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:
Title of each class Name of each exchange
to be so registered on which each class is
to be registered
------------------------------ ------------------------------
Notes due November 14, 2007 The American Stock Exchange LLC
--Performance Linked to Marsh &
McLennan Companies, Inc. (MMC)
Common Stock
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. [ ]
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Securities to be Registered Pursuant to Section 12(g) of the Exchange Act:
None
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" and "Description of Debt Securities" on
pages S-9 to S-16 and 4 to 12 of the Prospectus Supplement dated November 9,
2000, and accompanying Prospectus dated February 17, 1998, filed with the
Commission on November 14, 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).
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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).
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 $13,000,000 aggregate principal amount of the
Corporation's Notes due November 14, 2007--Performance Linked to Marsh &
McLennan Companies, Inc. (MMC) Common Stock (filed herewith).
1.10 Calculation Agency Agreement, dated as of November 9, 2000, between Lehman
Brothers Holdings Inc. (the "Corporation") and Lehman Brothers Inc., as
calculation agent, relating to the Corporation's Notes due November 14,
2007--Performance Linked to Marsh & McLennan Companies, Inc. (MMC) Common
Stock (filed herewith).
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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: November 15, 2000
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EXHIBIT INDEX
Exhibit No. Exhibit
1.09 Global Security representing $13,000,000 aggregate principal amount of the
Corporation's Notes due November 14, 2007--Performance Linked to Marsh &
McLennan Companies, Inc. (MMC) Common Stock .
1.10 Calculation Agency Agreement, dated as of November 9, 2000, between Lehman
Brothers Holdings Inc. (the "Corporation") and Lehman Brothers Inc., as
calculation agent, relating to the Corporation's Notes due November 14,
2007--Performance Linked to Marsh & McLennan Companies, Inc. (MMC) Common
Stock.
<PAGE>
EXHIBIT 1.09
LEHMAN BROTHERS HOLDINGS INC.
Notes Due November 14, 2007
Performance Linked to Marsh & McLennan Companies, Inc. (MMC) Common Stock
Number R-1 $13,000,000
CUSIP 524908CT5
See Reverse for Certain Definitions
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO SUCH DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO LEHMAN BROTHERS HOLDINGS INC. OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized
and existing under the laws of the State of Delaware (hereinafter called the
"Company"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, on November 14, 2007, or if a Delaying Event
occurs, three Business Days after the Payment Determination Date (the "Stated
Maturity"), in such coin or currency of the United States of America as 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 (i) the greater of (a) $1,000 and (b) the Alternative Redemption
Amount and (ii) accrued but unpaid interest through the Stated Maturity (the
"Maturity Payment Amount"), and to pay interest computed on the basis of a
360-day year of twelve 30-day months, semi-annually on May 14 and November 14 of
each year, commencing May 14, 2001, on said principal sum at said office or
agency, in like coin or currency, at a rate per annum equal to 0.25% from
November 14, 2000 or the most recent May 14 or November 14 on which interest has
been paid or duly provided for.
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The interest so payable on any May 14 or November 14 shall,
subject to certain exceptions provided in the Indenture referred to on the
reverse hereof, be paid to the person in whose name this Security is registered
at the close of business on the first day of the month in which the interest
payment is made. Interest may, at the option of the Company, be paid by check
mailed to the person entitled thereto at such person's address as it appears on
the registry books of the Company.
Any amount payable, at Stated Maturity, Redemption or
Repurchase, hereon shall 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.
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This Security shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC. has caused
this instrument to be signed by its Chairman of the Board, its Vice Chairman,
its President, its Chief Financial Officer, one of its Vice Presidents or its
Treasurer, by manual or facsimile signature under its corporate seal, attested
by its Secretary or one of its Assistant Secretaries by manual or facsimile
signature.
Dated: November 14, 2000 LEHMAN BROTHERS HOLDINGS
By: /s/ Barrett S. DiPaolo
Name: Barrett S. DiPaolo
Title:Vice President
[SEAL]
Attest: /s/ Madeline L. Shapiro
-------------------------
Name: Madeline L. 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: November 14, 2000
CITIBANK, N.A.
as Trustee
By: /s/ Wafaa Orfy
---------------------------------------
Authorized Signatory
<PAGE>
[Form of Reverse of Security]
This Security is one of a duly authorized series of Securities
of the Company designated as Notes Due November 14, 2007, Performance Linked to
Marsh & McLennan Companies, Inc. (MMC) Common Stock (herein called the
"Securities"), initially limited in aggregate principal amount to $13,000,000.
The Company may, without the consent of the holders of the Securities, create
and issue additional securities ranking equally with the Securities and
otherwise similar in all respects so that such further securities shall be
consolidated and form a single series with the Securities; provided that no
additional Securities shall be issued if an Event of Default has occurred with
respect to 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 Securities are not redeemable prior to November 9, 2002.
The Securities may be redeemed, at the option of the Company, as a whole or from
time to time in part, on or after November 9, 2002 (the "Redemption"), and prior
to the Stated Maturity, upon the notice referred to below, at a redemption
price, for each $1,000 principal amount of the Securities redeemed, equal to (i)
the greater of (a) $1,000 and (b) the Alternative Redemption Amount and (ii) any
accrued but unpaid interest through the Non-Delaying Event Redemption Date or,
if a Delaying Event occurs, through the Delaying Event Redemption Date (the
"Redemption Payment Amount").
Notice of Redemption shall be given by mailing a notice to the
Holders of such Redemption (the "Redemption Notice") in accordance with the
Indenture. A Redemption shall occur on the Non-Delaying Event Redemption Date
or, if a Delaying Event occurs, on the Delaying Event Redemption Date.
The Securities shall be repayable at the option of the Holder
thereof (the "Repurchase"), in whole or from time to time in part, at any time
prior to November 9, 2007, at a price for each $1,000 principal amount of the
Securities repurchased, equal to (i) the Alternative Redemption Amount and (ii)
any accrued but unpaid interest through the Non-Delaying Event Repurchase Date
or, if a Delaying Event occurs, through the Delaying Event Repurchase Date (the
"Repurchase Payment Amount"). In order for the Holder to be repaid, the Company
must receive at the Corporate Trust Office of the Trustee (or at such other
address of which the Company shall from time to time notify the Holders of the
Securities) on any Business Day but no later than the eighth Business Day prior
to November 9, 2007 (i) this Security with the form entitled "Option to Elect
Repayment" set forth below duly completed or (ii) unless the Holder is The
Depository Trust Company or its nominee or a successor securities depository or
its nominee, a telegram, telex, facsimile transmission or letter from a member
of a national securities exchange or the National Association of Securities
Dealers or a commercial bank or a trust company in the United States of America
setting forth the name of the Holder of this Security, the principal amount of
this Security, the portion of this Security to be repaid, a statement that the
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option to elect repayment is being exercised thereby and a guarantee that this
Security, together with the form entitled "Option to Elect Repayment" set forth
below duly completed, shall be received by the Company not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter and this Security and form duly completed are received by the Company by
such fifth Business Day. Any such election shall be irrevocable. All questions
as to the validity, eligibility (including time of receipt) and acceptance of
any Security for repayment shall be determined by the Company, whose
determination shall be final and binding. A Repurchase shall occur on the
Non-Delaying Event Repurchase Date or, if a Delaying Event occurs, on the
Delaying Event Repurchase Date.
The Settlement Value 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 shall 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.
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 shall 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 to the date of acceleration was the applicable
Payment Determination Date.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than 662/3% 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, without the consent of the
Holder of each Outstanding Security affected thereby, (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 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. 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
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interest, if any or the principal of, or premium if any, on any of the
Securities of such series, or in the payment of any sinking fund installment or
analogous obligation with respect to Securities of such series. Any such consent
or waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future holders and owners of this Security and any
Securities which may be issued in exchange or substitution hereof, irrespective
of whether or not any notation thereof is made upon this Security or such other
Securities.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal amount with
respect to this Security.
The Securities are issuable in denominations of $1,000 and any
integral multiples of $1,000.
The Company, the Trustee, and any agent of the Company or of
the Trustee may deem and treat the registered holder (the "Holder") hereof as
the absolute owner of this Security (whether or not this Security shall be
overdue and notwithstanding any notation of ownership or other writing hereon),
for the purpose of receiving payment hereof, or on account hereof, and for all
other purposes and neither the Company nor the Trustee nor any agent of the
Company or of the Trustee shall be affected by any notice to the contrary. All
such payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, effectually satisfy and discharge liability for
moneys payable on this Security.
No recourse for the payment of the principal of, premium, if
any, or interest on this Security, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the Corporate Trust Office or agency in a Place of Payment for this
Security, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Securities of this series or of like tenor and of
authorized denominations and for the same aggregate principal amount, shall be
issued to the designated transferee or transferees.
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THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Set forth below are definitions of the terms used in this
Security.
"Alternative Redemption Amount" shall mean the product of (a)
the Issue Price divided by $145.6855 and (b) the Settlement Value on the
relevant Payment Determination Date.
"Business Day", notwithstanding the Indenture, shall mean any
day other than a Saturday, a Sunday or a day on which the New York Stock
Exchange is not open for trading or banking institutions or trust companies in
the City of New York are authorized or required by law or executive order to
remain closed.
"Calculation Agency Agreement" shall mean the Calculation
Agency Agreement, dated as of November 14, 2000, between the Company and the
Calculation Agent, as amended from time to time.
"Calculation Agent" shall mean the person that has entered
into the Calculation Agency Agreement with the Company providing for, among
other things, the determination of the Settlement Value and the Payment Amount,
which term shall, unless the context otherwise requires, includes its successors
and assigns. The initial Calculation Agent is Lehman Brothers Inc.
"Calculation Day" shall mean three Trading Days prior to (a)
for payment at Stated Maturity, November 14, 2007, (b) for payment upon a
Redemption, the Non-Delaying Event Redemption Date or (c) for a payment upon a
Repurchase, the Non-Delaying Event Repurchase Date.
"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:
If the Settlement Value Security is listed on a
United States national securities exchange or trading system or is a
security quoted on The Nasdaq Stock Market, Inc. ("NASDAQ"), the last
reported sales 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 Settlement Value Security is listed
or admitted to trading or NASDAQ, as the case may be.
If the Settlement Value Security is listed or quoted
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 Settlement Value Security is listed,
quoted 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 at 11:00 a.m., New York City time. If there
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are several quotes for the Official W.M. Reuters Spot Closing Rate at
that time, 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 Closing
Price shall be converted into U.S. dollars using the last available
U.S. dollar cross-rate quote before 11:00 a.m., New York City time.
If the Settlement Value Security is not listed on a
national securities exchange or is not a NASDAQ 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 Settlement
Value Security to hedge the Company's obligations for this Security. If
such Settlement Value Security is listed or traded on a non-United
States bulletin board, the Closing Price shall then be converted into
U.S. dollars using the Official W.M. Reuters Spot Closing Rate at 11:00
a.m., New York City time. If there are several quotes for the Official
W.M. Reuters Spot Closing Rate at that time, 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 Closing Price shall be converted
into U.S. dollars using the last available U.S. dollar cross-rate quote
before 11:00 a.m., New York City time.
"Delaying Event" shall mean a Market Disruption Event for a
Settlement Value Security that occurs on the relevant Calculation Day.
"Delaying Event Redemption Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Redemption, three Business Days after
the Payment Determination Date therefor.
"Delaying Event Repurchase Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Repurchase, three Business Days after
the Payment Determination Date therefor.
"Issue Price" shall mean $1,000 per each $1,000 principal
amount of Securities.
"Market Disruption Event" with respect to a Settlement Value
Security means any of the following events as determined by the Calculation
Agent:
A suspension, absence or material limitation of trading of
such Settlement Value 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 Settlement Value Security is traded or, if such Settlement Value Security
is not listed or quoted in the United States, on the primary exchange, trading
system or market for such Settlement Value 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
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paragraph, a Market Disruption Event for a Settlement Value Security traded on a
bulletin board means a suspension, absence or material limitation of trading of
such Settlement Value Security for more than two hours or during the one hour
period preceding 4:00 p.m., New York City time.
A suspension, absence or material limitation has occurred on
that day, in each case, for more than two hours of trading or during the
one-half hour period preceding the Close of Trading in options contracts related
to such Settlement Value Security, whether by reason of movements in price
exceeding levels permitted by an exchange, trading system or market on which
such options contracts related to such Settlement Value Security are traded or
otherwise.
Information is unavailable on that date, through a recognized
system of public dissemination of transaction information, for more than two
hours of trading or during the one-half hour period preceding the Close of
Trading, of accurate price, volume or related information in respect of such
Settlement Value Security or in respect of options contracts related to such
Settlement Value Security, in each case traded on any major U.S. exchange or
trading system or, in the case of securities of a non-U.S. issuer, traded on the
primary non-U.S. exchange, trading system or market.
For purposes of determining whether a Market Disruption Event
has occurred:
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;
any suspension in trading in an option contract on a
Settlement Value 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;
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
"trading systems" include bulletin board services.
"Multiplier" shall mean, with respect to any applicable
principal amount of Securities, the number of shares or other units (including
any fractional share or other unit expressed as a decimal) of each Settlement
Value Security included in the calculation of the Settlement Value of such
Securities. The initial Multiplier relating to each Security with principal
amount of $1,000.00 shall be 1.0.
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"NYSE" shall mean the New York Stock Exchange.
"Non-Delaying Event Redemption Date" shall mean the date set
forth in the Redemption Notice, which date shall not be less than 30 nor more
than 60 days after the date of the Redemption Notice.
"Non-Delaying Event Repurchase Date" shall mean the eighth
Business Day following the Business Day on which the Company receives notice of
a Repurchase from a Holder.
"Official W.M. Reuters Spot Closing Rates" shall mean the
closing spot rates published on Reuters page "WMRA" relevant for such Settlement
Value Security.
"Payment Amount" shall mean the Maturity Payment Amount, the
Redemption Payment Amount or the Repurchase Payment Amount, as the case may be.
"Payment Determination Date" shall mean the relevant
Calculation Day, unless a Delaying Event occurs with respect to such Payment
Determination Date, in which case the first Trading Day after the Calculation
Day on which the Closing Prices for all Settlement Value Securities that have
been subject to a Delaying Event have been determined.
"Redemption" shall mean the option of the Company to redeem,
at any time on or after November 9, 2002, in whole or from time to time in part,
the Securities.
"Repurchase" shall mean the option of a beneficial holder to
elect to require the Company to repurchase, at any time prior to November 9,
2007, in whole or from time to time in part, such holder's Securities.
"Settlement Value", when used with respect to any Payment
Determination Date, shall equal the sum of (a)(i) the products of the Closing
Prices and the applicable Multipliers for each Settlement Value Security for
which a Delaying Event does not occur on the related Calculation Day or (ii) if
a Delaying Event occurs for a Settlement Value Security on the related
Calculation Day, the product of the Closing Price for such Settlement Value
Security on the next Trading Day on which a Market Disruption Event does not
occur for such Settlement Value Security and the Multiplier for such Settlement
Value Security and (b) in each case, any cash included in the Settlement Value
on such Calculation Day.
"Settlement Value Securities" shall mean the securities
included in the Settlement Value from time to time and shall initially be the
common stock of Marsh & McLennan Companies, Inc. The Settlement Value Securities
shall only be adjusted by the Calculation Agent pursuant to the Calculation
Agency Agreement for certain extraordinary corporate events as set forth in the
Calculation Agency Agreement.
"Trading Day" shall mean a day on which trading generally is
conducted on the New York Stock Exchange, American Stock Exchange and The Nasdaq
Stock Market, Inc. and in the over-the-counter market for equity securities as
determined by the Calculation Agent.
<PAGE>
8
All terms used but not defined in this Security are used
herein as defined in the Indenture.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Company to repay the within Security (or portion thereof specified below)
pursuant to its terms at a price equal to the Alternative Redemption Amount plus
any accrued but unpaid interest.
For this Security to be repaid, the Company must receive at
the office of the Trustee, located at its Corporate Trust Office (or at such
other place or places of which the Company shall from time to time notify the
holder of the within Security) on any Business Day but not later than the eighth
Business Days prior to November 9, 2007 (i) this Security with this "Option to
Elect Repayment" form duly completed, or (ii) unless the Holder is The
Depository Trust Company or its nominee or a successor securities depository or
its nominee, a telegram, telex, facsimile transmission or letter from a member
of a national securities exchange or the National Association of Securities
Dealers or a commercial bank or a trust company in the United States of America
setting forth the name of the holder of the within Security, the principal
amount of the within Security, the portion of the within Security to be repaid,
a statement that the option to elect repayment is being exercised thereby and a
guarantee that the within Security with this "Option to Elect Repayment" form
duly completed shall be received by the Company not later than five Business
Days after the date of such telegram, telex, facsimile transmission or letter
and the within Security and form duly completed are received by the Company by
such fifth Business Day.
If less than the entire amount of the within Security is to be
repaid, specify the portion thereof (which shall be an integral multiple of
$1,000 unless the total principal amount of Securities held by the holder would
be less than $1,000, in which case a holder cannot cause the Company to repay a
portion of the entire amount held by such holder and the minimum denomination to
be repaid shall be the total principal amount of Securities held by such holder)
which the holder elects to have repaid: $ . A Security shall be issued to the
holder in an amount equal to the portion not being repaid.
Dated:
NOTE: The Signature to this
Option to Elect Repayment
must correspond with the
name as written upon the
face of the within Security
in every particular without
alteration or enlargement
or any other change
whatsoever.
<PAGE>
-------------------------------
The following abbreviations, when used in the inscription on
the face of the within Security, shall be construed as through they were written
out in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with right of Act
survivorship and not as tenants (State)
in common
Additional abbreviations may also be used though not in
the above list.
------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(Name and Address of assignee, including zip code, must be printed or
typewritten.)
the within Security, and all rights thereunder, hereby irrevocably constituting
and appointing
to transfer the said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Security in every particular,
without alteration or enlargement or any change whatever.
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 (Notes Due November 14, 2007 Performance
Linked to Marsh & McLennan Companies, Inc. (MMC) Common Stock)
AGREEMENT, dated as of November 14, 2000, between Lehman
Brothers Holdings Inc. (the "Company") and Lehman Brothers Inc., as Calculation
Agent.
WHEREAS, the Company has authorized the issuance of
$13,000,000 aggregate principal amount of Notes Due November 14, 2007,
Performance Linked to Marsh & McLennan Companies, Inc. (MMC) Common Stock (the
"Securities");
WHEREAS, the Securities will be issued under an Indenture,
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 Maturity Payment Amount due at Stated
Maturity of the Securities, the Redemption Payment Amount and the Repurchase
<PAGE>
2
Payment Amount, the Calculation Agent shall determine such Payment Amount and
notify the Trustee of its determination. The Calculation Agent shall also be
responsible for (a) the determination of the Settlement Value, (b) whether
adjustments to 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. 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 gent
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 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;
(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 whom 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;
<PAGE>
3
(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.
(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
<PAGE>
4
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>
5
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 shall 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, 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>
6
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.
<PAGE>
IN WITNESS WHEREOF, this Calculation Agency Agreement has been
entered into as of the day and year first above written.
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ 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
1. The Settlement Value Securities.
----------------------------------------
The "Settlement Value Securities" shall mean the securities included in
the Settlement Value from time to time and shall initially be the common stock
of Marsh & McLennan Companies, Inc., unless adjusted for certain extraordinary
corporate events as described herein.
2. Determination of the Payment Amount.
--------------------------------------------
The Calculation Agent shall determine the Payment Amount payable for
each Security.
The amount payable at Stated Maturity for each $1,000 principal amount
of Securities (the "Maturity Payment Amount") shall equal (i) the greater of (a)
$1,000 and (b) the Alternative Redemption Amount and (ii) any accrued but unpaid
interest through the Stated Maturity. The amount payable upon a Redemption of
each $1,000 principal amount of Securities (the "Redemption Payment Amount")
shall equal (i) the greater of (a) $1,000 and (b) the Alternative Redemption
Amount and (ii) any accrued but unpaid interest through the Non-Delaying Event
Redemption Date or, if a Delaying Event occurs, through the Delaying Event
Redemption Date. The amount payable upon a Repurchase of each $1,000 principal
amount of Securities (the "Repurchase Payment Amount") shall equal (i) the
Alternative Redemption Amount and (ii) any accrued but unpaid interest through
the Non-Delaying Event Repurchase Date or, if a Delaying Event occurs, through
the Delaying Event Repurchase Date.
The Settlement Value used to calculate the Alternative Redemption
Amount shall be determined by the Calculation Agent.
3. Multipliers.
--------------------
The "Multiplier" shall mean, with respect to any applicable principal
amount of Securities, the number of shares or other units (including any
fractional share or other unit expressed as a decimal) of each Settlement Value
Security included in the calculation of the Settlement Value of such Securities.
The initial Multiplier relating to each Security with principal amount of $1,000
shall be 1.0. The Multiplier with respect to the initial Settlement Value
Security or any other Settlement Value Security shall remain constant unless
adjusted for certain extraordinary corporate events as described below.
4. Adjustments to the Multipliers and the Settlement Value Securities.
---------------------------------------------------------------------------
Adjustments to a Multiplier and the Settlement Value Securities shall
be made in the circumstances described below. For purposes of the following
adjustments, except as noted below, American Depositary Receipts ("ADRs") shall
be treated like common stock if a comparable adjustment to the foreign shares
underlying the ADRs is made pursuant to the terms of the depositary arrangement
for the ADRs or if holders of ADRs are entitled to receive property in respect
of the underlying foreign share.
<PAGE>
2
(a) If a Settlement Value Security is subject to a stock split or reverse stock
split, then once the split has become effective, the Multiplier relating to such
Settlement Value Security shall be adjusted. The Multiplier shall be adjusted to
equal the product of the number of shares outstanding of the Settlement Value
Security after the split with respect to each share of such Settlement Value
Security immediately prior to effectiveness of the split and the prior
Multiplier.
(b) If a Settlement Value Security is subject to an extraordinary stock dividend
or extraordinary stock distribution that is given equally to all holders of
shares, then once the Settlement Value Security is trading ex-dividend, the
Multiplier for such Settlement Value Security shall be increased by the product
of the number of shares of such Settlement Value Security issued with respect to
one share of such Settlement Value Security and the prior Multiplier.
(c) If the issuer of a Settlement Value Security, or if a Settlement Value
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 Settlement Value Security
shall continue to be included in the calculation of the Settlement Value so long
as the primary exchange, trading system or market is reporting a market price
for the Settlement Value Security. If a market price, including a price on a
bulletin board service, is no longer available for a Settlement Value Security,
then the value of the Settlement Value 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 Settlement Value to compensate for the deletion of such
Settlement Value Security.
(d) If the issuer of a Settlement Value Security, or if a Settlement Value
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 Settlement Value Security are entitled to receive cash, securities, other
property or a combination thereof in exchange for the Settlement Value Security,
then the following shall be included in the Settlement Value:
(i) To the extent cash is received, the Settlement Value 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. If the cash received is denominated in a foreign currency, such
cash shall then be converted into U.S. dollars using the Official W.M.
Reuters Spot Closing Rate at 11:00 a.m., New York City time. If there are
several quotes for the Official W.M. Reuters Spot Closing Rate at that
time, 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
currency-denominated cash shall be converted into U.S. dollars using the
last available U.S. dollar cross-rate quote before 11:00 a.m., New York
City time. Interest shall accrue beginning the first London Business Day
after the day that holders receive the cash consideration until the Stated
Maturity (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>
3
(ii) 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 Settlement Value
Security shall be removed from the calculation of the Settlement Value and
the new security shall be added to the calculation of the Settlement Value
as a new Settlement Value Security. The Multiplier for the new Settlement
Value Security shall equal the product of the last value of the Multiplier
of the original Settlement Value Security and the number of securities of
the new Settlement Value Security exchanged with respect to one share of
the original Settlement Value Security.
(iii) 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. The Settlement Value shall
include an amount of cash equal to the product of the Multiplier of the
Settlement Value Security and the Fair Market Value (the "M&A Sale
Component"). The Settlement Value 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 Stated Maturity (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 the shares of a Settlement Value Security of an issuer are
converted into or exchanged for the same or a different number of shares of any
class or classes of common stock other than such Settlement Value Security,
whether by capital reorganization, recapitalization or reclassification or
otherwise, then, once the conversion has become effective, the former Settlement
Value Security shall be removed from the calculation of the Settlement Value and
the new common stock shall be added to the calculation of the Settlement Value
as a new Settlement Value Security. The Multiplier for each new Settlement Value
Security shall equal the product of the last value of the Multiplier of the
original Settlement Value Security and the number of shares of the new
Settlement Value Security issued with respect to one share of the original
Settlement Value Security.
(f) If the issuer of a Settlement Value Security, or if a Settlement Value
Security is an ADR, the issuer of the underlying foreign share, 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
calculation of the Settlement Value as a new Settlement Value Security. The
multiplier for the new Settlement Value Security shall equal the product of the
last value of the Multiplier with respect to the original Settlement Value
Security and the number of shares of the new Settlement Value Security with
respect to one share of the original Settlement Value Security.
<PAGE>
4
(g) If an ADR is no longer listed or admitted to trading on a United States
securities exchange registered under the Securities Exchange Act of 1934 or is
no longer a security quoted on The Nasdaq Stock Market, then the foreign share
underlying the ADR shall be deemed to be a new common stock added to the
calculation of the Settlement Value as a new Settlement Value Security. The
initial Multiplier for that new Settlement Value Security shall equal the
product of the last value of the Multiplier with respect to the original ADR and
the number of underlying foreign shares represented by a single such ADR.
(h) If a Settlement Value 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 Settlement Value Security, then the Settlement
Value shall include the following:
(i) To the extent cash is entitled to be received, the Settlement
Value shall include on each day after the time that the Settlement Value
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 shall be deleted from the Settlement
Value and the Settlement Value shall include the amount of the cash
consideration (the "Extraordinary Cash Component"), plus accrued interest.
If the cash consideration received or entitled to be received is
denominated in a foreign currency, such cash or the present value of such
cash, as the case may be, shall be converted into U.S. dollars using the
Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New York City time.
If there are several quotes for the Official W.M. Reuters Spot Closing Rate
at that time, 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
currency-denominated cash shall be converted into U.S. dollars using the
last available U.S. dollar cross-rate quote before 11:00 a.m., New York
City time. 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 Stated
Maturity (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.
(ii) 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 calculation of the
Settlement Value shall include an amount of cash equal to the product of
the Multiplier of the Settlement Value Security and the Fair Market Value
(the "Extraordinary Sale Component"). The Settlement Value 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 Stated Maturity (the
"Extraordinary Sale Component Interest Accrual Period"). Interest shall
accrue at a rate equal to LIBOR with a term corresponding to the
Extraordinary Sale Component Interest Accrual Period.
<PAGE>
5
(i) If other corporate events occur with respect to such
issuer or a Settlement Value Security, adjustments shall be made to reflect the
economic substance of such events.
The payment of an ordinary cash dividend by an issuer of a Settlement
Value Security, or if a Settlement Value Security is an ADR, by a foreign issuer
of the underlying foreign share, from current income or retained earnings shall
not result in an adjustment to the Multiplier.
No adjustments of any Multiplier of a Settlement Value 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.
5. Definitions.
Set forth below are the terms used in this Annex A to the Calculation
Agent Agreement.
"Alternative Redemption Amount" shall mean the product of (a)
the Issue Price divided by $145.6855 and (b) the Settlement Value on the
relevant Payment Determination Date.
"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" notwithstanding the Indenture shall mean any
day other than a Saturday, a Sunday or a day on which the NYSE is not open for
trading or banking institutions or trust companies in the City of New York 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 Settlement Value and the Payment Amount, which term shall,
unless the context otherwise requires, include its successors and assigns. The
initial Calculation Agent shall be Lehman Brothers Inc.
"Calculation Day" shall mean three Trading Days prior to (a)
for payment at Stated Maturity, November 14, 2007, (b) for payment upon a
Redemption, the Non-Delaying Event Redemption Date or (c) for a payment upon a
Repurchase, the Non-Delaying Event Repurchase Date.
"Cash Included in the Settlement Value" 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.
<PAGE>
6
"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 Settlement Value Security is listed on a United States national
securities exchange or trading system or is a security quoted on The Nasdaq
Stock Market, Inc. ("NASDAQ"), 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
Settlement Value Security is listed or admitted to trading or NASDAQ, as
the case may be.
(ii) If the Settlement Value Security is listed or quoted 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 Settlement Value Security is listed, quoted 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 at 11:00 a.m.,
New York City time. If there are several quotes for the Official W.M.
Reuters Spot Closing Rate at that time, 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 Closing Price shall be converted into U.S. dollars using the
last available U.S. dollar cross-rate quote before 11:00 a.m., New York
City time.
(iii)If the Settlement Value Security is not listed on a national securities
exchange or is not a NASDAQ security, and is listed or traded on a bulletin
board, the Average Execution Price of the Settlement Value Security. If
such Settlement Value Security is listed or traded on a non-United States
bulletin board, the Closing Price shall then be converted into U.S. dollars
using the Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New York
City time. If there are several quotes for the Official W.M. Reuters Spot
Closing Rate at that time, 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 Closing Price shall be converted into U.S. dollars using the last
available U.S. dollar cross-rate quote before 11:00 a.m., New York City
time.
"Delaying Event" shall mean a Market Disruption Event for a
Settlement Value Security occurs on the relevant Calculation Day.
"Delaying Event Redemption Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Redemption, three Business Days after
the Payment Determination Date thereof.
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7
"Delaying Event Repurchase Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Repurchase, three Business Days after
the Payment Determination Date thereof.
"Issue Price" shall mean $1,000 per each $1,000 principal
amount of Securities.
"Market Disruption Event" with respect to a Settlement Value
Security means any of the following events as determined by the Calculation
Agent:
(i) A suspension, absence or material limitation of trading of such Settlement
Value 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 Settlement Value Security is traded or, if such Settlement Value
Security is not listed or quoted in the United States, on the primary
exchange, trading system or market for such Settlement Value 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 a Settlement Value Security traded on a
bulletin board means a suspension, absence or material limitation of
trading of such Settlement Value 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
Settlement Value Security, whether by reason of movements in price
exceeding levels permitted by an exchange, trading system or market on
which such options contracts related to such Settlement Value 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
Settlement Value Security or in respect of options contracts related to
such Settlement Value Security, in each case traded on any major U.S.
exchange or trading system or, in the case of 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> 8
(ii) any suspension in trading in an option contract on a Settlement Value
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" is defined in Section 3 herein.
"NYSE" shall mean the New York Stock Exchange.
"Non-Delaying Event Redemption Date" shall mean the date set
forth in the Redemption Notice, which date shall not be less than 30 nor more
than 60 days after the date of the Redemption Notice.
"Non-Delaying Event Repurchase Date" shall mean the third
Business Day following the five Business Days after the day on which a Holder
gives notice to the Trustee of a Repurchase.
"Official W.M. Reuters Spot Closing Rates" shall mean the
closing spot rates published on Reuters page "WMRA" relevant for such Settlement
Value Security.
"Payment Amount" shall mean the Maturity Payment Amount, the
Redemption Payment Amount or the Repurchase Payment Amount, as the case may be.
"Payment Determination Date" shall mean the relevant
Calculation Day, unless a Delaying Event occurs with respect to such Payment
Determination Date, in which case the first Trading Day after the Calculation
Day on which the Closing Prices for all Settlement Value Securities that have
been subject to a Delaying Event have been determined.
"Redemption" shall mean the option of the Company to redeem,
at any time on or after November 9, 2002, in whole or from time to time in part,
the Securities.
"Redemption Notice" shall mean the notice of Redemption mailed
to the Holders.
<PAGE>
9
"Repurchase" shall mean the option of a beneficial holder to
elect to require the Company to repurchase, at any time prior to November 9,
2007, in whole or from time to time in part, such holder's Securities.
"Settlement Value", when used with respect to any Payment
Determination Date, shall equal the sum of (a)(i) the products of the Closing
Prices and the applicable Multipliers for each Settlement Value Security for
which a Delaying Event does not occur on the related Calculation Day, (ii) if a
Delaying Event occurs for a Settlement Value Security on the related Calculation
Day, the product of the Closing Price for such Settlement Value Security on the
next Trading Day on which a Market Disruption Event does not occur for such
Settlement Value Security and the Multiplier for such Settlement Value Security
and (b) in each case, any cash included in the Settlement Value on such
Calculation Day.
"Settlement Value Securities" are defined in Section 1 herein.
"Stated Maturity" shall mean November 14, 2007, or if a
Delaying Event occurs, three Business Days after the Payment Determination Date
on which the Settlement Value has been determined.
"Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, American Stock Exchange and The Nasdaq Stock Market, Inc.
and in the over-the-counter market for equity securities as determined by the
Calculation Agent.
