EXHIBIT 1.09
LEHMAN BROTHERS HOLDINGS INC.
Nasdaq-100 Index(R) Rebound RANGERS(SM),
Rebound Risk AdjustiNG Equity Range Securities(SM) Notes Due June 7, 2008
Number R-1 $19,388,000
ISIN US 524908LY41 CUSIP 524908LY4
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 105% of 1,464.22, the Securities will be
redeemed for an amount equal to the Redemption Amount.
Any amount payable at Stated Maturity hereon will be paid only upon
presentation and surrender of this Security.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
"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: June 7, 2004 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 therein referred
to in the within-mentioned Indenture.
Dated: June 7, 2004
CITIBANK, N.A.
as Trustee
By:
-----------------------------
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 June 7, 2008 (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 2/3 in aggregate
principal amount of each series of Securities at the time Outstanding to be
affected (each series voting as a class), evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to, or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities of all such series; provided, however, that no such
supplemental indenture shall, among other things, (i) change the fixed maturity
of any Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, if any, or reduce any premium
payable on redemption, or make the principal thereof, or premium, if any, or
interest thereon, if
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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.
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
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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 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.
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 June 2, 2005, June 2,
2006, and June 4, 2007; 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 June 7, 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 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, 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 sessions.
"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.
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"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.
"Final Valuation Date" shall mean June 4, 2008; 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", with respect to the Index 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 the securities that then comprise 20% or more of the Index or any
Successor Index, 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 the Index or any Successor Index
by the primary exchange or quotation system on which those futures or
options contracts are traded, at any time during the one-hour period that
ends at the Close of Trading on such day, whether by reason of movements in
price exceeding limits permitted by that primary exchange or quotation
system or otherwise.
(3) Any event, other than an early closure, that disrupts or impairs
the ability of market participants in general to effect transactions in, or
obtain market values for, the securities that then comprise 20% or more of
the Index or any Successor Index, on the primary U.S. exchange or quotation
system on which those securities are traded, or in the case of a security
not listed or quoted in the United States, on the primary exchange,
quotation system or market for such 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 the
Index or any Successor Index 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
securities that then comprise 20% or more of the Index or any Successor
Index are traded or on which futures or options contracts relating to the
Index or any Successor Index 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.
For purposes of determining whether a Market Disruption Event has occurred
the relevant percentage contribution of a security to the level of the
Index or any Successor Index will be based on a comparison of (x) the
portion of the level of the Index attributable to that security and (y) the
overall level of the Index, in each case immediately before the occurrence
of the Market Disruption Event.
"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 105% of 1,464.22, $1,310; or (ii) If
the Ending Index Level of the Index on the Final Valuation Date is less than
105% of 1,464.22, the lesser of:
(a) $1,000; and
Ending Index Level
(b) $1,000 x (------------------ + 0.20)
1,464.22
"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 105% of 1,464.22:
$1,000 + ($77.50 x Years Outstanding)
"Relevant Exchange" shall mean, for each security included in the
Index, the primary securities exchange, quotation system, including any bulletin
board service, on which such security is traded.
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"Securities" shall have the meaning set forth on the reverse of this
Security.
"Security" shall have the meaning set forth on the face of this
Security.
"Stated Maturity" shall mean June 7, 2008 (or if June 7, 2008 is not a
Business Day, on the next Business Day); provided, that if a Market Disruption
Event occurs on the Final Valuation 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 Act _____________________________________
of Survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
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FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------
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(Name and Address of Assignee, including zip code, must be printed or
typewritten.)
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the within Security, and all rights thereunder, hereby irrevocably constituting
and appointing
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to transfer the said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
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NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Security in every particular, without
alteration or enlargement or any change whatever.
Signature(s) Guaranteed:
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.