CUSIP NO. 52517P VT5
REGISTERED PRINCIPAL AMOUNT: $6,850,000
No. R-1
LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTE, SERIES G
RANGERS(SM)
RISK ADJUSTING EQUITY RANGE SECURITIES(SM)
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: 100% of the Principal STOCK SETTLEMENT OPTION: OPTIONAL COUPON RATE RESET:
Amount [ ] YES [X] NO [ ] YES [X] NO
AGGREGATE ISSUE PRICE: $6,850,000 FRACTIONAL SHARE ISSUANCE: OPTIONAL RESET DATES: N/A
[ ] YES [X] NO
ISSUE DATE: February 23, 2004 REDEEMABLE:
INITIAL MULTIPLIER: 1.0 [ ] YES [X] NO
STATED MATURITY DATE: February 24,
2005 EXCHANGE RATE AGENT: N/A INITIAL REDEMPTION DATE: N/A
VALUATION DATE: February 16, 2005, DEPOSITORY: The Depositary Trust Company REDEMPTION NOTICE PERIOD: N/A
subject to postponement if a Market
Disruption Event occurs DUAL CURRENCY NOTE: RENEWABLE:
[ ] YES [X] NO [ ] YES [X] NO
COUPON RATE: 17.00% per annum
OPTION ELECTION DATES: N/A INITIAL MATURITY DATE: N/A
COUPON PAYMENT DATES: February
24, May 24, August 24 and November 24 of OPTIONAL PAYMENT SPECIAL ELECTION INTERVAL: N/A
each year, beginning on May 24, 2004 CURRENCY: N/A
RENEWABLE IN PART:
REGULAR RECORD DATES: 15 calendar DESIGNATED EXCHANGE [ ] YES [X] NO
days prior to each coupon payment date RATE: N/A
AUTHORIZED RENEWABLE AMOUNTS: N/A
ACCRUE TO PAY: OPTION VALUE CALCULATION
[X] YES [ ] NO AGENT: N/A SPECIAL ELECTION PERIOD: N/A
DETERMINATION PERIOD: Five business OPTION TO RECEIVE PAYMENTS REPURCHASE OPTION:
days IN THE SPECIFIED CURRENCY: [ ]YES [X] NO
[ ] YES [X] NO
INITIAL VALUE: $13.55 OPTIONAL REPURCHASE DATE: N/A
SPECIFIED CURRENCY: N/A
THRESHOLD VALUE: $9.485, subject to OPTIONAL REPURCHASE NOTICE PERIOD:
adjustment as provided herein DUAL CURRENCY NOTE PREPAYMENT N/A
AMOUNT: N/A
INDEX STOCK ISSUER: Advanced Digital OPTIONAL REPURCHASE CUTOFF PERIOD:
Information Corporation EXTENDIBLE NOTE: N/A
[ ] YES [X] NO
INDEX STOCK: The common stock, no par OTHER PROVISIONS: N/A
value per share, of the Index Stock Issuer. EXTENSION PERIOD: N/A
AUTHORIZED DENOMINATIONS: NUMBER OF EXTENSION PERIODS: N/A
$1,000 and integral multiples thereof
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, an amount equal to the Maturity
Payment Amount (as defined below) and, if so specified above, to make coupon
payments on the Principal Amount hereof 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 Maturity Payment Amount and
premium and on any overdue installment of coupon payments. Unless otherwise
specified above, and except as provided in Section 6 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 the face 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 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 with not less than 15
days' prior written notice to the Trustee, will pay the Maturity Payment Amount
or the Redemption Payment Amount, as applicable, 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 determines that
it is prohibited from delivering such shares, or that it would be unduly
burdensome to deliver such shares on such date, it will pay the applicable
Payment Amount in cash. If the Company elects 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
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Security on the applicable Calculation Day. 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 or the Redemption Payment Amount, as
applicable, 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 face 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 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.
5
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.
"RANGERS" and "Risk AdjustiNG Equity Range Securities" are registered
service marks 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: February 23, 2004
[SEAL] LEHMAN BROTHERS HOLDINGS INC.
By:
--------------------------
Name:
Title:
Attest:
--------------------------
Name:
Title:
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:
--------------------------
Name:
Title:
7
[REVERSE OF NOTE]
LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES G
RANGERS(SM)
RISK ADJUSTING EQUITY RANGE SECURITIES(SM)
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, RANGERS(SM),
Risk AdjustiNG Equity Range Securities(SM) 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. The terms and provisions on the reverse of this Note
are subject to the terms and provisions on the face hereof. If any term or
provision on the reverse of this Note is different than, or inconsistent with,
the terms and provisions on the face hereof, the terms and provisions on the
face shall prevail.
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
8
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 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
9
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 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 under
"Redeemable" and related captions, and subject to any additional or other
provisions in such sections, 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 Payment Amount,
together, in each case, with accrued coupon payments to the date of Redemption.
"Redemption Payment Amount" shall mean the Maturity Payment Amount calculated as
though the date of Redemption were the Stated Maturity Date and the date on
which notice of redemption is given in accordance with the Indenture were the
Valuation Date and marked the end of the Measurement Period. 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
(or such other Redemption Notice Period specified on the face hereof) prior to
the date of Redemption. 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.
Section 4. Optional Repurchase. If so specified on the face hereof
under "Repurchase Option" and related captions, and subject to any additional or
other provisions in such sections, this Note will be repayable prior to the
Maturity Date at the option of the Holder at the Optional Repurchase Amount. The
"Optional Repurchase Amount" shall be the Maturity Payment Amount calculated as
though the Optional Repurchase 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, together with accrued coupon payments to the
applicable Optional Repayment Date. Unless otherwise specified on the face
hereof, the "Optional Repurchase Date" shall be the eighth Business Day
following the Business Day on which the Company receives a written notice of
election to require repurchase of this Note in the manner specified in the
following sentence. In order for this Note to be so repaid, the Trustee must
receive, before the
10
earlier of (a) the date the Company gives notice of its intention to redeem this
Note pursuant to Section 3 or (b) eight Business Days (or such other Optional
Repurchase Cutoff Period specified on the face hereof) before the Stated
Maturity 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 5 or Section 7. 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 5. 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")
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
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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 4 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 6. 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
12
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
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 7. 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
13
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 4 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,
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 8. 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").
14
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
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 9. 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 10. 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
15
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 11. 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 12. 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.
Section 13. 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 14. 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
16
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 15. 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 and
marked the end of the Measurement Period. In 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 16. 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 17. Defined Terms. All terms used but not defined in this Note
are used herein as defined in the Indenture.
Section 18. Tax Treatment. The Company intends to treat, for all tax
purposes, this Note as a financial contract rather than as a debt instrument.
17
Section 19. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 20. Definitions. Set forth below are definitions of certain of
the terms used in this Note. The definitions set forth below are subject to the
terms and provisions on the face hereof. If any definition below is different
than, or inconsistent with, the terms and provisions on the face hereof, the
terms and provisions on the face shall prevail.
"ADR" shall mean American Depositary Receipt.
"Alternative Redemption Amount" shall equal, for each $1,000 Note, the
product of (a) $1,000 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
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 February 6, 2004, 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 Settlement Value and the Payment Amount, which term shall, unless the
context otherwise requires, include its successors and assigns. The initial
Calculation Agent shall be Lehman Brothers Inc.
"Calculation Day" shall mean (a) for payment at the Stated Maturity
Date, the Valuation Date, (b) for a payment upon a Repurchase, the date which is
the number of Business Days equal to the Determination Period before the
Non-Delaying Event Repurchase Date or (c) for payment upon a Redemption, the
date the Redemption Notice is given in accordance with the Indenture.
"Cash Settlement Option" shall have the meaning set forth on the face
of this Note.
18
"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 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.
"Delaying Event" shall mean a Market Disruption Event for a Settlement
Value Security which occurs on the relevant Calculation Day.
19
"Delaying Event Redemption Date" shall mean, if a Delaying Event occurs
on the Calculation Day for a Redemption, the later of (a) the Non-Delaying Event
Redemption Date and (b) the number of Business Days equal to the Determination
Period after the Payment Determination Date thereof.
"Delaying Event Repurchase Date" shall mean, if a Delaying Event occurs
on the Calculation Day for a Repurchase, the number of Business Days equal to
the Determination Period after the Payment Determination Date thereof.
"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 relevant Calculation
Day, of any of the extraordinary corporate transactions described in Section 4
of Annex A of the Calculation Agency Agreement.
"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 face 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
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.
20
(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 Calculation Day, or if the Calculation
Day is not a Scheduled Trading Day, 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 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 $1,000 Security, (1)(a)
$1,000, or (b) if the value of the Index Stock falls below the Threshold Value
at any time during the Measurement Period, the lesser of (i) $1,000, and (ii)
the Alternative Redemption Amount; and (2) any accrued but unpaid coupon
payments through but excluding the Maturity Date.
"Measurement Period" shall mean the period from the date of the
relevant Pricing Supplement to and including the relevant Valuation Date.
21
"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.
"Non-Delaying Event Redemption Date" shall mean the date set forth in
the Redemption Notice, which date shall not be less than 30 nor more than 60
days after the date of the Redemption Notice, unless otherwise specified on the
face hereof.
"Non-Delaying Event Repurchase Date" shall mean the date which is the
number of Business Days equal to the Optional Repurchase Notice Period following
the Business Day on which the Company receives notice of an Optional Repurchase
from a Holder.
"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.
"Optional Repurchase Amount" shall have the meaning set forth on the
reverse of this Note.
"Optional Repurchase Date" shall mean the meaning set forth on the
reverse of this Note.
"Optional Repurchase Notice Period" shall have the meaning set forth on
the face of this Note.
"Payment Amount" shall mean the Maturity Payment Amount, the Redemption
Payment Amount, if applicable, or the Optional Repurchase Payment Amount, if
applicable, as the case may be.
"Payment Determination Date" shall mean the relevant Calculation Day,
unless a Delaying Event occurs with respect to such Payment Determination Date,
in which case the first Business Day after the Calculation Day on which the
Closing Prices for all Settlement Value Securities that have been subject to a
Delaying Event have been determined.
"Pricing Supplement" shall mean the pricing supplement issued by the
Company relating to the series of the Securities.
"Principal Amount" shall have the meaning set forth on the face of this
Note.
"Redemption" shall mean, if or unless otherwise specified on the face
of this Note, the option of the Company to redeem, at any time on or after the
date specified on the face of this Note, in whole or from time to time in part,
the Securities.
22
"Redemption Payment Amount" shall have the meaning set forth on the
reverse of this Note.
"Redemption Notice" shall mean the notice of Redemption mailed to the
Holders pursuant to Section 3 hereof.
"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.
"Repurchase" shall mean, if or unless otherwise specified on the face
of this Note, the option of a holder to elect to require the Company to
repurchase, at any time until the earlier of (a) the date the Company gives the
Redemption Notice pursuant to Section 3 hereof or (b) eight Business Days before
(or such other period specified as the "Optional Repurchase Cutoff Period" on
the face hereof) the Stated Maturity Date, in whole or from time to time in
part, such holder's Securities.
"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 Calculation Day and (b) any cash included in the Settlement
Value on the Calculation Day; provided, that if a Market Disruption Event occurs
on the Calculation Day, 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 Calculation Day, and (ii) with respect to Settlement
Value Securities that have been subject to a Market Disruption Event, the
Average Execution Price on the postponed Calculation Day. The Settlement Value
used to calculate the Maturity Payment Amount shall be determined by the
Calculation Agent.
"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 have the meaning set forth on the face of
this Note.
"Stock Settlement Option" shall have the meaning set forth on the face
of this Note.
"Threshold Value" shall have the meaning set forth on the face of this
Note. The Threshold Value may be adjusted from time to time by the Calculation
Agent to reflect stock splits, extraordinary distributions, liquidations,
mergers, consolidations or similar events involving or relating to any
Settlement Value Security. Such adjustments shall, to the extent the Calculation
Agent believes appropriate, be made in a manner consistent with the adjustments
to
23
the Multipliers and the Settlement Value Securities described in the Calculation
Agency Agreement.
"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.
24
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 Repurchase Amount plus accrued coupon payments to
the Optional Repurchase Date, if this Note is to be repaid pursuant to the
Optional Repurchase provision described in Section 4 hereof, or (ii) the price
specified pursuant to the Optional Coupon Reset provision described in Section 5
hereof or the Extendible Notes provision described in Section 7 hereof. Any such
election is irrevocable except as provided in Section 5 or Section 7 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:
25
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:
26
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.
EXHIBIT A
RESET NOTICE
LEHMAN BROTHERS HOLDINGS INC.
Medium-Term Notes, Series G
RANGERS(SM)
Risk AdjustiNG Equity Range Securities(SM)
Performance Linked to the Value of a Common Stock
CUSIP No. 52517P VT5
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.