contributions are not made for participants whose annual compensation exceeds $100,000 per year. In 2001 and 2000, Company contributions were made in cash which was used to purchase common stock in the Company. Participant's before-tax Contributions are not subject to tax until distribution. The Internal Revenue Code of 1986, as amended (the "Code"), provides that before-tax Contributions (and any elective deferrals to other plans containing a cash or deferred arrangement) will be included in a participant's gross income to the extent such contributions exceed the statutory limitation. The maximum limitation amount was $10,500 for 2001 and 2000. The Company's contributions on behalf of a participant, as well as the income and appreciation on amounts invested in the investment funds offered under the Plan are also not subject to tax until distributed. Rollover contributions represent contributions to the Plan of certain assets previously held on behalf of participants by other qualified plans. Valuation of Participant Accounts Separate accounts are maintained for each participant whereby the participant's account is credited for contributions and credited or charged, as appropriate, for investment experience. Participant accounts are also charged for withdrawals and loans. The periodic allocation of investment experience is based upon the participant's beneficial interest in each of the investment funds on the valuation date. 5 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Notes to Financial Statements (continued) 1. Description of the Plan (continued) Investments Investment of contributions among the investment funds can be made in increments of 1%, with a maximum of 50% of contributions permitted to be invested in Lehman Brothers Common Stock Fund. Participants can elect to change their contribution rate and investment direction of new contributions on a daily basis. Participants may also elect to transfer existing fund balances among investment funds on a daily basis. The following table presents the fair value of investments held by the Plan at December 31, 2001 and 2000, respectively: December 31, 2001 2000 --------- --------- (in thousands) Investments, at fair value: Mutual Funds $ 324,368 $ 356,317 Stable Value Fund 130,147 95,868 Lehman Brothers Common Stock Fund 92,397 95,972 American Express Company Common Stock Fund 35,305 57,438 --------- --------- Total $ 582,217 $ 605,595 ========= ========= The following table presents the net appreciation and depreciation in fair value of investments held by the Plan at December 31, 2001 and 2000, respectively: Years ended December 31, 2001 2000 -------- --------- (in thousands) Net appreciation (depreciation) in fair value of investments: Mutual Funds $ (64,184) $ (51,275) American Express Company Common Stock Fund (19,532) (2,153) Lehman Brothers Common Stock Fund (248) 35,011 --------- --------- $ (83,964) $ (18,417) ========= ========= 6 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Notes to Financial Statements (continued) 1. Description of the Plan (continued) The following is a schedule of investments held in excess of 5% of the net assets available for plan benefits at the end of 2001 and 2000: Funds Fair Value at December 31, 2001 2000 ------------------------- (in thousands) Lehman Brothers Common Stock Fund $92,397 $95,972 Fidelity Large-Cap Stock Fund 82,699 - Vanguard Institutional Index Fund 78,621 77,808 American Express Company Common Stock Fund 35,305 57,438 Putnam International Growth Fund 34,446 - Lehman Brothers 10 Uncommon Values N/A 46,282 American Century Ultra Fund - 94,871 Templeton Foreign Fund - 40,291 Benefits A participant may elect, after attaining the age of 59-1/2, to withdraw all or a portion of the value of their accounts, provided that each withdrawal is at least $1,000 (or is 100% of the value of their account if less than $1,000). Withdrawals by actively employed participants before the age of 59-1/2 are permitted for before-tax contributions and pre-1989 earnings thereon, only after meeting specified financial hardship criteria and after obtaining approval by the Employee Benefit Plans Committee of the Company. Participants can elect to withdraw all or a portion of their rollover contributions made to the Plan. Although hardship and rollover withdrawals are allowed, a participant may be subject to an additional 10% tax imposed by the Code. If a participant's employment with the Company terminates for a reason other than death, any distributions made before age 59-1/2 must be in the form of a lump-sum payment. However, if the balance in a participant's account exceeds $5,000, payment will not be made before age 70-1/2 without prior consent. Upon death, the balance in the participant's account is paid to the designated beneficiary (as provided by the Plan) in a lump-sum payment. 7 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Notes to Financial Statements (continued) 1. Description of the Plan (continued) Benefits Payable Benefits payable to those participants who have elected to receive a distribution (or be paid automatically as described above) from the Plan but have not yet been paid was $0 and $5,931,157 in 2001 and 2000, respectively. Vesting Plan participants are 100% vested in all amounts in their respective Plan accounts. Income Tax Status The Plan received a determination letter from the Internal Revenue Service ("IRS") dated February 14, 1995, stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. The Plan has been amended and restated in its entirety subsequent to the receipt of the determination letter. The Employee Benefit Plans Committee intends to apply for a new determination letter from the IRS. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Employee Benefit Plans Committee believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt. Participant Loans Receivable Participants may borrow from their plan accounts a minimum of $1,000 up to a maximum of $50,000 or 50% of their vested account balance, whichever is less. Loan terms range from 1 year to 5 years or up to 10 years for the purchase of a primary residence as long as documentation is provided. The loans are secured by one half of the balance in the participant's accounts and bear interest at the rate of prime plus one. Principal and interest are paid ratably through biweekly or monthly payroll deductions, depending on the frequency with which the employee is paid. Participants who terminate with outstanding loan balances have until the end of the quarter following the quarter in which they terminate to pay the balance of their loan in full, in one lump sum payment. Loans not repaid in that timeframe will be reported as taxable distributions. Outstanding loan balances will also be treated as 8 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Notes to Financial Statements (continued) 1. Description of the Plan (continued) taxable distributions for those participants who request a distribution of their account prior to repaying their loan. For the years ended December 31, 2001 and 2000, $154,015 and $681,389 respectively in outstanding loan balances have been reported as taxable distributions to participants. 2. Summary of Significant Accounting Policies Valuation of Investments Investments in mutual funds are valued at the quoted redemption prices on the last business day of the Plan year. Investments in the common stock of American Express and the Company are valued at the quoted market price on the last business day of the Plan year. Short-term investments and deposits with insurance companies in connection with contracts are valued at cost plus accrued interest, which approximate fair value. Interest rates on deposits with insurance companies were 6.05% in 2001 and 7.01% in 2000. The Funds invested in deposits with insurance companies are guaranteed by the insurer as to principle plus interest. There are securities contained in the self directed accounts that are classified as "unpriced securities." Currently, these securities are not traded on any public exchange and are valued at $0. Purchase and sales of securities are reflected on a trade-date basis. Dividend and Interest Income Dividend income is recorded on the ex-dividend date. Income from other investments is recorded on the accrual basis. 9 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Notes to Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. 3. Third Party Administrative Fees Except to the extent paid by the Company, all expenses of the Plan are paid by the Plan. In 2001 and 2000, the Plan was charged $279,002 and $699,131 for third party administrative expenses incurred during the respective years. The Company paid all expenses not directly relating to the administration of the Plan. 4. Plan Termination While it has not expressed any intent to do so, the Company has the right to terminate the Plan at any time subject to the provisions set forth in ERISA and the Code. 5. Subsequent Events Lehman Brothers Bank FSB Employee 401(k) Plan (the "Bank Plan") was merged into the Plan, effective January 02, 2002. During 2002 Lehman filed a restated Plan with the IRS. The restated Plan incorporates all amendments enacted through January 11, 2002 and any further changes deemed necessary or advisable to comply with changes in applicable law. The Plan expects to receive a new determination letter from the IRS once the restatement is accepted. 10 SUPPLEMENTAL SCHEDULES EIN: #13-3216325 Plan #003 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Schedule H, Line 4(i)--Schedule of Assets Held At End of Year December 31, 2001
Par Value/ Current Value Number of at December Shares 31, 2001 ----------------------------------- Stable Value Fund Allstate Life Insurance Co.: Contract #GICA5584 3,121,476 $ 3,121,476 Contract #GICA5806 1,544,118 1,544,118 Bank of America: Contract #99-238 26,667,411 26,667,411 Continental Assurance Co.: Contract # 63205001 14,425,278 14,425,278 Chase Manhattan Bank:: Contract #431429-T 27,137,124 27,137,124 People's Security Insurance Co.: Contract #BDA00568FR 6,800,364 6,800,364 State Street Bank & Trust: Contract # 101060 10,168,562 10,168,562 The Principal Financial Group: Contract #4-26575-01 10,869,395 10,869,395 New York Life Insurance Co.: Contract #30727 2,500,069 2,500,069 TransAmerica Life Insurance Co.: Contract #51499 2,394,362 2,394,362 Travelers Life Insurance Co.: Contract #GA16953 6,069,739 6,069,739 UBS AG: Contract #5085 12,927,031 12,927,031 Boston Safe Dep. & Trust: Contract #GDLE 5,521,653 5,521,653 ------------ 130,146,582 ------------ Stock Funds American Express Company Common Stock Fund 4,609,046.668 35,305,297 Lehman Brothers Common Stock Fund* 11,267,930.014 92,397,026 ------------ 127,702,323 ------------ Mutual Funds Pimco Total Return 322,731.869 3,375,775 Dreyfus Founders Discovery 6,045.299 171,989 NB Genesis Trust 37,237.940 1,083,996 Strong Opportunity 38,076.855 1,496,040 Templeton Developing Markets 7,031.690 69,473 Janus Adv Worldwide 19,741.853 578,831 Pimco Micro Cap Growth 13,079.952 279,388 Vanguard Institutional Index 749,553.425 78,620,659 Lehman Brothers 10 Uncommon Values* 5,057,062.261 26,701,289 Putnam International Growth 1,737,951.038 34,446,190 Putnam New Opps 5,600.500 229,508 11 EIN: #13-3216325 Plan #003 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Schedule H, Line 4(i)--Schedule of Assets Held At End of Year (continued) December 31, 2001 Par Value/ Current Value Number of at December Shares 31, 2001 --------------------------------- Mutual Funds (continued) Putnam Vista A 5,508.362 47,592 Vanguard Total Stock market 38,910.172 1,001,548 Fid Select Computers* 1,009.868 $ 38,405 Fid Select Electronics* 12,793.658 630,344 Fidelity Equity Inc.* 20,225.911 986,418 Fid Select Software* 4,817.177 229,249 Fidelity Cap & Income* 2,954,053.822 20,028,485 Fid Select Biotech* 16,641.252 $ 1,083,678 Fid Select Healthcare* 5,076.448 646,029 Fid Select Technology* 14,771.322 895,142 Fid Select Telecomm* 4,872.040 176,465 Fid Asset Manager* 1,225,761.337 18,999,301 Fidelity Low-Pr iced Stock* 334,229.532 9,164,574 Fidelity Aggressive Growth* 559,506.666 10,641,817 Fidelity Large-Cap Stock* 5,679,852.787 82,698,657 Fid Freedom 2010* 26,873.031 338,869 Fid Freedom 2020* 68,401.222 860,487 Fid Freedom 2030* 18,393.422 231,021 Fid Select Develop Comm* 11,975.159 226,330 Fidelity US Bd Index* 2,615,232.128 28,244,507 Fid Freedom 2040* 14,903.907 110,140 ------------ 324,332,196 Self Directed Accounts** Various 36,006 ------------ 324,368,202 ------------ Total investments before Loan account 582,217,107 ------------ Loan account 6,487,479 ------------ Total investments $588,704,586 ============
12 EIN: #13-3216325 Plan #003 Lehman Brothers Savings Plan (formerly, Lehman Brothers Holdings Inc. Tax Deferred Savings Plan) Schedule H, Line 4(j)--Schedule of Reportable Transactions Year ended December 31, 2001
Number Cost of Number of Cost of of Proceeds Assets Gain Description Transactions Purchases Transactions from Sales Disposed (Loss) - ------------------------------------------------------------------------------------------------------------------ Category (i) Single transactions in excess of 5% of plan assets American Century Ultra Fund -- $ -- 1 $104,430,201 $ 91,017,149 $ 13,413,052 Templeton Foreign Fund -- -- 1 42,455,734 39,282,459 3,173,275 Category (iii)--Series of transactions in excess of 5% of plan assets American Century Ultra Fund 10 5,418,986 3 104,941,759 91,478,313 13,463,446 Templeton Foreign Fund 8 2,307,415 4 42,992,252 39,786,559 3,205,693
13 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Lehman Brothers Holdings Inc. Employee Benefit Plans Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. LEHMAN BROTHERS SAVINGS PLAN By: /s/ Wendy M. Uvino --------------------------------- Wendy M. Uvino Lehman Brothers Holdings Inc. Employee Benefit Plans Committee July 15, 2002 14 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 23 Consent of Independent Auditors 15 EX-23 3 kl07027_ex23.txt EXHIBIT 23 CONSENT EXHIBIT 23 [Letterhead of Ernst & Young LLP] [New York, New York] CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement of Lehman Brothers Savings Plan (the "Plan"), formerly Lehman Brothers Holdings Inc. Tax Deferred Savings Plan, Form S-8, File No. 33-53923, of our report dated July 2, 2002, with respect to the financial statements and supplemental schedules of the Plan included in the Plan's Annual Report (Form 11-K) for the year ended December 31, 2001. /s/ Ernst & Young LLP July 11, 2002 -----END PRIVACY-ENHANCED MESSAGE-----