Filed by Lehman Brothers Holdings Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under
the Securities Exchange Act of 1934
Subject Company: Neuberger Berman Inc.
Commission File No. 001-15361
Date: July 22, 2003
The attached document contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, (i) statements about the benefits
of the acquisition of Neuberger Berman by Lehman Brothers, including financial
and operating results, synergy benefits and any accretion to reported earnings
that may be realized from the acquisition; Lehman Brothers' and Neuberger
Berman's plans, objectives, expectations and intentions and other statements
contained in this presentation that are not historical facts; and (ii) other
statements identified by words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates" or words of similar meaning. These
forward-looking statements are based upon management's current beliefs or
expectations and are inherently subject to significant business, economic and
competitive uncertainties and contingencies and third-party approvals, many of
which are beyond our control. The following factors, among others, could cause
actual results to differ materially from the those described in the
forward-looking statements: (1) whether the stockholders of Neuberger Berman
approve the proposed transaction; (2) the satisfaction of the other conditions
specified in the merger agreement, including without limitation the receipt of
required governmental and other third-party approvals of the proposed
transaction; (3) the ability to successfully combine the businesses of Lehman
Brothers and Neuberger Berman; (4) the realization of revenue and cost synergy
benefits from the proposed transaction; (5) operating costs, customer loss and
business disruption following the merger, including adverse effects on
relationships with employees; (6) changes in the stock market and interest
rate environment that affect revenues; and (7) competition. Lehman Brothers
and Neuberger Berman do not undertake any obligation to update any
forward-looking statement to reflect circumstances or events that occur after
the date such forward-looking statement is made.
The attached document shall not constitute an offer of any securities for
sale. The proposed transaction will be submitted to Neuberger Berman's
stockholders for their consideration. Lehman Brothers and Neuberger Berman
will file a registration statement, a proxy statement/prospectus and other
relevant documents concerning the proposed transaction with the SEC.
Stockholders of Neuberger Berman are urged to read the registration statement
and the proxy statement/prospectus and any other relevant documents filed with
the SEC when they become available, as well as any amendments or supplements
to those documents, because they will contain important information.
Stockholders of Lehman Brothers can obtain more information about the proposed
transaction by reviewing the Form 8-K filed by Lehman Brothers in connection
with the announcement of the transaction, and any other relevant documents
filed with the SEC when they become available.
You will be able to obtain a free copy of the proxy statement/prospectus, as
well as other filings containing information about Lehman Brothers and
Neuberger Berman, at the SEC's Internet site (HTTP://WWW.SEC.GOV). Copies of
the proxy statement/prospectus and the SEC filings that will be incorporated
by reference in the proxy statement/prospectus can be obtained, without
charge, by directing a request to Lehman Brothers, Investor Relations, 745
Seventh Avenue, New York, New York 10019
(212-526-3267) or to Neuberger Berman, Corporate Communications, 605 Third
Avenue, New York, New York 10158 (212-476-8125).
Lehman Brothers, Neuberger Berman and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Neuberger Berman in connection with the proposed
transaction. Information about the directors and executive officers of Lehman
Brothers is set forth in the proxy statement on Schedule 14A, dated February
28, 2003, for Lehman Brothers' 2003 annual meeting of stockholders.
Information about directors and executive officers of Neuberger Berman and
their ownership of Neuberger Berman common stock is set forth in the proxy
statement on Schedule 14A, dated April 16, 2003, for Neuberger Berman's 2003
annual meeting of stockholders. Additional information regarding participants
in the proxy solicitation may be obtained by reading the proxy
statement/prospectus regarding the proposed transaction when it becomes
available.
* * *
This filing relates to the proposed merger pursuant to the terms of the
Agreement and Plan of Merger, dated as of July 21, 2003 (the "Merger
Agreement"), among Lehman Brothers Holdings Inc., Ruby Acquisition Company,
and Neuberger Berman Inc. The Merger Agreement was filed by Lehman Brothers
under cover of Form 8-K today and is incorporated by reference into this
filing.
The following joint press release announcing the execution of the Merger
Agreement was issued by Lehman Brothers and Neuberger Berman on July 22, 2003.
* * *
For Immediate Release Lehman Brothers
Media Contact: Hannah Burns
212-526-4064
Investor Contact: Shaun Butler
212-526-8381
Neuberger Berman
Media Contact: Andrea Trachtenberg
212-476-8912
Investor Contact: Robert Matza
212-476-9808
LEHMAN BROTHERS AND NEUBERGER BERMAN
ANNOUNCE STRATEGIC COMBINATION
Creates a Leading Position in High-Net-Worth Marketplace
Conference Call to be Held Today at 9:30 a.m. EDT
New York, New York -- July 22, 2003-- Lehman Brothers Holdings Inc. (NYSE
ticker symbol: LEH) and Neuberger Berman Inc. (NYSE ticker symbol: NEU)
announced today that they have
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entered into a definitive agreement whereby Lehman Brothers will acquire
Neuberger Berman in a transaction valued, at the time of the announcement, at
approximately $2.625 billion (including $42 million in in-the-money options
and less $255 million in net excess cash as of June 30, 2003 and excluding 1.6
million unvested restricted shares in employee compensation plans). Under the
terms of the agreement, based on yesterday's closing stock price, each Neuberger
Berman shareholder would receive an implied price of $41.48 per share consisting
of $9.49 in cash and 0.496 shares of Lehman Brothers common stock. The number of
shares to be received by each Neuberger Berman shareholder may, however, be
adjusted if the price of Lehman Brothers common stock is above $66.51 during a
period shortly prior to closing, subject to a collar.
Transaction Benefits
o The acquisition of Neuberger Berman's Private Asset Management
business will position Lehman Brothers as one of the industry's
leading providers of services to high-net-worth investors
o The addition will bring Lehman Brothers' client assets under
management to over $100 billion
o Neuberger Berman will expand Lehman Brothers' capabilities in the
areas of mutual funds, wrap accounts, institutional separate
accounts, and alternative investments
o Lehman Brothers will provide Neuberger Berman's clients with access
to an expanded range of investment products and services to manage
risk or seek enhanced returns, including structured capital markets
products, private equity, and other alternative and asset management
products
o Neuberger Berman's comprehensive portfolio of money management
products will create incremental product opportunities to be
distributed through Lehman Brothers' global network of institutional
and high-net-worth clients
o The combination is expected to further enhance Lehman Brothers'
revenue diversification and earnings stability, raising the
percentage of revenues from its Client Services Segment from 13% to
21%, on a pro forma basis for 2002
Lehman Brothers Chairman and Chief Executive Officer Richard S. Fuld, Jr.
said, "Neuberger Berman is an ideal partner for Lehman Brothers in every
respect. Strategically, this acquisition meets our objectives of enhancing
business diversification and growing our higher margin businesses.
Financially, we expect the combination to further improve our ability to
generate
3
consistent and attractive cross-cycle results and create additional value for
our shareholders. Culturally, Neuberger Berman is a wonderful fit with our One
Firm culture. Its team-oriented culture, as well as the minimal overlap in our
business platforms, should help ensure a smooth integration process. We look
forward to welcoming everyone at Neuberger Berman as colleagues."
Jeffrey B. Lane, president and chief executive officer of Neuberger Berman,
added, "In Lehman Brothers, we have found the best possible partner. Neuberger
Berman's strategy has been to diversify the breadth of the products and
services we offer in order to meet client needs and be responsive to the
ever-changing global securities markets. This strategy has helped us achieve
solid performance across the business cycle for both our clients and
shareholders. By combining our industry-leading private wealth and asset
management platform with Lehman Brothers' wide range of products and
geographic scope, we can create an even greater array of opportunities
together."
Subsequent to the closing of the transaction, Neuberger Berman will become
part of Lehman Brothers' Client Services Segment's Wealth and Asset Management
Division headed by Theodore P. Janulis. Jeffrey B. Lane will become a vice
chairman of Lehman Brothers, a member of the Office of the Chairman, chairman
of the Wealth and Asset Management Division, and chairman of Neuberger Berman.
Robert Matza will become president of Neuberger Berman and remain its chief
operating officer. In addition, Mr. Matza will join Lehman Brothers'
Management Committee.
Pursuant to the definitive agreement, each share of Neuberger Berman will be
exchanged for $9.49 in cash and a fractional share of Lehman Brothers common
stock based on the average trading price of Lehman Brothers common stock
during a period of time shortly prior to closing. The exchange ratio would be
fixed at 0.496 if the average stock price during that period were $66.51 or
less. If the average stock price were greater than $66.51 but not more than
$73.00, the exchange ratio would vary so that Neuberger Berman shareholders
would receive total per share consideration of $42.50. Above $73.00, the
exchange ratio mechanics vary subject to a minimum exchange ratio of 0.411 if
the average stock price were above $90.41.
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The transaction has been approved by the boards of directors of both companies
and is subject to the approval of Neuberger Berman shareholders and other
closing conditions, regulatory approvals, and termination events. As part of
the overall transaction, the 32 active Neuberger Berman partners who lead most
of the wealth management teams will convert their Neuberger Berman stock,
including approximately $941 million in shares subject to transfer
restrictions, into Lehman Brothers stock and cash on the same basis as the
public shareholders. All Lehman Brothers stock received in exchange for these
restricted shares will continue to be subject to similar transfer
restrictions. Also, Lehman Brothers will establish a $120 million stock
retention pool for key producers, subject to vesting. The transaction is
expected to close during Lehman Brothers' 2003 fiscal fourth quarter. The
transaction is intended to be tax-free with respect to the Lehman Brothers
common stock to be received in the transaction by Neuberger Berman
shareholders. Lehman Brothers was advised in the transaction by its own M&A
advisory group, and Neuberger Berman was advised by Merrill Lynch.
A conference call to discuss Lehman Brothers' acquisition of Neuberger Berman
will be held today, July 22 at 9:30 a.m., EDT. The call will be open to the
public. Members of the public who would like to access the conference call
should dial, from the United States, 888-989-4365 or, from outside the U.S.,
712-271-3214. The pass code for all callers is LEHMAN. The conference call will
also be accessible at http://leh.client.shareholder.com/mediaregister5post.
cfm?mediaid=8769&mediauserid=0. For those unable to listen to the live
broadcast, a replay will be available through the Shareholders section on the
Lehman Brothers Web site, www.lehman.com, or by dialing 888-566-0097 (domestic)
or 402-998-1667 (international). The replay will be available approximately 24
hours after the event and will remain available on the Lehman Brothers Web site
until 5:00 p.m., EDT on August 22, 2003, and by phone until 5:00 p.m., EDT on
August 5, 2003. For additional information about the transaction, please see
the Forms 8-K filed today by Lehman Brothers Holdings Inc. and Neuberger Berman
Inc. with the Securities and Exchange Commission, available through the SEC's
Web site at www.sec.gov. Please direct any questions regarding the conference
call to Shaun Butler at 212-526-8381 or sbutler@lehman.com or Ben Pratt at
212-526-5975 or benjamin.pratt@lehman.com.
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Neuberger Berman Inc., through its subsidiaries, is an investment advisory
company with $63.7 billion in assets under management, as of June 30, 2003.
For 64 years, the Company has provided clients with a broad range of
investment products, services and strategies for individuals, families, and
taxable and non-taxable institutions. The Company engages in wealth management
services including private asset management, tax and financial planning, and
personal and institutional trust services; mutual funds, institutional
management and alternative investments; and professional securities services.
Its Web site can be accessed at www.nb.com.
Lehman Brothers, an innovator in global finance, serves the financial needs of
corporations, governments and municipalities, institutional clients, and
high-net-worth individuals worldwide. Founded in 1850, Lehman Brothers
maintains leadership positions in equity and fixed income sales, trading and
research, investment banking, private equity, and private client services. The
Firm is headquartered in New York, London, and Tokyo and operates in a network
of offices around the world. For further information about Lehman Brothers'
services, products, and recruitment opportunities, please visit its Web site
at www.lehman.com.
# # #
This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, (i) statements about the benefits
of the acquisition of Neuberger Berman by Lehman Brothers, including financial
and operating results, synergy benefits and any accretion to reported earnings
that may be realized from the acquisition; Lehman Brothers' and Neuberger
Berman's plans, objectives, expectations and intentions and other statements
contained in this presentation that are not historical facts; and (ii) other
statements identified by words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates" or words of similar meaning. These
forward-looking statements are based upon management's current beliefs or
expectations and are inherently subject to significant business, economic and
competitive uncertainties and contingencies and third-party approvals, many of
which are beyond our control. The following factors, among others, could cause
actual results to differ materially from those described in the
forward-looking statements: (1) whether the stockholders of Neuberger Berman
approve the proposed transaction; (2) the satisfaction of the other conditions
specified in the merger agreement, including without limitation the receipt of
required governmental and other third-party approvals of the proposed
transaction; (3) the ability to successfully combine the businesses of Lehman
Brothers and Neuberger Berman; (4) the realization of revenue and cost synergy
benefits from the proposed transaction; (5) operating costs, customer loss and
business disruption following the merger, including adverse effects on
relationships with employees; (6) changes in the stock market and interest
rate environment that affect revenues; and (7) competition. Lehman Brothers
and Neuberger Berman do not
7
undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date such forward-looking
statement is made.
This press release shall not constitute an offer of any securities for sale.
The proposed transaction will be submitted to Neuberger Berman's stockholders
for their consideration. Lehman Brothers and Neuberger Berman will file a
registration statement, a proxy statement/prospectus and other relevant
documents concerning the proposed transaction with the SEC. Stockholders of
Neuberger Berman are urged to read the registration statement and the proxy
statement/prospectus and any other relevant documents filed with the SEC when
they become available, as well as any amendments or supplements to those
documents, because they will contain important information. Stockholders of
Lehman Brothers can obtain more information about the proposed transaction by
reviewing the Form 8-K filed by Lehman Brothers in connection with the
announcement of the transaction, and any other relevant documents filed with
the SEC when they become available. You will be able to obtain a free copy of
the proxy statement/prospectus, as well as other filings containing
information about Lehman Brothers and Neuberger Berman, at the SEC's Web site
(HTTP://WWW.SEC.GOV). Copies of the proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the proxy
statement/prospectus can be obtained, without charge, by directing a request
to Lehman Brothers, Investor Relations, 745 Seventh Avenue, New York, New York
10019 (tel: 212-526-3267) or to Neuberger Berman, Corporate Communications,
605 Third Avenue, New York, New York 10158 (tel: 212-476-8125).
Lehman Brothers, Neuberger Berman and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Neuberger Berman in connection with the proposed
transaction. Information about the directors and executive officers of Lehman
Brothers is set forth in the proxy statement on Schedule 14A, dated February
28, 2003, for Lehman Brothers' 2003 annual meeting of stockholders.
Information about directors and executive officers of Neuberger Berman and
their ownership of Neuberger Berman common stock is set forth in the proxy
statement on Schedule 14A, dated April 16, 2003, for Neuberger Berman's 2003
annual meeting of stockholders. Additional information regarding participants
in the proxy solicitation may be obtained by reading the proxy
statement/prospectus regarding the proposed transaction when it becomes
available.