424B3 1 rule424b3.txt RULE 424(B)(3) Rule 424(b)(3) Registration No. 333-121067 PRICING SUPPLEMENT NO. 54/A dated December 15, 2005 to Prospectus Supplement dated May 18, 2005 and Prospectus dated May 18, 2005 LEHMAN BROTHERS HOLDINGS INC. Medium-Term Notes, Series H This Pricing Supplement supplements the terms and conditions in, and incorporates by reference, the Prospectus, dated May 18, 2005, as supplemented by the Prospectus Supplement, dated May 18, 2005 (as so supplemented, together with all documents incorporated by reference therein, the "Prospectus"), and should be read in conjunction with the Prospectus. Unless otherwise defined in this Pricing Supplement, terms used herein have the same meanings as are given to them in the Prospectus. CUSIP No.: 52517PD40 ISIN: US52517PD408 Specified Currency: Principal: U.S. Dollars Interest: U.S. Dollars Principal Amount: $15,000,000 Total Per Note ----- -------- Issue Price: $15,000,000 100% Agent's Commission: $ 0 0% ----------- ---- Proceeds to Lehman Brothers Holdings: $15,000,000 100% The Notes will be issued in an aggregate principal amount of $15,000,000 and will be a further issuance of, and will form a single tranche with, the $50,000,000 aggregate principal amount of Medium-Term Notes, Series H, due December 20, 2007, that Lehman Brothers Holdings will issue on December 20, 2005. The Notes will have the same CUSIP and ISIN numbers as the other notes of this tranche and will settle on the same date as, and trade interchangeably with, the other notes of this tranche. The issuance of the Notes will increase the aggregate principal amount of the outstanding notes of this tranche to $65,000,000. On the Issue Date, we may, without the consent of the holders of Notes, issue additional notes similar to these Notes in all respects except for the Issue Price. Following the Issue Date, we may, without the consent of the holders of Notes, create and issue additional notes similar to these Notes in all respects except for the Issue Date, Issue Price and the payment of interest accruing prior to the Issue Date of such additional notes. All such additional notes will be consolidated and form a single tranche with, have the same CUSIP and ISIN numbers as and trade interchangeably with these Notes. 1 Agent: Lehman Brothers Agent's Capacity: [X] As principal [ ] As agent Issue Date: December 20, 2005 Stated Maturity Date: December 20, 2007; provided that if such day is not a New York business day, then such day will be the following New York business day. Date From Which Interest Accrues: [X] Issue Date [ ] Other: _____________ [ ] Fixed Rate Note Interest Rate per Annum: _______% [X] Floating Rate Note [ ]CD Rate [ ]Commercial Paper Rate [ ]Federal Funds (Effective) Rate [ ]Federal Funds (Open) Rate [ ]LIBOR Telerate [ ]LIBOR Reuters [ ]EURIBOR [ ]Treasury Rate: Constant Maturity [ ]Yes [ ]No [ ]Prime Rate [ ]Eleventh District Cost of Funds Rate [X]Other: See "Interest Rate per Annum" below Interest Rate per Annum: 1-Year CMT Rate plus the Spread Spread: 0.05% Initial Interest Rate: Not applicable Spread Multiplier: Not applicable Maximum Interest Rate: Not applicable Minimum Interest Rate: 0% Interest Calculation: All values used in any calculation of the Interest Rate will be rounded to five decimal places and all percentages resulting from any Interest Rate calculation will be rounded to three decimal places. Determination Dates: Two New York business days prior to the applicable Interest Reset Date 2 Interest Reset Dates: The Issue Date and each Interest Payment Date Interest Payment Dates: Monthly on the 20th, commencing on January 20, 2006 1-Year CMT Rate: The 1-year Constant Maturity U.S. Treasury yield index that appears on Telerate page 7051 for the applicable Interest Determination Date. If such rate does not appear on Telerate page 7051, then the rate that appears on the Federal Reserve Statistical Release H.15 shall apply. Interest Computation: Interest will be computed on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. Adjusted: [ ] Yes [X] No Interest Rate Calculation Agent: Lehman Brothers Special Financing Optional Redemption: Not applicable Form of Note: [X] Book-entry only (global) [ ] Certificated RISK FACTORS An investment in the Notes entails certain risks not associated with an investment in conventional floating rate medium-term notes. See "Risk Factors" generally in the Prospectus. The secondary market for, and the market value of, the Notes will be affected by a number of factors independent of the creditworthiness of Lehman Brothers Holdings, including the level and direction of interest rates, the anticipated level and potential volatility of the 1-Year CMT Rate, the method of calculating the 1-Year CMT Rate, the time remaining to the maturity of the Notes, the aggregate principal amount of the Notes and the availability of comparable instruments. The value of the 1-Year CMT Rate depends on a number of interrelated factors, including economic, financial and political events, over which Lehman Brothers Holdings has no control. The following table, showing the historical level of 1-Year CMT in effect for the hypothetical Interest Determination Dates listed below, illustrates the variability of that rate: Historical Levels of 1-Year CMT Hypothetical Interest Hypothetical Interest Reset Date 1-Year CMT (%) Reset Date 1-Year CMT (%) --------------------- ------------- --------------------- -------------- January 20, 1995 7.119 July 20, 2000 6.388 February 20, 1995 0.000 August 20, 2000 6.419 March 20, 1995 6.419 September 20, 2000 6.254 April 20, 1995 6.194 October 20, 2000 6.159 May 20, 1995 6.038 November 20, 2000 6.118 June 20, 1995 5.662 December 20, 2000 5.541 July 20, 1995 5.803 January 20, 2001 4.908 3 Hypothetical Interest Hypothetical Interest Reset Date 1-Year CMT (%) Reset Date 1-Year CMT (%) --------------------- ------------- --------------------- -------------- August 20, 1995 5.922 February 20, 2001 4.785 September 20, 1995 5.583 March 20, 2001 4.244 October 20, 1995 5.666 April 20, 2001 3.983 November 20, 1995 5.455 May 20, 2001 3.969 December 20, 1995 5.315 June 20, 2001 3.572 January 20, 1996 5.025 July 20, 2001 3.559 February 20, 1996 5.151 August 20, 2001 3.396 March 20, 1996 5.527 September 20, 2001 2.499 April 20, 1996 5.623 October 20, 2001 2.239 May 20, 1996 5.699 November 20, 2001 2.262 June 20, 1996 5.979 December 20, 2001 2.124 July 20, 1996 5.912 January 20, 2002 1.991 August 20, 1996 5.689 February 20, 2002 2.131 September 20, 1996 5.935 March 20, 2002 2.673 October 20, 1996 5.616 April 20, 2002 2.345 November 20, 1996 5.465 May 20, 2002 2.382 December 20, 1996 5.597 June 20, 2002 2.092 January 20, 1997 0.000 July 20, 2002 1.730 February 20, 1997 5.564 August 20, 2002 1.588 March 20, 1997 5.939 September 20, 2002 1.632 April 20, 1997 6.059 October 20, 2002 1.714 May 20, 1997 5.906 November 20, 2002 1.502 June 20, 1997 5.747 December 20, 2002 1.293 July 20, 1997 5.692 January 20, 2003 1.227 August 20, 1997 5.699 February 20, 2003 1.175 September 20, 1997 5.640 March 20, 2003 1.240 October 20, 1997 5.717 April 20, 2003 1.226 November 20, 1997 5.658 May 20, 2003 1.033 December 20, 1997 5.655 June 20, 2003 0.924 January 20, 1998 5.366 July 20, 2003 1.062 February 20, 1998 5.406 August 20, 2003 1.223 March 20, 1998 5.500 September 20, 2003 1.138 April 20, 1998 5.524 October 20, 2003 1.252 May 20, 1998 5.537 November 20, 2003 1.206 June 20, 1998 5.515 December 20, 2003 1.173 July 20, 1998 5.452 January 20, 2004 1.115 August 20, 1998 5.331 February 20, 2004 1.158 September 20, 1998 4.820 March 20, 2004 1.089 October 20, 1998 4.211 April 20, 2004 1.422 November 20, 1998 4.659 May 20, 2004 1.775 December 20, 1998 4.597 June 20, 2004 2.104 January 20, 1999 4.656 July 20, 2004 2.046 February 20, 1999 4.835 August 20, 2004 1.951 March 20, 1999 4.872 September 20, 2004 2.014 April 20, 1999 4.806 October 20, 2004 2.146 May 20, 1999 5.052 November 20, 2004 2.613 June 20, 1999 5.286 December 20, 2004 2.749 July 20, 1999 5.197 January 20, 2005 2.905 August 20, 1999 5.419 February 20, 2005 3.154 September 20, 1999 5.489 March 20, 2005 3.365 October 20, 1999 5.719 April 20, 2005 3.276 November 20, 1999 5.761 May 20, 2005 3.447 December 20, 1999 6.095 June 20, 2005 3.508 January 20, 2000 6.262 July 20, 2005 3.730 February 20, 2000 6.439 August 20, 2005 3.909 4 Hypothetical Interest Hypothetical Interest Reset Date 1-Year CMT (%) Reset Date 1-Year CMT (%) --------------------- ------------- --------------------- -------------- March 20, 2000 6.432 September 20, 2005 3.908 April 20, 2000 6.362 October 20, 2005 4.206 May 20, 2000 6.836 November 20, 2005 4.377 June 20, 2000 6.488 The historical experience of 1-Year CMT should not be taken as an indication of the future performance of 1-Year CMT during the term of the Notes. Fluctuations in the level of 1-Year CMT make the Notes' effective interest rate difficult to predict and can result in effective interest rates to investors that are lower than anticipated. In addition, historical interest rates are not necessarily indicative of future interest rates. Fluctuations in interest rates and interest rate trends that have occurred in the past are not necessarily indicative of fluctuations that may occur in the future, which may be wider or narrower than those that have occurred historically. SUPPLEMENTAL INFORMATION CONCERNING THE PLAN OF DISTRIBUTION Lehman Brothers Holdings has agreed to sell to Lehman Brothers Inc. (the "Agent"), and the Agent has agreed to purchase from Lehman Brothers Holdings Inc. the principal amount of the Notes at the price specified on the cover of this pricing supplement. The Agent is committed to take and pay for all of the Notes, if any are taken. The Agent proposes to offer the Notes initially at a public offering price equal to the Issue Price set forth above and to certain dealers at such price. After the initial public offering, the public offering price and other selling terms may from time to time be varied by the Agent. Lehman Brothers Holdings has agreed to indemnify the Agents against liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments that the Agents may be required to make relating to these liabilities as described in the Prospectus. The Notes are a new issue of securities with no established trading market. Lehman Brothers Holdings has been advised by the Agents that they may make a market in the Notes, but they are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Notes. Lehman Brothers Holdings or an affiliate may enter into swap agreements or related hedge transactions with one of Lehman Brothers Holdings' other affiliates or unaffiliated counterparties in connection with the sale of the Notes and Lehman Brothers Inc. and/or an affiliate may earn additional income as a result of payments pursuant to the swap, or related hedge transactions. European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), the Agent has represented and agreed, and any other Agent appointed under the Lehman Brothers Holdings Inc. Medium Term Note Program, Series H (the "Program"), will be required to represent and agree, that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date") it has not made and will not make an offer of Notes to the public in that Relevant 5 Member State except that it may, with effect from and including the Relevant Implementation Date, make an offer of Notes to the public in that Relevant Member State: (a) in (or in Germany, where the offer starts within) the period beginning on the date of publication of a prospectus in relation to the Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive and ending on the date which is 12 months after the date of such publication; (b) at any time to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; (c) at any time to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than (euro)43,000,000 and (3) an annual net turnover of more than (euro)50,000,000, as shown in its last annual or consolidated accounts; or (d) at any time in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an "offer of Notes to the public" in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. United Kingdom The Agent has represented and agreed, and the Agent appointed under the Program will be required to represent and agree, that: (a) in relation to any Notes which have a maturity of less than one year, (i) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and (ii) it has not offered or sold and will not offer or sell any Notes other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Notes would otherwise constitute a contravention of Section 19 of the FSMA by the Issuer; (b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in 6 investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer; and (c) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Notes in, from or otherwise involving the United Kingdom. The Agent has agreed that it will comply with all applicable laws and regulations in force in any jurisdiction in which it offers or sells the Notes or possesses or distributes the prospectus supplement, the accompanying prospectus or any other offering material and will obtain any consent, approval or permission required by it for the offer or sale by it of the Notes under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such offers or sales. It is expected that delivery of the Notes will be made against payment therefor more than three business days following the date of this pricing supplement. Trades in the secondary market generally are required to settle in three business days unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the securities on any day prior to the third business day before the settlement date will be required to specify an alternative settlement cycle at the time of any such trade to prevent failed settlement. If the Notes are sold in a market-making transaction after their initial sale, information about the purchase price and the date of the sale will be provided in a separate confirmation of sale. 7