<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 25, 1995
REGISTRATION STATEMENT NO. 33-62085
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-56615
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
AND POST EFFECTIVE AMENDMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
LEHMAN BROTHERS HOLDINGS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3216325
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
---------------
THOMAS A. RUSSO, ESQ.
3 WORLD FINANCIAL CENTER 3 WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10285 NEW YORK, NEW YORK 10285
(212) 526-7000 (212) 526-7000
(ADDRESS, INCLUDING ZIP CODE, AND (NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA TELEPHONE NUMBER, INCLUDING AREA CODE,
CODE, OF REGISTRANT'S PRINCIPAL OF AGENTFOR SERVICE)
EXECUTIVE OFFICES)
Copy to:
RAYMOND W. WAGNER, ESQ. JENNIFER MARRE, ESQ. LEHMAN BROTHERS
SIMPSON THACHER & BARTLETT INC. 3 WORLD FINANCIAL CENTER
425 LEXINGTON AVENUE NEW YORK, NEW NEW YORK, NEW YORK 10285
YORK 10017
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE AND DISTRIBUTION TO THE
PUBLIC: From time to time after the effective date of this Registration
Statement, as determined by market conditions.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE
FOLLOWING BOX. [_]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933 OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR
INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING
BOX AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [_]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [_]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [_]
---------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE AGGREGATE PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1)(2)(3)(4) PER UNIT PRICE(2)(3)(5) FEE(4)(6)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities and
Preferred Stock, par
value $1.00 per U.S.
share................. $3,000,000,000 (3) $3,000,000,000 $1,034,483
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) This Registration Statement also relates to offers and sales of Securities
in connection with market-making transactions by and through Lehman
Brothers Inc., a wholly-owned subsidiary of the Registrant.
(2) Or, if any Debt Securities are issued (i) with an initial offering price
denominated in a foreign currency or a foreign currency unit, such amount
as shall result in aggregate gross proceeds equivalent to U.S.
$3,000,000,000 to the Registrant at the time of initial offering, or (ii)
at an original issue discount, such greater amount as shall result in
aggregate gross proceeds of U.S. $3,000,000,000 to the Registrant.
(3) Pursuant to General Instruction II.D to Form S-3, the Amount to be
Registered, Proposed Maximum Aggregate Price Per Unit and Proposed Maximum
Aggregate Offering Price has been omitted for each class of securities.
(4) Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
herein also relates to $1,196,600,000 of debt securities of the Registrant
registered under Registration Statement No. 33-56615. A filing fee of
$412,624 in respect of such securities was paid on November 23, 1994 upon
the filing of such Registration Statement.
(5) Estimated solely for calculating the registration fee.
(6) Calculated in accordance with Rule 457(o) under the Securities Act of
1933.
---------------
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS HEREIN
IS A COMBINED PROSPECTUS AND ALSO RELATES TO REGISTRATION STATEMENT NO. 33-
56615 PREVIOUSLY FILED WITH THE COMMISSION ON FORM S-3 AND DECLARED EFFECTIVE
DECEMBER 13, 1994. THIS REGISTRATION STATEMENT ALSO CONSTITUTES POST-EFFECTIVE
AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-56615.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS Subject to Completion, dated October 25, 1995
LEHMAN BROTHERS HOLDINGS INC.
DEBT SECURITIES
PREFERRED STOCK
-----------
Lehman Brothers Holdings Inc. ("Holdings") may offer from time to time
unsecured debt securities (the "Debt Securities") consisting of debentures,
notes and/or other evidences of indebtedness in one or more series at an
aggregate initial public offering price not to exceed U.S. $4,196,600,000 (or
the equivalent thereof if any of the Debt Securities are denominated in a
foreign currency or currency unit), or (ii) shares of preferred stock, par
value $1.00 per share (the "Offered Preferred Stock" and, together with the
Debt Securities, the "Securities"), in one or more series at an aggregate
initial offering price not to exceed U.S.$3,000,000,000, or, subject to such
limitations, any combination of the foregoing, in each case at prices and on
terms to be determined at the time of sale.
Specific terms of the Securities in respect of which this Prospectus is being
delivered will be set forth in an applicable Prospectus Supplement ("Prospectus
Supplement"), together with the terms of the offering of the Securities, the
initial offering price, the net proceeds to the Company from the sale thereof
and any listing on a securities exchange. The Prospectus Supplement will also
set forth, among other matters, the following with respect to the particular
Securities: (i) in the case of Debt Securities, the title, priority, aggregate
principal amount, the currency or currency unit for which the Debt Securities
may be purchased, the currency or currency unit in which the principal and
interest, if any, is payable, the rate (or method of calculation) and time of
payment of interest, if any, authorized denominations, maturity, any redemption
or sinking fund provisions and any conversion or exchange rights and (ii) in
the case of Offered Preferred Stock, the designation, number of shares,
liquidation preference, dividend rate (or method of calculation thereof), dates
on which dividends shall be payable and dates from which dividends shall
accrue, any redemption or sinking fund provisions and any conversion or
exchange rights.
-----------
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. ANY
REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The Securities will be sold either through underwriters, dealers or agents,
or directly by Holdings. The applicable Prospectus Supplement sets forth the
names of any underwriters or agents (which may include Lehman Brothers Inc., a
subsidiary of Holdings ("Lehman Brothers")) involved in the sale of the
Securities in respect of which this Prospectus is being delivered, the proposed
amounts or number of shares, if any, to be purchased by underwriters and the
compensation, if any, of such underwriters or agents.
This Prospectus together with the applicable Prospectus Supplement may also
be used by Lehman Brothers in connection with offers and sales of Securities
related to market making transactions, by and through Lehman Brothers, at
negotiated prices related to prevailing market prices at the time of sale or
otherwise. Lehman Brothers may act as principal or agent in such transactions.
-----------
<PAGE>
AVAILABLE INFORMATION
Holdings is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"SEC"). Such reports and information may be inspected and copied at the public
reference facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the SEC: New
York Regional Office, 7 World Trade Center, New York, New York 10048; and
Chicago Regional Office, Suite 1400, Northwestern Atrium Center, 500 W.
Madison Street, Chicago, Illinois 60661-2511; and copies of such material can
be obtained from the Public Reference Section of the SEC, Washington, D.C.
20549, at prescribed rates. Holdings' Common Stock is listed on the New York
Stock Exchange, Inc. (the "Exchange") and the Pacific Stock Exchange Inc. (the
"PSE"). Holdings' 8 3/4% Notes Due 2002 and Holdings Medium-Term Note, Series
E, Due September 20, 1996 are listed on the Exchange. Holdings' $55 Million
Serial Zero Coupon Senior Notes Due May 16, 1998, FT-SE Eurotrack 200 Index
Call Warrants expiring June 4, 1996, 7 1/4% Oracle Yield Enhanced Equity
Linked Debt Securities SM due 1996, 6 1/2% Amgen Yield Enhanced Equity Linked
Debt Securities Due 1997, Japanese Yen Bear Warrants Expiring March 5, 1996,
Global Telecommunications Stock Upside Note Securities SM Due 2000, 9 1/8%
Micron Yield Enhanced Equity Linked Debt Securities Due 1997, AMEX Hong Kong
30 Index Call Warrants and Regional Bank Stock Upside Note Securities SM Due
1996 are listed on the American Stock Exchange, Inc. (the "ASE"). Reports and
other information concerning Holdings may also be inspected at the offices of
the Exchange at 20 Broad Street, New York, New York 10005, at the offices of
the ASE, 86 Trinity Place, New York, New York 10006 and at the offices of the
PSE, 301 Pine Street, San Francisco, California 94104.
Holdings has filed with the SEC registration statements on Form S-3 (herein,
together with all amendments and exhibits, referred to as the "Registration
Statements") under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus does not contain all of the information set forth in
the Registration Statements, certain parts of which are omitted in accordance
with the rules and regulations of the SEC. For further information, reference
is hereby made to the Registration Statements.
----------------
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed by Holdings with the SEC pursuant
to the Exchange Act are hereby incorporated by reference in this Prospectus:
(1) Holdings' Transition Report on Form 10-K for the eleven months ended
November 30, 1994.
(2) Holdings' Quarterly Reports on Form 10-Q for the fiscal quarters
ended February 28, 1995, May 31, 1995 and August 31, 1995.
(3) Holdings' Current Reports on Form 8-K dated January 6, 1995, March
24, 1995, June 28, 1995 and September 21, 1995.
Each document filed by Holdings pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered by an applicable
Prospectus Supplement shall be deemed to be incorporated by reference into
this Prospectus from the date of filing of such document. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of the
Registration Statements and this Prospectus to the extent that a statement
contained herein, in an applicable Prospectus Supplement or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of the Registration Statements or this
Prospectus.
Holdings will provide without charge to each person, including any
beneficial owner of any of the Securities, to whom a copy of this Prospectus
is delivered, upon the written or oral request of any such person, a copy of
any or all of the documents which are incorporated herein by reference, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Requests should be directed to
Mary Jo Capko, the Controller's Office, Lehman Brothers Holdings Inc., 3 World
Financial Center, 27th Floor, New York, New York 10285 (telephone (212) 526-
0660).
2
<PAGE>
THE COMPANY
Lehman Brothers Holdings Inc. (together with its consolidated subsidiaries,
hereinafter referred to as the "Company" unless the context otherwise requires)
is one of the leading global investment banks serving institutional, corporate,
government and high net worth individual clients and customers. The Company's
worldwide headquarters in New York and regional headquarters in London, Tokyo,
Hong Kong and Singapore are complemented by offices in additional locations in
the United States, Europe, the Middle East, Latin and South America.
The Company's business includes capital raising for clients through
securities underwriting and direct placements; corporate finance and strategic
advisory services; merchant banking; securities sales and trading; asset
management; research; and the trading of foreign exchange, derivative products
and certain commodities. The Company acts as a market marker in all major
equity and fixed income products in both the domestic and international
markets. The Company is a member of all principal securities and commodities
exchanges in the United States, as well as the National Association of
Securities Dealers, Inc. ("NASD"), and holds memberships or associate
memberships on several principal international securities and commodities
exchanges, including the London, Tokyo, Hong Kong, Frankfurt and Milan stock
exchanges.
Holdings was incorporated in Delaware on December 29, 1983. Holdings'
principal executive offices are located at 3 World Financial Center, New York,
New York 10285 (telephone (212) 526-7000).
USE OF PROCEEDS
Except as otherwise may be set forth in an applicable Prospectus Supplement
accompanying this Prospectus, Holdings intends to apply the net proceeds from
the sale of the Securities for general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of the
Company for each of the four years in the period ended December 31, 1993, the
eleven months ended November 30, 1994 and the nine months ended August 31,
1995:
<TABLE>
<CAPTION>
ELEVEN MONTHS NINE MONTHS
YEAR ENDED DECEMBER 31 ENDED ENDED
------------------------------------------- NOVEMBER 30, AUGUST 31,
1990 1991 1992 1993 1994 1995
---- ------ ----- ------ ------------- -----------
<S> <C> <C> <C> <C> <C>
* 1.03 * 1.00 1.03 1.03
</TABLE>
Earnings were inadequate to cover fixed charges and would have had to
increase approximately $766 million in 1990 and $247 million in 1992 in order
to cover the deficiencies for the respective periods.
In computing the ratio of earnings to fixed charges, "earnings" consist of
earnings from continuing operations before income taxes and fixed charges.
"Fixed charges" consist principally of interest expense and one-third of office
rentals and one-fifth of equipment rentals, which are deemed to be
representative of the interest factor.
3
<PAGE>
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratio of earnings to combined fixed
charges and preferred stock dividends of the Company for each of the four years
in the period ended December 31, 1993, the eleven months ended November 30,
1994 and the nine months ended August 31, 1995:
<TABLE>
<CAPTION>
ELEVEN MONTHS NINE MONTHS
YEAR ENDED DECEMBER 31 ENDED ENDED
------------------------------------------ NOVEMBER 30, AUGUST 31,
1990 1991 1992 1993 1994 1995
---- ------ ----- ----- ------------- -----------
<S> <C> <C> <C> <C> <C>
* 1.02 * * 1.02 1.03
</TABLE>
* Earnings were inadequate to cover fixed charges and would have had to
increase approximately $814 million in 1990, $295 million in 1992 and $27
million in 1993 in order to cover the deficiencies for the respective
periods.
In computing the ratio of earnings to combined fixed charges and preferred
stock dividends, "earnings" consist of earnings from continuing operations
before income taxes and fixed charges. "Fixed charges" consist principally of
interest expense and one-third of office rentals and one-fifth of equipment
rentals, which are deemed to be representative of the interest factor.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either Senior Debt (as defined below) or
Subordinated Debt (as defined below) of Holdings. The Debt Securities
constituting Senior Debt will be issued under an indenture, dated as of
September 1, 1987, between Holdings and Citibank, N.A., Trustee, as
supplemented and amended by Supplemental Indentures dated as of November 25,
1987, as of November 27, 1990, as of September 13, 1991, as of October 4, 1993
and as of August 1, 1995 (the "Senior Indenture"), and the Debt Securities
constituting Subordinated Debt will be issued under an indenture between
Holdings and Chemical Bank, Trustee (the "Subordinated Indenture"). The Senior
Indenture and the Subordinated Indenture are hereinafter collectively referred
to as the "Indentures" and, individually, as an "Indenture". Each Indenture
will incorporate by reference certain Standard Multiple-Series Indenture
Provisions, filed with the SEC on July 30, 1987 and as amended and refiled with
the SEC on November 16, 1987. This Prospectus contains descriptions of all
material provisions of the Indentures. The summary of such provisions of the
Indentures does not purport to be complete; copies of such Indentures are filed
as exhibits to the Registration Statements of which this Prospectus is a part.
All articles and sections of the applicable Indenture, and all capitalized
terms set forth below, have the meanings specified in the applicable Indenture.
GENERAL
Neither Indenture limits the amount of debentures, notes or other evidences
of indebtedness which may be issued thereunder. Each Indenture provides that
Debt Securities may be issued from time to time in one or more series. Since
Holdings, as a holding company, does not have any significant assets other than
the equity securities of its subsidiaries, its cash flow and consequent ability
to service its debt, including the Debt Securities, are dependent upon the
earnings of its subsidiaries and the distribution of those earnings to
Holdings, or upon loans or other payments of funds by those subsidiaries to
Holdings. Holdings' subsidiaries, including Lehman Brothers, are separate and
distinct legal entities and will have no obligation, contingent or otherwise,
to pay any interest or principal on the Debt Securities or to make any funds
available therefor, whether by dividends, loans or other payments. Dividends,
loans and other payments by Lehman Brothers are restricted by net capital and
other rules of various regulatory bodies. See "Capital Requirements." The
payment of dividends by Holdings' subsidiaries is contingent upon the earnings
of those subsidiaries and is subject to various business considerations in
addition to net capital requirements and contractual restrictions. Except as
described under "Limitations on Liens" and "Consolidation, Merger and Sale of
Assets", neither Indenture affords holders of Debt Securities protection in the
event of a highly leveraged transaction, reorganization, restructuring, merger
or other similar transaction involving the Company that may adversely affect
holders of Debt Securities.
4
<PAGE>
Since the Debt Securities will be obligations of a holding company, the
ability of holders of the Debt Securities to benefit from any distribution of
assets of any subsidiary upon the liquidation or reorganization of such
subsidiary is subordinate to the prior claims of present and future creditors
of such subsidiary.
Reference is made to the applicable Prospectus Supplement for the following
terms and other information with respect to the Debt Securities being offered
thereby: (1) the title of such Debt Securities and whether such Debt Securities
will be Senior Debt or Subordinated Debt; (2) any limit on the aggregate
principal amount of such Debt Securities; (3) whether the Debt Securities are
to be issuable as Registered Securities or Bearer Securities or both, and if
Bearer Securities are issued, whether Bearer Securities may be exchanged for
Registered Securities and the circumstances and places for such exchange, if
permitted; (4) whether the Debt Securities are to be issued in whole or in part
in the form of one or more temporary or permanent global Debt Securities
("Global Securities") in registered or bearer form and, if so, the identity of
the depositary, if any, for such Global Security or Securities; (5) the date or
dates (or manner of determining the same) on which such Debt Securities will
mature; (6) the rate or rates (or manner of determining the same) at which such
Debt Securities will bear interest, if any, and the date or dates from which
such interest will accrue; (7) the dates (or manner of determining the same) on
which such interest will be payable and the Regular Record Dates for such
Interest Payment Dates for Debt Securities which are Registered Securities, and
the extent to which, or the manner in which, any interest payable on a
temporary or permanent global Debt Security on an Interest Payment Date will be
paid if other than in the manner described under "Global Securities" below; (8)
any mandatory or optional sinking fund or analogous provisions; (9) each office
or agency where, subject to the terms of the applicable Indenture as described
below under "Payment and Paying Agents", the principal of and premium, if any,
and interest, if any, on the Debt Securities will be payable and each office or
agency where, subject to the terms of the applicable Indenture as described
below under "Denominations, Registration and Transfer," the Debt Securities may
be presented for registration of transfer or exchange; (10) the date, if any,
after which, and the price or prices in the currency or currency unit in which,
such Debt Securities are payable pursuant to any optional or mandatory
redemption provision; (11) any provisions for payment of additional amounts for
taxes and any provision for redemption, in the event Holdings must comply with
reporting requirements in respect of a Debt Security or must pay such
additional amounts in respect of any Debt Security; (12) the terms and
conditions, if any, upon which the Debt Securities of such series may be
repayable prior to maturity at the option of the holder thereof (which option
may be conditional) and the price or prices in the currency or currency unit in
which such Debt Securities are payable; (13) the denominations in which any
Debt Securities which are Registered Securities will be issuable if other than
denominations of $1,000 and any integral multiple thereof, and the denomination
or denominations in which any Debt Securities which are Bearer Securities will
be issuable if other than the denomination of $5,000; (14) the currency,
currencies or currency units for which such Debt Securities may be purchased
and the currency, currencies or currency units in which the principal of and
interest, if any, on such Debt Securities may be payable; (15) any index used
to determine the amount of payments of principal of and premium, if any, and
interest, if any, on such Debt Securities; (16) the terms and conditions, if
any, pursuant to which such Debt Securities may be converted or exchanged for
other securities of Holdings or any other person; (17) the terms and
conditions, if any, pursuant to which the principal of and premium, if any, and
interest, if any, on such Debt Securities are payable at the election of
Holdings or the holder thereof, in securities or other property; and (18) other
terms of the Debt Securities.
If any of the Debt Securities are sold for foreign currencies or foreign
currency units or if the principal of or interest, if any, on any series of
Debt Securities is payable in foreign currencies or foreign currency units, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such issue of Debt Securities and such currencies or currency
units will be set forth in an applicable Prospectus Supplement relating
thereto.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable to any such series are
described under "United States Taxation" and may be further described in an
applicable Prospectus Supplement.
5
<PAGE>
SENIOR DEBT
The Debt Securities constituting part of the senior debt of Holdings (the
"Senior Debt") will rank equally with all other unsecured debt of Holdings
except Subordinated Debt.
SUBORDINATED DEBT
The Debt Securities constituting part of the subordinated debt of Holdings
(the "Subordinated Debt") will be subordinate and junior in the right of
payment, to the extent and in the manner set forth in the Subordinated
Indenture, to all present or future Senior Debt. "Senior Debt" is defined to
mean (a) any indebtedness for money borrowed or evidenced by bonds, notes,
debentures or similar instruments, (b) indebtedness under capitalized leases,
(c) any indebtedness representing the deferred and unpaid purchase price of any
property or business, and (d) all deferrals, renewals, extensions and
refundings of any such indebtedness or obligation; except that the following
does not constitute Senior Debt: (i) indebtedness evidenced by the Subordinated
Debt, (ii) indebtedness which is expressly made equal in right of payment with
the Subordinated Debt or subordinate and subject in right of payment to the
Subordinated Debt, (iii) indebtedness for goods or materials purchased in the
ordinary course of business or for services obtained in the ordinary course of
business or indebtedness consisting of trade payables or (iv) indebtedness
which is subordinated to any obligation of Holdings of the type specified in
clauses (a) through (d) above. The effect of clause (iv) is that Holdings may
not issue, assume or guaranty any indebtedness for money borrowed which is
junior to the Senior Debt and senior to the Subordinated Debt. (Subordinated
Indenture Section 1401). The Prospectus Supplement related to a particular
series of Subordinated Debt will set forth the amount of Senior Debt then
outstanding. The Subordinated Indenture does not limit the amount of Senior
Debt or other indebtedness that may be issued.
Upon the failure to pay the principal or premium, if any, on Senior Debt when
due or upon the maturity of any Senior Debt by lapse of time, acceleration or
otherwise, all principal thereof, interest thereon, if any, and other amounts
due in connection therewith shall first be paid in full, before any payment is
made on account of the principal, premium, if any, or interest, if any, on the
Subordinated Debt or to acquire any of the Subordinated Debt or on account of
the redemption, sinking fund or analogous provisions in the Subordinated
Indenture. (Subordinated Indenture Section 1402). Upon any distribution of
assets of Holdings pursuant to any dissolution, winding up, liquidation or
reorganization of Holdings, payment of the principal, premium, if any, and
interest, if any, on the Subordinated Debt will be subordinated, to the extent
and in the manner set forth in the Subordinated Indenture, to the prior payment
in full of all Senior Debt. (Subordinated Indenture Section 1403). By reason of
such subordination, in the event of insolvency, creditors of Holdings who are
holders of Senior Debt may recover more ratably than the holders of
Subordinated Debt.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities will be issuable as Registered Securities without coupons
and in denominations of $1,000 or any integral multiple thereof, unless an
applicable Prospectus Supplement provides with respect to a series of Debt
Securities that such series of Debt Securities will be issued in whole or in
part as Bearer Securities and/or in different denominations. Debt Securities of
a series may be issuable in whole or in part in the form of one or more Global
Securities, as described below under "Global Securities." One or more Global
Securities will be issued in a denomination or aggregate denominations equal to
the aggregate principal amount of Debt Securities of the series to be
represented by such Global Security or Securities. If so provided with respect
to a series of Debt Securities, Debt Securities of such series will be issuable
solely as Bearer Securities with coupons attached or as both Registered
Securities and Bearer Securities. (Section 201).
In connection with the sale during the "restricted period" as defined in
Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations
(generally, the first 40 days after the closing date and, with respect to
unsold allotments, until sold) no Bearer Security shall be mailed or otherwise
delivered to any location in the United States (as defined under "Limitations
on Issuance of Bearer Securities"). A Bearer Security in definitive form
(including interests in a permanent Global Security) may be delivered only if
the Person entitled to receive such Bearer Security furnishes written
certification, in the form required by the applicable Indenture, to the effect
that such Bearer Security is not owned by or on behalf of a United States
person (as
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defined under "Limitations on Issuance of Bearer Securities"), or, if a
beneficial interest in such Bearer Security is owned by or on behalf of a
United States person, that such United States person (i) acquired and holds the
Bearer Security through a foreign branch of a United States financial
institution, (ii) is a foreign branch of a United States financial institution
purchasing for its own account or resale (and in either case, (i) or (ii), such
financial institution agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder) or (iii) is a financial institution
purchasing for resale during the restricted period only to non-United States
persons outside the United States. (Sections 303, 304). See "Global
Securities--Bearer Debt Securities" and "Limitations on Issuance of Bearer
Securities."
Registered Securities of any series (other than a Global Security) will be
exchangeable for other Registered Securities of the same series and of a like
aggregate principal amount and tenor of different authorized denominations. In
addition, if Debt Securities of any series are issuable as both Registered
Securities and as Bearer Securities, at the option of the Holder upon request
confirmed in writing, and subject to the terms of the applicable Indenture,
definitive Bearer Securities (with all unmatured coupons, except as provided
below, and all matured coupons in default) of such series will be exchangeable
into definitive Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Any
definitive Bearer Security surrendered in exchange for a definitive Registered
Security between a Regular Record Date or a Special Record Date and the
relevant date for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest and interest will not be payable
in respect of the definitive Registered Security issued in exchange for such
definitive Bearer Security, but will be payable only to the Holder of such
coupon when due in accordance with the terms of the applicable Indenture.
(Section 305). Except as provided in an applicable Prospectus Supplement,
Bearer Securities will not be issued in exchange for Registered Securities.
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Security Registrar or at the office of any
transfer agent designated by Holdings for such purpose with respect to any
series of Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in each Indenture. Such transfer or exchange
will be effected upon the Security Registrar or such transfer agent, as the
case may be, being satisfied with the documents of title and identity of the
person making the request. Holdings has appointed each Trustee as Security
Registrar under the applicable Indenture. (Section 305). If a Prospectus
Supplement refers to any transfer agents (in addition to the Security
Registrar) initially designated by Holdings with respect to any series of Debt
Securities, Holdings may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
only as Registered Securities, Holdings will be required to maintain a transfer
agent in each Place of Payment for such series and, if Debt Securities of a
series are issuable as Bearer Securities, Holdings will be required to maintain
(in addition to the Security Registrar) a transfer agent in a Place of Payment
for such series located outside the United States. Holdings may at any time
designate additional transfer agents with respect to any series of Debt
Securities. (Section 1002).
In the event of any redemption in part, Holdings shall not be required to (i)
issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before any
selection of Debt Securities of that series to be redeemed and ending at the
close of business on (A) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issuable as Bearer Securities, the
day of the first publication of the relevant notice of redemption or, if Debt
Securities of the series are also issuable as Registered Securities and there
is no publication, the mailing of the relevant notice of redemption; (ii)
register the transfer of or exchange any Registered Security, or portion
thereof, called for redemption, except the unredeemed portion of any Registered
Security being redeemed in part; or (iii) exchange any Bearer Security called
for redemption, except to exchange such Bearer Security for a Registered
Security of that series and like tenor which is immediately surrendered for
redemption. (Section 305).
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PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of (and premium, if any) and any interest on Bearer Securities will
be payable, subject to any applicable laws and regulations, at the offices of
such Paying Agents outside the United States as Holdings may designate from
time to time, at the option of the Holder, by check or by transfer to an
account maintained by the payee with a bank located outside the United States.
(Sections 307 and 1002). Unless otherwise indicated in an applicable Prospectus
Supplement, payment of interest on Bearer Securities on any Interest Payment
Date will be made only against surrender of the coupon relating to such
Interest Payment Date. (Section 1001). No payment of interest on a Bearer
Security will be made unless on the earlier of the date of the first such
payment by Holdings or the delivery by Holdings of the Bearer Security in
definitive form (including interests in a permanent Global Security) (the
"Certification Date"), a written certificate in the form and to the effect
described under "Denominations, Registration and Transfer" is provided to
Holdings. No payment with respect to any Bearer Security will be made at any
office or agency of Holdings in the United States or by check mailed to any
address in the United States or by transfer to an account maintained with a
bank located in the United States. Notwithstanding the foregoing, payment of
principal of (and premium, if any) and interest on Bearer Securities
denominated and payable in U.S. dollars will be made at the office of Holdings'
Paying Agent in the Borough of Manhattan, The City of New York if, and only if,
payment of the full amount thereof in U.S. dollars at all offices or agencies
outside the United States is illegal or effectively precluded by exchange
controls or other similar restrictions. (Section 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, as
contemplated under "Description of Securities--General", payment of principal
of (and premium, if any) and any interest on Registered Securities (other than
a Global Security) will be made in U.S. dollars at the office of such Paying
Agent or Paying Agents as Holdings may designate from time to time, except that
at the option of Holdings payment of any interest may be made (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto as specified in the Security
Register. (Sections 307, 1002). Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any installment of interest on Registered
Securities will be made to the Person in whose name such Registered Security is
registered at the close of business on the Regular Record Date for such
interest payment. (Section 307).
The principal office of each Trustee under the applicable Indenture in The
City of New York will be designated as Holdings' sole Paying Agent for payments
with respect to Debt Securities which are issuable solely as Registered
Securities and as Holdings' Paying Agent in the Borough of Manhattan, The City
of New York, for payments with respect to Debt Securities (subject to the
limitations described above in the case of Bearer Securities) which may be
issuable as Bearer Securities. Any Paying Agents outside the United States and
any other Paying Agents in the United States initially designated by Holdings
for the Debt Securities will be named in an applicable Prospectus Supplement.
Holdings may at any time designate additional Paying Agents or rescind the
designation of any Paying Agents or approve a change in the office through
which any Paying Agent acts, except that, if Debt Securities of a series are
issuable only as Registered Securities, Holdings will be required to maintain a
Paying Agent in each Place of Payment for such series, and if Debt Securities
of a series may be issuable as Bearer Securities, Holdings will be required to
maintain (i) a Paying Agent in the Borough of Manhattan, The City of New York
for payments with respect to any Registered Securities of the series (and for
payments with respect to Bearer Securities of the series in the circumstances
described above, but not otherwise), and (ii) a Paying Agent in a Place of
Payment located outside the United States where Debt Securities of such series
and any coupons appertaining thereto may be presented and surrendered for
payment; provided that if the Debt Securities of such series are listed on The
Luxembourg Stock Exchange (the "Stock Exchange") or any other stock exchange
located outside the United States and such stock exchange shall so require,
Holdings will maintain a Paying Agent in Luxembourg or any other required city
located outside the United States, as the case may be, for the Debt Securities
of such series. (Section 1002).
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All moneys paid by Holdings to a Paying Agent for the payment of principal of
(and premium, if any) or interest on any Debt Security which remain unclaimed
at the end of two years after such principal, premium or interest shall have
become due and payable will be repaid to Holdings and the Holder of such Debt
Security or any coupon will thereafter look only to Holdings for payment
thereof. (Section 1003).
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the form
of one or more Global Securities that will be deposited with or on behalf of a
depository (a "Depository") identified in the Prospectus Supplement relating to
such series. Global Securities may be issued in either registered or bearer
form and in either temporary or permanent form.
The specific terms of the depository arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
apply to all depository arrangements.
Debt Securities which are to be represented by a Global Security in
registered form to be deposited with or on behalf of a Depository will be
registered in the name of such Depository or its nominee. Upon the issuance of
a Global Security in registered form, the Depository for such Global Security
will credit the respective principal amounts of the Debt Securities represented
by such Global Security to the accounts of institutions that have accounts with
such depository or its nominee ("participants"). The accounts to be credited
shall be designated by the underwriters or agents of such Debt Securities or by
Holdings, if such Debt Securities are offered and sold directly by Holdings.
Ownership of beneficial interests in such Global Securities will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests by participants in such Global Securities will be shown
on, and the transfer of that ownership interest will be effected only through,
records maintained by the Depository or its nominee for such Global Security.
Ownership of beneficial interests in Global Securities by persons that hold
through participants will be shown on, and the transfer of that ownership
interest within such participant will be effected only through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depository for a Global Security in registered form, or its
nominee, is the registered owner of such Global Security, such depository or
such nominee, as the case may be, will be considered the sole owner or holder
of the Debt Securities represented by such Global Security for all purposes
under the Indenture governing such Debt Securities. Except as set forth below,
owners of beneficial interests in such Global Securities will not be entitled
to have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in definitive form and will not be
considered the owners or holders thereof under the Indenture.
Payment of principal of, premium, if any, and any interest on Debt Securities
registered in the name of or held by a Depository or its nominee will be made
to the Depository or its nominee, as the case may be, as the registered owner
or the holder of the Global Security. None of the Company, the Trustee, any
Paying Agent or the Security Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. (Section 308).
The Company expects that the Depository for a permanent Global Security in
registered form, upon receipt of any payment of principal, premium or interest
in respect of a permanent Global Security, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of such Depository. The
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Company also expects that payments by participants to owners of beneficial
interests in such Global Security held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants.
A Global Security in registered form may not be transferred except as a
whole by the Depository for such Global Security to a nominee of such
depository or by a nominee of such depository to such depository or another
nominee of such depository or by such depository or any such nominee to a
successor of such depository or a nominee of such successor. If a Depository
for a permanent Global Security in registered form is at any time unwilling or
unable to continue as depository and a successor depository is not appointed
by the Company within 90 days, the Company will issue Debt Securities in
definitive registered form in exchange for all of the Global Securities
representing such Debt Securities. In addition, the Company may at any time
and in its sole discretion determine not to have any Debt Securities in
registered form represented by one or more Global Securities and, in such
event, will issue Debt Securities in definitive form in exchange for all of
the Global Securities representing such Debt Securities. (Section 305).
Further, if the Company so specifies with respect to the Debt Securities of a
series in registered form, an owner of a beneficial interest in a Global
Security representing Debt Securities of such series may, on terms acceptable
to the Company and the Depository for such Global Security, receive Registered
Debt Securities of such series in definitive form. In any such instance, an
owner of a beneficial interest in a Global Security will be entitled to
physical delivery in definitive form of Registered Securities of the series
represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
(Section 305). Debt Securities of such series so issued in definitive form
will be issued (a) as Registered Securities in denominations, unless otherwise
specified by the Company, of $1,000 and integral multiples thereof if the Debt
Securities of such series are issuable as Registered Securities, (b) as Bearer
Securities in the denomination, unless otherwise specified by the Company, of
$5,000 if the Debt Securities of such series are issuable as Bearer Securities
or (c) as either Registered or Bearer Securities if the Debt Securities of
such series are issuable in either form. See, however, "Limitations on
Issuance of Bearer Securities" below for a description of certain restrictions
on the issuance of a Bearer Security in definitive form in exchange for an
interest in a Global Security.
BEARER DEBT SECURITIES
If so specified in an applicable Prospectus Supplement, pending the
availability of a permanent Global Security, all or any portion of the Debt
Securities of a series which may be issuable as Bearer Securities will
initially be represented by one or more temporary Global Securities, without
interest coupons, to be deposited with a common depositary in London for
Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear") and Cedel Bank, societe anonyme ("Cedel") for
credit to the designated accounts. The interests of the beneficial owner or
owners in a temporary Global Security in bearer form will be exchangeable for:
(i) in whole, definitive Bearer Securities, (ii) in whole, Senior Debt
Securities to be represented thereafter by one or more permanent Global
Securities in bearer form, without interest coupons, and/or (iii) in whole or
in part, definitive Registered Securities, (the date of such exchange, the
"Exchange Date"); provided, however, that if definitive Bearer Securities have
previously been issued in exchange for an interest in a permanent Global
Security in bearer form representing Senior Debt Securities of the same
series, then interests in such Senior Debt Securities (with certain
exceptions) shall only thereafter be exchangeable, in whole, for definitive
Bearer Securities, definitive Registered Securities, or any combination
thereof (with certain exceptions) representing Debt Securities having the same
interest rate and Stated Maturity, but only upon written certification in the
form and to the effect described under "Denominations, Registration and
Transfer" unless such certification has been provided on an earlier interest
payment date. The beneficial owner of a Debt Security represented by a
permanent Global Security in bearer form may, on the applicable Exchange Date
and upon 30 days' notice to the applicable Trustee given through Euroclear or
Cedel, exchange its interest in whole for definitive Bearer Securities or, if
specified in an applicable Prospectus Supplement, in whole or in part, for
definitive Registered Securities of any authorized denomination, provided,
however, that if definitive Bearer Securities are issued in partial exchange
for Senior Debt Securities
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represented by such permanent Global Security or by a temporary Global Security
in bearer form of the same series, such issuance (with certain exceptions)
shall give rise to the exchange of such permanent Global Security in whole for,
at the option of the Holders, definitive Bearer Securities, definitive
Registered Securities, or any combination thereof. No Bearer Security delivered
in exchange for a portion of a permanent Global Security shall be mailed or
otherwise delivered to any location in the United States in connection with
such exchange. (Sections 303 and 304).
Unless otherwise specified in an applicable Prospectus Supplement, interest
in respect of any portion of a temporary Global Security in bearer form payable
in respect of an Interest Payment Date occurring prior to the issuance of a
permanent Global Security in bearer form will be paid to each of Euroclear and
Cedel with respect to the portion of the temporary Global Security in bearer
form held for its account. Each of Euroclear and Cedel will undertake in such
circumstances to credit such interest received by it in respect of a temporary
Global Security in bearer form to the respective accounts for which it holds
such temporary Global Security in bearer form as of the relevant Interest
Payment Date, but only upon receipt in each case of written certification, in
the form and to the effect described under "Denomination, Registration and
Transfer."
LIMITATION ON LIENS
So long as any Debt Securities remain outstanding, unless an applicable
Prospectus Supplement relating thereto provides otherwise, Holdings will not,
and will not permit any Designated Subsidiary (as defined below), directly or
indirectly, to create, issue, assume, incur or guarantee any indebtedness for
money borrowed which is secured by a mortgage, pledge, lien, security interest
or other encumbrance of any nature on any of the present or future common stock
of a Designated Subsidiary unless the Debt Securities and, if Holdings so
elects, any other indebtedness of Holdings ranking at least pari passu with the
Debt Securities, shall be secured equally and ratably with (or prior to) such
other secured indebtedness for money borrowed so long as it is outstanding.
(Section 1005).
The term "Designated Subsidiary" means any present or future consolidated
subsidiary of Holdings, the consolidated net worth of which constitutes at
least 5% of the consolidated net worth of Holdings. As of September 30, 1995,
Holdings' Designated Subsidiaries were Lehman Brothers, Lehman Brothers
Holdings PLC, Lehman Brothers UK Holdings Limited, Lehman Brothers
International (Europe), Lehman Brothers Japan Inc., Lehman Brothers U.K.
Holdings (Delaware) Inc. and Lehman Brothers Financial Products Inc.
EVENTS OF DEFAULT
The following are Events of Default under each Indenture: (a) failure to pay
principal of or premium, if any, on any Debt Security of that series when due;
(b) failure to pay interest, if any, on any Debt Security of that series and
any related coupons when due, continued for 30 days; (c) failure to deposit any
sinking fund payment or analogous obligation, when due, continued for 30 days,
in respect of any Debt Security of that series; (d) failure to perform any
other covenant of Holdings in the Indenture (other than a covenant included in
the applicable Indenture solely for the benefit of a series of Debt Securities
other than that series), continued for 90 days after written notice as provided
in the Indenture; and (e) certain events in bankruptcy, insolvency or
reorganization in respect of Holdings. (Section 501). Each Indenture may be
amended without the consent of Holders to provide for additional Events of
Default with respect to any series of Debt Securities then outstanding. In
addition, prior to the issuance of any series of Debt Securities, there may be
additions to or modifications or deletions of the Events of Default described
above with respect to such series of Debt Securities. Any such additions,
modifications or deletions will be specified in an applicable Prospectus
Supplement. An Event of Default with respect to a particular series of Debt
Securities does not necessarily constitute an Event of Default with respect to
any other series of Debt Securities issued under the same or another Indenture.
The Trustee may withhold notice to the Holders of any series of Debt Securities
of any default with respect to such series (except in the payment of principal,
premium or interest, if any) if it considers such withholding to be in the
interests of such Holders. (Section 602).
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, unless the principal of all of the
Debt Securities of such series shall have already become due and
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payable, either the Trustee or the Holders of at least 25% in principal amount
of the outstanding Debt Securities of that series may declare the principal
amount (or, if the Debt Securities of that series are (i) Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of the series, or (ii) Indexed Securities or Dual Currency
Securities, the amount determined in accordance with the specified terms of the
series) of all the Debt Securities of that series to be due and payable
immediately. At any time after a declaration of acceleration with respect to
Debt Securities of any series has been made, but before a judgment or decree
based on acceleration has been obtained and entered, the Holders of a majority
in principal amount of the outstanding Debt Securities of that series may,
under certain circumstances, rescind and annul such acceleration. (Section
502). For information as to waiver of defaults, see "Meetings, Modification and
Waiver." Each Indenture provides that the Trustee will be under no obligation,
subject to the duty of the Trustee during default to act with the required
standard of care, to exercise any of its rights or powers under such Indenture
at the request or direction of any of the Holders, unless such Holders shall
have offered to the Trustee reasonable indemnity. (Section 603). Subject to
such provisions for indemnification of the Trustee, the Holders of a majority
in principal amount of the outstanding Debt Securities of any series will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Debt Securities of that series. (Section
512). Holdings will be required to furnish to each Trustee annually a statement
as to the performance by Holdings of certain of its obligations under the
applicable Indenture and as to any default in such performance. (Section 1006).
SATISFACTION AND DISCHARGE
Except as may otherwise be set forth in an applicable Prospectus Supplement
relating to a series of Debt Securities, each Indenture provides that Holdings
shall be discharged from its obligations under the Debt Securities of such
series (with certain exceptions) at any time prior to the Stated Maturity or
redemption thereof when (a) Holdings has irrevocably deposited with the
applicable Trustee, in trust, (i) sufficient funds in the currency or currency
unit in which the Debt Securities of such series are payable to pay the
principal of (and premium, if any), and interest, if any, to Stated Maturity
(or redemption) on, the Debt Securities of such series, or (ii) such amount of
direct obligations of, or obligations the principal of and interest, if any, on
which are fully guaranteed by, the government which issued the currency in
which the Debt Securities of such series are payable, and which are not subject
to prepayment, redemption or call, as will, together with the predetermined and
certain income to accrue thereon without consideration of any reinvestment
thereof, be sufficient to pay when due the principal of (and premium, if any),
and interest, if any, to Stated Maturity (or redemption) on, the Debt
Securities of such series, or (iii) such combination of such funds and
securities as described in (i) and (ii), respectively, as will, together with
the predetermined and certain income to accrue on any such securities as
described in (ii), be sufficient to pay when due the principal of (and premium,
if any), and interest, if any, to Stated Maturity (or redemption) on, the Debt
Securities of such series and (b) Holdings has paid all other sums payable with
respect to the Debt Securities of such series and (c) certain other conditions
are met. Upon such discharge, the Holders of the Debt Securities of such series
shall no longer be entitled to the benefits of the Indenture, except for
certain rights, including registration of transfer and exchange of the Debt
Securities of such series and replacement of lost, stolen or mutilated Debt
Securities, and shall look only to such deposited funds or obligations for
payment. (Sections 401 and 403).
DEFEASANCE OF CERTAIN OBLIGATIONS
If the terms of the Debt Securities of any series so provide, Holdings may
omit to comply with the restrictive covenants in Section 801 ("Company May
Consolidate, Etc., Only on Certain Terms"), Section 1005 ("Limitations on Liens
on Common Stock of Designated Subsidiaries") and any other specified covenant
and any such omission with respect to such Sections shall not be an Event of
Default with respect to the Debt Securities of such series, if (a) Holdings has
irrevocably deposited with the applicable Trustee, in trust, (i) sufficient
funds in the currency or currency unit in which the Debt Securities of such
series are payable to pay the principal of (and premium, if any), and interest,
if any, to Stated Maturity (or redemption) on, the Debt Securities of such
series, or (ii) such amount of direct obligations of, or obligations the
principal of and
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interest, if any, on which are fully guaranteed by, the government which issued
the currency in which the Debt Securities of such series are payable and which
are not subject to prepayment, redemption or call, as will, together with the
predetermined and certain income to accrue thereon without consideration of any
reinvestment thereof, be sufficient to pay when due the principal of (and
premium, if any), and interest, if any, to Stated Maturity (or redemption) on,
the Debt Securities of such series or, (iii) such combination of such funds and
securities as described in (i) and (ii), respectively, as will, together with
the predetermined and certain income to accrue on any such securities as
described in (ii), be sufficient to pay when due the principal of (and premium,
if any), and interest, if any, to Stated Maturity (or redemption) on, the Debt
Securities of such series and (b) certain other conditions are met. The
obligations of Holdings under the Indenture with respect to the Debt Securities
of such series, other than with respect to the covenants referred to above
shall remain in full force and effect. (Section 1009).
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of either Indenture may be made by Holdings and
the applicable Trustee with the consent of the Holders of not less than 66 2/3%
in principal amount of the Outstanding Debt Securities of each series issued
under such Indenture affected by such modification or amendment; provided,
however, that no such modification or amendment may, without the consent of the
Holder of each Outstanding Debt Security affected thereby, (a) change the
Stated Maturity of the principal of, or any installment of principal of or
interest, if any, on, any Debt Security, (b) reduce the principal amount of, or
the premium, if any, or interest, if any, on, any Debt Security, (c) change any
obligation of Holdings to pay additional amounts, (d) reduce the amount of
principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof, (e) adversely affect the right of repayment or
repurchase, if any, at the option of the Holder, (f) reduce the amount, or
postpone the date fixed for, any payment under any sinking fund or analogous
provision, (g) change the place or currency or currency unit of payment of
principal of or premium, if any, or interest, if any, on any Debt Security, (h)
change or eliminate the right, if any, to elect payment in a coin or currency
or currency unit other than that in which Debt Securities which are Registered
Securities are denominated or stated to be payable, (i) impair the right to
institute suit for the enforcement of any payment on or with respect to any
Debt Security, (j) reduce the percentage in principal amount of Outstanding
Debt Securities of any series, the consent of the Holders of which is required
for modification or amendment of the applicable Indenture or for waiver of
compliance with certain provisions of the applicable Indenture or for waiver of
certain defaults, (k) reduce the requirements contained in either Indenture for
quorum or voting, or (l) change any obligation of Holdings to maintain an
office or agency in the places and for the purposes required in the applicable
Indenture. (Section 902).
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive, insofar as that series is concerned,
compliance by Holdings with certain restrictive provisions of the applicable
Indenture. (Section 1007). The Holders of not less than a majority in principal
amount of the Outstanding Debt Securities of any series may on behalf of the
Holders of all Debt Securities of that series and any coupons appertaining
thereto waive any past default under the applicable Indenture with respect to
that series, except a default in the payment of the principal of or premium, if
any, or interest, if any, on any Debt Security of that series or in the payment
of any sinking fund installment or analogous obligation or in respect of a
provision which under the applicable Indenture cannot be modified or amended
without the consent of the Holder of each Outstanding Debt Security of that
series affected. (Section 513).
Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series if Debt Securities of that series are issuable as
Bearer Securities. A meeting may be called at any time by the applicable
Trustee, and also, upon request, by Holdings or Holders of at least 10% in
principal amount of the Outstanding Debt Securities of such series, in any such
case upon notice given in accordance with "Notices" below. (Section 1302).
Except as limited by the proviso in the second preceding paragraph, any
resolution presented at a meeting or adjourned meeting at which a quorum is
present may be adopted by the affirmative vote of the Holders of a majority in
principal amount of the Outstanding Debt Securities of that
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series; provided, however, that, except as limited by the proviso in the second
preceding paragraph, any resolution with respect to any consent or waiver which
may be given by the Holders of not less than 66 2/3% in principal amount of the
Outstanding Debt Securities of a series may be adopted at a meeting or an
adjourned meeting at which a quorum is present only by the affirmative vote of
66 2/3% in principal amount of the Outstanding Debt Securities of that series;
and provided, further, that, except as limited by the proviso in the second
preceding paragraph, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which may be
made, given or taken by the Holders of a specified percentage, which is less
than a majority, in principal amount of Outstanding Debt Securities of a series
may be adopted at a meeting or adjourned meeting duly reconvened at which a
quorum is present by the affirmative vote of the Holders of such specified
percentage in principal amount of the Outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of Holders of
Debt Securities of any series duly held in accordance with the applicable
Indenture will be binding on all Holders of Debt Securities of that series and
the related coupons. The quorum at any meeting called to adopt a resolution,
and at any reconvened meeting, will be persons holding or representing a
majority in principal amount of the Outstanding Debt Securities of a series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which may be given by the Holders of not less
than 66 2/3% in principal amount of the Outstanding Debt Securities of a
series, the persons holding or representing 66 2/3% in principal amount of the
Outstanding Debt Securities of such series will constitute a quorum (Section
1304).
CONSOLIDATION, MERGER AND SALE OF ASSETS
Holdings may, without the consent of any Holders of Outstanding Debt
Securities, consolidate or merge with or into, or transfer or lease its assets
substantially as an entirety to, any Person, and any other Person may
consolidate or merge with or into, or transfer or lease its assets
substantially as an entirety to, Holdings, provided that (i) the Person (if
other than Holdings) formed by such consolidation or into which Holdings is
merged or which acquires or leases the assets of Holdings substantially as an
entirety is organized under the laws of any United States jurisdiction and
assumes Holdings' obligations on the Debt Securities and under the Indenture,
(ii) after giving effect to the transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing, and (iii) certain other conditions are
met. (Section 801).
NOTICES
Except as may otherwise be set forth in an applicable Prospectus Supplement
relating to a series of Debt Securities, notices to Holders of Bearer
Securities will be given by publication in a daily newspaper in the English
language of general circulation in The City of New York and in London, and so
long as such Bearer Securities are listed on the Stock Exchange and the Stock
Exchange shall so require, in a daily newspaper of general circulation in
Luxembourg or, if not practical, elsewhere in Western Europe. Such publication
is expected to be made in The Wall Street Journal, the Financial Times and the
Luxemburger Wort. Notices to Holders of Registered Securities will be given by
mail to the addresses of such Holders as they appear in the Security Register.
(Sections 101 and 106).
TITLE
Title to any temporary global Debt Security, any permanent global Debt
Security, any Bearer Securities and any coupons appertaining thereto will pass
by delivery. Holdings, each Trustee and any agent of Holdings or the applicable
Trustee may treat the bearer of any Bearer Security and the bearer of any
coupon and the registered owner of any Registered Security as the absolute
owner thereof (whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 308).
REPLACEMENT OF DEBT SECURITIES AND COUPONS
Any mutilated Debt Security or a Debt Security with a mutilated coupon
appertaining thereto will be replaced by Holdings at the expense of the Holder
upon surrender of such Debt Security to the applicable
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Trustee. Debt Securities or coupons that become destroyed, stolen or lost will
be replaced by Holdings at the expense of the Holder upon delivery to the
applicable Trustee of the Debt Security and coupons or evidence of the
destruction, loss or theft thereof satisfactory to Holdings and the applicable
Trustee; in the case of any coupon which becomes destroyed, stolen or lost,
such coupon will be replaced by issuance of a new Debt Security in exchange for
the Debt Security to which such coupon appertains. In the case of a destroyed,
lost or stolen Debt Security or coupon an indemnity satisfactory to the
applicable Trustee and Holdings may be required at the expense of the Holder of
such Debt Security or coupon before a replacement Debt Security will be issued.
(Section 306).
CONCERNING THE TRUSTEES
Business and other relationships (including other trusteeships) between, on
the one hand, Holdings and its affiliates and, on the other hand, the Trustee
under the Indenture pursuant to which any of the Debt Securities to which an
applicable Prospectus Supplement accompanying this Prospectus relates are
described in such Prospectus Supplement.
DESCRIPTION OF OFFERED PREFERRED STOCK
The following is a description of certain general terms and provisions of the
Offered Preferred Stock. The particular terms of any series of any such Offered
Preferred Stock will be described in an applicable Prospectus Supplement. If so
indicated in such a Prospectus Supplement, the terms of any such series may
differ from the terms set forth below.
The summary of terms of any Offered Preferred Stock contained in this
Prospectus and in an applicable Prospectus Supplement does not purport to be
complete and is subject to, and qualified in its entirety by, the provisions of
Holdings' Restated Certificate of Incorporation (the "Restated Certificate of
Incorporation"), filed as an exhibit to the Registration Statements of which
this Prospectus is a part, and the certificate of designations relating to such
series of Preferred Stock (the "Certificate of Designation"), the form of which
is filed as an exhibit to the Registration Statement and which will be filed
with the Secretary of State of Delaware, at or prior to the time of issuance of
such series of Preferred Stock.
GENERAL
The Restated Certificate of Incorporation authorizes the issuance of
38,000,000 shares of Preferred Stock, $1.00 par value per share. As of
September 30, 1995, there were 13,000,000 shares of Cumulative Convertible
Voting Preferred Stock, Series A (the "Series A Preferred Stock"), 8,000,000
shares of Cumulative Voting Preferred Stock (the "Cumulative Preferred Stock")
and 1,000 shares of Redeemable Voting Preferred Stock (the "Redeemable
Preferred Stock") issued and outstanding.
SERIES A PREFERRED STOCK. As of the date of this Prospectus, Nippon Life
Insurance Company ("Nippon Life") owns all of the issued and outstanding shares
of Series A Preferred Stock. The shares of Series A Preferred Stock are
entitled to receive preferential dividends, as and when declared by the Board
of Directors out of funds legally available therefor, in an amount equal to 5%
per annum of the price per share paid by Nippon Life ($39.10) upon purchase of
the Series A Preferred Stock payable quarterly on a cumulative basis. The
liquidation preference of the Series A Preferred Stock is equal to $39.10 plus
accumulated and unpaid dividends. Holdings may redeem shares of Series A
Preferred Stock in cumulative annual increments of 2,600,000 shares, subject to
adjustment for shares theretofore converted, at a price per share equal to
$39.10, but only if there is a public market for the Holdings' common stock and
the average market price of shares of Holdings' common stock exceeds the
conversion price on the date notice of redemption is given.
Each share of Series A Preferred Stock is convertible, at any time prior to
the date of redemption, into 0.3178313, subject to adjustment, of a share of
Holdings' common stock, provided that at least 250,000 shares
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of Series A Preferred Stock (or such lesser number of shares then outstanding)
must be converted each time. Holders of Series A Preferred Stock are entitled
to vote, together with the holders of Holdings' common stock as one class
(except as otherwise required by law), on all matters to be voted on by
stockholders of Holdings. Each share of Series A Preferred Stock is entitled to
the number of votes per share equal to the quotient obtained by dividing $39.10
by the conversion price then in effect. In addition, the holders of the Series
A Preferred Stock have voting rights in certain other circumstances.
Nippon Life has the non-transferable right to exchange the Series A Preferred
Stock for common shares of American Express Company ("American Express"). In
addition, Holdings has the right to redeem the Series A Preferred Stock if the
average market price of American Express' common shares exceeds the exchange
price on the date notice of redemption is given.
CUMULATIVE PREFERRED STOCK. As of the date of the Prospectus, American
Express owns all of the issued and outstanding shares of Cumulative Preferred
Stock. The shares of Cumulative Preferred Stock are entitled to receive
preferential dividends, as and when declared by the Board of Directors out of
funds legally available therefor, at a rate of 8.44% per annum, payable
quarterly on a cumulative basis. The liquidation preference per share of the
Cumulative Preferred Stock is $25.00 plus accumulated and unpaid dividends.
Holdings may not redeem shares of the Cumulative Preferred Stock prior to
June 1, 2001. Thereafter, Holdings may redeem shares of Cumulative Preferred
Stock at a price per share equal to $25.00 plus accumulated and unpaid
dividends.
Holders of the Cumulative Preferred Stock are entitled to vote, together with
the holders of Holdings' common stock, as one class on all matters to be voted
on by stockholders of Holdings. Notwithstanding the foregoing, American Express
has agreed that so long as it or any of its subsidiaries holds any shares of
the Cumulative Preferred Stock, it will vote such shares in the same proportion
as the votes cast by the holders of shares of Holdings' common stock on matters
to be voted on by stockholders of Holdings generally. Each share of the
Cumulative Preferred Stock will be entitled to 0.295 votes per share. In
addition, if the equivalent of six quarterly dividends (whether or not
consecutive) on the Cumulative Preferred Stock or any Parity Preferred Stock
(as defined below) shall be in arrears, then the authorized number of directors
of Holdings shall be increased by two and the holders of the Cumulative
Preferred Stock will have the right (voting as a class with the holders of any
other Parity Preferred Stock of Holdings upon which like voting rights have
been conferred and are exercisable) to elect such two directors until such time
as all accumulated dividends have been paid. The holders of the Cumulative
Preferred Stock have voting rights in certain other circumstances.
REDEEMABLE PREFERRED STOCK. As of the date of this Prospectus, American
Express and Nippon Life together own all of the issued and outstanding shares
of Redeemable Preferred Stock.
The shares of Redeemable Preferred Stock are entitled to receive preferential
dividends, as and when declared by the Board of Directors out of funds legally
available therefor, on a cumulative basis. For each of eight annual dividend
periods following May 31, 1994, the holders of Redeemable Preferred Stock are
entitled to receive dividends in an amount equal to, in the aggregate, 50% of
the amount, if any, by which the Company's net income for the applicable
dividend period exceeds $400 million, up to a maximum of $50 million for any
such period (the "Dividend Formula"). The liquidation preference per share of
the Redeemable Preferred Stock is $1.00 plus accumulated and unpaid dividends
and accrued interest, if any, thereon at a specified rate.
Subject to funds being legally available therefor, Holdings is required to
redeem all of the Redeemable Preferred Stock on the final dividend payment date
therefor, or as soon as practicable thereafter when funds become legally
available, at a price per share equal to the liquidation preference referred to
above. In addition, if a Designated Event (as defined in the Restated
Certificate of Incorporation) occurs, the holders of the Redeemable Preferred
Stock have the right to require Holdings to redeem, out of funds legally
available
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therefor, all of the Redeemable Preferred Stock for an aggregate redemption
price initially equal to $400 million if such Designated Event takes place
prior to November 30, 1994, declining $50 million per year in each of the next
seven years thereafter.
Holders of Redeemable Preferred Stock are entitled to vote, together with the
holders of Holdings' common stock as one class, on all matters to be voted on
by stockholders of Holdings. Notwithstanding the foregoing, American Express
has agreed that so long as it or any of its subsidiaries holds any shares of
the Redeemable Preferred Stock, it will vote such shares in the same proportion
as the votes cast by the holders of shares of Holdings' common stock on matters
to be voted on by stockholders of Holdings generally. Each share of Redeemable
Preferred Stock is entitled to 1,059 votes. In addition, if the equivalent of
six quarterly dividends (whether or not consecutive) to which the holders of
the Redeemable Preferred Stock are entitled in accordance with the Dividend
Formula, or to which the holders of any Parity Preferred Stock are entitled
pursuant to the terms of such Parity Preferred Stock, are in arrears, then the
authorized number of directors of Holdings shall be increased by two and the
holders of the Redeemable Preferred Stock will have the right (voting as a
class with the holders of any other Parity Preferred Stock of Holdings upon
which like voting rights have been conferred and are exercisable) to elect such
two directors until such time as all accumulated dividends have been paid. In
addition, the holders of Redeemable Preferred Stock have voting rights in
certain other circumstances.
----------------
Subject to the Restated Certificate of Incorporation and to any limitations
contained in then outstanding Preferred Stock, Holdings may issue additional
classes or series of Preferred Stock, at any time or from time to time, with
such powers, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof, as the Board of
Directors or any duly authorized committee thereof shall determine, all without
further action of the stockholders, including holders of then outstanding
Preferred Stock, of Holdings.
The Offered Preferred Stock will have the dividend, liquidation, redemption
and voting rights set forth below unless otherwise provided in an applicable
Prospectus Supplement. Reference is made to such Prospectus Supplement for
specific terms, including (1) the designation of such Offered Preferred Stock;
(2) the number of shares of such Offered Preferred Stock, the liquidation
preference per share and the initial offering price of such Offered Preferred
Stock; (3) the dividend rate(s), period(s) and/or payment date(s) or method(s)
of calculation thereof applicable to such Offered Preferred Stock; (4) the date
from which dividends on such Offered Preferred Stock shall accumulate, if
applicable; (5) the procedures for any auction and remarketing, if any, of such
Offered Preferred Stock; (6) the provision of a sinking fund, if any, for such
Offered Preferred Stock; (7) the provision for redemption, if applicable, of
such Offered Preferred Stock; (8) any listing of such Offered Preferred Stock
on any securities exchange; (9) the terms and conditions, if applicable, upon
which such Offered Preferred Stock will be convertible into or exchangeable for
Holdings' common stock or other securities, and whether at the option of the
holder thereof or the Company; (10) whether such Offered Preferred Stock will
rank senior or junior to or on a parity with any other class or series of
Offered Preferred Stock; (11) the voting rights, if any, of such Offered
Preferred Stock; (12) any conversion or exchange rights of such Offered
Preferred Stock; (13) any other specific terms, preferences, rights limitations
or restrictions of such Offered Preferred Stock; and (14) a discussion of
Federal income tax considerations applicable to such Offered Preferred Stock.
The Offered Preferred Stock will, when issued, be fully paid and non-
assessable.
RANK
Each series of Offered Preferred Stock will, with respect to dividends or
upon liquidation, dissolution or winding up, rank (i) senior to all common
stock of Holdings, and to all equity securities issued by Holdings the terms of
which specifically provide that such equity securities rank junior to such
Offered Preferred Stock
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(collectively referred to as "Junior Securities"); (ii) on a parity with all
equity securities issued by Holdings the terms of which specifically provide
that such equity securities rank on a parity with such Preferred Stock
(collectively referred to as "Parity Preferred Stock"); and (iii) junior to all
equity securities issued by Holdings the terms of which specifically provide
that such equity securities rank senior to such Offered Preferred Stock
(collectively referred to as "Senior Securities").
Each series of Offered Preferred Stock will rank on a parity with the Series
A Preferred Stock, the Cumulative Preferred Stock and the Redeemable Preferred
Stock as to dividends and upon liquidation, dissolution or winding up.
DIVIDENDS
Holders of shares of Offered Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available therefor, dividends payable on such dates and at such rates per share
per annum as set forth in an applicable Prospectus Supplement. Such Prospectus
Supplement will also state applicable record dates regarding the payment of
dividends. No dividends may be declared or paid or set apart for payment on any
Parity Preferred Stock with regard to the payment of dividends unless there
shall also be or have been declared and paid or set apart for payment on the
Offered Preferred Stock, dividends for all dividend payment periods of such
Offered Preferred Stock ending on or before the dividend payment date of such
Parity Preferred Stock, ratably in proportion to the respective amounts of
dividends (x) accumulated and unpaid or payable on such Parity Preferred Stock,
on the one hand, and (y) accumulated and unpaid through the dividend payment
period or periods of Offered Preferred Stock next preceding such dividend
payment date, on the other hand.
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Offered Preferred Stock have been paid through the most
recently completed dividend period for such Offered Preferred Stock, no
dividends (other than in Holdings' common stock) may be paid or declared and
set aside for payment or other distribution made upon such common stock or on
any other stock of Holdings that are Junior Securities or Parity Preferred
Stock as to dividends, nor may any Holdings' common stock or shares of any
other stock of Holdings that are Junior Securities or Parity Preferred Stock as
to dividends be redeemed, purchased or otherwise acquired for any consideration
(or any payment be made to or available for a sinking fund for the redemption
of any shares of such stock; provided, however, that any moneys theretofore
deposited in any sinking fund with respect to any preferred stock of Holdings
in compliance with the provisions of such sinking fund may thereafter be
applied to the purchase or redemption of such preferred stock in accordance
with the terms of such sinking fund, regardless of whether at the time of such
application full cumulative dividends upon shares of such Offered Preferred
Stock outstanding to the last dividend payment date shall have been paid or
declared and set apart for payment), provided that any such Junior Securities
or Parity Preferred Stock or Holdings' common stock may be converted into or
exchanged for shares of stock that are Junior Securities as to dividends.
Payment of dividends on any series of Offered Preferred Stock may be
restricted by loan agreements, indentures or other transactions entered into by
Holdings.
CONVERTIBILITY
No series of Offered Preferred Stock offered hereby will be convertible into,
or exchangeable for, other securities or property except as set forth in an
applicable Prospectus Supplement.
REDEMPTION AND SINKING FUND
No series of Offered Preferred Stock offered hereby will be redeemable or
receive the benefit of a sinking fund except as set forth in an applicable
Prospectus Supplement.
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LIQUIDATION
Upon any voluntary or involuntary liquidation, dissolution or winding up of
Holdings, holders of any series of Offered Preferred Stock then outstanding
shall be entitled to receive out of the assets of Holdings available for
distribution to its stockholders, after any distribution is made to or set
aside for holders of Senior Securities and before any distribution is made to
holders of Junior Securities, the liquidation preference per share specified in
an applicable Prospectus Supplement, if any, in each case together with any
accumulated and unpaid dividends. After payment of the full amount of the
liquidation preference and such dividends, the holders of shares of Offered
Preferred Stock will not be entitled to any further participation in any
distribution of assets by Holdings. If, upon any liquidation, dissolution or
winding up of the assets of Holdings, the assets of Holdings, or proceeds
thereof, distributable among the holders of shares of Parity Preferred Stock
shall be insufficient to pay in full the preferential amount aforesaid, then
such assets, or the proceeds thereof, shall be distributable among such holders
ratably in accordance with the respective amounts which would be payable on
such shares if all amounts payable thereon were paid in full. Neither a
consolidation or merger of Holdings with or into any other corporation, nor a
merger of any other corporation with or into Holdings, nor a sale or transfer
of all or any part of Holdings' assets shall be considered a liquidation,
dissolution or winding up of Holdings.
The Restated Certificate of Incorporation does not contain any language
requiring funds to be set aside to protect the liquidation preference of the
Offered Preferred Stock, although such liquidation preference may be
substantially in excess of the par value of the Offered Preferred Stock. In
addition, Holdings is not aware of any provision of Delaware law or any
controlling decision of the courts of the State of Delaware (the state of
incorporation of Holdings) that requires a restriction upon the surplus of
Holdings solely because the liquidation preference of Offered Preferred Stock
will exceed its par value. Consequently, there will be no restriction upon
surplus of Holdings solely because the liquidation preference of Offered
Preferred Stock will exceed the par value and there will be no remedies
available to holders of Offered Preferred Stock before or after the payment of
any dividend, other than in connection with the liquidation of Holdings, solely
by reason of the fact that such dividend would reduce the surplus of Holdings
to an amount less than the difference between the liquidation preference of
Offered Preferred Stock and its par value.
VOTING
Except as provided by Delaware law, no series of Offered Preferred Stock will
be entitled to vote except as provided in an applicable Prospectus Supplement.
MISCELLANEOUS
The holders of Offered Preferred Stock will have no preemptive rights. Shares
of Offered Preferred Stock redeemed or otherwise reacquired by Holdings shall
be retired and, upon the taking of any action required by applicable law,
resume the status of authorized and unissued shares of Offered Preferred Stock
undesignated as to series, and shall be available for subsequent issuance. The
shares of a series of Offered Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in an applicable Prospectus Supplement, the
Restated Certificate of Incorporation or the related Certificate of Designation
or as otherwise required by law. Neither the par value nor the liquidation
preference is indicative of the price at which the Offered Preferred Stock will
actually trade on or after the date of issuance.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for each series of Offered Preferred Stock
will be described in an applicable Prospectus Supplement.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered or sold during the restricted period (as defined
under "Description of Debt Securities--Denominations,
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Registration and Transfer"), or delivered in definitive form in connection with
a sale during the restricted period, in the United States or to United States
persons other than to (a) the United States office of (i) an international
organization (as defined in Section 7701(a)(18) of the Code), (ii) a foreign
central bank (as defined in Section 895 of the Code), or (iii) any underwriter,
agent, or dealer offering or selling Bearer Securities during the restricted
period (a "Distributor") pursuant to a written contract with the issuer or with
another Distributor, that purchases Bearer Securities for resale or for its own
account and agrees to comply with the requirements of Section 165(j)(3)(A),
(B), or (C) of the Code, or (b) the foreign branch of a United States financial
institution purchasing for its own account or for resale, which institution
agrees to comply with the requirements of Section 165(j)(3)(A), (B), or (C) of
the Code. In addition, a sale of a Bearer Security may be made during the
restricted period to a United States person who acquired and holds the Bearer
Security on the Certification Date through a foreign branch of a United States
financial institution that agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Code. Any Distributor (including an affiliate
of a Distributor) offering or selling Bearer Securities during the restricted
period must agree not to offer or sell Bearer Securities in the United States
or to United States persons (except as discussed above) and must employ
procedures reasonably designed to ensure that its employees or agents directly
engaged in selling Bearer Securities are aware of these restrictions.
Bearer Securities and their interest coupons will bear a legend substantially
to the following effect: "Any United States person who holds this obligation
will be subject to limitations under the United States income tax laws,
including the limitations provided in Section 165(j) and 1287(a) of the
Internal Revenue Code."
Purchasers of Bearer Securities may be affected by certain limitations under
United States tax laws. See "United States Taxation--Backup Withholding." As
used herein, "United States person" means 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 and an estate or trust the income of which
is subject to United States federal income taxation regardless of its source,
and "United States" means the United States of America (including the States
and the District of Columbia) and its possessions including Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands. The term "Non-United States Holder" means any Holder which is not an
United States person.
UNITED STATES TAXATION
The following summary describes certain material United States federal income
tax consequences of the ownership of Debt Securities. Certain additional tax
consequences applicable to Debt Securities and any material federal income tax
consequences applicable to Offered Preferred Stock will be set forth in an
applicable Prospectus Supplement.
In the opinion of Simpson Thacher & Bartlett, special United States tax
counsel to Holdings, under present United States federal income and estate tax
law, and subject to the discussion below concerning backup withholding:
(a) no withholding of United States federal income tax will be required
with respect to the payment by Holdings or any Paying Agent of principal or
interest (which for purposes of this discussion includes original issue
discount) on a Debt Security owned by a Non-United States Holder, provided,
in the case of interest, (i) that the beneficial owner does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of Holdings entitled to vote within the meaning of Section
871(h)(3) of the Code and the regulations thereunder, (ii) the beneficial
owner is not a controlled foreign corporation that is related to Holdings
through stock ownership and (iii) in the case of a Registered Security, the
beneficial owner satisfies the statement requirement (described generally
below) set forth in Section 871(h) and Section 881(c) of the Code and the
regulations thereunder;
(b) no withholding of United States federal income tax will be required
with respect to any gain or income realized by a Non-United States Holder
upon the sale, exchange or retirement of a Debt Security; and
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(c) a Debt Security beneficially owned by an individual who at the time
of death is a Non-United States Holder will not be subject to United States
federal estate tax as a result of such individual's death, provided that
such individual does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of Holdings entitled to
vote within the meaning of Section 871(h)(3) of the Code and provided that
the interest payments with respect to such Debt Security would not have
been, if received at the time of such individual's death, effectively
connected with the conduct of a United States trade or business by such
individual.
To qualify for the exemption from withholding tax in (a)(iii) above, the
beneficial owner of a Registered Security, or a financial institution holding
the Debt Security on behalf of such owner, must provide, in accordance with
specified procedures, a paying agent of Holdings with a statement to the effect
that the beneficial owner is not a United States person. Pursuant to current
temporary Treasury regulations, these requirements will be met if (1) the
beneficial owner provides his name and address, and certifies, under penalties
of perjury, that he is not a United States person (which certification may be
made on an Internal Revenue Service ("IRS") Form W-8, or any successor form) or
(2) a financial institution holding the Debt Security on behalf of the
beneficial owner certifies, under penalties of perjury, that such statement has
been received by it and furnishes a paying agent with a copy thereof.
Payments to Non-United States Holders not meeting the requirements of
paragraph (a) above and thus subject to withholding of United States federal
income tax may nevertheless be exempt from such withholding if the beneficial
owner of the Debt Security provides a paying agent of Holdings with a properly
executed (1) IRS Form 1001 (or any successor form) claiming an exemption from
withholding under the benefit of a tax treaty or (2) IRS Form 4224 (or any
successor form) stating that interest paid on the Debt Security is not subject
to withholding tax because it is effectively connected with the owner's conduct
of a trade or business in the United States.
BACKUP WITHHOLDING
Under certain circumstances, Holdings or its paying agent will have to report
to the United States IRS payments of principal, interest, original issue
discount, if any, and any premium. In addition, Holdings or its paying agent
may have to withhold 31% of such payments made after December 31, 1992, and
deposit such amounts with the IRS ("backup withholding").
Generally, no information reporting or backup withholding will be required
with respect to payments made to Non-United States Holders (1) if those
payments are made outside of the United States on Bearer Securities or (2) on
Registered Securities with respect to which a statement described in (a)(iii)
above has been received.
If the conditions in the preceding paragraph have been met, backup
withholding and information reporting will not apply if the principal of, or
interest on, a Debt Security is paid or collected by a foreign office of a
custodian, nominee or other foreign agent on behalf of the beneficial owner of
such Debt Security, or if a foreign office of a broker (as defined in
applicable Treasury regulations) pays the proceeds of the sale of a Debt
Security to the owner thereof. If, however, such nominee, custodian, agent or
broker is, for United States federal income tax purposes, a United States
person, a controlled foreign corporation or a foreign person that derives 50%
or more of its gross income for certain periods from the conduct of a United
States trade or business, such payments will not be subject to backup
withholding but will be subject to information reporting, unless (1) such
custodian, nominee, agent or broker has documentary evidence in its records
that the beneficial owner is not a United States person and certain other
conditions are met or (2) the beneficial owner otherwise establishes an
exemption. Principal of, and interest on, a Debt Security paid to the
beneficial owner of a Debt Security by a United States office of a custodian,
nominee or agent, or the payment by the United States office of a broker of the
proceeds of sale of a Debt Security, will be subject to both backup withholding
and information reporting unless the beneficial owner certifies to its non-
United States status under penalties of perjury or otherwise establishes an
exemption.
21
<PAGE>
The temporary regulations expressly provide that the Treasury is still
considering the issue of whether backup withholding will apply with respect to
certain payments of principal, interest or the proceeds of a sale that are not
subject to backup withholding under the current regulations. Although the
temporary regulations indicate that any new provisions that impose backup
withholding on such payments will apply only to payments after the date such
regulations are issued, such provisions may apply to such future payments made
on or with respect to obligations existing at the time such regulations were
issued. Accordingly, such future regulations could result in the imposition of
backup withholding in respect of future payments of principal of and premium,
if any, interest on, or the proceeds of sale of, the Debt Securities
notwithstanding that the requirements outlined above are otherwise satisfied.
TAX CONSEQUENCES OF SATISFACTION AND DISCHARGE
The Company may discharge its obligations under the Debt Securities as more
fully described under "Description of Debt Securities--Satisfaction and
Discharge" above. In that event, the IRS may take the view that such a
discharge constitutes the retirement of the Debt Securities and the issuance
of new obligations with the result that Holders of the Debt Securities would
recognize any gain or loss realized on such a retirement, although any such
gain would not be taxable to Non-United States Holders under the circumstances
outlined above. Furthermore, following discharge, the Debt Securities might be
subject to withholding, backup withholding and/or information reporting.
CERTAIN TAX CONSEQUENCES FOR UNITED STATES HOLDERS
A Debt Security may be issued for an amount which is less than its stated
redemption price at maturity. The difference will be "original issue discount"
and will accrue as interest over the life of the Debt Security under a formula
based on the compounding of interest. The amount of original issue discount so
accrued in respect of a Debt Security will be added to the Holder's tax cost
therefor. Notice will be given in the appropriate Prospectus Supplement when a
particular Debt Security will have original issue discount.
If a Holder's tax cost for a Debt Security exceeds the redemption price at
maturity thereof, the Holder will be considered to have purchased the Debt
Security at a "premium." The Holder (except in the case of a dealer in
securities or one who holds debt obligations primarily for sale to customers
in the ordinary course of his trade or business) may elect to amortize the
premium generally over the remaining term of the Debt Security. The amount
amortized in any year will be treated as a reduction of the Holder's interest
income from the Debt Security. A Holder's tax cost for the Debt Security will
be reduced by the amount amortized each year. If a subsequent Holder purchases
a Debt Security at a premium, i.e., at a price in excess of the issue price
plus the original issue discount accrued prior to acquisition, the amount
includible in income in each taxable year as original issue discount will be
reduced by that portion of the premium properly allocable to the year. A
Holder will recognize taxable gain (or loss) when all or part of a Debt
Security is disposed of for an amount greater (or less) than his original tax
cost therefor plus any accrued original issue discount or minus any amortized
premium. In general, any such taxable gain or loss will be capital gain or
loss, except in the case of a dealer or financial institution. Such gain (or
loss) might arise in the event of a Satisfaction and Discharge. See "Tax
Consequences of Satisfaction and Discharge" above.
Under sections 165(j) and 1287(a) of the Code, a beneficial owner subject to
United States taxation on income derived from the Debt Securities or coupons
will not, with certain exceptions, be entitled to deduct any loss on Bearer
Securities or coupons and must treat as ordinary income any gain realized on
the sale or other disposition (including the receipt of principal) of Bearer
Securities or coupons.
THE OPINIONS AND DISCUSSION SET FORTH ABOVE ARE INTENDED ONLY AS A SUMMARY
AND DO NOT PURPORT TO BE A COMPLETE ANALYSIS OR LISTING OF ALL POTENTIAL TAX
EFFECTS RELEVANT TO A DECISION TO PURCHASE DEBT SECURITIES. SUCH OPINIONS AND
DISCUSSION DO NOT ADDRESS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY
STATE, LOCALITY OR NON-U.S. JURISDICTION.
22
<PAGE>
FURTHERMORE, THE OPINIONS OF COUNSEL AND DISCUSSION SET FORTH ABOVE ARE BASED
ON THE CODE, REGULATIONS, RULINGS AND JUDICIAL DECISIONS AS OF THE DATE HEREOF,
AND SUCH AUTHORITIES MAY BE REPEALED, REVOKED OR MODIFIED SO AS TO MAKE THE
FOREGOING ANALYSIS INAPPLICABLE. IT IS RECOMMENDED THAT ALL PROSPECTIVE
INVESTORS CONSULT THEIR OWN TAX ADVISORS CONCERNING THE TAX CONSIDERATIONS OF
THIS OFFERING.
CAPITAL REQUIREMENTS
As registered broker-dealers, Lehman Brothers and certain of Holdings' other
subsidiaries (the "Regulated Subsidiaries") are subject to the SEC's net
capital rule (Rule 15c3-1, the "Net Capital Rule"), promulgated under the
Exchange Act. The Exchange monitors the application of the Net Capital Rule by
Lehman Brothers. The Exchange or the NASD, as the case may be, monitors the
application of the Net Capital Rule by the Regulated Subsidiaries. Lehman
Brothers and such Regulated Subsidiaries compute net capital under the
alternative method of the Net Capital Rule which requires the maintenance of
minimum net capital, as defined. A broker-dealer may be required to reduce its
business if its net capital is less than 4% of aggregate debit balances and may
also be prohibited from expanding its business or paying cash dividends if
resulting net capital would be less than 5% of aggregate debit balances. In
addition, the Net Capital Rule does not allow withdrawal of subordinated
capital if net capital would be less than 5% of such debit balances.
The Net Capital Rule also limits the ability of broker-dealers to transfer
large amounts of capital to parent companies and other affiliates. Under the
Net Capital Rule equity capital can not be withdrawn from a broker-dealer
without the prior approval of the SEC when net capital after the withdrawal
would be less than 25% of its securities positions haircuts (which are
deductions from capital of certain specified percentages of the market value of
securities to reflect the possibility of a market decline prior to
disposition). In addition, the Net Capital Rule requires broker-dealers to
notify the SEC and the appropriate self-regulatory organization two business
days before a withdrawal of excess net capital if the withdrawal would exceed
the greater of $500,000 or 30% of the broker-dealer's excess net capital, and
two business days after a withdrawal that exceeds the greater of $500,000 or
20% of excess net capital. Finally, the Net Capital Rule authorizes the SEC to
order a freeze on the transfer of capital if a broker-dealer plans a withdrawal
of more than 30% of its excess net capital and the SEC believes that such a
withdrawal would be detrimental to the financial integrity of the firm or would
jeopardize the broker-dealer's ability to pay its customers.
Compliance with the Net Capital Rule could limit those operations of Lehman
Brothers and the Regulated Subsidiaries that require the intensive use of
capital, such as underwriting and trading activities and the financing of
customer account balances, and also could restrict Holdings' ability to
withdraw capital from Lehman Brothers and the Regulated Subsidiaries which in
turn could limit Holdings' ability to pay dividends, repay debt and redeem or
purchase shares of its outstanding capital stock. The Company is subject to
other domestic and international regulatory requirements with which it is
required to comply.
PLAN OF DISTRIBUTION
Holdings may sell the Securities in any one or more of the following ways:
(i) through, or through underwriting syndicates managed by, Lehman Brothers
alone or with one or more other underwriters; (ii) through one or more dealers
or agents (which may include Lehman Brothers); or (iii) directly to one or more
purchasers. The specific managing underwriter or underwriters or agent or
agents with respect to the offer and sale of Securities are set forth on the
cover of the Prospectus Supplement relating to such Securities and the members
of the underwriting syndicate, if any, are named in such Prospectus Supplement.
Only the underwriters or agents so named in such Prospectus Supplement are
underwriters or agents, respectively, in connection with such Securities. The
applicable Prospectus Supplement also describes the discounts and commissions
to be allowed or paid to the underwriters or agents, all other items
constituting underwriting or
23
<PAGE>
agency compensation, the discounts and commissions to be allowed or paid to
dealers, if any, and the exchanges, if any, on which such Securities will be
listed. Securities acquired by any underwriter will be acquired for its own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The obligations of the
underwriters to purchase such Securities will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase all such
Securities if any of such Securities are purchased. Any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time. To the extent, if any, that Securities to be
purchased by Lehman Brothers, as underwriter, are not resold by it or are not
resold at the public offering price set forth in an applicable Prospectus
Supplement, the funds derived from such offering by the Company on a
consolidated basis may be reduced.
If so indicated in an applicable Prospectus Supplement, Holdings will
authorize the underwriters named therein to solicit offers by certain
institutional investors to purchase Debt Securities providing for payment and
delivery on a future date specified in such Prospectus Supplement. There may be
limitations on the minimum amount which may be purchased by any such
institutional investor or on the portion of the aggregate principal amount of
the particular Debt Securities which may be sold pursuant to such arrangements.
Institutional investors to which such offers may be made, when authorized,
include commercial and savings banks, insurance companies, pension funds,
educational charitable institutions and such other institutions as may be
approved by Holdings. The obligations of any such purchasers pursuant to such
delayed delivery and payment arrangements will not be subject to any conditions
except (i) the purchase by an institution of the particular Debt Securities
shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject, and
(ii) Holdings shall have sold to such underwriters the total principal amount
of such Debt Securities less the principal amount thereof covered by such
arrangements. Underwriters named therein will not have any responsibility in
respect of the validity of such arrangements or the performance of Holdings or
such institutional investors thereunder.
Each distributor of Bearer Securities will agree that it will not offer or
sell during the restricted period, directly or indirectly, Bearer Securities in
the United States or to United States persons (other than as discussed under
"Limitations on Issuance of Bearer Securities") and in connection with the sale
of Bearer Securities during the restricted period, will not deliver definitive
Bearer Securities within the United States. See "Limitations on Issuance of
Bearer Securities."
Each underwriter or agent will represent and agree that (i) it has not
offered or sold and will not offer or sell any Debt Securities to persons in
the United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purpose of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995
(the "Regulations"); (ii) it complied and will comply with all applicable
provisions of the Financial Services Act 1986 and the Regulations with respect
to anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and
will only issue or pass on to any person in the United Kingdom any document
received by it in connection with the issue of the Securities if that person is
of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995 or is a person to whom such
document may otherwise lawfully be issued or passed on.
This Prospectus together with an applicable Prospectus Supplement may also be
used by Lehman Brothers in connection with offers and sales of Securities
related to market making transactions, by and through Lehman Brothers, at
negotiated prices related to prevailing market prices at the time of sale or
otherwise. Lehman Brothers may act as principal or agent in such transactions.
The underwriting and agency arrangements for any offering of the Securities
will comply with the requirements of Schedule E of the By-laws of the NASD
regarding an NASD member firm's affiliate's participating in distributing its
affiliate's securities.
24
<PAGE>
ERISA MATTERS
Each of Holdings and Lehman Brothers may be considered a "party in interest"
within the meaning of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and a "disqualified person" under corresponding provisions
of the Code, with respect to certain employee benefit plans. Certain
transactions between an employee benefit plan and a party in interest or
disqualified person may result in "prohibited transactions" within the meaning
of ERISA and the Code. ANY EMPLOYEE BENEFIT PLAN PROPOSING TO INVEST IN THE
DEBT SECURITIES SHOULD CONSULT WITH ITS LEGAL COUNSEL.
LEGAL OPINIONS
Unless otherwise indicated in an applicable Prospectus Supplement, the
validity of the Securities offered hereby will be passed upon for Holdings by
Karen M. Muller, Esq., Deputy General Counsel of Holdings and for the
underwriters or agents by Simpson Thacher & Bartlett (a partnership which
includes professional corporations), 425 Lexington Avenue, New York, New York
10017. Simpson Thacher & Bartlett acts as counsel in various matters for
Holdings, Lehman Brothers and certain of their subsidiaries.
INDEPENDENT ACCOUNTANTS
The consolidated financial statements and schedules of the Company for the
eleven months ended November 30, 1994 and for the years ended December 31, 1993
and December 31, 1992, appearing in the Company's Transition Report on Form 10-
K for the eleven months ended November 30, 1994, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements and schedules are, and audited financial statements included in
subsequently filed documents will be, incorporated herein by reference in
reliance upon the reports of Ernst & Young LLP pertaining to such financial
statements (to the extent covered by consents filed with the Securities and
Exchange Commission) given upon the authority of such firm as experts in
accounting and auditing.
25
<PAGE>
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- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS 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 DOES 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 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 OF THIS PROSPECTUS.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION...................................................... 2
DOCUMENTS INCORPORATED BY
REFERENCE................................................................. 2
THE COMPANY................................................................ 3
USE OF PROCEEDS............................................................ 3
RATIO OF EARNINGS TO FIXED CHARGES......................................... 3
RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS........................................................... 4
DESCRIPTION OF DEBT SECURITIES............................................. 4
DESCRIPTION OF OFFERED PREFERRED STOCK..................................... 15
LIMITATIONS ON ISSUANCE OF BEARER
SECURITIES................................................................ 19
UNITED STATES TAXATION..................................................... 20
CAPITAL REQUIREMENTS....................................................... 23
PLAN OF DISTRIBUTION....................................................... 23
ERISA MATTERS.............................................................. 25
LEGAL OPINIONS............................................................. 25
INDEPENDENT ACCOUNTANTS.................................................... 25
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LEHMAN BROTHERS HOLDINGS INC.
DEBT SECURITIES
PREFERRED STOCK
------------------
PROSPECTUS
, 1995
------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses to be incurred and paid by the
Registrant in connection with the offering described in this Registration
Statement to the then underwriting discounts and commissions.
<TABLE>
<S> <C>
SEC registration fee........................................... $1,034,483
NASD Listing Fee............................................... 30,500
New York Stock Exchange Listing Fee............................ 7,500*
Legal fees and expenses........................................ 50,000*
Accounting fees and expenses................................... 50,000*
Fees and expenses of Transfer Agent............................ 25,000*
Blue Sky qualification fees and expenses....................... 25,000*
Printing and engraving fees.................................... 40,000*
Miscellaneous.................................................. 5,017*
----------
Total........................................................ $1,267,500
==========
</TABLE>
- --------
* Estimated and subject to future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation of the Registrant requires the
Registrant to indemnify its directors and officers to the fullest extent
permitted by Delaware General Corporation Law. In addition, the directors of
the Registrant are insured under officers' and directors' liability insurance
policies purchased by the Company. The directors, officers and employees of the
Registrant are also insured against fiduciary liabilities under the Employee
Retirement Income Security Act of 1974.
Any underwriting agreement or agency agreement with respect to an offering of
securities registered hereunder will provide for indemnification of the
Registrant and its officers and directors by the underwriters or agents, as the
case may be, against certain liabilities including liabilities under the
Securities Act of 1933.
ITEM 16. EXHIBITS
The Exhibit Index beginning on page E-1 is hereby incorporated by reference.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 (the "Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which has
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
II-1
<PAGE>
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purposes of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 62085 TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY
OF NEW YORK, STATE OF NEW YORK, ON THE 25TH DAY OF OCTOBER, 1995.
Lehman Brothers Holdings Inc.
/s/ Michael R. Milversted
By___________________________________
Name: Michael R. Milversted
Title:Treasurer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT NO. 62085 HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURES TITLE DATE
Chief Executive
* Officer and, October 25,
- ------------------------------------- Chairman of the 1995
RICHARD S. FULD, JR. Board of Directors
(principal
executive officer)
Chief Operating
* Officer, President October 25,
- ------------------------------------- and Director 1995
T. CHRISTOPHER PETTIT
Chief Financial
* Officer, (principal October 25,
- ------------------------------------- financial officer) 1995
ROBERT MATZA
Controller
* (principal October 25,
- ------------------------------------- accounting officer) 1995
DAVID GOLDFARB
Director
* October 25,
- ------------------------------------- 1995
ROGER S. BERLIND
Director
* October 25,
- ------------------------------------- 1995
KATSUMI FUNAKI
Director
* October 25,
- ------------------------------------- 1995
HENRY KAUFMAN
II-3
<PAGE>
SIGNATURES TITLE DATE
Director
* October 25,
- ------------------------------------- 1995
JOHN D. MACOMBER
Director
* October 25,
- ------------------------------------- 1995
DINA MERRILL
Director
* October 25,
- ------------------------------------- 1995
MASATAKA SHIMASAKI
Director
* October 25,
- ------------------------------------- 1995
MALCOLM WILSON
/s/ Michael R. Milversted
*By: ___________________________
Michael R. Milversted
Attorney-in-Fact
October 25, 1995
II-4
<PAGE>
EXHBIT INDEX
<TABLE>
<CAPTION>
FILED HEREWITH (--), PAGE NUMBER
PREVIOUSLY FILED(*) IN SEQUENTIAL
XHIBITE OR INCORPORATED BY NUMBERING
NUMBER DESCRIPTION REFERENCE TO SYSTEM
- ------- ----------- -------------------- -------------
<S> <C> <C> <C>
1(a) -- Form of Agency Agreement Exhibit 1(a) to Registration
Statement No. 33-65674
filed July 7, 1993
1(b) -- Form of Underwriting Agreement Exhibit 1(b) to Registration
(including Delayed Delivery Statement No. 33-56615
Contract) for Debt Securities filed
November 23, 1994
1(c) -- Form of Placement Agency Exhibit 1(c) to Post-Effec-
Agreement tive Amendment No. 1 to
Registration Statement No.
33-16141 filed November 16,
1987
1(d) -- Form of Underwriting Agreement *
for Preferred Stock
4(a) -- Holdings Standard Multiple Series Exhibit 4(a) to Post-Effec-
Indenture Provisions dated July tive Amendment No. 1 to
30, 1987 and as amended November Registration Statement No.
16, 1987 33-16141 filed November 16,
1987
4(b) -- Indenture dated as of September Exhibit 4(b) to Post-Effec-
1, 1987 between Holdings and tive Amendment No. 1 to
Citibank, N.A., as Trustee, with Registration Statement No.
respect to the Senior Debt 33-16141 filed on November
Securities 16, 1987
4(c) -- Revised Form of Indenture between Exhibit 4(c) to Post-Effec-
Holdings and Chemical Bank, as tive Amendment No. 1 to
Trustee, with respect to the Registration Statement No.
Subordinated Debt Securities 33-16141 filed on November
16, 1987
4(d) -- Supplemental Indenture, dated as Exhibit 4(m) to Registration
of November 25, 1987, between Statement No. 33-25797
Holdings and Citibank, N.A., as filed on November 25, 1988
Trustee, with respect to the
Senior Debt Securities
4(e) -- Second Supplemental Indenture, Exhibit 4(e) to Registration
dated as of November 27, 1990 Statement No. 33-49062
between Holdings and Citibank, filed on June 30, 1992
N.A., as Trustee, with respect to
the Senior Debt Securities
4(f) -- Third Supplemental Indenture Exhibit 4(f) to Registration
dated as of September 13, 1991, Statement No. 33-46146
between Holdings and Citibank, filed on March 10, 1992
N.A., as Trustee, with respect to
the Senior Debt Securities
4(g) -- Fourth Supplemental Indenture Exhibit 4(f) to Form 8-A
dated as of October 4, 1993, filed
between Holdings and Citibank, October 7, 1993
N.A., as Trustee, with respect to
Senior Debt Securities
4(h) -- Fifth Supplemental Indenture *
dated as of August 1, 1995 between
Holdings and Citibank, N.A., as
Trustee, with respect to Senior
Debt Securities
</TABLE>
E-1
<PAGE>
<TABLE>
<CAPTION>
FILED HEREWITH (--), PAGE NUMBER
PREVIOUSLY FILED(*) IN SEQUENTIAL
XHIBITE OR INCORPORATED BY NUMBERING
NUMBER DESCRIPTION REFERENCE TO SYSTEM
- ------- ----------- -------------------- -------------
<S> <C> <C> <C>
4(i) -- Form of Fixed Rate Note Exhibit 4(d) to Registration
Statement No. 33-40990
filed May 31, 1991
4(j) -- Form of Variable Rate Note Exhibit 4(e) to Registration
Statement No. 33-40990
filed May 31, 1991
4(k) -- Form of Medium-Term Note (Fixed- Exhibit 4(f) to Registration
Rate) Statement No. 33-16141
filed July 30, 1987
4(l) -- Form of Medium-Term Note Exhibit 4(g) to Registration
(Floating Rate) Statement No. 33-16141
filed July 30, 1987
4(m) -- Form of Bearer Security for Exhibit 4(h) to Post-Effec-
Fixed-Rate Note and Form of tive Amendment No. 1 to
Related Coupon Registration Statement 33-
16141 filed November 16,
1987
4(n) -- Form of Bearer Security for Exhibit 4(i) to Post-Effec-
Variable Rate Note and Form of tive Amendment No. 1 to
Related Coupon Registration Statement No.
33-16141 filed November 16,
1987
4(o) -- Form of Bearer Security for Exhibit 4(j) to Post-Effec-
Medium-Term Note (Fixed Rate) and tive Amendment No. 1 to
Form of Related Coupon Registration Statement No.
33-16141 filed
November 16, 1987
4(p) -- Form of Bearer Security for Exhibit 4(k) to Post-Effec-
Medium-Term Note (Floating Rate) tive Amendment No. 1 to
and Form of Related Coupon Registration Statement 33-
16141 filed November 16,
1987
4(q) -- Form of Serial Zero Coupon Senior Exhibit 4.1 to Holdings'
Note Current Report on Form 8-K
dated April 27, 1988
4(r) -- Form of Medium-Term Note, Series Exhibit 4(o) to Registration
B (Fixed Rate) Statement No. 33-37226
filed on
October 16, 1990
4(s) -- Form of Medium-Term Note, Series Exhibit 4(p) to Registration
B (Floating Rate) Statement No. 33-37226
filed on October 16, 1990
4(t) -- Indenture, dated as of May 1, Exhibit 4.1 to the E.F. Hut-
1986, between the E.F. Hutton ton Group Inc.'s Registra-
Group Inc. ("Group") and United tion Statement on Form S-3
States Trust Company of New York (Reg. No. 33-3663)
("U.S. Trust"), as trustee with
respect to the Guaranteed Notes
4(u) -- Supplemental Indenture, dated as Exhibit 4(r) to Registration
of June 15, 1988 between Group and Statement No. 33-37226
U.S. Trust, with respect to the filed on
Guaranteed Notes October 16, 1990
</TABLE>
E-2
<PAGE>
<TABLE>
<CAPTION>
FILED HEREWITH (--), PAGE NUMBER
PREVIOUSLY FILED(*) IN SEQUENTIAL
XHIBITE OR INCORPORATED BY NUMBERING
NUMBER DESCRIPTION REFERENCE TO SYSTEM
- ------- ----------- -------------------- -------------
<S> <C> <C> <C>
4(v) -- Form of Medium-Term Note, Series Exhibit 4(t) to Registration
C (Fixed Rate) Statement No. 33-40990
filed May 31, 1991
4(w) -- Form of Medium-Term Note, Series Exhibit 4(u) to Registration
C (Floating Rate) Statement No. 33-40990
filed May 31, 1991
4(x) -- Form of Medium-Term Note, Series Exhibit 4(v) to Registration
D (Fixed Rate) Statement No. 33-49062
filed June 30, 1992
4(y) -- Form of Medium-Term Note, Series Exhibit 4(w) to Registration
D (Floating Rate) Statement No. 33-49062
filed June 30, 1992
4(z) -- Form of Medium-Term Note, Series Exhibit 4(y) to Registration
E (Fixed Rate) Statement No. 33-56615
filed
November 23, 1994
4(aa) -- Form of Medium-Term Note, Series Exhibit 4(z) to Registration
E (Floating Rate) Statement No. 33-56615
filed
November 23, 1994
4(bb) -- Form of Medium-Term Note, Series Exhibit 4(aa) to Registra-
E (Currency Indexed) tion Statement No. 33-56615
filed
November 23, 1994
4(cc) -- Form of Certificate of *
Designations
5 -- Opinion and consent of Karen M. *
Muller, Esq.
8 -- Opinion and consent of Simpson *
Thacher & Bartlett regarding
certain tax matters
12(a) -- Computation of ratio of earnings Exhibit 12 to Holdings'
to fixed charges Transition Report on Form
10-K for the eleven months
ended November 30, 1994 and
to Holdings' Quarterly Re-
port on Form 10-Q for the
six month period ended May
31, 1995
12(b) -- Computation of ratio of earnings --
to combined fixed charges and
preferred dividends
23(a) -- Consent of Karen M. Muller, Esq. *
(included in Exhibit 5)
23(b) -- Consent of Ernst & Young LLP, --
Independent Auditors
23(c) -- Consent of Simpson Thacher & *
Bartlett (included in Exhibit 8)
24 -- Power of Attorney *
25(a) -- Form T-1 Statement of Eligibility *
and Qualification under Trust
Indenture Act of 1939 of Citibank,
N.A.
25(b) -- Form T-1 Statement of Eligibility --
and Qualification under Trust
Indenture Act of 1939 of Chemical
Bank
</TABLE>
E-3
<PAGE>
EXHIBIT 12(b)
Lehman Brothers Holdings Inc. and Subsidiaries
Computation in Support of Ratio of Earnings to Combined Fixed Charges and
Preferred Dividends
(Dollars in millions)
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Eleven Months Nine Months
Ended Ended
For the Year Ended December 31, November 30, August 31,
------------------------------- ------------ ----------
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Combined Fixed Charges
and Preferred Dividends:
Interest expense:
Subordinated Indebtedness $203 $170 $150 $144 $158 $152
Bank loans and other
borrowings* 4,531 4,755 5,035 5,224 6,294 7,523
Interest component of rentals
of office equipment 62 70 74 76 42 34
Other adjustments** 8 2 2 7 4 22
------ ------ ------ ------ ------ ------
Total Fixed Charges 4,804 4,997 5,261 5,451 6,498 7,731
Preferred dividends (tax
equivalent basis) 48 48 48 48 58 49
------ ------ ------ ------ ------ ------
TOTAL (A) $4,852 $5,045 $5,309 $5,499 $6,556 $7,780
====== ====== ====== ====== ====== ======
Earnings:
Pretax income (loss) from
continuing operations ($749) $150 ($247) $27 $193 $269
Fixed charges 4,804 4,997 5,261 5,451 6,498 7,731
Other adjustments*** (17) 7 (6) (4) (21)
------ ------ ------ ------ ------ ------
TOTAL (B) $4,038 $5,154 $5,014 $5,472 $6,687 $7,979
====== ====== ====== ====== ====== ======
(B / A) **** 1.02 **** **** 1.02 1.03
</TABLE>
* Includes amortization of long-term debt discount.
** Other adjustments include capitalized interest and debt issuance costs
and amortization of capital interest.
*** Other adjustments include adding the net loss of affiliates accounted
for at equity whose debt is not guaranteed by the Company and
subtracting capitalized interest and debt issuance costs and
undistributed net income of affiliates accounted for at equity.
**** Earnings were inadequate to cover combined fixed charges and preferred
dividends and would have had to increase approximately $814 million in
1990, $295 million in 1992, and $27 million in 1993 to cover the
deficiency.
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm as experts under the caption
"Independent Accountants" in Amendment No. 1 to the Registration Statement on
Form S-3 (File No. 33-62085) and related Prospectus of Lehman Brothers Holdings
Inc. (the "Company") for the registration of $3,000,000,000 of debt securities
and preferred stock and in a post effective amendment to the Registration
Statement on Form S-3 (File No. 33-56615) of the Company and to the
incorporation by reference therein of our report dated January 5, 1995, included
in the 1994 Annual Report to Stockholders of Lehman Brothers Holdings Inc.
Ernst & Young LLP
New York, New York
October 25, 1995
<PAGE>
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
LEHMAN BROTHERS HOLDINGS INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-3216325
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
3 WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10285
(Address of principal executive offices) (Zip Code)
___________________________________________
DEBT SECURITIES
(Title of the indenture securities)
_____________________________________________________
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 6TH day of OCTOBER, 1995.
CHEMICAL BANK
By /s/ F. J. Grippo
--------------------------------------
F. J. Grippo
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1995, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions
Noninterest-bearing balances and
currency and coin...................................... $ 5,573
Interest-bearing balances.............................. 2,681
Securities: ................................................
Held to maturity securities ................................ 6,027
Available for sale securities .............................. 18,304
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold .................................... 1,516
Securities purchased under agreements to resell ....... 287
Loans and lease financing receivables:
Loans and leases, net of unearned income..... $73,829
Less: Allowance for loan and lease losses.... 1,885
Less: Allocated transfer risk reserve........ 104
Loans and leases, net of unearned income, -------
allowance, and reserve ................................ 71,840
Trading Assets ............................................. 25,315
Premises and fixed assets (including capitalized
leases) ............................................... 1,395
Other real estate owned .................................... 69
Investments in unconsolidated subsidiaries and
associated companies .................................. 158
Customer's liability to this bank on acceptances
outstanding ........................................... 1,120
Intangible assets .......................................... 484
Other assets ............................................... 7,254
--------
TOTAL ASSETS ............................................... $142,023
========
</TABLE>
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices.............................................. $ 46,128
Noninterest-bearing.......................................$16,282
Interest-bearing.......................................... 29,846
-------
In foreign offices, Edge and Agreement subsidiaries, and IBF's... 30,833
Noninterest-bearing.......................................$ 199
Interest-bearing.......................................... 30,634
-------
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBF's
Federal funds purchased.......................................... 16,779
Securities sold under agreements to repurchase................... 810
Demand notes issued to the U.S. Treasury............................. 1,001
Trading liabilities.................................................. 20,888
Other Borrowed money:
With original maturity of one year or less....................... 6,505
With original maturity of more than one year..................... 602
Mortgage indebtedness and obligations under capitalized leases....... 18
Bank's liability on acceptances executed and outstanding............. 1,126
Subordinated notes and debentures.................................... 3,411
Other liabilities.................................................... 6,287
TOTAL LIABILITIES.................................................... 134,388
--------
EQUITY CAPITAL
Common stock......................................................... 620
Surplus.............................................................. 4,524
Undivided profits and capital reserves............................... 2,724
Net unrealized holding gains (Losses) on available-for-sale
securities....................................................... (241)
Cumulative foreign currency translation adjustments.................. 8
TOTAL EQUITY CAPITAL................................................. 7,635
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK AND EQUITY CAPITAL... $142,023
========
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank,
do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the appropriate Federal
regulatory authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us, and
to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the appropriate Federal
regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM S. HARRISON )
- 5 -
