SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event
reported):
January 5, 2001
LEHMAN BROTHERS HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-9466 13-3216325
(Commission File Number) (IRS Employer Identification No.)
3 World Financial Center
New York, New York 10285
(Address of principal (Zip Code)
executive offices)
(212) 526-7000
(Registrant's Telephone Number, Including Area Code)
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Item 7. Financial Statements and Exhibits
(c) Exhibits
The following Exhibits are incorporated by reference into
Registration Statement on Form S-3 No. 33-53651 as exhibits thereto and are
filed as part of this Report.
Exhibit No. Description
4.01 Calculation Agency Agreement, dated as of January 5, 2001, between Lehman
Brothers Holdings Inc. (the "Corporation") and Lehman Brothers Inc., as
calculation agent, relating to the Corporation's 0.25% Notes Due January 5,
2006, Performance Linked to a Basket of Five Technology Stocks.
4.02 Global Security representing $20,000,000 aggregate principal amount of the
Corporation's 0.25% Notes Due January 5, 2006, Performance Linked to a
Basket of Five Technology Stocks.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
LEHMAN BROTHERS HOLDINGS INC.
By: /s/ Barrett S. DiPaolo
-----------------------------------------
Barrett S. DiPaolo
Vice President
Date: January 5, 2001
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EXHIBIT INDEX
Exhibit No. Description
4.01 Calculation Agency Agreement, dated as of January 5, 2001, between Lehman
Brothers Holdings Inc. (the "Corporation") and Lehman Brothers Inc., as
calculation agent, relating to the Corporation's 0.25% Notes Due January 5,
2006, Performance Linked to a Basket of Five Technology Stocks.
4.02 Global Security representing $20,000,000 aggregate principal amount of the
Corporation's 0.25% Notes Due January 5, 2006, Performance Linked to a
Basket of Five Technology Stocks.
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EXHIBIT 4.01
CALCULATION AGENCY AGREEMENT
(0.25% Notes Due January 5, 2006, Performance Linked to a Basket of
Five Technology Stocks)
AGREEMENT, dated as of January 5, 2001 between Lehman Brothers
Holdings Inc. (the "Company")and Lehman Brothers Inc., as Calculation Agent.
WHEREAS, the Company has authorized the issuance of
$20,000,000 aggregate principal amount of 0.25% Notes Due January 5, 2006,
Performance Linked to a Basket of Five Technology Stocks (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 Payment Amount, the Calculation Agent shall determine such
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Payment Amount and notify the Trustee of its determination. The Calculation
Agent shall also be responsible for (a) the determination of the Basket
Level, (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 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 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;
(iii) the Calculation Agent shall be obliged to perform only
such duties as are set out specifically herein and any duties
necessarily incidental thereto;
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(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 Agent or of its property
or affairs, for the purpose of rehabilitation, conservation or liquidation, a
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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.
7. Certain Definitions. Terms not otherwise defined herein or in Annex A
hereto are used herein as defined in the Indenture or the Securities.
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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.
10. Governing Law. This Agreement shall be governed by and continued in
accordance with the laws of the State of New York.
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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.
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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
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ANNEX A
1. The Basket Securities.
The Basket Securities is a group of securities included in the Basket
(as defined below) from time to time and shall initially consist of the American
Depositary Receipts ("ADRs") of Nokia Corporation and the common stocks of Cisco
Systems, Inc., Microsoft Corporation, Oracle Corporation and Sun Microsystems,
Inc., in each case unless adjusted for certain extraordinary corporate events as
described herein.
"Basket" shall mean the Basket Securities.
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 Basket Level 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 ADRs) or
any fractional share or other unit expressed as a decimal of each Basket
Security included in the Basket. In the case of each Security with principal
amount of $1,000.00, the initial Multiplier for each Basket Security is set
forth below:
Basket Security Initial Multiplier
Cisco Systems, Inc. 0.487322
Microsoft Corporation 0.436149
Nokia Corporation 0.450109
Oracle Corporation 0.655132
Sun Microsystems, Inc. 0.655853
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The Multipliers with respect to each Basket Security shall remain constant
unless adjusted for certain extraordinary corporate events as described below.
4. Adjustments to the Multipliers and the Basket.
Adjustments to a Multiplier and the Basket shall be made in the
circumstances described below. For purposes of the following adjustments, except
as noted below, 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.
(a) If a Basket Security is subject to a stock split or reverse stock
split, then once the split has become effective, the Multiplier relating to such
Basket Security shall be adjusted. The Multiplier shall be adjusted to equal the
product of the number of shares outstanding of the Basket Security after the
split with respect to each share of such Basket Security immediately prior to
effectiveness of the split and the prior Multiplier.
(b) If a Basket Security is subject to an extraordinary stock dividend
or extraordinary stock distribution that is given equally to all holders of
shares, then once the Basket Security is trading ex-dividend, the Multiplier for
such Basket Security shall be increased by the product of the number of shares
of such Basket Security issued with respect to one share of such Basket Security
and the prior Multiplier.
(c) If the issuer of a Basket Security, or if a Basket 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 Basket Security shall continue to be
included in the Basket so long as the primary exchange, trading system or market
is reporting a market price for the Basket Security. If a market price,
including a price on a bulletin board service, is no longer available for a
Basket Security, then the value of the Basket 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 Basket Level to compensate for the deletion of
such Basket Security.
(d) If the issuer of a Basket Security, or if a Basket 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
Basket Security are entitled to receive cash, securities, other property or a
combination thereof in exchange for the Basket Security, then the following
shall be included in the Basket:
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(i) To the extent cash is received, the Basket 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.
(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 Basket
Security shall be removed from the Basket and the new security shall be
added to the Basket as a new Basket Security. The Multiplier for the
new Basket Security shall equal the product of the last value of the
Multiplier of the original Basket Security and the number of securities
of the new Basket Security exchanged with respect to one share of the
original Basket 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 Basket shall include an amount of cash equal to the product
of the Multiplier of the Basket Security and the Fair Market Value (the
"M&A Sale Component"). The Basket 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 Basket 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 Basket Security, whether by
capital reorganization, recapitalization or reclassification or otherwise, then,
once the conversion has become effective, the former Basket Security shall be
removed from the Basket and the new common stock shall be added to the Basket as
a new Basket Security. The Multiplier for each new Basket Security shall equal
the product of the last value of the Multiplier of the original Basket Security
and the number of shares of the new Basket Security issued with respect to one
share of the original Basket Security.
(f) If the issuer of a Basket Security, or if a Basket 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
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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 Basket as a new
Basket Security. The multiplier for the new Basket Security shall equal the
product of the last value of the Multiplier with respect to the original Basket
Security and the number of shares of the new Basket Security with respect to one
share of the original Basket Security.
(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, Inc., then the
foreign share underlying the ADR shall be deemed to be a new common stock added
to the Basket as a new Basket Security. The initial Multiplier for that new
Basket 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 Basket 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 Basket Security, then the Basket shall include
the following:
(i) To the extent cash is entitled to be received, the Basket
shall include on each day after the time that the Basket 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
Basket and the Basket 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 Basket shall include an amount of cash equal to the
product of the Multiplier of the Basket Security and the Fair Market
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Value (the "Extraordinary Sale Component"). The Basket 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 Extraordinary Sale Component Interest Accrual Period.
(i) If other corporate events occur with respect to such issuer or a
Basket 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 Basket
Security, or if a Basket 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 Basket 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 133.35 and (b) the Basket Level 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.
"Basket Level", when used with respect to any Payment
Determination Date, shall equal the sum of (a) the products of the Closing
Prices and the applicable Multipliers for each Basket Security for which a
Delaying Event does not occur on the related Calculation Day, (b) if a Delaying
Event occurs for a Basket Security on the related Calculation Day, the product
of the Closing Price for such Basket Security on the next Trading Day on which a
Market Disruption Event does not occur for such Basket Security and the
Multiplier for such Basket Security and (c) any cash included in the Basket on
such Calculation Day.
"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 Basket Level and the Payment Amount, which term shall,
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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, January 5, 2006, (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 Basket" 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:
(i) If the Basket 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
Basket Security is listed or admitted to trading or quoted on NASDAQ,
as the case may be.
(ii) If the Basket 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 Basket 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 Basket 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 Basket
Security. If such Basket 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.
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"Delaying Event" shall mean a Market Disruption Event for a
Basket 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.
"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 Basket Security
means any of the following events as determined by the Calculation Agent:
(i) A suspension, absence or material limitation of trading of
such Basket 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 Basket Security is traded or, if such Basket
Security is not listed or quoted in the United States, on the primary
exchange, trading system or market for such Basket 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 Basket Security traded on a
bulletin board means a suspension, absence or material limitation of
trading of such Basket 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 Basket 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 Basket
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 Basket Security or in respect of options
contracts related to such Basket 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.
14
<PAGE>
For purposes of determining whether a Market Disruption Event has
occurred:
(i) a limitation on the hours or number of days of trading
shall not constitute a Market Disruption Event if it results from an
announced change in the regular business hours of the relevant
exchange, trading system or market;
(ii) any suspension in trading in an option contract on a
Basket 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,
notwithstanding anything to the contrary in the Indenture, the date set forth in
the Redemption Notice, which date shall not be less than 15 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 Basket
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 Basket Securities that have been subject
to a Delaying Event have been determined.
15
<PAGE>
"Redemption" shall mean the option of the Company to redeem,
at any time on or after December 28, 2002, in whole or from time to time in
part, the Securities.
"Redemption Notice" shall mean the notice of Redemption mailed
to the Holders.
"Repurchase" shall mean the option, at any time until eight
Business Days before January 5, 2006, of a beneficial holder to elect to require
the Company to repurchase, in whole or from time to time in part, such holder's
Securities.
"Stated Maturity" shall mean January 5, 2006 or if a Delaying
Event occurs, three Business Days after the Payment Determination Date on which
the Basket Level 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.
16
<PAGE>
EXHIBIT 4.02
LEHMAN BROTHERS HOLDINGS INC.
0.25% Notes Due January 5, 2006
Performance Linked to a Basket of Five Technology Stocks
Number R-1 $20,000,000.00
CUSIP 524908CU2
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.
<PAGE>
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 January 5, 2006, or if a Delaying Event
occurs, three Business Days after the Payment Determination Date therefor (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 (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 January 5 and July 5 of
each year, commencing July 5, 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
January 5 or the most recent January 5 or July 5 to which interest has been paid
or duly provided for.
The interest so payable on any January 5 or July 5 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 calendar 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 hereon at Stated Maturity, Redemption or
Repurchase 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.
2
<PAGE>
This Security shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC. has caused
this instrument to be signed by its Chairman of the Board, its Vice Chairman,
its President, its Chief Financial Officer, one of its Vice Presidents or its
Treasurer, by manual or facsimile signature under its corporate seal, attested
by its Secretary or one of its Assistant Secretaries by manual or facsimile
signature.
Dated: January 5, 2001 LEHMAN BROTHERS HOLDINGS INC.
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: January 5, 2001
CITIBANK, N.A.
as Trustee
By: /s/ Wafaa Orfy
________________________
Authorized Signatory
3
<PAGE>
[Form of Reverse of Security]
This Security is one of a duly authorized series of Securities
of the Company designated as 0.25% Notes Due January 5, 2006, Performance Linked
to a Basket of Five Technology Stocks (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 Securities are not redeemable prior to December 28, 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 December 28, 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 and the Securities. 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, on any
Business Day until eight Business Days before January 5, 2006, 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) at any time until eight
Business Days before January 5, 2006, (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 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,
<PAGE>
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 Basket 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 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 66?% in aggregate
principal amount of each series of Securities at the time Outstanding to be
affected (each series voting as a class), evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to, or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities of all such series; provided, however, that no such
supplemental indenture shall, among other things, 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
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.
2
<PAGE>
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 multiple of $1,000 inexcess thereof.
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.
3
<PAGE>
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 the product of (a)
the Issue Price divided by 133.35 and (b) the Basket Level on the relevant
Payment Determination Date.
"Basket" shall mean the Basket Securities.
"Basket Level", when used with respect to any Payment
Determination Date, shall equal the sum of (a) the products of the Closing
Prices and the applicable Multipliers for each Basket Security for which a
Delaying Event does not occur on the related Calculation Day, (b) if a Delaying
Event occurs for a Basket Security on the related Calculation Day, the product
of the Closing Price for such Basket Security on the next Trading Day on which a
Market Disruption Event does not occur for such Basket Security and the
Multiplier for such Basket Security and (c) any cash included in the Basket on
such Calculation Day.
"Basket Securities" shall mean the securities included in the
Basket from time to time and shall initially be the American Depositary Receipts
("ADRs") of Nokia Corporation and the common stocks of Cisco Systems, Inc.,
Microsoft Corporation, Oracle Corporation and Sun Microsystems, Inc. The Basket
Securities shall only be adjusted by the Calculation Agent pursuant to the
Calculation Agency Agreement for certain extraordinary corporate events.
"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 January 5, 2001 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 Basket Level 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, January 5, 2006, (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.
4
<PAGE>
"Closing Price," means the following, determined by the
Calculation Agent based on information reasonably available to it:
(i) If the Basket 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
Basket Security is listed or admitted to trading or quoted on NASDAQ,
as the case may be.
(ii) If the Basket 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 Basket 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 Basket 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 Basket Security
to hedge the Company's obligations for such Basket Security. If such
Basket 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
Basket 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 $1,000 principal amount of
Securities.
5
<PAGE>
"Market Disruption Event" with respect to a Basket Security
means any of the following events as determined by the Calculation Agent:
(i) A suspension, absence or material limitation of trading of
such Basket 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 Basket Security is traded or, if such Basket
Security is not listed or quoted in the United States, on the primary
exchange, trading system or market for such Basket 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 Basket Security traded on a
bulletin board means a suspension, absence or material limitation of
trading of such Basket 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 Basket 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 Basket
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 Basket Security or in respect of options
contracts related to such Basket 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:
(i) a limitation on the hours or number of days of trading
shall not constitute a Market Disruption Event if it results from an
announced change in the regular business hours of the relevant
exchange, trading system or market;
(ii) any suspension in trading in an option contract on a
Basket 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
6
<PAGE>
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 mean, with respect to any applicable
principal amount of Securities, the number of shares or other units (including
ADRs) or any fractional share or other unit expressed as a decimal of each
Basket Security included in the Basket. In the case of each Security with
principal amount of $1,000.00, the initial Multiplier for each Basket Security
is set forth below:
Basket Security Initial Multiplier
Cisco Systems, Inc. 0.487322
Microsoft Corporation 0.436149
Nokia Corporation 0.450109
Oracle Corporation 0.655132
Sun Microsystems, Inc. 0.655853
"NYSE" shall mean the New York Stock Exchange.
"Non-Delaying Event Redemption Date" shall mean,
notwithstanding anything to the contrary in the Indenture, the date set forth in
the Redemption Notice, which date shall not be less than 15 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 Basket
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 Basket Securities that have been subject
to a Delaying Event have been determined.
7
<PAGE>
"Redemption" shall mean the option of the Company to redeem,
at any time on or after December 28, 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 until eight business
days before January 5, 2006, in whole or from time to time in part, such
holder's Securities.
"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.
All terms used but not defined in this Security are used
herein as defined in the Indenture.
8
<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 until eight Business Days
before January 5, 2006, (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) 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 though they were written
out in full according to applicable laws or regulations:
TEN COM -as tenants in common UNIF GIFT MIN ACT - _____ Custodian ____
TEN ENT -as tenants by the entireties (Cust) (Minor)
JT TEN -as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act ___________________________________
in common (State)
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.
