EXHIBIT 1.09
LEHMAN BROTHERS HOLDINGS INC.
10 Uncommon Values(R)Index RANGERS PLUS(SM),
Risk AdjustiNG Equity Range Securities PLUS(SM) Notes Due July 3, 2003
Number R-1 Principal Amount: $20,000,000
CUSIP 524908 DM 9
See Reverse for Certain Definitions
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS 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 SUCH 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. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO LEHMAN BROTHERS HOLDINGS INC. OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized
and existing under the laws of the State of Delaware (hereinafter called the
"Company"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, on the Stated Maturity, in such coin or
currency of the United States of America at the time of payment shall be legal
tender for the payment of public and private debts, for each $1,000 principal
amount of the Securities represented hereby, the amount payable at Stated
Maturity (the "Maturity Payment Amount") shall be the following:
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If the Ending Index Level of the 10 Uncommon Values index is greater
than or equal to 100 (the index level of the 10 Uncommon Values index on June
28, 2001), the lesser of:
(1) $1,420; and
(2) $1,000 x ENDING INDEX LEVEL
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100
If the Ending Index Level of the 10 Uncommon Values index is less than
100, the lesser of:
(1) $1,000; and
(2) $1,000 x ENDING INDEX LEVEL
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Any amount payable hereon will be paid only upon presentation
and surrender of this Security.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
SECURITY SET FORTH ON THE REVERSE HEREOF WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
"10 Uncommon Values" is a registered trademark of, and "Risk
AdjustiNG Equity Range Securities Plus" and "RANGERS PLUS" are service marks of,
Lehman Brothers Inc.
This Security 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 referred to on the reverse hereof.
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IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC. has caused
this instrument to be signed by its Chairman of the Board, its Vice Chairman,
its President, 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: July 3, 2001 LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Barrett S. Dipaolo
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Name: Barrett S. DiPaolo
Title: Vice President
[SEAL]
Attest: /s/ Cindy Gregoire
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Name: Cindy Gregoire
Title: Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: July 3, 2001
CITIBANK, N.A.
as Trustee
By:
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Authorized Signatory
[Form of Reverse of Security]
This Security is one of a duly authorized series of Securities of the Company
designated as 10 Uncommon Values(R) Index RANGERS PLUS(SM), Risk AdjustiNG
Equity Range Securities PLUS(SM) Notes Due July 3, 2003 (herein called the
"Securities"). The Company may, without the consent of the holders of the
Securities, create and issue additional notes ranking equally with the
Securities and otherwise similar in all respects so that such further notes
shall be consolidated and form a single series with the Securities; provided
that no additional notes can be issued if an Event of Default has occurred
with respect to the Securities. This series of Securities is one of an
indefinite number of series of debt securities of the Company, issued and to
be issued under an indenture, dated as of September 1, 1987, as amended
(herein called the "Indenture"), duly executed and delivered by the Company
and Citibank N.A., as trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), 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 Company, the Trustee and the Holders of the
Securities.
All percentages resulting from any calculation with respect to
the Securities will be rounded at the Calculation Agent's discretion.
The Trustee shall fully rely on the determination by the
Calculation Agent of the Maturity Payment Amount and shall have no duty to make
any such determination.
This Security is not subject to any sinking fund and is not
redeemable prior to its Stated Maturity.
If an Event of Default with respect to the Securities shall
occur and be continuing, the amounts payable on all of the Securities 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 of acceleration was the Stated Maturity and the
date three Business Days prior thereto was the Calculation Date.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than 66"% in aggregate
principal amount of each series of Securities at the time Outstanding to be
affected (each series voting as a class), 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 thereof, or reduce the rate or
extend the time of payment of interest thereon or reduce any premium payable on
redemption, or make the principal thereof, or premium, if any, or interest
therein 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
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to institute suit for payment on any Security, or reduce the aforesaid
percentage of Securities, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of each Security
so affected. It is also provided in the Indenture that, prior to any declaration
accelerating the maturity of any series of Securities, the holders of a majority
in aggregate principal amount of the Securities of such series Outstanding may
on behalf of the holders of all the Securities of such series waive any past
default or Event of Default under the Indenture with respect to such series and
its consequences, except a default in the payment of interest, if any or the
principal 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
Security shall be conclusive and binding upon such Holder and upon all future
holders and owners of this Security and any Securities which may be issued in
exchange or substitution hereof, irrespective of whether or not any notation
thereof is made upon this Security or such other Securities.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal amount with
respect to this Security.
The Securities are issuable in denominations of $1,000 and any
integral multiple of $1,000.
The Company, the Trustee, and any agent of the Company or of
the Trustee may deem and treat the registered holder (the "Holder") hereof as
the absolute owner of this Security (whether or not this Security shall be
overdue and notwithstanding any notation of ownership or other writing hereon),
for the purpose of receiving payment hereof, or on account hereof, and for all
other 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. All
such payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, effectually satisfy and discharge liability for
moneys payable on this Security.
No recourse for the payment of the principal of, premium, if
any, or interest on this Security, 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 Security, 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.
The Company intends to treat, and by purchasing this Security,
the holder agrees to treat, for all tax purposes, this Security as a financial
contract for cash settlement, rather than as a debt instrument.
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As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the Corporate Trust Office or agency in a Place of Payment for this
Security, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Securities of this series or of like tenor and of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Set forth below are definitions of some of the terms used in
this Security.
"AMEX" shall mean the American Stock Exchange.
"Average Execution Price" for a security or other property
shall mean the average execution price that an affiliate of the Company receives
or pays for such security or property, as the case may be, to hedge the
Company's obligations under the Securities.
"Business Day" notwithstanding the Indenture, shall mean any
day other than a Saturday, a Sunday or a day on which either the NYSE or the
AMEX is not open for securities trading or commercial banks in New York City are
authorized or required by law or executive order to remain closed.
"Calculation Agency Agreement" shall mean the Calculation
Agency Agreement, dated as of July 3, 2001, between the Company and the
Calculation Agent, as amended, modified or supplemented from time to time.
"Calculation Agent" shall mean the person that has entered
into an agreement with the Company providing for, among other things, the
determination of the Index Level and the Maturity Payment Amount. The initial
Calculation Agent is Lehman Brothers Inc.
"Calculation Date" shall mean the third Business Day before
the Stated Maturity date.
"Close of Trading" shall mean 4:00 p.m., New York City time.
"Closing Price," means the following, determined by the
Calculation Agent based on information reasonably available to it:
(i) If the Index Security is listed on a United States
national securities exchange, trading system or is a NASDAQ Stock
Market, Inc. security, the last reported sale price at the Close of
Trading, regular way, on such day, on the primary securities
exchange or trading system registered under the Securities Exchange
Act of 1934 on
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which such Index Security is listed or admitted to trading or NASDAQ
Stock Market, Inc., as the case may be.
(ii) If the Index Security is listed on a non-United States
securities exchange, trading system (other than a bulletin board) or
market, the last reported sale price at the Close of Trading,
regular way, on such day, on the primary exchange, trading system or
market on which such Index Security is listed or admitted to
trading, as the case may be. The Closing Price will then be
converted into U.S. dollars using the Official W.M. Reuters Spot
Closing Rate.
(iii) If the Index Security is not listed on a national
securities exchange or trading system or is not a NASDAQ Stock
Market, Inc. security, and is listed or traded on a bulletin board,
the average execution price that an affiliate of the Company
receives upon the sale of such Index Security used to hedge the
Company's obligations for this Security. If such Index 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.
(iv) If a Market Disruption Event has occurred for an Index
Security on a day on which the Closing Price for such Index Security
is to be calculated, the Closing Price for such Index Security shall
initially be determined using the Closing Price for such Index
Security on the next preceding Trading Day on which a Market
Disruption Event did not occur. Once the Market Disruption Event has
ceased, the Closing Price of such Index Security shall then be
adjusted to equal the Average Execution Price of the Index Security.
The Rollover Closing Level and the resulting Multipliers shall then
be recalculated and adjusted accordingly.
"Ending Index Level" shall equal the sum of (a) the sum of the
products of the Closing Prices and the applicable Multipliers for each Index
Security for which a Market Disruption Event does not occur on the Calculation
Date, (b) if a Market Disruption Event occurs for an Index Security on the
Calculation Date, the product of the Closing Price for such Index Security and
the Multiplier for such Index Security and (c) any Cash included in the 10
Uncommon Values Index on the Calculation Date.
"Index Securities" shall mean the securities included in the
10 Uncommon Values Index from time to time.
"Issue Price" shall mean $1,000.
"Market Disruption Event" with respect to an Index Security
means any of the following events as determined by the Calculation Agent:
(i) A suspension, absence or material limitation of trading of
such Index Security has occurred on that day, in each case, for more
than two hours of trading or during the one-half hour period
preceding the Close of Trading on the primary organized U.S.
exchange or trading system on which such Index Security is traded
or, in the case of
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an Index Security not listed or quoted in the United States, on the
primary exchange, trading system or market for such Index Security.
Limitations on trading during significant market fluctuations
imposed pursuant to NYSE Rule 80B or any applicable rule or
regulation enacted or promulgated by the NYSE, any other exchange,
trading system, or market, any other self regulatory organization or
the Securities and Exchange Commission of similar scope or as a
replacement for Rule 80B, may be considered material.
Notwithstanding the first sentence of this paragraph, a Market
Disruption Event for an Index Security traded on a bulletin board
means a suspension, absence or material limitation of trading of
such Index Security for more than two hours or during the one hour
period preceding 4:00 p.m., New York City time.
(ii) A suspension, absence or material limitation has occurred
on that day, in each case, for more than two hours of trading or
during the one-half hour period preceding the Close of Trading in
options contracts related to such Index Security, whether by reason
of movements in price exceeding levels permitted by an exchange,
trading system or market on which options contracts related to such
Index Security are traded or otherwise.
(iii) Information is unavailable on that date, through a
recognized system of public dissemination of transaction
information, for more than two hours of trading or during the
one-half hour period preceding the Close of Trading, of accurate
price, volume or related information in respect of such Index
Security or in respect of options contracts related to such Index
Security, in each case traded on any major U.S. exchange or trading
system or in the case of Index Securities of a non-U.S. issuer, the
primary non-U.S. exchange, trading system or market.
For purposes of determining whether a Market Disruption Event has
occurred:
(i) a limitation on the hours or number of days of trading
will not constitute a Market Disruption Event if it results from an
announced change in the regular business hours of the relevant
exchange, trading system or market;
(ii) any suspension in trading in an option contract on an
Index Security by a major securities exchange, trading system or
market by reason of (a) a price change violating limits set by such
securities market, (b) an imbalance of orders relating to those
contracts, or (c) a disparity in bid and ask quotes relating to
those contracts will constitute a Market Disruption Event
notwithstanding that the suspension or material limitation is less
than two hours;
(iii) a suspension or material limitation on an exchange,
trading system or in a market will include a suspension or material
limitation of trading by one class of investors provided that the
suspension continues for more than two hours of trading or during
the last one-half hour period preceding the Close of Trading on the
relevant exchange, trading system or market but will not include any
time when the relevant exchange, trading system or market is closed
for trading as part of that exchange's, trading system's or market's
regularly scheduled business hours; and
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(iv) "Trading systems" include bulletin board services
"Multiplier" relating to each Index Security shall mean the
number of shares (including any fractional share expressed as a decimal) of such
Index Security included in the 10 Uncommon Values Index. The Multipliers with
respect to each Index Security shall only be adjusted for certain extraordinary
corporate events as described in the Calculation Agency Agreement.
"NYSE" shall mean the New York Stock Exchange.
"Official W.M. Reuters Spot Closing Rates" shall mean the
closing spot rates published on Reuters page "WMRA" relevant for such Index
Security.
"Stated Maturity" shall mean July 3, 2003 or if a Market
Disruption Event occurs on July 3, 2003 (or if July 3, 2003 is not a Business
Day, on the next Business Day on which the Ending Index Level can be calculated)
on the third Business Day after the date that an affiliate of the Company
completes the sale of the Index Security with respect to which such Market
Disruption Event occurred to hedge the Company's obligations under the
Securities.
"Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, AMEX and NASDAQ NMS and in the over-the-counter market
for equity securities as determined by the Calculation Agent.
"10 Uncommon Values Index" shall mean the group of common
stocks (or the depositary receipts representing such common stocks) of 10
corporations, selected each year by the Investment Policy Committee of Lehman
Brothers Inc. with the assistance of its Equity Research Department, as adjusted
for certain extraordinary corporate events as described in the Calculation
Agency Agreement.
All terms used but not defined in this Security are used
herein as defined in the Calculation Agency Agreement or the Indenture.
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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 (State)
tenants in common
Additional abbreviations may also be used though not in
the above list.
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FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
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(Name and Address of Assignee, including zip code, must be printed or
typewritten.)
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the within Security, and all rights thereunder, hereby irrevocably constituting
and appointing
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to transfer the said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
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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:
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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.