-----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, Lsxoa5wbcdNtlvXRDuVsys1jaTD/FxDeBczLJUR+tDh8sTByhYZEw1wiwa1kNnwo OuUHVOjXVieVIbt/P71nyA== 0000950123-97-005468.txt : 19970701 0000950123-97-005468.hdr.sgml : 19970701 ACCESSION NUMBER: 0000950123-97-005468 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961230 FILED AS OF DATE: 19970630 SROS: NYSE 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: 97632426 BUSINESS ADDRESS: STREET 1: AMERICAN EXPRESS TWR STREET 2: 3 WORLD FINANCIAL CNTR CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 2125267000 MAIL ADDRESS: STREET 1: AMERICAN EXPRESS TOWER 15TH FL STREET 2: 2 WORLD TRADE CENTER CITY: NEW YORK STATE: NY ZIP: 10048 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 11-K 1 FORM 11-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE COMMISSION For the fiscal year ended December 30, 1996 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 HOLDINGS INC. TAX DEFERRED SAVINGS PLAN Lehman Brothers Holdings Inc. 3 World Financial Center New York, NY 10285 B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Lehman Brothers Holdings Inc. 3 World Financial Center New York, NY 10285 2 Financial Statements and Supplemental Information Lehman Brothers Holdings Inc. Tax Deferred Savings Plan For the years ended December 30, 1996 and 1995 with Report of Independent Auditors 3 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Financial Statements and Supplemental Information For the years ended December 30, 1996 and 1995 CONTENTS
Report of Independent Auditors........................................................ 1 Financial Statements Statements of Net Assets Available for Plan Benefits, With Fund Information.......... 2 Statements of Changes in Net Assets Available for Plan Benefits, With Fund Information................................................................. 4 Notes to Financial Statements......................................................... 6 Supplemental Information Schedule I Schedule of Investments Held........................................... 14 Schedule II Schedule of Series of Transactions in Excess of Five Percent of Net Assets Available for Plan Benefits at Beginning of Year..... 15
A schedule of single transactions in excess of five percent of net assets available for plan benefits at beginning of year has not been presented because there were no single transactions in excess of five percent of net assets during the fiscal year 1996, which require disclosure under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and for which there are no statutory or administrative exemptions. A schedule of party-in-interest transactions has not been presented because there were no party-in-interest transactions which are prohibited by Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and for which there are no statutory or administrative exemptions. 4 Report of Independent Auditors The 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 Holdings Inc. Tax Deferred Savings Plan as of December 30, 1996 and 1995, 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 administrator. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about 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 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan at December 30, 1996 and 1995, and the changes in its net assets available for plan benefits for the years then ended, in conformity with general accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of investments held as of December 30, 1996, and single and series of transactions in excess of five percent of net assets available for plan benefits for the year ended December 30, 1996, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The Fund Information in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Ernst & Young LLP June 1, 1997 5 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Statement of Net Assets Available for Plan Benefits, With Fund Information December 30, 1996 Investment Funds
----------------------------------------------------------------- American Lehman Short Express Brothers Term Fixed Company Holdings Inc. Interest Income Common Common Assets Fund Fund Stock Fund Stock Fund ----------------------------------------------------------------- Institutional Contracts(at cost plus interest) $126,138,571 Investments at fair value: American Express Company common stock 523,614 shares (cost: $12,033,409) $30,042,353 Lehman Brothers Holdings Inc. common stock 624,363 shares (cost: $11,363,000) $19,589,389 Twentieth Century Ultra Investors Fund 1,829,588 shares (cost: $41,439,988) Prime Value Obligations Fund 16,757,626 shares (cost: $16,757,626) Templeton Foreign Fund 3,175,898 shares (cost: $29,764,390) Income Fund of America 1,134,086 shares (cost: $16,197,319) Fidelity Capital & Income Fund 1,866,652 shares (cost: $17,459,339) Vanguard Index Trust 500 Portfolio 431,688 shares (cost: $23,244,493) PIMCO Total Return Fund 941,665 shares (cost: $9,570,046) Vanguard Fixed Income Long-Term Corporate Portfolio 929,657 shares (cost: $7,958,488) ----------------------------------------------------------------- - 126,138,571 30,042,353 19,589,389 Cash and short-term investments $263,792 598,115 472 43,781 Interest and dividends receivable 1,658 750,574 93 - Other receivables 11,173 5,039 43,932 1,818,875 Net Inter-fund transfers (payable) receivable 47,878 (266,836) (411,102) (407,841) ----------------------------------------------------------------- Total assets 324,501 127,225,463 29,675,748 21,044,204 Liabilities Accrued liabilities - 40,422 8,490 5,199 Other liabilities - - - - ----------------------------------------------------------------- Total liabilities - 40,422 8,490 5,199 ----------------------------------------------------------------- Net assets available for plan benefits $324,501 $127,185,041 $29,667,258 $21,039,005 =================================================================
------------------------------------------------------------ Twentieth Century Ultra Prime Value Templeton Income Investors Obligations Foreign Fund of Assets Fund Fund Fund America ------------------------------------------------------------ Institutional Contracts(at cost plus interest) Investments at fair value: American Express Company common stock 523,614 shares (cost: $12,033,409) Lehman Brothers Holdings Inc. common stock 624,363 shares (cost: $11,363,000) Twentieth Century Ultra Investors Fund 1,829,588 shares (cost: $41,439,988) $52,015,185 Prime Value Obligations Fund 16,757,626 shares (cost: $16,757,626) $16,757,626 Templeton Foreign Fund 3,175,898 shares (cost: $29,764,390) $32,711,752 Income Fund of America 1,134,086 shares (cost: $16,197,319) $18,882,528 Fidelity Capital & Income Fund 1,866,652 shares (cost: $17,459,339) Vanguard Index Trust 500 Portfolio 431,688 shares (cost: $23,244,493) PIMCO Total Return Fund 941,665 shares (cost: $9,570,046) Vanguard Fixed Income Long-Term Corporate Portfolio 929,657 shares (cost: $7,958,488) ------------------------------------------------------------ 52,015,185 16,757,626 32,711,752 18,882,528 Cash and short-term investments 101,091 27 57,707 21,006 Interest and dividends receivable - - - - Other receivables 10,297 1,584 400 1,544 Net Inter-fund transfers (payable) receivable 143,106 635,063 (95,782) (153,304) ------------------------------------------------------------ Total assets 52,269,679 17,394,300 32,674,077 18,751,774 Liabilities Accrued liabilities 15,789 5,478 9,704 5,610 Other liabilities 101,091 108,309 57,707 21,006 ------------------------------------------------------------ Total liabilities 116,880 113,787 67,411 26,616 ------------------------------------------------------------ Net assets available for plan benefits $52,152,799 $17,280,513 $32,606,666 $18,725,158 ============================================================
-------------------------------------------------------------------- Vanguard Vanguard PIMCO Fixed Income Fidelity Index Trust Total Long Term Capital & 500 Return Corporate Assets Income Fund Portfolio Fund Portfolio Total -------------------------------------------------------------------- Institutional Contracts(at cost plus interest) $126,138,571 Investments at fair value: American Express Company common stock 523,614 shares (cost: $12,033,409) 30,042,353 Lehman Brothers Holdings Inc. common stock 624,363 shares (cost: $11,363,000) 19,589,389 Twentieth Century Ultra Investors Fund 1,829,588 shares (cost: $41,439,988) 52,015,185 Prime Value Obligations Fund 16,757,626 shares (cost: $16,757,626) 16,757,626 Templeton Foreign Fund 3,175,898 shares (cost: $29,764,390) 32,711,752 Income Fund of America 1,134,086 shares (cost: $16,197,319) 18,882,528 Fidelity Capital & Income Fund 1,866,652 shares (cost: $17,459,339) $17,434,530 17,434,530 Vanguard Index Trust 500 Portfolio 431,688 shares (cost: $23,244,493) $30,377,873 30,377,873 PIMCO Total Return Fund 941,665 shares (cost: $9,570,046) $ 9,953,400 9,953,400 Vanguard Fixed Income Long-Term Corporate Portfolio 929,657 shares (cost: $7,958,488) $8,320,428 8,320,428 -------------------------------------------------------------------- 17,434,530 30,377,873 9,953,400 8,320,428 362,223,635 Cash and short-term investments 31,523 79,873 9,999 14,708 1,222,094 Interest and dividends receivable - - - - 752,325 Other receivables - 7,441 - 975 1,901,260 Net Inter-fund transfers (payable) receivable 5,800 449,454 39,015 14,549 - -------------------------------------------------------------------- Total assets 17,471,853 30,914,641 10,002,414 8,350,660 366,099,314 Liabilities Accrued liabilities 5,246 7,610 3,028 2,687 109,263 Other liabilities 33,782 79,873 10,908 14,708 427,384 -------------------------------------------------------------------- Total liabilities 39,028 87,483 13,936 17,395 536,647 -------------------------------------------------------------------- Net assets available for plan benefits $17,432,825 $30,827,158 $ 9,988,478 $8,333,265 $365,562,667 ====================================================================
See accompanying notes 6 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Statement of Net Assets Available for Plan Benefits, With Fund Information December 30, 1995 Investment Funds
-------------------------------------------------------------------- American Lehman Twentieth Short Express Brothers Century Term Fixed Company Holdings Inc. Ultra Interest Income Common Common Investors Assets Fund Fund Stock Fund Stock Fund Fund -------------------------------------------------------------------- Institutional Contracts(at cost plus interest) $132,302,233 Investments at fair value: American Express Company common stock 629,545 shares (cost: $14,453,710) $26,047,424 Lehman Brothers Holdings Inc. common stock 583,133 shares (cost: $9,999,553) $12,391,576 Twentieth Century Ultra Investors Fund 1,617,105 shares (cost: $34,455,115) $42,222,614 Lehman Brothers Prime Value Money Market Fund 18,862,032 shares (cost: $18,862,032) Templeton Foreign Fund 2,817,938 shares (cost: $26,120,965) Income Fund of America 971,763 shares (cost: $13,266,086) Fidelity Capital & Income Fund 1,648,532 shares (cost: $15,509,153) Vanguard Index Trust 500 Portfolio 284,211 shares (cost: $13,849,110) PIMCO Total Return Fund 864,302 shares (cost: $8,733,498) Vanguard Fixed Income Long-Term Corporate Portfolio 899,925 shares (cost: $7,620,417) -------------------------------------------------------------------- - 132,302,233 26,047,424 12,391,576 42,222,614 Cash and short-term investments $264,946 1,366 19 1,970,388 79,748 Interest and dividends receivable 1,403 208 5,308 1,024 17 Other receivables 38,741 20,286 43,894 - 817 Net Inter-fund transfers (payable) receivable - (3,487,122) (165,254) 202,581 1,475,836 -------------------------------------------------------------------- Total assets 305,090 128,836,971 25,931,391 14,565,569 43,779,032 Liabilities Accrued liabilities - 43,599 9,024 3,885 13,627 Other liabilities - - - 686,824 79,016 -------------------------------------------------------------------- Total liabilities - 43,599 9,024 690,709 92,643 -------------------------------------------------------------------- Net assets available for plan benefits $305,090 $128,793,372 $25,922,367 $13,874,860 $43,686,389 ====================================================================
--------------------------------------------------------- Lehman Brothers Prime Value Templeton Income Fidelity Money Foreign Fund of Capital & Assets Market Fund Fund America Income Fund --------------------------------------------------------- Institutional Contracts(at cost plus interest) Investments at fair value: American Express Company common stock 629,545 shares (cost: $14,453,710) Lehman Brothers Holdings Inc. common stock 583,133 shares (cost: $9,999,553) Twentieth Century Ultra Investors Fund 1,617,105 shares (cost: $34,455,115) Lehman Brothers Prime Value Money Market Fund 18,862,032 shares (cost: $18,862,032) $18,862,032 Templeton Foreign Fund 2,817,938 shares (cost: $26,120,965) $25,868,671 Income Fund of America 971,763 shares (cost: $13,266,086) $15,421,879 Fidelity Capital & Income Fund 1,648,532 shares (cost: $15,509,153) $15,100,549 Vanguard Index Trust 500 Portfolio 284,211 shares (cost: $13,849,110) PIMCO Total Return Fund 864,302 shares (cost: $8,733,498) Vanguard Fixed Income Long-Term Corporate Portfolio 899,925 shares (cost: $7,620,417) --------------------------------------------------------- 18,862,032 25,868,671 15,421,879 15,100,549 Cash and short-term investments 18,680 45,917 18,226 39,346 Interest and dividends receivable - 1 17 9 Other receivables 802 326 1,825 - Net Inter-fund transfers (payable) receivable (158,132) 256,638 669,924 36,368 --------------------------------------------------------- Total assets 18,723,382 26,171,553 16,111,871 15,176,272 Liabilities Accrued liabilities 6,576 8,373 4,757 4,849 Other liabilities 133,953 47,411 18,161 40,767 --------------------------------------------------------- Total liabilities 140,529 55,784 22,918 45,616 --------------------------------------------------------- Net assets available for plan benefits $18,582,853 $26,115,769 $16,088,953 $15,130,656 =========================================================
----------------------------------------------------------- Vanguard Vanguard PIMCO Fixed Income Index Trust Total Long Term 500 Return Corporate Assets Portfolio Fund Portfolio Total ----------------------------------------------------------- Institutional Contracts(at cost plus interest) $132,302,233 Investments at fair value: American Express Company common stock 629,545 shares (cost: $14,453,710) 26,047,424 Lehman Brothers Holdings Inc. common stock 583,133 shares (cost: $9,999,553) 12,391,576 Twentieth Century Ultra Investors Fund 1,617,105 shares (cost: $34,455,115) 42,222,614 Lehman Brothers Prime Value Money Market Fund 18,862,032 shares (cost: $18,862,032) 18,862,032 Templeton Foreign Fund 2,817,938 shares (cost: $26,120,965) 25,868,671 Income Fund of America 971,763 shares (cost: $13,266,086) 15,421,879 Fidelity Capital & Income Fund 1,648,532 shares (cost: $15,509,153) 15,100,549 Vanguard Index Trust 500 Portfolio 284,211 shares (cost: $13,849,110) $16,370,552 16,370,552 PIMCO Total Return Fund 864,302 shares (cost: $8,733,498) $9,265,317 9,265,317 Vanguard Fixed Income Long-Term Corporate Portfolio 899,925 shares (cost: $7,620,417) $8,531,288 8,531,288 ----------------------------------------------------------- 16,370,552 9,265,317 8,531,288 322,384,135 Cash and short-term investments 55,643 723 15,987 2,510,989 Interest and dividends receivable - - - 7,987 Other receivables 6,252 119 1,957 115,019 Net Inter-fund transfers (payable) receivable 1,140,740 (27,797) 56,218 - ----------------------------------------------------------- Total assets 17,573,187 9,238,362 8,605,450 325,018,130 Liabilities Accrued liabilities 4,790 2,909 2,647 105,036 Other liabilities 55,524 - 15,696 1,077,352 ----------------------------------------------------------- Total liabilities 60,314 2,909 18,343 1,182,388 ----------------------------------------------------------- Net assets available for plan benefits $17,512,873 $9,235,453 $8,587,107 $323,835,742 ===========================================================
See accompanying notes 7 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information For the year ended December 30, 1996
Investment Funds ------------------------------------------------------------- American Lehman Short Express Brothers Term Fixed Company Holdings Inc. Interest Income Common Common Fund Fund Stock Fund Stock Fund ------------------------------------------------------------- Investment Income: Interest and dividends $ 19,411 $ 9,326,533 $ 536,067 $ 134,879 Net realized and unrealized appreciation/(depreciation) in fair value of investments -- -- 8,942,664 6,382,929 ------------------------------------------------------------- 19,411 9,326,533 9,478,731 6,517,808 Contributions: Employer -- -- -- 1,829,783 Participants -- 3,982,268 -- 1,332,461 Rollovers -- 134,831 -- 160,079 ------------------------------------------------------------- -- 4,117,099 -- 3,322,323 Net inter-fund transfers (out) in -- (2,057,350) (1,982,537) (850,253) Administrative fees -- (61,495) (13,103) (8,943) Participant withdrawals -- (12,724,436) (3,568,012) (1,783,659) Transfer (to) from other plan -- (208,682) (170,188) (33,131) ------------------------------------------------------------- -- (15,051,963) (5,733,840) (2,675,986) ------------------------------------------------------------- Net increase (decrease) 19,411 (1,608,331) 3,744,891 7,164,145 Net assets available for plan benefits, beginning of year 305,090 128,793,372 25,922,367 13,874,860 ------------------------------------------------------------- Net assets available for plan benefits, end of year $324,501 $ 127,185,041 $ 29,667,258 $ 21,039,005 ============================================================= Investment Funds ---------------------------------------------------------------- Twentieth Century Ultra Prime Value Templeton Income Investors Obligations Foreign Fund of Fund Fund Fund America ---------------------------------------------------------------- Investment Income: Interest and dividends $ 1,011 $ 919,531 $ 856,000 $ 964,379 Net realized and unrealized appreciation/(depreciation) in fair value of investments 7,163,514 -- 3,972,698 1,718,857 ---------------------------------------------------------------- 7,164,525 919,531 4,828,698 2,683,236 Contributions: Employer -- -- -- -- Participants 5,632,595 1,632,992 3,693,459 1,360,245 Rollovers 772,818 336,682 524,518 71,573 ---------------------------------------------------------------- 6,405,413 1,969,674 4,217,977 1,431,818 Net inter-fund transfers (out) in 339,031 (443,195) 1,068,291 83,558 Administrative fees (26,153) (7,931) (15,740) (9,226) Participant withdrawals (5,179,526) (3,622,291) (3,477,019) (1,500,889) Transfer (to) from other plan (236,880) (118,128) (131,310) (52,292) ---------------------------------------------------------------- (5,103,528) (4,191,545) (2,555,778) (1,478,849) ---------------------------------------------------------------- Net increase (decrease) 8,466,410 (1,302,340) 6,490,897 2,636,205 Net assets available for plan benefits, beginning of year 43,686,389 18,582,853 26,115,769 16,088,953 ---------------------------------------------------------------- Net assets available for plan benefits, end of year $ 52,152,799 $ 17,280,513 $ 32,606,666 $ 18,725,158 ================================================================ Investment Funds -------------------------------------------------------------------------------- Vanguard Vanguard PIMCO Fixed Income Fidelity Index Trust Total Long Term Capital & 500 Return Corporate Income Fund Portfolio Fund Portfolio Total -------------------------------------------------------------------------------- Investment Income: Interest and dividends $ 1,449,302 $ 509,242 $ 580,338 $ 543,227 $ 15,839,920 Net realized and unrealized appreciation/ (depreciation) in fair value of investments 355,639 4,987,516 (128,978) (433,708) 32,961,131 -------------------------------------------------------------------------------- 1,804,941 5,496,758 451,360 109,519 48,801,051 Contributions: Employer -- -- -- -- 1,829,783 Participants 2,279,015 3,334,129 876,072 855,438 24,978,674 Rollovers 426,623 948,487 193,738 105,738 3,675,087 -------------------------------------------------------------------------------- 2,705,638 4,282,616 1,069,810 961,176 30,483,544 Net inter-fund transfers (out) in (519,343) 5,106,198 (80,036) (664,364) -- Administrative fees (8,356) (13,127) (4,814) (4,295) (173,183) Participant withdrawals (1,665,853) (1,478,919) (682,915) (652,215) (36,335,734) Transfer (to) from other plan (14,858) (79,241) (380) (3,663) (1,048,753) -------------------------------------------------------------------------------- (2,208,410) 3,534,911 (768,145) (1,324,537) (37,557,670) -------------------------------------------------------------------------------- Net increase (decrease) 2,302,169 13,314,285 753,025 (253,842) 41,726,925 Net assets available for plan benefits, beginning of year 15,130,656 17,512,873 9,235,453 8,587,107 323,835,702 -------------------------------------------------------------------------------- Net assets available for plan benefits, end of year $ 17,432,825 $ 30,827,158 $ 9,988,478 $ 8,333,265 $365,562,657 ================================================================================
See accompanying notes 8 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information For the year ended December 30, 1995
Investment Funds ------------------------------------------------ American Short Express Term Fixed Company Interest Income Common Fund Fund Stock Fund ------------------------------------------------ Investment Income: Interest and dividends $ 26,828 $ 10,071,950 $ 523,084 Net realized and unrealized appreciation in fair value of invesments -- -- 8,654,132 ------------------------------------------------ 26,828 10,071,950 9,177,216 Contributions: Employer -- -- -- Participants -- 5,033,752 -- Rollovers -- 278,928 -- ------------------------------------------------ -- 5,312,680 -- Net inter-fund transfers (out) in -- (5,178,427) (1,885,859) Administrative fees -- (63,637) (12,970) Participant withdrawals -- (12,664,640) (4,617,562) Transfer (to) from other plan -- (19,216) (52,181) ------------------------------------------------ -- (17,925,920) (6,568,572) ------------------------------------------------ Net increase (decrease) 26,828 (2,541,290) 2,608,644 Net assets available for plan benefits, beginning of year 278,262 131,334,662 23,313,723 ------------------------------------------------ Net assets available for plan benefits, end of year $ 305,090 $ 128,793,372 $ 25,922,367 =============================================== Investment Funds ----------------------------------------------- Lehman Twentieth Lehman Brothers Century Brothers Holdings Inc. Ultra Prime Value Common Investors Money Stock Fund Fund Market Fund ----------------------------------------------- Investment Income: Interest and dividends $ 111,718 $ 81 $ 1,279,112 Net realized and unrealized appreciation in fair value of invesments 2,692,213 11,341,951 -- ----------------------------------------------- 2,803,931 11,342,032 1,279,112 Contributions: Employer 1,942,105 -- -- Participants 911,904 4,710,456 2,239,425 Rollovers 346,015 853,738 792,644 ----------------------------------------------- 3,200,024 5,564,194 3,032,069 Net inter-fund transfers (out) in 2,381,618 3,467,897 (4,457,741) Administrative fees (7,353) (20,892) (7,300) Participant withdrawals (1,175,156) (3,871,504) (5,337,041) Transfer (to) from other plan (3,895) -- 1,896 ----------------------------------------------- 1,195,214 (424,499) (9,800,186) ----------------------------------------------- Net increase (decrease) 7,199,169 16,481,727 (5,489,005) Net assets available for plan benefits, beginning of year 6,675,691 27,204,662 24,071,858 ----------------------------------------------- Net assets available for plan benefits, end of year $ 13,874,860 $ 43,686,389 $ 18,582,853 ============================================== Investment Funds ----------------------------------------------- Templeton Income Fidelity Foreign Fund of Capital & Fund America Income Fund ----------------------------------------------- Investment Income: Interest and dividends $ 679,973 $ 760,033 $ 1,258,820 Net realized and unrealized appreciation in fair value of invesments 2,032,974 2,663,597 690,665 ----------------------------------------------- 2,712,947 3,423,630 1,949,485 Contributions: Employer -- -- -- Participants 3,855,195 1,323,131 2,102,150 Rollovers 340,238 103,436 1,385,821 ----------------------------------------------- 4,195,433 1,426,567 3,487,971 Net inter-fund transfers (out) in 335,733 1,123,167 538,318 Administrative fees (12,940) (7,393) (7,449) Participant withdrawals (2,961,087) (1,137,603) (1,608,695) Transfer (to) from other plan (2,340) (2,080) (1,387) ----------------------------------------------- (2,640,634) (23,909) (1,079,213) ----------------------------------------------- Net increase (decrease) 4,267,746 4,826,288 4,358,243 Net assets available for plan benefits, beginning of year 21,848,023 11,262,665 10,772,413 ----------------------------------------------- Net assets available for plan benefits, end of year $ 26,115,769 $ 16,088,953 $ 15,130,656 ============================================== Investment Funds ------------------------------ Vanguard PIMCO Index Trust Total 500 Return Portfolio Fund ------------------------------ Investment Income: Interest and dividends $ 264,339 $ 570,046 Net realized and unrealized appreciation in fair value of invesments 3,543,643 923,361 ------------------------------ 3,807,982 1,493,407 Contributions: Employer -- -- Participants 1,944,526 979,827 Rollovers 1,135,472 242,340 ------------------------------ 3,079,998 1,222,167 Net inter-fund transfers (out) in 3,290,669 196,222 Administrative fees (7,572) (4,534) Participant withdrawals (1,152,683) (533,950) Transfer (to) from other plan -- -- ------------------------------ 2,130,414 (342,262) ------------------------------ Net increase (decrease) 9,018,394 2,373,312 Net assets available for plan benefits, beginning of year 8,494,479 6,862,141 ------------------------------ Net assets available for plan benefits, end of year $ 17,512,873 $ 9,235,453 ============================== Investment Funds --------------------------------- Vanguard Fixed Income Long Term Corporate Portfolio Total --------------------------------- Investment Income: Interest and dividends $ 580,903 $ 16,126,887 Net realized and unrealized appreciation in fair value of invesments 1,231,803 33,774,339 --------------------------------- 1,812,706 49,901,226 Contributions: Employer -- 1,942,105 Participants 823,661 23,924,027 Rollovers 110,257 5,588,889 --------------------------------- 933,918 31,455,021 Net inter-fund transfers (out) in 188,403 -- Administrative fees (4,060) (156,100) Participant withdrawals (785,212) (35,845,133) Transfer (to) from other plan -- (79,203) --------------------------------- (600,869) (36,080,436) --------------------------------- Net increase (decrease) 2,145,755 45,275,811 Net assets available for plan benefits, beginning of year 6,441,352 278,559,931 --------------------------------- Net assets available for plan benefits, end of year $ 8,587,107 $ 323,835,742 =================================
See accompanying notes 9 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements December 30, 1996 and 1995 1. DESCRIPTION OF THE PLAN GENERAL The Lehman Brothers Holdings Inc. Tax Deferred Savings Plan (the "Plan") is a defined contribution plan. The Plan became effective January 1, 1984, was amended and restated effective January 1, 1989 and was subsequently amended through April 1, 1996. Under the terms of the Plan, qualified employees of Lehman Brothers Holdings Inc. ("Lehman") and its participating subsidiaries (collectively, the "Company") are eligible to become Plan participants as soon as administratively possible upon employment. Prior to July 1, 1995, there was a 12 month service requirement for plan participants. The Plan is subject to the provisions of 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 the participants annual compensation, as defined in the Plan document. The Company may make a contribution, in Company 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 compensation is below $37,800 per year who have not earned commission income greater than $1,000 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. 2. Participants whose 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. Company contributions to participants whose compensation is between $37,800 and $100,000 per year will be made only if there are funds remaining after contributions are made for participants making less than $37,800 per year. 3. Company contributions will not be made for participants whose compensation exceeds $100,000 per year. 6 10 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (Continued) 1. DESCRIPTION OF THE PLAN-CONTINUED In 1996 and 1995, Company contributions were made in cash. Boston Safe Deposit & Trust Company ("Boston Safe"), the Plan's custodian, used cash to purchase the Company's common stock. A participant's Before-Tax Contributions will not be subject to tax until distribution. 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, which is indexed for inflation. In 1996 and 1995, the maximum limitation amount was $9,500 and $9,240, respectively. For 1997, the maximum limitation amount is $9,500. 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 not includable in the participant's taxable income until distributed. Rollover contributions arise from 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 investment income and credited or charged, as appropriate, for investment appreciation or depreciation. Participant accounts are charged for withdrawals. The periodic allocation of investment income and investment appreciation or depreciation is based upon the participant's beneficial interest in each of the investment funds at the valuation date. INVESTMENTS Effective April 1, 1994, a participant's contributions can be invested in any of the funds listed below. Investments of contributions among the investment funds can be made in increments of 10%, with a maximum of 50% of contributions permitted to be invested in the Lehman Brothers Holdings Inc. Common Stock Fund. Participants can elect to change their contribution rate and investment direction of new contributions on a monthly basis. Participants may also elect to transfer existing fund balances among the investment funds on a monthly basis. 7 11 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (Continued) 1. DESCRIPTION OF THE PLAN-CONTINUED The following is a general description of each investment fund in which the Plan invested since January 1995, as directed by participants: Fixed Income Fund: This fund invests its assets with one or more insurance companies or financial institutions (collectively, "institutions") which issue contracts ("contracts") providing for the repayment of principal with a specified annual rate of interest for a specified period. The fund is currently invested in contracts negotiated with the following institutions:
Carrying Value at Maturity Interest December 30, Date Rate(%) 1996 1995 --------- -------- ------------ ------------ Metropolitan Life Insurance Co. Contract #24565 12/15/01 7.30 $ 9,946,912 $ -- Contract #12865 03/31/97 8.10 5,401,713 10,058,107 Contract #13955 06/15/99 8.25 17,035,023 15,839,622 Contract #11649 06/30/96 9.62 -- 7,668,194 Allstate Life Insurance Company Contract #GICGA5584 12/15/00 7.30 17,365,463 16,278,034 Contract #GICGA5806 07/05/00 6.81 8,792,551 9,085,550 John Hancock Mutual Life Insurance Co. Contract #5565 09/30/97 9.60 5,488,257 11,156,679 Contract #5724 01/08/96 9.51 -- 5,330,455 Prudential Asset Management Group Contract #7430-211 12/15/99 6.52 9,086,741 8,574,596 Contract #7430-212 12/15/99 7.30 -- 12,544,475 American International Life Assurance Company of New York Contract #18180T 10/01/98 5.45 13,332,607 12,698,805 People's Security Insurance Co. Contract #BDA00473FR 08/15/01 8.20 11,655,780 10,842,259 Contract #BDA00568FR 12/15/01* 6.85 10,425,516 1,067,481 Aetna Life Insurance Co. Contract #014005 12/30/97 8.80 4,597,936 6,401,281 The Principal Financial Group Contract #4-08804-01 12/15/00 6.15 5,024,934 4,756,695 Contract #4-08804-02 12/15/02 6.40 7,985,138 -- ------------ ------------ $126,138,571 $132,302,233 ============ ============
* This contract is cancelable by the issuer on 06/30/97 8 12 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements December 30, 1996 and 1995 1. DESCRIPTION OF THE PLAN-CONTINUED The present value of the contracts approximates their fair value as of December 30, 1996 and December 30, 1995. Present value was estimated using an analysis based on the Plan's current investment rate for a similar contract. American Express Company Common Stock Fund: This fund invests solely in the common stock of American Express. As of May 31, 1994, this fund has been closed to any new contributions, dividend reinvestments, or transfers in from other funds. Lehman Brothers Holdings Inc. Common Stock Fund: This fund invests solely in the common stock of the Company. Twentieth Century Ultra Investors Fund: The primary objective of this fund is to provide a high level of capital appreciation by investing primarily in medium and small-sized companies with above average growth potential. Prime Value Obligations Fund: The objective of this short-term, fixed income money market fund is to provide current income and stability of principal. Prior to November 15, 1996 this fund was called the Lehman Brothers Prime Value Money Market Fund. Templeton Foreign Fund: The primary objective of this fund is to provide long-term growth of capital by investing primarily in securities of companies located outside the United States. Income Fund of America: This fund's objective is to provide current income by investing in debt securities and capital appreciation by investing in equity securities. Fidelity Capital & Income Fund: The primary objective of this fund is to provide a high total return of capital growth and income. The fund invests primarily in lower rated debt securities and securities of companies with uncertain financial position. Vanguard Index Trust 500 Portfolio/S&P 500 Index Fund: This equity fund's objective is to replicate the investment performance of the Standard & Poor's 500 Index. PIMCO Total Return Fund: This fund is an intermediate term, fixed income fund whose objective is to provide a high level of current income with reasonable risk by investing in a diversified portfolio of fixed income securities of varying maturities. 9 13 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (Continued) 1. DESCRIPTION OF THE PLAN-CONTINUED Vanguard Fixed Income Long-Term Corporate Portfolio: This fund invests in a diversified portfolio of long-term corporate and government bonds with the objective of providing a high level of current income. In addition to the funds described above, a short-term interest fund provides overnight investments in money market funds of Boston Safe for temporarily invested cash. While cash for withdrawals is disbursed from this fund, withdrawals are recorded in the investment fund from which the participant withdrew. INVESTMENTS IN EXCESS OF 5% OF NET ASSETS AVAILABLE FOR PLAN BENEFITS The following is a schedule of investments held in excess of 5% of the net assets available for plan benefits at the end of 1996.
PAR VALUE/ MARKET VALUE NUMBER AT DECEMBER FUNDS OF SHARES 30, 1996 - ----- --------- -------- American Express Company common stock 523,614 $30,042,353 Lehman Brothers Holdings Inc. common stock 624,363 19,589,389 Twentieth Century Ultra Investors Fund 1,829,588 52,015,185 Templeton Foreign Fund 3,175,898 32,711,752 Vanguard Index Trust 500 Portfolio 431,688 30,377,873 Income Fund Of America 1,134,086 18,882,528 -------------- $183,619,080 ==============
BENEFITS A participant may elect, after attaining the age of 59-1/2, to withdraw all or any portion of the value of his accounts, provided that each withdrawal is at least $1,000 (or is 100% of the value of his account if less than $1,000). Withdrawals by participants before the age of 59-1/2 are permitted only after meeting specified financial hardship criteria and after obtaining approval by the Employee Benefit Plans Committee of the Company. Effective April 1, 1996, a participant can elect to withdraw all or a part of their rollover contribution made to the Plan, as long as the partial withdrawal of their rollover contribution is at least $1,000. However a participant can elect to withdraw all or part of their rollover contribution only once during any consecutive 12- month period. Although hardship and rollover withdrawals are allowed, a participant may be subject to an additional 10 percent tax imposed by the Code. 10 14 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (Continued) 1. DESCRIPTION OF THE PLAN-CONTINUED If a participant's employment with the Company terminates for a reason other than death, the balance in the participant's account is paid to the participant in a lump-sum payment. However, if the balance in his account exceeds $3,500, payment will not be made without the participant's consent. Upon death of the participant, the balance in the participant's account is paid to the designated beneficiary (as provided by the Plan) in a lump-sum payment. BENEFITS PAYABLE Benefits payable to those participants who have elected to withdraw from the Plan but have not yet been paid was $4,508,785 and $5,837,737 in 1996 and 1995, respectively. VESTING Plan participants are 100 percent vested in all amounts in their respective Plan accounts. INCOME TAX STATUS The Internal Revenue Service ("IRS") made a favorable determination in a letter dated February 14, 1995 that the Plan is qualified under Sections 401(a) and 401(k) of the Code and that the trust established as part of the Plan is, therefore, exempt from federal income taxes under the provisions of Section 501(a) of the Code. It is not anticipated that amendments to the Plan after the date of the IRS determination letter will affect the qualified and tax-exempt status of the Plan and trust. 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. Purchase and sales of securities are reflected on a trade-date basis. OTHER Dividend income is recorded on the ex-dividend date. Income from other investments is recorded on the accrual basis. 11 15 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. ADMINISTRATIVE FEES Except to the extent paid by the Company, all expenses of the Plan are paid by the Plan. In 1996 and 1995, the Plan was charged $173,183 and $156,101 for administrative expenses incurred during the respective years. The Company paid all expenses not directly relating to the administration of the Plan, as well as all expenses paid to affiliated investment managers. 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. RELATED PARTY TRANSACTIONS On November 15, 1996, the Company sold the Lehman Brothers Prime Value Money Market Fund to Federated Investors. On April 1, 1995, the manager of the S&P 500 Index Fund was changed to The Vanguard Group. Prior to April 1, 1995, the investments maintained in the S&P 500 Index Fund were managed by PanAgora Asset Management ("PanAgora"), an affiliate of the Company. Prior to April 1, 1995, all fees relating to the management of the S&P 500 Index Fund were paid by the Company. The investment objective of both funds remained the same. 6. TRANSFER TO OTHER PLAN Prior to May 31, 1994, the Company was a subsidiary of the American Express Company ("American Express"). On May 31, 1994, American Express completed the distribution of a special dividend (the "Spin-off") to its shareholders of all of the common stock of the Company held by American Express. As a result of the Spin-off, the Company was no longer a subsidiary of American Express. The account balances associated with former employees of the company, who transferred to American Express prior to May 31, 1994 were transferred to the American Express Incentive Savings Plan in 1996. 12 16 Lehman Brothers Holdings Inc. Tax Deferred Savings Plan Notes to Financial Statements (Continued) 6. TRANSFER TO OTHER PLAN-CONTINUED On July 31, 1993, pursuant to an asset purchase agreement (the "Agreement") with Primerica Corporation (now known as "The Travelers Inc.") and its subsidiary, Smith Barney, Harris, Upham & Company Incorporated ("Smith Barney"), the Company sold its domestic retail brokerage business (except for such businesses conducted under the Lehman Brothers name) and substantially all of its asset management business. As a result of the sale, a significant number of employees became employed by Smith Barney. In 1995, additional employees were transferred to Smith Barney. The account balances associated with these participants were transferred to the Primerica Corporation Savings Plan for Shearson Employees in 1995. 13 17 Supplemental Information 18 Schedule 1 LEHMAN BROTHERS HOLDINGS INC. TAX DEFERRED SAVINGS PLAN SCHEDULE OF INVESTMENTS HELD DECEMBER 30, 1996
PAR VALUE/ CURRENT VALUE COST NUMBER AT DECEMBER AT DECEMBER OF SHARES 30, 1996 30, 1996 ---------- ------------ ====-------- CONTRACTS ISSUED BY INSTITUTIONS Metropolitan Life Insurance Co. Contract #24565 9,946,912 $ 9,946,912 $ 9,946,912 Contract #12865 5,401,713 5,401,713 5,401,713 Contract #13955 17,035,023 17,035,023 17,035,023 Allstate Life Insurance Co. Contract #GICA5584 17,365,463 17,365,463 17,365,463 Contract #GICA5806 8,792,551 8,792,551 8,792,551 John Hancock Mutual Life Insurance Co. Contract $5565 5,488,257 5,488,257 5,488,257 Prudential Asset Management Group Contract #7430-211 9,086,741 9,086,741 9,086,741 American International Life Assurance Company Of New York Contract 18180T 13,332,607 13,332,607 13,332,607 People's Security Insurance Co. Contract #BDA00473FR 11,655,780 11,655,780 11,655,780 Contract #BDA00568FR 10,425,516 10,425,516 10,425,516 Aetna Life Insurance Co. Contract #014005 4,597,936 4,597,936 4,597,936 The Principal Financial Group Contract #4-08804-01 5,024,934 5,024,934 5,024,934 Contract #4-08804-02 7,985,138 7,985,138 7,985,138 ------------------------------------ $126,138,571 $126,138,571 ==================================== STOCK FUNDS American Express Company common stock 523,614 $ 30,042,353 * $ 12,033,409 Lehman Brothers Holdings Inc. common stock 624,363 19,589,389 * 11,363,000 ------------------------------------ $ 49,631,742 $ 23,396,409 ==================================== MUTUAL FUNDS Twentieth Century Ultra Investors Fund 1,829,588 $ 52,015,185 * $ 41,439,988 Prime Value Obligations Fund 16,757,626 16,757,626 16,757,626 Templeton Foreign Fund 3,175,898 32,711,752 * 29,764,390 Income Fund Of America 1,134,086 18,882,528 * 16,197,319 Fidelity Capital & Income Fund 1,866,652 17,434,530 17,459,339 Vanguard Index Trust 500 Portfolio 431,688 30,377,873 * 23,244,493 PIMCO Total Return Fund 941,665 9,953,400 9,570,046 Vanguard Fixed Income Long-Term Corporate Portfolio 929,657 8,320,428 7,958,488 ------------------------------------ $186,453,322 $162,391,689 ====================================
* Investment in excess of five percent of Net Assets Available for Plan Benefits at end of Plan year 19 Schedule II LEHMAN BROTHERS HOLDINGS INC. TAX DEFERRED SAVINGS PLAN SCHEDULE OF SERIES OF TRANSACTIONS IN EXCESS OF FIVE PERCENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AT BEGINNING OF YEAR FOR THE YEAR ENDED DECEMBER 30, 1996
CONTRACT COST OF PROCEEDS FROM DESCRIPTION NUMBER PURCHASES SALES GAIN(LOSS) - ----------- -------- --------- ------------- ---------- People's Security Insurance Co. BDA00568 $22,828,022 - People's Security Insurance Co. BDA00568 $13,469,987 Metropolitan Life Insurance Co. 24565 $14,984,026 - Metropolitan Life Insurance Co. 24565 $5,037,113 Twentieth Century Ultra Investors $9,618,586 Twentieth Century Ultra Investors $6,989,528 $1,443,608
15 20 Schedule III LEHMAN BROTHERS HOLDINGS INC. TAX DEFERRED SAVINGS PLAN SCHEDULE OF SINGLE TRANSACTIONS IN EXCESS OF FIVE PERCENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AT BEGINNING OF YEAR FOR THE YEAR ENDED DECEMBER 30, 1996
COST OF PROCEEDS FROM DESCRIPTION PURCHASES SALES GAIN(LOSS) - ----------- --------- ------------- ----------
16 21 SIGNATURE Pursuant to the requirements of the Securities and 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 HOLDINGS INC. TAX DEFERRED SAVINGS PLAN By: /s/ Wendy Kleinschmidt -------------------------------- Wendy Kleinschmidt Lehman Brothers Holdings Inc. Employee Benefit Plans Committee June 30, 1997 22 EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- (23) Consent of Experts
EX-23 2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement of Lehman Brothers Holdings Inc. (Form S-8, File No. 333-07875), pertaining to the Lehman Brothers Holdings Inc. Tax Deferred Savings Plan (the "Plan"), of our report dated June 1, 1997 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 30, 1996. /s/ Ernst & Young LLP New York, New York June 26, 1997 -----END PRIVACY-ENHANCED MESSAGE-----