SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 16, 1996
LEHMAN BROTHERS INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-6817 13-2518466
(Commission File Number) (IRS Employer Identification No.)
3 World Financial Center
New York, New York 10285
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including
area code: (212) 526-7000
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following Exhibits are filed as part of this Report.
4.1 Form of Senior Subordinated Medium-Term Note, Series A (Fixed Rate)
4.2 Form of Senior Subordinated Medium-Term Note, Series A (Floating Rate)
4.3 Form of Senior Subordinated Medium-Term Note, Series A (Currency Indexed)
The Exhibit Index to this Report is incorporated herein by reference.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
LEHMAN BROTHERS INC.
By: /s/ Karen M. Muller
Karen M. Muller
Managing Director
Date: April 16, 1996
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
4.1 Form of Senior Subordinated Medium-Term Note, Series A (Fixed Rate)
4.2 Form of Senior Subordinated Medium-Term Note, Series A (Floating Rate)
4.3 Form of Senior Subordinated Medium-Term Note, Series A (Currency Indexed)
<PAGE>
EXHIBIT 4.1
CUSIP NO. __________
REGISTERED
No. ___ FACE AMOUNT:
If this Note is an OID Note (as defined below) the following legend is
applicable:
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF THIS NOTE IS _____% OF ITS
PRINCIPAL AMOUNT, AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE YIELD TO
MATURITY COMPOUNDED ______________, THE ISSUE DATE AND THE AMOUNT OF ORIGINAL
ISSUE DISCOUNT ALLOCABLE TO THE SHORT PERIOD DETERMINED USING THE EXACT METHOD
WITHIN THE MEANING OF PROPOSED TREASURY REGULATION SECTION 1.1272-1(c) (2)(ii)
ARE AS SET FORTH BELOW.
LEHMAN BROTHERS INC.
SENIOR SUBORDINATED MEDIUM-TERM NOTE, SERIES A
(FIXED RATE)
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.
<PAGE>
ISSUE PRICE: $ AMORTIZING NOTE: OPTIONAL REPAYMENT PRICES:
[ ] YES [ ] NO
ISSUE DATE: OPTIONAL INTEREST RATE RESET:
SINKING FUND: [ ] YES [ ] NO
MATURITY DATE:
TOTAL AMOUNT OF OID: OPTIONAL RESET DATES:
INTEREST RATE:
YIELD TO MATURITY: OPTIONAL REDEMPTION:
INTEREST PAYMENT [ ] YES [ ] NO
DATES: INITIAL ACCRUAL PERIOD OID:
INITIAL REDEMPTION DATE:
REGULAR RECORD AUTHORIZED DENOMINATIONS:
DATES: INITIAL REDEMPTION
EXTENDIBLE NOTE: PERCENTAGE: %
[ ] YES [ ] NO
DEPOSITORY: APPLICABILITY OF ANNUAL
REDEMPTION PERCENTAGE
EXTENSION PERIOD: PERCENTAGE REDUCTION:
[ ] YES [ ] NO
NUMBER OF EXTENSION PERIODS:If Yes, state Annual Percentage
Reduction:%
OPTION ELECTION OPTION TO ELECT REPAYMENT: RENEWABLE NOTE:
DATES: [ ] YES [ ] NO [ ] YES [ ] NO
OPTIONAL REPAYMENT DATES: INITIAL MATURITY DATE:
SPECIAL ELECTION INTERVAL:
OPTION VALUE RENEWABLE IN PART:
CALCULATION AGENT: [ ] YES [ ] NO
OTHER PROVISIONS: AUTHORIZED RENEWABLE AMOUNTS:
SPECIAL ELECTION PERIOD:
LEHMAN BROTHERS 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
____________below) and, if so specified above, to pay interest thereon from the
Issue Date specified above or from the most recent Interest Payment Date
specified above to which interest has been paid or duly provided for at the
Interest Rate specified above until the principal hereof is paid or made
available for payment and (to the extent that the payment of such interest shall
be legally enforceable) at such rate per annum on any overdue principal and
premium and on any overdue instalment of interest. The "Principal Amount" of
this Note at any time means (i) if this Note is an OID Note (as defined below),
the Amortized Face Amount at such time as described in Section 6 on the reverse
hereof, (ii)if this Note is an Amortizing Note, the Outstanding Face Amount at
such time as described in Section 3 on the reverse hereof and (iii) in all other
cases, the Face Amount hereof.
If this Note is subject to an Annual Percentage Reduction as specified
above, the Redemption Price shall initially be the Initial Redemption Percentage
of the Principal Amount of this Note on the Initial Redemption Date and shall
decline at each anniversary of the Initial Redemption Date (each such date, a
"Redemption Date") by the Annual Percentage Reduction of such Principal Amount
until the Redemption Price is 100% of such Principal Amount.
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 (a) any Note 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 Note not identified in (a) 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 pay
interest semiannually on February 15 and August 15 of each year (unless other
Interest Payment Dates are specified above) (each an "Interest Payment Date"),
commencing with the first Interest Payment Date next succeeding the Issue Date,
and at Maturity; provided, that any payment of principal, premium, if any, or
interest to be made on any Interest Payment Date or on a date of Maturity 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 Interest Payment Date or such date
of Maturity, as the case may be, and no additional interest shall accrue as a
result of such delayed payment. The term "Business Day" means any day, other
than a Saturday or Sunday, that is not a day on which banking institutions in
the Borough of Manhattan, The City of New York are authorized or required by law
or regulation to close. Each payment of interest hereon shall include
interest accrued through the day before the Interest Payment Date or date of
Maturity, as the case may be. Unless otherwise specified above, interest on this
Note will be computed on the basis of a 360-day year of twelve 30-day
months. In no event shall the interest 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 interest payable on any Interest
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 Interest Payment Date; provided, that, notwithstanding
any provision of the Indenture to the contrary, interest payable on any date of
Maturity shall be payable to the Person to whom principal 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 Interest Payment Date
relating to such Regular Record Date, interest for the period beginning on the
Issue Date and ending on such Interest Payment Date shall be paid on the
Interest Payment Date following the next succeeding Regular Record Date to the
registered Holder on such next succeeding Regular Record Date.
Unless otherwise indicated above, and except as provided below if this Note
is a Global Security, all payments of interest on this Note and all principal
payments hereon if this Note is an Amortizing Note (other than interest and,
in the case of Amortizing Notes, principal payable at Maturity) will be made by
wire transfer or by check provided, that, if the Holder hereof is the Holder of
U.S. $10,000,000 or more in aggregate Principal Amount of Notes of this series
of like tenor and term, such Holder shall be entitled to receive interest
payments (and principal payments, if this Note is an Amortizing Note) in
immediately available funds, but only if complete and appropriate instructions
have been received in writing by the Trustee (or any such Paying Agent) on or
prior to the applicable Regular Record Date.
Unless otherwise indicated above, and except as provided below if this
Note is a Global Security, payments of principal, premium, if any, and interest
payable at Maturity 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.
Unless otherwise specified above, if this Note is a Global Security,
payments of interest hereon and principal hereon if this Note is an Amortizing
Note (in each case, other than at Maturity), will be made in immediately
available funds in accordance with existing arrangements between the Trustee
(or any duly appointed Paying Agent) and the Depository. Unless otherwise
specified above, if this Note is a Global Security, any principal, premium
and/or interest payable hereon at Maturity will be paid by wire transfer in
immediately available funds to an account specified by the Depository.
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.
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.
This Note shall not be entitled to any benefit under the Indenture or be
valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the Indenture.
IN WITNESS WHEREOF, Lehman Brothers Inc. has caused this instrument to be
signed by its Chairman of the Board, one of its Vice Chairmen of the Board, its
President, its Treasurer or one of its Vice Presidents, 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:
[SEAL] LEHMAN BROTHERS 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.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:______________________
Authorized Officer
<PAGE>
[REVERSE OF NOTE]
LEHMAN BROTHERS INC.
SENIOR SUBORDINATED MEDIUM-TERM NOTE, SERIES A
(Fixed Rate)
Section 1. General. This Note is one of a duly authorized series of
Notes of the Company designated as the Senior Subordinated Medium-Term Notes,
Series A (Fixed Rate) of the Company (herein called the "Notes"), limited in
aggregate principal amount to $____________________ (or such greater amount, if
OID Notes are issued, as shall result in aggregate gross proceeds to the
Company of $______________), 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 March 1, 1996 (the "Indenture"), duly executed and delivered by the Company
and The First National Bank of Chicago, 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 and of the terms upon which the Securities are,
and are to be, authenticated and delivered. The separate series of Securities
may be issued in various aggregate principal amounts, may mature at different
times, may bear interest (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.
Section 2. Redemption. If so specified on the face hereof, 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
(which shall not be prior to the first anniversary date of the original issuance
hereof) at either a price based on a constant percentage of the Principal Amount
of this Note as specified on the face hereof or at prices declining from the
premium specified on the face hereof, if any, to 100% of the Principal Amount
hereof, together, in each case, with accrued interest to the Redemption Date;
provided, that permission of the Exchange for such redemption has been obtained.
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 prior to the Redemption Date. 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 3. Sinking Funds and Amortizing Notes. Unless otherwise
specified on the face hereof or unless this Note is an Amortizing Note, this
Note will not be subject to any sinking fund. If it is specified on the face
hereof that this Note is an Amortizing Note, the Company will make payments
combining principal and interest on the dates and in the amounts set forth in
the table appearing in Schedule 1, attached to this Note. If this Note is an
Amortizing Note, payments made hereon will be applied first to interest due and
payable on each such payment date and then to the reduction of the Outstanding
Face Amount. The term "Outstanding Face Amount" means, at any time, the amount
of unpaid principal hereof at such time.
Section 4. Optional Repayment. If so specified on the face hereof,
this Note will be repayable prior to the Maturity Date at the option of the
Holder on the Optional Repayment Dates specified on the face hereof at the
Optional Repayment Prices specified on the face hereof, together with accrued
interest to the applicable Optional Repayment Date. Unless otherwise specified
on the face hereof, in order for this Note to be so repaid, the Company must
receive, at least 30 but not more than 45 days prior to an Optional Repayment
Date, either (i) this Note with the form below entitled "Option to Elect
Repayment" duly completed or (ii) a telegram, telex, facsimile transmission 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 Face Amount
hereof, the Face 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, facsimile transmission 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 Face Amount then
outstanding provided that the Face 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 Face Amount
hereof shall be issued in the name of the Holder of this Note.
Section 5. Optional Interest Reset. If so specified on the
face hereof, the Interest 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 interest
rate, (ii) such new interest 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 Interest 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 Interest
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 interest 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 interest rate
provided for in the Reset Notice and establish an interest rate that is higher
than the interest rate provided for in the Reset Notice for the Subsequent
Interest Period commencing on such Optional Reset Date by causing the Trustee to
mail by first-class mail notice of such higher interest 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 interest rate is reset on an Optional Reset Date will bear such higher
interest rate for the Subsequent Interest Period.
If the Company elects to reset the interest 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 the Face Amount hereof to be repaid, plus any
interest 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. OID Notes. If this Note is an OID Note, unless
otherwise specified on the face hereof, the amount payable in the event of
redemption by the Company, repayment at the option of the Holder or acceleration
of Maturity shall be the Amortized Face Amount of this Note as of the date of
such redemption, repayment or acceleration rather than the Face Amount hereof.
The "Amortized Face Amount" of this Note shall be the amount equal to (a) the
Issue Price (as set forth on the face hereof) plus (b) that portion of the
difference between the Issue Price and the Face Amount hereof that has accrued
at the Yield to Maturity set forth on the face hereof (computed in accordance
with generally accepted United States bond yield computation principles) at the
date as of which the Amortized Face Amount is calculated, but in no event shall
the Amortized Face Amount of this Note exceed the Face Amount.
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 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 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 Maturity Date, (iii) the Interest 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 Maturity Date hereof shall be extended automatically, and, except as
modified by the 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
interest rate provided for in the Extension Notice and establish a higher
interest rate for the Extension Period by causing the Trustee to mail notice of
such higher interest 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 interest
rate for the Extension Period, whether or not tendered for repayment.
If the Company extends the 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 the Face Amount hereof to be repaid plus any accrued interest to
such date. In order for this Note to be so repaid on the Original Stated
Maturity, the Holder must follow the procedures set forth in Section 5 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 Interest 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 Interest 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
Interest 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 automatic extension of the Maturity hereof or
any portion hereof as described below.
If the Holder elects to terminate the automatic 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 Interest 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").
The Holder may elect to terminate the automatic extension of
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 15 nor more than 30 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
terminate the automatic extension of the Maturity of this Note may be exercised
with respect to less than the entire Face Amount hereof only if so specified on
the face hereof and only in such Face 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 Maturity Date specified on
the face hereof.
Unless otherwise specified above, any such election to
terminate will be effective only if this Note, with the "Option to Elect
Termination of Automatic Extension" included herein duly executed, is presented
to the Trustee (or any duly appointed Paying Agent) simultaneously with notice
of such election (or, in the event notice of such election, together with a
guarantee of delivery within five Business Days, is transmitted on behalf of the
Holder from a member of a national securities exchange, the National Association
of Securities Dealers, Inc. or a commercial bank or trust company in the United
States, within five Business Days of the date of such notice). 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 face amount of this Note for which the
election to terminate the automatic extension of Maturity was exercised, with
terms identical to those specified herein (except for the Issue Date and the
Initial Interest Rate and except that such Note shall have a fixed,
nonextendable Maturity on the Extended Maturity Date) and (ii) if such election
is made with respect to less than the full Face Amount hereof, a replacement
Renewable Note, in a face amount equal to the Face Amount of this Note for which
no election 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, provided, however, if this Note is an OID
Note, the outstanding, principal amount of this Note will be deemed to be the
Face Amount set forth above.
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 a majority 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, (a) change the stated maturity
of the principal of, or any installment of principal of or interest on, any
Security, (b) reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, (c) reduce the
amount of the principal of an OID Security that would be due and payable upon an
Event of Acceleration or an Event of Default (both as defined in the Indenture)
(d) adversely affect any right of repayment at the option of the holder of any
Security, (e) change any place of payment where, or the coin or currency in
which, any Security or any premium or the interest thereon is payable, (f)
impair the right to institute suit for the enforcement of any such payment on or
after the stated maturity thereof (or, in the case of redemption, on or after
the redemption date), (g) reduce the percentage in principal amount of the
outstanding Securities of any series, the consent of whose holders is required
for any such supplemental indenture, or the consent of whose holders is required
for any waiver (of compliance with certain provisions of the Indenture or
certain defaults thereunder and their consequences) provided for in the
Indenture, or (h) modify any of the provisions of sections of the Indenture
dealing with supplemental indentures, waivers of certain covenants or waivers of
past defaults, except to increase any such percentage or to provide that certain
other provisions of the Indenture cannot be modified or waived without the
consent of the holder of each outstanding Security affected thereby. 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 the principal of, or the premium (if any) or
interest, if any, on any of the Securities of such series, or in respect of a
provision under which the Indenture cannot be modified without the consent of
the holder of each outstanding security 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, premium, if any, and interest, 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 only in registered form, without coupons. Unless
otherwise set forth on the face hereof, Notes will be issued in Face Amount
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. Each Note will be issued initially as either a Global Security or a
Certificated Note, at the option of the holders thereof, 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 Face 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 Face 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 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 Face Amount equal to the Face
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. In case an Event of Default or
an Event of Acceleration, as defined n the Indenture, with respect to Notes of
this series shall have occurred and be continuing, the principal of all of the
Notes of this series, in the case of an Event of Default, shall become, or in
the case of an Event of Acceleration, may be declared and in accordance with
such declaration shall become, due and payable and such acceleration or
declaration may in certain events be rescinded, in the manner, with the effect
and subject to the conditions provided in the Indenture. In the event that this
Note is an OID Note, the amount of principal of this Note that becomes due and
payable upon such acceleration shall be equal to the amount calculated as set
forth in Section 6 hereof. Upon payment (i) of the aggregate applicable amounts
of principal of the Notes of this series so declared due and payable and (ii) of
interest on any overdue principal and overdue interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Company's obligations in respect of the payment of the principal of and
interest, if any, on the Notes of this series shall terminate.
Section 16. Subordination, Regulatory Matters. The
indebtedness evidenced by this Note, together with any interest accrued hereon
and premium, if any, is, to the extent provided in the Indenture, subordinate
and subject in right of payment to the prior payment in full of all Senior
Indebtedness, as defined in the Indenture, and this Note is issued subject to
the provisions of the Indenture, and each Holder hereof, by accepting the same,
agrees to and shall be bound by such provisions and authorizes and directs the
Trustee in his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination as provided in the Indenture and
appoints the Trustee his attorney-in-fact for any and all such purposes.
As provided in the Indenture, the Company's obligation to pay
the principal of the Notes of this series at Stated Maturity or pursuant to any
mandatory sinking fund shall be suspended if, after giving effect to such
payment and the payment of certain other subordinated debt, the Company's "net
capital" would be reduced below the minimum amounts of capital to be maintained
by the Company as required by the various domestic exchanges, boards of trade
and governmental agencies to which it is subject, all with the effect and to the
extent provided in the Indenture. Optional redemptions are subject to similar
suspensions and to the requirement that permission therefor of the Exchange has
been obtained. If payment is made of the principal of the Notes of this series
notwithstanding the foregoing, the Holders of the Notes so paid are required to
repay to the Company, its successors or assigns, the sum so paid; provided,
however, that any suit for such recovery must be commenced within two years of
the date of such payment. Each Holder hereof, by accepting the same, agrees to
be bound by such provisions.
Section 17. No Recourse Against Certain Persons. No recourse
for the payment of the principal of, premium, if any, or interest 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 18. Defined Terms. All terms used but not defined in this Note
are used herein as defined in the Indenture.
Section 19. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned owner of this Note hereby irrevocably elects
to have the Company repay the Face Amount of this Note or portion hereof below
designated at (i) the Optional Repayment Percentage multiplied by the Principal
Amount of this Note to be repaid in respect of such Face Amount plus accrued
interest to the Optional Repayment Date, if this Note is to be repaid pursuant
to the Optional Repayment provision described in Section 4 hereof, or (ii) 100%
of the Principal Amount of this Note to be repaid in respect of such Face Amount
plus accrued interest to the Optional Reset Date, if this Note is to be repaid
pursuant to the Optional Interest 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]
Face Amount to be repaid, if amount to Fill in for registration of Notes
be repaid is less than the Face Amount if to be issued otherwise than
of this Note (Face Amount remaining to the registered Holder:
must be an authorized denomination)
Name: __________________________
Address: _______________________
-----------------------
(Please print name and
address including zip code)
$------------------------
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER
---------------------------------
<PAGE>
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 Face
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]
Face Amount to be repaid, if amount to Fill in for registration of Notes
be repaid is less than the Face Amount if to be issued otherwise than
of this Note (Face Amount remaining to the registered Holder:
must be an authorized denomination)
Name: __________________________
Address: _______________________
-----------------------
(Please print name and
address including zip code)
$------------------------
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER
---------------------------------
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenant by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenantsin common
UNIF GIFT
MIN ACT - _________Custodian___________
(Cust) (Minor)
Under Uniform Gifts to
Minors Act
-----------------------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned
hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
Please print or type name and address, including zip code of assignee
the within Note of LEHMAN BROTHERS INC. and all rights thereunder and does
hereby irrevocably constitute and appoint
<PAGE>
_____________________________________________________Attorney to transfer the
said Note on the books of the within-named Company, with full power of
substitution in the premises.
Dated:______________________________
SIGNATURE GUARANTEED:__________________________________________
NOTICE: The signature to
this assignment must
correspond with the name as
it appears upon the face of
the within Note in every
particular, without
alteration or enlargement
or any change whatsoever.
<PAGE>
Schedule I
Amortization Table
Date Payment
EXHIBIT A
RESET NOTICE
LEHMAN BROTHERS INC.
Senior Subordinated Medium-Term Notes, Series A
(Fixed Rate)
CUSIP No. _____________
Registered Nos. ___-___
LEHMAN BROTHERS 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 Interest Rate
set forth on the face of the Notes. On and after ____________1/, the Interest
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 Inc. has caused this Reset
Notice to be signed by its Chairman of the Board, one of its Vice Chairmen of
the Board, its President, its Treasurer or one of its Vice Presidents and to be
attested by its Secretary or one of its Assistant Secretaries.
Dated:
LEHMAN BROTHERS INC.
By:________________________
Title:
Attest:____________________
Title:
1/ Insert applicable Optional Reset Date.
<PAGE>
EXHIBIT 4.2
CUSIP NO. _____________
REGISTERED FACE AMOUNT:
No. ____
If this Note is an OID Note (as defined below) the following
legend is applicable:
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED
STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE ISSUE
PRICE OF THIS NOTE IS ____% OF ITS PRINCIPAL AMOUNT, AND THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE YIELD TO MATURITY
COMPOUNDED __________, THE ISSUE DATE AND THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT ALLOCABLE TO THE SHORT PERIOD
DETERMINED USING THE EXACT METHOD WITHIN THE MEANING OF
PROPOSED TREASURY REGULATION SECTION 1.1272-1(c)(2)(ii) ARE AS
SET FORTH BELOW.
LEHMAN BROTHERS INC.
SENIOR SUBORDINATED MEDIUM-TERM NOTE, SERIES A
(FLOATING RATE)
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.
<PAGE>
ISSUE OPTION ELECTION DATES: OPTIONAL REPAYMENT DATES:
PRICE: $
ISSUE DATE: OPTIONAL REPAYMENT PRICES:
MATURITY OPTIONAL SPREAD OR SPREAD
DATE: MULTIPLIER RESET:
[ ] YES [ ] NO
INTEREST OPTION VALUE OPTIONAL RESET DATES:
RATE BASIS: CALCULATION AGENT:
MAXIMUM OPTIONAL REDEMPTION:
INTEREST [ ] YES [ ] NO
RATE:
MINIMUM INITIAL REDEMPTION DATE:
INTEREST
RATE:
INTEREST SINKING FUND: INITIAL REDEMPTION
RESET DATES: PERCENTAGE: %
INTEREST TOTAL AMOUNT OF OID: APPLICABILITY OF ANNUAL REDEMPTION
PAYMENT PERCENTAGE REDUCTION
DATES: [ ] YES [ ] NO
If yes, state Annual Percentage
Reduction: %
REGULAR YIELD TO MATURITY: RENEWABLE NOTE:
RECORD DATES: [ ] YES [ ] NO
INITIAL INITIAL ACCRUAL PERIOD INITIAL MATURITY DATE:
INTEREST OID:
RATE:
INDEX AUTHORIZED SPECIAL ELECTION INTERVAL:
MATURITY: DENOMINATIONS:
SPREAD: EXTENDIBLE NOTE: RENEWABLE IN PART:
[ ] YES [ ] [ ] YES [ ] NO
NO
SPREAD EXTENSION PERIOD: AUTHORIZED RENEWABLE AMOUNTS:
MULTIPLIER:
INTEREST NUMBER OF EXTENSION SPECIAL ELECTION PERIOD:
DETERMINATION PERIODS:
DATE:
DEPOSITORY:
<PAGE>
LEHMAN BROTHERS 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
____________________________, or registered assigns, on the Maturity Date the
Principal Amount hereof (as defined below) and, if so specified above, to pay
interest thereon from the Issue Date specified above or from the most recent
Interest Payment Date specified above to which interest has been paid or duly
provided for at the rate per annum determined in accordance with the provisions
on the reverse hereof, depending on the Interest Rate Basis specified above,
until the principal hereof is paid or made available for payment and (to the
extent that the payment of such interest shall be legally enforceable) at such
rate per annum on any overdue principal and premium and on any overdue
instalment of interest. The "Principal Amount" of this Note at any time means
(i) if this Note is an OID Note (as defined below), the Amortized Face Amount at
such time as described in Section 7 on the reverse hereof and (ii) in all other
cases, the Face Amount hereof.
If this Note is subject to an Annual Redemption Percentage
Reduction as specified above, the Redemption Price shall initially be the
Initial Redemption Percentage of the Principal Amount of this Note on the
Initial Redemption Date and shall decline at each anniversary of the Initial
Redemption Date (each such date, a "Redemption Date") by the Annual Percentage
Reduction of such Principal Amount until the Redemption Price is 100% of such
Principal Amount.
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 (a) any Note 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 Note not identified in (a) 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 pay interest on each Interest Payment Date specified above, commencing with
the first Interest Payment Date next succeeding the Issue Date, and at Maturity;
provided, that any payment of principal, premium, if any, or interest to be made
on any Interest Payment Date or on a date of Maturity 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 Interest Payment Date or such date of Maturity, as the case
may be, and no additional interest shall accrue as a result of such delayed
payment, except that if this Note is a LIBOR Note (as defined in Section 2 on
the reverse hereof) and such next succeeding Business Day falls in the next
calendar month, such payment shall be made on the preceding day that is a London
Banking Day. The term "Business Day" means any day, other than a Saturday or
Sunday, that meets each of the following applicable requirements: such day is
(a) not a day on which banking institutions in the Borough of Manhattan, The
City of New York are authorized or required by law or regulation to close; and
(b) if this Note is a LIBOR Note, a London Banking Day. The term "London Banking
Day" means any day on which dealings in deposits in U.S. Dollars are transacted
in the London interbank market. Unless otherwise specified above, the interest
payable on each Interest Payment Date or at Maturity will be the amount of
interest accrued from and including the Issue Date or from and including the
last Interest Payment Date to which interest has been paid, as the case may be,
to, but excluding, such Interest Payment Date or the date of Maturity, as the
case may be; provided, however, that if interest on this Note is reset daily or
weekly, interest payable on each Interest Payment Date will be the amount of
interest accrued from and including the Issue Date or from and excluding the
last date to which interest has been paid, as the case may be, to, and
including, the Regular Record Date immediately preceding such Interest Payment
Date, except that at Maturity the interest payable will include interest accrued
to, but excluding, the date of Maturity.
Unless otherwise specified above, the interest payable on any
Interest 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 Interest Payment Date; provided, that,
notwithstanding any provision of the Indenture to the contrary, interest payable
on any date of Maturity shall be payable to the Person to whom principal 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
Interest Payment Date relating to such Regular Record Date, interest for the
period beginning on the Issue Date and ending on such Interest Payment Date
shall be paid on the Interest Payment Date following the next succeeding Regular
Record Date to the registered Holder on such next succeeding Regular Record
Date.
Unless otherwise indicated above, and except as provided below
if this Note is a Global Security, all payments of interest on this Note (other
than interest payable at Maturity) will be made by wire transfer or by check;
provided, that, if the Holder hereof is the Holder of U.S. $10,000,000 or more
in aggregate Principal Amount of Notes of this series of like tenor and term,
such Holder shall be entitled to receive interest payments in immediately
available funds, but only if complete and appropriate instructions have been
received in writing by the Trustee (or any duly appointed Paying Agent) on or
prior to the applicable Regular Record Date.
Unless otherwise indicated above, and except as provided below
if this Note is a Global Security, payments of principal, premium, if any, and
interest payable at Maturity 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.
Unless otherwise specified above, if this Note is a Global
Security, payments of interest hereon (other than at Maturity) will be made in
funds in accordance with existing arrangements between the Trustee (or any duly
appointed Paying Agent) and the Depository. Unless otherwise specified above, if
this Note is a Global Security, any principal, premium, if any, and/or interest
payable hereon at Maturity will be paid by wire transfer in immediately
available funds to an account specified by the Depository.
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.
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.
This Note shall not be entitled to any benefit under the
Indenture or be valid or become obligatory for any purpose until the certificate
of authentication hereon shall have been signed by the Trustee under the
Indenture.
IN WITNESS WHEREOF, Lehman Brothers Inc. has caused this
instrument to be signed by its Chairman of the Board, one of its Vice Chairmen
of the Board, its President or one of its Vice Presidents, 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:
[SEAL] LEHMAN BROTHERS INC.
By:____________________________
Name:
Title:
Attest:________________________
Name:
Title:
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to in the
within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:_________________________
Authorized Officer
<PAGE>
[REVERSE OF NOTE]
LEHMAN BROTHERS INC.
SENIOR SUBORDINATED MEDIUM-TERM NOTE, SERIES A
(Floating Rate)
Section 1. General. This Note is one of a duly authorized
series of Notes of the Company designated as the Senior Subordinated Medium-Term
Notes, Series A (Floating Rate) of the Company (herein called the "Notes"),
limited in aggregate principal amount to $________________ (or such greater
amount, if OID Notes are issued, as shall result in aggregate gross proceeds to
the Company of $__________________), 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
March 1, 1996 (the "Indenture"), duly executed and delivered by the Company and
The First National Bank of Chicago, 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 and of the terms upon which the Securities are, and are to be,
authenticated and delivered. The separate series of Securities may be issued in
various aggregate principal amounts, may mature at different times, may bear
interest (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 Accleration and Events of Default and may
otherwise vary as in the Indenture provided.
Section 2. Determination of Interest Rate. For the period from
the Issue Date to the first Interest Reset Date set forth on the face hereof,
the interest rate hereon shall be the Initial Interest Rate specified on the
face hereof. Thereafter, the interest rate hereon will be reset on each Interest
Reset Date; provided, however, that the interest rate in effect for the ten days
immediately prior to Maturity will be that in effect on the tenth day preceding
such Maturity. If any Interest Reset Date would otherwise be a day that is not a
Business Day (or, if this Note is a LIBOR Note, a day that is not a London
Banking Day), such Interest Reset Date shall be postponed to the next day that
is a Business Day (or, if this Note is a LIBOR Note, to the next day that is a
London Banking Day), except that if this Note is a LIBOR Note and such London
Banking Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding London Banking Day. If this Note is a
Treasury Rate Note (as defined below) and an auction date for Treasury bills
shall fall on any Interest Reset Date, then such Interest Reset Date shall
instead be the first Business Day immediately following such auction date.
Subject to applicable provisions of law and except as specified herein, on each
Interest Reset Date, the rate of interest on this Note on and after the first
Interest Reset Date shall be the rate determined in accordance with the
provisions of the heading below which has been designated as the Interest Rate
Basis on the face hereof plus or minus the Spread, if any, specified on the face
hereof or multiplied by the Spread Multiplier, if any, specified on the face
hereof.
Commercial Paper Rate Notes
If the Interest Rate Basis is the commercial Paper Rate, this
Note is a "Commercial Paper Rate Note." A Commercial Paper Rate Note will bear
interest at the interest rate calculated with reference to the Commercial Paper
Rate and the Spread or Spread Multiplier, if any. Unless otherwise specified on
the face hereof, "Commercial Paper Rate" means, with respect to any Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on that date for commercial paper having the applicable Index Maturity
as such rate is published in the publication entitled "Statistical Release
H.15(519), Selected Interest Rates," or any successor publication, published by
the Board of Governors of the Federal Reserve System ("H.15(519)") under the
heading "Commercial Paper". If such rate is not published by 9:00 A.M., New York
City time, on the Calculation Date (as defined below) pertaining to such
Interest Determination Date, then the Commercial Paper Rate shall be the Money
Market Yield of the rate on such Interest Determination Date for commercial
paper having the applicable Index Maturity as published in the daily statistical
release entitled "Composite 3:30 P.M. Quotations for U.S. Government Securities"
(or any successor publication) published by the Federal Reserve Bank of New York
("Composite Quotations") under the heading "Commercial Paper". If such rate is
not yet published in either H.15(519) or Composite Quotations by 3:00 P.M., New
York City time, on such Calculation Date, then the Commercial Paper Rate for
such Interest Determination Date shall be calculated by the Calculation Agent
and shall be the Money Market Yield of the arithmetic mean of the offered rates
as of 11:00 A.M., New York City time, on such Interest Determination Date of
three leading dealers of commercial paper in The City of New York selected by
the Calculation Agent after consultation with the Company for commercial paper
having the applicable Index Maturity, placed for industrial issuers whose bond
rating is "AA", or the equivalent, from a nationally recognized securities
rating agency; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate for the applicable period will be the Commercial Paper
Rate in effect on such Interest Determination Date.
"Money Market Yield" shall be a yield calculated in accordance
with the following formula:
Money Market Yield = D X 360 x
100 360 - (D X M)
where "D" refers to the per annum rate for the commercial paper, quoted on a
bank discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Federal Funds Effective Rate Notes
If the Interest Rate Basis is the Federal Funds Effective
Rate, this Note is a "Federal Funds Effective Rate Note." A Federal Funds
Effective Rate Note will bear interest at the interest rate calculated with
reference to the Federal Funds Effective Rate and the Spread or Spread
Multiplier, if any. Unless otherwise specified on the face hereof, "Federal
Funds Effective Rate" means, with respect to any Interest Determination Date,
the rate on that day for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not so published by 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Effective Rate will be the rate on such
Interest Determination Date as published in Composite Quotations under the
heading "Federal Funds/Effective Rate". If such rate is not yet published in
either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, then the
Federal Funds Effective Rate for such Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
as of 11:00 A.M., New York City time, on such Interest Determination Date for
the last transaction in overnight Federal Funds arranged by three leading
brokers of Federal Funds transactions in The City of New York selected by the
Calculation Agent after consultation with the Company; provided, however, that
if the brokers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Effective Rate for the applicable
period will be the Federal Funds Effective Rate in effect on such Interest
Determination Date.
CD Rate Notes
If the Interest Rate Basis is the CD Rate, this Note is a "CD
Rate Note." A CD Rate Note will bear interest at the interest rate calculated
with reference to the CD Rate and the Spread or Spread Multiplier, if any.
Unless otherwise specified on the face hereof, "CD Rate" means, with respect to
any Interest Determination Date, the rate on such date for negotiable
certificates of deposit having the applicable Index Maturity as published in
H.15(519) under the heading "CDs (Secondary Market)" or, if not so published by
9:00 A.M., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, the CD Rate will be the rate on such Interest
Determination Date for negotiable certificates of deposit of the applicable
Index Maturity as published in Composite Quotations under the heading
"Certificates of Deposit". If such rate is not yet published in either H.15(519)
or Composite Quotations by 3:00 P.M., New York City time, on such Calculation
Date, then the CD Rate for such Interest Determination Date will be calculated
by the Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of the opening of business, New York City time, on such
Interest Determination Date, of three leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in The City of New York selected by the
Calculation Agent after consultation with the Company for negotiable
certificates of deposit of major United States money center banks of the highest
credit standing (in the market for negotiable certificates of deposit) with a
remaining maturity closest to the applicable Index Maturity in a denomination of
$5,000,000; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate for
the applicable period will be the CD Rate in effect on such Interest
Determination Date.
LIBOR Notes
If the Interest Rate Basis is LIBOR, this Note is a "LIBOR
Note." A LIBOR Note will bear interest at the interest rate calculated with
reference to LIBOR and the Spread or Spread Multiplier, if any. Unless otherwise
indicated on the face hereof, "LIBOR" means the rate determined by the
Calculation Agent as follows:
(a) With respect to an Interest Determination Date, LIBOR will
be, as specified on the face hereof, either (i) the arithmetic mean of the
offered rates for deposits in U.S. dollars for the period (commencing on the
Interest Reset Date) of the applicable Index Maturity which appear on the
display designated as page "LIBO" on the Reuters Monitor Money Rates Service, or
such other page as may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks (the "Reuters Screen
LIBO Page"), at approximately 11:00 A.M., London time, on such Interest
Determination Date, if at least two such offered rates appear on the Reuters
Screen LIBO Page ("LIBOR Reuters"), or (ii) the offered rate for deposits in
U.S. dollars for the period (commencing on the Interest Reset Date) of the
applicable Index Maturity which appears on the Telerate Page 3750 (as defined
below), as applicable, at approximately 11:00 A.M., London time, on such
Interest Determination Date ("LIBOR Telerate"). If neither LIBOR Reuters nor
LIBOR Telerate is specified on the face hereof, LIBOR will be determined as if
LIBOR Telerate had been specified.
(b) With respect to an Interest Determination Date on which
fewer than two offered rates appear on the Reuters Screen LIBO Page as specified
in (a)(i) above, or on which no rate appears on the Telerate Page 3750, as
applicable, as specified in (a)(ii) above, as applicable, the Calculation Agent
will request the principal London office of each of four major banks in the
London interbank market, as selected by the Calculation Agent after consultation
with the Company, to provide the Calculation Agent with its offered quotation
for deposits in U.S. dollars for the period (commencing on the Interest Reset
Date) of the applicable Index Maturity to prime banks in the London interbank
market at approximately 11:00 A.M., London time, on such Interest Determination
Date and in a principal amount equal to an amount of not less than $1,000,000
that is representative of a single transaction in such market at such time. If
at least two such quotations are provided, LIBOR in respect of such Interest
Determination Date will be the arithmetic mean of such quotations. If fewer than
two such quotations are provided, LIBOR in respect of such Interest
Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City time, on such Interest Determination
Date by three major banks in The City of New York selected by the Calculation
Agent after consultation with the Company for loans in the applicable currency
to leading European banks, for the period (commencing on the Interest Reset
Date) of the applicable Index Maturity and in a principal amount equal to an
amount of not less than $1,000,000 that is representative of a single
transaction in such market at such time, provided, however, that if the banks in
The City of New York selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, LIBOR for the applicable period will be
LIBOR as in effect on such Interest Determination Date.
The term "Telerate Page 3750" means the display designated as
page "3750" on the Telerate Service, or such other page as may replace the 3750
page on that service or such other service or services as may be nominated by
the British Bankers' Association for the purpose of displaying London interbank
offered rates for deposits in U.S. Dollars, British Pounds Sterling, German
Deutsche Marks, Swiss Francs, Japanese Yen and ECU.
Prime Rate Notes
If the Interest Rate Basis is the Prime Rate, this Note is a
"Prime Rate Note." A Prime Rate Note will bear interest at the interest rate
calculated with reference to the Prime Rate and the Spread or Spread Multiplier,
if any. Unless otherwise specified on the face hereof, "Prime Rate" means, with
respect to any Interest Determination Date, the rate on that day as published in
H.15(519) under the heading "Bank Prime Loan" or, if not so published by 9:00
A.M., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Prime Rate will be determined by the Calculation Agent
and will be the arithmetic mean of the rates of interest publicly announced by
each bank named on the display designated as page "NYMF" on the Reuters Monitor
Money Rates Service, or such other page as may replace the NYMF page on that
service for the purpose of displaying prime rates or base lending rates of major
United States banks (the "Reuters Screen NYMF Page"), as such bank's prime rate
or base lending rate as in effect for such Interest Determination Date. If fewer
than four such rates but more than one such rate appear on the Reuters Screen
NYMF Page for such Interest Determination Date, the Prime Rate will be
determined by the Calculation Agent and will be the arithmetic mean of the prime
rates quoted on the basis of the actual number of days in the year divided by
360 as of the close of business on such Interest Determination Date by four
major money center banks in The City of New York selected by the Calculation
Agent after consultation with the Company. If fewer than two such rates appear
on the Reuters Screen NYMF Page, the Prime Rate will be calculated by the
Calculation Agent and will be the arithmetic mean of the prime rates in effect
for such Interest Determination Date as furnished in The City of New York by at
least three substitute banks or trust companies organized and doing business
under the laws of the United States, or any state thereof, in each case having
total equity capital of at least $500,000,000 and being subject to supervision
or examination by federal or state authority, selected by the Calculation Agent
after consultation with the Company to provide such rate or rates; provided,
however, that if the banks or trust companies selected as aforesaid are not
quoting as mentioned in this sentence, the Prime Rate for the applicable period
will be the Prime Rate in effect on such Interest Determination Date.
Treasury Rate Notes
If the Interest Rate Basis is the Treasury Rate, this Note is
a "Treasury Rate Note." A Treasury Rate Note will bear interest at the interest
rate calculated with reference to the Treasury Rate and the Spread or Spread
Multiplier, if any. Unless otherwise specified on the face hereof "Treasury
Rate" means, with respect to any Interest Determination Date, the rate for the
auction held on such Interest Determination Date of direct obligations of the
United States ("Treasury bills") having the applicable Index Maturity as
published in H.15(519) under the heading "U.S. Government Securities--Treasury
bills-- auction average (investment)" or, if not so published by 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the auction average rate (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) as otherwise announced by the United States Department of the Treasury.
In the event that the results of the auction of Treasury bills having the
applicable Index Maturity are not published or reported as provided above by
3:00 P.M., New York City time, on such Calculation Date or if no such auction is
held on such Interest Determination Date, then the Treasury Rate shall be
calculated by the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent, on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent after consultation with the Company
for the issue of Treasury bills with a remaining maturity closest to the
applicable Index Maturity; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate for the applicable period will be the Treasury Rate
in effect on such Interest Determination Date.
The term "Calculation Date" means the date on which the
Calculation Agent is to calculate an interest rate for this Note, which shall be
the tenth calendar day after the related Interest Determination Date or if such
day is not a Business Day, the next succeeding Business Day, unless otherwise
specified on the face hereof.
Notwithstanding the foregoing, the interest rate hereon shall
not be greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown on the face hereof. The interest rate on this Note
will in no event be higher than the maximum rate permitted by New York law as
the same may be modified by United States law of general applicability.
The Calculation Agent will, upon the request of the Holder of
this Note, provide the interest rate then in effect and, if determined, the
interest rate which will become effective as a result of a determination made on
the most recent Interest Determination Date with respect to this Note.
Unless otherwise specified on the face hereof, the Interest
Determination Date pertaining to an Interest Reset Date will be (a) such
Interest Reset Date for a Prime Rate Note and (b) the Business Day preceding
such Interest Reset Date for a Commercial Paper Rate Note, a Federal Funds
Effective Rate Note or a CD Rate Note. Unless otherwise specified on the face
hereof, the Interest Determination Date pertaining to an Interest Reset Date for
a LIBOR Note will be the second London Banking Day preceding such Interest Reset
Date. Unless otherwise specified on the face hereof, the Interest Determination
Date pertaining to an Interest Reset Date for a Treasury Rate Note will be the
day of the week in which such Interest Reset Date falls on which Treasury bills
of the applicable Index Maturity would normally be auctioned. Treasury bills are
usually sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is usually held on the following Tuesday,
except that such auction may be held on the preceding Friday. If, as the result
of a legal holiday, an auction is so held on the preceding Friday, such Friday
will be the Interest Determination Date pertaining to the Interest Reset Date
occurring in the next succeeding week.
Accrued interest from the Issue Date or from the last date to
which interest has been paid shall be calculated by multiplying the face amount
of this Note by an accrued interest factor. This accrued interest factor shall
be computed by adding the interest factors calculated for each day from the
Issue Date or from the last date to which interest has been paid, to the date
for which accrued interest is being calculated. The interest factor for each
such day is computed by dividing the interest rate applicable to such date by
360, in the case of Commercial Paper Rate Notes, Federal Funds Effective Rate
Notes, CD Rate Notes, LIBOR Notes and Prime Rate Notes, or by the actual number
of days in the year, in the case of Treasury Rate Notes. The interest rate
applicable to any day that is an Interest Reset Date is the interest rate as
determined, in accordance with the procedures set forth above, with respect to
the Interest Determination Date pertaining to such Interest Reset Date. The
interest rate applicable to any other day is the interest rate for the
immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).
Unless otherwise specified on the face hereof, all percentages
resulting from any calculation of the rate of interest on this Note will be
rounded, if necessary, to the nearest one hundred-thousandth of a percent
(.0000001), with five one-millionths of a percentage point rounded upward, and
all currency amounts used in or resulting from such calculation will be rounded
to the nearest one-hundredth of a unit (with five one- thousandths of a unit
being rounded upwards).
Section 3. Redemption. If so specified on the face hereof, 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 (which shall not be prior to the first anniversary date of the original
issuance hereof) at either a price based on a constant percentage of the
Principal Amount of this Note as specified on the face hereof or at prices
declining from the premium specified on the face hereof, if any, to 100% of the
Principal Amount hereof, together, in each case, with accrued interest to the
Redemption Date; provided, however, that permission of the Exchange for such
redemption has been obtained. 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 prior to the Redemption Date.
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. Sinking Funds. Unless otherwise specified on the
face hereof, this Note will not be subject to any sinking fund.
Section 5. Optional Repayment. If so specified on the face
hereof, this Note will be repayable prior to the Maturity Date at the option of
the Holder on the Optional Repayment Dates specified on the face hereof at the
Optional Repayment Prices specified on the face hereof, together with accrued
interest to the applicable Optional Repayment Date. Unless otherwise specified
on the face hereof, in order for this Note to be so repaid, the Paying Agent
must receive, at least 30 but not more than 45 days prior to an Optional
Repayment Date, either (i) this Note with the form below entitled "Option to
Elect Repayment" duly completed or (ii) a telegram, telex, facsimile
transmission 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
Face Amount hereof, the Face 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, facsimile transmission 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 6 or Section 8. The repayment option may be exercised by
the Holder of this Note with respect to less than the Face Amount then
outstanding provided that the Face 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 Face Amount
hereof shall be issued in the name of the Holder of this Note.
Section 6. Optional Spread or Spread Multiplier Reset. If so
specified on the face hereof, the Spread or Spread Multiplier, if any, set forth
on the face hereof 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 in writing 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 Spread or Spread
Multiplier, (ii) such new Spread or Spread Multiplier 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 Interest
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 Interest 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 Spread or Spread Multiplier 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 Spread or
Spread Multiplier provided for in the Reset Notice and establish a Spread or
Spread Multiplier that is higher than the interest rate provided for in the
Reset Notice for the Subsequent Interest Period commencing on such Optional
Reset Date by causing the Trustee to mail by first-class mail notice of such
higher Spread or Spread Multiplier 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 Spread or Spread
Multiplier is reset on an Optional Reset Date will bear such higher Spread or
Spread Multiplier for the Subsequent Interest Period.
If the Company elects to reset the Spread or Spread Multiplier
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 the Face Amount hereof to be repaid, plus any
interest 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 5 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 7. OID Notes. If this Note is an OID Note, unless
otherwise specified on the face hereof, the amount payable in the event of
redemption by the Company, repayment at the option of the Holder or acceleration
of Maturity shall be the Amortized Face Amount of this Note as of the date of
such redemption, repayment or acceleration rather than the Face Amount hereof.
The "Amortized Face Amount" of this Note shall be the amount equal to (a) the
Issue Price (as set forth on the face hereof) plus (b) that portion of the
difference between the Issue Price and the Face Amount hereof that has accrued
at the Yield to Maturity set forth on the face hereof (computed in accordance
with generally accepted United States bond yield computation principles) at the
date as of which the Amortized Face Amount is calculated, but in no event shall
the Amortized Face Amount of this Note exceed the Face Amount.
Section 8. 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 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 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 Maturity Date, (iii) the Spread or Spread Multiplier
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 Maturity Date hereof shall be extended automatically,
and, except as modified by the 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
Spread or Spread Multiplier provided for in the Extension Notice and establish a
higher Spread or Spread Multiplier for the Extension Period by causing the
Trustee to mail notice of such higher Spread or Spread Multiplier, 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 Spread or Spread Multiplier for the Extension Period,
whether or not tendered for repayment.
If the Company extends the 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 the Face Amount hereof to be repaid plus any accrued interest to
such date. In order for this Note to be so repaid on the Original Stated
Maturity, the Holder must follow the procedures set forth in Section 5 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 9. 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 Interest 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 Interest 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
Interest 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 automatic extension of the Maturity hereof or
any portion hereof as described below.
If the Holder elects to terminate the automatic 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 Interest 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").
The Holder may elect to terminate the automatic extension of
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 15 nor more than 30 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
terminate the automatic extension of the Maturity of this Note may be exercised
with respect to less than the entire Face Amount hereof only if so specified on
the face hereof and only in such Face 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 Maturity Date specified on
the face hereof.
Unless otherwise specified above, any such election to
terminate will be effective only if this Note, with the "Option to Elect
Termination of Automatic Extension" included herein duly executed, is presented
to the Trustee (or any duly appointed Paying Agent) simultaneously with notice
of such election (or, in the event notice of such election, together with a
guarantee of delivery within five Business Days, is transmitted on behalf of the
Holder from a member of a national securities exchange, the National Association
of Securities Dealers, Inc. or a commercial bank or trust company in the United
States, within five Business Days of the date of such notice). 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 face amount of this Note for which the
election to terminate the automatic extension of Maturity was exercised, with
terms identical to those specified herein (except for the Issue Date and the
Initial Interest Rate and except that such Note shall have a fixed, non-
extendable Maturity on the Extended Maturity Date) and (ii) if such election is
made with respect to less than the full Face Amount hereof, a replacement
Renewable Note, in a face amount equal to the Face Amount of this Note for which
no election was made, with terms identical to this Note.
Section 10. 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, provided, however, if this Note is an OID
Note, the outstanding principal amount of this Note will be deemed to be the
Face Amount set forth above.
Section 11. Modification and Waivers. The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the
holders of not less than a majority 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, (a) change the stated maturity
of the principal of, or any installment of principal of or interest on, any
Security, (b) reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, (c) reduce the
amount of the principal of an OID Security that would be due and payable upon an
Event of Acceleration or an Event of Default (both as defined in the Indenture)
(d) adversely affect any right of repayment at the option of the holder of any
Security, (e) change any place of payment where, or the coin or currency in
which, any Security or any premium or the interest thereon is payable, (f)
impair the right to institute suit for the enforcement of any such payment on or
after the stated maturity thereof (or, in the case of redemption, on or after
the redemption date), (g) reduce the percentage in principal amount of the
outstanding Securities of any series, the consent of whose holders is required
for any such supplemental indenture, or the consent of whose holders is required
for any waiver (of compliance with certain provisions of the Indenture or
certain defaults thereunder and their consequences) provided for in the
Indenture, or (h) modify any of the provisions of sections of the Indenture
dealing with supplemental indentures, waivers of certain covenants or waivers of
past defaults, except to increase any such percentage or to provide that certain
other provisions of the Indenture cannot be modified or waived without the
consent of the holder of each outstanding Security affected thereby. 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 Acceleration or Event of Default under the Indenture with respect to such
series and its consequences, except a default in the payment of the principal
of, or the premium (if any) or interest, if any, on any of the Securities of
such series, or in respect of a provision under which the Indenture cannot be
modified without the consent of the holder of each outstanding security 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 12. 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, premium, if any, and interest, if any, on this Note at the
place, at the respective times, at the rate, and in the coin or currency herein
prescribed.
Section 13. 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 14. Authorized Form and Denominations. The Notes of
this series are issuable only in registered form, without coupons. Unless
otherwise set forth on the face hereof, Notes will be issued in Face Amount
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. Each Note will be issued initially as either a Global Security or a
Certificated Note, at the option of the holders thereof, 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 Face Amount of Notes of this series of a
different authorized denomination, except that Global Securities will not be
exchangeable for Certificated Notes.
Section 15. 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 Face 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 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 Face Amount equal to the Face
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 16. Events of Accleration; Events of Default. In case
an Event of Default or an Event of Acceleration, as defined in the Indenture,
with respect to Notes of this series shall have occurred and be continuing, the
principal of all of the Notes of this series, in the case of an Event of
Default, shall become, or in the case of an Event of Acceleration, may be
declared and in accordance with such declaration shall become, due and payable
and such acceleration or declaration may in certain events be rescinded, in the
manner, with the effect and subject to the conditions provided in the Indenture.
In the event that this Note is an OID Note, the amount of principal of this Note
that becomes due and payable upon such acceleration shall be equal to the amount
calculated as set forth in Section 7 hereof. Upon payment (i) of the aggregate
applicable amounts of principal of the Notes of this series so declared due and
payable and (ii) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and interest, if any, on the Notes of this series shall terminate.
Section 17. Subordination; Regulatory Matters. The
indebtedness evidenced by this Note, together with any interest accrued thereon
and premium, if any, is, to the extent provided in the Indenture, subordinate
and subject in right of payment to the prior payment in full of all Senior
Indebtedness, as defined in the Indenture, and this Note is issued subject to
the provisions of the Indenture, and each Holder hereof, by accepting the same,
agrees to and shall be bound by such provisions and authorizes and directs the
Trustee in his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination as provided in the Indenture and
appoints the Trustee his attorney-in-fact for any and all such purposes.
As provided in the Indenture, the Company's obligation to pay
the principal of the Notes of this series at Stated Maturity or pursuant to any
mandatory sinking fund shall be suspended if, after giving effect to such
payment and the payment of certain other subordinated debt, the Company's "net
capital" would be reduced below the minimum amounts of capital to be maintained
by the Company as required by the various domestic exchanges, boards of trade
and governmental agencies to which it is subject, all with the effect and to the
extent provided in the Indenture. Optional redemptions are subject to similar
suspensions and to the requirement that permission therefor of the Exchange (as
defined in the Indenture) has been obtained. If payment is made of the principal
of the Notes of this series notwithstanding the foregoing, the Holders of the
Notes so paid are required to repay to the Company, its successors or assigns,
the sum so paid; provided, however, that any suit for such recovery must be
commenced within two years of the date of such payment. Each Holder hereof, by
accepting the same, agrees to be bound by such provisions.
Section 18. No Recourse Against Certain Persons. No recourse
for the payment of the principal of, premium, if any, or interest 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 19. Defined Terms. All terms used but not defined in
this Note are used herein as defined in the Indenture.
Section 20. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned owner of this Note hereby irrevocably elects
to have the Company repay the Face Amount of this Note or portion hereof below
designated at (i) the Optional Repayment Percentage multiplied by the Principal
Amount of this Note to be repaid in respect of such Face Amount plus accrued
interest to the Optional Repayment Date, if this Note is to be repaid pursuant
to the Optional Repayment provision described in Section 5 hereof, or (ii) 100%
of the Principal Amount of this Note to be repaid in respect of such Face Amount
plus accrued interest to the Optional Reset Date, if this Note is to be repaid
pursuant to the Optional Spread or Spread Multiplier Reset provision described
in Section 6 hereof or the Extendible Notes provision described in Section 8
hereof. Any such election is irrevocable except as provided in Section 6 or
Section 8 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]
Face Amount to be repaid, if amount to Fill in for registration of Notes
be repaid is less than the Face Amount if to be issued otherwise than
of this Note (Face Amount remaining to the registered Holder:
must be an authorized denomination)
Name: __________________________
Address: _______________________
-----------------------
(Please print name and
address including zip code)
$------------------------
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER
---------------------------------
<PAGE>
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 Face
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]
Face Amount to be repaid, if amount to Fill in for registration of Notes
be repaid is less than the Face Amount if to be issued otherwise than
of this Note (Face Amount remaining to the registered Holder:
must be an authorized denomination)
Name: __________________________
Address: _______________________
-----------------------
(Please print name and
address including zip code)
$------------------------
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER
---------------------------------
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:
TEN CON - as tenants in common
TEN ENT - as tenant by the entireties
JT TEN - as joint tenants with right of survivorship and not a
tenants in common
UNIF GIFT
MIN ACT - ____________Custodian____________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned
hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ---------------------------------------------------------------
Please print or type name and address, including zip code of assignee
- ---------------------------------------------------------------
the within Note of LEHMAN BROTHERS INC. and all rights thereunder and does
hereby irrevocably constitute and appoint
______________________________________________Attorney to transfer the said
Note on the books of the within-named Company, with full power of substitution
in the premises.
Dated:_________________________
SIGNATURE GUARANTEED:__________________________________________
NOTICE: The signature to
this assignment must correspond with
the name as it appears upon the face
of the within Note in every
particular, without alteration or
enlargement or any change
whatsoever.
<PAGE>
EXHIBIT A
RESET NOTICE
LEHMAN BROTHERS INC.
Senior Subordinated Medium-Term Notes, Series A
(Floating Rate)
CUSIP No. __________
Registered Nos. ___-___
LEHMAN BROTHERS 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 [Spread] [Spread
Multiplier] set forth on the face of the Notes. On and after
____________________1/, the [Spread] Spread Multiplier] 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 Inc. has caused this Reset
Notice to be signed by its Chairman of the Board, one of its Vice Chairmen of
the Board, its President, its Treasureror one of its Vice Presidents and to be
attested by its Secretary or one of its Assistant Secretaries.
Dated:
LEHMAN BROTHERS INC.
By:________________________
Title:
Attest:____________________
1/ Insert applicable Optional Reset Date.
Title:
<PAGE>
EXHIBIT 4.3
CUSIP NO.__________________
REGISTERED FACE AMOUNT:
No. ___
If this Note is an OID Note (as defined below) the following
legend is applicable:
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED
STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE ISSUE
PRICE OF THIS NOTE IS _____% OF ITS FACE AMOUNT, AND THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE YIELD TO MATURITY
COMPOUNDED _____________, THE ISSUE DATE AND THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT ALLOCABLE TO THE SHORT PERIOD
DETERMINED USING THE EXACT METHOD WITHIN THE MEANING OF
PROPOSED TREASURY REGULATION SECTION 1.1272-1(c)(2)(ii) ARE AS
SET FORTH BELOW.
LEHMAN BROTHERS INC.
SENIOR SUBORDINATED MEDIUM-TERM NOTE, SERIES A
(CURRENCY INDEXED)
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.
<PAGE>
ISSUE PRICE: $ INDEXED CURRENCY: OPTION TO ELECT REPAYMENT:
[ ] YES [ ] NO
ISSUE DATE: BASE EXCHANGE RATE:
OPTIONAL REPAYMENT DATES:
MATURITY DATE: DETERMINATION AGENT:
OPTIONAL REPAYMENT PRICES:
INTEREST RATE: SINKING FUND:
OPTIONAL INTEREST RATE RESET:
INTEREST PAYMENT TOTAL AMOUNT OF OID: [ ] YES [ ] NO
DATES:
YIELD TO MATURITY: OPTIONAL RESET DATES:
REGULAR RECORD
DATES: INITIAL ACCRUAL OPTIONAL REDEMPTION:
PERIOD OID: [ ] YES [ ] NO
EXCHANGE RATE
AGENT: REFERENCE DEALERS: INITIAL REDEMPTION DATE:
DEPOSITORY: AUTHORIZED DENOMINATIONS: INITIAL REDEMPTION
PERCENTAGE %
OTHER PROVISIONS:
APPLICABILITY OF ANNUAL REDEMPTION
PERCENTAGE REDUCTION:
[ ] YES [ ] NO
If yes, state Annual Percentage
Reduction: %
LEHMAN BROTHERS 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
___________________, or registered assigns, on the Maturity Date the principal
sum equal to the Face Amount hereof, plus or minus an amount determined by the
Determination Agent (as defined below) in accordance with the formula set forth
below (the "Principal Amount") and to pay interest on the Face Amount as
described below and on the reverse hereof until the Principal Amount is paid or
made available for payment and (to the extent that the payment of such interest
shall be legally enforceable) to pay interest on any overdue principal and
premium and on any overdue instalment of interest. All payments in respect of
this Note will be made in U.S. Dollars.
The Principal Amount of this Note payable at Maturity shall
equal:
(a) if the Spot Rate equals or exceeds the Base Exchange Rate,
Face Amount + (Face Amount x Spot Rate - Base Exchange Rate Spot Rat); or
------------------------------
(b) if the Base Exchange Rate exceeds the Spot Rate,
Face Amount - (Face Amount x Base Exchange Rate - Spot Rate Spot Rate); or
; provided, however, that in no event shall such Principal Amount be greater
than twice the Face Amount or less than zero. If this Note is an OID Note,
unless otherwise specified above, the term "Face Amount" when used in the above
formula shall refer to the Amortized Face Amount, as described in Section 7 on
the reverse hereof. An "OID Note" is (a) any Note 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 Note not identified in
(a) that for United States federal income tax purposes would be considered an
original issue discount instrument.
The amount of interest, if any, payable on any Interest Payment Date
(as defined below) shall equal:
Face Amount x Interest Rate2 x Basic Exchange Rate Spot Rate
If the Interest Rate on this Note may be reset at the option of the Company as
set forth on the reverse hereof, the term "Interest Rate" when used in the above
formula shall refer to the interest rate in effect during the relevant period.
The terms used in the preceding formulas shall have the
following meanings:
"Business Day" means any day, other than a Saturday or Sunday,
that meets each of the following applicable requirements: such
day is (a) not a day on which banking institutions in the
Borough of Manhattan, The City of New York are authorized or
required by law or regulation to close; (x) not a day on which
banking institutions are authorized or required by law or
regulation to close in the principal financial center of the
country issuing the Indexed Currency and (y) a day on which
banking institutions in such principal financial center are
carrying out transactions in such Indexed Currency; and (b) if
the Indexed Currency specified above is ECU, (x) not a day on
which banking institutions are authorized or required by law
or regulation to close in Luxembourg and (y) an ECU clearing
day, as determined by the ECU Banking Association in Paris.
"Determination Date" means the second Exchange Rate Day prior
to the date of Maturity.
"Exchange Rate Day" means any day which is a Business Day in
The City of New York and the principal financial center of the
country which recognizes the Indexed Currency as a unit of
domestic exchange.
"Reference Dealers" means the three banks or firms specified
above or, if any of them shall be unwilling or unable to
provide the requested quotations, such other major money
center bank or banks in The City of New York selected by the
Company, in consultation with the Determination Agent, to act
as Reference Dealer or Dealers in replacement therefor.
"Spot Rate" means the arithmetic mean of the open market spot
offer quotations for the Indexed Currency (spot bid quotations
for the U.S. dollars) obtained by the Determination Agent from
the Reference Dealers in The City of New York at approximately
11:00 A.M., New York City time, on the Determination Date, for
an amount of Indexed Currency equal to the Face Amount
multiplied by the Base Exchange Rate, with settlement on the
date of Maturity to be in the U.S. dollars; provided that if
such quotations from the Reference Dealers are not available
on the Determination Date due to circumstances beyond the
control of the Company or the Determination Agent, the Spot
Rate will be determined on the basis of the most recently
available quotations from the Reference Dealers. The Spot Rate
shall be expressed in units of the Indexed Currency per one
U.S. dollar.
In the absence of manifest error, the determination by the
Determination Agent of the Spot Rate and of the amount of principal and interest
payable in respect of this Note shall be final and binding on the Company and
the Holder hereof.
If this Note is subject to an Annual Percentage Reduction as
specified above, the Redemption Price shall initially be the Initial Redemption
Percentage of the Principal Amount of this Note on the Initial Redemption Date
and shall decline at each anniversary of the Initial Redemption Date (each such
date, a "Redemption Date") by the Annual Percentage Reduction of such Principal
Amount until the Redemption Price is 100% of such Principal Amount.
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, the term "Maturity"
when used herein shall refer, where applicable, to the date of redemption,
repayment, acceleration or other prepayment of this Note.
Interest shall be payable from the Issue Date specified above
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for until the principal hereof is paid or made available for
payment. Except as provided in the following paragraph, the Company will pay
interest semiannually on February 15 and August 15 of each year (unless other
Interest Payment Dates are specified above) (each an "Interest Payment Date"),
commencing with the first Interest Payment Date next succeeding the Issue Date,
and at Maturity; provided, that any payment of principal, premium, if any, or
interest to be made on any Interest Payment Date or on a date of Maturity 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 the Interest Payment Date or date of
Maturity, as the case may be, and no additional interest shall accrue as a
result of such delayed payment. Each payment of interest hereon shall include
interest accrued through the day before the Interest Payment Date or date of
Maturity, as the case may be. Unless otherwise specified above, interest on this
Note will be computed on the basis of a 360-day year of twelve 30-day months. In
no event shall the interest 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 interest payable on any
Interest 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 Interest Payment Date; provided, that,
notwithstanding any provision of the Indenture to the contrary, interest payable
on any date of Maturity shall be payable to the Person to whom principal shall
be payable; and provided, further, that, unless otherwise specified above, in
the case of a Note issued between a Regular Record Date and the Interest Payment
Date relating to such Regular Record Date, interest for the period beginning on
the Issue Date and ending on such Interest Payment Date shall be paid on the
Interest Payment Date following the next succeeding Regular Record Date to the
registered Holder on such next succeeding Regular Record Date.
Unless otherwise indicated above, and except as provided below
if this Note is a Global Security, payment of interest on this Note (other than
interest payable at Maturity) will be made by wire transfer or by check;
provided, that, if the Holder hereof is the Holder of U.S. $10,000,000 or more
in aggregate Face Amount of Notes of this series of like tenor and term, such
Holder shall be entitled to receive interest payments in immediately available
funds, but only if complete and appropriate instructions have been received in
writing by the Trustee (or any duly appointed Paying Agent) on or prior to the
applicable Regular Record Date. A Holder may, if so entitled (as provided
above), elect to receive such payments in immediately available funds by
providing complete and appropriate instructions to the Trustee (or any such
Paying Agent), and all such payments will be made in immediately available funds
to an account maintained by the payee with a bank located outside the United
States or as otherwise provided above.
Unless otherwise indicated above, and except as provided below
if this Note is a Global Security, payments of principal, premium, if any, and
interest payable at Maturity 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.
Unless otherwise specified above, if this Note is a Global
Security, payments of interest (other than at Maturity) will be made in
immediately available funds in accordance with existing arrangements between the
Trustee (or any duly appointed Paying Agent) and the Depository. Unless
otherwise specified above, if this Note is a Global Security, any principal,
premium and/or interest payable hereon at Maturity will be paid by wire transfer
in immediately available funds to an account specified by the Depository.
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.
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.
IN WITNESS WHEREOF, Lehman Brothers Inc. has caused this
instrument to be signed by its Chairman of the Board, one of its Vice Chairmen
of the Board, its President, or one of its Vice Presidents, 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:
[SEAL] LEHMAN BROTHERS 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.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:_________________________
Authorized Officer
<PAGE>
[REVERSE OF NOTE]
LEHMAN BROTHERS INC.
SENIOR SUBORDINATED MEDIUM-TERM NOTES, SERIES A
(Currency Indexed)
Section 1. General. This Note is one of a duly authorized
series of Notes of the Company designated as the Senior Subordinated Medium-Term
Notes, Series A (Currency Indexed) of the Company (herein called the "Notes"),
limited in aggregate principal amount to $________________ (or such greater
amount, if OID Notes are issued, as shall result in aggregate gross proceeds to
the Company of $________________), 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
March 1, 1996 (the "Indenture"), duly executed and delivered by the Company and
The First National Bank of Chicago 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 and of the terms upon which the Securities are, and are to be,
authenticated and delivered. The separate series of Securities may be issued in
various aggregate principal amounts, may mature at different times, may bear
interest (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.
Section 2. Currency Exchanges. 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 Indexed
Currency (including, without limitation, an official redenomination of any such
currency that is a composite currency), the obligations of the Company to make
payments with reference to such currency shall, in all cases, be deemed
immediately following such redenomination to be obligations to make payments
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 any
redenomination of any component currency of any composite currency (unless such
composite currency is itself officially redenominated).
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.
Section 3. Redemption. If so specified on the face hereof, 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 (which shall not be prior to the first anniversary date of the original
issuance hereof) at either a price based on a constant percentage of the
Principal Amount of this Note as specified on the face hereof or at prices
declining from the premium specified on the face hereof, if any, to 100% of the
Principal Amount hereof, together, in each case, with accrued interest to the
Redemption Date; provided, that permission of the Exchange for such redemption
has been obtained. 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 prior to the Redemption Date. 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. Sinking Fund. Unless otherwise specified on the
face hereof, this Note will not be subject to any sinking fund.
Section 5. Optional Repayment. If so specified on the face
hereof, this Note will be repayable prior to the Maturity Date at the option of
the Holder on the Optional Repayment Dates specified on the face hereof at the
Optional Repayment Prices specified on the face hereof, together with accrued
interest to the applicable Optional Repayment Date. Unless otherwise specified
on the face hereof, in order for this Note to be so repaid, the Company must
receive, at least 30 but not more than 45 days prior to an Optional Repayment
Date, either (i) this Note with the form below entitled "Option to Elect
Repayment" duly completed or (ii) a telegram, telex, facsimile transmission 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 Face Amount
hereof, the Face 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, facsimile transmission 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 6. The repayment option may be exercised by the Holder of
this Note with respect to less than the Face Amount then outstanding provided
that the Face 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 Face Amount hereof shall be
issued in the name of the Holder of this Note.
Section 6. Optional Interest Reset. If so specified on the
face hereof, the Interest 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 in
writing 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
interest rate, (ii) such new interest 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 Interest 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 Interest
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 interest 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 interest rate
provided for in the Reset Notice and establish an interest rate that is higher
than the interest rate provided for in the Reset Notice for the Subsequent
Interest Period commencing on such Optional Reset Date by causing the Trustee to
mail by first-class mail notice of such higher interest 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 interest rate is reset on an Optional Reset Date will bear such higher
interest rate for the Subsequent Interest Period.
If the Company elects to reset the interest 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 the aggregate Face Amount hereof to be repaid, plus
any interest 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 5 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 7. OID Notes. If this Note is an OID Note, unless
otherwise specified on the face hereof, the amount payable in the event of
redemption by the Company, repayment at the option of the Holder or acceleration
of Maturity shall be calculated with reference to the Amortized Face Amount of
this Note as of the date of such redemption, repayment or acceleration rather
than with reference to the Face Amount hereof. The "Amortized Face Amount" of
this Note shall be the amount equal to (a) the Issue Price (as set forth on the
face hereof) plus (b) that portion of the difference between the Issue Price and
the Face Amount hereof that has accrued at the Yield to Maturity set forth on
the face hereof (computed in accordance with generally accepted United States
bond yield computation principles) at the date as of which the Amortized Face
Amount is calculated, but in no event shall the Amortized Face Amount of this
Note exceed the Face Amount.
Section 8. 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 Face Amount.
Section 9. Modification and Waivers. The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the
holders of not less than a majority 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, (a) change the stated maturity
of the principal of, or any installment of principal of or interest on, any
Security, (b) reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, (c) reduce the
amount of the principal of an OID Security that would be due and payable upon an
Event of Acceleration or an Event of Default (both as defined in the Indenture)
(d) adversely affect any right of repayment at the option of the holder of any
Security, (e) change any place of payment where, or the coin or currency in
which, any Security or any premium or the interest thereon is payable, (f)
impair the right to institute suit for the enforcement of any such payment on or
after the stated maturity thereof (or, in the case of redemption, on or after
the redemption date), (g) reduce the percentage in principal amount of the
outstanding Securities of any series, the consent of whose holders is required
for any such supplemental indenture, or the consent of whose holders is required
for any waiver (of compliance with certain provisions of the Indenture or
certain defaults thereunder and their consequences) provided for in the
Indenture, or (h) modify any of the provisions of sections of the Indenture
dealing with supplemental indentures, waivers of certain covenants or waivers of
past defaults, except to increase any such percentage or to provide that certain
other provisions of the Indenture cannot be modified or waived without the
consent of the holder of each outstanding Security affected thereby. 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 Acceleration or Event of Default under the Indenture with respect to such
series and its consequences, except a default in the payment of the principal
of, or the premium (if any) or interest, if any, on any of the Securities of
such series, or in respect of a provision under which the Indenture cannot be
modified without the consent of the holder of each outstanding security 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 10. 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, premium, if any, and interest, if any, on this Note at the
place, at the respective times, at the rate, and in the coin or currency herein
prescribed.
Section 11. 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 12. Authorized Form and Denominations. The Notes of
this series are issuable only in registered form, without coupons. Unless
otherwise set forth on the face hereof, Notes will be issued in Face Amount
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note, at the option of the holders thereof, 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 Face Amount of Notes of this series of a
different authorized denomination, except that Book-Entry Notes will not be
exchangeable for Certificated Notes.
Section 13. 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 Face 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 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 Face Amount equal to the Face
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 14. Events of Acceleration; Events of Default. In case
an Event of Default or an Event of Acceleration, as defined in the Indenture,
with respect to Notes of this series shall have occurred and be continuing, the
principal of all of the Notes of this series, in the case of an Event of
Default, shall become, or in the case of an Event of Acceleration, may be
declared and in accordance with such declaration shall become, due and payable
and such acceleration or declaration may in certain events be rescinded, in the
manner, with the effect and subject to the conditions provided in the Indenture.
In the event that this Note is an OID Note, the amount of principal of this Note
that becomes due and payable upon such acceleration shall be equal to the amount
calculated as set forth in Section 7 hereof. Upon payment (i) of the aggregate
applicable amounts of principal of the Notes of this series so declared due and
payable and (ii) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and interest, if any, on the Notes of this series shall terminate.
Section 15. Subordination; Regulatory Matters. The
indebtedness evidenced by this Note, together with any interest accrued thereon
and premium, if any, is, to the extent provided in the Indenture, subordinate
and subject in right of payment to the prior payment in full of all Senior
Indebtedness, as defined in the Indenture, and this Note is issued subject to
the provisions of the Indenture, and each Holder hereof, by accepting the same,
agrees to and shall be bound by such provisions and authorizes and directs the
Trustee in his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination as provided in the Indenture and
appoints the Trustee his attorney-in-fact for any and all such purposes.
As provided in the Indenture, the Company's obligation to pay
the principal of the Notes of this series at Stated Maturity or pursuant to any
mandatory sinking fund shall be suspended if, after giving effect to such
payment and the payment of certain other subordinated debt, the Company's "net
capital" would be reduced below the minimum amounts of capital to be maintained
by the Company as required by the various domestic exchanges, boards of trade
and governmental agencies to which it is subject, all with the effect and to the
extent provided in the Indenture. Optional redemptions are subject to similar
suspensions and to the requirement that permission therefor of the Exchange (as
defined in the Indenture) has been obtained. If payment is made of the principal
of the Notes of this series notwithstanding the foregoing, the Holders of the
Notes so paid are required to repay to the Company, its successors or assigns,
the sum so paid; provided, however, that any suit for such recovery must be
commenced within two years of the date of such payment. Each Holder hereof, by
accepting the same, agrees to be bound by such provisions.
Section 16. No Recourse Against Certain Persons. No recourse
for the payment of the principal of, premium, if any, or interest 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 efined in the Indenture.
Section 18. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned owner of this Note hereby irrevocably elects to have
the Company repay the Face Amount of this Note or portion hereof below
designated at (i) the Optional Repayment Percentage multiplied by the Principal
Amount of this Note to be repaid in respect of such Face Amount plus accrued
interest to the Optional Repayment Date, if this Note is to be repaid pursuant
to the Optional Repayment provision described in Section 5 hereof, or (ii) 100%
of the Principal Amount of this Note to be repaid in respect of such Face Amount
plus accrued interest to the Optional Reset Date, if this Note is to be repaid
pursuant to the Optional Interest Reset provision described in Section 6 hereof.
Any such election is irrevocable except as provided in Section 6 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]
Face Amount to be repaid, if amount to Fill in for registration of Notes
be repaid is less than the Face Amount if to be issued otherwise than
of this Note (Face Amount remaining to the registered Holder:
must be an authorized denomination)
Name: __________________________
Address: _______________________
-----------------------
(Please print name and
address including zip code)
$------------------------
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER
---------------------------------
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenant by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT
MIN ACT - Custodian
(Cust) (Minor)
Under Uniform Gifts to Minors Act
-------------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned
hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
Please print or type name and address, including zip code of assignee
the within Note of LEHMAN BROTHERS INC. and all rights thereunder and does
hereby irrevocably constitute and appoint
Attorney to transfer the
said Note on the books of the within-named Company, with full power of
substitution in the premises.
Dated: ________________________________
SIGNATURE GUARANTEED:____________________________________________
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Note in every particular,
without alteration or enlargement or
any change whatsoever.
<PAGE>
EXHIBIT A
RESET NOTICE
LEHMAN BROTHERS INC.
Senior Subordinated Medium-Term Notes, Series A
(Currency Indexed)
CUSIP No. _______________
Registered Nos. ____-____
LEHMAN BROTHERS INC., a corporation duly organized and
existing under tho 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 Interest Rate set forth
on the face of the Notes. On and after __________1/, the Interest 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 Inc. has caused this Reset Notice
to be signed by its Chairman of the Board, one of its Vice Chairmen of the
Board, its President, its Treasurer or one of its Vice Presidents and to be
attested by its Secretary or one of its Assistant Secretaries.
Dated:
LEHMAN BROTHERS INC.
By:_________________________________
Title:
Attest:_____________________________
Title:
1/ Insert applicable Optional Reset Date.
