Securities and Exchange Commission (the "Commission")
Washington, DC 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934 (the "Exchange Act")
LEHMAN BROTHERS HOLDINGS INC. (the "Registrant")
(Exact name of registrant as specified in its charter)
Delaware
(State of incorporation or organization)
13-3216325
(IRS Employer Identification No.)
3 World Financial Center
New York, New York 10285
(Address of principal executive offices, including zip code)
Securities to be registered pursuant to Section 12(b) of the Exchange Act:
Name of each exchange
Title of each class on which each class is
to be so registered to be registered
------------------------------ ------------------------------
10 Uncommon Values Index The American Stock Exchange
Structured Equity Securities LLC
Notes due 2001
If this form relates to the registration of a class of securities pursuant to
Section 12 (b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box.
[ X ]
If this form relates to the registration of a class of securities pursuant to
Section 12 (g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. [ ]
Securities to be Registered Pursuant to Section 12(g) of the Exchange Act:
None
4
<PAGE>
Item 1. Description of Registrant's Securities to be
Registered.
The Registrant hereby incorporates by reference the descriptions set forth under
the captions "Description of the Notes," "The Index" and "Description of Debt
Securities" on pages S-9 to S-19 and 4 to 13 of the Prospectus Supplement dated
September 15, 2000, and accompanying Prospectus dated February 17, 1998, filed
with the Commission on September 19, 2000, pursuant to Rule 424(b)(2) under the
Securities Act of 1933.
Item 2. Exhibits.
The securities described herein are to be registered pursuant to Section 12(b)
of the Exchange Act on an exchange on which other securities of the Registrant
are currently registered. In accordance with the instructions regarding exhibits
on Form 8-A, the following exhibits are filed herewith or incorporated herein by
reference:
1.01 Standard Multiple Series Indenture Provisions dated July 30, 1987 and as
amended November 16, 1987 (incorporated by reference to Exhibit 4(a) to
Post-Effective Amendment No. 1 to Registration Statement No. 33-16141,
filed with the Commission on November 16, 1987).
1.02 Indenture dated as of September 1, 1987 between the Registrant and
Citibank, N.A., as Trustee ("Citibank") (incorporated by reference to
Exhibit 4(b) to Post-Effective Amendment No. 1 to Registration Statement
No. 33-16141, filed with the Commission on November 16, 1987).
1.03 Supplemental Indenture dated as of November 25, 1987 between the Registrant
and Citibank (incorporated by reference to Exhibit 4(m) to Registration
Statement No. 33-25797, filed with the Commission on November 25, 1988).
1.04 Second Supplemental Indenture dated as of November 27, 1990 between the
Registrant and Citibank (incorporated by reference to Exhibit 4(e) to
Registration Statement No. 33-49062, filed with the Commission on June 30,
1992).
1.05 Third Supplemental Indenture dated as of September 13, 1991 between the
Registrant and Citibank (incorporated by reference to Exhibit 4(f) to
Registration Statement No. 33-46146, filed with the Commission on March 10,
1992).
5
<PAGE>
1.06 Fourth Supplemental Indenture dated as of October 4, 1993 between the
Registrant and Citibank (incorporated by reference to Exhibit 4(f) to Form
8-A, filed with the Commission on October 7, 1993).
1.07 Fifth Supplemental Indenture dated as of August 1, 1995 between the
Registrant and Citibank (incorporated by reference to Exhibit 4(h) to
Registration Statement No. 33-62085, filed with the Commission on August
24, 1995).
1.08 Sixth Supplemental Indenture dated as of June 26, 1997 between the
Registrant and Citibank (incorporated by reference to Exhibit 4(h) to
Registration Statement No. 33-38227, filed with the Commission on October
17, 1997).
1.09 Global Security representing $9,150,000 aggregate principal amount of the
Corporation's 10 Uncommon Values Index Structured Equity Securities Notes
Due 2001 (filed herewith).
1.10 Calculation Agency Agreement, dated as of September 15, 2000, between
Lehman Brothers Holdings Inc. (the "Corporation") and Lehman Brothers Inc.,
as calculation agent, relating to the Corporation's 10 Uncommon Values
Index Structured Equity Securities Notes Due 2001 (filed herewith).
SIGNATURE
Pursuant to the requirements of Section 12 of the Exchange Act, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized.
Lehman Brothers Holdings Inc.
By: /s/ Barrett S. DiPaolo
-------------------------------
Barrett S. DiPaolo
Vice President
Date: September 20, 2000
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
1.09 Global Security representing $9,150,000 aggregate principal amount of the
Corporation's 10 Uncommon Values Index Structured Equity Securities Notes
Due 2001.
1.10 Calculation Agency Agreement, dated as of September 15, 2000, between
Lehman Brothers Holdings Inc. (the "Corporation") and Lehman Brothers Inc.,
as calculation agent, relating to the Corporation's 10 Uncommon Values
Index Structured Equity Securities Notes Due 2001.
<PAGE>
EXHIBIT 1.09
LEHMAN BROTHERS HOLDINGS INC.
10 Uncommon Values(R)Index Structured Equity Securities Notes Due 2001
Number R-1 $9,150,000
CUSIP 524908CQ1
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 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 lesser of
(a) $1,133 and (b) the Alternative Redemption Amount (the "Payment Amount").
Any amount payable 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.
8
<PAGE>
"10 Uncommon Values" is a registered trademark of Lehman Brothers Inc.
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: September 20, 2000 LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Barrett S.DiPaolo
---------------------------------------
Name: Barrett S. DiPaolo
Title: Vice President
[SEAL]
Attest: /s/ Madeline Shapiro
------------------------------------
Name: Madeleine Shapiro
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: September 20, 2000
CITIBANK, N.A.
as Trustee
By: ___________________________
Authorized Signatory
<PAGE>
[Reverse of Security]
This Security is one of a duly authorized series of Securities
of the Company designated as 10 Uncommon Values(R) Index Structured Equity
Securities Notes Due 2001 (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 Index Level used to calculate the Alternative Redemption
Amount shall be determined by the Calculation Agent.
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 Payment Amount and shall have no duty to make any such
determination.
This Security is not subject to any sinking fund and is not
redeemable prior to its Stated Maturity.
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 acceleration
permitted under the Indenture will be equal to the Maturity Payment Amount
calculated as though the date of acceleration was the Stated Maturity and the
date three Business Days prior thereto was the Valuation Date.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than 66 2/3% 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
<PAGE>
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 $100,000 and
whole multiples of $1,000 in excess of $100,000.
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.
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.
The Company intends to treat, and by purchasing this Security,
the holder agrees to treat, for all tax purposes, this Security as a financial
contract for cash settlement, rather than as a debt instrument.
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
<PAGE>
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 some of the terms used in
this Security.
"Alternative Redemption Amount" shall mean, for each $1,000
principal amount of the Securities represented hereby, the amount of (a) $133,
plus (b) the product of (x) $1,000 and (y) the Index Level of the 10 Uncommon
Values Index on the Valuation Date, subject to the provisions of clause (iv) of
the definition of "Closing Price", divided by 90.
"AMEX" shall mean the American Stock Exchange.
"Average Execution Price" for a security or other property
shall mean the average execution price that an affiliate of the Company receives
or pays for such security or property, as the case may be, to hedge the
Company's obligations under the Securities.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which either the NYSE or the AMEX is not open for securities
trading or commercial banks in New York City are authorized or required by law
or executive order to remain closed.
"Calculation Agent" shall mean the person that has entered
into an agreement with the Company providing for, among other things, the
determination of the Index Level and the Payment Amount. The initial Calculation
Agent is Lehman Brothers Inc.
.
"Close of Trading" shall mean 4:00 p.m., New York City time.
"Closing Price," means the following, determined by the
Calculation Agent based on information reasonably available to it:
(i) If the Index Security is listed on a United States
national securities exchange, trading system or is a NASDAQ Stock
Market, Inc. security, the last reported sale price at the Close of
Trading, regular way, on such day, on the primary securities exchange
or trading system registered under the Securities Exchange Act of 1934
on which such Index Security is listed or admitted to trading or NASDAQ
Stock Market, Inc., as the case may be.
(ii) If the Index Security is listed on a non-United States
securities exchange, trading system (other than a bulletin board) or
market, the last reported sale price at the Close of Trading, regular
way, on such day, on the primary exchange, trading system or market on
which such Index Security is listed or admitted to trading, as the case
may be. The Closing Price will then be converted into U.S. dollars
using the Official W.M. Reuters Spot Closing Rate.
<PAGE>
(iii) If the Index Security is not listed on a national
securities exchange or trading system or is not a NASDAQ Stock Market,
Inc. security, and is listed or traded on a bulletin board, the average
execution price that an affiliate of the Company receives upon the sale
of such Index Security used to hedge the Company's obligations for this
Security. If such Index Security is listed or traded on a non-United
States bulletin board, the Closing Price will then be converted into
U.S. dollars using the Official W.M. Reuters Spot Closing Rate.
(iv) If a Market Disruption Event has occurred for an Index
Security on a day on which the Closing Price for such Index Security is
to be calculated, the Closing Price for such Index Security shall
initially be determined using the Closing Price for such Index Security
on the next preceding Trading Day on which a Market Disruption Event
did not occur. Once the Market Disruption Event has ceased, the Closing
Price of such Index Security shall then be adjusted to equal the
Average Execution Price of the Index Security.
"Index Level", when used with respect to the Valuation Date
shall equal the sum of (a) the sum of the products of the Closing Prices and the
applicable Multipliers for each Index Security for which a Market Disruption
Event does not occur on the Valuation Date, (b) if a Market Disruption Event
occurs for an Index Security on the Valuation Date, the product of the Closing
Price for such Index Security and the Multiplier for such Index Security and (c)
any Cash included in the 10 Uncommon Values Index on the Valuation Date.
"Index Securities" shall mean the securities included in the
10 Uncommon Values Index from time to time.
"Market Disruption Event" with respect to an Index Security
means any of the following events as determined by the Calculation Agent:
(i) A suspension, absence or material limitation of trading of
such Index Security 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 Index Security is traded or, in the case of an
Index Security not listed or quoted in the United States, on the
primary exchange, trading system or market for such Index Security.
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 an Index Security traded on a
bulletin board means a suspension, absence or material limitation of
trading of such Index Security for more than two hours or during the
one hour period preceding 4:00 p.m., New York City time.
<PAGE>
(ii) 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 such Index Security, whether by reason of
movements in price exceeding levels permitted by an exchange, trading
system or market on which options contracts related to such Index
Security are traded or otherwise.
(iii) 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 such Index Security or in respect of options
contracts related to such Index Security, in each case traded on any
major U.S. exchange or trading system or in the case of Index
Securities 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
will 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 an
Index Security 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 will
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 will 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 will 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.
"Multiplier" relating to each Index Security shall mean the
number of shares (including any fractional share expressed as a decimal) of such
Index Security included in the 10 Uncommon Values Index.
"NYSE" shall mean the New York Stock Exchange.
14
<PAGE>
"Official W.M. Reuters Spot Closing Rates" shall mean the
closing spot rates published on Reuters page "WMRA" relevant for such Index
Security.
"Stated Maturity" shall mean July 3, 2001, or (i) if July 3,
2001 is not a Business Day, the next Business Day and (ii) if a Market
Disruption Event occurs on the Valuation Date, on the fifth Business Day after
the date that an affiliate of the Company completes the sale of the Index
Security with respect to which such Market Disruption Event occurred to hedge
the Company's obligations under the Securities.
"Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, AMEX and NASDAQ NMS and in the over-the-counter market
for equity securities as determined by the Calculation Agent.
"Valuation Date" shall mean June 28, 2001 or, if June 28, 2001
is not a Business Day, the next succeeding Business Day.
"10 Uncommon Values Index" shall mean the group of common
stocks (or the depositary receipts representing such common stocks) of 10
corporations, selected on June 29, 2000 by the Investment Policy Committee of
Lehman Brothers Inc. with the assistance of its Equity Research Department, as
adjusted by certain extraordinary corporate events involving the issuers of the
Index Securities.
All terms used but not defined in this Security are used
herein as defined in the Indenture.
<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 notin 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.
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.
<PAGE>
EXHIBIT 1.10
CALCULATION AGENCY AGREEMENT
(10 Uncommon Values(R)Index Structured Equity Securities Notes Due 2001)
AGREEMENT, dated as of September 15, 2000, between Lehman
Brothers Holdings Inc. (the"Company") and Lehman Brothers Inc.,as Calculation
Agent.
WHEREAS, the Company has authorized the issuance of $9,150,000
aggregate principal amount of 10 Uncommon Values(R) Index Structured Equity
Securities Notes Due 2001, which will be issued in denominations of $100,000 and
whole multiples of $1,000 in excess of $100,000 (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:
1. 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.
2. Calculations and Information Provided. In response to a
request made by the Trustee for a determination of the Payment Amount due at
Stated Maturity of the Securities,
the Calculation Agent shall determine the
Payment Amount due at Stated Maturity and notify the Trustee of its
determination. The Calculation Agent shall also be responsible for (a) the
determination of the Index Level on the Valuation Date; (b) determining under
various circumstances if any adjustments to the 10 Uncommon Values Index and/or
the Multipliers should be made; and (c) whether a Market Disruption Event has
occurred. The Calculation Agent shall notify the Trustee of any such adjustment
or if a Market Disruption Event has occurred. In addition, the Calculation Agent
shall provide information to the American Stock Exchange ("AMEX") that is
necessary for the AMEX's daily calculation and dissemination of the level of the
10 Uncommon Values Index if the AMEX is unable to obtain such information. Annex
A hereto sets forth the procedures the Calculation Agent will use to determine
the information described in this Section 2.
3. 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.
4. 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.
5. 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:
(i) in acting under this Agreement, the Calculation Agent
is acting solely as an independent expert and not as agent 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;
<PAGE>
(ii) 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;
(iii) the Calculation Agent shall be obliged to perform
only such duties as are set out specifically herein and any duties
necessarily incidental thereto;
(iv) 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
(v) the Calculation Agent shall incur no liability
hereunder except for loss sustained by reason of its gross negligence
or wilful misconduct.
6. 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.
<PAGE>
(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 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.
<PAGE>
7. Certain Definitions. Terms not otherwise defined
herein or in Annex A hereto are used herein as defined in the Indenture or the
Securities.
8. 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.
9. 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 Business Days), (a) in the case of the
Company, to it at Three World Financial Center, New York, New York 10285
(facsimile: (212) 526-3772) (telephone: (212) 526-4841), 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.
<PAGE>
10. Governing Law. This Agreement shall be governed by and
continued in accordance with the laws of the State of New York.
11. 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.
12. 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.
[Signature page follows]
<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.,
as the Company
By: /s/ Barrett S.DiPaolo
-----------------------------------------
Name: Barrett S. DiPaolo
Title: Vice President
LEHMAN BROTHERS INC.,
as Calculation Agent
By: /s/ Barrett S.DiPaolo
-----------------------------------------
Name: Barrett S. DiPaolo
Title: Vice President
<PAGE>
ANNEX A
I. 10 Uncommon Values Index.
------------------------
Each year, the Investment Policy Committee of Lehman Brothers Inc.,
with the assistance of its Equity Research Department, selects a portfolio of 10
common stocks that appear to be unusually attractive and not yet recognized as
such by the market (the "10 Uncommon Values").
The "10 Uncommon Values Index" represented on June 29, 2000 an equal
dollar-weighted portfolio of the common stocks of the ten companies underlying
the 10 Uncommon Values, as adjusted by certain extraordinary corporate events
involving the issuers of the Index Securities as described herein.
II. Determination of the Payment Amount.
-----------------------------------
The Calculation Agent shall determine the Index Level on the Valuation
Date, and the Payment Amount payable for each Security.
The amount payable at Stated Maturity for each $1,000 principal amount
of Securities (the "Payment Amount") shall equal to the lesser of (a) $1,133 and
(b) the Alternative Redemption Amount. The Alternative Redemption Amount, for
each $1,000 principal amount of the Securities, is equal to $133 plus the
product of (x) $1,000 and (y) the Index Level of the 10 Uncommon Values Index on
the Valuation Date, subject to the provisions of clause (iv) of the definition
of "Closing Price", divided by 90.
III. Multipliers.
-----------
The Multiplier relating to each Index Security is the number of shares
(including fractional shares, expressed as a decimal) of such Index Security
included in the 10 Uncommon Values Index. The Multipliers for each Index
Security as of September 15, 2000 are:
Issuer Multiplier
Agilent Technologies, Inc................. 0.128191
BEA Systems, Inc.......................... 0.217762
Cendant Corporation....................... 0.686238
Gemstar International Group Limited....... 0.176994
Hewlett-Packard Company................... 0.081888
Juniper Networks, Inc..................... 0.071361
Eli Lilly and Company..................... 0.105385
Micron Technology, Inc.................... 0.112107
Nortel Networks Corporation............... 0.145956
Tellabs, Inc.............................. 0.144504
<PAGE>
The Multipliers with respect to each Index Security shall remain
constant unless adjusted for certain extraordinary corporate events as described
below. Each Multiplier shall be rounded at the Calculation Agent's discretion.
IV. Adjustments to the Multipliers and the 10 Uncommon Values Index.
Adjustments to a Multiplier and the 10 Uncommon Values Index shall be
made in the following circumstances. For purposes of these adjustments, except
as noted below, American Depository Receipts ("ADRs") are treated like common
stock if a comparable adjustment to the foreign shares underlying the ADRs is
made pursuant to the terms of the depository agreement for the ADRs or if the
holders of ADRs are entitled to receive property in respect of the underlying
foreign share.
A. If an Index Security is subject to a stock split or reverse stock
split, then once the split has become effective, the Multiplier relating to the
Index Security shall be adjusted. The Multiplier shall be adjusted to equal the
product of the number of shares outstanding of the Index Security after the
split with respect to each share of such Index Security immediately prior to
effectiveness of the split and the prior Multiplier.
B. If an Index Security is subject to an extraordinary stock dividend
or extraordinary stock distribution that is given equally to all holders of
shares, then once the Index Security is trading ex-dividend, the Multiplier for
such Index Security shall be increased by the product of the number of shares of
such Index Security issued with respect to one share of such Index Security and
the prior Multiplier.
C. If the issuer of an Index Security, or if an Index Security is an
ADR, the foreign issuer of the underlying foreign share is being liquidated or
dissolved or is subject to a proceeding under any applicable bankruptcy,
insolvency or other similar law, such Index Security shall continue to be
included in the 10 Uncommon Values Index so long as the primary exchange,
trading system or market is reporting a market price for the Index Security. If
a market price, including a price on a bulletin board service, is no longer
available for an Index Security, then the value of the Index Security shall
equal zero for so long as no market price is available, and no attempt shall be
made to find a replacement stock or increase the level of the 10 Uncommon Values
Index to compensate for the deletion of such Index Security.
D. If the issuer of an Index Security, or if an Index Security is an
ADR, the foreign issuer of the underlying foreign share, has been subject to a
merger or consolidation and is not the surviving entity and holders of the Index
Security are entitled to receive cash, securities, other property or a
combination thereof in exchange for the Index Security, then the following shall
be included in the 10 Uncommon Values Index:
1. To the extent cash is received, the 10 Uncommon Values
Index shall include the amount of the cash consideration at the time
holders are entitled to receive the cash consideration (the "M&A Cash
Component"), plus accrued interest. Interest shall accrue beginning the
first London Business Day after the day that holders are entitled to
receive the cash consideration until the next Announcement Day (the
"M&A Cash Component Interest Accrual Period"). Interest shall accrue on
the M&A Cash Component at a rate equal to the London Interbank Offered
Rate ("LIBOR") with a term corresponding to the M&A Cash Component
Interest Accrual Period.
<PAGE>
2. To the extent that equity securities that are traded or
listed on an exchange, trading system or market are received, once the
exchange for the new securities has become effective, the former Index
Security shall be removed from the 10 Uncommon Values Index and the new
security shall be added to the 10 Uncommon Values Index as a new Index
Security. The Multiplier for the new Index Security shall equal the
product of the last value of the Multiplier of the original Index
Security and the number of securities of the new Index Security
exchanged with respect to one share of the original Index Security.
3. To the extent that equity securities that are not traded or
listed on an exchange, trading system or market or non-equity
securities or other property (other than cash) are received, the
Calculation Agent shall determine the "Fair Market Value" of the
securities or other property received based on the Average Execution
Price. The 10 Uncommon Values Index shall include an amount of cash
equal to the product of the Multiplier of the Index Security and the
Fair Market Value (the "M&A Sale Component"). The 10 Uncommon Values
Index shall also include accrued interest on the M&A Sale Component.
Interest shall accrue beginning the first London Business Day after the
day that an affiliate of Holdings sells the securities or other
property used to hedge Holdings' obligations under the Securities until
the next Announcement Day (the "M&A Sale Component Interest Accrual
Period"). Interest shall accrue at a rate equal to LIBOR with a term
corresponding to the M&A Sale Component Interest Accrual Period.
E. If all of an Index Security of an issuer is converted into or
exchanged for the same or a different number of shares of any class or classes
of common stock other than the Index Security, whether by capital
reorganization, recapitalization or reclassification or otherwise, then, once
the conversion has become effective, the former Index Security shall be removed
from the 10 Uncommon Values Index and the new common stock shall be added to the
10 Uncommon Values Index as a new Index Security. The Multiplier for each new
Index Security shall equal the product of the last value of the Multiplier of
the original Index Security and the number of shares of the new Index Security
issued with respect to one share of the original Index Security.
F. If the issuer of an Index Security issues to all of its shareholders
common stock or another equity security that is traded or listed on an exchange,
trading system or market of an issuer other than itself, then the new common
stock or other equity security shall be added to the 10 Uncommon Values Index as
a new Index Security. The multiplier for the new Index Security shall equal the
product of the last value of the Multiplier with respect to the original Index
Security and the number of shares of the new Index Security with respect to one
share of the original Index Security.
<PAGE>
G. If an ADR is no longer listed or admitted to trading on a United
States securities exchange or trading system registered under the Securities
Exchange Act or is no longer a security quoted on the NASDAQ Stock Market, Inc.
then the foreign share underlying the ADR shall be deemed added to the 10
Uncommon Values Index as a new Index Security. The initial Multiplier for that
new Index Security shall equal the last value of the Multiplier for the ADR
multiplied by the number of underlying foreign shares represented by a single
ADR.
H. If an Index Security is subject to an extraordinary dividend or an
extraordinary distribution, including upon liquidation or dissolution, of cash,
equity securities that are not traded or listed on an exchange, trading system
or market, non-equity securities or other property of any kind which is received
equally by all holders of such Index Security, then the 10 Uncommon Values Index
shall include the following:
1. To the extent cash is entitled to be received, the 10
Uncommon Values Index shall include on each day after the time that the
Index Security trades ex-dividend until the date the cash consideration
is entitled to be received, the present value of the cash to be
received, discounted at a rate equal to LIBOR, with a term beginning
that day and ending on the date that the cash is entitled to be
received (the "PV Extraordinary Cash Component"). When the cash
consideration is received, the PV Extraordinary Cash Component will be
deleted from the 10 Uncommon Values Index and the 10 Uncommon Values
Index shall include the amount of the cash consideration (the
"Extraordinary Cash Component"), plus accrued interest. Interest shall
accrue on the Extraordinary Cash Component beginning the first London
Business Day after the day that holders are entitled to receive the
Extraordinary Cash Component until the next Announcement Day (the
"Extraordinary Cash Component Interest Accrual Period"). Interest shall
accrue at a rate equal to LIBOR with a term corresponding to the
Extraordinary Cash Component Interest Accrual Period.
2. To the extent that equity securities that are not traded or
listed on an exchange, trading system or market or non-equity
securities or other property (other than cash) is received, the
Calculation Agent shall determine the fair market value of the
securities or other property received based on the Average Execution
Price and the 10 Uncommon Values Index shall include an amount of cash
equal to the product of the Multiplier of the Index Security and the
fair market value (the "Extraordinary Sale Component"). The 10 Uncommon
Values Index shall also include accrued interest on the Extraordinary
Sale Component. Interest shall accrue beginning the first London
Business Day after the day that an affiliate of Holdings sells the
securities or other property used to hedge Holdings' obligations under
the Securities until the next Announcement Day (the "Extraordinary Sale
Component Interest Accrual Period"). Interest shall accrue at a rate
equal to LIBOR with a term corresponding to Extraordinary Sale
Component Interest Accrual Period.
The payment of an ordinary cash dividend by an issuer of an Index
Security from current income or retained earnings shall not result in an
adjustment to the Multiplier.
<PAGE>
No adjustments of any Multiplier of an Index Security shall be required
unless the adjustment would require a change of at least .1% (.001) in the
Multiplier then in effect. The Multiplier resulting from any of the adjustments
specified above shall be rounded at the Calculation Agent's discretion.
V Determination of Daily Level of the 10 Uncommon Values.
If the AMEX is unable to obtain certain information necessary for its
daily calculation and dissemination of the level of the 10 Uncommon Values
Index, the Calculation Agent shall provide the necessary information as follows
below.
In order to determine the value of an Index Security that is listed on
a non-United States exchange, trading system or market (the "Foreign Value"),
the Calculation Agent shall, once per Trading Day, value the Index Security
using the most recent sales price of such Index Security available from the
primary exchange, trading system or market in the Index Security's home market,
quoted as of the Close of Trading.
In order to convert the Foreign Value into U.S. dollars, the Calculation
Agent shall use the Official W.M. Reuters Spot Closing Rate. If there are
several quotes for the Official W.M. Reuters Spot Closing Rate, the first quoted
rate starting at 11:00 A.M. shall be the rate used. If there is no such Official
W.M. Reuters Spot Closing Rate for a country's currency at 11:00 A.M., New York
City time, the Foreign Value shall be determined using the last available U.S.
dollar cross-rate quote before 11:00 A.M., New York City time. In order to
determine the value of an Index Security that is listed or quoted on a bulletin
board service, the Calculation Agent shall use the average of the midpoint of
the bid and ask prices provided by three market makers in that Index Security.
The Calculation Agent shall obtain the bid and ask prices promptly upon the
opening of trading on that Trading Day at 9:30 A.M., New York City time or at
such other time as the Calculation Agent determines.
The Calculation Agent shall provide AMEX with the value of the M&A Cash
Component, the M&A Sale Component, the PV Extraordinary Cash Component, the
Extraordinary Cash Component and the Extraordinary Sale Component as soon as
such values are available. The Calculation Agent shall, once per Trading Day,
provide AMEX with the interest accrued on the Cash Included in the 10 Uncommon
Values Index.
VI Definitions.
-----------
Set forth below are some of the terms used in this Annex A to the
Calculation Agent Agreement.
"ADRs" shall have the meaning assigned thereto in paragraph 4.
<PAGE>
"Alternative Redemption Amount" shall mean, for each $1,000
principal amount of the Securities, the amount of (a) $133 plus (b) the product
of (x) $1,000 and (y) the Index Level of the 10 Uncommon Values Index on the
Valuation Date, subject to the provisions of clause (iv) of the definition of
"Closing Price", divided by 90.
"AMEX" shall mean the American Stock Exchange.
"Average Execution Price" for a security or other property
shall mean the average execution price that an affiliate of the Company receives
or pays for such security or property, as the case may be, to hedge the
Company's obligations under the Securities.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which either the NYSE or the AMEX is not open for securities
trading or commercial banks in New York City are authorized or required by law
or executive order to remain closed.
"Calculation Agent" shall mean the person that has entered
into an agreement with the Company providing for, among other things, the
determination of the Index Level and the Payment Amount, which term shall,
unless the context otherwise requires, include its successors and assigns. The
initial Calculation Agent is Lehman Brothers Inc.
"Cash Included in the 10 Uncommon Values Index" shall mean the
M&A Cash Component, the M&A Sale Component, the PV Extraordinary Cash Component,
the Extraordinary Cash Component, the Extraordinary Sale Component, and interest
accrued thereon as provided for herein.
"Close of Trading" shall mean 4:00 p.m., New York City time.
"Closing Price" means the following, determined by the
Calculation Agent based on information reasonably available to it:
1 If the Index Security is listed on a United States national
securities exchange or trading system or is a NASDAQ Stock Market, Inc.
security, the last reported sale price at the Close of Trading, regular
way, on such day, on the primary securities exchange registered under
the Securities Exchange Act of 1934 on which such Index Security is
listed or admitted to trading or NASDAQ Stock Market, Inc., as the case
may be.
2 If the Index Security is listed on a non-United States
securities exchange, trading system (other than a bulletin board) or
market, the last reported sale price at the Close of Trading, regular
way, on such day, on the primary exchange, trading system or market on
which such Index Security is listed or admitted to trading, as the case
may be. The Closing Price shall then be converted into U.S. dollars
using the Official W.M. Reuters Spot Closing Rate.
3 If the Index Security is not listed on a national securities
exchange or trading system or is not a NASDAQ Stock Market, Inc.
security, and is listed or traded on a bulletin board, the Average
Execution Price of the Index Security. If such Index Security is
listed or traded on a non-United States bulletin board, the Closing
Price will then be converted into U.S. dollars using the Official W.M.
Reuters Spot Closing Rate.
4 If a Market Disruption Event has occurred for an Index
Security on a day on which the Closing Price for such Index Security is
to be calculated, the Closing Price for such Index Security shall
initially be determined using the Closing Price for such Index Security
on the next preceding Trading Day on which a Market Disruption Event
did not occur. Once the Market Disruption Event has ceased, the Closing
Price of such Index Security shall then be adjusted to equal the
Average Execution Price of the Index Security.
"Extraordinary Cash Component" shall have the meaning assigned
thereto in paragraph IV.(H)1.
"Extraordinary Cash Component Interest Accrual Period" shall
have the meaning assigned thereto in paragraph IV.(H)1.
"Extraordinary Sale Component" shall have the meaning assigned
thereto in paragraph IV.(H)2.
"Extraordinary Sale Component Interest Accrual Period" shall
have the meaning assigned thereto in paragraph IV.(H)2.
"Foreign Value" shall have the meaning assigned thereto in
paragraph 5.
"Index Level", when used with respect to the Valuation Date
shall equal the sum of (a) the sum of the products of the Closing Prices and the
applicable Multipliers for each Index Security for which a Market Disruption
Event does not occur on the Valuation Date, (b) if a Market Disruption Event
occurs for an Index Security on the Valuation Date, the product of the Closing
Price for such Index Security and the Multiplier for such Index Security and (c)
any Cash included in the 10 Uncommon Values Index on the Valuation Date.
"Index Securities" shall mean the securities included in the 10
Uncommon Values Index from time to time.
"M&A Cash Component" shall have the meaning assigned thereto
in paragraph IV.(D)1.
"M&A Cash Component Interest Accrual Period" shall have the
meaning assigned thereto in paragraph IV.(D)1.
<PAGE>
"M&A Sale Component" shall have the meaning assigned thereto
in paragraph IV.(D)2.
"M&A Sale Component Interest Accrual Period" shall have the
meaning assigned thereto in paragraph IV.(D)2.
"Market Disruption Event" with respect to an Index Security
means any of the following events as determined by the Calculation Agent:
(i) A suspension, absence or material limitation of trading of
such Index Security 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 Index Security is traded or, in the case of an
Index Security not listed or quoted in the United States, on the
primary exchange, trading system or market for such Index Security.
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 an Index Security traded on a
bulletin board means a suspension, absence or material limitation of
trading of such Index Security for more than two hours or during the
one hour period preceding 4:00 p.m., New York City time.
(ii) 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 such Index Security, whether by reason of
movements in price exceeding levels permitted by an exchange, trading
system or market on which options contracts related to such Index
Security are traded or otherwise.
(iii) 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 such Index Security or in respect of options
contracts related to such Index Security, in each case traded on any
major U.S. exchange or trading system or in the case of Index
Securities 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;
<PAGE>
(ii) any suspension in trading in an option contract on an
Index Security 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.
"Multiplier" shall have the meaning assigned thereto in
paragraph 4.
"NYSE" shall mean the New York Stock Exchange.
"Official W.M. Reuters Spot Closing Rates" shall mean the
closing spot rates published on Reuters page "WMRA" relevant for such Index
Security.
"Payment Amount" shall have the meaning assigned thereto in
paragraph 2.
"PV Extraordinary Cash Component" shall have the meaning
assigned thereto in paragraph 4(h)(1).
"Stated Maturity" shall mean July 3, 2001, or (i) if July 3,
2001 is not a Business Day, the next Business Day and (ii) if a Market
Disruption Event occurs on the Valuation Date, on the fifth Business Day after
the date that an affiliate of the Company completes the sale of the Index
Security with respect to which such Market Disruption Event occurred to hedge
the Company's obligations under the Securities.
"Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, AMEX and NASDAQ Stock Market, Inc. and in the
over-the-counter market for equity securities as determined by the Calculation
Agent.
"Valuation Date" shall mean June 28, 2001 or if June 28, 2001
is not a Business Day, the next succeeding Business Day.
