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): March 28, 2000
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
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Item 7. Financial Statements and Exhibits
(c) Exhibits
The following Exhibit is incorporated by reference into the
Registration Statement on Form S-3 (Registration No. 333-75723) as an exhibit
thereto and is filed as part of this Report.
4.1 Certificate of Designations with respect to the
Registrant's Series E Preferred Stock
<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: March 30, 2000
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
4.1 Certificate of Designations with respect to the
Registrant's Series E Preferred Stock
Exhibit 4.1
CERTIFICATE OF DESIGNATIONS, POWERS,
PREFERENCES AND RIGHTS
OF THE
FIXED/ADJUSTABLE RATE CUMULATIVE PREFERRED STOCK, SERIES E
($5,000.00 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 (the
"Corporation"), HEREBY CERTIFIES that the following resolution was duly adopted
by the Executive Committee of the Board of Directors of the Corporation in
accordance with Section 151(g) of the General Corporation Law of the State of
Delaware 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 pursuant to the authority conferred upon the Executive
Committee by the By-Laws of the Corporation and pursuant to the authority duly
delegated thereto by the Board of Directors of the Corporation:
RESOLVED, that the Corporation be, and hereby is, authorized
to offer, issue and sell preferred stock, par value $1.00, with a liquidation
preference, in the aggregate, of up to $287,500,000, on the following terms,
with the following designations, powers, preferences and rights:
1. Designation and Amount; Fractional Shares. The series of preferred
stock shall be designated as the "Fixed/Adjustable Rate Cumulative Preferred
Stock, Series E" (the "Series E Preferred Stock"). The Series E Preferred Stock
shall be perpetual and the authorized number of shares of Series E Preferred
Stock shall be fifty-seven thousand five hundred (57,500) shares. The Series E
Preferred Stock is issuable in whole shares only.
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2. Dividends. Holders of shares of Series E Preferred Stock shall be
entitled to receive, when, as and if declared by the Board or a duly authorized
committee thereof out of funds of the Corporation legally available for payment,
cumulative cash dividends in the amounts or at the rate set forth below in this
Section 2. Dividends on the Series E Preferred Stock shall accrue from the date
of initial issuance and shall be payable quarterly, in arrears, on February 28,
May 31, August 31 and November 30 of each year, commencing May 31, 2000 (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 E 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 first
dividend shall accrue, without interest, from the date of initial issuance of
the Series E 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 of the month in which such Dividend Payment Date occurs (or, if the
Dividend Payment Date is postponed for any of the reasons discussed above in
this paragraph, the 15th day of the month prior to such Dividend Payment Date)
(each of which dates being a "Dividend Payment Record Date"). Dividends payable
on the Series E Preferred Stock for any full quarterly period shall be computed
on the basis of a 360-day year consisting of twelve 30-day months and, for any
period shorter than a full quarter, on the basis of the actual number of days
elapsed in such a 90-day quarter. Dividends shall cease to accrue on the Series
E Preferred Stock on the date of their earlier redemption pursuant to Section 7,
unless the Corporation shall default in providing funds for the payment of the
redemption price on the shares called for redemption pursuant thereto.
For each quarterly dividend period (hereinafter referred to
individually as a "Dividend Period") through and including the Dividend Period
ending May 31, 2005, dividends payable on the shares of Series E Preferred Stock
shall be payable at a rate of 7.115% per annum per share on the initial
liquidation preference of $5,000.00 per share. For each Dividend Period
beginning on or after June 1, 2005, dividends payable on the shares of Series E
Preferred Stock shall be payable at a rate per annum of the initial liquidation
preference of $5,000.00 per share equal to the Applicable Rate (as defined
below) in respect of such Dividend Period, expressed as a percentage to the
nearest five hundredths of a percentage point. Each Dividend Period shall
commence on the March 1, June 1, September 1 and December 1, as the case may be,
following the last day of the preceding Dividend Period and shall end on and
include the day next preceding the first day of the next such Dividend Period.
<PAGE>
If, prior to 18 months after the date of the original issuance of the
Series E Preferred Stock, one or more amendments to the Internal Revenue Code of
1986, as amended (the "Code"), are enacted that reduce the percentage of the
dividends-received deduction (currently 70%) as specified in section 243(a)(1)
of the Code or any successor provision (the "Dividends-Received Percentage"),
the amount of each dividend payable (if declared) per share of Series E
Preferred Stock for dividend payments made on or after the effective date of
such change in the Code will be adjusted by multiplying the amount of the
dividend payable described above (before adjustment) by the following fraction
(the "DRD Formula"), and rounding the result to the nearest cent (with one-half
cent rounded up):
1-.35(1-.70)
------------
1-.35(1-DRP)
For the purposes of the DRD Formula, "DRP" means the Dividends-Received
Percentage (expressed as a decimal) applicable to the dividend in question;
provided, however, that if the Dividends-Received Percentage applicable to the
dividend in question shall be less than 50%, then the DRP shall equal .50.
Notwithstanding the foregoing provisions, if, with respect to any such
amendment, the Corporation receives either an unqualified opinion of nationally
recognized independent tax counsel selected by the Corporation or a private
letter ruling or similar form of authorization from the Internal Revenue Service
("IRS") to the effect that such amendment does not apply to a dividend payable
on the Series E Preferred Stock, then such amendment will not result in the
adjustment provided for pursuant to the DRD Formula with respect to such
dividend. Such opinion shall be based upon the legislation amending or
establishing the DRP or upon a published pronouncement of the IRS addressing
such legislation.
If any such amendment to the Code is enacted after the dividend payable
on a Dividend Payment Date has been declared, the amount of the dividend payable
on such Dividend Payment Date will not be increased; instead, additional
dividends (the "Post Declaration Date Dividends") equal to the excess, if any,
of (x) the product of the dividend paid by the Corporation on such Dividend
Payment Date and the DRD Formula (where the DRP used in the DRD Formula would be
equal to the greater of the Dividend-Received Percentage applicable to the
dividend in question and .50) over (y) the dividend paid by the Corporation on
such Dividend Payment Date, will be payable (if declared) on the next succeeding
Dividend Payment Date to holders of Series E Preferred Stock on the Dividend
Payment Record Date applicable to such Dividend Payment Date or, if the Series E
Preferred Stock is called for redemption prior to such Dividend Payment Record
Date, to holders of Series E Preferred Stock on the applicable redemption date,
as the case may be, in addition to any other amounts payable on such date.
Notwithstanding the foregoing provisions, if, with respect to any such
amendment, the Corporation receives either an unqualified opinion of nationally
recognized independent tax counsel selected by the Corporation or a private
letter ruling or similar form of authorization from the IRS to the effect that
such amendment does not apply to a dividend so payable on the Series E Preferred
Stock, then such amendment will not result in the payment of Post Declaration
Date Dividends. The opinion referenced in the previous sentence shall be based
upon the legislation amendment or establishing the DRP or upon a published
pronouncement of the IRS addressing such legislation.
<PAGE>
If any such amendment to the Code is enacted and the reduction in the
Dividends-Received Percentage retroactively applies to a Dividend Payment Date
as to which the Corporation previously paid dividends on the Series E Preferred
Stock (each, an "Affected Dividend Payment Date"), the Corporation will pay (if
declared) additional dividends (the "Retroactive Dividends") on the next
succeeding Dividend Payment Date to holders of Series E Preferred Stock on the
Dividend Payment Record Date applicable to such Dividend Payment Date (or, if
such amendment is enacted after the dividend payable on such Dividend Payment
Date has been declared, to holders of Series E Preferred Stock on the Dividend
Payment Record Date following the date of enactment) or, if the Series E
Preferred Stock is called for redemption prior to such Dividend Payment Record
Date, to holders of Series E Preferred Stock on the applicable redemption date,
as the case may be, in an amount equal to the excess of (x) the product of the
dividend paid by the Corporation on each Affected Dividend Payment Date and the
DRD Formula (where the DRP used in the DRD Formula would be equal to the greater
of the Dividends-Received Percentage and .50 applied to each Affected Dividend
Payment Date) over (y) the sum of the dividend paid by the Corporation on each
Affected Dividend Payment Date. The Corporation will only make one payment of
Retroactive Dividends for any such amendment. Notwithstanding the foregoing
provisions, if, with respect to any such amendment, the Corporation receives
either an unqualified opinion of nationally recognized independent tax counsel
selected by the Corporation or a private letter ruling or similar form of
authorization from the IRS to the effect that such amendment does not apply to a
dividend payable on an Affected Dividend Payment Date for the Series E Preferred
Stock, then such amendment will not result in the payment of Retroactive
Dividends with respect to such Affected Dividend Payment Date. The opinion
referenced in the previous sentence shall be based upon the legislation amending
or establishing the DRP or upon a published pronouncement of the IRS addressing
such legislation.
Notwithstanding the foregoing, no adjustment in the dividends payable
by the Corporation shall be made, and no Post Declaration Date Dividends or
Retroactive Dividends shall be payable by the Corporation, in respect of the
enactment of any amendment to the Code 18 months or more after the date of
original issuance of the Series E Preferred Stock that reduces the
Dividends-Received Percentage.
In the event that the amount of dividends payable per share of the
Series E Preferred Stock is adjusted pursuant to the DRD Formula and/or Post
Declaration Date Dividends or Retroactive Dividends are to be paid, the
Corporation will give notice of each such adjustment and, if applicable, any
Post Declaration Date Dividends and Retroactive Dividends to the holders of
Series E Preferred Stock.
No dividends may be declared or paid or set apart for payment on any
Parity Preferred Stock (as defined in Section 9 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 E Preferred Stock, dividends for all
dividend payment periods of the Series E 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 E Preferred Stock
coinciding with or next preceding such Dividend Payment Date, on the other hand.
<PAGE>
Except as set forth in the preceding sentence, unless full cumulative
dividends on the Series E Preferred Stock have been paid through the most
recently completed quarterly dividend period for the Series E 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 E 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 E 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 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 E 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 E
Preferred Stock as to dividends.
3. Definition of Applicable Rate, etc. (a) Except as provided below in
this paragraph, the "Applicable Rate" for any Dividend Period beginning on or
after June 1, 2005 shall be equal to the Effective Rate (as hereinafter defined)
plus 1.150%. The "Effective Rate" for any Dividend Period beginning on or after
June 1, 2005 shall be equal to the highest of the Treasury Bill Rate, the Ten
Year Constant Maturity Rate and the Thirty Year Constant Maturity Rate (each as
hereinafter defined) for such Dividend Period. In the event that the Corporation
determines in good faith that for any reason:
(i) any one of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate or the Thirty Year Constant Maturity Rate cannot be determined for
any Dividend Period beginning on or after June 1, 2005, then the Effective Rate
for such Dividend Period shall be equal to the higher of whichever two of such
rates can be so determined;
(ii) only one of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate or the Thirty Year Constant Maturity Rate can be determined for
any Dividend Period beginning on or after June 1, 2005, then the Effective Rate
for such Dividend Period shall be equal to whichever such rate can be so
determined; or
(iii) none of the Treasury Bill Rate, the Ten Year Constant
Maturity Rate or the Thirty Year Constant Maturity Rate can be determined for
any Dividend Period beginning on or after June 1, 2005, then the Effective Rate
for the preceding Dividend Period shall be continued for such Dividend Period.
Anything herein to the contrary notwithstanding, the Applicable Rate
for any Dividend Period shall in no event be less than 7.615% per annum or
greater than 13.615% per annum (without taking into account adjustments
described in the third paragraph of Section 2 above).
<PAGE>
(b) Except as described below in this paragraph, the "Treasury Bill
Rate" for each applicable Dividend Period shall be the arithmetic average of the
two most recent weekly per annum market discount rates (or the one weekly per
annum market discount rate, if only one such rate is published during the
relevant Calendar Period (as hereinafter defined)) for three-month U.S. Treasury
bills, as published weekly by the Federal Reserve Board (as hereinafter defined)
during the Calendar Period immediately preceding the last ten calendar days
preceding the Dividend Period for which the dividend rate on the Series E
Preferred Stock is being determined. In the event that the Federal Reserve Board
does not publish such a weekly per annum market discount rate during such
Calendar Period, then the Treasury Bill Rate for such Dividend Period shall be
the arithmetic average of the two most recent weekly per annum market discount
rates (or the one weekly per annum market discount rate, if only one such rate
is published during such Calendar Period) for three-month U.S. Treasury bills,
as published weekly during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by the Corporation. In the
event that a per annum market discount rate for three-month U.S., Treasury bills
is not published by the Federal Reserve Board or by any Federal Reserve Bank or
by any U.S. Government department or agency during such Calendar Period, then
the Treasury Bill Rate for such Dividend Period shall be the arithmetic average
of the two most recent weekly per annum market discount rates (or the one weekly
per annum market discount rate, if only one such rate is published during the
relevant Calendar Period) for all of the U.S. Treasury bills then having
remaining maturities of not less than 80 nor more than 100 days, as published
during such Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such rates, by any Federal Reserve Bank or by any
U.S. Government department or agency selected by the Corporation. In the event
that the Corporation determines in good faith that for any reason no such U.S.
Treasury bill rates are published as provided above during such Calendar Period,
then the Treasury Bill Rate for such Dividend Period shall be the arithmetic
average of the per annum market discount rates based upon the closing bids
during such Calendar Period for each of the issues of marketable
non-interest-bearing U.S. Treasury securities with a remaining maturity of not
less than 80 nor more than 100 days from the date of each such quotation, as
chosen and quoted daily for each business day in New York city (or less
frequently if daily quotations are not generally available) to the Corporation
by at least three recognized dealers in U.S. Government securities selected by
the Corporation. In the event that the Corporation determines in good faith that
for any reason the Corporation cannot determine the Treasury Bill Rate for any
applicable Dividend Period as provided above in this paragraph, the Treasury
Bill Rate for such Dividend Period shall be the arithmetic average of the per
annum market discount rates based upon the closing bids during such Calendar
Period for each of the issues of marketable interest-bearing U.S. Treasury
securities with a remaining maturity of not less than 80 nor more than 100 days
from the date of each such quotation, as chosen and quoted daily for each
business day in New York City (or less frequently if daily quotations are not
generally available) to the Corporation by at least three recognized dealers in
U.S. Government securities selected by the Corporation.
<PAGE>
(c) Except as described below in this paragraph, the "Ten Year Constant
Maturity Rate" for each applicable Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Ten Year Average Yields (as
hereinafter defined) (or the one weekly per annum Ten Year Average Yield, if
only one such yield is published during the relevant Calendar Period), as
published weekly by the Federal Reserve Board during the Calendar Period
immediately preceding the last ten calendar days preceding the Dividend Period
for which the dividend rate on the Series E Preferred Stock is being determined.
In the event that the Federal Reserve Board does not publish such a weekly per
annum Ten Year Average Yield during such Calendar Period, then the Ten Year
Constant Maturity Rate for such Dividend Period shall be the arithmetic average
of the two most recent weekly per annum Ten year Average Yields (or the one
weekly per annum Ten Year Average Yield, if only one such yield is published
during the relevant Calendar Period), as published weekly during such Calendar
Period by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Corporation. In the event that a per annum Ten Year
Average Yield is not published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency during such Calendar
Period, then the Ten Year Constant Maturity Rate for such Dividend Period shall
be the arithmetic average of the two most recent weekly per annum average yields
to maturity (or the one weekly per annum average yield to maturity, if only one
such yield is published during the relevant Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities (as hereinafter defined)) then having remaining
maturities of not less than eight nor more than twelve years, as published
during such Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such yields, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by the Corporation. In the
event that the Corporation determines in good faith that for any reason the
Corporation cannot determine the Ten Year Constant Maturity Rate for any
applicable Dividend Period as provided above in this paragraph, then the Ten
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the per annum average yields to maturity based upon the closing bids
during such Calendar Period for each of the issues of actively traded marketable
U.S. Treasury fixed interest rate securities (other than Special Securities)
with a final maturity date not less than eight nor more than twelve years from
the date of each such quotation, as chosen and quoted daily for each business
day in New York city (or less frequently if daily quotations are not generally
available) to the Corporation by at least three recognized dealers in U.S.
Government securities selected by the Corporation.
<PAGE>
(d) Except as described below in this paragraph the "Thirty Year
Constant Maturity Rate" for each applicable Dividend Period shall be the
arithmetic average of the two most recent weekly per annum Thirty Year Average
Yields (as hereinafter defined) (or the one weekly per annum Thirty Year Average
yield, if only one such yield is published during the relevant Calendar Period),
as published weekly by the Federal Reserve Board during the Calendar Period
immediately preceding the last ten calendar days preceding the Dividend Period
for which the dividend rate on the Series E Preferred Stock is being determined.
In the event that the Federal Reserve Board does not publish such a weekly per
annum Thirty Year Average Yield during such Calendar Period, then the Thirty
Year Constant Maturity Rate for such Dividend Period shall be the arithmetic
average of the two most recent weekly per annum Thirty Year Average Yields (or
the one weekly per annum Thirty Year Average Yield, if only one such yield is
published during the relevant Calendar Period), as published weekly during such
Calendar Period by any Federal Reserve Bank or by any U.S. Government department
or agency selected by the Corporation. In the event that a per annum Thirty Year
Average Yield is not published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency during such Calendar
Period, then the Thirty Year Constant Maturity Rate for such Dividend Period
shall be the arithmetic average of the two most recent weekly per annum average
yields to maturity (or the one weekly per annum average yield to maturity, if
only one such yield is published during the relevant Calender Period) for all of
the actively traded marketable U.S. Treasury fixed interest rate securities
(other than Special Securities) then having remaining maturities of not less
than twenty-eight nor more than thirty years, as published during such Calendar
Period by the Federal Reserve Board or, if the Federal Reserve Board does not
publish such yields, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Corporation. In the event that the
Corporation determines in good faith that for any reason the Corporation cannot
determine the Thirty Year Constant Maturity for any applicable Dividend Period
as provided above in this paragraph, the Thirty Year Constant Maturity Rate for
such Dividend Period shall be the arithmetic average of the per annum average
yields to maturity based upon the closing bids during such Calendar Period for
each of the issues of actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities) with a final maturity date not
less than twenty-eight nor more than thirty years from the date of each such
quotation, as chosen and quoted daily for each business day in New York City (or
less frequently if daily quotations are not generally available) to the
Corporation by at least three recognized dealers in U.S. Government securities
selected by the Corporation.
(e) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Thirty Year Constant Maturity Rate shall each be rounded to the nearest five
hundredths of a percent.
(f) The Applicable Rate with respect to each Dividend Period beginning
on or after June 1, 2005 shall be calculated as promptly as practicable by the
Corporation according to the appropriate method described above. The Corporation
shall cause notice of each Applicable Rate to be sent to the holders of the
Series E Preferred Stock.
(g) For purposes of this Section,
(i)"Calendar Period" means a period of fourteen calendar days;
(ii) "Federal Reserve Board" means the board of Governors of
the Federal Reserve System;
(iii) "Special Securities" means securities which can, at the
option of the holder, be surrendered at face value in payment of any Federal
estate tax or which provide tax benefits to the holder and are priced to reflect
such tax benefits or which were originally issued at a deep or substantial
discount;
(iv) "Ten Year Average Yield" means the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of ten years); and
(v) "Thirty Year Average Yield" means the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of thirty years).
<PAGE>
4. Liquidation Preference. The shares of Series E 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 E 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 E 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 the liquidation preference of $5,000.00 per share plus an amount equal
to all dividends (whether or not earned or declared) accrued and accumulated and
unpaid on the shares of Series E Preferred Stock to the date of final
distribution. The holders of the Series E Preferred Stock shall not be entitled
to receive the preferential amounts as aforesaid until the liquidation
preference of any other stock of the Corporation ranking senior to the Series E
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 preferential amounts as
aforesaid, the holders of shares of Series E 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 and Series E Preferred
Stock shall be insufficient to pay in full the preferential amounts payable
thereon, 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 with or into
the Corporation, nor a sale, lease, exchange or transfer of all or any part of
the Corporation's assets shall be considered a liquidation, dissolution or
winding up of the Corporation.
5. Conversion. The Series E Preferred Stock is not convertible into, or
exchangeable for, other securities or property.
<PAGE>
6. Voting Rights. The Series E 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 E 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 E 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 E 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 E
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 E Preferred Stock shall be entitled
to ten votes 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 E Preferred Stock remain
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least 66-2/3% of the shares of such Series E 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 E
Preferred Stock, or reclassify any authorized capital stock of the Corporation
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 E 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 E Preferred
Stock. Any increase in the amount of authorized common stock or other 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 E 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.
In exercising the voting rights set forth in this Section 6 or when
otherwise granted voting rights by operation of law or by the Corporation, each
share of Series E Preferred Stock shall be entitled to ten votes.
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 E Preferred Stock shall be entitled to vote
shall be effected, all outstanding shares of Series E Preferred Stock shall have
been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
<PAGE>
7. Redemption. The shares of Series E Preferred Stock shall not be
redeemable prior to May 31, 2005. On and after such date, the Corporation, at
its option, may redeem shares of the Series E Preferred Stock, as a whole or in
part, at any time or from time to time, at a redemption price equal to $5,000.00
per share, plus, in each case, an amount equal to all dividends (whether or not
earned or declared) accrued and accumulated and unpaid to, but excluding, the
date fixed for redemption.
The holders of shares of Series E 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.
If fewer than all the outstanding shares of Series E 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 by lot or
pro rata or by any other means determined by the Board of Directors in its sole
discretion to be equitable.
If full cumulative dividends on the Series E Preferred Stock have not
been paid or set apart for payment with respect of all prior dividend periods,
the Series E Preferred Stock may not be redeemed in part and the Corporation may
not purchase or acquire any shares of the Series E Preferred Stock otherwise
than pursuant to a purchase or exchange offer made on the same terms to all
holders of the Series E Preferred Stock.
In the event the Corporation shall redeem shares of Series E 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 E 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 E 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).
<PAGE>
If a notice of redemption has been given pursuant to this Section 7 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 E 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 authority to such bank or trust company that
such funds be delivered upon redemption of the shares of Series E 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 E 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.
8. Amendment of Resolution. The Board reserves the right from time to
time to increase or decrease the number of shares that constitute the Series E
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.
9. 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 E 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 E Preferred Stock;
<PAGE>
(b) on a parity with shares of the Series E 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 E
Preferred Stock, 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
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 E Preferred Stock (the term "Parity
Preferred Stock" being used to refer to any stock on a parity with the shares of
Series E 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 E 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
E 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 E 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, the Corporation's Cumulative Convertible
Voting Preferred Stock, Series B, the Corporation's 5.94% Cumulative Preferred
Stock, Series C, and the Corporation's 5.67% Cumulative Preferred Stock, Series
D.
<PAGE>
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
Assistant Secretary on March 28, 2000.
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Daniel O. Minerva
Name: Daniel O. Minerva
Title: Treasurer
Attested:
By: /s/ Jeannine Cozzati
Name: Jeannine Cozzati
Title: Assistant Secretary
