EXHIBIT 1.09
LEHMAN BROTHERS HOLDINGS INC.
Nasdaq-100 Index(R)Rebound RANGERS(SM),
Rebound Risk AdjustiNG Equity Range Securities(SM) Notes Due May 20, 2007
Number R-1 $27,500,000
ISIN US 524908FK11 CUSIP 524908FK1
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
registered assigns, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, at 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, an amount equal to the Maturity Payment Amount.
THE SECURITIES REPRESENTED HEREBY SHALL NOT BEAR ANY INTEREST.
If, on any of the Annual Observation Dates, the Ending Index Level of
the Index is greater than or equal to 1,162.93, the Securities will be redeemed
for an amount equal to the Redemption Amount.
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Any amount payable at Stated Maturity hereon will be paid only upon
presentation and surrender of this Security.
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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.
"Nasdaq-100", "Nasdaq-100 Index", and "Nasdaq" are trade or
servicemarks of The Nasdaq Stock Market, Inc. (together with its affiliates, the
"Nasdaq Corporations") and are licensed for use by the Company. This Security
has not been passed on by the Nasdaq Corporations as to its legality or
suitability. This Security is not issued, endorsed, sold, or promoted by the
Nasdaq Corporations. THE NASDAQ CORPORATIONS MAKE NO WARRANTIES AND BEAR NO
LIABILITY WITH RESPECT TO THIS SECURITY.
"RANGERS" is a servicemark and "Risk AdjustiNG Equity Range Securities"
is a servicemark 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: May 20, 2003 LEHMAN BROTHERS HOLDINGS INC.
By:
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Name:
Title:
Attest:
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Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: May 20, 2003
CITIBANK, N.A.
as Trustee
By:
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Name:
Title: Authorized Signatory
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Reverse of Security
This Security is one of a duly authorized series of Securities of the
Company designated as Nasdaq-100 Index(R) Rebound RANGERS(SM), Rebound Risk
AdjustiNG Equity Range Securities(SM) Notes Due May 20, 2007 (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 Maturity Payment Amount or the Redemption 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 Maturity Payment Amount or the Redemption Amount and shall have no
duty to make any such determination.
This Security is not subject to any sinking fund.
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 Final Valuation 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, if any, or reduce any premium
payable on redemption, or make the principal thereof, or premium, if any, or
interest thereon, if
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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,
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 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 the terms used in this Security.
"AMEX" shall mean the American Stock Exchange LLC.
"Annual Observation Date" shall mean each of May 17, 2004, May 16, 2005
and May 15, 2006; provided, that if a Market Disruption Event occurs on any such
day, then such Annual Observation Date shall be the next following Business Day
on which no Market Disruption Event occurs.
"Business Day", notwithstanding any provision in the Indenture, shall
mean any day that is not a Saturday, a Sunday or a day on which the NYSE, Nasdaq
or AMEX is not open for trading or banking institutions or trust companies in
the City of New York are authorized or obligated by law or executive order to
close.
"Calculation Agency Agreement" shall mean the Calculation Agency
Agreement, dated as of May 20, 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 Maturity Payment Amount and the Redemption 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 the Close of Trading, as reported by
Nasdaq, the publisher of the Successor Index or the primary exchange on which
any such security then trades, as the case may be.
"Company" shall have the meaning set forth on the face of this
Security.
"Ending Index Level" shall equal the Closing Level on the Final
Valuation Date or any Annual Observation Date, as the case may be.
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"Final Valuation Date" shall mean May 16, 2007; provided, that if a
Market Disruption Event occurs on such day, then the Final Valuation Date shall
be the next following Business Day on which no Market Disruption Event occurs.
"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 Nasdaq-100 Index(R), as calculated by Nasdaq.
"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 securities 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 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
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.
(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.
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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 systems" include bulletin board services.
"Maturity Payment Amount" for each $1,000 principal amount of
Securities, shall equal (i) if the Ending Index Level of the Index on the Final
Valuation Date is greater than or equal to 1,162.93, $1,310; or (ii) If the
Ending Index Level of the Index on the Final Valuation Date is less than
1,162.93, the lesser of:
(a) $1,000; and
( Ending Index Level + 0.20 )
(b) $1,000 x ------------------
1162.93
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"NYSE" shall mean The New York Stock Exchange, Inc.
"Redemption Amount" for each $1,000 principal amount of Securities,
shall equal, if the Ending Index Level of the Index on any Annual Observation
Date is greater than or equal to 1,162.93:
$1000 + ($77.50 x Years Outstanding)
"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.
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"Stated Maturity" shall mean May 20, 2007 (or if May 20, 2007 is not a
Business Day, on the next Business Day); provided, that if a Market Disruption
Event occurs on the Calculation Date, the Stated Maturity shall be the third
Business Day following the date that the Ending Index Level on the postponed
Final Valuation Date 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.
"Trustee" shall have the meaning set forth on the reverse of this
Security.
"Years Outstanding" shall mean the number of full years elapsed since
the date on which the Securities were first offered for sale.
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 tenants in (State)
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.