SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
November 10, 1999
LEHMAN BROTHERS HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-9466 13-3216325
(Commission File Number) (IRS Employer Identification No.)
3 World Financial Center
New York, New York 10285
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including
area code: (212) 526-7000
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following Exhibits are incorporated by reference into Registration
Statement on Form S-3 No. 33-53651 as exhibits thereto and are filed as part of
this Report.
4.01 Calculation Agency Agreement, dated as of November 10, 1999, between Lehman
Brothers Holdings Inc. (the "Corporation") and Lehman Brothers Inc., as
calculation agent.
4.02 Global Security representing $20,722,000 aggregate principal amount of the
Corporation's Dow Jones Internet Index Stock Upside Note Securities Due
2004, dated November 10, 1999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Oliver Budde
Oliver Budde
Vice President
Date: November 10, 1999
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
4.01 Calculation Agency Agreement, dated as of Novermber 10, 1999, between
Lehman Brothers Holdings Inc. (the "Corporation") and Lehman Brothers Inc.,
as calculation agent.
4.02 Global Security representing $20,722,000 aggregate principal amount of the
Corporation's Dow Jones Internet Index Stock Upside Note Securities Due
2004, dated November 10, 1999.
Exhibit 4.01
CALCULATION AGENCY AGREEMENT
AGREEMENT, dated as of November 10, 1999, between Lehman Brothers Holdings
Inc. (the "Company")and Lehman Brothers Inc., as Calculation Agent.
WHEREAS, the Company has authorized the issuance of up to $23,830,000
aggregate principal amount of Dow Jones Internet IndexSM Stock Upside Note
SecuritiesSM Due November 10, 2004 (the "Securities");
WHEREAS, the Securities will be issued under an Indenture Agreement dated
as of September 1, 1987, between the Company and Citibank, N.A., as Trustee (the
"Trustee"), as supplemented and amended by supplemental indentures dated as of
November 25, 1987, November 27, 1990, September 13, 1991, October 4, 1993,
October 1, 1995, and June 26, 1997, and incorporating Standard Multiple Series
Indenture Provisions dated July 30, 1987, as amended November 16, 1987
(collectively, the "Indenture"); and
WHEREAS, the Company requests the Calculation Agent to perform certain
services described herein in connection with the Securities;
NOW THEREFORE, the Company and the Calculation Agent agree as follows:
Appointment of Agent. The Company hereby appoints Lehman Brothers Inc. as
Calculation Agent and Lehman Brothers Inc. hereby accepts such appointment as
the Company's agent for the purpose of performing the services hereinafter
described upon the terms and subject to the conditions hereinafter mentioned.
Calculations and Information Provided. In response to a request made by
the Trustee for a determination of the Maturity Payment Amount due at Stated
Maturity of the Securities, the Calculation Agent shall determine such Maturity
Payment Amount and notify the Trustee of its determination. The Calculation
Agent shall also be responsible for (a) the determination of the Alternative
Amount, (b) whether adjustments to the index level should be made, (c) the
Successor Index if publication of the Index is discontinued and (d) whether a
<PAGE>
Market Disruption Event has occurred. The Calculation Agent shall notify the
Trustee of any such adjustment or any such Successor Index, or if a Market
Disruption Event has occurred. Annex A hereto sets forth the procedures the
Calculation Agent will use to determine the information described in this
Section 1.
Calculations. Any calculation or determination by the Calculation Agent
pursuant hereto shall (in the absence of manifest error) be final and binding.
Any calculation made by the Calculation Agent hereunder shall, at the Trustee's
request, be made available at the Corporate Trust Office. .
Fees and Expenses. The Calculation Agent shall be entitled to reasonable
compensation for all services rendered by it as agreed to between the
Calculation Agent and the Company.
Terms and Conditions. The Calculation Agent accepts its obligations herein
set out upon the terms and conditions hereof, including the following, to all of
which the Company agrees:
() in acting under this Agreement, the Calculation Agent is acting
solely as an independent expert of the Company and does not assume any
obligation toward, or any relationship of agency or trust for or with, any
of the holders of the Securities;
() unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the
Company or the Trustee made or given under any provision of this Agreement
shall be sufficient if signed by any person who the Calculation Agent
reasonably believes to be a duly authorized officer or attorney-in-fact of
the Company or the Trustee, as the case may be; () the Calculation Agent
shall be obliged to perform only such duties as are set out specifically
herein and any duties necessarily incidental thereto;
() the Calculation Agent, whether acting for itself or in any other
capacity, may become the owner or pledgee of Securities with the same
rights as it would have had if it were not acting hereunder as Calculation
Agent; and
() the Calculation Agent shall incur no liability hereunder except for
loss sustained by reason of its gross negligence or wilful misconduct.
Resignation; Removal; Successor. (a) The Calculation Agent may at any time
resign by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective,
subject to the appointment of a successor Calculation Agent and acceptance of
such appointment by such successor Calculation Agent, as hereinafter provided.
The Calculation Agent hereunder may be removed at any time by the filing with it
of an instrument in writing signed by or on behalf of the Company and specifying
such removal and the date when it shall become effective. Such resignation or
removal shall take effect upon the appointment by the Company, as hereinafter
provided, of a successor Calculation Agent and the acceptance of such
appointment by such successor Calculation Agent. In the event a successor
Calculation Agent has not been appointed and has not accepted its duties within
90 days of the Calculation Agent's notice of resignation, the Calculation Agent
may apply to any court of competent jurisdiction for the designation of a
successor Calculation Agent.
(b) In case at any time the Calculation Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or make an assignment for the benefit of its creditors or consent to
the appointment of a receiver or custodian of all or any substantial part of its
property, or shall admit in writing its inability to pay or meet its debts as
they mature, or if a receiver or custodian of it or all or any substantial part
of its property shall be appointed, or if any public officer shall have taken
charge or control of the Calculation Agent or of its property or affairs, for
the purpose of rehabilitation, conservation or liquidation, a successor
Calculation Agent shall be appointed by the Company by an instrument in writing,
filed with the successor Calculation Agent. Upon the appointment as aforesaid of
a successor Calculation Agent and acceptance by the latter of such appointment,
the Calculation Agent so superseded shall cease to be Calculation Agent
hereunder.
(c) Any successor Calculation Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor, to the Company and to the Trustee an
instrument accepting such appointment hereunder and agreeing to be bound by the
terms hereof, and thereupon such successor Calculation Agent, without any
further act, deed or conveyance, shall become vested with all the authority,
rights, powers, trusts, immunities, duties and obligations of such predecessor
<PAGE>
with like effect as if originally named as Calculation Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid, shall
thereupon become obligated to transfer, deliver and pay over, and such successor
Calculation Agent shall be entitled to receive, all moneys, securities and other
property on deposit with or held by such predecessor, as Calculation Agent
hereunder.
(d) Any corporation into which the Calculation Agent hereunder may be
merged or converted or any corporation with which the Calculation Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Calculation Agent shall be a party, or any
corporation to which the Calculation Agent shall sell or otherwise transfer all
or substantially all of the assets and business of the Calculation Agent shall
be the successor Calculation Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
.
Certain Definitions. Terms not otherwise defined herein or in Annex A
hereto are used herein as defined in the Indenture or the Securities.
Indemnification. The Company will indemnify the Calculation Agent against
any losses or liability which it may incur or sustain in connection with its
appointment or the exercise of its powers and duties hereunder except such as
may result from the gross negligence or wilful misconduct of the Calculation
Agent or any of its agents or employees. The Calculation Agent shall incur no
liability and shall be indemnified and held harmless by the Company for or in
respect of any action taken or suffered to be taken in good faith by the
Calculation Agent in reliance upon written instructions from the Company.
Notices. Any notice required to be given hereunder shall be delivered in
person, sent (unless otherwise specified in this Agreement) by letter, telex or
facsimile transmission or communicated by telephone (confirmed in a writing
dispatched within two New York Business Days), (a) in the case of the Company,
to it at Three World Financial Center, New York, New York 10285 (facsimile:
<PAGE>
(212) 526-3774) (telephone: (212) 526-1936), Attention: Legal Counsel, (b) in
the case of the Calculation Agent, to it at Three World Financial Center, 200
Vesey Street, New York, New York 10285-0600 (facsimile: (212) 526-2755)
(telephone: (212) 526-0900), Attention: Equity Derivatives Trading and (c) in
the case of the Trustee, to it at 111 Wall Street, 5th Floor, New York, New York
10043 (facsimile: (212) 657-3836) (telephone: (212) 657-7805), Attention:
Corporate Trust Department or, in any case, to any other address or number of
which the party receiving notice shall have notified the party giving such
notice in writing. Any notice hereunder given by telex, facsimile or letter
shall be deemed to be served when in the ordinary course of transmission or
post, as the case may be, it would be received.
Governing Law. This Agreement shall be governed by and continued in
accordance with the laws of the State of New York. .
Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
Benefit of Agreement. This Agreement is solely for the benefit of the
parties hereto and their successors and assigns, and no other person shall
acquire or have any rights under or by virtue hereof.
<PAGE>
IN WITNESS WHEREOF, this Calculation Agency Agreement has been
entered into as of the day and year first above written.
LEHMAN BROTHERS HOLDINGS INC.
By: \s\ Jennifer Marre
Name: Jennifer Marre
Title: Vice President
LEHMAN BROTHERS INC.,
as Calculation Agent
By: \s\ Karen Manson
Name: Karen Manson
Title: Vice President
<PAGE>
ANNEX A
. The Index.
The Index is the Dow Jones Internet Index, as calculated by Dow Jones
(the "Index").
. Determination of the Maturity Payment Amount.
The Calculation Agent shall determine the amount payable at Stated
Maturity for each $1,000 principal amount of Securities (the "Maturity
Payment Amount"). The Maturity Payment Amount shall equal the greater of
(a) $1,000 and (b) the Alternative Amount.
. Discontinuance of the Index.
() If Dow Jones discontinues publication of the Index and Dow Jones or
another entity publishes a successor or substitute index that the
Calculation Agent determines, in its sole discretion, to be comparable to
the Index, then, upon the Calculation Agent's notification of its
determination to the Trustee and the Company, the Calculation Agent shall
substitute that successor index (the "Successor Index") for the Index and
calculate the Maturity Payment Amount pursuant to Section 2 hereof by
reference to the level of that Successor Index.
() If Dow Jones discontinues publication of the Index and (i) the
Calculation Agent does not select a Successor Index or (ii) the Successor
Index is no longer published, then the Calculation Agent, based on the
information provided by Dow Jones, shall compute a substitute level for the
Index in accordance with the procedures last used to calculate the Index
before any discontinuance.
() If Dow Jones discontinues publication of the Index and the
Calculation Agent determines that no Successor Index is available at that
time, then on each Business Day until the Calculation Agent determines that
a Successor Index is available, the Calculation Agent shall determine the
level of the Index as described in Section 3(b).
() If a Successor Index is selected or the Calculation Agent calculates
a level as a substitute for the Index, that Successor Index or that level
shall be used as a substitute for the Index for all purposes, including for
purposes of determining whether a Market Disruption Event exists.
. Alterations to the index level.
If at any time Dow Jones or the publisher of a Successor Index changes
its method of calculating the Index or a Successor Index, as the case may
be, in any material respect, or if the Index or a Successor Index, as the
case may be, is in any other way modified so that the Index or that
Successor Index does not, in the opinion of the Calculation Agent, fairly
represent the value thereof had those changes or modifications not been
made, then the Calculation Agent shall, at the Close of Trading, on each
day, make those adjustments as, in the good faith judgment of the
<PAGE>
Calculation Agent, may be necessary in order to arrive at a calculation of
a value of a stock index comparable to the Index or that Successor Index,
as the case may be, as if those changes or modifications had not been made.
The Calculation Agent shall calculate the index level with reference to the
Index or that Successor Index, as the case may be, as so adjusted.
. Definitions.
Set forth below are the terms used in this Annex A to the Calculation
Agent Agreement.
"Alternative Amount" shall mean, with respect to each $1,000
principal amount of Securities, the sum of (i) the Issue Price and (ii) the
product of (x) the Issue Price multiplied by (y) the quotient of (1) the
Final Index Level minus the Starting Level divided by (2) the Starting
Level; provided, that the Alternative Amount shall not exceed $2,000.
"Business Day" shall mean any day that is not a Saturday, a
Sunday or a day on which the NYSE or banking institutions or trust
companies in the City of New York are authorized or obligated by law or
executive order to close.
"Calculation Agent" shall mean the person that has entered
into an agreement with the Company providing for, among other things, the
determination of the Maturity Payment Amount, which term shall, unless the
context otherwise requires, include its successors and assigns. The initial
Calculation Agent shall be Lehman Brothers Inc.
"Calculation Day" shall mean three Trading Days prior to
November 10, 2004.
"Closing Level" shall mean the last reported level of the
Index or the Successor Index, as the case may be, at 4:00 p.m., New York
City time, as reported by Dow Jones or the publisher of the Successor
Index, as the case may be.
"Close of Trading" shall mean 4:00 p.m., New York City time.
"Dow Jones" shall mean Dow Jones & Company, Inc.
"Final Index Level" shall equal (a) the Closing Level of the
Index or a Successor Index, as the case may be, on the Calculation Day or
(b) if a Market Disruption Event occurs on the Calculation Day, the Closing
Level of the Index or that Successor Index, as the case may be, on the next
Trading Day on which a Market Disruption Event does not occur.
"Issue Price" shall mean $1,000 per each $1,000 principal
amount of Securities.
"Market Disruption Event", on any day, shall mean any of the
following events as determined by the Calculation Agent:
() A suspension, absence or material limitation of trading in
20% of more of the underlying stocks which then comprise the Index or
any Successor Index, as the case may be, has occurred on that day, in
each case, for more than two hours of trading or during the one-half
<PAGE>
hour period preceding the Close of Trading on the primary organized
U.S. exchange or trading system on which such stocks are traded or, in
the case of a common stock not listed or quoted in the United States,
on the primary exchange, trading system or market for such stock.
Limitations on trading during significant market fluctuations imposed
pursuant to NYSE Rule 80B or any applicable rule or regulation enacted
or promulgated by the NYSE, any other exchange, trading system, or
market, any other self regulatory organization or the Securities and
Exchange Commission of similar scope or as a replacement for Rule 80B,
may be considered material. Notwithstanding the first sentence of this
paragraph, a Market Disruption Event for a stock traded on a bulletin
board means a suspension, absence or material limitation of trading of
such stock for more than two hours or during the one hour period
preceding 4:00 p.m., New York City time.
() A suspension, absence or material limitation has occurred
on that day, in each case, for more than two hours of trading or during
the one-half hour period preceding the Close of Trading in options
contracts related to the Index or any Successor Index, as the case may
be, whether by reason of movements in price exceeding levels permitted
by an exchange, trading system or market on which such options
contracts are traded or otherwise.
() Information is unavailable on that date, through a recognized
system of public dissemination of transaction information, for more
than two hours of trading or during the one-half hour period preceding
the Close of Trading, of accurate price, volume or related information
in respect of 20% or more of the underlying stocks which then comprise
the Index or any Successor Index, as the case may be, or in respect of
options contracts related to the Index or any Successor Index, as the
case may be, in each case traded on any major U.S. exchange or trading
system or in the case of stocks of a non-U.S. issuer, the primary
non-U.S. exchange, trading system or market.
For purposes of determining whether a Market Disruption Event has
occurred:
(i) a limitation on the hours or number of days of trading
shall not constitute a Market Disruption Event if it results from an
announced change in the regular business hours of the relevant
exchange, trading system or market;
(ii) any suspension in trading in an option contract on the
Index or the Successor Index, as the case may be, by a major securities
exchange, trading system or market by reason of (a) a price change
violating limits set by such securities market, (b) an imbalance of
orders relating to those contracts, or (c) a disparity in bid and ask
quotes relating to those contracts, shall constitute a Market
Disruption Event notwithstanding that the suspension or material
limitation is less than two hours;
(iii) a suspension or material limitation on an exchange,
trading system or in a market shall include a suspension or material
limitation of trading by one class of investors provided that the
suspension continues for more than two hours of trading or during the
last one-half hour period preceding the Close of Trading on the
relevant exchange, trading system or market but shall not include any
<PAGE>
time when the relevant exchange, trading system or market is closed for
trading as part of that exchange's, trading system's or market's
regularly scheduled business hours; and
(iv) "Trading systems" include bulletin board services.
"NYSE" shall mean the New York Stock Exchange.
"Payment Determination Date" shall mean the Calculation Day,
unless a Market Disruption Event occurs with respect to such Payment
Determination Date, in which case the first Trading Day after the
Calculation Day on which a Market Disruption Event does not occur.
"Starting Level" shall mean 268.73.
"Stated Maturity" shall mean November 10, 2004, or if a Market
Disruption Event occurs, three Business Days after the Payment
Determination Date on which the Final Index Level has been determined.
"Successor Index" shall have the meaning set forth in Section
3(a).
"Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, American Stock Exchange and NASDAQ NMS and in the
over-the-counter market for equity securities as determined by the Calculation
Agent.
Exhibit 4.02
LEHMAN BROTHERS HOLDINGS INC.
Dow Jones Internet Index SM Stock Upside Note Securities SM
Due November 10, 2004
Number R-1 $20,722,000.00
CUSIP 524908 CE 8
See Reverse for Certain Definitions
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO SUCH DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO LEHMAN BROTHERS HOLDINGS INC. OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized
and existing under the laws of the State of Delaware (hereinafter called the
"Company"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, on November 10, 2004, or if a Market Disruption
Event occurs, three Business Days after the Payment Determination Date (the
"Stated Maturity"), in such coin or currency of the United States of America at
the time of payment shall be legal tender for the payment of public and private
debts, for each $1,000 principal amount of the Securities represented hereby, an
amount equal to the greater of (a) $1,000 and (b) the Alternative Amount (the
"Maturity Payment Amount").
<PAGE>
Any amount payable, at Stated Maturity or Redemption, hereon
will be paid only upon presentation and surrender of this Security.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
SECURITY SET FORTH ON THE REVERSE HEREOF WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
<PAGE>
This Security shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC. has caused
this instrument to be signed by its Chairman of the Board, its Vice Chairman,
its President, its Chief Financial Officer, one of its Vice Presidents or its
Treasurer, by manual or facsimile signature under its corporate seal, attested
by its Secretary or one of its Assistant Secretaries by manual or facsimile
signature.
Dated: November 10, 1999 LEHMAN BROTHERS HOLDINGS INC.
By: \s\ Jennifer Marre
Name: Jennifer Marre
Title: Vice President
[SEAL]
Attest: \s\ Jeannine Cozzati
Name: Jeannine Cozzati
Title: Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: November 10, 1999
CITIBANK, N.A.
as Trustee
By: \s\ Wafaa Orfy
Authorized Signatory
<PAGE>
(Reverse of Security)
This Security is one of a duly authorized series of Securities
of the Company designated as Dow Jones Internet Index SM Stock Upside Note
Securities SM Due November 10, 2004 (herein called the "Securities"). This
series of Securities is one of an indefinite number of series of debt securities
of the Company, issued and to be issued under an indenture, dated as of
September 1, 1987, as amended (herein called the "Indenture"), duly executed and
delivered by the Company and Citibank N.A., as trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities.
The Alternative Amount shall be determined by the Calculation
Agent pursuant to the Calculation Agency Agreement.
All percentages resulting from any calculation with respect to
the Securities will be rounded at the Calculation Agent's discretion.
The Trustee shall fully rely on the determination by the
Calculation Agent of the Maturity Payment Amount and shall have no duty to make
any such determination.
The Securities are not redeemable prior to November 5, 2001.
The Securities may be redeemed, at the option of the Company, as a whole or from
time to time in part, during the 30-day period beginning on November 5 of each
year, beginning in 2001 (the "Redemption"), at the applicable redemption price
per $1,000 principal amount of Securities set forth below (the "Redemption
Payment Amount"):
30-day redemption Redemption Payment Amount
period beginning on:
November 5, 2001 $1,400
November 5, 2002 $1,600
November 5, 2003 $1,800
Notice of Redemption shall be given by mailing a notice to the
Holders of such Redemption (the "Redemption Notice") in accordance with the
Indenture.
This Security is not subject to any sinking fund.
If an Event of Default with respect to the Securities shall
occur and be continuing, the amounts payable on all of the Securities may be
declared due and payable in the manner and with the effect provided in the
Indenture. The amount payable to the Holder hereof upon any
<PAGE>
acceleration permitted under the Indenture will be equal to the Maturity Payment
Amount calculated as though the date of acceleration was the Stated Maturity.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than 66_% in aggregate
principal amount of each series of Securities at the time Outstanding to be
affected (each series voting as a class), evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to, or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities of all such series; provided, however, that no such
supplemental indenture shall, among other things, (i) change the fixed maturity
of any Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon or reduce any premium payable on
redemption, or make the principal thereof, or premium, if any, or interest
therein payable in any coin or currency other than that hereinabove provided,
without the consent of the holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security so affected. It is also
provided in the Indenture that, prior to any declaration accelerating the
maturity of any series of Securities, the holders of a majority in aggregate
principal amount of the Securities of such series Outstanding may on behalf of
the holders of all the Securities of such series waive any past default or Event
of Default under the Indenture with respect to such series and its consequences,
except a default in the payment of interest, if any or the principal of, or
premium if any, on any of the Securities of such series, or in the payment of
any sinking fund installment or analogous obligation with respect to Securities
of such series. Any such consent or waiver by the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future holders and
owners of this Security and any Securities which may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Security or such other Securities.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal amount with
respect to this Security.
The Securities are issuable in denominations of $1,000 and any
integral multiples of $1,000.
The Company, the Trustee, and any agent of the Company or of
the Trustee may deem and treat the registered holder (the "Holder") hereof as
the absolute owner of this Security (whether or not this Security shall be
overdue and notwithstanding any notation of ownership or other writing hereon),
for the purpose of receiving payment hereof, or on account hereof, and for all
other purposes and neither the Company nor the Trustee nor any agent of the
Company or of the Trustee shall be affected by any notice to the contrary. All
such payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, effectually satisfy and discharge liability for
moneys payable on this Security.
<PAGE>
No recourse for the payment of the principal of, premium, if
any, or interest on this Security, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the Corporate Trust Office or agency in a Place of Payment for this
Security, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Securities of this series or of like tenor and of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Set forth below are definitions of the terms used in this Security.
"Alternative Amount" shall mean, with respect to each $1,000
principal amount of Securities, the sum of (i) the Issue Price and (ii) the
product of (x) the Issue Price multiplied by (y) the quotient of (1) the Final
Index Level minus the Starting Level divided by (2) the Starting Level;
provided, that the Alternative Amount shall not exceed $2,000.
"Business Day" shall mean any day that is not a Saturday, a
Sunday or a day on which the NYSE or banking institutions or trust companies in
the City of New York are authorized or obligated by law or executive order to
close.
"Calculation Agent" shall mean the person that has entered
into an agreement with the Company providing for, among other things, the
determination of the Maturity Payment Amount, which term shall, unless the
context otherwise requires, include its successors and assigns. The initial
Calculation Agent shall be Lehman Brothers Inc.
"Calculation Agency Agreement" shall mean the Calculation
Agency Agreement, dated as of November 10, 1999 between the Company and the
Calculation Agent, as amended from time to time.
<PAGE>
"Calculation Day" shall mean three Trading Days prior to
November 10, 2004.
"Closing Level" shall mean the last reported level of the
Index or the Successor Index, as the case may be, at 4:00 p.m., New York City
time, as reported by Dow Jones or the publisher of the Successor Index, as the
case may be.
"Close of Trading" shall mean 4:00 p.m., New York City time.
"Dow Jones" shall mean Dow Jones & Company, Inc.
"Final Index Level" shall equal (a) the Closing Level of the
Index or a Successor Index, as the case may be, on the Calculation Day or (b) if
a Market Disruption Event occurs on the Calculation Day, the Closing Level of
the Index or that Successor Index, as the case may be, on the next Trading Day
on which a Market Disruption Event does not occur.
"Index" shall mean the Dow Jones Internet Index, as calculated
by Dow Jones & Company, Inc.
"Issue Price" shall mean $1,000 per each $1,000 principal
amount of Securities.
"Market Disruption Event", on any day, shall mean any of the
following events as determined by the Calculation Agent:
() A suspension, absence or material limitation of trading in
20% of more of the underlying stocks which then comprise the Index or
any Successor Index, as the case may be, has occurred on that day, in
each case, for more than two hours of trading or during the one-half
hour period preceding the Close of Trading on the primary organized
U.S. exchange or trading system on which such stocks are traded or, in
the case of a common stock not listed or quoted in the United States,
on the primary exchange, trading system or market for such stock.
Limitations on trading during significant market fluctuations imposed
pursuant to NYSE Rule 80B or any applicable rule or regulation enacted
or promulgated by the NYSE, any other exchange, trading system, or
market, any other self regulatory organization or the Securities and
Exchange Commission of similar scope or as a replacement for Rule 80B,
may be considered material. Notwithstanding the first sentence of this
paragraph, a Market Disruption Event for a stock traded on a bulletin
board means a suspension, absence or material limitation of trading of
such stock for more than two hours or during the one hour period
preceding 4:00 p.m., New York City time.
() A suspension, absence or material limitation has occurred
on that day, in each case, for more than two hours of trading or during
the one-half hour period preceding the Close of Trading in options
contracts related to the Index or any Successor Index, as the case may
be, whether by reason of movements in price exceeding levels permitted
<PAGE>
by an exchange, trading system or market on which such options
contracts are traded or otherwise.
() Information is unavailable on that date, through a recognized
system of public dissemination of transaction information, for more
than two hours of trading or during the one-half hour period preceding
the Close of Trading, of accurate price, volume or related information
in respect of 20% or more of the underlying stocks which then comprise
the Index or any Successor Index, as the case may be, or in respect of
options contracts related to the Index or any Successor Index, as the
case may be, in each case traded on any major U.S. exchange or trading
system or in the case of stocks of a non-U.S. issuer, the primary
non-U.S. exchange, trading system or market.
For purposes of determining whether a Market Disruption Event has
occurred:
(i) a limitation on the hours or number of days of trading
shall not constitute a Market Disruption Event if it results from an
announced change in the regular business hours of the relevant
exchange, trading system or market;
(ii) any suspension in trading in an option contract on the
Index or the Successor Index, as the case may be, by a major securities
exchange, trading system or market by reason of (a) a price change
violating limits set by such securities market, (b) an imbalance of
orders relating to those contracts, or (c) a disparity in bid and ask
quotes relating to those contracts, shall constitute a Market
Disruption Event notwithstanding that the suspension or material
limitation is less than two hours;
(iii) a suspension or material limitation on an exchange,
trading system or in a market shall include a suspension or material
limitation of trading by one class of investors provided that the
suspension continues for more than two hours of trading or during the
last one-half hour period preceding the Close of Trading on the
relevant exchange, trading system or market but shall not include any
time when the relevant exchange, trading system or market is closed for
trading as part of that exchange's, trading system's or market's
regularly scheduled business hours; and
(iv) "Trading systems" include bulletin board services.
"NYSE" shall mean the New York Stock Exchange.
"Payment Determination Date" shall mean the Calculation Day,
unless a Market Disruption Event occurs with respect to such Payment
Determination Date, in which case the first Trading Day after the Calculation
Day on which a Market Disruption Event does not occur.
"Starting Level" shall mean 268.73.
<PAGE>
"Stated Maturity" shall mean November 10, 2004, or if a Market
Disruption Event occurs, three Business Days after the Payment Determination
Date on which the Final Index Level has been determined.
"Successor Index" shall mean such substitute index as the
Calculation Agent may select pursuant to the Calculation Agency Agreement upon
discontinuance of the Index.
"Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, American Stock Exchange and NASDAQ NMS and in the
over-the-counter market for equity securities as determined by the Calculation
Agent.
<PAGE>
--------------------------------
The following abbreviations, when used in the inscription on
the face of the within Security, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM -as tenants in common.....UNIF GIFT MIN ACT - ________ Custodian ______
..........................................(Cust).....................(Minor)
TEN ENT -.......as tenants by the entireties.......under Uniform Gifts to Minors
JT TEN - as joint tenants with right of......Act ________________________
................survivorship and not as tenants...... (State)
in common
Additional abbreviations may also be used though not in the above list.
--------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(Name and Address of Assignee, including zip code, must be
printed or typewritten.)
the within Security, and all rights thereunder, hereby irrevocably constituting
and appointing
to transfer the said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Security in every particular, without
alteration or enlargement or any change whatever.
<PAGE>
Signature(s) Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT TO
S.E.C.
RULE 17Ad-15.
