EXHIBIT 4.01
CUSIP NO. _______________
REGISTERED PRINCIPAL AMOUNT:
No.
LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTE, SERIES G
YEELDS(R)
YIELD ENHANCED EQUITY LINKED DEBT SECURITIES
PERFORMANCE LINKED TO THE VALUE OF A COMMON STOCK
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.
2
ISSUE PRICE: $ per YEELD INITIAL MULTIPLIER: NUMBER OF EXTENSION PERIODS:
AGGREGATE ISSUE PRICE: $ EXCHANGE RATE AGENT: OPTION TO ELECT REPAYMENT:
[ ] YES [ ] NO
PRINCIPAL AMOUNT PER YEELD: $ DEPOSITORY: OPTIONAL REPAYMENT DATES:
ISSUE DATE: DUAL CURRENCY NOTE: OPTIONAL REPAYMENT PRICES:
[ ] YES [ ] NO
OPTIONAL COUPON RATE RESET:
[ ] YES [ ] NO
STATED MATURITY DATE: OPTION ELECTION DATES:
OPTIONAL RESET DATES:
VALUATION DATE: OPTIONAL PAYMENT
CURRENCY: OPTIONAL REDEMPTION:
[ ] YES [ ] NO
COUPON RATE: % per annum DESIGNATED EXCHANGE INITIAL REDEMPTION DATE:
RATE:
INITIAL REDEMPTION
PERCENTAGE:
COUPON PAYMENT DATES: OPTION VALUE CALCULATION
AGENT: REDEMPTION PRICE:
REGULAR RECORD DATES: OPTION TO RECEIVE PAYMENTS APPLICABILITY OF ANNUAL REDEMPTION
PERCENTAGE REDUCTION:
[ ] YES [ ] NO
If yes, state Annual Percentage
Reduction:
IN THE SPECIFIED CURRENCY:
[ ] YES [ ] NO RENEWABLE NOTE:
[ ] YES [ ] NO
ACCRUE TO PAY: SPECIFIED CURRENCY: INITIAL MATURITY DATE:
[ ] YES [ ] NO
DUAL CURRENCY NOTE PREPAYMENT AMOUNT: SPECIAL ELECTION INTERVAL:
DETERMINATION PERIOD:
AMORTIZING NOTE: RENEWABLE IN PART:
[ ] YES [ ] NO [ ] YES [ ] NO
INITIAL VALUE: $
SINKING FUND: AUTHORIZED RENEWABLE AMOUNTS:
EQUITY CAP PRICE PER YEELD: $
TOTAL AMOUNT OF OID: SPECIAL ELECTION PERIOD:
INDEX STOCK ISSUER:
YIELD TO MATURITY: OTHER PROVISIONS:
INDEX STOCK:
INITIAL ACCRUAL PERIOD OID:
AUTHORIZED DENOMINATIONS:
OID NOTE PREPAYMENT AMOUNT:
STOCK SETTLEMENT OPTION:
[ ] YES [ ] NO EXTENDIBLE NOTE:
[ ] YES [ ] NO
FRACTIONAL SHARE ISSUANCE: EXTENSION PERIOD:
[ ] YES [ ] NO
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 principal amount of the Notes represented
hereby equal to the Principal Amount per YEELD specified above (such
principal amount of Notes referred to herein as a "YEELD"), an amount
equal to the Maturity Payment Amount (as defined below) and, if so
specified above, to make coupon payments thereon from the Issue Date
specified above or from the most recent Coupon Payment Date specified
above to which coupon payments have been paid or duly provided for at
the Coupon 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 coupon payments 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
coupon payments. 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
coupon payments 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 Principal Amount at such
time as described in Section 7 on the reverse hereof, (ii) if 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", and subject to any additional or other provisions in such
section, 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 Settlement Value Securities (as
defined below) (the "Stock Settlement Option"). If the Company elects
4
the Stock Settlement Option, no fractional shares of the Settlement
Value Securities will be issued unless otherwise specified above under
"Fractional Share Issuance". In such case, unless otherwise specified
above under "Fractional Share Issuance", the Company will pay cash to
the Holder in an amount equal to the market value of that fractional
share based upon the Closing Price of the Settlement Value Security on
the Valuation Date specified above. Even if the Company has elected the
Stock Settlement Option, if the Alternative Redemption Amount (as
defined herein) is greater than the Equity Cap Price per YEELD (as
defined herein), 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 make coupon payments on the dates specified above (each a "Coupon
Payment Date"), commencing with the first Coupon 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 coupon payments to be made on any Coupon 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 Coupon Payment Date or such Maturity Date, as the case
may be, and, unless Accrue to Pay is specified on the face hereof, no
additional coupon payments shall accrue as a result of such delayed
payment; provided further that if the Maturity Date is postponed due to
a Market Disruption Event, coupon payments 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 coupon payment on the Coupon Payment Date will include
coupon payments accrued through the day before the Coupon Payment Date.
Each coupon payment hereon shall include coupon payments accrued
through the day before the Coupon Payment Date or Maturity Date, as the
case may be. Unless otherwise specified above, coupon payments 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 coupon 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 coupon payments due on
any Coupon 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
Coupon Payment Date; provided that, notwithstanding any provision of
the Indenture to the contrary, coupon payments due on the Maturity Date
5
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 Coupon Payment Date
relating to such Regular Record Date, coupon payments for the period
beginning on the Issue Date and ending on such Coupon Payment Date
shall be paid on the Coupon 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 coupon payments 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 coupon payments due 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 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.
YEELDS is a registered trademark of Lehman Brothers Inc.
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.
6
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:
[SEAL] LEHMAN BROTHERS HOLDINGS INC.
By:
-------------------------------------
Vice President
Attest:
-------------------------------------
Assistant Secretary
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:
---------------------------
Authorized Officer
7
[REVERSE OF NOTE]
LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES G
YEELDS(R)
YIELD ENHANCED EQUITY LINKED DEBT SECURITIES
PERFORMANCE LINKED TO THE VALUE OF A COMMON STOCK
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, YEELDS(R),
Yield Enhanced Equity Linked Debt Securities 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 coupon payments (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 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
8
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 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
9
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.
Section 3. Redemption. If so specified on the face hereof, 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 Price, together, in each case, with accrued coupon payments to
the Redemption Date. "Redemption Price" shall mean (a) a price based on a
constant percentage of (i) the Principal Amount of this Note, (ii) the Maturity
Payment Amount calculated as though the date of redemption 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 (iii) such
other amount or amounts, in each case as specified on the face hereof (the
amount specified in (i), (ii) or (iii) being herein referred to as the
"Redemption Amount"), (b) at prices declining from the premium specified on the
face hereof, if any, to 100% of the Redemption Amount, and in the case of (a) or
(b) above, subject to any minimum or maximum amount or percentage specified on
the face hereof. 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 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.
If this Note is subject to an Annual Redemption Percentage Reduction
as specified above, the Redemption Price shall initially be the Initial
Redemption Percentage of the Redemption Amount of this Note on the Initial
Redemption Date and shall decline at each anniversary of the Initial Redemption
Date (each such date, a "Redemption Date") by the Annual Percentage Reduction of
such Redemption Amount until the Redemption Price is 100% of such Redemption
Amount or such other percentage or amount as specified on the face hereof.
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 coupon payments on the dates and in the amounts
10
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 coupon
payments 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 Repayment. If so specified on the face hereof, this
Note will be repayable prior to the Maturity Date at the option of the Holder on
the Optional Repayment Dates specified on the face hereof at the Optional
Repayment Prices specified on the face hereof (which may be a constant or
varying percentage of (a) the Principal Amount of this Note, (b) the Maturity
Payment Amount calculated as though the date of redemption 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), together with
accrued coupon payments to the applicable Optional Repayment Date. Unless
otherwise specified on the face hereof, in order for this Note to be so repaid,
the Trustee must receive, at least 30 but not more than 45 days prior to an
Optional Repayment 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 Coupon Reset. If so specified on the face hereof,
the Coupon 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")
11
setting forth (i) the election of the Company to reset the coupon rate, (ii)
such new coupon rate and (iii) the provisions, if any, for 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 Coupon 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 Coupon 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 coupon 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 coupon rate
provided for in the Reset Notice and establish a coupon rate that is higher than
the coupon rate provided for in the Reset Notice for the Subsequent Coupon
Period commencing on such Optional Reset Date by causing the Trustee to mail by
first-class mail notice of such higher coupon 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 coupon
rate is reset on an Optional Reset Date will bear such higher coupon rate for
the Subsequent Coupon Period.
If the Company elects to reset the coupon 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 coupon
payments 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.
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.
12
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 coupon payments (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 a Coupon 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
prior to the Maturity Date shall be (a) an amount equal to the amount otherwise
due and payable plus accrued coupon payments 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 Coupon Payment Dates
occurring after the date of calculation up to and including the Maturity Date.
The term "Option Value" means, with respect to a Coupon 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 Coupon Payment Date or Maturity
Date to purchase for value on such Coupon Payment Date or Maturity Date from
such reference banks (A) the aggregate amount of the Specified Currency due on
such Coupon 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
13
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 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 Coupon 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
coupon rate provided for in the Extension Notice and establish a higher coupon
rate for the Extension Period by causing the Trustee to mail notice of such
higher coupon 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 coupon 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,
14
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 Coupon 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 Coupon 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 Coupon 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
Coupon 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
(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 Coupon 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
15
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 to make coupon payments 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 coupon
payments 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 coupon payments, if any, on
or the principal or Maturity Payment Amount (as the case may be) of, or premium,
if 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 coupon payments, 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.
16
Section 15. Authorized Form and Denominations. The Notes of this series
are issuable in registered form, without coupons. The authorized denominations
of the Notes are as specified on the face hereof. 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.
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
17
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 this series so declared
due and payable and (ii) of coupon on any overdue principal or Maturity Payment
Amount (as the case may be) and overdue coupon payments (in each case to the
extent that the payment of such coupon payments 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 coupon payments, 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 coupon payments 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. Defined Terms. All terms used but not defined in this Note
are used herein as defined in the Indenture.
Section 20. Tax Treatment. The Company intends to treat and, by
purchasing this Note, the Holder hereof agrees to treat, for all tax purposes,
this Note as a financial contract rather than as a debt instrument.
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.
"Alternative Redemption Amount" shall mean the product of (a) the
Principal Amount per YEELD and (b) the Settlement Value divided by the Initial
Value.
"AMEX" shall mean the American Stock Exchange LLC.
"Average Execution Price" shall mean, for a security or other property,
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
18
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" shall mean 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 November 7, 2003, between the Company and the Calculation
Agent, as amended from time to time, or any successor calculation agency
agreement.
"Calculation Agent" shall mean the person that has entered into an
agreement with the Company providing for, among other things, the determination
of the Maturity Payment Amount, which term shall, unless the context otherwise
requires, include its successors and assigns. The initial Calculation Agent
shall be Lehman Brothers Inc.
"Cash Settlement Option" shall have the meaning set forth on the face
of this Note.
"Close of Trading" shall mean, in respect of any primary exchange or
quotation system, the scheduled weekday closing time on a day on which the
primary exchange or quotation system is scheduled to be open for trading for its
respective regular trading session, without regard to after hours or any other
trading outside of the regular trading session hours.
"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 quotation 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 on Nasdaq, as the case may be.
(ii) If the Settlement Value Security is listed or quoted on a
non-United States securities exchange, quotation 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, quotation system or market on which such Settlement
Value Security is listed 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
19
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 quotation 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 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.
"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 Valuation Date, of any
of the extraordinary corporate transactions described in Section 4 of Annex A of
the Calculation Agency Agreement.
"Equity Cap Price per YEELD" shall have the meaning set forth on the
face of this Note.
"Indenture" shall have the meaning set forth on the reverse of this
Note.
"Index Stock" shall have the meaning set forth on the face of this
Note.
"Index Stock Issuer" shall have the meaning set forth on the face of
this Note.
"Initial Value" shall have the meaning set forth on the face of this
Note.
"Issue Date" shall have the meaning set forth on the reverse of this
Note.
"Market Disruption Event", unless indicated otherwise in the relevant
Pricing Supplement, with respect to a Settlement Value Security shall mean any
of the following events has occurred on any day as determined by the Calculation
Agent:
(1) A material suspension of or limitation imposed on trading
relating to such Settlement Value Security by the Relevant Exchange, at
any time during the one-hour period that ends at the Close of Trading
on such day, whether by reason of movements in price exceeding limits
permitted by that primary exchange or quotation system or otherwise.
Limitations on trading during significant market fluctuations imposed
pursuant to NYSE Rule 80B or any applicable rule or regulation enacted
20
or promulgated by the NYSE, any other exchange, quotation 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.
(2) A material suspension of or limitation imposed on trading
in futures or options contracts relating to such Settlement Value
Security by the primary exchange or quotation system on which those
futures or options contracts are traded, at any time during the
one-hour period that ends at the Close of Trading on such day, whether
by reason of movements in price exceeding limits permitted by that
primary exchange or quotation system or otherwise.
(3) Any event, other than an early closure, that disrupts or
impairs the ability of market participants in general to effect
transactions in, or obtain market values for, that Settlement Value
Security on the primary U.S. exchange or quotation system on which that
Settlement Value Security is traded, or in the case of a Settlement
Value Security not listed or quoted in the United States, on the
primary exchange, quotation system or market for such Settlement Value
Security, at any time during the one hour period that ends at the Close
of Trading on such day.
(4) Any event, other than an early closure, that disrupts or
impairs the ability of market participants in general to effect
transactions in, or obtain market values for, the futures or options
contracts relating to such Settlement Value Security on the primary
exchange or quotation system on which those futures or options
contracts are traded at any time during the one hour period that ends
at the Close of Trading on such day.
(5) The closure of the primary exchange or quotation system on
which that Settlement Value Security is traded or on which futures or
options contracts relating to that Settlement Value Security are traded
prior to its scheduled closing time unless the earlier closing time is
announced by the primary exchange or quotation system at least one hour
prior to the earlier of (i) the actual closing time for the regular
trading session on the primary exchange or quotation system and (ii)
the submission deadline for orders to be entered into the primary
exchange or quotation system for execution at the Close of Trading on
such day.
(6) The Company, or any of its affiliates, is unable, after
using commercially reasonable efforts to unwind or dispose of, or
realize, recover or remit the proceeds of, any transactions or assets
it deems necessary to hedge the equity price risk of entering into and
performing its obligations with respect to the Securities.
"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 occurs on the Valuation Date, 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
21
used herein shall refer, where applicable, to the date of redemption, repayment,
acceleration or other prepayment of this Note.
"Maturity Payment Amount" shall equal, for each YEELD, (i) the lesser
of (a) the Alternative Redemption Amount and (b) the Equity Cap Price per YEELD
and (ii) any accrued but unpaid coupon payments through 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 the
Index Stock shall be specified on the face of this Note.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"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 Rate" shall mean the closing spot
rate published on Reuters page "WMRA" relevant for a Settlement Value Security.
"Principal Amount" shall have the meaning set forth on the face of this
Note.
"Relevant Exchange" shall mean for each Settlement Value Security, the
primary United States national securities exchange, quotation system, including
any bulletin board service, or market on which such Settlement Value Security is
traded, or in case such Settlement Value Security is not listed or quoted in the
United States, the primary exchange, quotation system or market for such
Settlement Value Security.
"Scheduled Trading Day" shall mean any day on which each Relevant
Exchange is scheduled to be open for trading for its respective regular trading
session.
"Securities" shall have the meaning set forth on the reverse of this
Note.
"Settlement Value" shall mean the sum of (a) the products of the
Closing Prices and the applicable Ending Multipliers for each Settlement Value
Security on the Valuation Date and (b) any cash included in the Settlement Value
on the Valuation Date; provided, that if a Market Disruption Event occurs on the
Valuation Date, the Settlement Value will be determined based on (i) with
respect to Settlement Value Securities that have not been subject to a Market
Disruption Event, the Closing Price of each such Settlement Value Security on
the postponed Valuation Date, and (ii) with respect to Settlement Value
Securities that have been subject to a Market Disruption Event, the Average
Execution Price on the postponed Valuation Date.
"Settlement Value Securities" shall mean the securities included in the
calculation of the Settlement Value from time to time and shall initially
consist only of the Index Stock.
"Stated Maturity Date" shall mean the date specified as such on the
face of this Note.
22
"Stock Settlement Option" shall have the meaning set forth on the face
of this Note.
"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 Scheduled Trading Day on which no Market
Disruption Event occurs.
23
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 Repayment Price plus accrued coupon payments to
the Optional Repayment Date, if this Note is to be repaid pursuant to the
Optional Repayment provision described in Section 5 hereof, or (ii) the price
specified pursuant to the Optional Coupon 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 Address:
authorized denomination)
(Please print name
$ and address including zip code)
-----------------------
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER:
24
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 han to the registered Holder:
Principal Amount of this
Note (such Principal Amount Name:
must be an authorized Address:
denomination)
(Please print name
$ and address including zip code)
-----------------------
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER:
25
The following abbreviations, when used in the inscription on the face
of the within Security, shall be construed as though they were written out in
full according to applicable laws or regulations:
- ---------------- --------------------------------------------------------------
TEN COM - as tenants in common UNIF GIFT MIN ACT-__Custodian__
- ----------------------- ----------------------------------------- -------------
(Cust) (Minor)
- ----------------- --------------------------------------------------------------
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
- ----------------------- -------------------------------------------------------
JT TEN - as joint tenants with right of Act _________________________
- ----------------------- -------------------------------------------------------
Survivorship and not as tenants in (State)
common
- ---------------- --------------------------------------------------------------
Additional abbreviations may also be used though not in the above list.
--------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------
- --------------------------------
- -----------------------------------------------------------------------------
(Name and Address of Assignee, including zip code, must be printed or
typewritten.)
- -----------------------------------------------------------------------------
the within Security, and all rights thereunder, hereby irrevocably constituting
and appointing
- -----------------------------------------------------------------------------
to transfer the said Security on the books of the 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 Security in every particular, without
alteration or enlargement or any change whatever.
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 MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.
Schedule I
Amortization Table
Date Payment
EXHIBIT A
RESET NOTICE
LEHMAN BROTHERS HOLDINGS INC.
Medium-Term Notes, Series G
YEELDS(R)
Yield Enhanced Equity Linked Debt Securities
Performance Linked to the Value of a Common Stock
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 Coupon Rate set forth on the face of
the Notes. On and after _________________1/, the Coupon 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.