EXHIBIT 1.09
LEHMAN BROTHERS HOLDINGS INC.
The Dow Jones Industrial Average(SM) SUNS(R)
Stock Upside Note Securities(R)Due April 29, 2010
Number R-1 $7,340,000
ISIN US524908FJ48 CUSIP: 524908 FJ4
See Reverse for Certain Definitions
THIS SECURITY (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 its registered assigns,
at the office or agency of the Company in the Borough of Manhattan, The City of
New York, on the Stated Maturity Date, 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, an amount equal to the Maturity Payment Amount. THE
SECURITIES REPRESENTED HEREBY SHALL NOT BEAR ANY INTEREST.
Any amount payable on the Stated Maturity Date shall 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
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SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
"Dow Jones" and "Dow Jones Industrial Average" are servicemarks of Dow
Jones & Company, Inc. and have been licensed for use by Lehman Brothers Holdings
Inc. This Security, based on the performance of the Dow Jones Industrial
Average, is not sponsored, endorsed, sold or promoted by Dow Jones, and Dow
Jones makes no representation regarding the advisability of investing in this
Security.
"Stock Upside Note Securities" and "SUNS" are trademarks 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.
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: April 29, 2003 LEHMAN BROTHERS HOLDINGS INC.
By:
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Name: Karen Corrigan
Title: Vice President
Attest:
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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: April 29, 2003
CITIBANK, N.A.,
as Trustee
By:
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Name:
Title: Authorized Signatory
Reverse of Security
This Security is one of a duly authorized series of Securities of the
Company designated as The Dow Jones Industrial Average(SM) SUNS(R), Stock Upside
Note Securities Due April 29, 2010 (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.
The Adjusted Final Index Level and the Maturity Payment Amount shall be
determined by the Calculation Agent pursuant to the Calculation Agency
Agreement.
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 Adjusted Final Index Level and 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 Date and the date three Business Days prior
thereto was the date for determining the Closing Level for the last monthly
period.
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 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, if any, or reduce any premium payable on
redemption, or make the principal thereof, or premium, if any, or interest
thereon, if any, 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,
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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
multiples 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, if any, 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 agrees, and by acceptance of beneficial ownership interest in
the Securities each beneficial holder of the Securities will be deemed to have
agreed, for United States federal income tax purposes, (i) to treat the
Securities as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the
"Contingent Payment Regulations") and (ii) to be bound by the Company's
determination of the "comparable yield" and "projected payment schedule," within
the meaning of the Contingent Payment Regulations, with respect to the
Securities. The Company has determined the "comparable yield" to be 4.40% per
annum, compounded semi-annually, and the projected "payment schedule" per $1,000
note to be $1,356.17 due on the Stated Maturity Date.
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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 the terms used in this Security.
"AMEX" shall mean the American Stock Exchange LLC.
"Adjusted Final Index Level" shall mean the product of (a) .868 and (b) the
Final Index Level.
"Alternative Redemption Amount" shall mean, with respect to each $1,000
principal amount of Securities, the product of (a) $1,000 and (b) the Adjusted
Final Index Level, divided by the Initial Index Level.
"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, the Nasdaq
or the AMEX is not open for trading or banking institutions or trust companies
in the City of New York are authorized or obligated by law or executive order to
close.
"Calculation Agency Agreement" shall mean the Calculation Agency Agreement,
dated as of April 29, 2003, between the Company and the Calculation Agent, as
amended from time to time.
"Calculation Agent" shall mean the person that has entered into an
agreement with the Company providing for, among other things, the determination
of the Adjusted Final Index Level and 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.
"Close of Trading" shall mean 4:00 p.m., New York City time.
"Closing Level" shall mean, with respect to any day, the last reported
level of the Index, the Successor Index or any security which is a component of
either such index, as the case may be, at 4:00 p.m., New York City time, as
reported by Dow Jones & Company, Inc., the publisher of the Successor Index or
the primary exchange on which any such security then trades, as the case may be,
on such day; provided, that if any such day is not a Business Day, the last
reported level on the next following Business Day will be used; provided
further, that if a Market Disruption Event occurs on any such date, the
Calculation Agent will determine the Closing Level by reference to the last
reported level on the next following Business Day on which no Market Disruption
Event occurs.
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"Company" shall have the meaning set forth on the face of this Security.
"Final Index Level" shall mean the Closing Level on the Valuation Date.
"Holder" shall have the meaning set forth on the reverse of this Security.
"Indenture" shall have the meaning set forth on the reverse of this
Security.
"Index" shall mean the Dow Jones Industrial Average(SM), as calculated by
Dow Jones & Company, Inc. The Dow Jones Industrial Average is a price-weighted
index of 30 common stocks chosen by the editors of The Wall Street Journal as
representative of a broad cross-section of U.S. industry. As of April 24, 2003,
the component companies of the Dow Jones Industrial Average were as follows: 3M
Company, Alcoa Inc., Altria Group, Inc., American Express Company, AT&T Corp.,
The Boeing Company, Caterpillar Inc., Citigroup Inc., The Coca-Cola Company,
E.I. du Pont de Nemours and Company, Eastman Kodak Company, Exxon Mobil
Corporation, General Electric Company, General Motors Corporation,
Hewlett-Packard Company, The Home Depot, Inc., Honeywell International Inc.,
Intel Corporation, International Business Machines Corporation, International
Paper Company, J.P. Morgan Chase & Co., Johnson & Johnson, McDonald's
Corporation, Merck & Co., Inc., Microsoft Corporation, The Procter & Gamble
Company, SBC Communications Inc., United Technologies Corporation, Wal-Mart
Stores, Inc. and The Walt Disney Company.
"Initial Index Level" shall mean 8440.04, the Closing Level on April 24,
2003.
"Market Disruption Event", on any day, shall mean any of the following
events as determined by the Calculation Agent:
(i) A suspension, absence or material limitation of trading in 20% or
more of the underlying stocks which then comprise the Index or any
Successor Index, as the case may be, has occurred on that day, in each
case, for more than two hours of trading or during the one-half hour period
preceding the Close of Trading on the primary organized U.S. exchange or
trading system on which such securities are traded or, in the case of a
common stock not listed or quoted in the United States, on the primary
exchange, trading system or market for such security. Limitations on
trading during significant market fluctuations imposed pursuant to the
rules of any primary organized U.S. exchange or trading system similar to
NYSE Rule 80B or any applicable rule or regulation enacted or promulgated
by the NYSE, any other exchange, trading system, or market, any other self
regulatory organization or the Securities and Exchange Commission of
similar scope or as a replacement for Rule 80B, may be considered material.
Notwithstanding the first sentence of this paragraph, a Market Disruption
Event for a security traded on a bulletin board means a suspension, absence
or material limitation of trading of such security for more than two hours
or during the one-hour period preceding the Close of Trading.
(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 the Index or any Successor Index, as the case may be, whether by
reason of movements in price exceeding levels permitted by an exchange,
trading system or market on which such options contracts related to the
Index, or any Successor Index, are traded or otherwise.
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(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
20% or more of the underlying stocks which then comprise the Index or any
Successor Index, as the case may be, or in respect of options contracts
related to the Index or any Successor Index, as the case may be, in each
case traded on any major U.S. exchange or trading system or, in the case of
securities of a non-U.S. issuer, traded on 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 shall not
constitute a Market Disruption Event if it results from an announced change
in the regular business hours of the relevant exchange, trading system or
market;
(ii) any suspension in trading in an options contract on the Index or
any Successor Index, as the case may be, by a major securities exchange,
trading system or market by reason of (a) a price change violating limits
set by such securities market, (b) an imbalance of orders relating to those
contracts, or (c) a disparity in bid and ask quotes relating to those
contracts, shall constitute a Market Disruption Event notwithstanding that
the suspension or material limitation is less than two hours;
(iii) a suspension or material limitation on an exchange, trading
system or in a market shall include a suspension or material limitation of
trading by one class of investors provided that the suspension continues
for more than two hours of trading or during the last one-half hour period
preceding the Close of Trading on the relevant exchange, trading system or
market but shall not include any time when the relevant exchange, trading
system or market is closed for trading as part of that exchange's, trading
system's or market's regularly scheduled business hours; and
(iv) "trading system" includes bulletin board services.
"Maturity Payment Amount", for each $1,000 principal amount of Securities,
shall be equal to the greater of (a) $1,000 and (b) the Alternative Redemption
Amount.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"NYSE" shall mean The New York Stock Exchange, Inc.
"Securities" shall have the meaning set forth on the reverse of this
Security.
"Security" shall have the meaning set forth on the face of this Security.
"Stated Maturity Date" shall mean April 29, 2010 (or if April 29, 2010 is
not a Business Day, on the next Business Day); provided, that if a Market
Disruption Event occurs on the Valuation Date, the Stated Maturity Date shall be
the third Business Day following the date that the Final Index Level is
determined.
"Successor Index" shall mean such substitute index as the Calculation Agent
may select pursuant to the Calculation Agency Agreement upon discontinuance of
the Index.
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"Trustee" shall have the meaning set forth on the reverse of this Security.
"Valuation Date" shall mean April 26, 2010; provided, that if such day is
not a Business Day, the Valuation Date shall mean the next following Business
Day; provided further, that if a Market Disruption Event occurs on such date,
the Valuation Date will be the next following Business Day on which no Market
Disruption Event occurs.
All terms used but not defined in this Security are used herein as defined
in the Indenture or the Calculation Agency Agreement.
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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.