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PURSUANT TO RULE 424(b)(2)
REGISTRATION NO. 33-58548
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 15, 1993)
5,000,000 WARRANTS
LEHMAN BROTHERS HOLDINGS INC.
JAPANESE YEN BEAR WARRANTS
EXPIRING MARCH 5, 1996
------------------------
Each Warrant will entitle the holder thereof to receive from Lehman Brothers
Holdings Inc. ("Holdings"), upon exercise (including automatic exercise), an
amount in U.S. Dollars calculated by reference to decreases in the value of the
Japanese Yen relative to the U.S. Dollar. Such amount (the "Cash Settlement
Value") will equal the greater of (i) zero and (ii) the amount (rounded down to
the nearest cent) computed by subtracting from U.S. $100 an amount equal to the
product of U.S. $100 times a fraction, the numerator of which is Y104.20 per
U.S. Dollar (the "Strike Rate") and the denominator of which is the spot
exchange rate of the Japanese Yen for the U.S. Dollar (expressed as a number of
Japanese Yen per U.S. Dollar and determined by the Calculation Agent) at 10:00
A.M., New York City time, on the applicable valuation date (the "Spot Rate"). If
the Strike Rate is equal to or exceeds the Spot Rate for such valuation date,
the Cash Settlement Value will be zero. The Strike Rate is equal to the spot
exchange rate of the Japanese Yen for the U.S. Dollar quoted by the Calculation
Agent at 10:00 A.M., New York City time, on the date hereof and as of such time
the Cash Settlement Value of the Warrants was zero.
The Warrants are unsecured contractual obligations of Holdings and will rank
on a parity with Holdings' other unsecured contractual obligations and with
Holdings' unsecured and unsubordinated debt.
THE WARRANTS INVOLVE A HIGH DEGREE OF RISK, INCLUDING FOREIGN EXCHANGE RISKS
AND THE RISK OF EXPIRING WORTHLESS IF THE U.S. DOLLAR DOES NOT APPRECIATE, OR IF
IT DEPRECIATES, AGAINST THE JAPANESE YEN. PURCHASERS SHOULD BE PREPARED TO
SUSTAIN A TOTAL LOSS OF THE PURCHASE PRICE OF THEIR WARRANTS AND ARE ADVISED TO
CONSIDER CAREFULLY THE INFORMATION UNDER "RISK FACTORS," "DESCRIPTION OF THE
WARRANTS" AND "EXCHANGE RATES."
The Warrants will be exercisable immediately upon issuance and may be
exercised until 3:00 P.M., New York City time, on the New York Business Day
immediately preceding the earlier of the expiration date for the Warrants, which
will be March 5, 1996 (the "Expiration Date"), or the effective date of their
delisting from, or permanent suspension from trading on, the American Stock
Exchange and failure to list on another self-regulatory organization (the
"Delisting Date"). Any Warrant not exercised at or before 3:00 P.M., New York
City time, on such New York Business Day will be automatically exercised on the
Expiration Date or the Delisting Date, as applicable. A Warrantholder may
exercise no fewer than 500 Warrants at any one time, except in the case of
automatic exercise. See "Certain Important Information Concerning the Warrants"
and "Description of the Warrants" herein and "Description of Warrants" in the
Prospectus.
The Warrants will be originally issued as certificates in registered form
(each, a "Warrant Certificate"). Forty-six calendar days after the closing of
the offering, each registered warrantholder will have the option to convert the
form of such warrantholder's Warrants from certificated to book-entry form
within a forty-five calendar day period as described herein. Ownership of
converted Warrants will be maintained in book-entry form by or through the
Depository. Beneficial owners of Warrants in book-entry form will not have the
right to receive physical certificates evidencing their ownership except under
the limited circumstances described herein.
The Warrants have been approved for listing on the American Stock Exchange,
subject to notice of issuance, under the symbol "YBW.WS."
Lehman Brothers Inc., a wholly owned subsidiary of Holdings, may, but is not
obligated to, purchase and sell Warrants for its own account for the purposes of
making a market in the Warrants.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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Underwriting
Price to Discounts Proceeds to
Public and Commissions(1) Holdings(2)
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Per Warrant............................................ $6.60 $0.40 $6.20
- ---------------------------------------------------------------------------------------------------------------------
Total(3)............................................... $33,000,000 $2,000,000 $31,000,000
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
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(1) Holdings has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(2) Before deducting expenses payable by Holdings, estimated at $100,000.
(3) Holdings has granted the Underwriter a 30-day option to purchase up to
750,000 additional Warrants solely to cover over-allotments. If such option
is exercised in full, the Total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Holdings, before deducting expenses, will be
$37,950,000, $2,300,000 and $35,650,000 respectively. See "Underwriting."
------------------------
The Warrants offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, to withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain further conditions. The Underwriters reserve the right to reject
orders in whole or in part. It is expected that delivery of the Warrant
Certificates will be made at the offices of Lehman Brothers Inc., New York, New
York, on or about March 10, 1994.
------------------------
LEHMAN BROTHERS
KIDDER, PEABODY & CO.
INCORPORATED
OPPENHEIMER & CO., INC.
March 3, 1994
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE WARRANTS
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
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SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in the Prospectus and this Prospectus Supplement
and in the documents incorporated therein and herein by reference.
References herein to "U.S. Dollars" or "$" are to the currency of the
United States of America and references to "Japanese Yen" or "Y" are to the
currency of Japan.
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ISSUER................. Lehman Brothers Holdings Inc. ("Holdings").
SECURITIES OFFERED..... 5,000,000 Japanese Yen Bear Warrants Expiring March 5, 1996. Each
Warrant will entitle the holder thereof to receive from Holdings,
upon exercise (including automatic exercise), an amount in U.S.
Dollars calculated by reference to decreases in the value of the
Japanese Yen relative to the U.S. Dollar. Such amount, which is the
Cash Settlement Value of the Warrant, will equal the greater of (i)
zero and (ii) the amount (rounded down to the nearest cent) computed
by subtracting from U.S. $100 an amount equal to the product of U.S.
$100 times a fraction, the numerator of which is Y104.20 per U.S.
Dollar (the "Strike Rate") and the denominator of which is the spot
exchange rate of the Japanese Yen for the U.S. Dollar (expressed as
a number of Japanese Yen per U.S. Dollar and determined by the
Calculation Agent) at 10:00 A.M., New York City time, on the
applicable valuation date (the "Spot Rate"). If the Strike Rate is
equal to or exceeds the Spot Rate for such valuation date, the Cash
Settlement Value will be zero. The Strike Rate is equal to the spot
exchange rate of the Japanese Yen for the U.S. Dollar quoted by the
Calculation Agent at 10:00 A.M., New York City time, on the date
hereof and as of such time the Cash Settlement Value of the Warrants
was zero. See "Description of the Warrants -- Cash Settlement Value"
for the method by which the Spot Rate and the Cash Settlement Value
will be calculated.
PRICE.................. $6.60 per Warrant.
EXERCISE OF WARRANTS... The Warrants will be exercisable immediately upon issuance and may
be exercised until 3:00 P.M., New York City time, on the New York
Business Day immediately preceding the earlier of (i) the expiration
date for the Warrants, which will be March 5, 1996 (the "Expiration
Date") or (ii) the effective date of their delisting from, or
permanent suspension from trading on, the American Stock Exchange
(the "AMEX") and failure to list on another Self-Regulatory
Organization. All Warrants which have not been exercised by 3:00
P.M., New York City time, on such New York Business Day will be
automatically exercised on the Expiration Date or the date of such
delisting or suspension. See "Description of the Warrants --
Exercise of Warrants" and "-- Automatic Exercise". In the case of
automatic exercise upon such delisting or suspension, each Warrant
will entitle the holder thereof to receive from Holdings the
Alternative Settlement Amount, if any, in lieu of the Cash
Settlement Value thereof. See "Description of the
Warrants -- Alternative Settlement Amount" for a description of the
method of calculation of the Alternative Settlement Amount.
EXERCISE AMOUNT........ A Warrantholder may exercise no fewer than 500 Warrants at any one
time, except in the case of automatic exercise. See "Description of
the Warrants -- Minimum Exercise Amount."
CERTAIN RISK FACTORS... The Warrants involve a high degree of risk, including foreign
exchange risks and the risk of expiring worthless if the U.S. Dollar
does not appreciate, or if it depreciates, against the Japanese Yen.
If a Warrant is not exercised and if at expiration one U.S. Dollar
is worth Y104.20 or less, the Warrant will expire
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worthless. Investors therefore should be prepared to sustain a total
loss of the purchase price of their Warrants. Warrantholders will
bear the foreign exchange risks of the U.S. Dollar as compared to
the Japanese Yen.
Investors are advised to consider carefully the risk factors and the
other matters discussed under "Risk Factors," "Certain Important
Information Concerning the Warrants," "Description of the Warrants,"
"Exchange Rates" and "Certain United States Federal Income Tax
Considerations," prior to purchasing the Warrants.
WHO SHOULD INVEST...... It is suggested that investors who consider purchasing Warrants
should be experienced with respect to options and option
transactions and understand the risks of foreign exchange
transactions and should reach an investment decision only after
careful consideration with their advisers of the suitability of the
Warrants in the light of their particular financial circumstances.
The AMEX recommends that the Warrants be sold only to investors
whose accounts have been approved for options trading, and requires
that its members, member organizations and the registered employees
thereof make certain suitability determinations before recommending
transactions in Warrants. As indicated above, investors should be
prepared to sustain a total loss of the purchase price of the
Warrants.
DEFINED TERMS.......... Refer to "Glossary" herein for a list of defined terms used herein.
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USE OF PROCEEDS
A substantial part of the proceeds to be received by Holdings from the sale
of the Warrants will be used by Holdings or one or more of its subsidiaries in
connection with hedging Holdings' obligations under the Warrants. Depending on
market conditions (including the prevailing Japanese Yen/U.S. Dollar exchange
rate from time to time), in connection with such hedging, Holdings expects that
it or its subsidiaries may (i) take positions in listed and over-the-counter
Japanese Yen or U.S. Dollar currency option contracts, (ii) take positions in
Japanese Yen or U.S. Dollar currency forward contracts, (iii) take positions in
Japanese Yen or U.S. Dollar currency spot contracts and (iv) enter into currency
swap arrangements, in each case, other than exchange traded options, in
privately negotiated transactions with institutional counterparties. The
remainder of the proceeds, if any, will be used for general corporate purposes.
RISK FACTORS
THE WARRANTS INVOLVE A HIGH DEGREE OF RISK, INCLUDING FOREIGN EXCHANGE
RISKS AND THE RISK OF EXPIRING WORTHLESS. INVESTORS THEREFORE SHOULD BE PREPARED
TO SUSTAIN A TOTAL LOSS OF THE PURCHASE PRICE OF THEIR WARRANTS. THE WARRANTS
WILL BE "IN THE MONEY" ONLY WHEN THE SPOT RATE EXCEEDS THE STRIKE RATE. AS FOR
WHO SHOULD INVEST IN THE WARRANTS, IT IS SUGGESTED THAT INVESTORS CONSIDERING
PURCHASING WARRANTS BE EXPERIENCED WITH RESPECT TO OPTIONS AND OPTION
TRANSACTIONS AND UNDERSTAND THE RISKS OF FOREIGN EXCHANGE TRANSACTIONS AND REACH
AN INVESTMENT DECISION ONLY AFTER CAREFULLY CONSIDERING, WITH THEIR ADVISERS,
THE SUITABILITY OF THE WARRANTS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES AND
THE INFORMATION SET FORTH BELOW AND UNDER "CERTAIN IMPORTANT INFORMATION
CONCERNING THE WARRANTS," "DESCRIPTION OF THE WARRANTS," "EXCHANGE RATES" AND
"CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS." THE AMEX RECOMMENDS
THAT THE WARRANTS BE SOLD ONLY TO INVESTORS WHOSE ACCOUNTS HAVE BEEN APPROVED
FOR OPTIONS TRADING AND REQUIRES THAT ITS MEMBERS, MEMBER ORGANIZATIONS AND THE
REGISTERED EMPLOYEES THEREOF MAKE CERTAIN SUITABILITY DETERMINATIONS BEFORE
RECOMMENDING TRANSACTIONS IN WARRANTS.
Possible Illiquidity of Trading Market. Investors should be aware that it
is not possible to predict how the Warrants will trade in the secondary market
or whether such market will be liquid or illiquid.
Minimum Exercise Amount. Except in the case of automatic exercise of the
Warrants, a Warrantholder must tender at least 500 Warrants at any one time in
order to exercise. Thus, Warrantholders with fewer than 500 Warrants will need
either to sell their Warrants or to purchase additional Warrants, incurring
transaction costs in each case, in order to realize upon their investment.
Furthermore, such Warrantholders incur the risk that there may be differences
between the trading value of the Warrants and the Cash Settlement Value of such
Warrants. All Warrantholders, including those owning fewer than 500 Warrants,
will receive the Cash Settlement Value or the Alternative Settlement Amount of
their Warrants, as applicable, upon automatic exercise. See "Description of the
Warrants--Minimum Exercise Amount," "--Cash Settlement Value" and "--Alternative
Exercise Amount."
Time Lag After Exercise Instructions Given. There will be a time lag
between the time a Warrantholder gives instructions to exercise its Warrants and
the time the Spot Rate relating to such exercise is determined. The delay will,
at a minimum, amount to an entire day and could be much longer (e.g., an
Exercise Notice received by the Warrant Agent after 3:00 P.M. on a Friday would
result in a Valuation Date in respect of the exercise not occurring until the
following Tuesday at the earliest). The spot exchange rate may change
significantly during any such period, and such movement could adversely affect
the Cash Settlement Value of the Warrants being exercised. See "Description of
the Warrants--Exercise of Warrants."
Time Difference. The interbank market in foreign currencies is a global,
around-the-clock market. Therefore, the hours of trading for the Warrants will
not conform to the hours during which the Japanese Yen and U.S. Dollar are
traded. To the extent that the AMEX is closed while the markets for the Japanese
Yen and U.S. Dollar remain open, significant price and rate movements may take
place in the underlying foreign exchange markets which will not be reflected
immediately in the price of a Warrant on the AMEX. The possibility of such
movement should be taken into account when relating closing prices on the AMEX
for the Warrants to those in the underlying foreign exchange markets.
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Automatic Exercise of the Warrants upon Delisting. In the event that the
Warrants are delisted from, or permanently suspended from trading (within the
meaning of the Exchange Act and the rules and regulations thereunder) on the
AMEX, and not accepted at the same time for trading pursuant to the rules of
another self-regulatory organization that are filed with the Securities and
Exchange Commission under the Exchange Act (a "Self-Regulatory Organization"),
Warrants not previously exercised will be deemed automatically exercised on the
effective date of such delisting or suspension, and the Alternative Settlement
Amount, if any, shall be calculated as provided under "Description of the
Warrants--Alternative Settlement Amount." The Alternative Settlement Amount so
calculated could be less than the trading value the Warrants would have had if
such delisting or suspension had not occurred. See "Description of the
Warrants--Delisting of Warrants."
Certain Factors Affecting the Value of the Warrants. Each Warrant is
expected to have a Cash Settlement Value of zero at issuance. The Cash
Settlement Value at any time prior to expiration is expected typically to be
less than the Warrants trading value at that time. The difference between the
trading value and the Cash Settlement Value will reflect a number of factors,
including the "time value" for the Warrants, which reflects expectations
concerning the value of the Japanese Yen as compared to the U.S. Dollar during
the period remaining prior to expiration of the Warrants, and the supply and
demand for the Warrants. The "time value" of the Warrants will depend upon the
length of the period remaining to expiration of the Warrants. The date on which
the Warrants expire may be accelerated should the Warrants be delisted or should
their trading on the AMEX or other Self-Regulatory Organization be permanently
suspended. Any such acceleration could result in the total loss of any otherwise
remaining "time value", and could occur when the Warrants are "out-of-the-money"
(i.e., when the Spot Rate is less than or equal to Strike Rate), thus resulting
in total loss of the purchase price of the Warrants.
The trading price of the Warrants may be adversely affected to the extent
similar public offerings of Warrants related to Japanese Yen are made in the
United States.
The initial public offering price per Warrant is in excess of the price a
commercial user of currencies might pay in the interbank market for a comparable
option in a private, less liquid transaction.
Before exercising or selling a Warrant, investors should carefully consider
the trading value of the Warrants, the spot exchange rate, the probable range of
Cash Settlement Values and any related transaction costs. The trading value of a
Warrant is expected to be dependent on the Strike Price and also on a number of
interrelated factors, including those listed below. The relationship among these
factors is complex. However, the expected effect on the trading value of a
Warrant of each of the factors listed below, assuming in each case that all
other factors are held constant, is as follows:
(1) The Spot Rate. If the value of the U.S. Dollar falls in relation to
the Japanese Yen, the trading value of a Warrant is expected to
decrease.
(2) The volatility of the Yen/$ exchange rate. If the volatility of the
Yen/$ exchange rate decreases, then the trading value of a Warrant is
expected to decrease.
(3) The time remaining to the expiration of the Warrants. As the time
remaining to the expiration date decreases, the trading value of a
Warrant is expected to decrease.
(4) Interest rates on Japanese Yen and U.S. Dollar fixed income
instruments. If (a) Japanese Yen interest rates decrease, (b) U.S.
Dollar interest rates increase or (c) both, then the trading value
of a Warrant is expected to decrease.
It is possible that the trading value of a Warrant may decline even if
there is an increase in the value of the U.S. Dollar as compared to the Japanese
Yen.
As noted above, these hypothetical scenarios are based on the assumption
that all other factors are held constant. In reality, it is unlikely that only
one factor would change in isolation, since changes in one factor usually cause,
or result from, changes in others. In addition, some of the factors referred to
above are in turn influenced by the political and economic factors discussed
below under "Exchange Rates."
Warrants Not a Perfect Hedge. Because of the factors noted above, the
Warrants should not be considered to be a perfect hedge against increases in the
value of Japanese Yen in relation to the U.S. Dollar.
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Warrants Not Standardized Options Issued by The Options Clearing
Corporation. The Warrants are unsecured contractual obligations of Holdings and
will rank on a parity with Holdings' other unsecured contractual obligations and
with Holdings' unsecured and unsubordinated debt. The Warrants are not
standardized foreign currency options of the type issued by the Options Clearing
Corporation (the "OCC"). For example, unlike purchasers of OCC standardized
options who have the credit benefits of guarantees and margin and collateral
deposits by OCC clearing members to protect the OCC from a clearing member's
failure, purchasers of Warrants must look solely to Holdings for performance of
Holdings' obligations to pay the Cash Settlement Value or Alternative Settlement
Amount, as the case may be, upon the exercise of Warrants. In addition, OCC
standardized options provide for physical delivery of the underlying foreign
currency (rather than cash settlement in U.S. Dollars), and permit immediate
determination of value on exercise. Further, the market for the Warrants is not
expected to be generally as liquid as the market for some OCC standardized
options.
Potential Governmental Intervention. Foreign exchange rates can either be
fixed by sovereign governments or float. Exchange rates of most economically
developed nations, including Japan and the United States, are permitted to
fluctuate in value relative to the Japanese Yen and U.S. Dollar. National
governments, however, rarely voluntarily allow their currencies to float freely
in response to economic forces. Sovereign governments in fact use a variety of
techniques, such as intervention by a country's central bank or imposition of
regulatory controls or taxes, to affect the exchange rates of their currencies.
Governments may also issue a new currency to replace an existing currency or
alter the exchange rate or relative exchange characteristics by devaluation or
revaluation of their currency. Thus, a special risk in purchasing Warrants is
that their liquidity, trading value and Cash Settlement Values could be affected
by governmental actions which could change or interfere with theretofore freely
determined currency valuation, fluctuations in response to other market forces
and the movement of currencies across borders. There will be no adjustment or
change in the terms of the Warrants in the event that exchange rates should
become fixed, or in the event of any devaluation or revaluation or imposition of
exchange or other regulatory controls or taxes, or in the event of other
developments affecting the Japanese Yen, the U.S. Dollar or any other currency.
In contrast, the OCC has reserved the authority to adjust the terms of its
standardized options for certain governmental action and to impose special
exercise settlement procedures.
General Risk Considerations. Options and warrants provide opportunities
for investment and pose risks to investors as a result of fluctuations in the
value of the underlying investment interests. In general, certain of the risks
associated with the Warrants are similar to those generally applicable to other
options or warrants of corporate issuers. However, unlike options or warrants on
equities or debt securities, which are priced primarily on the basis of the
value of a single underlying security, the trading value of a Warrant is likely
to reflect primarily present and expected exchange rates.
The purchaser of a Warrant may lose his entire investment. The risk
reflects the nature of a Warrant as an asset which tends to decline in value
over time and which may, depending on the relative value of the U.S. Dollar as
compared to the Japanese Yen, become worthless by the Warrant's expiration date.
Assuming all other factors are held constant, the more a Warrant is "out of the
money" (i.e., the greater the positive difference between the Strike Rate and
the Spot Rate) and the shorter its remaining term to expiration, the greater the
risk that a purchaser of the Warrant will lose all or part of his investment.
This means that the purchaser of a Warrant who does not sell it in the secondary
market or exercise it prior to expiration will necessarily lose his entire
investment in the Warrant if it expires when the Spot Rate is less than or equal
to the Strike Rate.
The fact that Warrants may become valueless upon expiration means that in
order to make a profit a purchaser of a Warrant must generally be correct about
both the direction and magnitude of an anticipated exchange rate change
affecting the Japanese Yen in relation to the U.S. Dollar and be correct about
when that exchange rate change will occur. If the value of the U.S. Dollar as
compared to the Japanese Yen does not increase before the Warrant is
automatically exercised to an extent sufficient to cover an investor's cost of
the Warrant (i.e., the purchase price plus transaction costs, if any), all or
part of such investor's investment in the Warrant would be lost upon such
automatic exercise. Warrantholders will thus bear the foreign exchange risks of
the U.S. Dollar as compared to the Japanese Yen.
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Investors should also consider factors affecting the Japanese economy and
the U.S. economy. In addition, the value of any currency, including the Japanese
Yen and the U.S. Dollar, may be affected by complex political and economic
factors. See "Exchange Rates."
There is no systematic reporting of last-sale information for foreign
currencies. Reasonably current, representative bid and offer information is
available on the floor of any exchange where foreign currency is traded, in
certain broker's offices, in bank foreign currency trading offices, and to
others who wish to subscribe for this information. There is, however, no
regulatory requirement that those quotations be firm or revised on a timely
basis. The absence of last-sale information and the limited availability of
quotations to individual investors may make it difficult for investors to obtain
timely, accurate data about the state of the underlying foreign exchange market.
In addition, the quotation information that is available is representative of
very large round lot or "wholesale" transactions in the interbank market and
does not reflect exchange rates for smaller odd lot or "retail" transactions.
Because more favorable rates are generally obtained in large transactions, the
rate that will be obtained at any given time in connection with the exercise of
a small aggregate number of Warrants is likely to be less favorable than the
rates reported in quotation information generally available to investors at such
time.
In general, a wholesale, round lot quote would be obtained in a transaction
valued at approximately $5 million or more and a retail, odd lot quote would be
obtained in a transaction valued at less than approximately $5 million.
Accordingly, because the Spot Rate on any date will be obtained for transaction
amounts approximately equivalent to U.S. $100 times the aggregate number of
Warrants being exercised on such date, a wholesale, round lot quote generally
would be obtained in a transaction involving the aggregate exercise of
approximately 50,000 Warrants or more on any particular date, and a retail, odd
lot quote generally would be obtained in a transaction involving the aggregate
exercise of fewer than approximately 50,000 Warrants on any particular date.
Furthermore, the difference between a wholesale, round lot quote and a retail,
odd lot quote generally would not be expected to exceed approximately one
percent. However, on any given day and in the context of any particular
transaction, the distinction between, and the size of, a wholesale, round lot
transaction and a retail, odd lot transaction and the variation of the
difference between the related quotes can vary, in some cases materially,
because of the many factors that influence the foreign exchange market, as more
fully discussed above and under "Exchange Rates" below. Accordingly, no
assurance can be given as to whether the aggregate number of Warrants exercised
on any day will constitute a wholesale, round lot transaction or a retail, odd
lot transaction or as to the quotes to be obtained in connection therewith.
At the time a Warrantholder delivers its notice of exercise, such holder
will not know the aggregate number of Warrants to be exercised on the applicable
Exercise Date, see "Description of the Warrants-- Exercise of Warrants" below,
and accordingly will not know whether the rate to be obtained on such Exercise
Date will be based on a wholesale or retail transaction. In addition, the rate
to be obtained on any Exercise Date may differ, in some cases significantly,
from the quotes generally available to a Warrantholder on the date it delivers
its notice of exercise due to changes in market conditions.
CERTAIN IMPORTANT INFORMATION
CONCERNING THE WARRANTS
The beneficial owner of a Warrant (a "Warrantholder") will receive a cash
payment upon exercise (including automatic exercise) only if such Warrant has a
Cash Settlement Value or, if applicable, an Alternative Settlement Amount
greater than zero at such time. The Cash Settlement Value of a Warrant will be
an amount in U.S. Dollars equal to the greater of (i) zero and (ii) the amount
(rounded down to the nearest cent) computed by subtracting from U.S. $100 an
amount equal to the product of U.S. $100 times a fraction the numerator of which
is Y104.20 per U.S. Dollar (the "Strike Rate") and the denominator of which is
the spot exchange rate of the Japanese Yen for the U.S. Dollar (expressed as a
number of Japanese Yen per U.S. Dollar and determined by the Calculation Agent)
at 10:00 A.M., New York City time, on the applicable valuation date (the "Spot
Rate"). The Strike Rate is equal to the spot exchange rate of the Japanese Yen
for the U.S. Dollar quoted by the Calculation Agent at 10:00 A.M., New York City
time, on the date hereof. See "Description of the Warrants--Cash Settlement
Value" and "--Alternative Settlement Amount." The
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Calculation Agent will not be responsible for good faith errors or omissions in
calculating or disseminating information regarding the Spot Rate, the Cash
Settlement Value or the Alternative Settlement Amount.
Warrantholders will be subject to foreign exchange risk which may have
important economic and tax consequences to them. See "Exchange Rates" and
"Certain United States Federal Income Tax Considerations."
Except under the circumstances described in the next paragraph, the
valuation date for an exercised Warrant will be the first New York Business Day
after the related Exercise Date. The Exercise Date for an exercised Warrant,
subject to certain exceptions described under "Description of the
Warrants -- Automatic Exercise" herein, will be the New York Business Day on
which such Warrant and an Exercise Notice in proper form are received by the
Warrant Agent if received at or prior to 3:00 P.M., New York City time, on such
day; if such Warrant and Exercise Notice are received after such time, the
Exercise Date will be the next succeeding New York Business Day. See
"Description of the Warrants--Exercise of Warrants."
The valuation date for an exercised Warrant will occur after the Exercise
Date (see "Description of the Warrants--Exercise of Warrants"). Therefore, a
Warrantholder will not be able to determine, at the time of exercise of a
Warrant, the Spot Rate that will be used in calculating the Cash Settlement
Value of such Warrant (and will thus be unable to determine such Cash Settlement
Value). Any downward movement in the value of the U.S. Dollar relative to the
Japanese Yen between the time a Warrantholder submits an Exercise Notice and the
time the Spot Rate for such exercise is determined (which period will, at a
minimum, represent an entire New York Business Day) will result in such
Warrantholder being entitled to a Cash Settlement Value or Alternative
Settlement Amount (which may be zero) that is less than the Cash Settlement
Value anticipated by such Warrantholder.
The Warrants will initially be evidenced by certificates in registered form
(each a "Warrant Certificate"). To exercise a Warrant in certificated form the
registered holder of such Warrant must deliver to the Warrant Agent the Warrant
Certificate representing such Warrant, with the Exercise Notice on the reverse
thereof (or an Exercise Notice in substantially identical form delivered
therewith) duly completed and executed. Accordingly, a beneficial owner of
Warrants holding such Warrants indirectly (for instance, through a broker that
holds such Warrants in "street name") may exercise such Warrants only through
such owner's registered holder. In the case of a beneficial owner holding
Warrants through his broker in "street name," such beneficial owner must direct
his broker, who may in turn need to direct another intermediary, to deliver an
Exercise Notice and the related Warrant Certificates to the Warrant Agent. In
order to ensure that an Exercise Notice and the related Warrant Certificates
will be delivered to the Warrant Agent before 3:00 P.M., New York City time, on
a given New York Business Day, a beneficial owner of Warrants may have to give
exercise instructions to his broker or other intermediary substantially earlier
than 3:00 P.M., New York City time, on such day. Different firms may have
different cut-off times for accepting and implementing exercise instructions
from their customers. Therefore, Warrantholders should consult their brokers or
other intermediaries, if applicable, as to applicable cut-off times and other
exercise mechanics. See "Description of the Warrants--Exercise of Warrants"
herein.
Forty-six calendar days after the closing of the offering, each registered
warrantholder will have the option to convert the form of such warrantholder's
Warrant from certificated to book-entry form within a forty-five calendar day
period as described herein. See "Description of the Warrants--Form of Warrants"
herein. To exercise a Warrant in book-entry form, (i) the participant through
which the Warrant is held must transfer such Warrant free on the records of the
Depository to the account of the Warrant Agent and (ii) a duly completed and
executed Exercise Notice on behalf of the Warrantholder must be delivered to the
Warrant Agent by the participant. A Warrantholder that is not a participant must
therefore instruct the broker or other intermediary that maintains the
Warrantholder's account to take such action, and if that firm is not a
participant, that firm must forward such instructions to the participant which
ultimately holds the relevant Warrants for the Depository. In order to ensure
that such Warrants and Exercise Notice will be received by the Warrant Agent on
a particular day, such Warrantholder must give exercise instructions to the
broker or other intermediary through which it holds the Warrant (which may, in
turn, need to direct a participant) before that firm's (and, if that firm is not
a participant, the applicable participant's) cut-off time for accepting exercise
instructions for that day. Different firms may have different cut-off times for
accepting exercise instructions
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<PAGE> 10
from their customers. Therefore, Warrantholders should consult their brokers or
other intermediaries, if applicable, as to applicable cut-off times and other
exercise mechanics. See "Description of the Warrants--Exercise of Warrants"
herein.
FORMS OF EXERCISE NOTICE APPEAR ON THE REVERSE OF THE WARRANT CERTIFICATES
OR MAY BE OBTAINED AT THE WARRANT AGENT'S OFFICE, DURING THE WARRANT AGENT'S
NORMAL BUSINESS HOURS. SEE "DESCRIPTION OF THE WARRANTS--GENERAL."
The Warrants will be "at-the-money" (i.e., their Cash Settlement Value will
be zero) when initially offered and will be "in-the-money" (i.e., their Cash
Settlement Value will be greater than zero) on any given day only if the Spot
Rate exceeds the Strike Rate. An increase in the positive difference, if any,
between the Spot Rate and the Strike Rate will result in a greater Cash
Settlement Value, and a decrease in such difference will result in a lesser or
zero Cash Settlement Value. Potential profit or loss upon exercise (including
automatic exercise) of a Warrant will be a function of the Cash Settlement Value
(or, if applicable, the Alternative Settlement Amount) of such Warrant upon
exercise, the purchase price of such Warrant and any related transaction costs.
If a Warrant is not exercised prior to its expiration and if at expiration
the Strike Rate equals or exceeds the Spot Rate, such Warrant will expire
worthless and the Warrantholder will have sustained a total loss of the purchase
price of such Warrant. See "Risk Factors."
Investors considering purchasing Warrants should be experienced with
respect to options and option transactions and understand the risks of foreign
exchange transactions and reach an investment decision only after careful
consideration, with their advisers, of the suitability of the Warrants in light
of their particular financial circumstances and the information set forth in
this Prospectus Supplement and in the Prospectus. The AMEX recommends that the
Warrants be sold only to investors whose accounts have been approved for options
trading, and requires that its members and member organizations and the
registered employees thereof make certain suitability determinations before
recommending transactions in Warrants.
A Warrantholder may exercise no fewer than 500 Warrants at any time, except
in the case of automatic exercise. Accordingly, except in the case of automatic
exercise of the Warrants, Warrantholders with fewer than 500 Warrants will need
either to sell their Warrants or to purchase additional Warrants, thereby
incurring transaction costs, in order to realize upon their investment.
DESCRIPTION OF THE WARRANTS
GENERAL
The Warrants will be issued pursuant to the Warrant Agreement (the "Warrant
Agreement"), to be dated as of March 10, 1994, between Holdings and Citibank,
N.A., as Warrant Agent (the "Warrant Agent"). The following summaries of certain
provisions of the Warrants and the Warrant Agreement do not purport to be
complete and are subject to, and qualified in their entirety by reference to,
all of the provisions of the Warrant Agreement (including the form of Warrant
Certificate and Global Warrant Certificate attached as exhibits thereto). The
Warrant Agreement will be available for inspection by any Warrantholder at the
office of the Warrant Agent (the "Warrant Agent's Office") which is currently
located at 111 Wall Street, 5th Floor, New York, New York 10043, Attention:
Corporate Trust Department, during the Warrant Agent's normal business hours.
The aggregate number of Warrants to be issued will be 5,000,000, subject to
the over-allotment option granted by Holdings to the Underwriters (see
"Underwriting") and to the right of Holdings to "reopen" the issue of Warrants
and issue additional Warrants at a later time.
A Warrant will not require or entitle a Warrantholder to purchase U.S.
Dollars from, or sell Japanese Yen to, Holdings. Upon exercise of a Warrant,
Holdings will make only a U.S. Dollar cash payment in the amount of the Cash
Settlement Value or Alternative Settlement Amount, if any and as applicable, of
such Warrant. Holdings is under no obligation to, nor will it, sell U.S. Dollars
to, or purchase Japanese Yen from, Warrantholders in connection with the
exercise of any Warrants. Warrantholders will not receive any interest on any
Cash Settlement Value or Alternative Settlement Amount.
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<PAGE> 11
CASH SETTLEMENT VALUE
Except as described under "Alternative Settlement Amount," each Warrant
will entitle the Warrantholder to receive upon exercise (including automatic
exercise), the Cash Settlement Value of such Warrant. The "Cash Settlement
Value" of a Warrant will equal an amount in U.S. Dollars which is the greater of
(i) zero and (ii) the amount (rounded down to the nearest cent) computed by
subtracting from U.S. $100 an amount equal to the product of U.S. $100 times a
fraction, the numerator of which is Y104.20 per U.S. Dollar and the denominator
of which is the spot exchange rate of the Japanese Yen for the U.S. Dollar
(expressed as a number of Japanese Yen per U.S. Dollar and determined by the
Calculation Agent) at 10:00 A.M., New York City time on the applicable Valuation
Date, as set forth under "Description of the Warrants--Exercise of Warrants."
This amount is described by the following formula:
Y104.20
per U.S. Dollar
Cash Settlement Value = the greater of (i) $0 and (ii) $100 - ($100 x
( Spot Rate ))
The Calculation Agent will determine the Spot Rate as follows: with respect
to exercises other than automatic exercises, the Calculation Agent will obtain a
quote for the relevant bid spot rate for the U.S. Dollar from one Reference Bank
and select the higher (i.e., the rate expressed as the greater number of
Japanese Yen per U.S. Dollar) of the relevant bid spot rate for the U.S. Dollar
quoted by the Calculation Agent and the quote obtained from the Reference Bank;
and with respect to automatic exercises, the Calculation Agent will obtain
quotes for the relevant bid spot rate for the U.S. Dollar from two Reference
Banks and select the highest of the relevant bid spot rate for the U.S. Dollar
quoted by the Calculation Agent and the quotes obtained from the Reference
Banks. Each "Reference Bank" will be a bank that is a leading market maker in
the foreign exchange market for the relevant currencies. Market makers in the
foreign exchange market for foreign currencies, such as the Japanese Yen, base
their spot rate quotes on the bid and asked quotes obtained in connection with
their market making activities in the relevant foreign currencies. Such quotes
with respect to the exercise of Warrants are likely to vary with reference to
the aggregate number of Warrants being exercised as of a given date: in general,
the quotes with respect to the exercise of a small aggregate number of Warrants
on any date are likely to be retail, odd lot quotes, while the quotes with
respect to the exercise of a large aggregate number of Warrants are likely to be
wholesale, round lot quotes. In connection with an automatic exercise of the
Warrants, the quote obtained will depend on the number of Warrants that remain
outstanding at the time of automatic exercise. With respect to any Exercise
Date, the spot exchange rates to be quoted by the Calculation Agent and the
Reference Bank or Banks, as applicable, will be based on the aggregate number of
Warrants being exercised on such date, determined as provided above. The Spot
Rate will be rounded by the Calculation Agent to the second decimal place,
rounding up if the third decimal place, without regard to rounding, is five or
higher and otherwise truncating after the second decimal place.
ALTERNATIVE SETTLEMENT AMOUNT
If the Warrants are automatically exercised on the Delisting Date as
described under "Delisting of Warrants" below, each Warrant will entitle the
Warrantholder to receive, in lieu of the Cash Settlement Value, the Alternative
Settlement Amount of such Warrant. The "Alternative Settlement Amount" of a
Warrant will be calculated by the Calculation Agent as of 10:00 A.M., New York
City time, on the Valuation Date and will equal an amount in U.S. Dollars
(rounded down to the nearest cent) which is equal to the amount "X" calculated
using the formula set forth below:
X = I + ((A/B) X (T-Z))
where
I = the Cash Settlement Value of the Warrants determined as described
above;
A = the total number of days from but excluding the Valuation Date for such
Warrants to and including the Expiration Date;
B = the total number of days from but excluding the date the Warrants were
initially sold to and including the Expiration Date;
T = $6.60, the initial offering price per Warrant; and
Z = the lesser of T or I.
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<PAGE> 12
WARRANT VALUES ON EXERCISE
Set forth below are a series of illustrative examples demonstrating the
Cash Settlement Value of a Warrant at exercise, based on various hypothetical
Spot Rates and a Strike Rate of Y104.20 per U.S. Dollar. The illustrative Cash
Settlement Values in the table do not reflect any "time value" for a Warrant,
which may be reflected in the trading value, and are not necessarily indicative
of potential profit or loss, which are affected in addition by purchase price
and transaction costs. See "Cash Settlement Value" above for a description of
the method of calculation of the Cash Settlement Value.
<TABLE>
<CAPTION>
CASH
HYPOTHETICAL SETTLEMENT
SPOT RATE VALUE OF A
Y/$ WARRANT
- ------------- ----------
<S> <C>
104.20 $ 0.00
107.00 $ 2.61
110.00 $ 5.27
113.00 $ 7.78
116.00 $10.17
119.00 $12.43
122.00 $14.59
125.00 $16.64
128.00 $18.59
131.00 $20.45
</TABLE>
FORM OF WARRANTS
The Warrants will initially be evidenced by Warrant Certificates in
registered form. Forty-six calendar days after the closing of the offering, each
registered warrantholder will have the option to convert the form of such
Warrantholder's Warrant from certificated to book-entry form within a forty-five
calendar day period (the "Conversion Option Period"). In order to be exchanged
for Warrants in book-entry form (represented by a beneficial interest in the
Global Warrant described below), a Warrant Certificate must be delivered to the
Depository in the manner referred to below. The Conversion Option Period is
expected to run from April 25, 1994 through June 8, 1994. Warrant Certificates
received by the Depository for exchange during the Conversion Option Period will
be exchanged for Warrants in book-entry form by the close of business on the New
York Business Day so received by the Depository (if received by the Depository
at its then applicable cut-off time for same day credit) or on the following New
York Business Day (if received by the Depository at its then applicable cut-off
time for next day credit). After the last day of the Conversion Option Period,
the Depository will not be required to accept delivery of Warrant Certificates
for exchange for book-entry Warrants, but may permit Warrant Certificates to be
so exchanged on a case-by-case basis. It is anticipated that after the
Conversion Option Period, Warrant Certificates delivered to the Depository in
proper form for deposit will be accepted by the Depository for exchange for
book-entry Warrants, generally within three to four New York Business Days after
delivery to the Depository. However, there can be no assurance that such Warrant
Certificates will be accepted for exchange. Further, there can be no assurance,
with respect to Warrant Certificates accepted for exchange, that exchange will
occur within that time period. Warrants surrendered at any time for exchange for
book-entry Warrants may not be exercised or delivered for settlement of transfer
until such exchange has been effected. Accordingly, if an increase in the value
of the U.S. Dollar as compared to the Japanese Yen were to occur after a Warrant
Certificate had been surrendered for exchange into book-entry form, the
Warrantholder would not be able to take advantage of the increase by exercising
its Warrant until such exchange had been effected. Since Warrant Certificates
are not required to be exchanged for Warrants in book-entry form, it is likely
that not all Warrant Certificates will be so exchanged. Accordingly,
Warrantholders purchasing Warrants in secondary market trading after the
Conversion Option Period may wish to make specific arrangements with brokers or
other participants or indirect participants if they wish to purchase only
Warrants in book-entry form and not Warrant Certificates.
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<PAGE> 13
In order to be exchanged for a Warrant in book-entry form, a Warrant
Certificate must be delivered to the Depository, in proper form for deposit, by
a participant of the Depository. Accordingly, a Warrantholder which is not a
participant must deliver its Warrant Certificate, in proper form for deposit, to
such a participant, either directly or through an indirect participant or
brokerage firm which maintains an account with the participant, in order to have
its Warrant Certificate exchanged for a Warrant in book-entry form. Such
Warrantholders who desire to exchange their Warrant Certificates for Warrants in
book-entry form should contact their brokers or other participants or indirect
participants to obtain information on procedures for submitting their Warrant
Certificates to the Depository, including the proper form for submission and
(during the Conversion Option Period) the cut-off times for same day and next
day exchange. Warrant Certificates which are held by the Warrantholder in
nominee or "street" name may be automatically exchanged into book-entry form by
the broker or other entity in whose name such Warrant Certificates are
registered, without action of or consent by the beneficial owner of the related
Warrant (i.e.,such beneficial owner need not deliver a Warrant Certificate).
Warrant Certificates which have been exchanged into book-entry form may not
be re-exchanged for Warrant Certificates, except under the limited circumstances
described in the accompanying Prospectus under "Global Securities."
WARRANT CERTIFICATES
The Warrant Agent will maintain a register (the "Warrant Register") for
registering the ownership of and transfers of Warrants represented by Warrant
Certificates. Prior to due presentment for registration of transfer, Holdings,
the Warrant Agent, and any agent of either of them may deem and treat the person
in whose name a Warrant Certificate is registered (the "registered holder") as
the absolute owner of the Warrants evidenced by such Warrant Certificate for any
purpose whatsoever, and as the person entitled to exercise the rights
represented by the Warrants evidenced thereby, and neither Holdings, the Warrant
Agent, nor any agent of either of them shall be affected by any notice to the
contrary. Accordingly, if a beneficial owner of a Warrant evidenced by a Warrant
Certificate is not the registered holder thereof (for example, if it holds the
Warrant Certificate through a broker holding such Warrant Certificate in nominee
or "street" name), it may exercise its rights as a Warrantholder (including its
right to exercise Warrants) only through the registered holder.
The Warrant Agent shall from time to time register the transfer of any
outstanding Warrant Certificates upon surrender thereof at the Warrant Agent's
Office, duly endorsed, or accompanied by a written instrument or instruments of
transfer in form satisfactory to the Warrant Agent, duly executed by the
registered holder thereof, by the duly appointed legal representative thereof or
by its duly authorized attorney, such signature to be guaranteed by a bank or
trust company located, or with a correspondent office, in The City of New York
or by a broker or dealer which is a member of a national securities exchange. A
new Warrant Certificate shall be issued to the transferee upon any such
registration of transfer.
At the option of a Warrantholder, Warrant Certificates may be exchanged for
other Warrant Certificates, representing a like number of Warrants, upon
surrender to the Warrant Agent at the Warrant Agent's Office of the Warrant
Certificates to be exchanged. Holdings shall thereupon execute, and the Warrant
Agent shall countersign and deliver, one or more new Warrant Certificates
representing a like number of Warrants.
In the event that upon any exercise of Warrants evidenced by a Warrant
Certificate the number of Warrants exercised is less than the total number of
Warrants evidenced by such Certificate, there shall be issued to the holder
thereof or such holder's assignee a new Warrant Certificate evidencing the
number of Warrants not exercised.
If any Warrant Certificate is mutilated, lost, stolen or destroyed,
Holdings may in its discretion execute, and the Warrant Agent may countersign
and deliver, in exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of the lost, stolen or destroyed
Warrant Certificate, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only (in the case of loss, theft or
destruction) upon receipt of evidence satisfactory to Holdings and the Warrant
Agent of such
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<PAGE> 14
loss, theft or destruction of such Warrant Certificate and security or
indemnity, if requested, also satisfactory to them. Applicants for substitute
Warrant Certificates must also comply with such other reasonable regulations and
pay such other reasonable charges as Holdings or the Warrant Agent may
prescribe. In case any such mutilated, lost, stolen or destroyed Warrant
Certificate has been or is about to be exercised, or deemed to be exercised,
Holdings in its absolute discretion may, instead of issuing a new Warrant
Certificate, direct the Warrant Agent to treat the same as if it had received
irrevocable notice of exercise in proper form in respect thereof, as provided
below.
BOOK-ENTRY FORM
Warrants held in book-entry form will be held in the form of one or more
global certificates (the "Global Warrant") registered in the name of the nominee
of the depository, The Depository Trust Company ("DTC", and together with any
successor depository, the "Depository"). Holdings anticipates that the
Depository's initial nominee will be CEDE & Co. ("CEDE"). Accordingly, CEDE is
expected to be the registered holder of the Warrants in book-entry form.
DTC is a limited-purpose trust company which was created to hold securities
for its participating organizations ("participants") and to facilitate the
clearance and settlement of securities transactions between participants through
electronic book-entry changes in accounts of its participants. Participants
include securities brokers and dealers (including the Underwriters), banks and
trust companies, clearing corporations and certain other organizations. Access
to DTC's system is also available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly ("indirect participants"). Persons
who are not participants may beneficially own securities held by DTC only
through participants or indirect participants.
Under the Warrant Agreement, DTC's nominee for all purposes will be
considered the sole owner or holder of the Warrants which are held in book-entry
form. Warrantholders which own Warrants in book-entry form will not be entitled
to have Warrants registered in their names, will not be considered the holders
thereof under the Warrant Agreement, and will not be entitled to exchange their
book-entry Warrants for definitive form Warrant Certificates, except under the
limited circumstances described below.
A Warrantholder that is not a participant will have its ownership of a
Warrant in book-entry form recorded on or through the records of the brokerage
firm or other entity that maintains such Warrantholder's account. In turn, the
total number of Warrants in book-entry form held by an individual brokerage firm
for its clients will be maintained on the records of the Depository in the name
of such brokerage firm (or in the name of a participant that acts as agent for
the Warrantholder's brokerage firm if such firm is not a participant).
Therefore, a Warrantholder must rely upon the foregoing procedures to evidence
such Warrantholder's ownership of a Warrant in book-entry form. Transfer of
ownership of a Warrant in book-entry form may be effected only through the
Depository, and, if applicable, the brokerage firm or other entity that
maintains the selling Warrantholder's book-entry account. The laws of some
states of the United States may require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such limits on
transfer and such laws may impair the ability to own, transfer or pledge
Warrants in book-entry form.
Neither Holdings nor the Warrant Agent will have any responsibility or
liability for any aspect of the records relating to or payments made to
beneficial owners of book-entry Warrants or for maintaining, supervising or
reviewing any records relating to such beneficial owners.
Holdings understands that under existing industry practices, in the event
that Holdings requests any action of Warrantholders or that Warrantholders which
own Warrants in book-entry form desire to give or take any action which
Warrantholders are entitled to give or take under the Warrant Agreement, the
Depository would authorize the participants to give or take such action, and
such participants would authorize Warrantholders owning through such
participants to give or take such action or would otherwise act upon the
instructions of Warrantholders owning through them. Accordingly, each
Warrantholder which owns a Warrant in book-entry form must rely on the
procedures of the Depository and, if such Warrantholder is not a participant, on
the procedures of the participant through which such Warrantholder owns its
Warrant, to exercise any rights of a Warrantholder under the Warrant Agreement.
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<PAGE> 15
EXERCISE OF WARRANTS
The Warrants will be immediately exercisable upon issuance and will expire
on March 5, 1996. Warrants not exercised at or before 3:00 P.M., New York City
time, on the New York Business Day immediately preceding the earlier of the
Expiration Date and the Delisting Date will be automatically exercised as
described under "Automatic Exercise" below.
Except in the case of automatic exercise, to exercise a Warrant not in
book-entry form a Warrantholder must deliver to the Warrant Agent at the Warrant
Agent's Office the Warrant Certificate representing such Warrant, with a duly
completed notice (executed by the registered holder) on the reverse thereof (or
a notice in substantially identical form delivered therewith) indicating an
irrevocable election to exercise such Warrants (such notice, an "Exercise
Notice"). Except for Warrants subject to automatic exercise, the "Exercise Date"
for a Warrant will be (i) the New York Business Day on which the Warrant Agent
receives the Warrant Certificate and Exercise Notice in proper form with respect
to such Warrant, if received at or prior to 3:00 P.M., New York City time, on
such day, or (ii) if the Warrant Agent receives such Warrant Certificate and
Exercise Notice after 3:00 P.M., New York City time, on a New York Business Day,
then the New York Business Day next succeeding such New York Business Day. In
order to ensure that an Exercise Notice and the related Warrant Certificates
will be delivered to the Warrant Agent before 3:00 P.M., New York City time, on
a given New York Business Day, a beneficial owner of Warrants may have to give
exercise instructions to his broker or other intermediary substantially earlier
than 3:00 P.M., New York City time, on such day. Different firms may have
different cut-off times for accepting and implementing exercise instructions
from their customers. Therefore, Warrantholders should consult their brokers or
other intermediaries, if applicable, as to applicable cut-off times and other
exercise mechanics.
To exercise a Warrant in book-entry form, (i) the participant through which
the Warrant is held must transfer such Warrant free on the records of the
Depository to the account of the Warrant Agent and (ii) a duly completed and
executed Exercise Notice on behalf of the Warrantholder must be delivered to the
Warrant Agent by the participant. The Warrant Agent's current facsimile number
for these purposes is (201) 262-7521. A Warrantholder that is not a participant
must therefore instruct the broker or other intermediary that maintains the
Warrantholder's account to take such action, and if that firm is not a
participant, that firm must forward such instructions to the participant which
ultimately holds the relevant Warrants for the Depository. In order to ensure
that such Warrants and Exercise Notice will be received by the Warrant Agent on
a particular day, such Warrantholder must give exercise instructions to the
broker or other intermediary through which it holds the Warrants (which may, in
turn, need to direct a participant) before that firm's (and, if that firm is not
a participant, the applicable participant's) cut-off time for accepting exercise
instructions for that day. Different firms may have different cut-off times for
accepting exercise instructions from their customers. Therefore, Warrantholders
should consult their brokers or other intermediaries, if applicable, as to
applicable cut-off times and other exercise mechanics.
FORMS OF EXERCISE NOTICE APPEAR ON THE REVERSE OF THE WARRANT CERTIFICATES
OR MAY BE OBTAINED AT THE WARRANT AGENT'S OFFICE, DURING THE WARRANT AGENT'S
NORMAL BUSINESS HOURS. SEE "DESCRIPTION OF THE WARRANTS -- GENERAL."
The "Valuation Date" for a Warrant will be the first New York Business Date
following the Exercise Date. The following is an illustration of the timing of
an Exercise Date and the ensuing Valuation Date, assuming that all relevant
dates are New York Business Days. If the Warrant Agent receives a
Warrantholder's Warrants and Exercise Notice in proper form at or prior to 3:00
P.M., New York City time, on Thursday, April 21, 1994, the Exercise Date for
such Warrants will be April 21 and the Valuation Date for such Warrants will be
Friday, April 22, 1994. The Spot Rate used to determine the Cash Settlement
Value of such Warrants will be the Spot Rate on April 22 (i.e., the spot
exchange rate at 10:00 A.M., New York City time, on April 22). If the Warrant
Agent were to receive such Warrantholder's Warrants and Exercise Notice after
3:00 P.M., New York City time, on Thursday, April 21, 1994, then the Exercise
Date for such Warrants would instead be Friday, April 22 and, the Valuation Date
would be Monday, April 25.
Following receipt of Warrants and the related Exercise Notice in proper
form, the Warrant Agent will, not later than 5:00 P.M., New York City time, on
the applicable Valuation Date (i) obtain from the Calculation Agent the Spot
Rate (ii) obtain from the Calculation Agent the Cash Settlement Value of such
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<PAGE> 16
Warrants and (iii) advise Holdings of the aggregate Cash Settlement Value of the
exercised Warrants. Holdings will be required to make available to the Warrant
Agent, no later than 3:00 P.M., New York City time, on the fifth New York
Business Day following the Valuation Date, funds in an amount sufficient to pay
such aggregate Cash Settlement Value. If Holdings has made such funds available
by such time the Warrant Agent will be responsible for making payment available
either (i) in respect of Warrant Certificates, to each appropriate registered
holder in the form of a cashier's check or an official bank check, or (in the
case of payments of $100,000 or more) by wire transfer to a U.S. Dollar account
maintained by such registered holder in the United States (at such registered
holder's election as specified in the applicable Exercise Notice), after 3:00
P.M., New York City time, but prior to the close of business, on such date or
(ii) in respect of book-entry Warrants, to each appropriate participant in the
form of a cashier's check or an official bank check, or (in the case of payments
of $100,000 or more) by wire transfer to a U.S. Dollar account maintained by
such participant in the United States (at the participant's election as
specified in the Exercise Notice), after 3:00 P.M., New York City time, but
prior to the close of business, on such date. Each participant will be
responsible for disbursing such payments to the Warrantholders that it
represents and to each brokerage firm for which it acts as agent. Each such
brokerage firm will be responsible for disbursing funds to the Warrantholders
that it represents.
MINIMUM EXERCISE AMOUNT
No fewer than 500 Warrants may be exercised by a Warrantholder at any one
time, except in the case of automatic exercise. Accordingly, except in the case
of automatic exercise of the Warrants, Warrantholders with fewer than 500
Warrants will need either to sell their Warrants or to purchase additional
Warrants, thereby incurring transaction costs, in order to realize upon their
investment.
AUTOMATIC EXERCISE
All Warrants for which a valid Exercise Notice and, if applicable, the
related Warrant Certificate have not been received by the Warrant Agent at or
prior to 3:00 P.M., New York City time, on the New York Business Day immediately
preceding the Expiration Date or the Delisting Date, as the case may be, will be
automatically exercised on such date. The Exercise Date for such Warrants will
be the Expiration Date or the Delisting Date, as the case may be, or, if such
date is not a New York Business Day, the next succeeding New York Business Day.
The Warrant Agent will obtain from the Calculation Agent the Spot Rate, and will
determine the Cash Settlement Value or Alternative Settlement Amount, if any, of
such Warrants.
LISTING
The Warrants have been approved for listing on the American Stock Exchange,
subject to notice of issuance, under the symbol "YBW.WS."
DELISTING OF WARRANTS
In the event that the Warrants are delisted from, or permanently suspended
from trading (within the meaning of the Exchange Act and the rules and
regulations thereunder) on, the AMEX and not accepted at the same time for
listing on another Self-Regulatory Organization, Warrants not previously
exercised will be deemed automatically exercised on the effective date of such
delisting or trading suspension (the "Delisting Date"), and the Alternative
Settlement Amount, if any, with respect to such Warrants shall be calculated as
provided above under "Cash Settlement Value" and "Alternative Settlement
Amount." Holdings will notify Warrantholders as soon as practicable of such
delisting or trading suspension. Holdings will covenant in the Warrant Agreement
that it will not seek delisting of the Warrants from, or suspension of their
trading on, the AMEX unless Holdings has, at the same time, arranged for listing
of the Warrants on another Self-Regulatory Organization.
S-16
<PAGE> 17
EXCHANGE RATES
EXCHANGE RATES
The following table sets forth the average for the months indicated, as
calculated by the Calculation Agent, of the daily noon buying rates in New York
City as such daily rates were reported in Statistical Release H.10 of the Board
of Governors of the Federal Reserve System.
<TABLE>
<CAPTION>
Yen/$
-------
<S> <C> <C>
1989: January............................................... 127.36
February.............................................. 127.74
March................................................. 130.55
April................................................. 132.04
May................................................... 137.86
June.................................................. 143.98
July.................................................. 140.42
August................................................ 141.31
September............................................. 145.07
October............................................... 142.21
November.............................................. 143.53
December.............................................. 143.69
1990: January............................................... 144.98
February.............................................. 145.70
March................................................. 153.31
April................................................. 158.46
May................................................... 154.04
June.................................................. 153.74
July.................................................. 149.04
August................................................ 147.68
September............................................. 138.45
October............................................... 129.59
November.............................................. 129.22
December.............................................. 133.89
1991: January............................................... 133.70
February.............................................. 130.54
March................................................. 137.39
April................................................. 137.12
May................................................... 138.22
June.................................................. 139.75
July.................................................. 137.83
August................................................ 136.82
September............................................. 134.30
October............................................... 130.77
November.............................................. 129.63
December.............................................. 128.04
</TABLE>
S-17
<PAGE> 18
<TABLE>
<CAPTION>
Y/$
-------
<S> <C> <C>
1992: January............................................... 125.46
February.............................................. 127.70
March................................................. 132.86
April................................................. 133.54
May................................................... 130.77
June.................................................. 126.84
July.................................................. 125.88
August................................................ 126.23
September............................................. 122.60
October............................................... 121.17
November.............................................. 123.88
December.............................................. 124.04
1993: January............................................... 124.99
February.............................................. 120.76
March................................................. 116.96
April................................................. 112.41
May................................................... 110.34
June.................................................. 107.41
July.................................................. 107.69
August................................................ 103.77
September............................................. 105.55
October............................................... 106.95
November.............................................. 107.86
December.............................................. 109.90
1994: January............................................... 111.43
February.............................................. 106.19
March (through March 3)............................... 103.08
</TABLE>
S-18
<PAGE> 19
The actual exchange rates for Japanese Yen per U.S. Dollar, and the spot
exchange rates determined pursuant to the Warrant Agreement upon exercise of
Warrants, could materially differ from the noon buying rates as reported by the
Board of Governors of the Federal Reserve System.
The information presented in this Prospectus Supplement relating to the
exchange rate of the U.S. Dollar as compared to the Japanese Yen is furnished as
a matter of information only. The fluctuations in the Y/$ exchange rate that
have occurred in the past are not necessarily indicative of fluctuations in that
rate that may occur over the term of the Warrants.
The spot exchange rates between the Japanese Yen and U.S. Dollars are at
any moment a result of the supply of and demand for the currencies being
compared, and changes in the rates result over time from the interaction of many
factors directly or indirectly affecting economic and political conditions in
Japan and the United States, including economic and political developments in
other countries. Of particular importance are rates of inflation, interest rate
levels, the balance of payments and the extent of governmental surpluses or
deficits in Japan and the United States, all of which are in turn sensitive to
the monetary, fiscal and trade policies pursued by the governments of Japan, the
United States and other countries important to international trade and finance.
See "Risk Factors."
As discussed under "Description of the Warrants," the spot exchange rate of
the U.S. Dollar as compared to the Japanese Yen will determine the Cash
Settlement Value of a Warrant upon exercise. Appreciation of the U.S. Dollar as
compared to the Japanese Yen (i.e., depreciation of the Japanese Yen as compared
to the U.S. Dollar) will result in a greater Cash Settlement Value. Conversely,
depreciation of the U.S. Dollar as compared to the Japanese Yen (i.e.,
appreciation of the Japanese Yen as compared to the U.S. Dollar) will result in
a lesser or zero Cash Settlement Value. Warrantholders will thus bear the
foreign exchange risks of the U.S. Dollar as compared to the Japanese Yen.
EXCHANGE CONTROLS
The amended Foreign Exchange and Foreign Trade Control Law of Japan, which
came into effect in 1980, has deregulated external transactions in principle.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes certain United States federal income tax
consequences of the ownership of a Warrant as of the date hereof. Except where
noted, it deals only with Warrants held as capital assets by United States
Holders and does not deal with those with special situations, such as dealers in
options or persons who hold a Warrant in the ordinary course of business,
financial institutions, life insurance companies or purchasers holding Warrants
as a part of a hedging transaction or a "straddle." Furthermore, the discussion
below is based upon the provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and regulations, rulings and judicial decisions thereunder
as of the date hereof, and such authorities may be repealed, revoked or modified
so as to result in federal income tax consequences different from those
discussed below. PERSONS CONSIDERING THE PURCHASE, OWNERSHIP OR DISPOSITION OF
WARRANTS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS CONCERNING THE FEDERAL
INCOME TAX CONSEQUENCES IN LIGHT OF THEIR PARTICULAR SITUATIONS AS WELL AS ANY
CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION.
As used herein, a "United States Holder" of a Warrant means a holder that
is a citizen or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the United States or
any political subdivision thereof, or an estate or trust the income of which is
subject to United States federal income taxation regardless of its source.
TAXATION OF WARRANTS
Each Warrant will be treated as a "section 1256 contract" which must be
"marked-to-market" (i.e., treated as sold at fair market value) on the last
business day of each taxable year. Under these mark-to-market rules, a United
States Holder of a Warrant will recognize gain or loss equal to the difference
between the fair market value of the Warrant on the last business day of each
taxable year (as determined by the Warrant's trading price) and the United
States Holder's tax basis for the Warrant. A United States Holder's tax basis in
a Warrant will equal the amount paid for the Warrant, plus or minus the net gain
or loss recognized by the
S-19
<PAGE> 20
United States Holder in respect of the Warrant in prior taxable years. As a
result of these mark-to-market rules, a United States Holder might incur federal
income tax liability on an annual basis in respect of an increase in the value
of the Warrant without the receipt of cash attributable thereto.
SALE, EXCHANGE AND EXERCISE OF WARRANTS
Upon sale, exchange or exercise (including automatic exercise) of a
Warrant, a United States Holder will recognize gain or loss equal to the
difference between the amount realized, if any, and the United States Holder's
tax basis in the Warrant.
CHARACTER OF GAIN OR LOSS
In the absence of a section 988 election as described below, any gain or
loss (described above) will be capital gain or loss and will be 60% long-term
capital gain or loss and 40% short-term capital gain or loss. With respect to a
corporate United States Holder, capital losses for a taxable year are allowed
only to the extent of the holder's capital gains for such year, but may be
carried back for three taxable years and carried forward for five taxable years.
With respect to individual United States Holders, in general, capital losses for
the taxable year are allowed only to the extent of the holder's capital gains
for the taxable year plus $3,000, but may be carried forward against net capital
gains. An individual may elect, however, to carry net capital losses from
section 1256 contracts for the taxable year back against net capital gains from
section 1256 contracts for the three preceding taxable years. Net capital gains
of individuals are, under certain circumstances, taxed at lower rates than items
of ordinary income.
A United States Holder may elect under section 988 of the Code (a "section
988 election") to treat any gain or loss described above as ordinary income or
loss. If made, this election will apply to certain other section 1256 contracts,
such as regulated futures contracts and other nonequity options, held by such
United States Holder during the taxable year for which the election is made and
any succeeding taxable year and may not be revoked without the consent of the
Internal Revenue Service. United States Holders should consult with their own
tax advisors concerning the procedures for, and consequences of, making this
election.
BACKUP WITHHOLDING
The proceeds received from a sale, exchange or exercise (including
automatic exercise) of a Warrant will be subject to a 31 percent backup
withholding tax if the United States Holder thereof (other than certain exempt
recipients such as corporations) fails to supply an accurate taxpayer
identification number or otherwise comply with applicable information reporting
or certification requirements.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated as of March 3, 1994 (the "Underwriting Agreement"), Holdings has agreed to
sell to each of the underwriters named below (the "Underwriters") for whom
Lehman Brothers Inc., Kidder, Peabody & Co. Incorporated and Oppenheimer & Co.,
Inc. are acting as representatives (the "Representatives"), and each of the
Underwriters has severally agreed to purchase, the number of Warrants set forth
opposite its name below.
S-20
<PAGE> 21
<TABLE>
<CAPTION>
NUMBER
OF
UNDERWRITERS WARRANTS
-------------------------------------------------------------------------- ----------
<S> <C>
Lehman Brothers Inc. ..................................................... 930,000
Kidder, Peabody & Co. Incorporated........................................ 930,000
Oppenheimer & Co., Inc. .................................................. 930,000
Advest, Inc. ............................................................. 130,000
Arnhold and S. Bleichroeder, Inc. ........................................ 130,000
Robert W. Baird & Co. Incorporated........................................ 130,000
Cowen & Company........................................................... 130,000
Crowell, Weedon & Co...................................................... 130,000
Dain Bosworth Incorporated................................................ 130,000
First Albany Corporation.................................................. 130,000
Interstate/Johnson Lane Corporation....................................... 130,000
Ladenburg, Thalmann & Co. Inc. ........................................... 130,000
McDonald & Company Securities, Inc. ...................................... 130,000
Needham & Company, Inc. .................................................. 130,000
Parker/Hunter Incorporated................................................ 130,000
Pennsylvania Merchant Group Ltd .......................................... 130,000
Piper Jaffray Inc. ....................................................... 130,000
The Robinson-Humphrey Company, Inc. ...................................... 130,000
Sutro & Co. Incorporated.................................................. 130,000
Raymond James & Associates, Inc. ......................................... 130,000
----------
Total........................................................... 5,000,000
----------
----------
</TABLE>
Holdings has been advised by the Representatives that the Underwriters
propose initially to offer the Warrants to the public at the price set forth on
the cover page of this Prospectus Supplement, and to certain dealers at such
price less a concession not in excess of $0.24 per Warrant. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $0.05 per
Warrant. After the initial public offering, the public offering price, the
concession to selected dealers and the reallowance may be changed.
The Representatives have advised Holdings that they intend to make a market
in the Warrants but the Representatives are not obliged to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Warrants.
Holdings has granted an option to the Underwriters, exercisable within 30
days of the date of this Prospectus Supplement, to purchase up to an additional
750,000 Warrants to cover over-allotments, if any, at the price to public less
the underwriting discounts and commissions specified on the cover page of this
Prospectus Supplement. To the extent that the Underwriters exercise such option,
the Underwriters will be committed, subject to certain conditions, to purchase
the number of additional Warrants proportionate to each Underwriter's initial
commitment.
Lehman Brothers Inc. is a wholly owned subsidiary of Holdings. The
participation of Lehman Brothers Inc. in the offer and sale of the Warrants
complies with the requirements of Schedule E of the By-Laws of the NASD
regarding underwriting securities of an affiliate.
Lehman Brothers Inc. may, but is not obligated to, purchase and sell
Warrants for its own account for the purpose of making a market in the Warrants.
Holdings has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act.
S-21
<PAGE> 22
GLOSSARY
Set forth below are definitions of some of the terms in this Prospectus
Supplement that are not defined in the accompanying Prospectus.
"Calculation Agent" means Lehman Brothers Inc., or, in lieu thereof,
another firm selected by Holdings to perform the functions of the Calculation
Agent in connection with the Warrants.
"New York Business Day" means any day other than a Saturday or a Sunday or
a day on which either the AMEX or the New York Stock Exchange is not open for
securities trading or commercial banks in New York City are required or
authorized by law or executive order to remain closed.
In addition, definitions for the following terms are set forth in this
Prospectus Supplement at the pages indicated:
<TABLE>
<CAPTION>
PAGE ON WHICH
TERM TERM IS DEFINED
- ------------------------------------------------------------------------------- ---------------
<S> <C>
Alternative Settlement Amount.................................................. S-11
AMEX........................................................................... S-3
Cash Settlement Value.......................................................... S-11
CEDE........................................................................... S-14
Code........................................................................... S-19
Conversion Option Period....................................................... S-12
Delisting Date................................................................. S-16
Depository..................................................................... S-14
DTC............................................................................ S-14
Exercise Date.................................................................. S-15
Exercise Notice................................................................ S-15
Expiration Date................................................................ S-3
Global Warrant................................................................. S-14
Holdings....................................................................... S-3
indirect participants.......................................................... S-14
OCC............................................................................ S-7
participants................................................................... S-14
registered holder.............................................................. S-13
Representatives................................................................ S-20
Self-Regulatory Organization................................................... S-6
Spot Rate...................................................................... S-3
Strike Rate.................................................................... S-3
Underwriters................................................................... S-20
Underwriting Agreement......................................................... S-20
United States Holder........................................................... S-19
Valuation Date................................................................. S-15
Warrant Agent.................................................................. S-10
Warrant Agent's Office......................................................... S-10
Warrant Agreement.............................................................. S-10
Warrant Certificate............................................................ S-9
Warrant Register............................................................... S-13
Warrantholder.................................................................. S-8
</TABLE>
S-22
<PAGE> 23
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY HOLDINGS OR ANY AGENT OR UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF HOLDINGS SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary............................... S-3
Use of Proceeds....................... S-5
Risk Factors.......................... S-5
Certain Important Information
Concerning the Warrants............. S-8
Description of the Warrants........... S-10
Exchange Rates........................ S-17
Certain United States Federal Income
Tax Considerations.................. S-19
Underwriting.......................... S-20
Glossary.............................. S-22
Prospectus
Available Information................. 2
Documents Incorporated by Reference... 2
The Company........................... 3
Use of Proceeds....................... 3
Ratio of Earnings to Fixed Charges.... 3
Description of Debt Securities........ 4
Description of Warrants............... 13
Global Securities..................... 20
United States Taxation................ 22
Capital Requirements.................. 22
Plan of Distribution.................. 23
ERISA Matters......................... 24
Legal Opinions........................ 24
Independent Accountants............... 24
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
5,000,000 WARRANTS
LEHMAN BROTHERS
HOLDINGS INC.
JAPANESE YEN BEAR WARRANTS
EXPIRING MARCH 5, 1996
------------------------
PROSPECTUS SUPPLEMENT
March 3, 1994
------------------------
LEHMAN BROTHERS
KIDDER, PEABODY & CO.
INCORPORATED
OPPENHEIMER & CO., INC.
- ------------------------------------------------------
- ------------------------------------------------------
