EXHIBIT 4.01
CERTIFICATE OF DESIGNATIONS, POWERS,
PREFERENCES AND RIGHTS
OF THE
6.50% CUMULATIVE PREFERRED STOCK, SERIES F
($2,500.00 initial liquidation preference per share)
OF
LEHMAN BROTHERS HOLDINGS INC.
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation (the
"Corporation"), HEREBY CERTIFIES that the following resolution was duly adopted
by the Executive Committee of the Board of Directors of the Corporation in
accordance with Section 151(g) of the General Corporation Law of the State of
Delaware pursuant to the authority conferred upon the Board of Directors of the
Corporation by the provisions of the Restated Certificate of Incorporation of
the Corporation and pursuant to the authority conferred upon the Executive
Committee by the By-Laws of the Corporation and pursuant to the authority duly
delegated thereto by the Board of Directors of the Corporation:
RESOLVED, that the Corporation be, and hereby is, authorized to issue a
new series of its preferred stock, par value $1.00 per share, with a liquidation
preference, in the aggregate, of up to $345,000,000, on the following terms,
with the following designations, powers, preferences and rights:
1. Designation and Amount; Fractional Shares. The series of preferred
stock shall be designated as the "6.50% Cumulative Preferred Stock, Series F"
(the "Series F Preferred Stock"). The Series F Preferred Stock shall be
perpetual and the authorized number of shares of Series F Preferred Stock shall
be one hundred thirty-eight (138,000) shares. The Series F Preferred Stock is
issuable in whole shares only.
2. Dividends. Holders of shares of Series F Preferred Stock shall be
entitled to receive, when, as and if declared by the Board or a duly authorized
committee thereof out of funds of the Corporation legally available for payment,
cumulative cash dividends at the rate of 6.50% per annum on the initial
liquidation preference of $2,500.00 per share. Dividends on the Series F
Preferred Stock shall accrue from the date of initial issuance and shall be
payable quarterly, in arrears, on February 28, May 31, August 31 and November 30
of each year, commencing November 30, 2003 (each a "Dividend Payment Date"). If
any date on which dividends would otherwise be payable shall be or be declared a
national or New York State holiday, or if banking institutions in the State of
New York shall be closed because of a banking moratorium or otherwise on such
date, then the Dividend Payment Date shall be the next succeeding day on which
such banks shall be open. Dividends on shares of the Series F Preferred Stock
shall be fully cumulative and shall accumulate (whether or not earned or
declared), on a daily basis, without interest, from the previous Dividend
Payment Date, except that the first dividend shall accrue, without interest,
from the date of initial issuance of the Series F Preferred Stock. Accumulated
and unpaid dividends shall not bear interest. Dividends shall be payable, in
arrears, to holders of record as they appear on the stock books of the
Corporation on each record date, which shall be the 15th day of the month in
which such Dividend Payment Date occurs (or, if the Dividend Payment Date is
postponed for any of the reasons discussed above in this paragraph, the 15th day
of the month prior to such Dividend Payment Date) (each of which dates being a
"Dividend Payment Record Date"). Dividends payable on the Series F Preferred
Stock for any full quarterly period shall be computed on the basis of a 360-day
year consisting of twelve 30-day months and, for any period shorter than a full
quarter, on the basis of the actual number of days elapsed in such a 90-day
quarter. Dividends shall cease to accrue on the Series F Preferred Stock on the
date of their earlier redemption pursuant to Section 6, unless the Corporation
shall default in providing funds for the payment of the redemption price on the
shares called for redemption pursuant thereto.
No dividends may be declared or paid or set apart for payment on any
Parity Preferred Stock (as defined in Section 8 below) unless there shall also
be or have been declared and paid or set apart for payment on the Series F
Preferred Stock, dividends for all dividend payment periods of the Series F
Preferred Stock ending on or before the Dividend Payment Date of such Parity
Preferred Stock, ratably in proportion to the respective amounts of dividends
(x) accumulated and unpaid or payable on such Parity Preferred Stock, on the one
hand, and (y) accumulated and unpaid through the dividend payment period or
periods of the Series F Preferred Stock coinciding with or next preceding such
Dividend Payment Date, on the other hand.
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Series F Preferred Stock have been paid through the most
recently completed quarterly dividend period for the Series F Preferred Stock,
no dividends (other than in common stock of the Corporation) may be paid or
declared and set aside for payment or other distribution made upon the common
stock or on any other stock of the Corporation ranking junior to or on a parity
with the Series F Preferred Stock as to dividends, nor may any common stock or
any other stock of the Corporation ranking junior to or on a parity with the
Series F Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration (or any payment be made to or available for a
sinking fund for the redemption of any shares of such stock; provided, however,
that any moneys theretofore deposited in any sinking fund with respect to any
preferred stock of the Corporation in compliance with the provisions of such
sinking fund may thereafter be applied to the purchase or redemption of such
preferred stock in accordance with the terms of such sinking fund, regardless of
whether at the time of such application full cumulative dividends upon shares of
the Series F Preferred Stock outstanding to the last Dividend Payment Date shall
have been paid or declared and set apart for payment) by the Corporation;
provided that any such junior or parity stock or common stock may be converted
into or exchanged for stock of the Corporation ranking junior to the Series F
Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Series F Preferred Stock shall
rank, as to liquidation, dissolution or winding up of the Corporation, prior to
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the shares of common stock and any other stock of the Corporation ranking junior
to the Series F Preferred Stock as to rights upon liquidation, dissolution or
winding up of the Corporation, so that in the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of the Series F Preferred Stock shall be entitled to receive out of
the assets of the Corporation available for distribution to its stockholders,
whether from capital, surplus or earnings, before any distribution is made to
holders of shares of common stock or any other such junior stock, an amount
equal to the liquidation preference of $2,500.00 per share plus an amount equal
to all dividends (whether or not earned or declared) accrued and accumulated and
unpaid on the shares of Series F Preferred Stock to the date of final
distribution. The holders of the Series F Preferred Stock shall not be entitled
to receive the preferential amounts as aforesaid until the liquidation
preference of any other stock of the Corporation ranking senior to the Series F
Preferred Stock as to rights upon liquidation, dissolution or winding up shall
have been paid (or a sum set aside therefor sufficient to provide for payment)
in full. After payment of the full amount of the preferential amounts as
aforesaid, the holders of shares of Series F Preferred Stock will not be
entitled to any further participation in any distribution of assets by the
Corporation. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of shares of Parity Preferred Stock and Series F Preferred
Stock shall be insufficient to pay in full the preferential amounts payable
thereon, then such assets, or the proceeds thereof, shall be distributable among
such holders ratably in accordance with the respective amounts which would be
payable on such shares if all amounts payable thereon were paid in full. For the
purposes hereof, neither a consolidation or merger of the Corporation with or
into any other corporation, nor a merger of any other corporation with or into
the Corporation, nor a sale, lease, exchange or transfer of all or any part of
the Corporation's assets shall be considered a liquidation, dissolution or
winding up of the Corporation.
4. Conversion. The Series F Preferred Stock is not convertible into, or
exchangeable for, other securities or property.
5. Voting Rights. The Series F Preferred Stock, except as provided
herein or as otherwise from time to time required by law, shall have no voting
rights. Whenever, at any time or times, dividends payable on the shares of
Series F Preferred Stock or on any Parity Preferred Stock shall be in arrears
for an aggregate number of days equal to six calendar quarters or more, whether
or not consecutive, the authorized number of directors of the Corporation shall
automatically be increased by two and the holders of the Series F Preferred
Stock shall have the right, with holders of shares of any one or more other
classes or series of Parity Preferred Stock outstanding at the time upon which
like voting rights have been conferred and are exercisable ("Voting Parity
Stock"), voting together as a class, to elect two directors (hereinafter the
"Preferred Directors" and each a "Preferred Director") to fill such newly
created directorships at the Corporation's next annual meeting of stockholders
and at each subsequent annual meeting of stockholders until such arrearages have
been paid or set aside for payment, at which time such right shall terminate,
except as herein or by law expressly provided, subject to revesting in the event
of each and every subsequent default of the character above mentioned. Upon any
termination of the right of the holders of shares of Series F Preferred Stock
and Voting Parity Stock as a class to vote for directors as provided above, the
term of office of all Preferred Directors then in office shall terminate
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immediately and the authorized number of directors shall be reduced by the
number of Preferred Directors elected pursuant hereto. Any Preferred Director
may be removed at any time, with or without cause. Any vacancy created thereby
may be filled only by the affirmative vote of the holders of shares of Series F
Preferred Stock voting separately as a class (together with the holders of
shares of Voting Parity Stock). If the office of any Preferred Director becomes
vacant for any reason other than removal from office as aforesaid, the remaining
Preferred Director may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy occurred. At elections for such
directors, each holder of shares of Series F Preferred Stock shall be entitled
to ten votes for each share held (the holders of shares of any other class or
series of Voting Parity Stock being entitled to such number of votes, if any,
for each share of such stock held as may be granted to them).
So long as any shares of any Series F Preferred Stock remain
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least 66-2/3% of the shares of such Series F Preferred Stock (i)
authorize, create or issue any capital stock of the Corporation ranking, as to
dividends or upon liquidation, dissolution or winding up, prior to such Series F
Preferred Stock, or reclassify any authorized capital stock of the Corporation
into any such shares of such capital stock or issue any obligation or security
convertible into or evidencing the right to purchase any such shares of capital
stock, or (ii) amend, alter or repeal the certificate of designations for such
Series F Preferred Stock, or the Restated Certificate of Incorporation of the
Corporation, whether by merger, consolidation or otherwise, so as to adversely
affect the powers, preferences or special rights of such Series F Preferred
Stock. Any increase in the amount of authorized common stock or other authorized
preferred stock, or any increase or decrease in the number of shares of any
series of preferred stock or the authorization, creation and issuance of other
classes or series of common stock or other stock, in each case ranking on a
parity with or junior to the shares of Series F Preferred Stock with respect to
the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to adversely affect such powers,
preferences or special rights.
In exercising the voting rights set forth in this Section 5 or when
otherwise granted voting rights by operation of law or by the Corporation, each
share of Series F Preferred Stock shall be entitled to ten votes.
The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required or
upon which the holders of Series F Preferred Stock shall be entitled to vote
shall be effected, all outstanding shares of Series F Preferred Stock shall have
been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
6. Redemption. The shares of Series F Preferred Stock shall not be
redeemable prior to August 31, 2008. On and after such date, the Corporation, at
its option, may redeem shares of the Series F Preferred Stock, as a whole or in
part, at any time or from time to time, at a redemption price equal to $2,500.00
per share, plus, in each case, an amount equal to all dividends (whether or not
earned or declared) accrued and accumulated and unpaid to, but excluding, the
date fixed for redemption.
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The holders of shares of Series F Preferred Stock at the close of
business on a Dividend Payment Record Date shall be entitled to receive the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the call for redemption thereof (except that holders of shares
called for redemption on a date occurring between such Record Date and the
Dividend Payment Date shall not be entitled to receive such dividend on such
Dividend Payment Date) or the Corporation's default in payment of the dividend
due on such Dividend Payment Date.
If fewer than all the outstanding shares of Series F Preferred Stock
are to be redeemed, the number of shares to be redeemed shall be determined by
the Board of Directors and the shares to be redeemed shall be selected by lot or
pro rata or by any other means determined by the Board of Directors in its sole
discretion to be equitable.
If full cumulative dividends on the Series F Preferred Stock have not
been paid or set apart for payment with respect of all prior dividend periods,
the Series F Preferred Stock may not be redeemed in part and the Corporation may
not purchase or acquire any shares of the Series F Preferred Stock otherwise
than pursuant to a purchase or exchange offer made on the same terms to all
holders of the Series F Preferred Stock.
In the event the Corporation shall redeem shares of Series F Preferred
Stock, written notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed at such
holder's address as the same appears on the stock books of the Corporation;
provided, however, that no failure to give such notice nor any defect therein
shall affect the validity of the proceeding for the redemption of any shares of
Series F Preferred Stock to be redeemed except as to the holder to whom the
Corporation has failed to mail said notice or except as to the holder whose
notice was defective. Each such notice shall state: (a) the redemption date; (b)
the number of shares of Series F Preferred Stock to be redeemed and, if less
than all the shares held by such holder are to be redeemed from such holder, the
number of shares to be redeemed from such holder; (c) the redemption price and
any accumulated and unpaid dividends to the redemption date; (d) the place or
places where certificates for such shares are to be surrendered for payment of
the redemption price; and (e) that dividends on the shares to be redeemed will
cease to accrue on such redemption date (unless the Corporation shall default in
providing funds for the payment of the redemption price of the shares called for
redemption at the time and place specified in such notice).
If a notice of redemption has been given pursuant to this Section 6 and
if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Series F Preferred Stock so called for redemption, then, notwithstanding that
any certificates for such shares have not been surrendered for cancellation, on
the redemption date dividends shall cease to accrue on the shares to be
redeemed, and at the close of business on the redemption date the holders of
such shares shall cease to be stockholders with respect to such shares and shall
have no interest in or claims against the Corporation by virtue thereof and
shall have no voting or other rights with respect to such shares, except the
right to receive the moneys payable upon surrender (and endorsement, if required
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by the Corporation) of their certificates, and the shares evidenced thereby
shall no longer be outstanding. The Corporation's obligation to provide funds
for the payment of the redemption price (and any accumulated and unpaid
dividends to the redemption date) of the shares called for redemption shall be
deemed fulfilled if, on or before a redemption date, the Corporation shall
deposit, with a bank or trust company, or an affiliate of a bank or trust
company, having an office or agency in New York City and having a capital and
surplus of at least $50,000,000, such funds sufficient to pay the redemption
price (and any accumulated and unpaid dividends to the redemption date) of the
shares called for redemption, in trust for the account of the holders of the
shares to be redeemed (and so as to be and continue to be available therefor),
with irrevocable instructions and authority to such bank or trust company that
such funds be delivered upon redemption of the shares of Series F Preferred
Stock so called for redemption.
Subject to applicable escheat laws, any moneys so set aside by the
Corporation and unclaimed at the end of two years from the redemption date shall
revert to the general funds of the Corporation, after which reversion the
holders of such shares so called for redemption shall look only to the general
funds of the Corporation for the payment of the amounts payable upon such
redemption. Any interest accrued on funds so deposited shall be paid to the
Corporation from time to time.
Shares of Series F Preferred Stock that have been issued and reacquired
in any manner, including shares purchased or redeemed, shall (upon compliance
with any applicable provisions of the laws of the State of Delaware) have the
status of authorized and unissued shares of the class of Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of the preferred stock.
7. Amendment of Resolution. The Board reserves the right from time to
time to increase or decrease the number of shares that constitute the Series F
Preferred Stock (but not below the number of shares thereof then outstanding)
and in other respects to amend this Certificate of Designations within the
limitations provided by law, this resolution and the Restated Certificate of
Incorporation.
8. Rank. Any stock of any class or classes or series of the Corporation
shall be deemed to rank:
(a) prior to shares of the Series F Preferred Stock, either as
to dividends or upon liquidation, dissolution or winding up, or both,
if the holders of stock of such class or classes or series shall be
entitled by the terms thereof to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of shares of the
Series F Preferred Stock;
(b) on a parity with shares of the Series F Preferred Stock,
either as to dividends or upon liquidation, dissolution or winding up,
or both, whether or not the dividend rates, dividend payment dates, or
redemption or liquidation prices per share thereof be different from
those of the Series F Preferred Stock, if the holders of stock of such
class or classes or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributed upon liquidation,
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dissolution or winding up, as the case may be, in proportion to their
respective dividend rates or liquidation prices, without preference or
priority of one over the other as between the holders of such stock and
the holders of shares of Series F Preferred Stock (the term "Parity
Preferred Stock" being used to refer to any stock on a parity with the
shares of Series F Preferred Stock, either as to dividend or upon
liquidation dissolution or winding up, or both, as the content may
require); and
(c) junior to shares of the Series F Preferred Stock, either
as to dividends or upon liquidation, dissolution or winding up, or
both, if such class or classes or series shall be common stock or if
the holders of the Series F Preferred Stock shall be entitled to the
receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or
priority to the holders of stock of such class or classes or series.
The Series F Preferred Stock shall rank, as to dividends and upon
liquidation, dissolution or winding up, on a parity with the Corporation's 5.94%
Cumulative Preferred Stock, Series C, the Corporation's 5.67% Cumulative
Preferred Stock, Series D, the Corporation's Fixed/Adjustable Rate Cumulative
Preferred Stock, Series E, and any Parity Preferred Stock issued hereafter.
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IN WITNESS WHEREOF, the undersigned, being duly authorized thereto,
does hereby affirm, under penalties of perjury, that this certificate is the act
and deed of the Corporation and that the facts herein stated are true, and
accordingly has hereunto set his hand this 25th day of August, 2003.
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Barrett S. DiPaolo
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Name: Barrett S. DiPaolo
Title: Vice President and
Assistant Secretary
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