CUSIP NO. 52517PUS8
REGISTERED PRINCIPAL AMOUNT: $35,000,000
No. R-1
LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTE, SERIES G
PERFORMANCE LINKED TO THE VALUE OF A COMMON STOCK, A
STOCK INDEX, A BASKET OF COMMON STOCKS OR A BASKET OF STOCK INDICES
If the registered owner of this Note (as indicated below) is
The Depository Trust Company (the "Depository") or a nominee of the Depository,
this Note is a Note in global form (a "Global Security") and the following
legends are applicable except as specified on the reverse hereof:
This Note is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of the Depository or a nominee of the
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Company (as defined below) or its agent for registration of transfer, exchange
or payment and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY.
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ISSUE PRICE: 100%
ISSUE DATE: June 24, 2003
STATED MATURITY DATE: June 24, 2008
VALUATION DATE: June 17, 2008, subject to postponement if a Market Disruption
Event occurs
INTEREST RATE: 0.25% per annum
INTEREST PAYMENT DATES: June 24 and December 24 of each year, beginning on
December 24, 2003
REGULAR RECORD DATES: 15 calendar days prior to each Interest Payment Date
ACCRUE TO PAY
[X] YES [ ] NO
DETERMINATION PERIOD: Five Business Days
REFERENCE EQUITY: Russell Midcap(R) Growth Index
INITIAL MULTIPLIERS: N/A
INDEX WEIGHTS: N/A
THRESHOLD VALUE: 321.351
EXCHANGE RATE AGENT: N/A
DEPOSITORY: The Depository Trust Company
DUAL CURRENCY NOTE:
[ ] YES [X] NO
OPTION ELECTION DATES: N/A
OPTIONAL PAYMENT
CURRENCY: N/A
OTHER PROVISIONS: N/A
DESIGNATED EXCHANGE
RATE: N/A
OPTION VALUE CALCULATION
AGENT: N/A
OPTION TO RECEIVE PAYMENTS
IN THE SPECIFIED CURRENCY:
[ ] YES [X] NO
SPECIFIED CURRENCY: N/A
AMORTIZING NOTE:
[ ] YES [X] NO
SINKING FUND: No
TOTAL AMOUNT OF OID: N/A
YIELD TO MATURITY: N/A
INITIAL ACCRUAL PERIOD OID: N/A
OID NOTE PREPAYMENT AMOUNT: N/A
AUTHORIZED DENOMINATIONS: $1,000 and integral multiples thereof
EXTENDIBLE NOTE:
[ ] YES [X] NO
EXTENSION PERIOD: N/A
NUMBER OF EXTENSION PERIODS: N/A
OPTIONAL INTEREST RATE RESET:
[ ] YES [X] NO
OPTIONAL RESET DATES: N/A
INITIAL REDEMPTION DATE: June 17, 2005
RENEWABLE NOTE:
[ ] YES [X] NO
INITIAL MATURITY DATE: N/A
SPECIAL ELECTION INTERVAL: N/A
RENEWABLE IN PART:
[ ] YES [X] NO
AUTHORIZED RENEWABLE AMOUNTS: N/A
SPECIAL ELECTION PERIOD: N/A
REDEMPTION NOTICE PERIOD: 30 Business Days
OPTIONAL REPURCHASE NOTICE PERIOD: Eight Business Days
STOCK SETTLEMENT OPTION: No
COMPARABLE YIELD: 2.90% per annum
PROJECTED PAYMENT SCHEDULE: $1.25 semi-annually and $1,142.74 due at Stated
Maturity which includes the final
interest payment
3
LEHMAN BROTHERS HOLDINGS INC., a corporation duly
organized and existing under the laws of the State of Delaware (herein
called the "Company," which term includes any successor corporation
under the Indenture referred to on the reverse hereof), for value
received, hereby promises to pay to CEDE & Co., or registered assigns,
on the Maturity Date, for each $1,000 principal amount of the Notes
represented hereby, an amount equal to the Maturity Payment Amount (as
defined below) and, if so specified above, to pay interest thereon from
the Issue Date specified above or from the most recent Interest Payment
Date specified above to which interest has been paid or duly provided
for at the Interest Rate specified above until the Maturity Payment
Amount hereof is paid or made available for payment and (to the extent
that the payment of such interest shall be legally enforceable) at such
rate per annum on any overdue principal or Maturity Payment Amount (as
the case may be) and premium and on any overdue installment of
interest. Unless otherwise specified above, and except as provided in
Section 8 on the reverse hereof if this Note is a Dual Currency Note
(as hereinafter defined), payments of principal or Maturity Payment
Amount (as the case may be), premium, if any, and interest hereon will
be made in U.S. dollars; if the Specified Currency set forth above is a
currency other than U.S. dollars (a "Foreign Currency"), such payments
will be made in U.S. dollars based on the equivalent of that Foreign
Currency converted into U.S. dollars in the manner set forth in Section
2 on the reverse hereof. If the Specified Currency is a Foreign
Currency and it is so provided above, the Holder may elect to receive
such payments in that Foreign Currency by delivery of a written request
to the Trustee (or to any duly appointed Paying Agent) at the Corporate
Trust Office (as defined below) not later than 10 calendar days prior
to the applicable payment date, and such election will remain in effect
for the Holder until revoked by written notice to the Trustee (or to
any such Paying Agent) at the Corporate Trust Office received not later
than 10 calendar days prior to the applicable payment date; provided,
however, no such election or revocation may be made if, with respect to
this Note, (i) an Event of Default has occurred, (ii) the Company has
exercised any discharge or defeasance options or (iii) the Company has
given a notice of redemption. In the event the Holder makes any such
election pursuant to the preceding sentence, such election will not be
effective on any transferee of such Holder and such transferee shall be
paid in U.S. dollars unless such transferee makes an election pursuant
to the preceding sentence; provided, however, that such election, if in
effect while funds are on deposit with the Trustee to satisfy and
discharge this Note, will be effective on any such transferee unless
otherwise specified above. The "Principal Amount" of this Note at any
time means (i) if this Note is an OID Note, the Amortized Face Amount
at such time as described in Section 7 on the reverse hereof, (ii) if
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this Note is an Amortizing Note, the Outstanding Principal Amount at
such time as described in Section 4 on the reverse hereof, (iii) in all
other cases, the Principal Amount hereof.
If applicable as specified above under "Stock
Settlement Option", on the Maturity Date or upon any optional
redemption by the Company, any repayment at the option of the Holder or
other prepayment of this Note prior to the Maturity Date specified
above, other than as a result of an Event of Default, the Company, at
its sole option and (except in the case of a repayment at the option of
the Holder) with not less than 15 days' prior written notice to the
Trustee, will pay the Maturity Payment Amount either (i) in cash (the
"Cash Settlement Option") or (ii) in shares of the Reference Equity
specified above (and any other equity securities used in the
calculation of the Settlement Value (as defined herein)) (the "Stock
Settlement Option"). If the Company elects the Stock Settlement Option,
no fractional shares of the Reference Equity (or any other equity
securities used in the calculation of the Settlement Value) will be
issued. As a result, even if the Company has elected the Stock
Settlement Option, if fractional shares of any equity securities are
included in the calculation of the Settlement Value, or if a partial
redemption or repayment would result in the delivery of fractional
securities, the Maturity Payment Amount will be paid in cash, rather
than in shares of stock. In the absence of any election notice to the
Trustee as aforesaid, the Company will be deemed to have elected to pay
the Maturity Payment Amount in cash.
In the event of any optional redemption by the
Company, any repayment at the option of the Holder, acceleration of the
maturity of this Note or other prepayment of this Note prior to the
Maturity Date specified above, the term "Maturity" when used herein
shall refer, where applicable, to the date of redemption, repayment,
acceleration or other prepayment of this Note.
An "OID Note" is any Note (a) that has been issued at
an Issue Price lower, by more than a de minimis amount (as determined
under United States federal income tax rules applicable to original
issue discount instruments), than the Principal Amount thereof and (b)
any other Note that for United States federal income tax purposes would
be considered an original issue discount instrument.
Except as provided in the following paragraph, the
Company will pay interest on the dates specified above (each an
"Interest Payment Date"), commencing with the first Interest Payment
Date next succeeding the Issue Date, and at the Maturity Date; provided
that any payment of principal or Maturity Payment Amount (as the case
may be), premium, if any, or interest to be made on any Interest
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Payment Date or on the Maturity Date that is not a Business Day shall
be made on the next succeeding Business Day with the same force and
effect as if made on such Interest Payment Date or such Maturity Date,
as the case may be, and, unless Accrue to Pay is specified on the face
hereof, no additional interest shall accrue as a result of such delayed
payment; provided further that if the Maturity Date is postponed due to
a Market Disruption Event, interest will continue to accrue during the
period from the Stated Maturity Date to and excluding the postponed
Maturity Date. If Accrue to Pay is specified on the face hereof, any
payment of interest on the Interest Payment Date will include interest
accrued through the day before Interest Payment Date. Each payment of
interest hereon shall include interest accrued through the day before
the Interest Payment Date or Maturity Date, as the case may be. Unless
otherwise specified above, interest on this Note will be computed on
the basis of a 360-day year of twelve 30-day months or in the case of
an incomplete month, the number of days elapsed. In no event shall the
interest rate of this Note be higher than the maximum rate permitted by
applicable law, as the same may be modified by United States law of
general application.
Unless otherwise specified above, the interest
payable on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Note (or one or
more predecessor Notes) is registered at the close of business on the
Regular Record Date indicated above (whether or not a Business Day)
next preceding such Interest Payment Date; provided that,
notwithstanding any provision of the Indenture to the contrary,
interest payable on the Maturity Date shall be payable to the Person to
whom the Maturity Payment Amount or principal (as the case may be)
shall be payable; and provided, further, that, unless otherwise
specified above, in the case of a Note initially issued between a
Regular Record Date and the Interest Payment Date relating to such
Regular Record Date, interest for the period beginning on the Issue
Date and ending on such Interest Payment Date shall be paid on the
Interest Payment Date following the next succeeding Regular Record Date
to the registered Holder on such next succeeding Regular Record Date.
Except as provided below, all payments of interest on
this Note may, at the option of the Company, be made by check mailed to
the person entitled thereto at such person's address as it appears on
the registry books of the Company.
Payments of principal or Maturity Payment Amount (as
the case may be), premium, if any, and interest payable on the Maturity
Date will be made in immediately available funds upon surrender of this
Note at the corporate trust office or agency of the Trustee (or any
duly appointed Paying Agent) maintained for that purpose in the Borough
6
of Manhattan, The City of New York (the "Corporate Trust Office"),
provided that this Note is presented to the Trustee (or any such Paying
Agent) in time for the Trustee (or any such Paying Agent) to make such
payments in such funds in accordance with its normal procedures.
The Company will pay any administrative costs imposed
by banks in making payments in immediately available funds, but any
tax, assessment or governmental charge imposed upon payments hereunder,
including, without limitation, any withholding tax, will be borne by
the Holder hereof.
References herein to "U.S. dollars" or "U.S.$" or "$"
are to the coin or currency of the United States as at the time of
payment is legal tender for the payment of public and private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS NOTE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS
PLACE.
This Note shall not be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have
been signed by the Trustee under the Indenture.
IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has
caused this instrument to be signed by its Chairman of the Board, its
President, its Vice Chairman, its Chief Financial Officer, one of its
Vice Presidents or its Treasurer, by manual or facsimile signature
under its corporate seal, attested by its Secretary or one of its
Assistant Secretaries by manual or facsimile signature.
Dated: June 24, 2003
[SEAL] LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Karen Corrigan
-------------------------------------
Karen Corrigan
Vice President
Attest:/s/ Cindy Gregoire
--------------------------------------
Cindy Gregoire
Assistant Secretary
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
CITIBANK, N.A.
as Trustee
By: /s/ Waafa Orfy
---------------------------
Waafa Orfy
Authorized Officer
8
[REVERSE OF NOTE]
LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES G
PERFORMANCE LINKED TO THE VALUE OF A COMMON STOCK, A
STOCK INDEX, A BASKET OF COMMON STOCKS OR A BASKET OF STOCK INDICES
Section 1. General. This Note is one of a duly authorized
series of Notes of the Company designated as the Medium-Term Notes, Series G,
Performance Linked to the Value of a Common Stock, a Stock Index, a Basket of
Common Stocks or a Basket of Stock Indices of the Company (herein called the
"Notes"), which, together with all other Medium-Term Notes, Series G, of the
Company, are limited in aggregate principal amount to $24,820,000,000 (or (i)
the equivalent thereof in Foreign Currencies or (ii) such greater amount, if OID
Notes (as defined on the face hereof) are issued, as shall result in aggregate
gross proceeds to the Company of $24,820,000,000), subject to reduction as a
result of the sale under certain circumstances of other debt securities of the
Company. The foregoing limit, however, may be increased by the Company if in the
future it determines that it may wish to sell additional Notes. The Notes are
one of an indefinite number of series of debt securities of the Company
(collectively, the "Securities") issued or issuable under and pursuant to an
indenture dated as of September 1, 1987, as amended (the "Indenture"), duly
executed and delivered by the Company and Citibank, N.A., as Trustee (herein
called the "Trustee"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Securities. The separate series of Securities may
be issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption provisions or repayment or repurchase rights (if any), may be subject
to different sinking, purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary as in the
Indenture provided.
Section 2. Currency Exchanges and Payments. If the Specified
Currency hereof is a Foreign Currency and the Holder is either not entitled to
elect to receive payments in respect hereof in such Foreign Currency or any such
election is not in effect, the amount of any U.S. dollar payment to be made in
respect hereof will be determined by the Exchange Rate Agent specified on the
face hereof or a successor thereto (the "Exchange Rate Agent"), based on the
9
highest firm bid quotation (expressed in U.S. dollars) in The City of New York
selected by the Exchange Rate Agent at approximately 11:00 a.m., New York City
time, on the second Business Day preceding the applicable payment date, or, if
no such rate is quoted on that date, the last date on which such rate was
quoted. Unless otherwise provided on the face hereof, such selection shall be
made from among the quotations appearing on the bank composite or
multi-contributor pages of the Reuters Monitor Foreign Exchange Service or, if
not available, the Telerate Monitor Foreign Exchange Service. If such quotations
are unavailable from either such foreign exchange service, unless otherwise
provided on the face hereof, such selection shall be made from the quotations
received by the Exchange Rate Agent from three, or if three are not available,
two recognized foreign exchange dealers in The City of New York selected by the
Exchange Rate Agent and approved by the Company (one of which may be the
Exchange Rate Agent) for the purchase by the quoting dealer, for settlement on
such payment date, of the aggregate amount of such Foreign Currency payable on
such payment date in respect of all Notes denominated in such Foreign Currency
and for which the applicable dealer commits to execute a contract. If no such
bid quotations are available, payments will be made in the Foreign Currency.
Unless otherwise specified on the face hereof, if payment
hereon is required to be made in a Foreign Currency and such currency is
unavailable to the Company for making payments thereof due to the imposition of
exchange controls or other circumstances beyond the Company's control, or is no
longer used by the government of the country which issued such currency or for
the settlement of transactions by public institutions of or within the
international banking community, then the Company will be entitled to make
payments with respect hereto in U.S. dollars until such Foreign Currency is
again available or so used. The amount so payable on any date in such Foreign
Currency shall be converted into U.S. dollars at a rate determined by the
Exchange Rate Agent on the basis of the noon buying rate in The City of New York
for cable transfers in the Foreign Currency as certified for customs purposes by
the Federal Reserve Bank of New York (the "Market Exchange Rate") for such
Foreign Currency on the second Business Day prior to such payment date, or on
such other basis as may be specified on the face hereof. In the event such
Market Exchange Rate is not then available, the Company will be entitled to make
payments in U.S. dollars (i) if such Foreign Currency is not a composite
currency, on the basis of the most recently available Market Exchange Rate for
such Foreign Currency or (ii) if such Foreign Currency is a composite currency,
including, without limitation, the ECU, in an amount determined by the Exchange
Rate Agent to be the sum of the results obtained by multiplying the number of
units of each component currency of such composite currency, as of the most
recent date on which such composite currency was used, by the Market Exchange
Rate for such component currency on the second Business Day prior to such
payment date (or if such Market Exchange Rate is not then available, by the most
10
recently available Market Exchange Rate for such component currency, or as
otherwise specified on the face hereof). Any payment in respect hereof made
under such circumstances in U.S. dollars will not constitute an Event of Default
under the Indenture.
If the official unit of any component currency of a composite
currency is altered by way of combination or subdivision, the number of units of
that currency as a component shall be divided or multiplied in the same
proportion. If two or more component currencies are consolidated into a single
currency, the amounts of those currencies as components shall be replaced by an
amount in such single currency equal to the sum of the amounts of the
consolidated component currencies expressed in such single currency. If any
component currency is divided into two or more currencies, the amount of that
original component currency as a component shall be replaced by amounts of such
two or more currencies having an aggregate value on the date of division equal
to the amount of the former component currency immediately before such division.
In the event of an official redenomination of the Specified
Currency or the Optional Payment Currency (including, without limitation, an
official redenomination of any such currency that is a composite currency), the
obligations of the Company to make payments in or with reference to such
currency shall, in all cases, be deemed immediately following such
redenomination to be obligations to make payments in or with reference to that
amount of redenominated currency representing the amount of such currency
immediately before such redenomination. In no event shall any adjustment be made
to any amount payable hereunder as a result of (i) any redenomination of any
component currency of any composite currency (unless such composite currency is
itself officially redenominated) or (ii) any change in the value of the
specified currency or the Optional Payment Currency relative to any other
currency due solely to fluctuations in exchange rates.
All determinations referred to above made by the Exchange Rate
Agent shall be at its sole discretion (except to the extent expressly provided
herein that any determination is subject to approval by the Company) and, in the
absence of manifest error, shall be conclusive for all purposes and binding on
the Holder hereof, and the Exchange Rate Agent shall have no liability therefor.
All currency exchange costs will be borne by the Holder hereof
by deduction from the payments made hereon.
11
Section 3. Redemption. The Company may at its option redeem
this Note in whole or from time to time in part on or after the date designated
as the Initial Redemption Date on the face hereof at the Redemption Amount,
together with accrued interest to the Redemption Date. "Redemption Amount" shall
mean the Maturity Payment Amount calculated as though the Redemption Date were
the Stated Maturity Date and the date on which notice of redemption is given in
accordance with the Indenture were the Valuation Date. The Company may exercise
such option by causing the Trustee to mail by first-class mail to the Holder
hereof a notice of such redemption at least 30 but not more than 60 days (or
such other Redemption Notice Period specified on the face hereof) prior to the
Redemption Date. In the event of redemption of this Note in part only, a new
Note or Notes of this series for the unredeemed portion hereof shall be issued
in the name of the Holder hereof upon the cancellation hereof in accordance with
the terms of the Indenture. Unless otherwise specified on the face hereof, if
less than all of the Notes with like tenor and terms to this Note are to be
redeemed, the Notes to be redeemed shall be selected by the Trustee by such
method as the Trustee shall deem fair and appropriate.
Section 4. Sinking Funds and Amortizing Notes. Unless
otherwise specified on the face hereof or unless this Note is an Amortizing
Note, this Note will not be subject to any sinking fund. If it is specified on
the face hereof that this Note is an Amortizing Note, the Company will make
payments combining Redemption Amount and interest on the dates and in the
amounts set forth in the table appearing in Schedule I, attached to this Note.
If this Note is an Amortizing Note, payments made hereon will be applied first
to interest due and payable on each such payment date and then to the reduction
of the Outstanding Principal Amount. The term "Outstanding Principal Amount"
means, at any time, the amount of unpaid principal hereof at such time.
Section 5. Optional Repurchase. At any time until the earlier
of (a) the date the Company gives notice of its intention to redeem this Note
pursuant to Section 3 or (b) eight Business Days (or such other Optional
Repurchase Cutoff Period specified on the face hereof) before the Stated
Maturity Date, this Note will be repayable prior to the Stated Maturity Date at
the option of the Holder at the Optional Repurchase Amount. The "Optional
Repurchase Amount" shall be the Maturity Payment Amount calculated as though the
Optional Repurchase Date were the Stated Maturity Date and the date that is a
number of business days equal to the Determination Period before that date were
the Valuation Date, together with accrued interest to the applicable Optional
Repayment Date. The "Optional Repurchase Date" shall be the eighth Business Day
following the Business Day on which the Company receives a written notice of
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election to require repurchase of this Note in the manner specified in the
following sentence. In order for this Note to be so repaid, the Trustee must
receive, before the earlier of (a) the date the Company gives notice of its
intention to redeem this Note pursuant to Section 3 or (b) eight Business Days
(or such other Optional Repurchase Cutoff Period specified on the face hereof)
before the Stated Maturity Date, either (i) this Note with the form below
entitled "Option to Elect Repayment" duly completed or (ii) a telegram, telex,
fax or letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company in
the United States setting forth the name of the Holder hereof, the Principal
Amount hereof, the Principal Amount to be repaid, the certificate number hereof
or a description of the tenor and terms of this Note, a statement that the
option to elect repayment is being exercised thereby and a guarantee that this
Note with the form below entitled "Option to Elect Repayment" duly completed
will be received by the Paying Agent not later than five Business Days after the
date of such telegram, telex, fax or letter and this Note and form duly
completed are received by the Paying Agent by such fifth Business Day. Exercise
of this repayment option shall be irrevocable, except as otherwise provided
under Section 6 or Section 9. The repayment option may be exercised by the
Holder of this Note with respect to less than the Principal Amount then
outstanding provided that the Principal Amount of the Note remaining outstanding
after repayment is an authorized denomination. Upon such partial repayment this
Note shall be cancelled and a new Note or Notes for the remaining Principal
Amount hereof shall be issued in the name of the Holder of this Note.
If this note is a Global Security, the holder of this Note, the nominee
of the Depositary, will be the only entity that can exercise a right to
repayment. In order to ensure that the nominee of the depositary will timely
exercise a right to repayment relating to this Note, the beneficial owner of
this Note must instruct the broker or other direct of indirect participant
through which it holds an interest in this Note to notify the Depositary of its
desire to exercise a right to repayment.
Section 6. Optional Interest Reset. If so specified on the
face hereof, the Interest Rate on this Note may be reset at the option of the
Company, in the manner set forth below (unless otherwise specified on the face
hereof), on the Optional Reset Date or Optional Reset Dates specified on the
face hereof. The Company may exercise such option by notifying the Trustee of
such exercise at least 45 but not more than 60 days prior to an Optional Reset
Date. Not later than five Business Days after receipt thereof, the Trustee will
mail by first-class mail to the Holder of this Note a notice (the "Reset
Notice") setting forth (i) the election of the Company to reset the interest
rate, (ii) such new interest rate and (iii) the provisions, if any, for
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redemption during the period from such Optional Reset Date to the next Optional
Reset Date or, if there is no such next Optional Reset Date, to the Maturity
Date of this Note (each such period a "Subsequent Interest Period"), including
the date or dates on which or the period or periods during which and the price
or prices at which such redemption may occur during such Subsequent Interest
Period. The Reset Notice shall be substantially in the form of Exhibit A to this
Note. Upon the transmittal by the Trustee of a Reset Notice to the Holder of
this Note, such new interest rate shall take effect automatically, and, except
as modified by the Reset Notice and as described in the next paragraph, this
Note will have the same terms as prior to the transmittal of such Reset Notice.
Notwithstanding the foregoing, not later than 20 days prior to
an Optional Reset Date, the Company may, at its option, revoke the interest rate
provided for in the Reset Notice and establish an interest rate that is higher
than the interest rate provided for in the Reset Notice for the Subsequent
Interest Period commencing on such Optional Reset Date by causing the Trustee to
mail by first-class mail notice of such higher interest rate to the Holder of
this Note. Such notice shall be irrevocable and shall be mailed by the Trustee
within five Business Days after receipt thereof. All Notes with respect to which
the interest rate is reset on an Optional Reset Date will bear such higher
interest rate for the Subsequent Interest Period.
If the Company elects to reset the interest rate of this Note,
the Holder of this Note will have the option to elect repayment by the Company
of this Note, or any portion hereof, on any Optional Reset Date at a price
calculated with reference to (a) the Principal Amount of this Note, (b) the
Maturity Payment Amount calculated as though the Optional Reset Date were the
Stated Maturity Date and the date that is a number of business days equal to the
Determination Period before that date were the Valuation Date, or (c) such other
amount or amounts, in each case as specified on the face hereof, plus any
interest accrued to, such Optional Reset Date. In order to obtain repayment on
an Optional Reset Date, the Holder must follow the procedures set forth above in
Section 5 for optional repayment except that the period for delivery or
notification to the Trustee shall be at least 25 but not more than 35 days prior
to such Optional Reset Date and except that, if the Holder has tendered this
Note for repayment pursuant to the Reset Notice, the Holder may, by written
notice to the Trustee, revoke such tender for repayment until the close of
business on the tenth day prior to such Optional Reset Date; provided, however,
that if such day is not a Business Day, then such notice may be given on the
next succeeding Business Day.
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Section 7. OID Notes. If this Note is an OID Note, the amount
payable in the event of redemption by the Company, repayment at the option of
the Holder or acceleration of Maturity shall be (i) the Amortized Principal
Amount of this Note as of the date of such redemption, repayment or acceleration
rather than the Principal Amount hereof or (ii) such other amount as specified
on the face hereof (such amount, the "OID Note Prepayment Amount"). The
"Amortized Principal Amount" of this Note shall be the amount equal to (a) the
Issue Price (as set forth on the face hereof) plus (b) that portion of the
difference between the Issue Price and the Principal Amount hereof that has
accrued at the Yield to Maturity set forth on the face hereof (computed in
accordance with generally accepted United States bond yield computation
principles) at the date as of which the Amortized Principal Amount is
calculated, but in no event shall the Amortized Principal Amount of this Note
exceed the Principal Amount.
Section 8. Dual Currency Notes. If it is specified on the face
hereof that this Note is a Dual Currency Note, the Company has a one time
option, exercisable on any one of the Option Election Dates specified on the
face hereof in whole, but not in part, with respect to all Dual Currency Notes
issued on the same day and having the same terms as this Note (this "Tranche"),
of thereafter making all payments of principal or Maturity Payment Amount (as
the case may be), premium, if any, and interest (which payments would otherwise
be made in the Specified Currency of such Notes) in the Optional Payment
Currency specified on the face hereof. If the Company makes such an election,
the amount of Optional Payment Currency payable in respect hereof shall be
determined by the Exchange Rate Agent by converting the amount of Specified
Currency that would otherwise be payable into the Optional Payment Currency at
the Designated Exchange Rate specified on the face hereof.
The Company may exercise such option by notifying the Trustee of such
exercise on or prior to the Option Election Date. The Trustee will mail by
first-class mail to each holder of a Note of this Tranche a notice of such
election within five Business Days of the Option Election Date which shall state
(i) the first date, whether an Interest Payment Date and/or the Maturity Date,
on which scheduled payments in the Optional Payment Currency will be made and
(ii) the Designated Exchange Rate. Any such notice by the Company, once given,
may not be withdrawn.
If this Note is a Dual Currency Note, notwithstanding any prior
election made by the Company, the amount payable hereon in the event of any
optional redemption by the Company, any repayment at the option of the Holder,
any acceleration of the Maturity of this Note or other prepayment of this Note
15
prior to the Maturity Date shall be (a) an amount equal to the amount otherwise
due and payable plus accrued interest to but excluding the date of redemption,
repayment, acceleration or other prepayment minus the Total Option Value
multiplied by a fraction, the numerator of which is the Principal Amount hereof
and the denominator of which is the aggregate Principal Amount of all Dual
Currency Notes of this Tranche or (b) such other amount as specified on the face
hereof (such amount, the "Dual Currency Note Prepayment Amount"). In no event
will such payment be less than zero. Notwithstanding any prior election made by
the Company, such payment shall be made in the Specified Currency unless
otherwise provided on the face hereof.
The term "Total Option Value" means, with respect to any Dual Currency
Note on any date, an amount (calculated as of such date by the Option Value
Calculation Agent) equal to the sum of the Option Values (calculated as of such
date by the Option Value Calculation Agent) for all Interest Payment Dates
occurring after the date of calculation up to and including the Maturity Date.
The term "Option Value" means, with respect to an Interest Payment Date or the
Maturity Date, the amount calculated by the Option Value Calculation Agent to be
the arithmetic average of the prices quoted on the date of calculation by three
reference banks (which banks shall be selected by the Option Value Calculation
Agent and shall be reasonably acceptable to the Company) for the right on the
Option Election Date immediately preceding such Interest Payment Date or
Maturity Date to purchase for value on such Interest Payment Date or Maturity
Date from such reference banks (A) the aggregate amount of the Specified
Currency due on such Interest Payment Date or Maturity Date with respect to all
of the Dual Currency Notes of this Tranche in exchange for (B) the amount of the
Optional Payment Currency that would be received if the amount in clause (A)
were converted into the Optional Payment Currency at the Designated Exchange
Rate.
All determinations referred to above made by the Exchange Rate Agent or
the Option Value Calculation Agent shall be at their sole discretion (except to
the extent expressly provided herein that any determination is subject to
approval by the Company) and, in the absence of manifest error, shall be
conclusive for all purposes and binding on the Holder hereof, and neither the
Exchange Rate Agent nor the Option Value Calculation Agent shall have any
liability therefor.
Section 9. Extendible Notes. If it is specified on the face
hereof that this Note is an Extendible Note, the Company has the option to
extend the Stated Maturity Date hereof for the number of Extension Periods set
forth on the face hereof, each of which Extension Periods shall be a period of
16
from one to five whole years. Unless otherwise specified on the face hereof, the
following procedures shall apply if this Note is an Extendible Note.
The Company may exercise its option by notifying the Trustee of such
exercise at least 45 but not more than 60 days prior to the Stated Maturity Date
hereof in effect prior to the exercise of such option (the "Original Stated
Maturity"). Not later than five Business Days after receipt thereof, the Trustee
will mail to the Holder a notice (the "Extension Notice"), first class, postage
prepaid, setting forth (i) the election of the Company to extend the Maturity
Date, (ii) the new Stated Maturity Date, (iii) the Interest Rate applicable to
the Extension Period and (iv) the provisions, if any, for redemption during the
Extension Period, including the date on which or the period or periods during
which and the price at which such redemption may occur during the Extension
Period. Upon the mailing by the Trustee of an Extension Notice to the Holder,
the Stated Maturity Date hereof shall be extended automatically, and, except as
modified by the Extension Notice and as described in the next paragraph, this
Note will have the same terms as prior to the mailing of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the
Original Stated Maturity hereof, the Company may, at its option, revoke the
interest rate provided for in the Extension Notice and establish a higher
interest rate for the Extension Period by causing the Trustee to mail notice of
such higher interest rate, first class, postage prepaid, to the Holder. Such
notice shall be irrevocable and shall be mailed by the Trustee within three
Business Days after receipt thereof. This Note will bear such higher interest
rate for the Extension Period, whether or not tendered for repayment.
If the Company extends the Stated Maturity Date of this Note, the
Holder will have the option to elect repayment by the Company of this Note, or
any portion hereof, on the Original Stated Maturity at a price calculated with
reference to (a) the Principal Amount of this Note, (b) the Maturity Payment
Amount calculated as though the Original Stated Maturity Date were the Stated
Maturity Date and the date that is a number of business days equal to the
Determination Period before that date were the Valuation Date, or (c) such other
amount or amounts, in each case as specified on the face hereof). In order for
this Note to be so repaid on the Original Stated Maturity, the Holder must
follow the procedures set forth in Section 5 hereof for optional repayment,
except that the period for delivery of this Note or notification to the Trustee
shall be at least 25 but not more than 35 days prior to the Original Stated
Maturity and except that the Holder may, by written notice to the Trustee,
17
revoke any such tender for repayment until the close of business on the tenth
day prior to the Original Stated Maturity; provided, however, that if such day
is not a Business Day, then such notice may be given on the next succeeding
Business Day.
Section 10. Renewable Notes. If it is specified on the face
hereof that this Note is a Renewable Note, this Note will mature on the Initial
Maturity Date specified on the face hereof unless the Maturity of all or any
portion of this Note is extended in accordance with the procedures described
below.
On the Interest Payment Date occurring in the sixth month (unless a
different Special Election Interval is specified on the face hereof) prior to
the Initial Maturity Date hereof (the "Initial Maturity Extension Date") and on
the Interest Payment Date occurring in each sixth month (or the last month of
each Special Election Interval) after such Initial Maturity Extension Date
(each, together with the Initial Maturity Extension Date, a "Maturity Extension
Date"), the Maturity of this Note will be extended to the Interest Payment Date
occurring in the twelfth month (or, if a Special Election Interval is specified
on the face hereof, the last month in a period equal to twice the Special
Election Interval) after such Maturity Extension Date, unless the Holder elects
to terminate the extension of the Maturity hereof or any portion hereof as
described below.
If the Holder elects to terminate the extension of the Maturity of any
portion of the principal amount of this Note during the specified period prior
to any Maturity Extension Date, such portion will become due and payable on the
Interest Payment Date occurring in the sixth month (or the last month in the
Special Election Interval) after such Maturity Extension Date (the "Extended
Maturity Date").
The Holder may elect to renew the Maturity of this Note, or if so
specified above, any portion hereof, by delivering a notice to such effect to
the Trustee (or any duly appointed Paying Agent) at the Corporate Trust Office
not less than 3 nor more than 15 days prior to such Maturity Extension Date
(unless another period is specified on the face hereof as the "Special Election
Period"). Such election will be irrevocable and will be binding upon each
subsequent Holder of this Note. An election to renew the Maturity of this Note
may be exercised with respect to less than the entire Principal Amount hereof
only if so specified on the face hereof and only in such Principal Amount, or
any integral multiple in excess thereof, as is specified on the face hereof.
Notwithstanding the foregoing, the Maturity of this Note will not be extended
beyond the Stated Maturity Date specified on the face hereof.
Unless otherwise specified above, any election not to renew will be
effective only if this Note is presented to the Trustee (or any duly appointed
Paying Agent) as soon as practicable. Following receipt of this Note the Trustee
18
(or any duly appointed Paying Agent) shall issue in exchange herefor in the name
of the Holder (i) a Note, in a face amount equal to the Principal Amount of this
Note for which no election to renew was exercised, with terms identical to those
specified herein (except for the Issue Date and the Initial Interest Rate and
except that such Note shall have a fixed, non-extendable Maturity on the
Extended Maturity Date) and (ii) if such election not to renew is made with
respect to less than the full Principal Amount hereof, a replacement Renewable
Note, in a face amount equal to the Principal Amount of this Note for which an
election to renew was made, with terms identical to this Note.
Section 11. Principal Amount For Indenture Purposes. For the
purpose of determining whether Holders of the requisite amount of Notes
outstanding under the Indenture have made a demand, given a notice or waiver or
taken any other action, the outstanding principal amount of this Note will be
deemed to be the Principal Amount.
Section 12. Modification and Waivers. The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the
holders of not less than 66-2/3% in aggregate principal amount of each series of
the Securities at the time Outstanding to be affected, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities of all such series; provided, however, that no such
supplemental indenture shall, among other things, (i) change the fixed maturity
of any Security, or reduce the principal amount or Maturity Payment Amount
thereof, or reduce the rate or extend the time of payment of interest thereon or
reduce any premium or other amount payable on redemption, or make the principal
or Maturity Payment Amount thereof, or premium or other amount payable, if any,
or interest thereon payable in any coin or currency other than that hereinabove
provided, without the consent of the holder of each Security so affected, or
(ii) change the place of payment on any Security, or impair the right to
institute suit for payment on any Security, or reduce the aforesaid percentage
of Securities, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of each Security so
affected. It is also provided in the Indenture that, prior to any declaration
accelerating the Maturity of any series of Securities, the holders of a majority
in aggregate principal amount of the Securities of such series Outstanding may
on behalf of the holders of all the Securities of such series waive any past
default or Event of Default under the Indenture with respect to such series and
its consequences, except a default in the payment of interest, if any, on or the
principal or Maturity Payment Amount (as the case may be) of, or premium, if
19
any, on any of the Securities of such series, or in the payment of any sinking
fund installment or analogous obligation with respect to Securities of such
series. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future holders and owners
of this Note and any Notes which may be issued in exchange or substitution
herefor, irrespective of whether or not any notation thereof is made upon this
Note or such other Notes.
Section 13. Obligations Unconditional. No reference herein to
the Indenture and no provisions of this Note or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of or Maturity Payment Amount (as the case may be), premium,
if any, and interest, if any, on this Note at the place, at the respective
times, at the rate, and in the coin or currency herein prescribed.
Section 14. Defeasance. The Indenture contains provisions for
the discharge of the Indenture and defeasance at any time of the indebtedness on
this Note upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.
Section 15. Authorized Form and Denominations. The Notes of
this series are issuable in registered form, without coupons. Unless otherwise
set forth on the face hereof, Notes denominated in U.S. dollars will be issued
in Principal Amount denominations of U.S. $1,000 and any integral multiple of
U.S. $1,000 in excess thereof. Notes denominated in a Foreign Currency will be
issued in a denomination approximately equivalent to Notes denominated in U.S.
dollars. Each Note will be issued initially as either a Global Security or a
Certificated Note, at the option of the Company, either at the office or agency
to be designated and maintained by the Company for such purpose in the Borough
of Manhattan, The City of New York, pursuant to the provisions of the Indenture
or at any of such other offices or agencies as may be designated and maintained
by the Company for such purpose pursuant to the provisions of the Indenture, and
in the manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge, except for any tax or other
governmental charges imposed in connection therewith. Notes of this series are
exchangeable for a like aggregate Principal Amount of Notes of this series of a
different authorized denomination, except that Global Securities will not be
exchangeable for Certificated Notes.
20
Section 16. Registration of Transfer. As provided in the
Indenture and subject to certain limitations as therein set forth, the transfer
of this Note is registrable in the Security Register, upon surrender of this
Note for registration of transfer, at the Corporate Trust Office or agency in a
Place of Payment for this Note, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar requiring such written instrument of transfer duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of this series, of authorized denominations and for the same
aggregate Principal Amount, will be issued to the designated transferee or
transferees.
If this Note is a Global Security and if at any time the
Depository notifies the Company that it is unwilling or unable to continue as
Depository or if at any time the Depository shall no longer be eligible under
the Indenture, the Company shall appoint a successor Depository. If a successor
Depository for the Securities of such series is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will issue, and the Trustee will authenticate and
deliver, Notes in definitive form in an aggregate Principal Amount equal to the
Principal Amount hereof.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name this Note is registered as the owner hereof
for all purposes, and neither the Company nor the Trustee nor any agent of the
Company or of the Trustee shall be affected by any notice to the contrary.
Section 17. Events of Default. If an Event of Default with
respect to Notes of this series shall occur and be continuing, the principal of
the Notes of this series may be declared due and payable in the manner and with
the effect provided in the Indenture. The amount payable to the Holder hereof
upon any acceleration permitted under the Indenture will be equal to the
Maturity Payment Amount calculated as though the date to which the maturity has
been accelerated were the Stated Maturity Date and the date that is a number of
business days equal to the Determination Period before that date were the
Valuation Date. In any such case, if the Stock Settlement Option is available to
the Company, the Company will be deemed to have elected the Cash Settlement
Option. Upon payment (i) of the aggregate applicable amounts on the Notes of
21
this series so declared due and payable and (ii) of interest on any overdue
principal or Maturity Payment Amount (as the case may be) and overdue interest
(in each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal or Maturity Payment Amount (as the case may be) of and interest, if
any, on the Notes of this series shall terminate.
Section 18. No Recourse Against Certain Persons. No recourse
for the payment of the principal or Maturity Payment Amount (as the case may be)
of, premium, if any, or interest on this Note, or for any claim based hereon or
otherwise in respect hereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or any Indenture
supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
Section 19. Tax Treatment. The Company agrees, and by
acceptance of beneficial ownership interest in the Notes each beneficial holder
of the Notes will be deemed to have agreed, for United States federal income tax
purposes, (i) to treat the Notes as indebtedness that is subject to Treas. Reg.
Sec. 1.1275-4 (the "Contingent Payment Regulations") and (ii) to be bound by the
Company's determination of the "comparable yield" and "projected payment
schedule," within the meaning of the Contingent Payment Regulations, with
respect to the Notes. The "comparable yield" and the "projected payment
schedule", as determined by the Company per $1,000 note, are specified on the
face hereof.
Section 20. Defined Terms. All terms used but not defined in
this Note are used herein as defined in the Indenture.
Section 21. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 22. Definitions. Set forth below are definitions of
certain of the terms used in this Note.
"ADR" shall mean American Depositary Receipt.
22
"Alternative Redemption Amount" shall mean, per $1,000 Note,
the product of (a) $1,000 and (b) the Settlement Value on the relevant Payment
Determination Date, divided by the Threshold Value.
"AMEX" shall mean the American Stock Exchange LLC.
"Average Execution Price" for a security or other property
shall mean the average execution price that an affiliate of the Company receives
or pays for such security or property, as the case may be, to hedge the
Company's obligations under the Notes.
"Business Day", notwithstanding any provision in the
Indenture, shall mean any day that is not a Saturday, a Sunday or a day on which
the NYSE, Nasdaq or AMEX is not open for trading or banking institutions or
trust companies in the City of New York are authorized or obligated by law or
executive order to close, and, (a) if the Specified Currency is a Foreign
Currency other than Euros, not a day on which banking institutions are
authorized or required by law to close in the Principal Financial Center of the
country issuing the Foreign Currency and (b) if the Specified Currency is Euros,
a day on which the Trans-European Automated Real-Time Gross Settlement Express
Transfer System is open. "Principal Financial Center" means the capital city of
the country issuing the specified currency. However, for U.S. dollars,
Australian dollars, Canadian dollars and Swiss francs, the Principal Financial
Center will be New York City, Sydney, Toronto and Zurich, respectively.
"Calculation Agency Agreement" shall mean the Calculation
Agency Agreement, dated as of June 24, 2003, between the Company and the
Calculation Agent, as amended from time to time.
"Calculation Agent" shall mean the person that has entered
into an agreement with the Company providing for, among other things, the
determination of the Settlement Value and the Payment Amount, which term shall,
unless the context otherwise requires, include its successors and assigns. The
initial Calculation Agent shall be Lehman Brothers Inc.
"Calculation Day" shall mean (a) for payment at the Stated
Maturity Date, the Valuation Date, (b) for a payment upon a Repurchase, the date
which is the number of Business Days equal to the Determination Period before
the Non-Delaying Event Repurchase Date or (c) for payment upon a Redemption, the
date the Redemption Notice is given in accordance with the Indenture.
"Cash Settlement Option" shall have the meaning set forth on
the face of this Note.
23
"Close of Trading" shall mean 4:00 p.m., New York City time.
"Closing Level", shall mean, when used with respect to any
Relevant Index on any Payment Determination Date, the last reported level of the
Relevant Index, the Successor Index for the Relevant Index or any security which
is a component of any such index, as the case may be, at the Close of Trading
for such day, as reported by the publisher of such index or the primary exchange
on which any such security then trades, as the case may be.
"Closing Price" shall mean, for each Settlement Value
Security, as determined by the Calculation Agent based on information reasonably
available to it:
(i) If the Settlement Value Security is listed on a United
States national securities exchange or trading system or is a security
quoted on Nasdaq, the last reported sale price per share at the Close
of Trading, regular way, on such day, on the primary securities
exchange registered under the Securities Exchange Act of 1934 on which
such Settlement Value Security is listed or admitted to trading or
Nasdaq, as the case may be.
(ii) If the Settlement Value Security is listed or quoted on a
non-United States securities exchange, trading system (other than a
bulletin board) or market, the last reported sale price at the Close of
Trading, regular way, on such day, on the primary exchange, trading
system or market on which such Settlement Value Security is listed,
quoted or admitted to trading, as the case may be. The Closing Price
per share shall then be converted into U.S. dollars using the Official
W.M. Reuters Spot Closing Rate at 11:00 a.m., New York City time. If
there are several quotes for the Official W.M. Reuters Spot Closing
Rate at that time, the first quoted rate starting at 11:00 a.m. shall
be the rate used. If there is no such Official W.M. Reuters Spot
Closing Rate for a country's currency at 11:00 a.m., New York City
time, the Closing Price shall be converted into U.S. dollars using the
last available U.S. dollar cross-rate quote before 11:00 a.m., New York
City time.
(iii) If the Settlement Value Security is not listed on a
national securities exchange or trading system or is not a Nasdaq
security, and is listed or traded on a bulletin board, the Average
Execution Price per share of the Settlement Value Security. If such
Settlement Value Security is listed or traded on a non-United States
bulletin board, the Closing Price will then be converted into U.S.
dollars using the Official W.M. Reuters Spot Closing Rate at 11:00
a.m., New York City time. If there are several quotes for the Official
24
W.M. Reuters Spot Closing Rate at that time, the first quoted rate
starting at 11:00 a.m. shall be the rate used. If there is no such
Official W.M. Reuters Spot Closing Rate for a country's currency at
11:00 a.m., New York City time, the Closing Price shall be converted
into U.S. dollars using the last available U.S. dollar cross-rate quote
before 11:00 a.m., New York City time.
"Company" shall have the meaning set forth on the face of this
Note.
"Delaying Event" shall mean a Market Disruption Event for a
Settlement Value Security or a Relevant Index which occurs on the relevant
Calculation Day.
"Delaying Event Redemption Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Redemption, the later of (a) the
Non-Delaying Event Redemption Date and (b) the number of Business Days equal to
the Determination Period after the Payment Determination Date thereof.
"Delaying Event Repurchase Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Repurchase, the number of Business
Days equal to the Determination Period after the Payment Determination Date
thereof.
"Determination Period" shall have the meaning set forth on the
face of this Note.
"Ending Multiplier" shall mean, for each Settlement Value
Security, the initial Multiplier for such Settlement Value Security adjusted
from time to time for the occurrence, prior to the Close of Trading on the
relevant Calculation Day, of any of the extraordinary corporate transactions
described in Section 4 of Annex A of the Calculation Agency Agreement.
"Indenture" shall have the meaning set forth on the reverse of
this Note.
"Index Weight" shall mean, if the Reference Equity is a basket
of stock indices, for each Relevant Index, the number by which the Closing Level
of such Relevant Index will be multiplied in order to calculate the Settlement
Value. The Index Weight relating to each Relevant Index included in the
Reference Equity shall be specified on the face of this Note.
"Market Disruption Event" with respect to a Settlement Value
Security or a Relevant Index means any of the following events as determined by
the Calculation Agent:
25
(1) A suspension, absence or material limitation of trading of
(a) in the case of a Settlement Value Security, such Settlement Value
Security, or (b) in the case of a Relevant Index, 20% or more of the
underlying stocks which then comprise such Relevant Index or any
Successor Index, has occurred on that day, in each case, for more than
two hours of trading or during the one-half hour period preceding the
Close of Trading on the primary organized U.S. exchange or trading
system on which such securities are traded or, if such securities are
not listed or quoted in the United States, on the primary exchange,
trading system or market for such securities. Limitations on trading
during significant market fluctuations imposed pursuant to the rules of
any primary organized U.S. exchange or trading system similar to NYSE
Rule 80B or any applicable rule or regulation enacted or promulgated by
the NYSE, any other exchange, trading system, or market, any other self
regulatory organization or the Securities and Exchange Commission of
similar scope or as a replacement for Rule 80B, may be considered
material. Notwithstanding the first sentence of this paragraph, a
Market Disruption Event for a security traded on a bulletin board means
a suspension, absence or material limitation of trading of such
security for more than two hours or during the one hour period
preceding the Close of Trading.
(2) A suspension, absence or material limitation has occurred
on that day, in each case, for more than two hours of trading or during
the one-half hour period preceding the Close of Trading in options
contracts related to such Settlement Value Security or such Relevant
Index, whether by reason of movements in price exceeding levels
permitted by an exchange, trading system or market on which such
options contracts related to such Settlement Value Security or such
Index are traded or otherwise.
(3) Information is unavailable on that date, through a
recognized system of public dissemination of transaction information,
for more than two hours of trading or during the one-half hour period
preceding the Close of Trading, of accurate price, volume or related
information in respect of (a) in the case of a Settlement Value
Security, such Settlement Value Security, or (b) in the case of a
Relevant Index, 20% or more of the underlying stocks which then
comprise such Relevant Index or any Successor Index or in respect of
options contracts related to such Settlement Value Security or such
Relevant Index, in each case traded on any major U.S. exchange or
trading system or, in the case of securities of a non-U.S. issuer, the
primary non-U.S. exchange, trading system or market.
26
(4) It has become (i) impracticable for the Company or its
affiliates to (A) acquire, establish, re-establish, substitute,
maintain, unwind or dispose of any transactions or assets that the
Company deems necessary to hedge the equity price risk of entering into
and performing its obligations with respect to the Securities or (B)
realize, recover or remit the proceeds of any such transactions or
assets or (ii) impossible for the Company or its affiliates to perform
any activities mentioned in (A) or (B) above or to borrow any assets in
connection with hedging the Company's obligations under the Securities
without any increase in costs above the anticipated costs of such
borrowing.
If the Reference Equity (as specified on the face hereof) is a
basket of common stocks or indices, a Market Disruption Event with respect to
the basket will occur if a Market Disruption Event occurs with respect to any of
the common stocks or indices included in the basket.
For purposes of determining whether a Market Disruption Event
has occurred:
(i) a limitation on the hours or number of days of trading
shall not constitute a Market Disruption Event if it results from an
announced change in the regular business hours of the relevant
exchange, trading system or market;
(ii) any suspension in trading in an options contract on a
Settlement Value Security or a Relevant Index by a major securities
exchange, trading system or market by reason of (a) a price change
violating limits set by such securities market, (b) an imbalance of
orders relating to those contracts, or (c) a disparity in bid and ask
quotes relating to those contracts, shall constitute a Market
Disruption Event notwithstanding that the suspension or material
limitation is less than two hours;
(iii) a suspension or material limitation on an exchange,
trading system or in a market shall include a suspension or material
limitation of trading by one class of investors provided that the
suspension continues for more than two hours of trading or during the
last one-half hour period preceding the Close of Trading on the
relevant exchange, trading system or market but shall not include any
time when the relevant exchange, trading system or market is closed for
trading as part of that exchange's, trading system's or market's
regularly scheduled business hours; and
(iv) "trading systems" include bulletin board services.
27
"Maturity Date" shall mean the Stated Maturity Date (except as
otherwise provided in the case of an Extendible Note or a Renewable Note);
provided, that if a Market Disruption Event with respect to one or more of the
Settlement Value Securities or Relevant Indices, as the case may be, occurs on
the Calculation Day, then the Maturity Date shall be postponed by a number of
Business Days equal to the Determination Period after the date on which the
Settlement Value is finally determined. In the event of any optional redemption
by the Company, any repayment at the option of the Holder, acceleration of the
maturity of this Note or other prepayment of this Note prior to the Maturity
Date specified above, the term "Maturity" when used herein shall refer, where
applicable, to the date of redemption, repayment, acceleration or other
prepayment of this Note.
"Maturity Payment Amount" shall equal (i) the greater of (a)
$1,000 and (b) the Alternative Redemption Amount and (ii) any accrued but unpaid
interest through but excluding the Stated Maturity Date.
"Multiplier", relating to each Settlement Value Security,
shall mean the number of shares or other units (including ADRs) (or fraction of
a share or other unit expressed as a decimal) of such Settlement Value Security
included in the calculation of the Settlement Value. The initial multiplier
relating to each stock included in the Reference Equity shall be specified on
the face of this Note.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"Non-Delaying Event Redemption Date" shall mean the date set
forth in the Redemption Notice, which date shall not be less than 30 nor more
than 60 days after the date of the Redemption Notice, unless otherwise specified
on the face hereof.
"Non-Delaying Event Repurchase Date" shall mean the eighth
Business Day following the Business Day on which the Company receives notice of
a Repurchase from a Holder, unless otherwise specified on the face hereof.
"Notes" shall have the meaning set forth on the reverse of
this Note.
"NYSE" shall mean The New York Stock Exchange, Inc.
"Official W.M. Reuters Spot Closing Rates" shall mean the
closing spot rates published on Reuters page "WMRA" relevant for such Settlement
Value Security.
28
"Optional Repurchase Amount" shall have the meaning set forth
on the reverse of this Note.
"Optional Repurchase Date" shall have the meaning set forth on
the reverse of this Note.
"Payment Amount" shall mean the Maturity Payment Amount, the
Redemption Payment Amount or the Repurchase Payment Amount, as the case may be.
"Payment Determination Date" shall mean the relevant
Calculation Day, unless a Delaying Event occurs with respect to such Payment
Determination Date, in which case the first Business Day after the Calculation
Day on which the Closing Prices for all Settlement Value Securities or the
Closing Levels for all Relevant Indices, as the case may be, that have been
subject to a Delaying Event have been determined.
"Redemption" shall mean the option of the Company to redeem,
at any time on or after the date specified on the face hereof, in whole or from
time to time in part, the Securities.
"Redemption Amount" shall have the meaning set forth on the
reverse of this Note.
"Redemption Notice" shall mean the notice of Redemption mailed
to the Holders pursuant to Section 3 hereof.
"Reference Equity" means the common stock, stock index, basket
of common stocks or basket of stock indices specified as such on the face of
this Note.
"Relevant Index" shall mean any stock index included in the
Reference Equity.
"Repurchase" shall mean the option of a beneficial holder to
elect to require the Company to repurchase, at any time until the earlier of (a)
the date the Company gives the Redemption Notice pursuant to Section 3 hereof or
(b) eight Business Days before (or such other period specified on the face
hereof) the Stated Maturity Date, in whole or from time to time in part, such
holder's Securities.
"Securities" shall have the meaning set forth on the reverse
of this Note.
"Settlement Value", when used with respect to any Payment
Determination Date, shall equal:
(1) if the Reference Equity (as specified on the face hereof)
is a common stock or a basket of common stocks, the sum of (a)(i) the products
of the Closing Prices and the applicable Ending Multipliers for each Settlement
Value Security for which a Delaying Event does not occur on the related
29
Calculation Day or (ii) if a Delaying Event occurs for a Settlement Value
Security on the related Calculation Day, the product of the Closing Price for
such Settlement Value Security on the next Business Day on which a Market
Disruption Event does not occur for such Settlement Value Security and the
Ending Multiplier for such Settlement Value Security and (b) in each case, any
cash included in the Settlement Value on such Calculation Day;
(2) if the Reference Equity (as specified on the face hereof)
is a stock index, the Closing Level of the Relevant Index so long as a Delaying
Event does not occur for such Relevant Index on the related Calculation Day. If
a Delaying Event occurs for such Relevant Index on the related Calculation Day,
the Settlement Value shall equal the Closing Level of the Relevant Index on the
next Business Day on which a Market Disruption Event does not occur for such
Relevant Index; or
(3) if the Reference Equity (as specified on the face hereof)
is a basket of stock indices, the sum of (i) the products of the Closing Levels
and the applicable Index Weight for each Relevant Index for which a Delaying
Event does not occur on the related Calculation Day or (ii) if a Delaying Event
occurs for a Relevant on the related Calculation Day, the product of the Closing
Level for such Relevant Index on the next Business Day on which a Market
Disruption Event does not occur for such Relevant Index and the Index Weight for
such Relevant Index.
"Settlement Value Securities" shall mean the securities
included in the calculation of the Settlement Value from time to time and shall
initially be the common stock or common stocks designated as the Reference
Equity on the face of this Note, unless adjusted for certain extraordinary
corporate events as described herein.
"Stated Maturity Date" shall mean the date specified as such
on the face of this Note.
"Stock Settlement Option" shall mean the Company's option,
exercisable in its sole discretion with not less than 15 days' notice to the
Trustee and the registered holders of the Securities if so specified on the face
hereof, to pay the Maturity Payment Amount in shares of the Reference Equity
(and any other equity securities used in the calculation of the Settlement
Value), rather than in cash.
"Successor Index" shall mean such substitute index as the
Calculation Agent may select pursuant to the Calculation Agency Agreement upon
discontinuance of a Relevant Index.
30
"Threshold Value" shall have the meaning set forth on the face
of this Note.
"Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, AMEX and Nasdaq and in the over-the-counter market for
equity securities, as determined by the Calculation Agent.
"Trustee" shall have the meaning set forth on the reverse of
this Note.
"Valuation Date" shall mean the date specified as such on the
face of this Note; provided that if a Market Disruption Event occurs on such
date, the Valuation Date shall be the next Business Day on which no Market
Disruption Event occurs.
31
OPTION TO ELECT REPAYMENT
The undersigned owner of this Note hereby irrevocably elects
to have the Company repay the Principal Amount of this Note or portion hereof
below designated at (i) the Optional Repurchase Amount plus accrued interest to
the Optional Repurchase Date, if this Note is to be repaid pursuant to the
Optional Repurchase provision described in Section 5 hereof, or (ii) the price
specified pursuant to the Optional Interest Reset provision described in Section
6 hereof or the Extendible Notes provision described in Section 9 hereof. Any
such election is irrevocable except as provided in Section 6 or Section 9
hereof.
Dated:
----------------- -------------------------------
Signature
Sign exactly as name
appears on the front of
this Note [SIGNATURE
GUARANTEED - required only
if Notes are to be issued
and delivered to other than
the registered Holder]
Principal Amount to be Fill in for registration of
repaid, if amount to be Notes if to be issued otherwise
repaid is less than the than to the registered Holder:
Principal Amount of this
Note (Principal Amount Name:
remaining must be an ------------------------
authorized denomination) Address:
(Please print name
$ and address including
----------------------- zip code)
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER
32
OPTION TO ELECT TERMINATION OF AUTOMATIC EXTENSION
The undersigned owner of this Note hereby irrevocably elects
to terminate the automatic extension of this Note or of the portion of the
Principal Amount of this Note below designated. Any such election is irrevocable
and will be binding on any subsequent Holder hereof.
Dated:
----------------- -------------------------------
Signature
Sign exactly as name
appears on the front of
this Note [SIGNATURE
GUARANTEED - required only
if Notes are to be issued
and delivered to other than
the registered Holder]
Principal Amount to be Fill in for registration of
terminated, if amount to be Notes if to be issued otherwise
terminated is less than the than to the registered Holder:
Principal Amount of this
Note (such Principal Amount Name:
must be an authorized
denomination) Address:
(Please print name
$ and address including
----------------------- zip code)
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER
33
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenant by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT
MIN ACT - ___ Custodian ___
---------- -------------
(Cust) (Minor)
under Uniform Gifts to Minors Act
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
- ----------------------------------------------------------------------
(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE)
(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
_
_
the within Note of LEHMAN BROTHERS HOLDINGS INC. and all rights thereunder and
does hereby irrevocably constitute and appoint
Attorney to transfer the said Note on the books of the within-named Company,
with full power of substitution in the premises.
Dated: Signature:
-------------- ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as it appears upon
the face of the within Note in every
particular, without alteration or enlargement
or any change whatsoever.
Signature(s) Guaranteed:
- -------------------------------
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
SEC rule 17Ad-15.
Schedule I
Amortization Table
Date Payment
EXHIBIT A
RESET NOTICE
LEHMAN BROTHERS HOLDINGS INC.
Medium-Term Notes, Series G
Performance Linked to the Value of a Common Stock, a
Stock Index, a Basket of Common Stocks or a Basket of Stock Indices
CUSIP No. ___________
Registered Nos. ___-___
LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized
and existing under the laws of the State of Delaware (the "Company"), is the
issuer of the above-referenced Notes (the "Notes"). Capitalized terms
used herein and not defined are used as defined in the Notes.
The Company hereby elects to reset the Interest Rate set
forth on the face of the Notes. On and after _________________1/, the Interest
Rate shall be _______________.
Each Holder of a Note has the option to elect repayment by the
Company of such Note, or any portion thereof, on any Optional Reset Date
pursuant to the terms of such Note. The Notes may be repaid on the dates and at
the prices set forth below:
Date Redemption Price
IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused
this Reset Notice to be signed by its Chairman of the Board, its President, its
Vice Chairman, its Chief Financial Officer, one of its Vice Presidents or its
Treasurer and to be attested by its Secretary or one of its Assistant
Secretaries.
Dated:
LEHMAN BROTHERS HOLDINGS INC.
By:
------------------------
Title:
Attest:
--------------------
Title:
1/ Insert applicable Optional Reset Date.