<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 24, 1995
REGISTRATION STATEMENT NO. 33-
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-56615
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
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 AGENT FOR SERVICE)
EXECUTIVE OFFICES)
Copy to:
RAYMOND W. WAGNER, ESQ. JENNIFER MARRE, ESQ.
SIMPSON THACHER & BARTLETT LEHMAN BROTHERS INC.
425 LEXINGTON AVENUE NEW YORK, 3 WORLD FINANCIAL CENTER
NEW YORK 10017 NEW YORK, NEW YORK 10285
---------------
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
-------------------------------------------------------------------------------
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE AGGREGATE PRICE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1)(2)(3) PER UNIT PRICE(2)(3)(4) REGISTRATION FEE(5)
------------------------------------------------------------------------------------------------------------
<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>
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(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) Estimated solely for calculating the registration fee.
(5) 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.
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<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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, dated August 24, 1995
PROSPECTUS
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. $4,441,600,000 (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, Japanese Yen Bear Warrants Expiring
September 15, 1995, 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 and May 31, 1995.
(3) Holdings' Current Reports on Form 8-K dated January 6, 1995, March
24, 1995 and June 28, 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 six months ended May 31, 1995:
<TABLE>
<CAPTION>
ELEVEN MONTHS SIX MONTHS
YEAR ENDED DECEMBER 31 ENDED ENDED
------------------------------------------- NOVEMBER 30, MAY 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 six months ended May 31, 1995:
<TABLE>
<CAPTION>
ELEVEN MONTHS SIX MONTHS
YEAR ENDED DECEMBER 31 ENDED ENDED
------------------------------------------ NOVEMBER 30, MAY 31,
1990 1991 1992 1993 1994 1995
---- ------ ----- ----- ------------- ----------
<S> <C> <C> <C> <C> <C>
* 1.02 * * 1.02 1.02
</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, fixed charges and preferred stock dividends. "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.
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).
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
Unless otherwise provided with respect to a series of Debt Securities, the
Debt Securities will be issuable as Registered Securities without coupons and
in denominations of $1,000 or any integral multiple thereof. 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 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
6
<PAGE>
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. Unless
otherwise indicated in an applicable Prospectus Supplement, 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, 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).
Unless otherwise indicated in an applicable Prospectus Supplement, 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.
Unless otherwise specified in an applicable Prospectus Supplement, 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 July 31, 1995,
Holdings' Designated Subsidiaries were Lehman Brothers, Lehman Commercial Paper
Inc., Lehman Brothers Holdings PLC, Lehman Brothers UK Holdings Limited, Lehman
Brothers International (Europe), Lehman Brothers Japan Inc., Lehman Brothers
Government Securities Inc., Lehman Brothers U.K. Holdings (Delaware) Inc. and
Lehman Brothers Financial Products Inc.
EVENTS OF DEFAULT
Except as may otherwise be set forth in an applicable Prospectus Supplement
relating to a series of Debt Securities, the following are Events of Default
under the Indenture with respect to Debt Securities of such series: (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). 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 July 31,
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
Unless otherwise specified in an applicable Prospectus Supplement, 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
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such equity securities rank junior to such Offered Preferred Stock
(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").
Unless otherwise indicated in the applicable Prospectus Supplement, 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 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.
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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.
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>
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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;
(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
II-1
<PAGE>
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 REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW
YORK, ON THE 24TH DAY OF AUGUST, 1995.
Lehman Brothers Holdings Inc.
/s/ Michael R. Milversted
By___________________________________
Name: Michael R. Milversted
Title:Treasurer
II-3
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS THOMAS A. RUSSO, ROBERT MATZA AND MICHAEL R.
MILVERSTED AND EACH OF THEM, HIS TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS,
WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION, FOR HIM AND IN HIS NAME,
PLACE AND STEAD, IN ANY AND ALL CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS
(INCLUDING POST-EFFECTIVE AMENDMENTS) AND SUPPLEMENTS TO THIS REGISTRATION
STATEMENT AND ANY REGISTRATION STATEMENT PREVIOUSLY FILED BY THE REGISTRANT OR
A PREDECESSOR IN INTEREST, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND
OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE
COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, AND EACH OF THEM,
FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING
REQUISITE AND NECESSARY TO BE DONE, AS FULLY TO ALL INTENTS AND PURPOSES AS HE
MIGHT OR COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT SAID
ATTORNEYS-IN-FACT AND AGENTS, OR ANY OF THEM, OR THEIR SUBSTITUTES, MAY
LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
SIGNATURES TITLE DATE
---------- ----- ----
/s/ Richard S. Fuld, Jr. Chief Executive August 24, 1995
------------------------------------- Officer and,
RICHARD S. FULD, JR. Chairman of the
Board of Directors
(principal
executive officer)
/s/ T. Christopher Pettit Chief Operating August 24, 1995
------------------------------------- Officer, President
T. CHRISTOPHER PETTIT and Director
/s/ Robert Matza Chief Financial August 24, 1995
------------------------------------- Officer, (principal
ROBERT MATZA financial officer)
/s/ David Goldfarb Controller (principal August 24, 1995
------------------------------------- accounting officer)
DAVID GOLDFARB
/s/ Roger S. Berlind Director August 24, 1995
-------------------------------------
ROGER S. BERLIND
/s/ Katsumi Funaki Director August 24, 1995
-------------------------------------
KATSUMI FUNAKI
/s/ Henry Kaufman Director August 24, 1995
-------------------------------------
HENRY KAUFMAN
II-4
<PAGE>
SIGNATURES TITLE DATE
---------- ----- ----
/s/ John D. Macomber Director August 24, 1995
-------------------------------------
JOHN D. MACOMBER
/s/ Dina Merrill Director August 24, 1995
-------------------------------------
DINA MERRILL
/s/ Masataka Shimasaki Director August 24, 1995
-------------------------------------
MASATAKA SHIMASAKI
/s/ Malcolm Wilson Director August 24, 1995
-------------------------------------
MALCOLM WILSON
II-5
<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 -- 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
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 Included on Page II-4 of
this Registration Statement
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 Exhibit 26(b) to Registra-
and Qualification under Trust tion Statement No. 33-40990
Indenture Act of 1939 of Chemical filed May 31, 1991
Bank
</TABLE>
E-3
<PAGE>
EXHIBIT 1.D
Preferred Stock
LEHMAN BROTHERS HOLDINGS INC.
UNDERWRITING AGREEMENT
----------------------
New York, New York
Dated the date set forth
In Schedule I hereto
To the Representative(s)
named in Schedule I
hereto, of the Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
Lehman Brothers Holdings Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you and the other underwriters named in Schedule
II hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), the number of shares identified in Schedule I hereto (the
"Firm Stock") of the Company's preferred stock, par value $1.00 per share (the
"Preferred Stock"). In addition, the Company proposes to grant to the
Underwriters an option to purchase up to an additional number of shares of the
Preferred Stock identified in Schedule I hereto on the terms and for the
purposes set forth in Section 2 (the "Option Stock"). The Firm Stock and the
Option Stock, if purchased, are hereinafter collectively called the "Stock". If
the firm or firms listed in Schedule II hereto include only the firm or firms
listed in Schedule I hereto, then the terms "Underwriters" and "Representatives"
shall each be deemed to refer to such firm or firms. This is to confirm the
agreement concerning the purchase of the Stock from the Company by the
Underwriters named in Schedule II hereto.
1. Representations and Warranties. The Company represents and warrants to
each Underwriter that:
(a) The Company meets the requirements for the use of Form S-3 under
the Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations promulgated thereunder (the "Rules"), and has
carefully prepared and filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (the file number of
which is set forth in Schedule I hereto), which has become effective, for
the registration of the Stock under the Securities Act. The registration
statement, as
<PAGE>
2
amended at the date of this Agreement, meets the requirements set forth in
Rule 415(a)(1)(x) under the Securities Act and complies in all other
material respects with such rule. The Company proposes to file with the
Commission pursuant to Rule 424 under the Securities Act ("Rule 424") a
supplement to the form of prospectus included in the registration statement
relating to the initial offering of the Stock and the plan of distribution
thereof and has previously advised you of all further information
(financial and other) with respect to the Company to be set forth therein.
The term "Registration Statement" means the registration statement, as
amended at the date of this Agreement, including the exhibits thereto,
financial statements, and all documents incorporated therein by reference
pursuant to Item 12 of Form S-3 (the "Incorporated Documents"), and such
prospectus as then amended, including the Incorporated Documents, is
hereinafter referred to as the "Basic Prospectus"; and such supplemented
form of prospectus, in the form in which it shall be filed with the
Commission pursuant to Rule 424 (including the Basic Prospectus as so
supplemented), is hereinafter called the "Final Prospectus". Any
preliminary form of the Basic Prospectus which has heretofore been filed
pursuant to Rule 424 is hereinafter called the "Interim Prospectus". Any
reference herein to the Registration Statement, the Basic Prospectus, any
Interim Prospectus or the Final Prospectus shall be deemed to refer to and
include the Incorporated Documents which were filed under the Securities
Exchange Act of 1934 (the "Exchange Act"), on or before the date of this
Agreement or the issue date of the Basic Prospectus, any Interim Prospectus
or the Final Prospectus, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any Interim Prospectus or the
Final Prospectus shall be deemed to refer to and include the filing of any
Incorporated Documents under the Exchange Act after the date of this
Agreement or the issue date of the Basic Prospectus, any Interim Prospectus
or the Final Prospectus, as the case may be, and deemed to be incorporated
therein by reference.
(b) As of the date hereof, when the Final Prospectus is first filed
with the Commission pursuant to Rule 424, when, before either Delivery Date
(hereinafter defined), any amendment to the Registration Statement becomes
effective, when, before either Delivery Date, any Incorporated Document is
filed with the Commission, when any supplement to the Final Prospectus is
filed with the Commission and at each Delivery Date, the Registration
Statement, the Final Prospectus and any such amendment or supplement will
comply in all material respects with the applicable requirements of the
Securities Act and the Rules, and the Incorporated Documents will comply in
all material respects with the requirements of the Exchange Act or the
Securities Act, as
<PAGE>
3
applicable, and the rules and regulations adopted by the Commission
thereunder; on the date it became effective, the Registration Statement did
not, and, on the date that any post-effective amendment to the Registration
Statement becomes effective, the Registration Statement as amended by such
post-effective amendment did not or will not, as the case may be, contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; on the date the Final Prospectus is filed with the
Commission pursuant to Rule 424 and on each Delivery Date, the Final
Prospectus, as it may be amended or supplemented, will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; and on said dates,
the Incorporated Documents will comply in all material respects with the
applicable provisions of the Exchange Act and rules and regulations of the
Commission thereunder, and, when read together with the Final Prospectus,
or the Final Prospectus as it may be then amended or supplemented, will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading; provided that the foregoing representations and warranties in
this paragraph (b) shall not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives on behalf of any Underwriter
specifically for use in connection with the preparation of the Registration
Statement or the Final Prospectus, as they may be amended or supplemented.
(c) The Basic Prospectus and any Interim Prospectus, as of their
respective dates, complied in all material respects with the requirements
of the Securities Act and of the Rules and did not include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Commission has not issued
an order preventing or suspending the use of the Basic Prospectus or any
Interim Prospectus.
(d) The nationally recognized firm of independent public accountants
whose report appears in the Company's most recent Annual Report on Form 10-
K, which is incorporated by reference in the Final Prospectus, are
independent public accountants as required by the Securities Act and the
Rules.
<PAGE>
4
(e) In the event that a report of a nationally recognized firm of
independent public accountants regarding historical financial information
with respect to any entity acquired by the Company is required to be
incorporated by reference in the Final Prospectus, such independent public
accountants were independent public accountants, as required by the
Securities Act and the Rules, during the period of their engagement to
examine the financial statements being reported on and at the date of their
report.
(f) The audited consolidated financial statements of the Company in
the Final Prospectus and the Registration Statement present fairly on a
consolidated basis the financial position, the results of operations,
changes in common stock and other stockholder's equity and cash flows of
the Company and its subsidiaries, as of the respective dates and for the
respective periods indicated, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved. The unaudited consolidated financial statements of the Company,
if any, included in the Final Prospectus and the Registration Statement and
the related notes are true, complete and correct, subject to normally
recurring changes resulting from year-end audit adjustments, and have been
prepared in accordance with the instructions to Form 10-Q.
(g) Except as described in or contemplated by the Registration
Statement and the Final Prospectus, there has not been any material adverse
change in or any adverse development which materially affects the business,
properties, financial condition or results of the Company or the Company
and its subsidiaries taken as whole, from the dates as of which information
is given in the Registration Statement and Final Prospectus.
(h) The Stock conforms to the description thereof contained in the
Final Prospectus, is duly and validly authorized, and, when issued and
delivered against payment therefor as provided in this Agreement, will be
validly issued, fully paid and non-assessable.
(i) The Company does not have any subsidiaries having business or
properties that are material to the business and properties of the Company
and its subsidiaries taken as a whole with the exception of Lehman Brothers
Inc. ("Lehman") and the possible exception of Lehman Commercial Paper Inc.
(the "Named Subsidiaries"). Neither the Company nor any of the Named
Subsidiaries is in violation of its corporate charter or by-laws or in
default under any agreement, indenture or instrument, the effect of which
violation or default would be material to the Company and its subsidiaries
taken as a whole. The execution, delivery and performance of this
Agreement will not constitute a breach of, result in the creation or
imposition of any material
<PAGE>
5
lien, charge or encumbrance upon any of the assets of the Company or any of
its subsidiaries pursuant to the terms of, or constitute a default under,
any material agreement, indenture or instrument, or result in a violation
of the corporate charter or by-laws of the Company or any of its
subsidiaries or any order, rule or regulation of any court or governmental
agency having jurisdiction over the Company, any of the Named Subsidiaries
or their property. Except as set forth in the Final Prospectus or as
required by the Securities Act, the Exchange Act and applicable state
securities laws, no consent, authorization or order of, or filing or
registration with, any court or governmental agency is required for the
execution, delivery and performance of this Agreement.
(j) The Company and each of the Named Subsidiaries have been duly
organized, are validly existing and in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to do
business and in good standing as foreign corporations and are fully
registered as a broker-dealer, broker, dealer or investment advisor, as the
case may be, in each jurisdiction in which their respective ownership of
property or the conduct of their respective businesses requires such
qualification or registration and in which the failure to qualify or
register would be reasonably likely, individually or in the aggregate, to
have a material adverse effect on the business, condition or properties of
the Company and its subsidiaries taken as a whole. Each of the Company and
its Named Subsidiaries holds all material licenses, permits, and
certificates from governmental authorities necessary for the conduct of its
business and owns, or possesses adequate rights to use, all material rights
necessary for the conduct of such business and has not received any notice
of conflict with the asserted rights of others in respect thereof; and each
of the Company and its Named Subsidiaries has the corporate power and
authority necessary to own or hold its properties and to conduct the
businesses in which it is engaged. Except as may be disclosed in the
Registration Statement and the Final Prospectus, all outstanding shares of
capital stock of the Named Subsidiaries are owned by the Company, directly
or indirectly through subsidiaries, free and clear of any lien, pledge and
encumbrance or any claim of any third party and are duly authorized,
validly issued and outstanding, fully paid and non-assessable.
(k) Except as described in the Registration Statement and the Final
Prospectus, there is no material litigation or governmental proceeding
pending or, to the knowledge of the Company, threatened against the Company
or any of its subsidiaries which might reasonably be expected to result in
any material adverse change in the business, properties, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole or which is required
<PAGE>
6
to be disclosed in the Registration Statement and the Final Prospectus.
(l) The certificates delivered pursuant to paragraph (f) of Section 6
hereof and all other documents delivered by the Company or its
representatives in connection with the issuance and sale of the Stock were
on the dates on which they were delivered, or will be on the dates on which
they are to be delivered, in all material respects true and complete.
2. Sale and Purchase of the Stock. The Company agrees to sell to
each Underwriter, and each Underwriter, on the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein stated, agrees to purchase from the Company the number of
shares of Firm Stock set forth opposite the name of such Underwriter in Schedule
II hereto. The obligations of the Underwriters under this Agreement are several
and not joint.
In addition, the Company grants to the Underwriters an option to
purchase up to an additional number of shares of Option Stock indicated in
Schedule I hereto. Such option is granted solely for the purpose of covering
over-allotments in the sale of Firm Stock and is exercisable as provided in
Section 3 hereof. Shares of Option Stock shall be purchased severally for the
account of the Underwriters in proportion to the number of shares of Firm Stock
set forth opposite the name of such Underwriters in Schedule II hereto. The
respective purchase obligations of each Underwriter with respect to the Option
Stock shall be adjusted by the Representatives so that no Underwriter shall be
obligated to purchase Option Stock other than in 100 share amounts. The price
of both the Firm Stock and any Option Stock shall be the price per share
indicated in Schedule I hereto.
3. Delivery and Payment. Delivery by the Company of the Firm Stock
to the Representatives for the respective accounts of the several Underwriters
and payment by the Underwriters therefor by certified or official bank check or
checks payable in, or by wire transfer of, immediately available (federal) funds
to or upon the order of the Company shall take place at the office, on the date
and at the time specified in Schedule I hereto, which date and time may be
postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Firm Stock being herein called the "First Delivery Date").
The Firm Stock will be registered in such names and in such authorized
denominations as the Representatives may request no less than two full business
days in advance of the First Delivery Date. The Company agrees to have the Firm
Stock available for inspection, checking and packaging by the Representatives at
such place as is designated by the
<PAGE>
7
Representatives, not later than 1:00 p.m., New York City time, on the business
day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date as of which
the Registration Statement is declared effective by the Commission, the option
granted in Section 2 may be exercised by written notice being given to the
Company by the Representatives. Such notice shall set forth the aggregate
number of shares of Option Stock as to which the option is being exercised, the
names in which the shares of Option Stock are to be registered, the
denominations in which the shares of Option Stock are to be issued and the date
and time, as determined by the Representatives, when the shares of Option Stock
are to be delivered; provided, however, that this date and time shall not be
earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes referred to as a "Delivery Date".
Delivery by the Company of the Option Stock to the Representatives for
the respective accounts of the several Underwriters and payment by the
Underwriters therefor by certified or official bank check or checks payable in,
or by wire transfer of, immediately available (federal) funds to or upon the
order of the Company shall take place at the office and at the time specified in
Schedule I hereto, on the Second Delivery Date, which date and time may be
postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof.
The Option Stock will be registered in such names and in such
authorized denominations as the Representatives may request in the aforesaid
written notice. The Company agrees to have the Option Stock available for
inspection, checking and packaging by the Representatives at such place as is
designated by the Representatives, not later than 1:00 p.m., New York City time,
on the business day prior to the Second Delivery Date.
4. Offering by Underwriters. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed any Interim Prospectus and are authorized to distribute the Final
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters). The
Representatives agree that, as soon as the Representatives believe the offering
of the Stock has been terminated, the Representatives will so advise the
Company.
5. Agreements. The Company agrees with the several Underwriters
that:
<PAGE>
8
(a) The Company will cause the Final Prospectus to be filed with the
Commission pursuant to Rule 424 not later than 10:00 a.m., New York City
time, on the business day following the date of this Agreement and will
promptly advise the Representatives (A) when the Final Prospectus shall
have been filed with the Commission pursuant to Rule 424, (B) when any
amendment to the Registration Statement relating to the Stock shall have
become effective, (C) of any request by the Commission for any amendment of
the Registration Statement, the Final Prospectus, the Basic Prospectus or
any Interim Prospectus, or for any additional information, (D) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threatening of any
proceedings for that purpose and (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. After the date of this Agreement and prior to
the termination of the offering of the Stock, the Company will not file any
amendment of the Registration Statement or amendment or supplement to the
Final Prospectus (except an amendment or supplement to the Final Prospectus
that is deemed to be incorporated by reference in the Final Prospectus
pursuant to Item 12 of Form S-3) without the consent of the Representatives
and will use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the withdrawal thereof.
Prior to receipt of the advice to be given by the Representatives pursuant
to Section 4, the Company will not file any document that would be deemed
to be incorporated by reference in the Final Prospectus pursuant to Item 12
of Form S-3 without delivering to the Representatives a copy of the
document proposed to be so filed, such delivery to be made at least twenty-
four hours prior to such filing, and the Company will consult with the
Representatives as to any comments which the Representatives make in a
timely manner with respect to the document so delivered.
(b) Subject to the last sentence of the immediately preceding
paragraph, if, at any time when a prospectus relating to the Stock is
required to be delivered under the Securities Act, any event occurs as a
result of which the Final Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if it shall be necessary at any time to amend or supplement the Final
Prospectus to comply with the Securities Act or the Rules, the Company
promptly will prepare and file with the Commission an amendment or
supplement which will correct such statement or omission or an amendment
which will effect
<PAGE>
9
such compliance and will use its best efforts to cause any amendment of the
Registration Statement containing an amended Final Prospectus to be made
effective as soon as possible.
(c) The Company will deliver to the Representatives, without charge,
(i) signed copies of the Registration Statement relating to the Stock and
of any amendments thereto (including all exhibits filed with, or
incorporated by reference in, any such document) and (ii) as many conformed
copies of the Registration Statement and of any amendments thereto which
shall become effective on or before the First Delivery Date (excluding
exhibits) as the Representatives may reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by an Underwriter or dealer, the Company will deliver, without
charge to the Representatives and to Underwriters and dealers, at such
office or offices as the Representatives may designate, as many copies of
the Basic Prospectus, any Interim Prospectus and the Final Prospectus as
the Representatives may reasonably request.
(e) The Company will make generally available to its security holders
and to the Representatives as soon as practicable an earnings statement
(which need not be audited) of the Company and its subsidiaries, covering a
period of at least 12 months beginning after the date the Final Prospectus
is filed with the Commission pursuant to Rule 424, which will satisfy the
provisions of Section 11(a) of the Securities Act.
(f) The Company will furnish such information, execute such
instruments and take such actions as may be required to qualify the Stock
for offering and sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Stock; provided,
however, that the Company shall not be required to qualify to do business
in any jurisdiction where it is not now so qualified or to take any action
which would subject it to general or unlimited service of process in any
jurisdiction where it is not now so subject.
(g) So long as any Stock is outstanding, the Company will furnish or
cause to be furnished to the Representatives copies of all annual reports
and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K,
or such other similar forms as may be designated by the Commission.
(h) If the Company has applied for the listing of the Stock on the New
York Stock Exchange Inc. (the "NYSE"), it will use its best efforts to
cause such listing to be approved as soon as possible.
<PAGE>
10
(i) For a period beginning at the time of execution of this Agreement
and ending on the later of the business day following either the Second
Delivery Date or following the date on which any price restrictions on the
sale of the Stock are terminated, without the prior consent of the
Representatives, the Company will not offer, sell, contract to sell or
otherwise dispose of any shares of Preferred Stock (other than the Stock),
or sell or grant options, rights or warrants with respect to any shares of
Preferred Stock covered by the Registration Statement or any other
registration statement filed under the Securities Act.
(j) The Company will use its best efforts to do and perform all things
to be done and performed hereunder prior to each Delivery Date and to
satisfy all conditions precedent to the delivery of the Stock to be
purchased hereunder.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Stock shall be subject to the
accuracy in all material respects of the representations and warranties on the
part of the Company contained herein as of the date hereof and each Delivery
Date, to the accuracy of any material statements made in any certificates,
opinions, affidavits, written statements or letters furnished to the
Representatives or to Simpson Thacher & Bartlett ("Underwriters' Counsel")
pursuant to this Section 6, to the performance by the Company of its respective
obligations hereunder and to the following additional conditions:
(a) The Final Prospectus shall have been filed with the Commission
pursuant to Rule 424 not later than 10:00 a.m., New York City time, on the
business day following the date of this Agreement or such later date and
time as shall be consented to in writing by the Representatives.
(b) No order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall be in effect and no
proceedings for such purpose shall be pending before or threatened by the
Commission and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Final
Prospectus or otherwise) shall have been complied with to the reasonable
satisfaction of the Representatives.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, there shall not have been
any change or decrease specified in the letter or letters referred to in
paragraphs (g) or (h) of this Section 6 which, in the judgment of the
Representatives, makes it impracticable or inadvisable to proceed with the
offering and delivery of the Stock as contemplated by the Registration
Statement and the Final Prospectus.
<PAGE>
11
(d) The Company shall have furnished to the Representatives the
opinion of a Deputy General Counsel or the Chief Legal Officer for the
Company, dated the day of each Delivery Date to the effect that:
(i) The Company has been duly organized and is validly existing
and in good standing under the laws of the jurisdiction of its
incorporation with all requisite corporate power and authority to own
and operate its properties and to conduct its business as described in
the Final Prospectus.
(ii) The Stock conforms in all material respects to the
descriptions thereof contained in the Final Prospectus.
(iii) The Company has an authorized capitalization as set forth
in the Final Prospectus, and all of the issued shares of capital stock
of the Company (including the shares of Stock being delivered on such
Delivery Date) have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus;
(iv) There are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's charter or by-laws or
any agreement or other instrument known to such counsel;
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated in this Agreement, except for such consents,
approvals, authorizations or orders as have been obtained under the
Securities Act and such as may be required under the Exchange Act and
the blue sky laws of any jurisdiction in connection with the purchase
and distribution of the Stock by the Underwriters.
(vi) Such counsel does not know of any contracts or other
documents which are required to be filed as exhibits to the
Registration Statement by the Securities Act or by the Rules which
have not been filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules.
(vii) To the best of such counsel's knowledge, neither
the Company nor any of its Named Subsidiaries is in violation of its
corporate charter or by-laws, or in default under any material
agreement, indenture or instrument known to such counsel, the effect
of which
<PAGE>
12
violation or default would be material to the Company and its
subsidiaries taken as a whole.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company; the execution, delivery and performance of
this Agreement by the Company will not constitute a breach of, or
result in the creation or imposition of any material lien, charge or
encumbrance upon any of the assets of the Company or any of its Named
Subsidiaries pursuant to the terms of, or constitute a default under,
any material agreement, indenture or instrument known to such counsel
and to which the Company or any of its Named Subsidiaries is a party
or is bound, or result in a violation of the corporate charter or by-
laws of the Company or any of its Named Subsidiaries or any order,
rule or regulation known to such counsel of any court or governmental
agency having jurisdiction over the Company, any of its Named
Subsidiaries or any of their respective properties, the effect of
which would be material to the Company and its subsidiaries taken as a
whole.
(ix) The Registration Statement has become effective under the
Securities Act, and, to the best of the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose is pending or
threatened by the Commission.
(x) The Registration Statement, the Final Prospectus and each
amendment thereof or supplement thereto (except that no opinion need
be expressed as to the financial statements or other financial or
statistical data included or incorporated by reference therein) comply
as to form in all material respects with the requirements of the
Securities Act and the Rules.
(xi) If the Stock is to be listed on the NYSE, authorization
therefor has been given, subject to official notice of issuance and
evidence of satisfactory distribution, or the Company has filed a
preliminary listing application and all required supporting documents
with respect to the Stock with the NYSE, and such counsel has no
reason to believe that the Stock will not be authorized for listing,
subject to official notice of issuance and evidence of satisfactory
distribution.
(xii) Each of the Named Subsidiaries is a duly organized and
validly existing corporation in good standing under the laws of the
jurisdiction of its incorporation with all requisite corporate power
and authority to own and operate its properties and to
<PAGE>
13
conduct its business as described in the Final Prospectus. Each of
the Company and its Named Subsidiaries is duly qualified to do
business as a foreign corporation, is in good standing and is duly
registered as a broker-dealer, broker, dealer or investment advisor,
as the case may be, in each jurisdiction in which the nature of the
business conducted by it or in which the ownership or holding by lease
of the properties owned or held by it require such qualification or
registration and where the failure to so qualify or register would
have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(xiii) All the outstanding shares of capital stock of each of
the Company's Named Subsidiaries have been duly and validly authorized
and issued and are fully paid and non-assessable and, except for
directors' qualifying shares, are owned by the Company or a subsidiary
of the Company free and clear of any claims, liens, encumbrances and
security interests.
(xiv) Such counsel does not know of any litigation or any
governmental proceeding pending or threatened against the Company or
any of its subsidiaries which would affect the subject matter of this
Agreement or is required to be disclosed in the Final Prospectus which
is not disclosed and correctly summarized therein.
Such opinion shall also contain a statement that although such counsel
is not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Final Prospectus (except as to those matters stated in
paragraph (ii) of such opinion), such counsel has no reason to believe that (i)
the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading or (ii) the Final Prospectus contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except that no opinion need be expressed as to the
financial statements or other financial or statistical data included or
incorporated by reference therein).
In rendering such opinion, such counsel may rely upon opinions of
local counsel satisfactory to the Representatives for matters not governed by
New York law and may rely as to matters of fact, to the extent such counsel
deems proper, upon certificates or affidavits of officers of the Company and
public officials.
<PAGE>
14
(e) The Representatives shall have received from Underwriters' Counsel
such opinion or opinions, dated the day of such Delivery Date, with respect to
the issuance and sale of the Stock, the Registration Statement, the Final
Prospectus and other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of its Chief Executive Officer, its President or any Managing
Director or Executive Vice President or Vice President and its Chief Financial
Officer or its Treasurer, dated the day of each Delivery Date, to the effect
that, to the best of their knowledge after due inquiry:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
such Delivery Date with the same effect as if made on such Delivery
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to such Delivery Date.
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or threatened.
(iii) (x) The Registration Statement does not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (y) the Final Prospectus does not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and (z) since the effective date of the
Registration Statement there has not occurred any event required to be
set forth in an amended or supplemented prospectus which has not been
so set forth.
(g) At the time this Agreement is executed, a nationally recognized
firm of independent public accountants shall have furnished to the
Representatives a letter, dated the date of this Agreement, in form and
substance satisfactory to the Representatives, confirming that they are
independent auditors with respect to the Company within the meaning of the
Securities Act and the Rules and stating in effect that:
<PAGE>
15
(i) In their opinion, the consolidated financial statements of
the Company and its subsidiaries, and the supporting schedules,
included in the Registration Statement and the Final Prospectus and
audited by them comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
Exchange Act and the related published rules and regulations
thereunder.
(ii) On the basis of a reading of the unaudited consolidated
financial statements of the Company and its subsidiaries, if any,
included in the Registration Statement and the Final Prospectus,
carrying out certain specified procedures (but not an audit in
accordance with generally accepted auditing standards), a reading of
the minutes of the meetings of the directors of the Company and Lehman
and inquiries of certain officials of the Company and its subsidiaries
who have responsibility for financial and accounting matters of the
Company and its subsidiaries, as to transactions and events subsequent
to the date of the most recent audited consolidated financial
statements included in the Registration Statement and the Final
Prospectus, nothing came to their attention that caused them to
believe that any material modifications should be made to the
unaudited consolidated financial statements of the Company and its
subsidiaries, if any, included in the Registration Statement and the
Final Prospectus for them to be in conformity with generally accepted
accounting principles; and such financial statements do not comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act and the related published rules and
regulations.
(iii) If pro forma financial statements are included in the
Registration Statement or the Final Prospectus, (x) they have read
such pro forma financial statements, (y) they have made inquiries of
certain officials of the Company who have responsibility for financial
and accounting matters of the Company as to the basis for their
determination of the pro forma adjustments and whether such pro forma
financial statements comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-X
and (z) they have proved the arithmetic accuracy of the application of
the pro forma adjustments to historical amounts; and as a result
thereof, nothing came to their attention that caused them to believe
that such pro forma financial statements do not so comply with Rule
11-02 of Regulation S-X and that such pro forma adjustments have not
been properly applied to the historical amounts in the compilation of
those statements.
<PAGE>
16
(iv) They have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is expressed in
dollars, or percentages derived from dollar amounts, and has been
obtained from the general accounting records of the Company) set forth
in the Registration Statement, as amended, and the Final Prospectus,
as amended or supplemented, and in Exhibit 12 to the Registration
Statement, including specified information, if any, included or
incorporated from the Company's Annual Report on Form 10-K
incorporated therein or specified information, if any, included or
incorporated from any of the Company's Quarterly Reports on Form 10-Q
or its Current Reports on Form 8-K incorporated therein, agrees with
the accounting records of the Company and its subsidiaries or
computations made therefrom, excluding any questions of legal
interpretation.
The letter required by this paragraph (g) may refer to a prior letter
of such nationally recognized firm of independent public accountants, addressed
to the Company, covering the above items (a "Prior Letter"). For the purposes
of the letter required by this paragraph (g), such nationally recognized firm of
independent public accountants need not perform any procedures subsequent to the
date of the Prior Letter.
(h) At each Delivery Date, the nationally recognized firm of
independent public accountants referred to in paragraph (g) of this Section 6
shall have furnished to the Representatives a letter, dated the day of such
Delivery Date, in form and substance satisfactory to the Representatives, which
reconfirms the matters set forth in their letter delivered pursuant to paragraph
(g) of this Section 6 and states in effect that:
(i) In their opinion, any consolidated financial statements of
the Company and its subsidiaries, and the supporting schedules,
included in the Registration Statement and the Final Prospectus and
audited by them and not covered by their letter delivered pursuant to
paragraph (g) of this Section 6 comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the Exchange Act and the related published rules and
regulations thereunder.
(ii) On the basis of a reading of the unaudited consolidated
financial statements of the Company and its subsidiaries, if any,
included in the Registration Statement and the Final Prospectus and of
the latest unaudited consolidated financial statements made available
by the Company and Lehman, carrying out certain specified procedures
(but not an audit in accordance with generally accepted auditing
standards),
<PAGE>
17
a reading of the minutes of the meetings of the directors of the
Company, and inquiries of certain officials of the Company and its
subsidiaries, who have responsibility for financial and accounting
matters of the Company and its subsidiaries, as to transactions and
events subsequent to the date of the most recent audited consolidated
financial statements included in the Registration Statement and the
Final Prospectus, nothing came to their attention that caused them to
believe that:
(A) any material modifications should be made to the
unaudited consolidated financial statements of the Company and
its subsidiaries, if any, included in the Registration Statement
and the Final Prospectus and not covered by their letter
delivered pursuant to paragraph (g) of this Section 6, for them
to be in conformity with generally accepted accounting
principles; and such financial statements do not comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act and the published
instructions, rules and regulations thereunder.
(B) the unaudited capsule information of the Company and its
subsidiaries, if any, included in the Registration Statement and
the Final Prospectus does not agree with the amounts set forth in
the unaudited consolidated financial statements of the Company
from which it was derived or was not determined on a basis
substantially consistent with that of the corresponding financial
information in the latest audited financial statements of the
Company included in the Registration Statement and the Final
Prospectus.
(C)(I) as of the latest date as of which the Company and its
subsidiaries have monthly financial statements, there was any
decrease in the capital stock or additional paid-in capital, or
increase in long-term indebtedness of the Company and its
subsidiaries, or any increase in the accumulated deficit, as
compared with the amounts shown in the most recent consolidated
statement of financial condition of the Company and its
subsidiaries included in the Registration Statement and the Final
Prospectus, (II) with respect to the period subsequent to the
date of the most recent financial statements included in the
Registration Statement and the Final Prospectus and extending
through the latest date as of which the Company and its
subsidiaries have
<PAGE>
18
monthly financial statements, there was a consolidated net loss
or (III) with respect to the amounts of net capital or excess net
capital of Lehman determined pursuant to Commission Rule 15c3-1
and shown in the most recent financial statement of Lehman filed
pursuant to Commission Rule 17a-5, there has been any decrease in
such amounts as compared with the amounts shown in the most
recent consolidated financial statements included in the
Registration Statement and the Final Prospectus;
(D) as of a specified date not more than five business days
prior to the date of the letter, (I) there was any decrease in
the capital stock or additional paid-in capital, or increase in
long-term indebtedness of the Company and its subsidiaries as
compared with the amounts shown in the most recent consolidated
statement of financial condition of the Company and its
subsidiaries included in the Registration Statement and the Final
Prospectus or (II) there was any decrease in the estimated
amounts of net capital or excess net capital of Lehman determined
pursuant to Commission Rule 15c3-1, as compared with the amounts
shown on the most recent financial statement of Lehman filed
pursuant to Commission Rule 17a-5, such that Lehman did not
satisfy the requirements of Section 5 of Schedule E to Article
III of the By-Laws of the National Association of Securities
Dealers, Inc., which permit releases of proceeds from escrow;
except in all instances for increases or decreases set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof, unless said
explanation is not deemed necessary by the Representatives.
(iii) If pro forma financial statements are included in the
Registration Statement or the Final Prospectus and are not covered by
their letter delivered pursuant to paragraph (g) of this Section 6,
(x) they have read such pro forma financial statements, (y) they have
made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company as
to the basis for their determination of the pro forma adjustments and
whether such pro forma financial statements comply as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and (z) they have proved the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts; and as a result thereof, nothing
<PAGE>
19
came to their attention that caused them to believe that such pro
forma financial statements do not so comply with Rule 11-02 of
Regulation S-X and that such pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements.
(iv) To the extent not covered by their letter delivered
pursuant to paragraph (g) of this Section 6, they have performed
certain other specified procedures as a result of which they
determined that certain information of an accounting, financial or
statistical nature (which is expressed in dollars, or percentages
derived from dollar amounts, and has been obtained from the general
accounting records of the Company) set forth in the Registration
Statement, as amended, and the Final Prospectus, as amended or
supplemented, and in Exhibit 12 to the Registration Statement,
including specified information, if any, included or incorporated from
the Company's Annual Report on Form 10-K incorporated therein or
specified information, if any, included or incorporated from any of
the Company's Quarterly Reports on Form 10-Q or its Current Reports on
Form 8-K incorporated therein, agrees with the accounting records of
the Company and its subsidiaries or computations made therefrom,
excluding any questions of legal interpretation.
(i) So long as historical financial information with respect to any
entity acquired by the Company is required to be included in the Registration
Statement or the Final Prospectus, at each Delivery Date, a nationally
recognized firm of independent public accountants shall have furnished to the
Representatives a letter, dated the day of such Delivery Date, in form and
substance satisfactory to the Representatives, confirming that they are, or were
as of a stated time, independent public accountants within the meaning of the
Securities Act and the Rules and stating in effect that:
(i) in their opinion the audited consolidated financial
statements of such entity acquired by the Company, and the supporting
schedules, included in the Registration Statement and Final Prospectus
and examined by them, comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and the
related published rules and regulations of the Commission thereunder;
and
(ii) they have performed certain other specified procedures as a
result of which they determined that certain historical financial
information relating to such entity acquired by the Company as
required to be reported pursuant to rules and regulations promulgated
under the Exchange Act agree with the accounting
<PAGE>
20
records of such entity acquired by the Company or computations made
therefrom, excluding any questions of legal interpretation.
(j) Subsequent to the execution of this Agreement, there shall not
have been any decrease in the ratings of any of the Company's debt securities by
Moody's Investors Service, Inc. or Standard & Poor's Corporation.
Prior to each Delivery Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives or Underwriters' Counsel may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates or opinions furnished to the Representatives or Underwriters'
Counsel pursuant to this Section 6 shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and to
Underwriters' Counsel, this Agreement and all obligations of the Underwriters
hereunder may be cancelled at, or at any time prior to, each Delivery Date by
the Representatives. Notice of such cancellation shall be given to the Company
in writing, or by telegraph confirmed in writing.
7. Expenses. (a) Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, the Company
will pay all costs and expenses incident to the performance of the obligations
of the Company hereunder, including, without limiting the generality of the
foregoing, all costs, taxes and expenses incident to the issuance, sale and
delivery of the Stock to the Underwriters, all fees and expenses of the
Company's counsel and accountants, all costs and expenses incident to the
preparing, printing and filing of the Registration Statement (including all
exhibits thereto), any Interim Prospectus, the Basic Prospectus, the Final
Prospectus and any amendments thereof or supplements thereto, and the rating of
the Stock by one or more rating agencies, all costs and expenses (including fees
of Underwriters' Counsel and their disbursements) incurred in connection with
blue sky qualifications, advising on the legality of the Stock for investment,
the filing requirements, if any, of the National Association of Securities
Dealers, Inc. in connection with its review of corporate financings, the fee for
listing the Stock on the NYSE and all costs and expenses of the printing and
distribution of all documents in connection with such offering. Except as
provided in this Section 7, the Company will have no responsibility to the
Underwriters for the Underwriters' own costs and expenses, including the fees of
Underwriters' Counsel and any advertising expenses in connection with any offer
the Underwriters may make.
<PAGE>
21
(b) If the sale of the Stock provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied or because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or comply
with any provision hereof, the Company will, subject to demand by the
Representatives, reimburse the Underwriters for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the Stock.
8. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person who controls such Underwriter within
the meaning of the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, as originally filed or in any amendment
thereof, or in any Interim Prospectus, the Basic Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company as herein stated by the Representatives on
behalf of any Underwriter specifically for use in connection with the
preparation thereof, and (ii) such indemnity with respect to the Basic
Prospectus or any Interim Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the person
asserting any such loss, claim, damage or liability purchased the Stock which is
the subject thereof if such person did not receive a copy of the Final
Prospectus at or prior to the confirmation of the sale of such Stock to such
person in any case where such delivery is required by the Securities Act and the
untrue statement or omission of a material fact contained in the Basic
Prospectus or any Interim Prospectus was corrected in the Final Prospectus,
unless such failure to deliver the Final Prospectus was a result of
noncompliance by the Company with Section 5(d) hereof. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
<PAGE>
22
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person, if any, who controls the Company within
the meaning of the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Basic Prospectus, any Interim
Prospectus or the Final Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that the same was made therein in reliance upon and in conformity
with written information furnished to the Company as herein stated by the
Representatives on behalf of such Underwriter specifically for use in the
preparation thereof, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The statements set forth in the last paragraph
of the cover page and under the heading "Underwriting" in the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the Registration Statement and the Final
Prospectus, as the case may be, and you, as the Representatives, confirm that
such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and either (i) the indemnifying party or parties and
the indemnified party or parties mutually agree or (ii) representation of both
the indemnifying party or parties and the indemnified party or
<PAGE>
23
parties by the same counsel is inappropriate under applicable standards of
professional conduct due to actual or potential differing interests between
them, the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed counsel in connection with the assumption
of legal defenses in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the
Representatives in the case of subparagraph (a) representing the indemnified
parties under subparagraph (a), as the case may be, who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subparagraph (a) of
this Section 8 is due in accordance with its terms but is for any reason held by
a court to be unavailable from the Company on grounds of policy or other similar
grounds, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to which
the Company and one or more of the Underwriters may be subject in such
proportion so that the Underwriters are responsible for that portion represented
by the percentage that the underwriting discounts appearing on the cover page of
the Final Prospectus bear to the public offering prices appearing thereon and
the Company is responsible for the balance; provided, however, that (i) in no
case shall any Underwriter (except as may be provided in any agreement among
underwriters) be responsible for any amount in excess of the underwriting
discounts applicable to the Stock purchased by such Underwriter hereunder and
(ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
the Securities Act shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Securities Act or the Exchange Act, each
<PAGE>
24
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this subparagraph (d).
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this subparagraph (d), notify such party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this
subparagraph (d).
9. Default by an Underwriter. If, on either Delivery Date, any one
or more Underwriters shall fail to purchase and pay for all of the Stock agreed
to be purchased by such Underwriter or Underwriters hereunder and such failure
to purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the number
of shares of Firm Stock set forth opposite their names in Schedule II hereto
bear to the aggregate number of shares of Firm Stock set opposite the names of
the remaining Underwriters) the Stock which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date; provided,
however, that in the event that the aggregate number of shares of Stock which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date shall exceed 10% of the aggregate number of shares of the Stock,
the remaining Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Stock, and if such non-
defaulting Underwriters do not purchase all the Stock, this Agreement (or, with
respect to the Second Delivery Date, the obligation of the Underwriters to
purchase, and of the Company to sell, the Option Stock) will terminate without
liability to any non-defaulting Underwriters or the Company. In the event of a
default by any Underwriter as set forth in this Section 9, the particular
Delivery Date shall be postponed for such period, not exceeding seven days, as
the Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing herein contained shall relieve any
defaulting Underwriter of its liability, if any, to the Company and any non-
defaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
at or prior to delivery of and payment for all the Firm Stock, if, prior to such
time (i) trading in securities generally on the NYSE or the over-the-counter
market shall have been suspended or limited or minimum prices shall have been
established on the NYSE or the over-the-
<PAGE>
25
counter market, (ii) a banking moratorium shall have been declared either by
federal or New York State authorities, (iii) any new restriction materially
affecting the distribution of the Stock shall have become effective or trading
in any securities of the Company shall have been suspended or halted by any
national securities exchange, the National Association of Securities Dealers,
Inc. or the Commission, (iv) the United States becomes engaged in hostilities or
there is an escalation in hostilities involving the United States or there is a
declaration of a national emergency or war by the United States, or (v) there
shall have been such a material adverse change in national or international
political, financial or economic conditions, national or international equity
markets or currency exchange rates or controls as to make it, in the judgment of
the Representatives, inadvisable or impracticable to proceed with the payment
for and delivery of the Stock.
11. Representations and Indemnities to Survive Delivery. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers (as such officers) and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its officers or directors or any
controlling person within the meaning of the Securities Act, and will survive
delivery of the payment for the Stock.
12. Notices. All communications hereunder will be in writing, and,
if sent to the Representatives will be mailed, delivered, telegraphed or telexed
and confirmed to them, at the address specified in Schedule I hereto; or, if
sent to the Company will be mailed, delivered, telegraphed or telexed and
confirmed to it at 3 World Financial Center, New York, New York 10285,
Attention: Chief Financial Officer.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their successors and, to the extent and only
to the extent stated in Section 8 hereof, the officers and directors and
controlling persons referred to in Section 8 hereof, and except as provided in
Section 8 hereof, no person other than the parties hereto and their respective
successors will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
<PAGE>
26
Very truly yours,
LEHMAN BROTHERS HOLDINGS INC.
By____________________________________
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
LEHMAN BROTHERS INC.
By___________________________
Title:
Acting on behalf of the Representatives named
in Schedule I annexed hereto and the several
Underwriters named in Schedule II annexed hereto.
<PAGE>
SCHEDULE I
Date of Underwriting Agreement:
Registration Statement No. 33-
Representative and Address: Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
Description of Stock:
Title: % Cumulative Preferred Stock, Series ,
$1.00 par value per share
Number of shares
of Firm Stock: ____________ shares
Maximum number of shares
of Option Stock: ____________ shares
Price per share: $
Price to public:
Time of payment of
dividends:
Sinking fund
provisions:
Redemption
provisions:
Repayment
provisions:
Other provisions:
First Delivery Date, Time and Location:
Date:
Time:
Location:
<PAGE>
SCHEDULE II
NUMBER OF
SHARES OF
FIRM STOCK
TO BE
UNDERWRITERS PURCHASED
------------ ----------
Lehman Brothers Inc. ...................................................
Total .............................................................
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EXHIBIT 4.C(C)
CERTIFICATE OF DESIGNATIONS, POWERS,
PREFERENCES AND RIGHTS
OF THE
____ % CUMULATIVE PREFERRED STOCK, SERIES _
($25.00 initial liquidation preference per share)
OF
LEHMAN BROTHERS HOLDINGS INC.
_________________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
_________________________________
LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation having its
registered office at 1209 Orange Street, in the City of Wilmington, in the
County of New Castle (the "Corporation"), HEREBY CERTIFIES that resolutions were
duly adopted by the Board of Directors of the Corporation pursuant to the
authority conferred upon the Board of Directors of the Corporation by the
provisions of the Restated Certificate of Incorporation of the Corporation, and
by the Executive Committee thereof pursuant to the authority duly delegated
thereto by the Board of Directors of the Corporation, as follows:
RESOLVED, that the Corporation be, and it hereby is, authorized to
offer, issue and sell preferred stock, par value $1.00, with a liquidation
preference, in the aggregate, of up to $400,000,000 (the "New Preferred
Stock") in one or more series, on such terms, and with such designations,
preferences, relative, participating, optional, redemption, exchange or
other special rights, and such dividend periods, method of determining
dividend rates and such other terms and conditions as the Executive
Committee of the Board of Directors may approve; provided, however, that
the Executive Committee shall have no power or authority to alter the
voting rights of the New Preferred Stock as set forth in these resolutions;
and be it further
RESOLVED, that the designations, preferences, relative, participating,
optional, redemption, exchange or other special rights, and dividend
periods, method of determining dividend rates and such other terms and
conditions are hereby established as follows:
1. Designation and Amount; Fractional Shares. The Executive Committee of
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the Board of Directors has authorized the issuance of a series of preferred
stock designated as the "_____ % Cumulative Preferred Stock, Series _" (the
"Series _ Preferred Stock"). The Series _ Preferred Stock shall be perpetual
and the authorized number of shares of Series _ Preferred Stock shall be eight
million (8,000,000) shares. The Series _ Preferred Stock is issuable in whole
shares only.
2. Dividends. Holders of shares of Series _ Preferred Stock shall be
---------
entitled to receive, when, as and if declared by the Board or a duly authorized
committee thereof out of assets of the Corporation legally available for
payment, cumulative cash dividends at the rate of ____% per annum per share on
the initial liquidation preference of 25.00 per share. Dividends on the Series
_ Preferred Stock shall be payable quarterly, in arrears on _____, _____, _____
and _____ of each year, commencing _____, 1995 (each a "Dividend Payment Date").
If any date on which dividends would otherwise be payable shall be or be
declared a national or New York State holiday, or if banking institutions in the
State of New York shall be closed because of a banking moratorium or otherwise
on such date, then the Dividend Payment Date shall be the next succeeding day on
which such banks shall be open. Dividends on shares of the Series _ Preferred
Stock shall be fully cumulative and shall accumulate (whether or not earned or
declared), on a daily basis, without interest, from the previous Dividend
Payment Date, except that the
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first dividend shall accumulate, without interest, from the date of initial
issuance of the Series _ Preferred Stock. Accumulated and unpaid dividends shall
not bear interest. Dividends shall be payable, in arrears, to holders of record
as they appear on the stock books of the Corporation on each record date, which
shall be the 15th day immediately preceding each such Dividend Payment Date
(each of which dates being a "Dividend Payment Record Date"), Dividends payable
on the Series _ Preferred Stock for the first dividend period and any partial
dividend period shall be computed on the basis of a 360 day year consisting of
twelve 30-day months. Dividends shall cease to accumulate on the Series _
Preferred Stock on the date of their earlier redemption pursuant to Section 6,
unless the Corporation shall default in providing funds for the payment of
redemption price on the shares called for redemption pursuant thereto.
No dividends may be declared or paid or set apart for payment on any Parity
Preferred Stock ( as defined in Section 8 below), 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 Series _ Preferred Stock, dividends for all dividend payment
periods of the Series _ 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 the Series _ 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 Series _ Preferred Stock have been paid through the most
recently completed quarterly dividend period for the Series _ Preferred Stock,
no dividends (other than in common stock of the Corporation) may be paid or
declared and set aside for payment or other distribution made upon the common
stock or on any other stock of the Corporation ranking junior to or on a parity
with the Series _ Preferred Stock as to dividends, nor may any common stock or
any other stock of the Corporation ranking junior to or on a parity with the
Series _ 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,
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that any moneys theretofore deposited in any sinking fund with respect to any
preferred stock of the Corporation 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
the Series _ Preferred Stock outstanding to the last dividend payment date shall
have been paid or declared and set apart for payment) by the Corporation;
provided that any such junior or parity stock or common stock may be converted
--------
into or exchanged for stock of the Corporation ranking junior to the Series _
Preferred Stock as to dividends.
3. Liquidation Preference. The shares of Series _ Preferred Stock shall
----------------------
rank, as to liquidation, dissolution or winding up of the Corporation, prior to
the shares of common stock and any other stock of the Corporation ranking junior
to the Series _ Preferred Stock as to rights upon liquidation, dissolution or
winding up of the Corporation, so that in the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of the Series _ Preferred Stock shall be entitled to receive out of
the assets of the Corporation available for distribution to its stockholders,
whether from capital, surplus or earnings, before any distribution is made to
holders of shares of common stock or any other such junior stock, an amount
equal to $25.00 per share (the "Liquidation Preference" of a share of Series _
Preferred Stock) plus an amount equal to all dividends (whether or not earned or
declared) accrued and accumulated and unpaid on the shares of Series _ Preferred
Stock to the date of final distribution. The holders of the Series _ Preferred
Stock shall not be entitled to receive the Liquidation Preference until the
liquidation preference of any other stock of the Corporation ranking senior to
the Series _ Preferred Stock as to rights upon liquidation, dissolution or
winding up shall have been paid (or a sum set aside therefor sufficient to
provide for payment) in full. After payment of the full amount of the
Liquidation Preference and such dividends, the holders of shares of Series _
Preferred Stock will not be entitled to any further participation in any
distribution of assets by the Corporation. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, 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. For the
purposes hereof, neither a consolidation or merger of the Corporation with or
into any other corporation, nor a merger of any other corporation
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with or into the Corporation, nor a sale or transfer of all or any part of the
Corporation's assets shall be considered a liquidation, dissolution or winding
up of the Corporation.
4. Conversion. The Series _ Preferred Stock is not convertible into, or
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exchangeable for, other securities or property.
5. Voting Rights. The Series _ Preferred Stock, except as provided
-------------
herein or as otherwise from time to time required by law, shall have no voting
rights. Whenever, at any time or times, dividends payable on the shares of
Series _ Preferred Stock or on any Parity Preferred Stock shall be in arrears
for an aggregate number of days equal to six calendar quarters or more, whether
or not consecutive, the authorized number of directors of the Corporation shall
automatically be increased by two and the holders of the Series _ Preferred
Stock shall have the right, with holders of shares of any one or more other
classes or series of Parity Preferred Stock outstanding at the time upon which
like voting rights have been conferred and are exercisable ("Voting Parity
Stock"), voting together as a class, to elect two directors (hereinafter the
"Preferred Directors" and each a "Preferred Director") to fill such newly
created directorships at the Corporation's next annual meeting of stockholders
and at each subsequent annual meeting of stockholders until such arrearages have
been paid or set aside for payment, at which time such right shall terminate,
except as herein or by law expressly provided, subject to revesting in the event
of each and every subsequent default of the character above mentioned. Upon any
termination of the right of the holders of shares of Series _ Preferred Stock
and Voting Parity Stock as a class to vote for directors as provided above, the
term of office of all Preferred Directors then in office shall terminate
immediately and the authorized number of directors shall be reduced by the
number of Preferred Directors elected pursuant hereto. Any Preferred Director
may be removed at any time, with or without cause. Any vacancy created thereby
may be filled only by the affirmative vote of the holders of shares of Series _
Preferred Stock voting separately as a class (together with the holders of
shares of Voting Parity Stock). If the office of any Preferred Director becomes
vacant for any reason other than removal from office as aforesaid, the remaining
Preferred Director may choose a successor who shall hold office for the
unexpired term in respect of which such vacancy occurred. At elections for such
directors, each holder of shares of Series _ Preferred Stock shall be entitled
to one vote for each share held (the holders of shares of any other class or
series of Voting Parity Stock being entitled to such number of votes, if any,
for each share of such stock held as may be granted to them.
So long as any shares of any Series _ Preferred Stock remain
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least a majority of the shares of such Series _ Preferred Stock
(i) authorize, create or issue any capital stock of the Corporation ranking, as
to dividends or upon liquidation, dissolution or winding up, prior to such
Series _ Preferred Stock, or reclassify any authorized capital stock of Holdings
into any such shares of such capital stock or issue any obligation or security
convertible into or evidencing the right to purchase any such shares of capital
stock, or (ii) amend, alter or repeal the certificate of designations for such
Series _ Preferred Stock, or the Restated Certificate of Incorporation of the
Corporation, whether by merger, consolidation or otherwise, so as to adversely
affect the powers, preferences or special rights of such Series _ Preferred
Stock. Any increase in the amount of authorized common stock or authorized
preferred stock, or any increase or decrease in the number of shares of any
series of preferred stock or the authorization, creation and issuance of other
classes or series of common stock or other stock, in each case ranking on a
parity with or junior to the shares of Series _ Preferred Stock with respect to
the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to adversely affect such powers,
preferences or special rights.
The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required or
upon which the holders of Series _ Preferred Stock shall be entitled to vote
shall be effected, all outstanding shares of Series _ Preferred Stock shall have
been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
6. Redemption. The shares of Series _ Preferred Stock shall not be
----------
redeemable prior to _________, 2000 on and after such date, the Corporation, at
its option, may redeem shares of the Series _ Preferred Stock, as a whole or in
part, at any time or from time to time, at a redemption price equal to $25.00
per share, plus, in each
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case, an amount equal to all dividends (whether or not earned or declared) and
accumulated and unpaid to, but excluding, the date fixed for redemption.
The holders of shares of Series _ Preferred Stock at the close of
business on a Dividend Payment Record Date shall be entitled to receive the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the call for redemption thereof (except that holders of shares
called for redemption on a date occurring between such Record Date and the
Dividend Payment Date shall not be entitled to receive such dividend on such
Dividend Payment Date) or the Corporation's default in payment of the dividend
due on such Dividend Payment Date.
In the event that fewer than all the outstanding shares of Series _
Preferred Stock are to be redeemed, the number of shares to be redeemed shall be
determined by the Board of Directors and the shares to be redeemed shall be
selected pro rata (as nearly as may be practicable without creating fractional
shares) or by any other means determined by the Board of Directors in its sole
discretion to be equitable, except the Corporation may redeem all shares held by
any holders of a number of shares not to exceed 100, including all shares held
by holders who, after giving effect to such redemption, would hold less than 100
shares, as may be specified by the Corporation.
If full cumulative dividends on the Series _ Preferred Stock have not
been paid, the Series _ Preferred Stock may not be redeemed in part and the
Corporation may not purchase or acquire any shares of the Series _ Preferred
Stock otherwise than pursuant to a purchase or exchange offer made on the same
terms to all holders of the Series _ Preferred Stock.
In the event the Corporation shall redeem shares of Series _ Preferred
Stock, written notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to
the redemption date, to each holder of record of the shares to be redeemed at
such holder's address as the same appears on the stock books of the Corporation;
provided, however, that no failure to give such notice nor any defect therein
shall affect the validity of the proceeding for the redemption of any shares of
Series _ Preferred Stock to be redeemed except as to the holder to whom the
Corporation has failed to mail said notice or except as to the holder whose
notice was defective. Each such notice shall state: (a) the redemption date;
(b) the number of shares of Series _ Preferred Stock to be redeemed and, if less
than all the shares held by such holder are to be redeemed from such holder, the
number of shares to be redeemed from such holder; (c) the redemption price and
any accumulated and unpaid dividends to the redemption date; (d) the place or
places where certificates for such shares are to be surrendered for payment of
the redemption price; and (e) that dividends on the shares to be redeemed will
cease to accrue on such redemption date (unless the Corporation shall default in
providing funds for the payment of the redemption price of the shares called for
redemption at the time and place specified in such notice).
If a notice of redemption has been given pursuant to this Paragraph 6
and if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Series _ Preferred Stock so called for redemption, then, notwithstanding that
any certificates for such shares have not been surrendered for cancellation, on
the redemption date dividends shall cease to accrue on the shares to be
redeemed, and at the close of business on the redemption date the holders of
such shares shall cease to be stockholders with respect to such shares and shall
have no interest in or claims against the Corporation by virtue thereof and
shall have no voting or other rights with respect to such shares, except the
right to receive the moneys payable upon surrender (and endorsement, if required
by the Corporation) of their certificates, and the shares evidenced thereby
shall no longer be outstanding. The Corporation's obligation to provide funds
for the payment of the redemption price (and any accumulated and unpaid
dividends to the redemption date) of the shares called for redemption shall be
deemed fulfilled if, on or before a redemption date, the Corporation shall
deposit, with a bank or trust company, or an affiliate of a bank or trust
company, having an office or agency in New York City and having a capital and
surplus of at least $50,000,000, such funds sufficient to pay the redemption
price (and any accumulated and unpaid dividends to the redemption date) of the
shares called for redemption, in trust for the account of the holders of the
shares to be redeemed (and so as to be and continue to be available therefor),
with irrevocable instructions and
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authority to such bank or trust company that such funds be delivered upon
redemption of the shares of Series _ Preferred Stock so called for redemption.
Subject to applicable escheat laws, any moneys so set aside by the
Corporation and unclaimed at the end of two years from the redemption date shall
revert to the general funds of the Corporation, after which reversion the
holders of such shares so called for redemption shall look only to the general
funds of the Corporation for the payment of the amounts payable upon such
redemption. Any interest accrued on funds so deposited shall be paid to the
Corporation from time to time.
Shares of Series _ Preferred Stock that have been issued and
reacquired in any manner, including shares purchased or redeemed, shall (upon
compliance with any applicable provisions of the laws of the State of Delaware)
have the status of authorized and unissued shares of the class of Preferred
Stock undesignated as to series and may be redesignated and reissued as part of
any series of the preferred stock.
7. Amendment of Resolution. The Board reserves the right by from time to
-----------------------
time to increase or decrease the number of shares that constitute the Series _
Preferred Stock (but not below the number of shares thereof then outstanding)
and in other respects to amend this Certificate of Designations within the
limitations provided by law, this resolution and the Restated Certificate of
Incorporation.
8. Rank. Any stock of any class or classes or series of the Corporation
----
shall be deemed to rank:
(a) prior to shares of the Series _ Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if the
holders of stock of such class or classes or series shall be entitled by the
terms thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of shares of the Series _ Preferred Stock;
(b) on a parity with shares of the Series _ Preferred Stock, either as
to dividends or upon liquidation, dissolution or winding up, or both, whether or
not the dividend rates, dividend payment dates, or redemption or liquidation
prices per share thereof be different from those of the Series _ Preferred
Stock, if the holders of stock of such class or classes shall be entitled by the
terms thereof to the receipt of dividends or of amounts distributed upon
liquidation, dissolution or winding up, as the case may be, in proportion to
their respective dividend rates or liquidation prices, without preference or
priority of one over the other as between the holders of such stock and the
holders of shares of Series _ Preferred Stock; (the term "Parity Preferred
Stock" being used to refer to any stock on a parity with the shares of Series _
Preferred Stock, either as to dividend or upon liquidation dissolution or
winding up, or both, as the content may require,; and
(c) junior to shares of the Series _ Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if such class
or classes or series shall be common stock or if the holders of the Series _
Preferred Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of stock of such class or classes or
series.
The Series _ Preferred Stock shall rank, as to dividends and upon
liquidation, dissolution or winding up, on a parity with the Corporation's
Redeemable Voting Preferred Stock, the Corporation's Cumulative Convertible
Voting Preferred Stock, Series A and the Corporation's Cumulative Voting
Preferred Stock.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly
executed on its behalf by its undersigned Treasurer and attested to by its
Secretary this day of , 1995.
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EXHIBIT 4.H
THIS FIFTH SUPPLEMENTAL INDENTURE, dated as of August 1, 1995, is between
LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under
the laws of the State of Delaware (the "Company"), and CITIBANK, N.A., a
national banking association duly organized and existing under the laws of the
United States of America, acting as Trustee under the Original Indenture
referred to below (the "Trustee").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company has duly authorized the execution and delivery of an
Indenture dated as of September 1, 1987 (the "Original Indenture") to provide
for the issuance from time to time of its unsecured notes or other evidences of
indebtedness to be issued in one or more series (the "Securities"), as in the
Original Indenture provided, up to such principal amount or amounts as may from
time to time be authorized in or pursuant to one or more resolutions of the
Board of Directors;
WHEREAS, the Company has duly authorized the execution and delivery of a
Supplemental Indenture dated as of November 25, 1987 to incorporate by reference
Articles One through Thirteen of the Lehman Brothers Holdings Inc. Standard
Multiple-Series Indenture Provisions dated and filed with the Securities and
Exchange Commission (the "Commission") on July 30, 1987 and as amended and
refiled with the Commission on November 16, 1987 (the "Standard Provisions");
WHEREAS, the Company has duly authorized the execution and delivery of a
Second Supplemental Indenture dated as of November 27, 1990 to provide for the
issuance of global Securities in either registered or bearer form or in either
temporary or global form and for the defeasance of certain obligations;
WHEREAS, the Company has duly authorized the execution and delivery of a
Third Supplemental Indenture dated as of September 13, 1991 to provide for the
conformity of Section 602 of the Standard Provisions to Section 315(b) of the
Trust Indenture Act of 1939, as amended;
WHEREAS, the Company has duly authorized the execution and delivery of the
Fourth Supplemental Indenture dated as of October 4, 1993 in order to provide
for the issuance of, and clarify the treatment of Indexed Securities and Dual
Currency Securities (as each such terms are defined in the Indenture);
WHEREAS, the Company has duly authorized the execution and delivery of this
Fifth Supplemental Indenture in order to provide for the new Euroclear and Cedel
rules with respect to the exchange of Bearer Securities in global form (as each
such terms are defined herein and in the Indenture);
WHEREAS, the Original Indenture, as amended by the Supplemental Indenture,
the Second Supplemental Indenture, the
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2
Third Supplemental Indenture and the Fourth Supplemental Indenture, is
hereinafter referred to as the "Indenture";
WHEREAS, Section 901(11) of the Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee, without the
consent of any Holders of Securities, to make provisions with respect to matters
or questions arising under the Indenture, provided such action shall not
adversely affect the Interests of the Holders of Securities of any series in any
material respect;
WHEREAS, the Company has determined that this Fifth Supplemental Indenture
complies with said Section 901(11) and does not require the consent of any
Holders of Securities. On the basis of the foregoing, the Trustee has
determined that this Fifth Supplemental Indenture is in form satisfactory to it;
and
WHEREAS, all acts and things necessary to make this Fifth Supplemental
Indenture a valid agreement of the Company according to its terms have been done
and performed, and the execution and delivery of this Fifth Supplemental
Indenture have in all respects been duly authorized. The Trustee makes no
representations as to the validity or sufficiency of this Fifth Supplemental
Indenture. Capitalized terms herein, not otherwise defined, shall have the same
meanings given them in the Indenture.
In consideration of the premises, of the purchase and acceptance of the
Securities by the Holders thereof and of the sum of one dollar duly paid to it
by the Trustee at the execution and delivery of these presents, the receipt
whereof is hereby acknowledged, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective Holders from
time to time of the Securities or of any series thereof and any related coupons,
as follows:
SECTION 1. AMENDMENTS TO THE STANDARD PROVISIONS
1.1 Amendment to Section 101 of the Indenture. Section 101 of the
-----------------------------------------
Indenture is hereby amended by (a) deleting in their entirety the definitions of
"CEDEL, S.A." and "Euro-clear" and (b) inserting in proper alphabetical order
the following definitions:
'"Cedel" means Cedel Bank, societe anonyme. All references in the
Indenture to "CEDEL, S.A." shall mean "Cedel".
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, or its successor, as operator of the Euroclear System. All
references in the Indenture to "Euro-clear" shall mean "Euroclear".'
<PAGE>
3
1.2 Amendment to Section 203 of the Indenture. Section 203 of the
-----------------------------------------
Indenture is hereby amended by deleting the last sentence of the last paragraph
thereof.
1.3 Amendment to Section 301 of the Indenture. Section 301 of the
-----------------------------------------
Indenture is hereby amended by (a) replacing the word "definitive" on the third
and fourth lines of paragraph (23) with the word "permanent", (b) redesignating
paragraph (25) as paragraph (27) and (c) inserting the following paragraphs in
proper numerical order:
"(25) if the Securities of such series may be converted into or
exchanged for other securities of the Company or any other Persons, the
terms and conditions pursuant to which the Securities of such series may be
converted or exchanged;
(26) if the principal of (or premium, if any) or interest, if any, on
the Securities of such series are to be payable, at the election of the
Company or a Holder thereof, in securities or other property, the type and
amount of such securities or other property, or the method by which such
amount shall be determined, and the periods within which, and the terms and
conditions upon which, any such election may be made; and"
1.4 Amendment to Section 303 of the Indenture. Section 303 of the
-----------------------------------------
Indenture is hereby amended by (a) replacing the word "definitive" on the third
line of the sixth full paragraph with the word "permanent" and (b) inserting as
the eighth paragraph of such Section the following:
"Any temporary global Security and any permanent global Security
shall, unless otherwise provided therein, be delivered to a Depositary
designated pursuant to Section 301, for the benefit, in the case of a
global Security in bearer form, of Euroclear and Cedel, and for credit to
the respective accounts of the beneficial owners of such Securities (or to
such other accounts as they may direct). With respect to temporary global
Securities in bearer form, on or prior to the last day of the Restricted
Period, the Company shall deliver to the Trustee or the Global Exchange
Agent as applicable definitive Bearer Securities and definitive Registered
Securities executed by the Company."
1.5 Amendment to Section 304 of the Indenture. Section 304 of the
-----------------------------------------
Indenture is hereby amended by (a) deleting Section 304 in its entirety and (b)
inserting in lieu thereof the following:
"SECTION 304. Temporary Securities; Exchange of Temporary Global
Securities and Permanent Global Securities in Bearer Form.
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4
Pending the preparation of permanent Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate
and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the permanent Securities in
lieu of which they are issued, in registered form or, if authorized, in
bearer form with one or more coupons or without coupons, and with such
appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities. Any such temporary Securities may be in
global form, representing such of the Outstanding Securities of such series
as shall be specified therein.
Except in the case of temporary global Securities in bearer form
(which shall be exchanged in accordance with the provisions of the
following paragraphs), if temporary Securities of any series are issued,
the Company will cause permanent Securities of that series to be prepared
within a reasonable period of time after the issue date of such temporary
Securities. After the preparation of permanent Securities of such series,
the temporary Securities of such series shall be exchangeable for permanent
Securities of such series and of a like Stated Maturity and with like terms
and provisions upon surrender of the temporary Securities of such series at
the office or agency of the Company in a Place of Payment for that series,
without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall execute and
(in accordance with a Company Order delivered at or prior to the
authentication of the first permanent Security of such series) the Trustee
shall authenticate and deliver in exchange therefor a like principal amount
of permanent Securities of the same series of authorized denominations and
of a like Stated Maturity and with like terms and provisions; provided,
however, unless otherwise specified pursuant Section 301, no permanent
Bearer Securities shall be delivered in exchange for a temporary Registered
Security; and provided, further, that permanent Bearer Securities shall be
delivered in exchange for a temporary global Security in bearer form only
in compliance with the conditions set forth in Section 303 and this Section
304. Until exchanged as herein above provided, the temporary Securities of
any series shall in all respects be entitled to the same benefits under
this Indenture as permanent Securities of the same series and tenor
authenticated and delivered hereunder.
Within a reasonable period of time after the Restricted Period but in
any event not later than the date specified in or determined pursuant to
the terms of any temporary global Security in bearer form, the Securities
represented by any
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5
such temporary global Security in bearer form may be exchanged for (i) in
whole, definitive Bearer Securities or (ii) in whole, 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 Securities of the same series, then
(unless the Securities which would continue to be represented by any such
permanent global Security in bearer form would be regarded by Euroclear and
Cedel as fungible with any such definitive Bearer Securities issued in
partial exchanges for interests in any such permanent global Security)
interests in such temporary global Security in bearer form shall only
thereafter be exchangeable, in whole, for definitive Bearer Securities,
definitive Registered Securities or any combination thereof; provided,
further, however, that if definitive Bearer Securities have previously been
issued in exchange for interests in a temporary global Security in bearer
form representing Securities of the same series, then interests in any such
temporary global Security shall not be exchangeable for interests in a
permanent global Security in bearer form of the series (unless the
Securities to be represented by any such permanent global Security in
bearer form would be regarded by Euroclear and Cedel as fungible with such
previously issued definitive Bearer Securities). On the Exchange Date any
such temporary global Security shall be surrendered by the Depositary to
the Trustee as the Company's agent for such purpose, or the agent appointed
by the Company pursuant to Section 301 to effect the exchange of any such
temporary global Security for permanent Securities (the "Global Exchange
Agent"), and following such surrender, the Trustee or the Global Exchange
Agent (as authorized by the Trustee as an Authenticating Agent pursuant to
Section 614) shall (1) endorse any such temporary global Security to
reflect the reduction of its principal amount by an equal aggregate
principal amount of such permanent Securities being registered, (2) endorse
the applicable permanent global Security in bearer form, if any, to reflect
the initial amount, or an increase in the amount of Securities represented
thereby, (3) manually authenticate such definitive Bearer Securities,
definitive Registered Securities or permanent global Security, as the case
may be, (4) deliver such definitive Bearer Securities or definitive
Registered Securities, as the case may be, to the Holder thereof or, as the
case may be, deliver such permanent global Security in bearer form to the
Depositary to be held outside the United States for the accounts of
Euroclear and Cedel, for credit to the respective accounts at Euroclear and
Cedel, designated by or on behalf of the beneficial owners of such
Securities (or to such other accounts as they
<PAGE>
6
may direct) and (5) redeliver such temporary global Security to the
Depositary, unless such temporary global Security shall have been cancelled
in accordance with Section 309 hereof provided, however, that, unless
otherwise specified in such temporary global Security or unless a
certificate substantially in the form set forth in Exhibit B to this
Indenture has previously been provided pursuant to this Section 304, upon
such presentation by the Depositary, such temporary global Security shall
be accompanied by a certificate dated the Exchange Date, or a subsequent
date and signed by Euroclear as to the portion of such temporary global
Security held for its account then to be exchanged for definitive Bearer
Securities, definitive Registered Securities or Securities represented by
one or more permanent global Securities in bearer form, as the case may be,
and a certificate dated the Exchange Date or a subsequent date and signed
by Cedel, as to the portion of such temporary global Security held for its
account then to be exchanged for definitive Bearer Securities, definitive
Registered Securities or Securities represented by one or more permanent
global Securities in bearer form, as the case may be, each substantially in
the form set forth in Exhibit B to this Indenture. Each certificate
substantially in the form of Exhibit B hereto of Euroclear or Cedel, as the
case may be, shall be based on certificates of the account holders listed
in the records of Euroclear or Cedel, as the case may be, as being entitled
to all or any portion of the applicable temporary global Security. An
account holder of Euroclear or Cedel, as the case may be, desiring to
effect the exchange of an interest in a temporary global Security in bearer
form for definitive Bearer Securities, definitive Registered Securities or
Securities represented by one or more permanent global Securities in bearer
form, as the case may be, shall instruct Euroclear or Cedel, as the case
may be, to request such exchange on its behalf and shall deliver to
Euroclear or Cedel, as the case may be, a certificate substantially in the
form of Exhibit A hereto and dated no earlier than 15 days prior to the
Exchange Date.
The delivery to the Trustee or the Global Exchange Agent by Euroclear
or Cedel of any certificate substantially in the form of Exhibit B hereto
may be relied upon by the Company and the Trustee or the Global Exchange
Agent as conclusive evidence that a corresponding certificate or
certificates has or have been delivered to Euroclear or to Cedel, as the
case may be, pursuant to the terms of this Indenture.
At any time after the last day of the Restricted Period, upon 30 days'
notice to the Trustee or the Global Exchange Agent by Euroclear or Cedel,
as the case may be, acting at the request of or on behalf of the beneficial
owner, Securities represented by a permanent global Security in bearer form
may be exchanged in whole for definitive
<PAGE>
7
Bearer Securities or in whole or in part for definitive Registered
Securities and the Trustee or the Global Exchange Agent shall authenticate
and deliver, in exchange for each portion of such permanent global
Security, an equal aggregate principal amount of definitive Securities of
the same series of authorized denominations and of like tenor as the
portion of such permanent global Security to be exchanged, which, unless
the Securities of the series are not issuable both as Bearer Securities and
as Registered Securities, as contemplated by Section 301, shall be in the
form of Bearer Securities or Registered Securities, or any combination
thereof, as shall be specified by the beneficial owner thereof; provided,
however, that if definitive Bearer Securities are issued in partial
exchange for Securities represented by such a permanent global Security or
by a temporary global Security in bearer form of the same series, such
issuance shall (unless the Securities which would continue to be
represented by such permanent global Security would be regarded by
Euroclear and Cedel as fungible with any such definitive Bearer Securities
issued in partial exchange for Securities represented by any such permanent
global Security or any such temporary global Security of the same series)
give rise to the exchange of such permanent global Security in whole for,
at the option of the Holders entitled thereto, definitive Bearer
Securities, definitive Registered Securities or any combination thereof.
On or prior to the thirtieth day following receipt by the Trustee or the
Global Exchange Agent of such notice with respect to the exchange of such
Securities or, if such day is not a Business Day, the next succeeding
Business Day, the permanent global Security shall be surrendered by the
Depositary to the Trustee or the Global Exchange Agent, as the Company's
agent for such purpose, to be so exchanged for definitive Securities
following such surrender, upon the request of Euroclear or Cedel, as the
case may be, and the Trustee or the Global Exchange Agent shall (1) endorse
the applicable permanent global Security to reflect the reduction of its
principal amount by the aggregate principal amount of such definitive
Securities being requested, (2) cause the terms of such Securities and
coupons, if any, to be entered on one or more definitive Bearer Securities
and/or definitive Registered Securities, as the case may be, (3) manually
authenticate such definitive Securities and (4) with respect to definitive
Bearer Securities, deliver such definitive Securities outside the United
States to Euroclear or Cedel, as the case may be, for or on behalf of the
beneficial owner thereof, in exchange for a portion of such permanent
global Security.
Unless otherwise specified in any such temporary global Security or
permanent global Security in bearer form, any such exchange shall be made
free of charge to the beneficial owners of such temporary global Security
or permanent global Security, except that a Person receiving definitive
<PAGE>
8
Securities must bear the cost of insurance, postage, transportation and the
like in the event that such Person does not take delivery of such
definitive Securities in person at the offices of Euroclear or Cedel or at
the Corporate Trust Office of the Trustee or at the office or agency in a
Place of Payment for Securities of such series, as the case may be.
Definitive Securities in bearer form to be delivered in exchange for any
portion of a temporary global Security or a permanent global Security in
bearer form shall be delivered only outside the United States.
Until exchanged in full as herein above provided, any temporary global
Security or permanent global Security in bearer form shall in all respects
be entitled to the same benefits under this Indenture as definitive Bearer
Securities of the same series and tenor authenticated and delivered
hereunder, except that, unless otherwise specified as contemplated by
Section 301, interest payable on any such temporary global Security on an
Interest Payment Date for Securities of such series occurring prior to the
applicable Exchange Date shall be payable to Euroclear and Cedel on such
Interest Payment Date only upon delivery by Euroclear and Cedel to the
Trustee or the Global Exchange Agent of a certificate or certificates
substantially in the form set forth in Exhibit B to this Indenture, for
credit without further interest on or after such Interest Payment Date to
the respective accounts of the Persons who are the beneficial owners of
such temporary global Security on such Interest Payment Date and who have
each delivered to Euroclear or Cedel, as the case may be, a certificate
substantially in the form set forth in Exhibit A to this Indenture.
Any definitive Bearer Security authenticated and delivered by the
Trustee in exchange for a portion of a temporary global Security in bearer
form or a permanent global Security in bearer form shall not bear a coupon
for any interest which shall theretofore have been duly paid by the Trustee
to Cedel or Euroclear or by the Company to the Trustee in accordance with
the provisions of this Section 304."
1.6 Amendment to Section 305 of the Indenture. Section 305 of the
-----------------------------------------
Indenture is hereby amended by (a) deleting Section 305 in its entirety and (b)
inserting in lieu thereof the following:
"SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company in a Place of Payment being
herein
<PAGE>
9
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Registered Securities and of
transfers of Registered Securities. The Trustee is hereby appointed
Security Registrar for the purpose of registering Registered Securities and
transfers of Registered Securities as herein provided.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency in a Place of Payment for
that series, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one
or more new Registered Securities of the same series, of any authorized
denominations and in a like aggregate principal amount and of a like Stated
Maturity and with like terms and conditions.
Except as set forth below, at the option of the Holder,
Registered Securities of any series may be exchanged for other Registered
Securities of the same series, of any authorized denominations and in a
like aggregate principal amount and of a like Stated Maturity and with like
terms and conditions, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive. Except as otherwise specified pursuant to Section 301, Registered
Securities may not be exchanged for Bearer Securities.
Notwithstanding any other provision of this Section or Section
304, unless and until it is exchanged in whole or in part for Registered
Securities in definitive form, a global Security representing all or a
portion of the Registered Securities of a series may not be transferred
except as a whole by the Depositary for such series to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor
Depositary.
At the option of the Holder, definitive Bearer Securities of any
series may be exchanged for definitive Registered Securities of the same
series of any authorized denominations and of a like aggregate principal
amount and tenor, upon surrender of the definitive Bearer Securities to be
exchanged at any such office or agency, with all unmatured coupons and all
matured coupons in default thereto appertaining. If the Holder of a
definitive Bearer Security is unable to produce any such unmatured coupon
or coupons or
<PAGE>
10
matured coupon or coupons in default, such exchange may be effected if the
definitive Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon
or coupons, or the surrender of such missing coupon or coupons may be
waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to any Paying Agent any such missing coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to
receive the amount of such payment; provided, however, that, except as
otherwise provided in Section 1002, interest represented by coupons shall
be payable only upon presentation and surrender of those coupons at an
office or agency located outside the United States. Notwithstanding the
foregoing, in case a definitive Bearer Security of any series is
surrendered at any such office or agency in exchange for a definitive
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before
the opening of business at such office or agency on the relevant Interest
Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment
of Defaulted Interest, such definitive Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date or proposed date
for payment, as the case may be (or, if such coupon is so surrendered with
such definitive Bearer Security, such coupon shall be returned to the
person so surrendering the definitive Bearer Security), and interest or
Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the definitive Registered Security issued in exchange for such
Bearer Security, but will be payable only to the Holder of such coupon when
due in accordance with the provisions of this Indenture.
Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
If at any time the Depositary for Securities of a series in
registered form notifies the Company that it is unwilling or unable to
continue as Depositary for the Securities of such series or if at any time
the Depositary for the Securities for such series shall no longer be
eligible under Section 303, the Company shall appoint a successor
Depositary with respect to the Securities for such series. If a successor
Depositary for the Securities of such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes
aware of
<PAGE>
11
such ineligibility, the Company's election pursuant to Section 301 shall no
longer be effective with respect to the Securities for such series and the
Company will issue, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of definitive Registered Securities of such
series, will authenticate and deliver Registered Securities in definitive
form in exchange for an aggregate principal amount equal to the principal
amount of the global Security or Securities representing such Securities.
The Company may at any time and in its sole discretion determine
that the Registered Securities of any series issued in the form of one or
more global Securities shall no longer be represented by such global
Security or Securities. In such event, the Company will issue, and the
Trustee, upon receipt of a Company Order for the authentication and
delivery of definitive Registered Securities of such series, will
authenticate and deliver, Registered Securities of such series in
definitive form and in an aggregate principal amount equal to the principal
amount in exchange for the global Security or Securities representing such
Registered Securities.
If specified by the Company pursuant to Section 301 with respect
to a series of Securities in registered form, the Depositary for such
series of Securities may surrender a global Security for such series of
Securities in exchange in whole or in part for Registered Securities of
such series of like tenor and terms and in definitive form on such terms as
are acceptable to the Company and such Depositary. Thereupon the Company
shall execute, and the Trustee shall authenticate and deliver, without
service charge, (i) to each Person specified by such Depositary a new
Registered Security or Securities of the same series, of like tenor and
terms and of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the global Security; and (ii) to such Depositary a
new global Security of like tenor and terms and in a denomination equal to
the difference, if any, between the principal amount of the surrendered
global Security and the aggregate principal amount of Registered Securities
delivered to Holders thereof.
Upon the exchange in full of a global Security for Securities in
definitive form, such global Security shall be cancelled by the Trustee.
Registered Securities issued in exchange for a global Security pursuant to
this Section shall be registered in such names and in such authorized
denominations as the Depositary for such global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The
<PAGE>
12
Trustee shall deliver such Registered Securities to the persons in whose
names such Securities are so registered.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer
or exchange.
Every Registered Security presented or surrendered for
registration of transfer or exchange shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar
duly executed, by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906 or 1108 not
involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning
at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities of that series selected for redemption
under Section 1104 and ending at the close of business on (A) if Securities
of the series are issuable only as Registered Securities, the day of the
mailing of the relevant notice of redemption and (B) if Securities of the
series are issuable as Bearer Securities, the day of the first publication
of the relevant notice of redemption or, if Securities of the series are
also issuable as Registered Securities and there is no publication, the
mailing of the relevant notice of redemption, or (ii) to register the
transfer of or exchange any Registered Security so selected for redemption
as a whole or in part, except the unredeemed portion of any Security being
redeemed in part, or (iii) to exchange any Bearer Security so selected for
redemption except that such a Bearer Security may be exchanged for a
Registered Security of that series and like tenor, provided that such
Registered Security shall be simultaneously surrendered for redemption."
SECTION 2. EFFECT OF FIFTH SUPPLEMENTAL INDENTURE
The amendments to the Indenture contained in this Fifth Supplemental
Indenture shall be effective only with respect to
<PAGE>
13
those series of Securities initially issued on or after the date hereof.
-------------------------------
Citibank, N.A. hereby accepts the trusts in this Fifth Supplemental
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused this
Fifth Supplemental Indenture to be signed, and acknowledged by its President,
its Chairman of the Board, one of its Vice Presidents, its Chief Financial
Officer or its Treasurer, and its corporate seal to be affixed hereunto, and the
same to be attested by its Secretary, its Assistant Secretary or one of its
Attesting Secretaries, and Citibank, N.A. , as Trustee, has caused this Fifth
Supplemental Indenture to be signed and acknowledged by one of its Assistant
Vice Presidents, and its corporate seal to be affixed hereunto, and the same to
be attested by one of its Trust Officers, as of the day and year first above
written.
LEHMAN BROTHERS HOLDINGS INC.
By:___________________________
[Corporate Seal]
Attest:
___________________________
CITIBANK, N.A., as Trustee
By:___________________________
[Corporate Seal]
Attest:
____________________________
Trust Officer
<PAGE>
EXHIBIT 5
LEHMAN BROTHERS HOLDINGS INC.
THREE WORLD FINANCIAL CENTER
NEW YORK, NY 10285
August 24, 1995
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Ladies and Gentlemen:
I am Deputy General Counsel of Lehman Brothers Holdings Inc., a Delaware
corporation ("Holdings"). A Registration Statement on Form S-3 (the
"Registration Statement"), under the Securities Act of 1933, as amended (the
"Act"), was filed by Holdings with the Securities and Exchange Commission on the
date hereof. The Registration Statement relates to the registration of up to
$3,000,000,000 of debt securities (the "Debt Securities") consisting of senior
debt (the "Senior Debt") and subordinated debt (the "Subordinated Debt") and
Preferred Stock, par value $1.00 per share (the Preferred Stock and together
with the Debt Securities, the Securities) which Holdings may offer from time to
time in one or more series.
In that connection, I or members of my staff have examined and relied upon
originals or copies, certified or otherwise identified to our satisfaction, of
such documents, corporate records, certificates and instruments relating to
Holdings as I have deemed relevant and necessary to the formation of the opinion
hereinafter set forth. In such examination, I have assumed the genuineness and
authenticity of all documents examined by me or members of my staff and all
signatures thereon, the legal capacity of all persons executing such documents,
the conformity to originals of all copies of documents submitted to us and the
truth and correctness of any representations and warranties contained therein.
Based upon the foregoing, I am of the opinion that:
(i) the Senior Debt is duly authorized, the indenture pursuant to which the
Senior Debt will be issued (the "Senior Indenture") between Holdings and
Citibank, N.A., as Trustee (the "Senior Debt Trustee"), has been duly executed
and delivered, and, the Senior Debt, when duly executed by Holdings,
authenticated by the Senior Debt Trustee in accordance with the terms of the
Senior Indenture and issued and delivered against payment therefor, will be
legally issued and will constitute a valid and binding obligation of Holdings
entitled to the benefits of the Senior Indenture, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting
<PAGE>
Letter to Securities and Exchange Commission
August 24, 1995
Page 2
creditors rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and by an implied covenant of good faith and
fair dealing; and
(ii) the Subordinated Debt is duly authorized and, the Indenture pursuant
to which the Subordinated Debt will be issued (the "Subordinated Indenture")
between Holdings and Chemical Bank, as Trustee (the "Subordinated Debt Trustee")
has been duly executed and delivered, the Subordinated Debt, when duly executed
by Holdings, authenticated by the Subordinated Debt Trustee in accordance with
the terms of the Subordinated Indenture and issued and delivered against payment
therefor, will be legally issued and will constitute a valid and binding
obligation of Holdings entitled to the benefits of the Subordinated Indenture,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and by an implied covenant of good faith and
fair dealing; and
(iii) The Preferred Stock is duly authorized, and when and to the extent
issued, the shares of Preferred Stock will be validly issued, fully paid and
non-assessable, and no holder thereof will be subject to personal liability by
reason of being such a holder.
In rendering this opinion, I express no opinion as to the laws of any
jurisdiction other than the State of New York, the General Corporation Law of
the State of Delaware and the United States of America.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption "Legal
Opinions" in the Registration Statement, without admitting that I am an "expert"
under the Act, or the rules and regulations of the Securities and Exchange
Commission issued thereunder, with respect to any part of the Registration
Statement, including this exhibit.
Very truly yours,
Karen M. Muller
Deputy General Counsel
<PAGE>
Exhibit 8
August 23, 1995
Lehman Brothers Holdings Inc.
3 World Financial Center
New York, New York 10285
Ladies and Gentlemen:
We have acted as special United States tax counsel to Lehman Brothers
Holdings Inc. (the "Company") in connection with the preparation and filing of
the Registration Statement on Form S-3 filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, in respect of
Debt Securities and Preferred Stock to be offered by the Company. In that
connection, we have given the opinions contained in the section entitled "United
States Taxation" in the Registration Statement and related prospectuses.
We hereby confirm that our opinions referenced in this letter are
accurate in all material respects and hereby consent to the filing of this
letter as an Exhibit to the Registration Statement and to the use of our name in
the section entitled "United States Taxation" in the Registration Statement and
related prospectuses.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the federal law of the
United States.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
EXHIBIT 23.B
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm as experts under the caption
Independent Accountants in the Registration Statement on Form S-3 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
New York, New York
August 24, 1995
<PAGE>
EXHIBIT 25.A
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) ____
________________________
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
(I.R.S. employer
Identification no.)
399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)
_______________________
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.)
American Express Tower
World Financial Center
New York, NY 10285
(Address of principal executive offices) (Zip Code)
_________________________
Debt Securities
(Title of the indenture securities)
<PAGE>
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.
Name Address
---- -------
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of New York New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2.AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. LIST OF EXHIBITS.
Exhibit 1 - Copy of Articles of Association of the Trustee, as now in
effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to commence
business. (Exhibit 2 to T-1 to Registration Statement No. 2-29577).
Exhibit 3 - Copy of authorization of the Trustee to exercise corporate
trust powers. (Exhibit 3 to T-1 to Registration Statement No. 2-55519)
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1 to
Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section 321(b) of the
Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration
Statement No. 33-19227.)
Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A. (as
of March 31, 1995 - attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
2
<PAGE>
__________________
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, 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 21st day
of August, 1995.
CITIBANK, N.A.
By:_____________________
Arthur W. Aslanian
Vice President
3
<PAGE>
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
Citibank, N.A.
of New York in the State of New York, at the close
of business on March 31, 1995, published in
response to call made by Comptroller of the Currency,
under Title 12, United States Code, Section 161.
Charter Number 1461 Comptroller of the Currency
Northeastern District.
ASSETS
Thousands of dollars
Cash and balances due from de-
pository institutions: Noninterest-bearing
balances and currency and coin $7,174,000
Interest-bearing balances 8,467,000
Securities: Held-to-maturity securities 3,981,000
Available-for-sale securities 12,042,000
Federal funds sold and
securities purchased under agreements to
resell in domestic offices of the
bank and of its Edge and Agree-
ment subsidiaries, and in IBFs:
Federal funds sold 5,570,000
Securities purchased under
agreements to resell 489,000
Loans and lease financing receiv-
ables: Loans and leases, net of un-
earned income $ 132,901,000
LESS: Allowance for loan
and lease losses 4,071,000
Loans and leases, net of un-
earned income, allowance,
and reserve 128,830,000
Trading assets 46,711,000
Premises and fixed assets (includ-
ing capitalized leases) 3,393,000
Other real estate owned 1,272,000
Investments in unconsolidated
subsidiaries and associated com-
panies 1,076,000
Customers' liability to this bank on
acceptances outstanding 1,557,000
Intangible assets 14,000
Other assets 7,861,000
TOTAL ASSETS $ 228,437,000
LIABILITIES Deposits:
In domestic offices$ 32,712,000
Noninterest-
bearing $11,340,000
<PAGE>
Interest-
bearing 21,372,000
In foreign offices, Edge and
Agreement subsidiaries, and
IBFs 117,885,000
Noninterest-
bearing 7,763,000
Interest-
bearing 110,122,000
Federal funds purchased and se-
curities sold under agreements
to repurchase in domestic offices
of the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased 2,442,000
Securities sold under agree-
ments to repurchase 806,000
Trading liabilities 33,310,000
Other borrowed money:
With original maturity of one
year or less 7,746,000
With original maturity of more
than one year 3,995,000
Mortgage indebtedness and obli-
gations under capitalized leases 90,000
Bank's liability on acceptances ex-
ecuted and outstanding 1,567,000
Notes and debentures subordi-
nated to deposits 5,700,000
Other liabilities 7,616,000
TOTAL LIABILITIES $213,869,000
EQUITY CAPITAL Common stock $ 751,000
Surplus 6,649,000
Undivided profits and capital re-
serves 7,566,000
Net unrealized holding gains (losses)
on available-for-sale securities 135,000
Cumulative foreign currency
translation adjustments (533,000)
TOTAL EQUITY CAPITAL $ 14,568,000
TOTAL LIABILITIES LIMITED-
LIFE PREFERRED STOCK, AND
EQUITY CAPITAL $ 228,437,000
I, Roger W. Trupin, Controller of the above-
named bank do hereby declare that this
Report of Condition is true and correct to the
best of my knowledge and belief.
ROGER W. TRUPIN
We, the undersigned directors, attest to
the correctness of this Report of Condition.
We declare that it has been examined by us,
and to the best of our knowledge and belief
has been prepared in conformance with the
<PAGE>
instructions and is true and correct.
PAUL J. COLLINS
CHRISTOPHER J. STEFFEN
WILLIAM
R. RHODES DIRECTORS
