-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EFFWNd7FXBGUy9PF5UqbY0uxs7fmz1bxlrmZ6b4k4pDE8l8eKw6hbhgRRWj+sr0k B82nSn/562PcQSSEyYtNxg== 0000912057-01-518004.txt : 20010531 0000912057-01-518004.hdr.sgml : 20010531 ACCESSION NUMBER: 0000912057-01-518004 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 20010530 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEHMAN BROTHERS HOLDINGS INC CENTRAL INDEX KEY: 0000806085 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 133216325 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-61878 FILM NUMBER: 1650785 BUSINESS ADDRESS: STREET 1: AMERICAN EXPRESS TWR STREET 2: 3 WORLD FINANCIAL CNTR CITY: NEW YORK STATE: NY ZIP: 10285 BUSINESS PHONE: 2125267000 MAIL ADDRESS: STREET 1: AMERICAN EXPRESS TOWER 15TH FL STREET 2: 2 WORLD TRADE CENTER CITY: NEW YORK STATE: NY ZIP: 10048 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 S-3 1 a2048768zs-3.txt FORM S-3 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- LEHMAN BROTHERS HOLDINGS INC. (Exact Name of Registrant as Specified in its Charter) DELAWARE 13-3216325 (State or Other Jurisdiction of (I.R.S. Employer Identification Number) Incorporation or Organization)
-------------------------- THREE WORLD FINANCIAL CENTER NEW YORK, NEW YORK 10285 (212) 526-7000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) -------------------------- THOMAS A. RUSSO, ESQ. LEHMAN BROTHERS HOLDINGS INC. THREE WORLD FINANCIAL CENTER NEW YORK, NEW YORK 10285 (212) 526-7000 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------------------- Copies to: JOHN E. RILEY, ESQ. JEFFREY A. WELIKSON, ESQ. SIMPSON THACHER & BARTLETT LEHMAN BROTHERS HOLDINGS INC. 425 LEXINGTON AVENUE ONE WORLD FINANCIAL CENTER NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10281 (212) 455-2000 (646) 836-2150
-------------------------- Approximate Date of Commencement of Proposed Sale of the Securities to the Public: From time to time after the effective date of this Registration Statement, as determined by market conditions. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, please check the following box. / / -------------------------- CALCULATION OF REGISTRATION FEE (SEE FOLLOWING PAGE) -------------------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CALCULATION OF REGISTRATION FEE PROPOSED PROPOSED MAXIMUM MAXIMUM AGGREGATE AMOUNT OF TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION REGISTERED REGISTERED(1) PER UNIT(2) PRICE(3)(4) FEE(5) Debt Securities of Lehman Brothers Holdings Inc. (6).................................. 100% Warrants of Lehman Brothers Holdings Inc. (7).................................. 100% Purchase Contracts of Lehman Brothers Holdings Inc. (8)......................... 100% Units of Lehman Brothers Holdings Inc. (9).................................. 100% Total (10).................................. $1,100,000,000 $1,100,000,000 $275,000
(1) This Registration Statement also relates to offers and sales of Debt Securities, Warrants, Purchase Contracts and Units in connection with market-making transactions by and through affiliates of the Registrant. Includes the amount, if any, that may be acquired and sold by such affiliates in connection with such market-making activities. (2) The proposed maximum offering price per unit will be determined from time to time by the Registrant in connection with the issuance by Registrant of the securities registered hereunder. (3) The proposed maximum aggregate offering price has been estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 under the Securities Act of 1933. As described in note 10 below, the aggregate public offering price of the securities registered hereby and pursuant to the Registration Statement referred to below will not exceed $1,165,000,000 or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies. (4) Exclusive of accrued interest, distributions and dividends, if any. (5) A filing fee was previously paid in connection with a registration statement filed earlier relating to the registration of $65,000,000 aggregate principal amount (or initial offering price) of Debt Securities and Warrants which are being covered by the Prospectus included in this Registration Statement. The filing fee of $275,000 relates solely to the registration of $1,100,000,000 aggregate principal amount (or initial offering price) of securities not previously registered. (6) Subject to note (10) below, there is being registered hereunder an indeterminate principal amount of Debt Securities as may be sold from time to time. (7) Subject to note (10) below, there is being registered hereunder an indeterminate number of Warrants of Lehman Brothers Holdings Inc. as from time to time may be issued at indeterminate prices. (8) Subject to note (10) below, there is being registered hereunder an indeterminate number of Purchase Contracts of Lehman Brothers Holdings Inc. as from time to time may be issued at indeterminate prices. (9) Subject to note (10) below, there is being registered hereunder an indeterminate number of Units of Lehman Brothers Holdings Inc. as from time to time may be issued at indeterminate prices. (10) As described in note (5) above, this Registration Statement relates to the registration of $1,100,000,000 aggregate principal amount (or initial offering price) of securities being registered hereby and an additional $65,000,000 aggregate principal amount of Debt Securities and Warranties previously registered. In no event will the aggregate offering price of all securities issued from time to time pursuant to this Registration Statement and the Registration Statement on Form S-3 (No. 33-53651) referred to below exceed $1,165,000,000 or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies. It is not practicable to determine the principal amount of Debt Securities or the number of Warrants, Purchase Contracts and Units and proposed maximum offering price per security at this time, as they will depend, among other things, on the term of such securities, prevailing interest rates at the time of the offering, the currency selected and the exchange rate in effect between the U.S. dollar and that currency at the time of the offering, any index selected at the time of the offering and the denominations or stated values of the Debt Securities covered by Warrants. Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus included in this Registration Statement is a Combined Prospectus that also relates to Debt Securities and Warrants of the Registrant previously registered under the Registration Statement on Form S-3 (No. 33-53651) of Lehman Brothers Holdings Inc. A filing fee was paid in connection with $65,000,000 of securities that remain eligible to be sold under such Registration Statement. This Registration Statement constitutes Post-Effective Amendment No. 2 to Registration Statement on Form S-3 (No. 33-53651). INTRODUCTORY NOTE This Registration Statement contains a form of base prospectus for debt securities, warrants, purchase contracts and units issuable by Lehman Brothers Holdings Inc. To the extent required, the information in the prospectus, including financial information, will be updated at the time of each offering. Upon each such offering, a prospectus supplement to the base prospectus will be filed. SUBJECT TO COMPLETION, DATED MAY 30, 2001 THE INFORMATION IN THIS PROSPECTUS IS NEITHER FINAL NOR COMPLETE. THESE SECURITIES MAY NOT BE SOLD UNTIL THE RELATED REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES NOR IS IT AN INVITATION FOR OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE NOT PERMITTED. PROSPECTUS $1,165,000,000 LEHMAN BROTHERS HOLDINGS INC. MAY OFFER-- DEBT SECURITIES WARRANTS PURCHASE CONTRACTS UNITS ---------------- The Securities may be offered in one or more series, in amounts, at prices and on terms to be determined at the time of the offering. Lehman Brothers Holdings will provide the specific terms of these securities in supplements to this prospectus. You should read this prospectus and the accompanying prospectus supplement carefully before you invest. The securities offered pursuant to this prospectus will have an initial aggregate offering price of up to $1,165,000,000 or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies, subject to reduction as a result of the sale under certain circumstances of other securities. --------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus or any accompanying prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense. --------------------- , 2001 PROSPECTUS SUMMARY This summary provides a brief overview of the key aspects of Lehman Brothers Holdings and all material terms of the offered securities that are known as of the date of this prospectus. For a more complete understanding of the terms of a particular issuance of offered securities, before making your investment decision, you should carefully read: - this prospectus, which explains the general terms of the securities that Lehman Brothers Holdings may offer; - the accompanying prospectus supplement for such issuance, which explains the specific terms of the securities being offered and which may update or change information in this prospectus; and - the documents referred to in "Where You Can Find More Information" on page 6 for information about Lehman Brothers Holdings, including its financial statements. LEHMAN BROTHERS HOLDINGS INC. Lehman Brothers Holdings is one of the leading global investment banks, serving institutional, corporate, government and high-net-worth individual clients and customers. The company's worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by offices in additional locations in the United States, Europe, the Middle East, Latin America and the Asia Pacific region. The company's business includes capital raising for clients through securities underwriting and direct placements, corporate finance and strategic advisory services, private equity investments, securities sales and trading, research, and the trading of foreign exchange, derivative products and certain commodities. The company acts as a market-maker in all major equity and fixed income products in both the domestic and international markets. The company is a member of all principal securities and commodities exchanges in the United States, as well as the National Association of Securities Dealers, Inc., and holds memberships or associate memberships on several principal international securities and commodities exchanges, including the London, Tokyo, Hong Kong, Frankfurt, Paris and Milan stock exchanges. Lehman Brothers Holdings' principal executive office is at Three World Financial Center, New York, New York 10285, and its telephone number is (212) 526-7000. THE SECURITIES LEHMAN BROTHERS HOLDINGS MAY OFFER Lehman Brothers Holdings may use this prospectus to offer up to $1,165,000,000 of: - debt securities, - warrants, - purchase contracts, and - units, comprised of two or more debt securities, warrants and purchase contracts, in any combination. A prospectus supplement will describe the specific types, amounts, prices and detailed terms of any of these offered securities and may describe certain risks associated with an investment in the securities. Terms used in the prospectus supplement will have the meanings described in this prospectus, unless otherwise specified. The debt securities, warrants, purchase contracts and units are unsecured obligations of Lehman Brothers Holdings. Since Lehman Brothers Holdings is a holding company, its cash flow and consequent ability to satisfy its obligations under the offered securities are dependent upon the earnings of its subsidiaries and the distribution of those earnings or loans or other payments by those subsidiaries to Lehman Brothers Holdings. Lehman Brothers Holdings' subsidiaries will have no obligation to pay any amount in respect of offered securities or to make any funds available therefor. 2 Dividends, loans and other payments by Lehman Brothers Inc. and certain other subsidiaries are restricted by net capital and other rules of various regulatory bodies. Additionally, the ability of Lehman Brothers Holdings to participate as an equity holder in any distribution of assets of any subsidiary is subordinate to the claims of creditors of the subsidiary, except to the extent that any claims Lehman Brothers Holdings may have as a creditor of the subsidiary are judicially recognized. DEBT SECURITIES Debt securities are unsecured general obligations of Lehman Brothers Holdings in the form of senior or subordinated debt. Senior debt includes Lehman Brothers Holdings' notes, debt and guarantees and any other indebtedness for money borrowed that is not subordinated. Subordinated debt, so designated at the time it is issued, will not be entitled to interest, principal or other payments if payments on the senior debt are not made. The senior and subordinated debt will be issued under separate indentures. Neither indenture limits the amount of debt that Lehman Brothers Holdings may issue. Debt securities may bear interest at a fixed or a floating rate and may provide that the amount payable at maturity, and/or the amount of interest payable on an interest payment date, will be determined by reference to: - securities of one or more issuers, including Lehman Brothers Holdings, - one or more currencies, - one or more commodities, - any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, and/or - one or more indices or baskets of the items described above. For any particular debt securities Lehman Brothers Holdings offers, the prospectus supplement will describe the specific designation, the aggregate principal or face amount and the purchase price; the ranking, whether senior or subordinated; the stated maturity; the redemption terms, if any; the rate or manner of calculating the rate and the payment dates for interest, if any; the amount or manner of calculating the amount payable at maturity and whether that amount may be paid by delivering cash, securities or other property; and any other specific terms. WARRANTS Lehman Brothers Holdings may offer two types of warrants: - warrants to purchase Lehman Brothers Holdings' debt securities, and - warrants to purchase or sell, or whose cash value is determined by reference to the performance, level or value of, one or more of the following: - securities of one or more issuers, including Lehman Brothers Holdings, - one or more currencies, - one or more commodities, - any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, and - one or more indices or baskets of the items described above. For any particular warrants Lehman Brothers Holdings offers, the prospectus supplement will describe the underlying property; the expiration date; the exercise price or the manner of determining the exercise price; the amount and kind, or the manner of determining the amount and kind, of property or cash to be delivered by you or us upon exercise; and any other specific terms. Lehman 3 Brothers Holdings will issue the warrants under warrant agreements between Lehman Brothers Holdings and one or more warrant agents and may issue warrants under a unit agreement described below. PURCHASE CONTRACTS Lehman Brothers Holdings may offer purchase contracts for the purchase or sale of, or whose cash value is determined by reference to the performance, level or value of, one or more of the following: - securities of one or more issuers, including Lehman Brothers Holdings, - one or more currencies, - one or more commodities, - any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, and - one or more indices or baskets of the items described above. For any particular purchase contracts Lehman Brothers Holdings offers, the prospectus supplement will describe the underlying property; the settlement date; the purchase price or manner of determining the purchase price and whether it must be paid when the purchase contract is issued or at a later date; the amount and kind, or the manner of determining the amount and kind, of property or cash to be delivered at settlement; whether the holder will pledge property to secure the performance of any obligations the holder may have under the purchase contract; and any other specific terms. Lehman Brothers Holdings will issue prepaid purchase contracts under an indenture for debt securities described above and may issue purchase contracts under a unit agreement described below. UNITS Lehman Brothers Holdings may offer units, comprised of two or more debt securities, warrants and purchase contracts, in any combination. For any particular units Lehman Brothers Holdings offers, the prospectus supplement will describe the particular securities comprising each unit; the terms on which those securities will be separable, if any; whether the holder will pledge property to secure the performance of any obligations the holder may have under the unit; and any other specific terms of the units. Lehman Brothers Holdings may issue the units under unit agreements between Lehman Brothers Holdings and one or more unit agents. FORM OF SECURITIES Lehman Brothers Holdings will generally issue the securities in book-entry form through one or more depositaries, such as The Depository Trust Company, Euroclear or Clearstream, Luxembourg, named in the applicable prospectus supplement. Each sale of a security in book-entry form will settle in immediately available funds through the depositary, unless otherwise stated. Lehman Brothers Holdings will issue the securities only in registered form, without coupons. PAYMENT CURRENCIES Amounts payable in respect of the securities, including the purchase price, will be payable in U.S. dollars, unless the prospectus supplement states otherwise. LISTING If any securities are to be listed or quoted on a securities exchange or quotation system, the applicable prospectus supplement will so state. 4 USE OF PROCEEDS Lehman Brothers Holdings will use the net proceeds it receives from any offering of these securities for general corporate purposes, primarily to fund its operating units and subsidiaries. Lehman Brothers Holdings may use some of the proceeds to refinance or extend the maturity of existing debt obligations. Lehman Brothers Holdings may use a portion of the proceeds from the sale of securities to hedge its exposure to payments that it may have to make on such securities as described below under "Use of Proceeds and Hedging." PLAN OF DISTRIBUTION Lehman Brothers Holdings may sell the offered securities in any of the following ways: - to or through underwriters or dealers; - by itself directly; - through agents; or - through a combination of any of these methods of sale. The prospectus supplement will explain the ways Lehman Brothers Holdings will sell specific securities, including the names of any underwriters and details of the pricing of the securities, as well as the commissions, concessions or discounts Lehman Brothers Holdings is granting the underwriters, dealers or agents. If Lehman Brothers Holdings uses underwriters in any sale, the underwriters will buy the securities for their own account and may resell the securities from time to time in one or more transactions, at a fixed public offering price or at varying prices determined at the time of sale. In connection with an offering, underwriters and selling group members and their affiliates may engage in transactions to stabilize, maintain or otherwise affect the market price of the securities, in accordance with applicable law. Lehman Brothers Holdings expects that the underwriters for any offering will include one or more of its broker-dealer affiliates. It also expects that one or more of these affiliates may offer and sell previously issued offered securities as part of their business, and may act as principals or agents in such transactions. Lehman Brothers Holdings or such affiliates may use this prospectus and the related prospectus supplements and pricing supplements in connection with these activities. 5 WHERE YOU CAN FIND MORE INFORMATION As required by the Securities Act of 1933, Lehman Brothers Holdings filed a registration statement (No. 333- ) relating to the securities offered by this prospectus with the Securities and Exchange Commission. This prospectus is a part of that registration statement, which includes additional information. Lehman Brothers Holdings files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document Lehman Brothers Holdings files at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. You can also request copies of the documents, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. These SEC filings are also available to the public from the SEC's web site at http://www.sec.gov. The SEC allows Lehman Brothers Holdings to "incorporate by reference" the information it files with the SEC, which means that it can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus. Information that Lehman Brothers Holdings files later with the SEC will automatically update information in this prospectus. In all cases, you should rely on the later information over different information included in this prospectus or the prospectus supplement. Lehman Brothers Holdings incorporates by reference the documents listed below and any future filings made with the SEC under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934: - Annual Report on Form 10-K for the year ended November 30, 2000, filed with the SEC on February 28, 2001; - Amendment No. 1 to Annual Report on Form 10-K for the year ended November 30, 2000, filed with the SEC on March 9, 2001; - Quarterly Report on Form 10-Q for the quarter ended February 28, 2001, filed with the SEC on April 16, 2001; - Current Reports on Form 8-K, filed with the SEC on January 4, January 5, February 27, March 13, March 21, April 26 (two filings), May 2 and May 22, 2001. All documents Lehman Brothers Holdings files pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and before the later of (1) the completion of the offering of the securities described in this prospectus and (2) the date affiliates of Lehman Brothers Holdings stop offering securities pursuant to this prospectus shall be incorporated by reference in this prospectus from the date of filing of such documents. You may request a copy of these filings, at no cost, by writing or telephoning Lehman Brothers Holdings at the following address: Controller's Office Lehman Brothers Holdings Inc. Three World Financial Center New York, New York 10285 (212) 526-0660 ------------------------ YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED IN THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT, AS WELL AS THE INFORMATION INCORPORATED BY REFERENCE. LEHMAN BROTHERS HOLDINGS HAS NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. LEHMAN BROTHERS HOLDINGS IS NOT MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS, THE PROSPECTUS SUPPLEMENT OR ANY DOCUMENTS INCORPORATED BY REFERENCE IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE OF THE APPLICABLE DOCUMENT. 6 USE OF PROCEEDS AND HEDGING GENERAL. Lehman Brothers Holdings will use the proceeds it receives from the sale of the offered securities for general corporate purposes, principally to: - fund the business of its operating units; - fund investments in, or extensions of credit or capital contributions to, its subsidiaries; and - lengthen the average maturity of liabilities, by reducing short-term liabilities or re-funding maturing indebtedness. Lehman Brothers Holdings expects to incur additional indebtedness in the future to fund its businesses. Lehman Brothers Holdings or an affiliate may enter into one or more swap agreements in connection with sales of the offered securities and may earn additional income from those transactions. HEDGING. Lehman Brothers Holdings or its subsidiaries may use all or some of the proceeds received from the sale of offered securities to purchase or maintain positions in the securities or other assets underlying the offered securities or assets used to determine the relevant index or indices. Lehman Brothers Holdings or its subsidiaries may also purchase or maintain positions in options, futures contracts, forward contracts or swaps, or options on such securities, or other derivative or similar instruments relating to the relevant index or underlying assets. Lehman Brothers Holdings may also use the proceeds to pay the costs and expenses of hedging any currency, interest rate or other risk relating to offered securities. Lehman Brothers Holdings expects that it or its subsidiaries will increase or decrease their initial hedging position over time using techniques which help evaluate the size of any hedge based upon a variety of factors affecting the value of the underlying instrument. These factors may include the history of price changes in that underlying instrument and the time remaining to maturity. Lehman Brothers Holdings may take long or short positions in the underlying instrument, the assets underlying any such instrument or other derivative or similar instruments related thereto. These other hedging activities may occur from time to time before the offered securities mature and will depend on market conditions and the value of the underlying instrument. In addition, Lehman Brothers Holdings or its subsidiaries may purchase or otherwise acquire long or short positions in offered securities from time to time and may, in their sole discretion, hold, resell, exercise, cancel or retire such offered securities. Lehman Brothers Holdings or its subsidiaries may also take hedging positions in other types of appropriate financial instruments that may become available in the future. If Lehman Brothers Holdings or its subsidiaries have long hedge positions in, options contracts in, or other derivative or similar instruments related to, the underlying assets or measures, Lehman Brothers Holdings or its subsidiaries may liquidate all or a portion of their holdings at or about the time of the maturity of the offered securities. The aggregate amount and type of such positions are likely to vary over time depending on future market conditions and other factors. Lehman Brothers Holdings is only able to determine profits or losses from any such position when the position is closed out and any offsetting position or positions are taken into account. Lehman Brothers Holdings has no reason to believe that its hedging activities will have a material impact on the price of such options, swaps, futures contracts, options on the foregoing, or other derivative or similar instruments, or on the value of the underlying securities, index (or the assets underlying the index), currency, commodity or interest rate. However, Lehman Brothers Holdings cannot guarantee to you that its hedging activities will not affect such prices or value. Lehman Brothers Holdings will use the remainder of the proceeds from the sale of offered securities for general corporate purposes as described above. 7 RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS YEAR ENDED NOVEMBER 30, ENDED ---------------------------------------------------- FEBRUARY 28, 1996 1997 1998 1999 2000 2001 -------- -------- -------- -------- -------- ------------ Ratio of Earnings to Fixed Charges................. 1.06 1.07 1.07 1.12 1.14 1.12
DESCRIPTION OF DEBT SECURITIES Please note that in this section entitled "Description of Debt Securities", references to Lehman Brothers Holdings refer only to Lehman Brothers Holdings and not to its consolidated subsidiaries. Also, in this section, references to "holders" mean those who own debt securities registered in their own names, on the books that Lehman Brothers Holdings or the trustee maintains for this purpose, and not those who own beneficial interests in debt securities registered in street name or in debt securities issued in book-entry form through one or more depositaries. Owners of beneficial interests in the debt securities should read the section below entitled "Book-Entry Procedures and Settlement". GENERAL The debt securities offered by this prospectus will be unsecured obligations of Lehman Brothers Holdings and will be either senior or subordinated debt. Senior debt will be issued under a senior debt indenture. Subordinated debt will be issued under a subordinated debt indenture. The senior debt indenture and the subordinated debt indenture are sometimes referred to in this prospectus individually as an "indenture" and collectively as the "indentures." The indentures (including all amendments and a separate related document containing standard multiple series indenture provisions) have been filed with the SEC and are incorporated by reference in the registration statement of which this prospectus forms a part. You can obtain copies of the indentures by following the directions on page 6 or by contacting the applicable indenture trustee. A form of each debt security, reflecting the particular terms and provisions of a series of offered debt securities, has been filed with the SEC or will be filed with the SEC at the time of the offering and incorporated by reference in the registration statement of which this prospectus forms a part. You can obtain a copy of any form of debt security when it has been filed by following the directions on page 6 or by contacting the applicable indenture trustee. The following briefly summarizes the material provisions of the indentures and the debt securities. You should read the more detailed provisions of the applicable indenture, including the defined terms, for provisions that may be important to you. As you read this section, please remember that the specific terms of your debt security as described in the prospectus supplement will supplement and, if applicable, modify or replace the general terms described in this section. You should read carefully the particular terms of a series of debt securities, which will be described in more detail in the prospectus supplement. If there are differences between the prospectus supplement and this prospectus, the prospectus supplement will control. Thus, the statements made in this section may not apply to your debt security. Unless otherwise provided for a particular issuance in an accompanying prospectus supplement, the trustee under the senior debt indenture will be Citibank, N.A., and the trustee under the subordinated debt indenture will be The Chase Manhattan Bank (formerly known as Chemical Bank). The indentures provide that unsecured senior or subordinated debt securities of Lehman Brothers Holdings may be issued in one or more series, with different terms, in each case as authorized from time to time by Lehman Brothers Holdings. Lehman Brothers Holdings also has the right to "reopen" a previous issue of a series of debt securities by issuing additional debt securities of such series. 8 TYPES OF DEBT SECURITIES Lehman Brothers Holdings may issue fixed rate debt securities, floating rate debt securities or indexed debt securities. FIXED AND FLOATING RATE DEBT SECURITIES Fixed rate debt securities will bear interest at a fixed rate described in the prospectus supplement. This type includes zero coupon debt securities, which bear no interest and are often issued at a price lower than the principal amount. Federal income tax consequences and other special considerations applicable to any debt securities issued by Lehman Brothers Holdings at a discount will be described in the applicable prospectus supplement. Upon the request of the holder of any floating rate debt security, the calculation agent will provide for that debt security the interest rate then in effect, and, if determined, the interest rate that will become effective on the next interest reset date. The calculation agent's determination of any interest rate, and its calculation of the amount of interest for any interest period, will be final and binding in the absence of manifest error. All percentages resulting from any interest rate calculation relating to a debt security will be rounded upward or downward, as appropriate, to the next higher or lower one hundred-thousandth of a percentage point. All amounts used in or resulting from any calculation relating to a debt security will be rounded upward or downward, as appropriate, to the nearest cent, in the case of U.S. dollars, or to the nearest corresponding hundredth of a unit, in the case of a currency other than U.S. dollars, with one-half cent or one-half of a corresponding hundredth of a unit or more being rounded upward. In determining the base rate that applies to a floating rate debt security during a particular interest period, the calculation agent may obtain rate quotes from various banks or dealers active in the relevant market, as described in the prospectus supplement. Those reference banks and dealers may include the calculation agent itself and its affiliates, as well as any underwriter, dealer or agent participating in the distribution of the relevant floating rate debt securities and its affiliates, and they may include affiliates of Lehman Brothers Holdings. INDEXED DEBT SECURITIES Lehman Brothers Holdings may also offer indexed debt securities, which may be fixed or floating rate debt securities or bear no interest. An indexed debt security provides that the amount payable at its maturity, and/or the amount of interest (if any) payable on an interest payment date, will be determined by reference to: - securities of one or more issuers, including Lehman Brothers Holdings, - one or more currencies, - one or more commodities, - any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, which may include any credit event (as defined in the prospectus supplement) relating to any company or companies or other entity or entities (which may include a government or governmental agency) other than Lehman Brothers Holdings, and/or - one or more indices or baskets of the items described above. Each instrument, measure or event described above is referred to as an "index property". If you are a holder of an indexed debt security, you may receive an amount at maturity that is greater than or less than the face amount of your debt security depending upon the value of the applicable index property at maturity. The value of the applicable index property will fluctuate over time. 9 An indexed debt security may provide either for cash settlement or for physical settlement by delivery of the index property or another property of the type listed above. An indexed debt security may also provide that the form of settlement may be determined at Lehman Brothers Holdings' option or at the holder's option. Some indexed debt securities may be exchangeable, at Lehman Brothers Holdings' option or the holder's option, for securities of an issuer other than Lehman Brothers Holdings. If you purchase an indexed debt security, the prospectus supplement will include information about the relevant index property, about how amounts that are to become payable will be determined by reference to the price or value of that index property and about the terms on which the security may be settled physically or in cash. No holder of an indexed debt security will, as such, have any rights of a holder of the index property referenced in the debt security or deliverable upon settlement, including any right to receive payment thereunder. INFORMATION IN THE PROSPECTUS SUPPLEMENT The prospectus supplement for any offered series of debt securities will describe the following terms, as applicable: - the title; - whether senior or subordinated debt; - the total principal amount offered; - the percentage of the principal amount at which the securities will be sold and, if applicable, the method of determining the price; - the maturity date or dates; - whether the debt securities are fixed rate debt securities, floating rate debt securities or indexed debt securities; - if the debt securities are fixed rate debt securities, the yearly rate at which the debt security will bear interest, if any, and the interest payment dates; - if the debt security is an original issue discount debt security, the yield to maturity; - if the debt securities are floating rate debt securities, the interest rate basis; any applicable index currency or maturity, spread or spread multiplier or initial, maximum or minimum rate; the interest reset, determination, calculation and payment dates; the day count used to calculate interest payments for any period; - the date or dates from which interest, if any, will accrue, or how such date or dates will be determined, and the interest payment dates and any related record dates; - if the debt securities are indexed debt securities, the amount Lehman Brothers Holdings will pay you at maturity, the amount of interest, if any, Lehman Brothers Holdings will pay you on an interest payment date or the formula Lehman Brothers Holdings will use to calculate these amounts, if any, and the terms on which your debt security will be exchangeable for or payable in cash, securities or other property; - if the index property is an index, the method of providing for a substitute index or indices or otherwise determining the amount payable on the indexed debt securities if any index changes or ceases to be made available by its publisher; - if other than in United States dollars, the currency or currency unit in which the securities are denominated and in which payment will be made; - any provisions for the payment of additional amounts for taxes; 10 - the denominations in which the securities will be issuable if other than denominations of $1,000 and integral multiples thereof; - the terms and conditions on which the securities may be redeemed at the option of Lehman Brothers Holdings; - any obligation of Lehman Brothers Holdings to redeem, purchase or repay the securities at the option of a holder upon the happening of any event and the terms and conditions of redemption, purchase or repayment; - any provisions for the discharge of Lehman Brothers Holdings' obligations relating to the securities by deposit of funds or United States government obligations; - the names and duties of any co-trustees, depositaries, authenticating agents, calculation agents, paying agents, transfer agents or registrars for the debt securities; - any material provisions of the applicable indenture described in this prospectus that do not apply to the securities; and - any other specific terms of the securities. The terms on which a series of debt securities may be convertible into or exchangeable for other securities of Lehman Brothers Holdings or any other entity will be set forth in the prospectus supplement relating to such series. Such terms will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at the option of Lehman Brothers Holdings. The terms may include provisions pursuant to which the number of other securities to be received by the holders of such series of debt securities may be adjusted. PAYMENT AND PAYING AGENTS Distributions on the debt securities other than those represented by global notes will be made in the designated currency against surrender of the debt securities at the principal corporate trust office of the relevant trustee in New York City. Payment will be made to the registered holder at the close of business on the record date for such payment. Interest payments will be made at the principal corporate trust office of the relevant trustee in New York City, or by a check mailed to the holder at his registered address. Payments in any other manner will be specified in the prospectus supplement. CALCULATION AGENTS Calculations relating to floating rate debt securities and indexed debt securities will be made by the calculation agent, an institution that Lehman Brothers Holdings appoints as its agent for this purpose. That institution may include any affiliate of Lehman Brothers Holdings, such as Lehman Brothers Inc. Lehman Brothers Holdings may appoint a different institution to serve as calculation agent from time to time after the original issue date of the debt security without your consent and without notifying you of the change. The initial calculation agent will be identified in the prospectus supplement. SENIOR DEBT The senior debt securities will be issued under the senior debt indenture and will rank on an equal basis with all other unsecured debt of Lehman Brothers Holdings except subordinated debt. SUBORDINATED DEBT The subordinated debt securities will be issued under the subordinated debt indenture and will rank subordinated and junior in right of payment, to the extent set forth in the subordinated debt indenture, to all "senior debt" (as defined below) of Lehman Brothers Holdings. If Lehman Brothers Holdings defaults in the payment of any principal of, or premium, if any, or interest on any senior debt when it becomes due and payable after any applicable grace period, then, 11 unless and until the default is cured or waived or ceases to exist, Lehman Brothers Holdings cannot make a payment on account of or redeem or otherwise acquire the subordinated debt securities. If there is any insolvency, bankruptcy, liquidation or other similar proceeding relating to Lehman Brothers Holdings, its creditors or its property, then all senior debt must be paid in full before any payment may be made to any holders of subordinated debt securities. Furthermore, if Lehman Brothers Holdings defaults in the payment of the principal of and accrued interest on any subordinated debt securities that is declared due and payable upon an event of default under the subordinated debt indenture, holders of all senior debt will first be entitled to receive payment in full in cash before holders of such debt can receive any payments. "Senior debt" means: (1) the principal, premium, if any, and interest in respect of (A) indebtedness of Lehman Brothers Holdings for money borrowed and (B) indebtedness evidenced by securities, notes, debentures, bonds or other similar instruments issued by Lehman Brothers Holdings, including the senior debt securities; (2) all capitalized lease obligations of Lehman Brothers Holdings; (3) all obligations of Lehman Brothers Holdings representing the deferred purchase price of property; and (4) all deferrals, renewals, extensions and refundings of obligations of the type referred to in clauses (1) through (3); but senior debt does not include: (a) subordinated debt securities; (b) any indebtedness that by its terms is subordinated to, or ranks on an equal basis with, subordinated debt securities; (c) indebtedness for goods or materials purchased in the ordinary course of business or for services obtained in the ordinary course of business or indebtedness consisting of trade payables; and (d) indebtedness that is subordinated to an obligation of Lehman Brothers Holdings of the type specified in clauses (1) through (4) above. The effect of clause (d) is that Lehman Brothers Holdings may not issue, assume or guarantee any indebtedness for money borrowed which is junior to the senior debt securities and senior to the subordinated debt securities. COVENANTS LIMITATIONS ON LIENS. The indentures provide that Lehman Brothers Holdings will not, and will not permit any designated subsidiary to, incur, issue, assume or guarantee any indebtedness for money borrowed if such indebtedness is secured by a pledge of, lien on, or security interest in any shares of common stock of any designated subsidiary, without providing that each series of debt securities and, at Lehman Brothers Holdings' option, any other indebtedness ranking equally and ratably with such indebtedness, is secured equally and ratably with (or prior to) such other secured indebtedness. "Designated subsidiary" means any subsidiary of Lehman Brothers Holdings, the consolidated net worth of which represents at least 5% of the consolidated net worth of Lehman Brothers Holdings. As of February 28, 2001, the designated subsidiaries were Lehman Brothers Bancorp Inc., Lehman Brothers Bank, FSB, Lehman Brothers Inc., Lehman Brothers Holdings Plc, Lehman Brothers (International) Europe, Lehman Brothers Japan Inc., Lehman Brothers U.K. Holdings (Delaware) Inc., Lehman Brothers UK Holdings Ltd., Lehman Commercial Paper Inc., LCPI Properties Inc., LW-LP Inc., Lehman Re Ltd. and Structured Asset Securities Corp. 12 LIMITATIONS ON MERGERS AND SALES OF ASSETS. The indentures provide that Lehman Brothers Holdings will not merge or consolidate or transfer or lease all or substantially all its assets, and another person may not transfer or lease all or substantially all of its assets to Lehman Brothers Holdings unless: - either (1) Lehman Brothers Holdings is the continuing corporation, or (2) the successor corporation, if other than Lehman Brothers Holdings, is a U.S. corporation and expressly assumes by supplemental indenture the obligations evidenced by the securities issued pursuant to the indenture and - immediately after the transaction, there would not be any default in the performance of any covenant or condition of the indenture. Other than the restrictions described above, the indentures do not limit the amount of debt or other securities that Lehman Brothers Holdings may issue or contain any covenants or provisions that would protect holders of the debt securities in the event of a highly leveraged transaction. MODIFICATION OF THE INDENTURES Under the indentures, Lehman Brothers Holdings and the relevant trustee can enter into supplemental indentures to establish the form and terms of any new series of debt securities without obtaining the consent of any holder of debt securities. Lehman Brothers Holdings and the trustee may, with the consent of the holders of at least 66 2/3% in aggregate principal amount of the debt securities of a series, modify the applicable indenture or the rights of the holders of the securities of such series to be affected. No such modification may, without the consent of the holder of each security so affected: - extend the fixed maturity of any such securities, - reduce the rate or change the time of payment of interest on such securities, - reduce the principal amount of such securities or the premium, if any, on such securities, - change any obligation of Lehman Brothers Holdings to pay additional amounts, - reduce the amount of the principal payable on acceleration of any securities issued originally at a discount, - adversely affect the right of repayment or repurchase at the option of the holder, - reduce or postpone any sinking fund or similar provision, - change the currency or currency unit in which any such securities are payable or the right of selection thereof, - impair the right to sue for the enforcement of any such payment on or after the maturity of such securities, - reduce the percentage of securities referred to above whose holders need to consent to the modification or a waiver without the consent of such holders, - change any obligation of Lehman Brothers Holdings to maintain an office or agency. DEFAULTS Each indenture provides that events of default regarding any series of debt securities will be: - failure to pay required interest on any debt security of such series for 30 days; - failure to pay principal or premium, if any, on any debt security of such series when due; - failure to make any required scheduled installment payment for 30 days on debt securities of such series; 13 - failure to perform for 90 days after notice any other covenant in the relevant indenture other than a covenant included in the relevant indenture solely for the benefit of a series of debt securities other than such series; and - certain events of bankruptcy or insolvency, whether voluntary or not. If an event of default regarding debt securities of any series issued under the indentures should occur and be continuing, either the trustee or the holders of 25% in the principal amount of outstanding debt securities of such series may declare each debt security of that series due and payable. Lehman Brothers Holdings is required to file annually with the trustee a statement of an officer as to the fulfillment by Lehman Brothers Holdings of its obligations under the indenture during the preceding year. No event of default regarding one series of debt securities issued under an indenture is necessarily an event of default regarding any other series of debt securities. Holders of a majority in principal amount of the outstanding debt securities of any series will be entitled to control certain actions of the trustee under the indentures and to waive past defaults regarding such series. The trustee generally will not be requested, ordered or directed by any of the holders of debt securities, unless one or more of such holders shall have offered to the trustee reasonable security or indemnity. If an event of default occurs and is continuing regarding a series of debt securities, the trustee may use any sums that it holds under the relevant indenture for its own reasonable compensation and expenses incurred prior to paying the holders of debt securities of such series. Before any holder of any series of debt securities may institute action for any remedy, except payment on such holder's debt security when due, the holders of not less than 25% in principal amount of the debt securities of that series outstanding must request the trustee to take action. Holders must also offer and give the satisfactory security and indemnity against liabilities incurred by the trustee for taking such action. DEFEASANCE Except as may otherwise be set forth in an accompanying prospectus supplement, after Lehman Brothers Holdings has deposited with the trustee, cash or government securities, in trust for the benefit of the holders sufficient to pay the principal of, premium, if any, and interest on the debt securities of such series when due, then: - if the terms of the debt securities so provide, Lehman Brothers Holdings will be deemed to have paid and satisfied its obligations on all outstanding debt securities of such series, which is known as "defeasance and discharge"; or - Lehman Brothers Holdings will cease to be under any obligation, other than to pay when due the principal of, premium, if any, and interest on such debt securities, relating to the debt securities of such series, which is known as "covenant defeasance". When there is a defeasance and discharge, (1) the applicable indenture will no longer govern the debt securities of such series, (2) Lehman Brothers Holdings will no longer be liable for payment and (3) the holders of such debt securities will be entitled only to the deposited funds. When there is a covenant defeasance, however, Lehman Brothers Holdings will continue to be obligated to make payments when due if the deposited funds are not sufficient. For a discussion of the principal United States federal income tax consequences of covenant defeasance and defeasance and discharge, see the discussion of United States federal income tax consequences in the prospectus supplement. 14 PAYMENT OF ADDITIONAL AMOUNTS If so noted in the applicable prospectus supplement for a particular issuance, Lehman Brothers Holdings will pay to the holder of any debt security who is a "United States Alien" (as defined below) such additional amounts as may be necessary so that every net payment of principal of and interest on the debt security, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon the holder by the United States or any taxing authority thereof or therein, will not be less than the amount provided in such debt security to be then due and payable. Lehman Brothers Holdings will not be required, however, to make any payment of additional amounts for or on account of: - any tax, assessment or other governmental charge that would not have been imposed but for (1) the existence of any present or former connection between such holder (or between a fiduciary, settlor, beneficiary of, member or shareholder of, or possessor of a power over, such holder, if such holder is an estate, trust, partnership or corporation) and the United States including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor), being or having been a citizen or resident or treated as a resident of the United States or being or having been engaged in trade or business or present in the United States, or (2) the presentation of a debt security for payment after 10 days; - any estate, inheritance, gift, sales, transfer, excise, personal property or similar tax, assessment or other governmental charge; - any tax, assessment or other governmental charge imposed by reason of such holder's past or present status as a passive foreign investment company, a controlled foreign corporation, a personal holding company or foreign personal holding company with respect to the United States, or as a corporation which accumulates earnings to avoid United States federal income tax; - any tax, assessment or other governmental charge which is payable otherwise than by withholding from payment of principal of, or interest on, such debt security; - any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of, or interest on, any debt security if such payment can be made without withholding by any other paying agent; - any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply with certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connections with the United States of the holder or beneficial owner of such debt security, if such compliance is required by statute or by regulation of the United States Treasury Department as a precondition to relief or exemption from such tax, assessment or other governmental charge; - any tax, assessment or other governmental charge imposed on interest received by (1) a 10% shareholder (as defined in Section 871(h)(3)(B) of the Code and the regulations that may be promulgated thereunder) of Lehman Brothers Holdings, or (2) a controlled foreign corporation with respect to Lehman Brothers Holdings within the meaning of the Code; or - any combinations of items identified in the bullet points above. In addition, Lehman Brothers Holdings will not be required to pay any additional amounts to any holder who is a fiduciary or partnership or other than the sole beneficial owner of such debt security to the extent that a beneficiary or settlor with respect to such fiduciary, or a member of such partnership or a beneficial owner thereof would not have been entitled to the payment of such additional amounts had such beneficiary, settlor, member or beneficial owner been the holder of the debt security. The term "United States Alien" means any corporation, partnership, individual or fiduciary that is, as to the United States, a foreign corporation, a nonresident alien individual, a nonresident fiduciary of 15 a foreign estate or trust, or a foreign partnership one or more of the members of which is, as to the United States, a foreign corporation, a nonresident alien individual or a nonresident fiduciary of a foreign estate or trust. REDEMPTION UPON A TAX EVENT If so noted in the applicable prospectus supplement for a particular issuance, the debt securities may be redeemed at the option of Lehman Brothers Holdings in whole, but not in part, on not more than 60 days' and not less than 30 days' notice, at a redemption price equal to 100% of their principal amount, if Lehman Brothers Holdings determines that as a result of a "change in tax law" (as defined below): - Lehman Brothers Holdings has or will become obligated to pay additional amounts as described under the heading "--Payment of Additional Amounts" on any debt security, or - there is a substantial possibility that Lehman Brothers Holdings will be required to pay such additional amounts. A "change in tax law" that would trigger the provisions of the preceding paragraph is any change in or amendment to the laws, treaties, regulations or rulings of the United States or any political subdivision or taxing authority thereof, or any proposed change in the laws, treaties, regulations or rulings, or any change in the official application, enforcement or interpretation of the laws, treaties, regulations or rulings (including a holding by a court of competent jurisdiction in the United States) or any other action (other than an action predicated on law generally known on or before the date of the applicable prospectus supplement for the particular issuance of debt securities to which this section applies except for proposals before the Congress prior to that date) taken by any taxing authority or a court of competent jurisdiction in the United States, or the official proposal of the action, whether or not the action or proposal was taken or made with respect to Lehman Brothers Holdings. Prior to the publication of any notice of redemption, Lehman Brothers Holdings shall deliver to the Trustee (1) an officers' certificate stating that Lehman Brothers Holdings is entitled to effect the aforementioned redemption and setting forth a statement of facts showing that the conditions precedent to the right of Lehman Brothers Holdings so to redeem have occurred, and (2) an opinion of counsel to such effect based on such statement of facts. GOVERNING LAW Unless otherwise stated in the prospectus supplement, the debt securities and the indentures will be governed by New York law. CONCERNING THE TRUSTEES Lehman Brothers Holdings has had and may continue to have banking and other business relationships with the trustees in the ordinary course of business. 16 DESCRIPTION OF WARRANTS Please note that in this section entitled "Description of Warrants", references to Lehman Brothers Holdings refer only to Lehman Brothers Holdings and not to its consolidated subsidiaries. Also, in this section, references to "holders" mean those who own warrants registered in their own names, on the books that Lehman Brothers Holdings or its agent maintains for this purpose, and not those who own beneficial interests in warrants registered in street name or in warrants issued in book-entry form through one or more depositaries. Owners of beneficial interests in the warrants should read the section below entitled "Book-Entry Procedures and Settlement". GENERAL Lehman Brothers Holdings may issue warrants that are debt warrants or universal warrants. Lehman Brothers Holdings may offer warrants separately or together with its debt securities. Lehman Brothers Holdings may also offer warrants together with other warrants, purchase contracts and debt securities in the form of units, as summarized below in "Description of Units". Lehman Brothers Holdings may issue warrants in such amounts or in as many distinct series as Lehman Brothers Holdings wishes. This section summarizes terms of the warrants that apply generally to all series. Most of the financial and other specific terms of your warrant will be described in the prospectus supplement. Those terms may vary from the terms described here. The warrants of a series will be issued under a separate warrant agreement to be entered into between Lehman Brothers Holdings and one or more banks or trust companies, as warrant agent, as set forth in the prospectus supplement, and, if part of a unit, may be issued under a unit agreement as described below under "Description of Units". A form of each warrant agreement, including a form of warrant certificate representing each warrant, reflecting the particular terms and provisions of a series of offered warrants, will be filed with the SEC at the time of the offering and incorporated by reference in the registration statement of which this prospectus forms a part. You can obtain a copy of any form of warrant agreement when it has been filed by following the directions on page 6 or by contacting the applicable warrant agent. The following briefly summarizes the material provisions of the warrant agreements and the warrants. As you read this section, please remember that the specific terms of your warrant as described in the prospectus supplement will supplement and, if applicable, may modify or replace the general terms described in this section. You should read carefully the prospectus supplement and the more detailed provisions of the warrant agreement and the warrant certificate, including the defined terms, for provisions that may be important to you. If there are differences between the prospectus supplement and this prospectus, the prospectus supplement will control. Thus, the statements made in this section may not apply to your warrant. TYPES OF WARRANTS Lehman Brothers Holdings may issue debt warrants or universal warrants. DEBT WARRANTS Lehman Brothers Holdings may issue warrants for the purchase of its debt securities on terms to be determined at the time of sale. This type of warrant is referred to as a "debt warrant". UNIVERSAL WARRANTS Lehman Brothers Holdings may also issue warrants, on terms to be determined at the time of sale, for the purchase or sale of, or whose cash value is determined by reference to the performance, level or value of, one or more of the following: - securities of one or more issuers, including Lehman Brothers Holdings, - one or more currencies, 17 - one or more commodities, - any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, which may include any credit event (as defined in the prospectus supplement) relating to any company or companies or other entity or entities (which may include a government or governmental agency), and - one or more indices or baskets of the items described above. This type of warrant is referred to as a "universal warrant". Each instrument, measure or event described above is referred to as a "warrant property". Lehman Brothers Holdings may satisfy its obligations, if any, with respect to any universal warrants by delivering: - the warrant property, - the cash value (as defined in the prospectus supplement) of the warrant property, or - the cash value of the warrants determined by reference to the performance, level or value of the warrant property. The prospectus supplement will describe what Lehman Brothers Holdings may deliver to satisfy its obligations with respect to any universal warrants. Any securities deliverable by Lehman Brothers Holdings with respect to any universal warrants will be freely transferable by the holder. INFORMATION IN THE PROSPECTUS SUPPLEMENT The prospectus supplement may contain, where applicable, the following information about your warrants: - the specific designation and aggregate number of, and the price at which Lehman Brothers Holdings will issue, the warrants, - the currency or currency unit with which the warrants may be purchased and in which any payments due to or from the holder upon exercise must be made, - the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants, - whether and under what circumstances the warrants may be cancelled by Lehman Brothers Holdings prior to their expiration date, in which case the holders will be entitled to receive only the applicable cancellation amount, which may be either a fixed amount or an amount that varies during the term of the warrants in accordance with a schedule or formula, - whether the warrants will be issued in global or non-global form, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of any debt security or purchase contract included in that unit, - the identities of the warrant agent, any depositaries and any paying, transfer, calculation or other agents for the warrants, - any securities exchange or quotation system on which the warrants or any securities deliverable upon exercise of the warrants may be listed, - whether the warrants are to be sold separately or with other securities, as part of units or otherwise, and if the warrants are to be sold with the securities of another company or other companies, certain information regarding such company or companies, and 18 - any other terms of the warrants. If warrants are issued as part of a unit, the prospectus supplement will specify whether the warrants will be separable from the other securities in the unit before the warrants' expiration date. A warrant issued in a unit in the United States may not be so separated before the 91st day after the unit is issued. No holder of a warrant will, as such, have any rights of a holder of the debt securities or warrant property purchasable under or in the warrant, including any right to receive payment thereunder. ADDITIONAL INFORMATION IN THE PROSPECTUS SUPPLEMENT DEBT WARRANTS If you purchase debt warrants, the prospectus supplement may contain, where appropriate, the following additional information about the debt warrants: - the designation, aggregate principal amount, currency and terms of the debt securities that may be purchased upon exercise of the debt warrants, - whether the exercise price may be paid in cash, by the exchange of any debt warrants or other securities or both and the method of exercising the debt warrants, and - the designation, terms and amount of debt securities, if any, to be issued together with each of the debt warrants and the date, if any, after which the debt warrants and debt securities will be separately transferable. After the close of business on the expiration date (or such later date to which the expiration date may be extended by Lehman Brothers Holdings), unexercised debt warrants will become void. UNIVERSAL WARRANTS If you purchase universal warrants, the prospectus supplement may contain, where appropriate, the following additional information about the universal warrants: - whether the universal warrants are put warrants (entitling the holder to sell the warrant property or receive the cash value of the right to sell the warrant property), call warrants (entitling the holder to buy the warrant property or receive the cash value of the right to buy the warrant property), or spread warrants (entitling the holder to receive a cash value determined by reference to the amount, if any, by which a specified reference value of the warrant property at the time of exercise exceeds a specified base value of the warrant property), - the warrant property or cash value, and the amount or method for determining the amount of warrant property or cash value, deliverable upon exercise of each universal warrant, - the price at which and the currency with which the warrant property may be purchased or sold upon the exercise of each universal warrant, or the method of determining that price, - whether the exercise price may be paid in cash, by the exchange of any universal warrants or other securities or both, and the method of exercising the universal warrants, - whether the exercise of the universal warrants is to be settled in cash or by delivery of the warrant property or both and whether settlement will occur on a net basis or a gross basis, - the minimum number, if any, of universal warrants that must be exercised at any one time, other than upon automatic exercise, - the maximum number, if any, of universal warrants that may, subject to election by Lehman Brothers Holdings, be exercised by all owners (or by any person or entity) on any day, 19 - any provisions for the automatic exercise of the warrants at expiration or otherwise, - if the warrant property is an index, the method of providing for a substitute index or indices or otherwise determining the amount payable in connection with the exercise of the warrants if any index changes or ceases to be made available by its publisher, and - whether, following the occurrence of a market disruption event or force majeure event (as defined in the prospectus supplement), the cash settlement value of a universal warrant will be determined on a different basis than under normal circumstances. CALCULATION AGENTS Calculations relating to universal warrants will be made by the calculation agent, an institution that Lehman Brothers Holdings appoints as its agent for this purpose. That institution may be an affiliate of Lehman Brothers Holdings, such as Lehman Brothers Inc. Lehman Brothers Holdings may appoint a different institution to serve as calculation agent from time to time after the original issue date of the warrant without your consent and without notifying you of the change. The initial calculation agent will be identified in the prospectus supplement. NO LIMIT ON ISSUANCE OF WARRANTS The warrant agreements do not limit the number of warrants or other securities that Lehman Brothers Holdings may issue. MODIFICATIONS Lehman Brothers Holdings and the relevant warrant agent may, without the consent of the holders, amend each warrant agreement and the terms of each issue of warrants, for the purpose of curing any ambiguity or of correcting or supplementing any defective or inconsistent provision, or in any other manner that Lehman Brothers Holdings may deem necessary or desirable and that will not adversely affect the interests of the holders of the outstanding unexercised warrants in any material respect. Lehman Brothers Holdings and the relevant warrant agent also may, with the consent of the holders of at least a majority in number of the outstanding unexercised warrants affected, modify or amend the warrant agreement and the terms of the warrants. No such modification or amendment may, without the consent of the holders of each warrant affected: - reduce the amount receivable upon exercise, cancellation or expiration, - shorten the period of time during which the warrants may be exercised, - otherwise materially and adversely affect the exercise rights of the beneficial owners of the warrants, or - reduce the percentage of outstanding warrants whose holders must consent to modification or amendment of the applicable warrant agreement or the terms of the warrants. MERGER AND SIMILAR TRANSACTIONS PERMITTED; NO RESTRICTIVE COVENANTS OR EVENTS OF DEFAULT Warrant agreements will not restrict Lehman Brothers Holdings' ability to merge or consolidate with, or sell its assets to, another firm or to engage in any other transactions. If at any time there is a merger or consolidation involving Lehman Brothers Holdings or a sale or other disposition of all or substantially all of the assets of Lehman Brothers Holdings, the successor or assuming company will be substituted for Lehman Brothers Holdings, with the same effect as if it had been named in the warrant 20 agreement and in the warrants as Lehman Brothers Holdings. Lehman Brothers Holdings will be relieved of any further obligation under the warrant agreement or warrants, and, in the event of any such merger, consolidation, sale or other disposition, Lehman Brothers Holdings as the predecessor corporation may at any time thereafter be dissolved, wound up or liquidated. Warrant Agreements will not include any restrictions on Lehman Brothers Holdings' ability to put liens on its assets, including Lehman Brothers Holdings' interests in its subsidiaries, nor will they provide for any events of default or remedies upon the occurrence of any events of default. WARRANT AGREEMENTS WILL NOT BE QUALIFIED UNDER TRUST INDENTURE ACT No warrant agreement will be qualified as an indenture, and no warrant agent will be required to qualify as a trustee, under the Trust Indenture Act. Therefore, holders of warrants issued under a warrant agreement will not have the protection of the Trust Indenture Act with respect to their warrants. ENFORCEABILITY OF RIGHTS BY BENEFICIAL OWNER Each warrant agent will act solely as an agent of Lehman Brothers Holdings in connection with the issuance and exercise of the applicable warrants and will not assume any obligation or relationship of agency or trust for or with any registered holder of or owner of a beneficial interest in any warrant. A warrant agent will have no duty or responsibility in case of any default by Lehman Brothers Holdings under the applicable warrant agreement or warrant certificate, including any duty or responsibility to initiate any proceedings at law or otherwise or to make any demand upon Lehman Brothers Holdings. Holders may, without the consent of the applicable warrant agent, enforce by appropriate legal action, on their own behalf, their right to exercise their warrants, to receive debt securities, in the case of debt warrants, and to receive payment, if any, for their warrants, in the case of universal warrants. GOVERNING LAW Unless otherwise stated in the prospectus supplement, the warrants and each warrant agreement will be governed by New York law. 21 DESCRIPTION OF PURCHASE CONTRACTS Please note that in this section entitled "Description of Purchase Contracts", references to Lehman Brothers Holdings refer only to Lehman Brothers Holdings and not to its consolidated subsidiaries. Also, in this section, references to "holders" mean those who own purchase contracts registered in their own names, on the books that Lehman Brothers Holdings, its agent or the trustee maintains for this purpose, and not those who own beneficial interests in purchase contracts registered in street name or in purchase contracts issued in book-entry form through one or more depositaries. Owners of beneficial interests in the purchase contracts should read the section below entitled "Book-Entry Procedures and Settlement". GENERAL Lehman Brothers Holdings may issue purchase contracts in such amounts and in as many distinct series as Lehman Brothers Holdings wishes. In addition, Lehman Brothers Holdings may issue a purchase contract separately or as part of a unit, as described below under "Description of Units". This section summarizes terms of the purchase contracts that will apply generally to all purchase contracts. Most of the financial and other specific terms of your purchase contract will be described in the prospectus supplement. Those terms may vary from the terms described here. A form of each purchase contract reflecting the particular terms and provisions of a series of offered purchase contracts will be filed with the SEC at the time of the offering and incorporated by reference in the registration statement of which this prospectus forms a part. You can obtain a copy of any form of purchase contract when it has been filed by following the directions on page 6. The following briefly summarizes the material provisions of the purchase contracts. As you read this section, please remember that the specific terms of your purchase contract as described in the prospectus supplement will supplement and, if applicable, may modify or replace the general terms described in this section. You should read carefully the prospectus supplement and the more detailed provisions of the purchase contract, including the defined terms, for provisions that may be important to you. If there are differences between the prospectus supplement and this prospectus, the prospectus supplement will control. Thus, the statements made in this section may not apply to your purchase contract. PURCHASE CONTRACT PROPERTY Lehman Brothers Holdings may offer purchase contracts for the purchase or sale of, or whose cash value is determined by reference to the performance, level or value of, one or more of the following: - securities of one or more issuers, including Lehman Brothers Holdings' securities described in this prospectus and securities of third parties, - one or more currencies, - one or more commodities, - any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, which may include any credit event (as defined in the prospectus supplement) relating to any company or companies or other entity or entities (which may include a government or governmental agency) other than Lehman Brothers Holdings, and - one or more indices or baskets of the items described above. 22 Each instrument, measure or event described above is referred to as a "purchase contract property". Each purchase contract will obligate: - the holder to purchase or sell, and obligate Lehman Brothers Holdings to sell or purchase, on specified dates, one or more purchase contract properties at a specified price or prices, or - the holder or Lehman Brothers Holdings to settle the purchase contract with a cash payment determined by reference to the value, performance or level of one or more purchase contract properties, on specified dates and at a specified price or prices. Some purchase contracts may include multiple obligations to purchase or sell different purchase contract properties, and both Lehman Brothers Holdings and the holder may be sellers or buyers under the same purchase contract. No holder of a purchase contract will, as such, have any rights of a holder of the purchase contract property purchasable under or referenced in the contract, including any right to receive payments on that property. Any securities deliverable by Lehman Brothers Holdings with respect to any purchase contracts will be freely transferrable by the holder. PREPAID PURCHASE CONTRACTS; APPLICABILITY OF INDENTURE Some purchase contracts may require the holders to satisfy their obligations under the contracts at the time the contracts are issued. Those contracts are referred to as "prepaid purchase contracts". Lehman Brothers Holdings' obligation to settle a prepaid purchase contract on the relevant settlement date will be one of its senior debt securities or subordinated debt securities, which are described above under "Description of Debt Securities". Prepaid purchase contracts will be issued under the applicable indenture, and the provisions of that indenture will govern those contracts, including the rights and duties of the holders, the trustee and us with respect to those contracts. NON-PREPAID PURCHASE CONTRACTS Some purchase contracts do not require the holders to satisfy their obligations under the contracts until settlement. Those contracts are referred to as "non-prepaid purchase contracts". The holder of a non-prepaid purchase contract may remain obligated to perform under the contract for a substantial period of time. Non-prepaid purchase contracts will be issued under a unit agreement, if they are issued in units, or under some other document, if they are not. For example, Lehman Brothers Holdings may issue non-prepaid purchase contracts under which the holder has multiple obligations to purchase or sell, some of which are prepaid and some of which are not, under one of its indentures. Unit agreements generally are described under "Description of Units" below. The particular governing document that applies to your non-prepaid purchase contracts will be described in the prospectus supplement. NO TRUST INDENTURE ACT PROTECTION Non-prepaid purchase contracts will not be senior debt securities or subordinated debt securities and will not be issued under one of Lehman Brothers Holdings' indentures, unless stated otherwise in the applicable prospectus supplement. Consequently, no governing documents for non-prepaid purchase contracts will be qualified as indentures, and no third party will be required to qualify as a trustee with regard to those contracts, under the Trust Indenture Act. Holders of non-prepaid purchase contracts will not have the protection of the Trust Indenture Act with respect to those contracts. PLEDGE BY HOLDERS TO SECURE PERFORMANCE If provided in the prospectus supplement, the holder's obligations under the purchase contract and governing document will be secured by collateral. In that case, the holder, acting through the unit agent as its attorney-in-fact, if applicable, will pledge the items described below to a collateral agent named in 23 the prospectus supplement, which will hold them, for Lehman Brothers Holdings' benefit, as collateral to secure the holder's obligations. This is referred to as the "pledge" and all the items described below as the "pledged items". The pledge will create a security interest in the holder's entire interest in and to: - any other securities included in the unit, if the purchase contract is part of a unit, or any other property specified in the applicable prospectus supplement, - all additions to and substitutions for the pledged items, - all income, proceeds and collections received in respect of the pledged items, and - all powers and rights owned or acquired later with respect to the pledged items. The collateral agent will forward all payments from the pledged items to Lehman Brothers Holdings, unless the payments have been released from the pledge in accordance with the purchase contract and the governing document. Lehman Brothers Holdings will use the payments from the pledged items to satisfy the holder's obligations under the purchase contract. SETTLEMENT OF PURCHASE CONTRACTS THAT ARE PART OF UNITS If so provided in the prospectus supplement, the following will apply to a non-prepaid purchase contract that is issued together with any of Lehman Brothers Holdings' debt securities as part of a unit. If the holder fails to satisfy its obligations under the purchase contract, the unit agent may apply the principal and interest payments on the debt securities to satisfy those obligations as provided in the governing document. If the holder is permitted to settle its obligations by cash payment, the holder may be permitted to do so by delivering the debt securities in the unit to the unit agent as provided in the governing document. Book-entry and other indirect owners should consult their banks or brokers for information on how to settle their purchase contracts. FAILURE OF HOLDER TO PERFORM OBLIGATIONS If the holder fails to settle its obligations under a non-prepaid purchase contract as required, the holder will not receive the purchase contract property or other consideration to be delivered at settlement. Holders that fail to make timely settlement may also be obligated to pay interest or other amounts. MERGER AND SIMILAR TRANSACTIONS PERMITTED; NO RESTRICTIVE COVENANTS OR EVENTS OF DEFAULT Purchase contracts that are not prepaid will not restrict Lehman Brothers Holdings' ability to merge or consolidate with, or sell its assets to, another firm or to engage in any other transactions. If at any time Lehman Brothers Holdings merges or consolidates with, or sells its assets substantially as an entirety to, another firm, the successor company will succeed to and assume Lehman Brothers Holdings' obligations under these purchase contracts. Lehman Brothers Holdings will then be relieved of any further obligation under these purchase contracts and, in the event of any such merger, consolidation or sale, Lehman Brothers Holdings as the predecessor company may at any time thereafter be dissolved, wound up or liquidated. Purchase contracts that are not prepaid will not include any restrictions on Lehman Brothers Holdings' ability to put liens on its assets, including Lehman Brothers Holdings' interests in its subsidiaries. These purchase contracts also will not provide for any events of default or remedies upon the occurrence of any events of default. 24 INFORMATION IN THE PROSPECTUS SUPPLEMENT The prospectus supplement may contain, where applicable, the following information about your purchase contract: - whether the purchase contract obligates the holder to purchase or sell, or both purchase and sell, one or more purchase contract properties and the nature and amount of each of those properties, or the method of determining those amounts, - whether the purchase contract is to be prepaid or not and the governing document for the contract, - whether the purchase contract is to be settled by delivery of, or by reference or linkage to the value, performance or level of, the purchase contract properties, - any acceleration, cancellation, termination or other provisions relating to the settlement of the purchase contract, - if the purchase contract property is an index, the method of providing for a substitute index or indices or otherwise determining the amount payable in connection with the settlement of the purchase contract if any index changes or ceases to be made available by its publisher, - whether, following the occurrence of a market disruption event or force majeure event (as defined in the prospectus supplement), the settlement delivery obligation or cash settlement value of a purchase contract will be determined on a different basis than under normal circumstances, - whether the purchase contract will be issued as part of a unit and, if so, the other securities comprising the unit and whether any unit securities will be subject to a security interest in Lehman Brothers Holdings' favor as described below, - whether the purchase contract will be issued in global or non-global form, although, in any case, the form of a purchase contract included in a unit will correspond to the form of the unit and of any debt security or warrant included in that unit, - the identities of any depositaries and any paying, transfer, calculation or other agents for the purchase contracts, - any securities exchange or quotation system on which the purchase contracts or any securities deliverable in settlement of the purchase contracts may be listed, and - any other terms of the purchase contracts. If Lehman Brothers Holdings issues a purchase contract as part of a unit, the prospectus supplement will state whether the contract will be separable from the other securities in the unit before the contract settlement date. A purchase contract issued in a unit in the United States may not be so separated before the 91st day after the unit is issued. CALCULATION AGENTS Calculations relating to purchase contracts will be made by the calculation agent, an institution that Lehman Brothers Holdings appoints as its agent for this purpose. That institution may be an affiliate of Lehman Brothers Holdings, such as Lehman Brothers Inc. Lehman Brothers Holdings may appoint a different institution to serve as calculation agent from time to time after the original issue date of the purchase contract without your consent and without notifying you of the change. The initial calculation agent will be identified in the prospectus supplement. 25 NO LIMIT ON ISSUANCE OF PURCHASE CONTRACTS There is no limit on the number of purchase contracts or other securities that Lehman Brothers Holdings may issue. GOVERNING LAW Unless stated otherwise in the prospectus supplement, the purchase contracts and any governing documents will be governed by New York law. DESCRIPTION OF UNITS Please note that in this section entitled "Description of Units", references to Lehman Brothers Holdings refer only to Lehman Brothers Holdings and not to its consolidated subsidiaries. Also, in this section, references to "holders" mean those who own units registered in their own names, on the books that Lehman Brothers Holdings or its agent maintains for this purpose, and not those who own beneficial interests in units registered in street name or in units issued in book-entry form through one or more depositaries. Owners of beneficial interests in the units should read the section below entitled "Book-Entry Procedures and Settlement". GENERAL Lehman Brothers Holdings may issue units in such amounts and in as many distinct series as Lehman Brothers Holdings wishes. This section summarizes terms of the units that apply generally to all series. Most of the financial and other specific terms of your series will be described in the prospectus supplement. Those terms may vary from the terms described here. The units of a series will be issued under a separate unit agreement to be entered into between Lehman Brothers Holdings and one or more banks or trust companies, as unit agent, as set forth in the prospectus supplement. A form of each unit agreement, including a form of unit certificate representing each unit, reflecting the particular terms and provisions of a series of offered units will be filed with the SEC at the time of the offering and incorporated by reference in the registration statement of which this prospectus forms a part. You can obtain a copy of any form of unit agreement when it has been filed by following the directions on page 6 or by contacting the applicable unit agent. The following briefly summarizes the material provisions of the unit agreements and the units. The specific terms of your unit as described in the prospectus supplement will supplement and, if applicable, may modify or replace the general terms described in this section. You should read carefully the prospectus supplement and the more detailed provisions of the unit agreement and the unit certificate, including the defined terms, for provisions that may be important to you. If there are differences between the prospectus supplement and this prospectus, the prospectus supplement will control. Thus, the statements made in this section may not apply to your unit. Lehman Brothers Holdings may issue units comprised of one or more debt securities, warrants and purchase contracts in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date. 26 INFORMATION IN THE PROSPECTUS SUPPLEMENT The prospectus supplement may contain, where applicable, the following information about your unit: - the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; - any provisions of the governing unit agreement that differ from those described below; - whether the units will be issued in global or non-global form, although, in any case, the form of a unit will correspond to the form of the debt securities, warrants and/or purchase contracts included in that unit, - the identities of the unit agent, any depositaries and any paying, transfer, calculation or other agents for the units, - any securities exchange or quotation system on which the units and the securities separable therefrom may be listed, and - any other terms of the units. The applicable provisions described in this section, as well as those described under "Description of Debt Securities", "Description of Warrants" and "Description of Purchase Contracts", will apply to each unit and to any debt security, warrant or purchase contract included in each unit, respectively. UNIT AGREEMENTS: PREPAID, NON-PREPAID AND OTHER Lehman Brothers Holdings will issue the units under one or more unit agreements to be entered into between Lehman Brothers Holdings and a bank or other financial institution, as unit agent. Lehman Brothers Holdings may add, replace or terminate unit agents from time to time. Lehman Brothers Holdings may also choose to act as its own unit agent. Lehman Brothers Holdings will identify the unit agreement under which your units will be issued and the unit agent under that agreement in the applicable prospectus supplement. If a unit includes one or more purchase contracts and all those purchase contracts are prepaid purchase contracts, Lehman Brothers Holdings will issue the unit under a "prepaid unit agreement". Prepaid unit agreements will reflect the fact that the holders of the related units have no further obligations under the purchase contracts included in their units. If a unit includes one or more non-prepaid purchase contracts, Lehman Brothers Holdings will issue the unit under a "non-prepaid unit agreement". Non-prepaid unit agreements will reflect the fact that the holders have payment or other obligations under one or more of the purchase contracts comprising their units. Lehman Brothers Holdings may also issue units under other kinds of unit agreements, which will be described in the applicable prospectus supplement. In some cases, Lehman Brothers Holdings may issue units under one of its indentures. A unit agreement may also serve as the governing document for a security included in a unit. For example, a non-prepaid purchase contract that is part of a unit may be issued under and governed by the relevant unit agreement. This prospectus refers to prepaid unit agreements, non-prepaid unit agreements and other unit agreements, generally, as "unit agreements". GENERAL PROVISIONS OF A UNIT AGREEMENT The following provisions will generally apply to all unit agreements unless otherwise stated in the prospectus supplement. 27 ENFORCEMENT OF RIGHTS The unit agent under a unit agreement will act solely as Lehman Brothers Holdings's agent in connection with the units issued under that agreement. The unit agent will not assume any obligation or relationship of agency or trust for or with any registered holder of or owner of a beneficial interest in those units or of the securities comprising those units. The unit agent will not be obligated to take any action on behalf of those holders or owners to enforce or protect their rights under the units or the included securities. Except as indicated in the next paragraph, a holder of a unit may, without the consent of the unit agent or any other holder, enforce its rights as holder under any security included in the unit, in accordance with the terms of that security and the indenture, warrant agreement or unit agreement under which that security is issued. Those terms are described elsewhere in this prospectus under the sections relating to debt securities, warrants and purchase contracts. Notwithstanding the foregoing, a unit agreement may limit or otherwise affect the ability of a holder of units issued under that agreement to enforce its rights, including any right to bring a legal action, with respect to those units or any securities, other than debt securities and prepaid purchase contracts, that are included in those units. Limitations of this kind will be described in the prospectus supplement. MODIFICATION WITHOUT CONSENT OF HOLDERS Lehman Brothers Holdings and the applicable unit agent may amend any unit or unit agreement without the consent of any holder: - to cure any ambiguity, - to correct or supplement any defective or inconsistent provision, or - to make any other change that Lehman Brothers Holdings believes is necessary or desirable and will not adversely affect the interests of the affected holders in any material respect. Lehman Brothers Holdings does not need any approval to make changes that affect only units to be issued after the changes take effect. Lehman Brothers Holdings may also make changes that do not adversely affect a particular unit in any material respect, even if they adversely affect other units in a material respect. In those cases, Lehman Brothers Holdings does not need to obtain the approval of the holder of the unaffected unit; Lehman Brothers Holdings only needs to obtain any required approvals from the holders of the affected units. The foregoing applies also to any security issued under a unit agreement, as the governing document. MODIFICATION WITH CONSENT OF HOLDERS Lehman Brothers Holdings may not amend any particular unit or a unit agreement with respect to any particular unit unless Lehman Brothers Holdings obtains the consent of the holder of that unit, if the amendment would: - impair any right of the holder to exercise or enforce any right under a security included in the unit if the terms of that security require the consent of the holder to any changes that would impair the exercise or enforcement of that right, - impair the right of the holder to purchase or sell, as the case may be, the purchase contract property under any non-prepaid purchase contract issued under the unit agreement, or to require delivery of or payment for that property when due, or 28 - reduce the percentage of outstanding units of any series or class the consent of whose holders is required to amend that series or class, or the applicable unit agreement with respect to that series or class, as described below. Any other change to a particular unit agreement and the units issued under that agreement would require the following approval: - If the change affects only the units of a particular series issued under that agreement, the change must be approved by the holders of a majority of the outstanding units of that series. - If the change affects the units of more than one series issued under that agreement, it must be approved by the holders of a majority of all outstanding units of all series affected by the change, with the units of all the affected series voting together as one class for this purpose. These provisions regarding changes with majority approval also apply to changes affecting any securities issued under a unit agreement, as the governing document. In each case, the required approval must be given by written consent. UNIT AGREEMENTS WILL NOT BE QUALIFIED UNDER TRUST INDENTURE ACT No unit agreement will be qualified as an indenture, and no unit agent will be required to qualify as a trustee, under the Trust Indenture Act. Therefore, holders of units issued under unit agreements will not have the protections of the Trust Indenture Act with respect to their units. ADDITIONAL PROVISIONS OF A NON-PREPAID UNIT AGREEMENT In addition to the provisions described above, a non-prepaid unit agreement will include the following provisions. OBLIGATIONS OF UNIT HOLDER Each holder of units issued under a non-prepaid unit agreement will: - be bound by the terms of each non-prepaid purchase contract included in the holder's units and by the terms of the unit agreement with respect to those contracts, and - appoint the unit agent as its authorized agent to execute, deliver and perform on the holder's behalf each non-prepaid purchase contract included in the holder's units. The unit agreement for a unit that includes a non-prepaid purchase contract will also include provisions regarding the holder's pledge of collateral and special settlement provisions. These are described above under "Description of Purchase Contracts--Additional Terms of Non-Prepaid Purchase Contracts". ASSUMPTION OF OBLIGATIONS BY TRANSFEREE When the holder of a unit issued under a non-prepaid unit agreement transfers the unit to a new holder, the new holder will assume the obligations of the prior holder with respect to each non-prepaid purchase contract included in the unit, and the prior holder will be released from those obligations. Under the non-prepaid unit agreement, Lehman Brothers Holdings will consent to the transfer of the unit, to the assumption of those obligations by the new holder and to the release of the prior holder, if the transfer is made in accordance with the provisions of that agreement. MERGERS AND SIMILAR TRANSACTIONS PERMITTED; NO RESTRICTIVE COVENANTS OR EVENTS OF DEFAULT The unit agreements will not restrict Lehman Brothers Holdings's ability to merge or consolidate with, or sell its assets to, another firm or to engage in any other transactions. If at any time Lehman Brothers Holdings merges or consolidates with, or sells its assets substantially as an entirety to, another firm, the successor company will succeed to and assume Lehman Brothers Holdings' obligations under 29 the unit agreements. Lehman Brothers Holdings will then be relieved of any further obligation under these agreements and, in the event of any such merger, consolidation or sale, Lehman Brothers Holdings as the predecessor corporation may at any time thereafter be dissolved, wound up or liquidated. The unit agreements will not include any restrictions on Lehman Brothers Holdings' ability to put liens on its assets, including Lehman Brothers Holdings' interests in its subsidiaries. The unit agreements also will not provide for any events of default or remedies upon the occurrence of any events of default. NO LIMIT ON ISSUANCE OF UNITS There is no limit on the number of units or other securities that Lehman Brothers Holdings may issue. GOVERNING LAW Unless otherwise stated in the prospectus supplement, the unit agreements and the units will be governed by New York law. FORM, EXCHANGE AND TRANSFER Securities will only be issued in registered form; no securities will be issued in bearer form. Lehman Brothers Holdings will issue each debt security, warrant, purchase contract or unit in book-entry form only, unless otherwise specified in the prospectus supplement. Securities in book-entry form will be represented by a global security registered in the name of a depositary, which will be the holder of all the securities represented by the global security. Those who own beneficial interests in a global security will do so through participants in the depositary's system, and the rights of these indirect owners will be governed solely by the applicable procedures of the depositary and its participants. Only the depositary will be entitled to transfer or exchange a security in global form, since it will be the sole holder of the security. These book-entry securities are described below under "Book-Entry Procedures and Settlement". If any securities are issued in non-global form or cease to be book-entry securities (in the circumstances described in the next section), the following will apply to them: - The securities will be issued in fully registered form in denominations stated in the prospectus supplement. Holders may exchange their securities for debt securities, warrants, purchase contracts or units, as the case may be, of the same series of smaller denominations or combined into fewer securities of the same series of larger denominations, as long as the total amount is not changed. - Holders may exchange, transfer, present for payment or exercise their securities at the office of the trustee, warrant agent, unit agent or other agent indicated in the prospectus supplement. They may also replace lost, stolen, destroyed or mutilated securities at that office. Lehman Brothers Holdings may appoint another entity to perform these functions or may perform them itself. - Holders will not be required to pay a service charge to transfer or exchange their securities, but they may be required to pay any tax or other governmental charge associated with the transfer or exchange. The transfer or exchange, and any replacement, will be made only if Lehman Brothers Holdings' transfer agent is satisfied with the holder's proof of legal ownership. The transfer agent may also require an indemnity before replacing any securities. - If Lehman Brothers Holdings has the right to redeem, accelerate or settle any securities before their maturity or expiration, and Lehman Brothers Holdings exercises that right as to less than all those securities, Lehman Brothers Holdings may block the transfer or exchange of those 30 securities during the period beginning 15 days before the day Lehman Brothers Holdings mails the notice of exercise and ending on the day of that mailing, in order to freeze the list of holders to prepare the mailing. Lehman Brothers Holdings may also refuse to register transfers of or exchange any security selected for early settlement, except that Lehman Brothers Holdings will continue to permit transfers and exchanges of the unsettled portion of any security being partially settled. - If fewer than all of the securities represented by a certificate that are payable or exercisable in part are presented for payment or exercise, a new certificate will be issued for the remaining amount of securities. BOOK-ENTRY PROCEDURES AND SETTLEMENT Most offered securities will be book-entry (global) securities. Upon issuance, all book-entry securities will be represented by one or more fully registered global securities without coupons. Each global security will be deposited with, or on behalf of, The Depository Trust Company, a securities depository, and will be registered in the name of DTC or a nominee of DTC. DTC will thus be the only registered holder of these securities. Purchasers of securities may only hold interests in the global securities through DTC if they are participants in the DTC system. Purchasers may also hold interests through a securities intermediary--banks, brokerage houses and other institutions that maintain securities accounts for customers--that has an account with DTC or its nominee. DTC will maintain accounts showing the security holdings of its participants, and these participants will in turn maintain accounts showing the security holdings of their customers. Some of these customers may themselves be securities intermediaries holding securities for their customers. Thus, each beneficial owner of a book-entry security will hold that security indirectly through a hierarchy of intermediaries, with DTC at the "top" and the beneficial owner's own securities intermediary at the "bottom." The securities of each beneficial owner of a book-entry security will be evidenced solely by entries on the books of the beneficial owner's securities intermediary. The actual purchaser of the securities will generally not be entitled to have the securities represented by the global securities registered in its name and will not be considered the owner under the declaration. In most cases, a beneficial owner will also not be able to obtain a paper certificate evidencing the holder's ownership of securities. The book-entry system for holding securities eliminates the need for physical movement of certificates and is the system through which most publicly traded securities are held in the United States. However, the laws of some jurisdictions require some purchasers of securities to take physical delivery of their securities in definitive form. These laws may impair the ability to transfer book-entry securities. A beneficial owner of book-entry securities represented by a global security may exchange the securities for definitive (paper) securities only if: - DTC is unwilling or unable to continue as depositary for such global security and Lehman Brothers Holdings does not appoint a qualified replacement for DTC within 90 days; or - Lehman Brothers Holdings in its sole discretion decides to allow some or all book-entry securities to be exchangeable for definitive securities in registered form. Unless we indicate otherwise, any global security that is exchangeable will be exchangeable in whole for definitive securities in registered form, with the same terms and of an equal aggregate principal amount or aggregate number of warrants or units, as the case may be. Definitive securities will be registered in the name or names of the person or persons specified by DTC in a written instruction to the registrar of the securities. DTC may base its written instruction upon directions that it receives from its participants. In this prospectus, for book-entry securities, references to actions taken by security holders will mean actions taken by DTC upon instructions from its participants, and references to payments, notices of redemption and other notices to security holders will mean payments, notices of redemption and 31 other notices to DTC as the registered holder of the securities for distribution to participants in accordance with DTC's procedures. DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered under section 17A of the Securities Exchange Act of 1934. The rules applicable to DTC and its participants are on file with the SEC. Lehman Brothers Holdings will not have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interest in the book-entry securities or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests. CLEARSTREAM AND EUROCLEAR Links have been established among DTC, Clearstream Banking, societe anonyme, Luxembourg ("Clearstream Banking SA") and Euroclear (two international clearing systems that perform functions similar to those that DTC performs in the U.S.), to facilitate the initial issuance of book-entry securities and cross-market transfers of book-entry securities associated with secondary market trading. Although DTC, Clearstream Banking SA and Euroclear have agreed to the procedures provided below in order to facilitate transfers, they are under no obligation to perform such procedures, and the procedures may be modified or discontinued at any time. Clearstream Banking SA and Euroclear will record the ownership interests of their participants in much the same way as DTC, and DTC will record the aggregate ownership of each of the U.S. agents of Clearstream Banking SA and Euroclear, as participants in DTC. When book-entry securities are to be transferred from the account of a DTC participant to the account of a Clearstream Banking SA participant or a Euroclear participant, the purchaser must send instructions to Clearstream Banking SA or Euroclear through a participant at least one business day prior to settlement. Clearstream Banking SA or Euroclear, as the case may be, will instruct its U.S. agent to receive book-entry securities against payment. After settlement, Clearstream Banking SA or Euroclear will credit its participant's account. Credit for the book-entry securities will appear on the next day (European time). Because settlement is taking place during New York business hours, DTC participants can employ their usual procedures for sending book-entry securities to the relevant U.S. agent acting for the benefit of Clearstream Banking SA or Euroclear participants. The sale proceeds will be available to the DTC seller on the settlement date. Thus, to the DTC participant, a cross-market transaction will settle no differently than a trade between two DTC participants. When a Clearstream Banking SA or Euroclear participant wishes to transfer book-entry securities to a DTC participant, the seller must send instructions to Clearstream Banking SA or Euroclear through a participant at least one business day prior to settlement. In these cases, Clearstream Banking SA or Euroclear will instruct its U.S. agent to transfer the book-entry securities against payment. The payment will then be reflected in the account of the Clearstream Banking SA or Euroclear participant the following day, with the proceeds back-valued to the value date (which would be the preceding day, when settlement occurs in New York). If settlement is not completed on the intended value date (i.e., the trade fails), proceeds credited to the Clearstream Banking SA or Euroclear participant's account would instead be valued as of the actual settlement date. UNITED STATES FEDERAL INCOME TAX CONSEQUENCES The prospectus supplement will contain a summary of the material U.S. federal income tax consequences to U.S. persons investing in offered securities. The summary of U.S. federal income tax consequences contained in the prospectus supplement will be presented for informational purposes only, however, and will not be intended as legal or tax advice to prospective purchasers. You are urged to consult your own tax advisor prior to any acquisition of offered securities. 32 PLAN OF DISTRIBUTION Lehman Brothers Holdings may offer the offered securities in one or more of the following ways from time to time: - to or through underwriters or dealers; - by itself directly; - through agents; or - through a combination of any of these methods of sale. Any such underwriters, dealers or agents may include Lehman Brothers Inc. or other affiliates of Lehman Brothers Holdings. The prospectus supplement relating to a particular offering of securities will set forth the terms of such offering, including: - the name or names of any underwriters, dealers or agents; - the purchase price of the offered securities and the proceeds to Lehman Brothers Holdings from such sale; - any underwriting discounts and commissions or agency fees and other items constituting underwriters' or agents' compensation; - the initial public offering price; - any discounts or concessions to be allowed or reallowed or paid to dealers; and - any securities exchanges on which such offered securities may be listed. Any initial public offering prices, discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. If underwriters are used in an offering of offered securities, such offered securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The securities may be either offered to the public through underwriting syndicates represented by one or more managing underwriters or by one or more underwriters without a syndicate. Unless otherwise set forth in the prospectus supplement, the underwriters will not be obligated to purchase offered securities unless specified conditions are satisfied, and if the underwriters do purchase any offered securities, they will purchase all offered securities. In connection with underwritten offerings of the offered securities and in accordance with applicable law and industry practice, underwriters may over-allot or effect transactions that stabilize, maintain or otherwise affect the market price of the offered securities at levels above those that might otherwise prevail in the open market, including by entering stabilizing bids, effecting syndicate covering transactions or imposing penalty bids, each of which is described below: - A stabilizing bid means the placing of any bid, or the effecting of any purchase, for the purpose of pegging, fixing or maintaining the price of a security. - A syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase to reduce a short position created in connection with the offering. 33 - A penalty bid means an arrangement that permits the managing underwriter to reclaim a selling concession from a syndicate member in connection with the offering when offered securities originally sold by the syndicate member are purchased in syndicate covering transactions. These transactions may be effected on the NYSE, in the over-the-counter market, or otherwise. Underwriters are not required to engage in any of these activities, or to continue such activities if commenced. If dealers are utilized in the sale of offered securities, Lehman Brothers Holdings will sell such offered securities to the dealers as principals. The dealers may then resell such offered securities to the public at varying prices to be determined by such dealers at the time of resale. The names of the dealers and the terms of the transaction will be set forth in the prospectus supplement relating to that transaction. Offered securities may be sold directly by Lehman Brothers Holdings to one or more institutional purchasers, or through agents designated by Lehman Brothers Holdings from time to time, at a fixed price or prices, which may be changed, or at varying prices determined at the time of sale. Any such agent may be deemed to be an underwriter as that term is defined in the Securities Act. Any agent involved in the offer or sale of the offered securities in respect of which this prospectus is delivered will be named, and any commissions payable by Lehman Brothers Holdings to such agent will be set forth, in the prospectus supplement relating to that offering. Unless otherwise indicated in such prospectus supplement, any such agent will be acting on a best efforts basis for the period of its appointment. If so indicated in the applicable prospectus supplement, Lehman Brothers Holdings will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase offered securities from Lehman Brothers Holdings at the public offering price set forth in such prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be subject only to those conditions set forth in the prospectus supplement and the prospectus supplement will set forth the commission payable for solicitation of such contracts. Lehman Brothers Inc., the U.S. broker-dealer subsidiary of Lehman Brothers Holdings, is a member of the National Association of Securities Dealers, Inc. and may participate in distributions of the offered securities. Accordingly, offerings of offered securities in which Lehman Brothers Inc. participates will conform to the requirements set forth in Rule 2720 of the Conduct Rules of the NASD. Furthermore, any underwriters offering the offered securities will not confirm sales to any accounts over which they exercise discretionary authority without the prior approval of the customer. This prospectus together with any applicable prospectus supplement may also be used by Lehman Brothers Inc. and other affiliates of Lehman Brothers Holdings in connection with offers and sales of the offered securities in market-making transactions at negotiated prices related to prevailing market prices at the time of sale. Such affiliates may act as principals or agents in such transactions. Such affiliates have no obligation to make a market in any of the offered securities and may discontinue any market-making activities at any time without notice, at its sole discretion. Underwriters, dealers and agents may be entitled, under agreements with Lehman Brothers Holdings, to indemnification by Lehman Brothers Holdings relating to material misstatements and omissions. Underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, Lehman Brothers Holdings and affiliates of Lehman Brothers Holdings in the ordinary course of business. Each series of offered securities will be a new issue of securities and will have no established trading market. Any underwriters to whom offered securities are sold for public offering and sale may make a market in such offered securities, but such underwriters will not be obligated to do so and may 34 discontinue any market making at any time without notice. The offered securities may or may not be listed on a national securities exchange. No assurance can be given that there will be a market for the offered securities. UNITED KINGDOM SELLING RESTRICTIONS Each underwriter will represent and agree that: - it has not offered or sold and prior to the date six months after the date of issue of the offered securities will not offer or sell offered securities in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; - it has complied and will comply with all applicable provisions of the Financial Services Act 1986 with respect to anything done by it in relation to the offered securities in, from or otherwise involving the United Kingdom; and - it has only issued or passed on, and will only issue or pass on, in the United Kingdom any document received by it in connection with the issue of the offered securities to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisement) (Exemptions) Order 1996 (as amended) or is a person to whom the document may otherwise lawfully be issued or passed on. ERISA CONSIDERATIONS Lehman Brothers Holdings has subsidiaries, including Lehman Brothers Inc., that provide services to many employee benefit plans. Lehman Brothers Holdings and any direct or indirect subsidiary of Lehman Brothers Holdings may each be considered a "party in interest" within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"), and a "disqualified person" under corresponding provisions of the Internal Revenue Code of 1986 (the "Code"), relating to many employee benefit plans. "Prohibited transactions" within the meaning of ERISA and the Code may result if any offered securities are acquired by an employee benefit plan relating to which Lehman Brothers Holdings or any direct or indirect subsidiary of Lehman Brothers Holdings is a party in interest, unless such offered securities are acquired pursuant to an applicable exemption. Any employee benefit plan or other entity subject to such provisions of ERISA or the Code proposing to acquire the offered securities should consult with its legal counsel. LEGAL MATTERS Barrett S. DiPaolo, Vice President and Associate General Counsel of Lehman Brothers Holdings, has rendered an opinion to Lehman Brothers Holdings regarding the validity of the securities offered by the prospectus. Simpson Thacher & Bartlett, New York, New York, or other counsel identified in the applicable prospectus supplement, will act as legal counsel to the underwriters. Simpson Thacher & Bartlett has from time to time acted as counsel for Lehman Brothers Holdings and its subsidiaries and may do so in the future. EXPERTS The consolidated financial statements and financial statement schedule of Lehman Brothers Holdings Inc. as of November 30, 2000 and 1999, and for each of the years in the three-year period ended November 30, 2000, have been audited by Ernst & Young LLP, independent certified public 35 accountants, as set forth in their report on the consolidated financial statements. The consolidated financial statements and such report are incorporated by reference in Lehman Brothers Holdings' annual report on Form 10-K for the year ended November 30, 2000, and incorporated by reference in this prospectus. The consolidated financial statements of Lehman Brothers Holdings referred to above are incorporated by reference in this prospectus in reliance upon such report given on the authority of said firm as experts in accounting and auditing. To the extent that Ernst & Young LLP audits and reports on consolidated financial statements of Lehman Brothers Holdings issued at future dates, and consents to the use of their report thereon, such consolidated financial statements also will be incorporated by reference in the registration statement in reliance upon their report given on said authority. 36 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following are the estimated expenses to be incurred and paid by the Registrant in connection with the offerings described in this Registration Statement (other than underwriting discounts and commissions). SEC registration fee........................................ $ 275,000 NASD fee.................................................... 30,500 Rating Agency fees.......................................... 0* Exchange listing fees....................................... 100,000* Legal fees and expenses..................................... 1,350,000* Accounting fees and expenses................................ 200,000* Transfer Agent and Trustees fees and expenses............... 150,000* Blue Sky qualification fees and expenses.................... 30,000* Printing and engraving fees and expenses.................... 750,000* Miscellaneous fees and expenses............................. 200,000* ---------- Total..................................................... $3,085,500 ==========
- ------------------------ * Estimated and subject to future contingencies. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Restated Certificate of Incorporation of Lehman Brothers Holdings (the "Charter") and the Amended and Restated By-Laws of Lehman Brothers Holdings (the "By-Laws") require Lehman Brothers Holdings to indemnify its directors and officers to the fullest extent permitted by Delaware law. The Charter and By-Laws also provide that Lehman Brothers Holdings may, by action of the Board of Directors, provide indemnification to any employee or agent of Lehman Brothers Holdings to the same extent as the foregoing indemnification of directors and officers of Lehman Brothers Holdings. The right to indemnification under the Charter and By-Laws includes the right to be paid the expenses and costs incurred in defending a civil, criminal, administrative, regulatory or investigative action, suit or proceeding in advance of the final disposition of such action, suit or proceeding (subject, in the case of employees and agents, to authorization by the Board of Directors) upon receipt of an undertaking in writing by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by Lehman Brothers Holdings as authorized in the Charter or By-Laws. In addition, the officers and directors of Lehman Brothers Holdings are insured under officers' and directors' liability insurance policies purchased by Lehman Brothers Holdings, as permitted by the By-Laws. Under the By-Laws, Lehman Brothers Holdings has the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of Lehman Brothers Holdings, or of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any capacity whether or not Lehman Brothers Holdings has the power to indemnify such person against such liability under the provisions of the By-Laws or applicable law. The directors, officers and employees of Lehman Brothers Holdings are also insured against fiduciary liabilities under the Employee Retirement Income Security Act of 1974. II-1 Any underwriting agreement or agency agreement with respect to an offering of securities registered hereunder will provide for indemnification of Lehman Brothers Holdings and its officers and directors who signed this Registration Statement by the underwriters or agents, as the case may be, against certain liabilities including liabilities under the Securities Act of 1933 (the "Act"). ITEM 16. EXHIBITS The Exhibit Index beginning on page E-1 is hereby incorporated by reference. ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes: 1) a) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: i) To include any prospectus required by section 10(a)(3) of the Act; ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which has registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that the undertakings set forth in paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by Lehman Brothers Holdings pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. b) That, for the purposes of determining any liability under the Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. That, for purposes of determining any liability under the Act, each filing of Lehman Brothers Holdings' annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 2) 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II-2 Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or 3) controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Lehman Brothers Holdings Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement or Amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on May 30, 2001. LEHMAN BROTHERS HOLDINGS INC. /s/ BARRETT S. DIPAOLO ----------------------------------------- Barrett S. DiPaolo VICE PRESIDENT By:
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement or Amendment thereto has been signed below by the following persons in the capacities indicated. Dated: May 30, 2001
SIGNATURE TITLE --------- ----- * Chief Executive Officer and Chairman of the ------------------------------------------- Board of Directors (principal executive Richard S. Fuld, Jr. officer) * ------------------------------------------- Chief Financial Officer (principal financial David Goldfarb and accounting officer) * ------------------------------------------- Director Michael L. Ainslie * ------------------------------------------- Director John F. Akers * ------------------------------------------- Director Roger S. Berlind * ------------------------------------------- Director Thomas H. Cruikshank * ------------------------------------------- Director Henry Kaufman * ------------------------------------------- Director John D. Macomber * ------------------------------------------- Director Dina Merrill
*By: /s/ BARRETT S. DIPAOLO -------------------------------------- Barrett S. DiPaolo ATTORNEY-IN-FACT
II-4 EXHIBIT INDEX 1.01 Form of underwriting agreement (including delayed delivery contract) for debt securities, warrants, units and purchase contracts -- Filed herewith 4.01 Standard multiple series indenture provisions with respect to the senior and subordinated debt securities -- Incorporated by reference to Exhibit 4(a) of Post-Effective Amendment No. 1 to Registration Statement (No. 33-16141) filed with the SEC on November 16, 1987 4.02 Indenture with respect to the senior debt securities -- Incorporated by reference to Exhibit 4(b) of Post-Effective Amendment No. 1 to Registration Statement (No. 33-16141) filed with the SEC on November 16, 1987 4.03 First supplemental indenture with respect to the senior debt securities -- Incorporated by reference to Exhibit 4(m) of Registration Statement (No. 33-25797) filed with the SEC on November 25, 1988 4.04 Second supplemental indenture with respect to the senior debt securities -- Incorporated by reference to Exhibit 4(e) of Registration Statement (No. 33-49062) filed with the SEC on June 30, 1992 4.05 Third supplemental indenture with respect to the senior debt securities -- Incorporated by reference to Exhibit 4(f) of Registration Statement (No. 33-46146) filed with the SEC on March 10, 1992 4.06 Fourth supplemental indenture with respect to the senior debt securities -- Incorporated by reference to Exhibit 4(f) of Form 8-A filed with the SEC on October 7, 1993 4.07 Fifth supplemental indenture with respect to the senior debt securities -- Incorporated by reference to Exhibit 4(h) of Post-Effective Amendment No. 1 to Registration Statement (No. 33-56615) filed with the SEC on August 24, 1995 4.08 Sixth supplemental indenture with respect to the senior debt securities -- Incorporated by reference to Exhibit 4(h) of S-3 Registration Statement (No. 333-38227) filed with the SEC on October 17, 1997 4.09 Form of senior debt security--fixed rate note -- Filed herewith 4.10 Form of senior debt security--variable rate note -- Filed herewith 4.11 Form of senior debt security--zero coupon note -- Filed herewith 4.12 Form of senior debt security--index note -- Filed herewith 4 .13 Indenture with respect to the subordinated debt securities -- Incorporated by reference to Exhibit 2 of Form 8-A filed with the SEC on February 8, 1996
E-1 4.14 Supplemental indenture with respect to the subordinated debt securities -- Incorporated by reference to Exhibit 3 of Form 8-A filed with the SEC on February 8, 1996 4.15 Form of subordinated debt security -- Filed herewith 4.16 Form of Warrant Agreement for debt warrants, including form of debt warrant.* 4.17 Form of Warrant Agreement for universal warrants, including form of universal warrant.* 4.18 Form of Prepaid Unit Agreement, including form of prepaid unit certificate.* 4.19 Form of Non-Prepaid Unit Agreement.* 4.20 Form of Prepaid Purchase Contract.* 4.21 Form of Non-Prepaid Purchase Contract.* 5.01 Opinion and consent of Barrett S. DiPaolo, Vice President and Associate General Counsel of Lehman Brothers Holdings, as to the validity of the debt securities, warrants, purchase contracts and units being registered -- Filed herewith 12.01 Computation in support of ratio of earnings to fixed charges -- Incorporated by reference to Exhibit 12 of Quarterly Report on Form 10-Q filed with the SEC on April 16, 2001 23.01 Consent of Barrett S. DiPaolo, Vice President of Lehman Brothers Holdings -- Included in Exhibit 5.01 above 23.02 Consent of Ernst & Young LLP -- Filed herewith 24.01 Powers of attorney -- Filed herewith 25.01 Form T-1 statement of eligibility and qualification under the Trust Indenture Act of 1939 (a "Form T-1") of Citibank, N.A. as trustee under the indenture with respect to the senior debt securities -- Filed herewith 25.02 Form T-1 of The Chase Manhattan Bank ("Chase") as trustee under the indenture with respect to the subordinated debt securities -- Filed herewith
- ------------------------ * To be filed as an exhibit to a Current Report on Form 8-K and incorporated herein by reference. E-2 EX-1.01 2 a2048768zex-1_01.txt EXHIBIT 1.01 EXHIBIT 1.01 DEBT SECURITIES, WARRANTS, PURCHASE CONTRACTS AND UNITS LEHMAN BROTHERS HOLDINGS INC. UNDERWRITING AGREEMENT New York, New York Dated the date set forth In Schedule I hereto To the Representative(s) named in Schedule I hereto, of the Underwriters named in Schedule II hereto Ladies and Gentlemen: Lehman Brothers Holdings Inc., a Delaware corporation (the "COMPANY"), proposes to issue and sell to you and the other underwriters named in Schedule II hereto (the "UNDERWRITERS"), for whom you are acting as representative(s) (the "REPRESENTATIVE(S)"), its (i) debt securities (the "DEBT SECURITIES"), (ii) warrants to purchase Debt Securities ("DEBT WARRANTS"), (iii) warrants to purchase or sell, or representing the right to receive a cash value determined by reference to the performance, level, or value of, securities of the Company and/or one or more other issuers, one or more interest rates, one or more currencies, one or more commodities, any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, or one or more indices or baskets of the foregoing ("UNIVERSAL WARRANTS"), (iv) contracts to purchase or sell, or representing the right to receive a cash value determined by reference to the performance, level, or value of, securities of the Company and/or one or more other issuers, one or more interest rates, one or more currencies, one or more commodities, any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, or one or more indices or baskets of the foregoing ("PURCHASE CONTRACTS") and/or (v) units ("UNITS") comprised of one or more Debt Securities, Debt Warrants, Universal Warrants and Purchase Contracts (the "UNIT SECURITIES"), in such amount or amounts as is described in Schedule I hereto. Such Debt Securities, Debt Warrants, Universal Warrants, Purchase Contracts and Units listed in Schedule I hereto are hereinafter collectively referred to as the "FIRM SECURITIES". Debt Warrants and Universal Warrants are hereinafter collectively referred to as "WARRANTS." In addition, if so identified in Schedule I hereto, the Company proposes to grant to the Underwriters an option to purchase up to an additional principal amount or number of Debt Securities, Debt Warrants, Universal Warrants, Purchase Contracts or Units (the "OPTION Securities"). Such Firm Securities and Option Securities, if purchased, are hereinafter collectively referred to as the "SECURITIES", which term includes any Underlying Debt Securities (as hereinafter defined) isssuable upon the exercise or in settlement of Debt Warrants or Purchase Contracts, and any Unit Securities comprising any Units, included in the Firm 2 Securities or Option Securities (but does not include any Underlying Company Securities or Other Underlying Securities (as hereinafter defined)). Debt Securities issuable upon the exercise or in settlement of Debt Warrants or Purchase Contracts are hereinafter referred to as the "UNDERLYING DEBT SECURITIES". Other securities of the Company issuable upon the exercise or in settlement of Universal Warrants or Purchase Contracts are hereinafter referred to as the "UNDERLYING COMPANY SECURITIES". Securities of issuers other than the Company issuable upon the exercise or in settlement of Debt Securities, Warrants or Purchase Contracts are hereinafter referred to as the "OTHER UNDERLYING SECURITIES". The Debt Securities will be issued under the indenture (the "INDENTURE") identified in Schedule I hereto, between the Company and the trustee (the "TRUSTEE") identified therein. The Warrants will be issued under one or more separate warrant agreements (each a "WARRANT AGREEMENT") identified in Schedule I hereto, between the Company and one or more separate institutions, as warrant agent, each as identified in such Warrant Agreement (each a "WARRANT AGENT"). The Purchase Contracts requiring the holders thereof to satisfy their obligations at the time of issuance (the "PREPAID PURCHASE CONTRACTS") will be issued under the Indenture identified in Schedule I hereto, between the Company and the Trustee identified therein. The Units will be issued under one or more separate unit agreements (each a "UNIT AGREEMENT") identified in Schedule I hereto, between the Company and one or more separate institutions, as unit agent, each as identified in such Unit Agreement (each a "UNIT AGENT"). Purchase Contracts that are not Prepaid Purchase Contracts ("NON-PREPAID PURCHASE CONTRACTS") will be issued under a governing document (which may be a Unit Agreement if issued as part of a Unit) identified in Schedule I hereto. If the firm or firms listed in Schedule II hereto include only the firm or firms listed in Schedule I hereto, then the terms "UNDERWRITERS" and "REPRESENTATIVES" shall each be deemed to refer to such firm or firms. 1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to each Underwriter that: (a) The Company meets the requirements for the use of Form S-3 under the Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules and regulations promulgated thereunder (the "RULES"), and has carefully prepared and filed with the Securities and Exchange Commission (the "COMMISSION") a registration statement on Form S-3 (the file number of which is set forth in Schedule I hereto), which has become effective, for the registration of the Securities under the Securities Act. The registration statement, as amended at the date of this Agreement, meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies in all other material respects with such rule. The Company proposes to file with the Commission pursuant to Rule 424 under the Securities Act ("RULE 424") a supplement to the form of prospectus included in the registration statement relating to the initial offering of the Securities and the plan of distribution thereof and has previously advised you of all further information (financial and other) with respect to the Company to be set forth therein. The term "REGISTRATION STATEMENT" means the registration statement, as amended at the date of this Agreement, 3 including the exhibits thereto, financial statements, and all documents incorporated therein by reference pursuant to Item 12 of Form S-3 (the "INCORPORATED DOCUMENTS"), and such prospectus as then amended, including the Incorporated Documents, is hereinafter referred to as the "BASIC PROSPECTUS;" and such supplemented form of prospectus, in the form in which it shall be filed with the Commission pursuant to Rule 424 (including the Basic Prospectus as so supplemented), is hereinafter called the "FINAL PROSPECTUS". Any preliminary form of the Basic Prospectus which has heretofore been filed pursuant to Rule 424 is hereinafter called the "INTERIM PROSPECTUS". Any reference herein to the Registration Statement, the Basic Prospectus, any Interim Prospectus or the Final Prospectus shall be deemed to refer to and include the Incorporated Documents which were filed under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), on or before the date of this Agreement or the issue date of the Basic Prospectus, any Interim Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms "AMEND," "AMENDMENT" or "SUPPLEMENT" with respect to the Registration Statement, the Basic Prospectus, any Interim Prospectus or the Final Prospectus shall be deemed to refer to and include the filing of any Incorporated Documents under the Exchange Act after the date of this Agreement or the issue date of the Basic Prospectus, any Interim Prospectus or the Final Prospectus, as the case may be, and deemed to be incorporated therein by reference. (b) As of the date hereof, when the Final Prospectus is first filed with the Commission pursuant to Rule 424, when, before any Delivery Date (hereinafter defined) any amendment to the Registration Statement becomes effective, when, before any Delivery Date, any Incorporated Document is filed with the Commission, when any supplement to the Final Prospectus is filed with the Commission and at each Delivery Date, the Registration Statement, the Final Prospectus and any such amendment or supplement will comply in all material respects with the applicable requirements of the Securities Act and the Rules, and the Incorporated Documents will comply in all material respects with the requirements of the Exchange Act or the Securities Act, as applicable, and the rules and regulations adopted by the Commission thereunder; on the date hereof and on each Delivery Date, the Indenture shall have been qualified under and will comply in all material respects with the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"); on the date it became effective, the Registration Statement did not, and, on the date that any post-effective amendment to the Registration Statement becomes effective, the Registration Statement as amended by such post-effective amendment did not or will not, as the case may be, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; on the date the Final Prospectus is filed with the Commission pursuant to Rule 424 and on each Delivery Date, the Final Prospectus, as it may be amended or supplemented, will not include an untrue statement of a material fact or 4 omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; and on said dates, the Incorporated Documents will comply in all material respects with the applicable provisions of the Exchange Act and rules and regulations of the Commission thereunder, and, when read together with the Final Prospectus, or the Final Prospectus as it may be then amended or supplemented, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading; PROVIDED that the foregoing representations and warranties in this paragraph (b) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company by or through the Representatives on behalf of any Underwriter specifically for use in connection with the preparation of the Registration Statement or the Final Prospectus, as they may be amended or supplemented, or to any statements in or omissions from the statement of eligibility and qualification on Form T-1 of the Trustee under the Trust Indenture Act ("FORM T-1"). (c) The Basic Prospectus and any Interim Prospectus, as of their respective dates, complied in all material respects with the requirements of the Securities Act and of the Rules and did not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Commission has not issued an order preventing or suspending the use of the Basic Prospectus or any Interim Prospectus. (d) The nationally recognized firm of independent public accountants whose report appears in the Company's most recent Annual Report on Form 10-K, which is incorporated by reference in the Final Prospectus, are independent public accountants as required by the Securities Act and the Rules. (e) In the event that a report of a nationally recognized firm of independent public accountants regarding historical financial information with respect to any entity acquired by the Company is required to be incorporated by reference in the Final Prospectus, such independent public accountants were independent public accountants, as required by the Securities Act and the Rules, during the period of their engagement to examine the financial statements being reported on and at the date of their report. (f) The audited consolidated financial statements of the Company in the Final Prospectus and the Registration Statement present fairly on a consolidated basis the financial position, the results of operations, changes in common stock and other stockholder's equity and cash flows of the Company and its subsidiaries, as of the respective dates and for the respective periods indicated, all in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. The unaudited consolidated financial statements of the Company, if any, included in the Final Prospectus and the Registration Statement and the related notes are true, complete and correct, subject to normally recurring changes resulting from year-end audit adjustments, and have been prepared in accordance with the instructions to Form 10-Q. (g) Except as described in or contemplated by the Registration Statement and the Final Prospectus, there has not been any material adverse change in or any adverse development which materially affects the business, properties, financial condition or 5 results of the Company or the Company and its subsidiaries taken as whole, from the dates as of which information is given in the Registration Statement and Final Prospectus. (h) The Securities have been duly authorized. The Securities (other than the UNDERLYING DEBT SECURITIES) and the Contract Securities (as hereinafter defined)) have been executed and issued by the Company, and assuming due authentication by the Trustee (in the case of Debt Securities and Prepaid Purchase Contracts), the applicable Warrant Agent (in the case of Warrants), any applicable Unit Agent or other agent named in the Unit Agreement or other document identified in Schedule I hereto (in the case of Non-Prepaid Purchase Contracts) and the applicable Unit Agent (in the case of Units), and upon payment and delivery in accordance with this Agreement, will constitute legal, valid and binding obligations of the Company, entitled to the benefits of, in the case of Debt Securities and Prepaid Purchase Contracts, the Indenture, in the case of Warrants, the Warrant Agreement, in the case of Non-Prepaid Purchase Contracts, the Unit Agreement or other document identified in Schedule I hereto, and in the case of Units, the Unit Agreement. The Underlying Debt Securities and the Contract Securities, when executed, authenticated, issued and delivered against payment therefor in the manner provided in the Indenture (in the case of Debt Securities and Prepaid Purchase Contracts), the applicable Warrant Agreement (in the case of Warrants), any applicable Unit Agreement or other document identified in Schedule I hereto (in the case of Non-Prepaid Purchase Contracts) and the applicable Unit Agreement (in the case of Units), and (in the case of Contract Securities) sold pursuant to the Delayed Delivery Contract, will constitute legal, valid and binding obligations of the Company entitled to the benefits of, in the case of Debt Securities and Prepaid Purchase Contracts, the Indenture, in the case of Warrants, the Warrant Agreement, in the case of Non-Prepaid Purchase Contracts, the Unit Agreement or other document identified in Schedule I hereto, and in the case of Units, the Unit Agreement. The Securities (other than any Underlying Debt Securities and any Contract Securities), the Indenture (if the Securities include Debt Securities, Debt Warrants or Prepaid Purchase Contracts), each Warrant Agreement (if the Securities include Warrants) , each Unit Agreement or other document identified in Schedule I hereto (if the Securities include Non-Prepaid Purchase Contracts) and each Unit Agreement (if the Securities include Units) conform, and any Underlying Debt Securities and any Contract Securities, when so issued and delivered and sold, will conform, in all material respects to the description thereof contained in the Final Prospectus. (i) Neither the Company nor any of the Significant Subsidiaries (as defined below) is in violation of its corporate charter or by-laws or in default under any agreement, indenture or instrument, the effect of which violation or default would be material to the Company and its subsidiaries taken as a whole. The execution, delivery and performance of this Agreement will not conflict with, result in the creation or imposition of any material lien, charge or encumbrance upon any of the assets of the Company or any of its subsidiaries pursuant to the terms of, or constitute a default under, any material agreement, indenture or instrument, or result in a violation of the corporate charter or by-laws of the Company or any of its subsidiaries or any order, rule or regulation of any court or governmental agency having jurisdiction over the Company, any of its Significant Subsidiaries or their property. Except as set forth in the Final 6 Prospectus or as required by the Securities Act, the Exchange Act, the Trust Indenture Act and applicable state securities laws, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of this Agreement. "Significant Subsidiary" means Lehman Brothers Inc., Lehman Brothers International (Europe), Lehman Brothers Finance S.A. and Lehman Brothers Special Financing Inc. (j) Each of the Company and the Significant Subsidiaries have been duly organized, are validly existing and in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and in good standing as foreign corporations and are fully registered as a broker-dealer, broker, dealer or investment advisor, as the case may be, in each jurisdiction in which their respective ownership of property or the conduct of their respective businesses requires such qualification or registration and in which the failure to qualify or register would be reasonably likely, individually or in the aggregate, to have a material adverse effect on the business, condition or properties of the Company and its subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT"). Each of the Company and the Significant Subsidiaries holds all material licenses, permits, and certificates from governmental authorities necessary for the conduct of its business and owns, or possesses adequate rights to use, all material rights necessary for the conduct of such business and has not received any notice of material conflict with the asserted rights of others in respect thereof, except in each case where the failure to do so would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect; and each of the Company and the Significant Subsidiaries has the corporate power and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged. Except as may be disclosed in the Registration Statement and the Final Prospectus, all outstanding shares of capital stock of the Significant Subsidiaries have been duly authorized and are validly issued and outstanding, fully paid and non-assessable and, except for directors' qualifying shares, are owned by the Company, directly or indirectly through subsidiaries, free and clear of any lien, pledge and encumbrance or any claim of any third party. (k) Except as described in the Registration Statement and the Final Prospectus, there is no material litigation or governmental proceeding pending or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries which might reasonably be expected to have a Material Adverse Effect or which is required to be disclosed in the Registration Statement and the Final Prospectus. (l) The certificates delivered pursuant to paragraph (h) of Section 6 hereof and all other documents delivered by the Company or its representatives in connection with the issuance and sale of the Securities were on the dates on which they were delivered, or will be on the dates on which they are to be delivered, in all material respects true and complete. If the Securities include Debt Securities, Warrants or Purchase Contracts that may be exercised for or settled by delivery of Underlying 7 Company Securities or Other Underlying Securities, the Company further represents and warrants to each Underwriter as set forth in Schedule IV hereto. 2. SALE AND PURCHASE OF THE SECURITIES. The Company agrees to sell to each Underwriter, and each Underwriter, on the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein stated, agrees to purchase from the Company, at the purchase price set forth in Schedule I hereto, the principal amount of Firm Securities set forth opposite the name of such Underwriter in Schedule II hereto, except that, if Schedule I hereto provides for the sale of Securities pursuant to delayed delivery arrangements, the respective principal amounts of Debt Securities and/or number of Warrants, Purchase Contracts or Units to be purchased by the Underwriters shall be as set forth in Schedule II hereto, less the respective amounts of Contract Securities determined as provided below. In addition, the Company grants to the Underwriters an option to purchase up to the principal amount or number of Option Securities specified in Schedule I hereto. Such option is granted solely for the purpose of covering over-allotments in the sale of Firm Securities and is exercisable as provided in Section 3 hereof. The price of the Option Securities to the Underwriters shall equal the price of the Firm Securities set forth in Schedule I hereto. Securities to be purchased by the Underwriters are herein sometimes called the "UNDERWRITERS' SECURITIES" and Securities to be purchased pursuant to Delayed Delivery Contracts (as hereinafter defined) are herein called "CONTRACT SECURITIES." The obligations of the Underwriters under this Agreement are several and not joint. If so provided in Schedule I hereto, the Underwriters are authorized to solicit offers to purchase Securities, or a portion thereof, from the Company pursuant to delayed delivery contracts ("DELAYED DELIVERY CONTRACTS"), substantially in the form of Schedule III hereto but with such changes therein as the Company may authorize or approve, and the Underwriters will endeavor to make such arrangements. Delayed Delivery Contracts are to be with institutional investors, including commercial and savings banks, insurance companies, pension funds and educational and charitable institutions. The Company will make Delayed Delivery Contracts in all cases where sales of Contract Securities arranged by the Underwriters have been approved by the Company but, except as the Company may otherwise agree, each such Delayed Delivery Contract must be for not less than the minimum principal amount of Debt Securities and/or number of each type of Warrant, Purchase Contract or Unit set forth in Schedule I hereto and the total principal amount of Debt Securities and/or total number of each type of Warrant, Purchase Contract or Unit to be purchased pursuant to Delayed Delivery Contracts may not exceed the maximum principal amount and/or number set forth in Schedule I hereto. The Underwriters will not have any responsibility in respect of the validity or performance of Delayed Delivery Contracts. The principal amount of Debt Securities and the number of each type of Warrant, Purchase Contract or Unit to be purchased by each Underwriter as set forth in Schedule II hereto shall be reduced by an amount or number which bears the same proportion to the total principal amount of Debt Securities and/or number of each type of Warrant, Purchase Contract or Unit to be purchased pursuant to Delayed Delivery Contracts as the principal amount of Debt Securities and/or number of such type of Warrant, Purchase Contract or Unit set forth opposite the name of such Underwriter bears to the total principal amount of Debt Securities and/or number of such type of Warrant, Purchase Contract or Unit set forth in Schedule II hereto, except to the extent that the Representatives determine that such 8 reduction shall be otherwise than in such proportion and so advise the Company in writing; PROVIDED, HOWEVER, that the total principal amount of Debt Securities and/ or number of each type of Warrant, Purchase Contract or Unit to be purchased by all Underwriters shall be the total principal amount and/or number set forth in Schedule II hereto less the total principal amount of Debt Securities and/or number of such type of Warrant, Purchase Contract or Unit to be purchased pursuant to Delayed Delivery Contracts. 3. DELIVERY AND PAYMENT. Delivery by the Company of the Firm Securities to the Representatives for the respective accounts of the several Underwriters and payment by the Underwriters therefor by certified or official bank check or checks payable in, or by wire transfer of, immediately available funds to or upon the order of the Company shall take place at the office, on the date and at the time specified in Schedule I hereto, which date and time may be postponed by agreement between the Representatives and the Company or as provided in Section 9 hereof (such date and time of delivery and payment for the Firm Securities being herein called the "FIRST DELIVERY DATE"). Concurrently with the delivery of any payment for Firm Securities as provided in this Section 3, the Company will deliver to the Representatives for the respective accounts of the several Underwriters a check in an amount equal to the fee set forth in Schedule I hereto with respect to the principal amount of Debt Securities and/or number of Warrants, Purchase Contracts or Units for which Delayed Delivery Contracts are made. The Firm Securities will be registered in such names and in such authorized denominations as the Representatives may request no less than two full business days in advance of the First Delivery Date. The Company agrees to have the Firm Securities available for inspection, checking and packaging by the Representatives at such place as is designated by the Representatives, not later than 1:00 p.m., New York City time, on the business day prior to the First Delivery Date. At any time on or before the thirtieth day after the date of this Agreement the option granted in Section 2 may be exercised by written notice being given to the Company by the Representatives. Such notice shall set forth the aggregate principal amount or number of Option Securities as to which the option is being exercised, the names in which the Option Securities are to be registered, the denominations in which the Option Securities are to be issued and the date and time, as determined by the Representatives, when the Option Securities are to be delivered, provided, however, that this date and time shall not be earlier than the First Delivery Date nor earlier than the second business day after the date on which the option shall have been exercised nor later than the fifth business day after the date on which the option shall have been exercised. The date and time the Option Securities are delivered are sometimes referred to as the "SECOND DELIVERY DATE" and the First Delivery Date and the Second Delivery Date are sometimes each referred to as a "DELIVERY DATE." Delivery by the Company of the Option Securities to the Representatives for the account of the Underwriters and payment by the Underwriters therefor by certified or official bank check or checks payable in, or by wire transfer of, immediately available funds to or upon the order of the Company shall take place on the Second Delivery Date at the office and at the 9 time specified in Schedule I hereto, which date and time may be postponed by agreement between the Representatives and the Company. The Option Securities will be registered in such names and in such authorized denominations as the Representatives may request no less than two full business days in advance of the Second Delivery Date. The Company agrees to have the Option Securities available for inspection, checking and packaging by the Representatives at such place as is designated by the Representatives, not later than 1:00 p.m., New York City time, on the business day prior to the Second Delivery Date. 4. OFFERING BY UNDERWRITERS. The Company hereby confirms that the Underwriters and dealers have been authorized to distribute or cause to be distributed any Interim Prospectus and are authorized to distribute the Final Prospectus (as from time to time amended or supplemented if the Company furnishes amendments or supplements thereto to the Underwriters). The Representatives agree that, as soon as the Representatives believe the offering of the Securities has been terminated, the Representatives will so advise the Company. 5. AGREEMENTS. The Company agrees with the several Underwriters that: (a) (i) The Company will cause the Final Prospectus to be filed with the Commission pursuant to Rule 424 as required thereby and will promptly advise the Representatives (A) when the Final Prospectus shall have been filed with the Commission pursuant to Rule 424, (B) when any amendment to the Registration Statement relating to the Securities shall have become effective, (C) of any request by the Commission for any amendment of the Registration Statement, the Final Prospectus, the Basic Prospectus or any Interim Prospectus, or for any additional information, (D) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, any registration statement or registration statements of the Company on Form 8-A relating to the Securities (each, a "FORM 8-A") or the qualification of the Indenture [or the institution][???] or threatening of any proceedings for that purpose, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (F) the delisting or threatened delisting of any Securities listed on a "national securities exchange" as such term is defined in the Exchange Act (each an "EXCHANGE") from such Exchange. (ii) After the date of this Agreement and prior to the termination of the offering of these Securities, the Company will not file any amendment of the Registration Statement or amendment or supplement to the Final Prospectus (except an amendment or supplement to the Final Prospectus that is deemed to be incorporated by reference in the Final Prospectus pursuant to Item 12 of Form S-3) without the consent of the Representatives and will use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. (iii) Prior to receipt of the advice to be given by the Representatives pursuant to Section 4, the Company will not file any document that would be deemed to 10 be incorporated by reference in the Final Prospectus pursuant to Item 12 of Form S-3 without delivering to the Representatives a copy of the document proposed to be so filed, such delivery to be made at least twenty-four hours prior to such filing, and the Company will consult with the Representatives as to any comments which the Representatives make in a timely manner with respect to the document so delivered. (b) Subject to clause (a)(iii) of this Section 5, if, at any time when a prospectus relating to the Securities is required to be delivered under the Securities Act, any event occurs as a result of which the Final Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it shall be necessary at any time to amend or supplement the Final Prospectus to comply with the Securities Act or the Rules, the Company promptly will prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance and will use its best efforts to cause any amendment of the Registration Statement containing an amended Final Prospectus to be made effective as soon as possible. (c) The Company will deliver to the Representatives, without charge, (i) signed copies of the Registration Statement relating to the Securities and of any amendments thereto (including all exhibits filed with, or incorporated by reference in, any such document) and (ii) as many conformed copies of the Registration Statement and of any amendments thereto which shall become effective on or before any Delivery Date (excluding exhibits) as the Representatives may reasonably request. (d) During such period as a prospectus is required by law to be delivered by an Underwriter or dealer, the Company will deliver, without charge to the Representatives and to Underwriters and dealers, at such office or offices as the Representatives may designate, as many copies of the Basic Prospectus, any Interim Prospectus and the Final Prospectus as the Representatives may reasonably request. (e) The Company will make generally available to its security holders and to the Representatives as soon as practicable an earnings statement (which need not be audited) of the Company and its subsidiaries, covering a period of at least 12 months beginning after the date the Final Prospectus is filed with the Commission pursuant to Rule 424, which will satisfy the provisions of Section 11(a) of the Securities Act. (f) The Company will furnish such information, execute such instruments and take such actions as may be required to qualify the Securities for offering and sale under the laws of such jurisdictions as the Representatives may designate and will maintain such qualifications in effect so long as required for the distribution of the Securities; PROVIDED, HOWEVER, that the Company shall not be required to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to general or unlimited service of process in any jurisdiction where it is not now so subject. 11 (g) So long as any Securities are outstanding, the Company will furnish or cause to be furnished to the Representatives copies of all annual reports and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by the Commission. (h) If the Company has applied for the listing of any of the Securities on an Exchange, it will use its best efforts to maintain the listing of such Securities on such Exchange. (i) For a period beginning at the time of execution of this Agreement and ending on the later of the business day following the final Delivery Date or following the date on which any price restrictions on the sale of the Securities are terminated, without the prior consent of the Representatives, the Company will not offer, sell, contract to sell or otherwise dispose of (i) if the Securities include Debt Securities or Debt Warrants, any debt securities of the Company covered by the Registration Statement or any other registration statement filed under the Securities Act having a maturity of more than one year from the date of issue or (ii) if the Securities include Warrants or Purchase Contracts, any warrants or purchase contracts substantially similar to such Warrants or Purchase Contracts. (j) The Company will use its best efforts to do and perform all things to be done and performed hereunder prior to the final Delivery Date and to satisfy all conditions precedent to the delivery of the Securities to be purchased hereunder. If the Securities include Debt Securities, Warrants or Purchase Contracts that may be exercised for or settled by delivery of Underlying Company Securities or Other Underlying Securities, the Company further agrees with the several Underwriters as set forth in Schedule IV hereto. 6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of the Underwriters to purchase the Securities shall be subject to the accuracy in all material respects of the representations and warranties on the part of the Company contained herein as of the date hereof and on each Delivery Date, to the accuracy of any material statements made in any certificates, opinions, affidavits, written statements or letters furnished to the Representatives or to Simpson Thacher & Bartlett ("UNDERWRITERS' COUNSEL") pursuant to this Section 6, to the performance by the Company of its respective obligations hereunder and to the following additional conditions: (a) The Final Prospectus shall have been filed with the Commission pursuant to Rule 424 not later than 5:00 p.m., New York City time, on the second business day following the date of this Agreement or such later date and time as shall be consented to in writing by the Representatives. (b) No order suspending the effectiveness of the Registration Statement, as amended from time to time, or of any Form 8-A, or suspending the qualification of the 12 Indenture shall be in effect and no proceedings for such purpose shall be pending before or threatened by the Commission and any requests for additional information on the part of the Commission (to be included in the Registration Statement or the Final Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the Representatives. (c) Since the respective dates as of which information is given in the Registration Statement and the Final Prospectus, there shall not have been any change or decrease specified in the letter or letters referred to in paragraph (i) of this Section 6 which, in the judgment of the Representatives, makes it impracticable or inadvisable to proceed with the offering and delivery of the Securities as contemplated by the Registration Statement and the Final Prospectus. (d) The Company shall have furnished to the Representatives the opinion of an Associate General Counsel or Deputy General Counsel or the Chief Legal Officer for the Company, dated the day of such Delivery Date, to the effect that: (i) The Company has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its incorporation with all requisite corporate power and authority to own and operate its properties and to conduct its business as described in the Final Prospectus. (ii) The Securities (other than any Underlying Debt Securities and any Contract Securities), the Indenture (if the Securities include Debt Securities, Debt Warrants or Prepaid Purchase Contracts), each Warrant Agreement (if the Securities include Warrants), each Unit Agreement or other document identified in Schedule I hereto (if the Securities include Non-Prepaid Purchase Contracts) and each Unit Agreement (if the Securities include Units) conform, and any Underlying Debt Securities and any Contract Securities, when so issued and delivered and sold, will conform, in all material respects to the description thereof contained in the Final Prospectus. (iii) Each of the Indenture (if the Securities include Debt Securities, Debt Warrants or Prepaid Purchase Contracts), the Warrant Agreements (if the Securities include Warrants), the Unit Agreements or other documents identified in Schedule I hereto (if the Securities include Non-Prepaid Purchase Contracts) and the Unit Agreements (if the Securities include Units) has been duly authorized, executed and delivered by the Company, and constitutes a legal, valid and binding instrument enforceable against the Company in accordance with its terms; the Indenture (if the Securities include Debt Securities, Debt Warrants or Prepaid Purchase Contracts) has been duly qualified under the Trust Indenture Act; the Securities have been duly authorized; the Securities (other than any Underlying Debt Securities and any Contract Securities) have been executed and issued by the Company, and assuming due authentication by the Trustee (in the case of Debt Securities or Prepaid Purchase Contracts), the applicable Warrant Agent (in the case of Warrants) , any applicable Unit Agent or other agent named 13 in the Unit Agreement or other document identified in Schedule I hereto (in the case of Non-Prepaid Purchase Contracts) and the applicable Unit Agent (in the case of Units), and upon payment therefor and delivery thereof in accordance with this Agreement, will constitute legal, valid and binding obligations of the Company entitled to the benefits of, in the case of Debt Securities and Prepaid Purchase Contracts, the Indenture, in the case of Warrants, the Warrant Agreement, in the case of Non-Prepaid Purchase Contracts, the Unit Agreement or other document identified in Schedule I hereto, and, in the case of Units, the Unit Agreement; the Underlying Debt Securities and the Contract Securities, when executed, authenticated, issued and delivered against payment therefor in the manner provided in the Indenture (in the case of Debt Securities and Prepaid Purchase Contracts), the applicable Warrant Agreement (in the case of Warrants), any applicable Unit Agreement or other document identified in Schedule I hereto (in the case of Non-Prepaid Purchase Contracts) and the applicable Unit Agreement (in the case of Units), and (in the case of Contract Securities) sold pursuant to the Delayed Delivery Contract, will constitute legal, valid and binding obligations of the Company entitled to the benefits of, in the case of Debt Securities and Prepaid Purchase Contracts, the Indenture, in the case of Warrants, the Warrant Agreement, in the case of Non-Prepaid Purchase Contracts, the Unit Agreement or other document identified in Schedule I hereto, and, in the case of Units, the Unit Agreement; PROVIDED, HOWEVER, that the foregoing is subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (iv) No consent, approval, authorization or order of any court or governmental agency or body is required for the consummation of the transactions contemplated in this Agreement, except for (1) such consents, approvals, authorizations or orders as have been obtained under the Securities Act and such as may be required under the Exchange Act and the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters and (2) the qualification of the Indenture (if the Securities include Debt Securities, Debt Warrants or Prepaid Purchase Contracts) under the Trust Indenture Act, which has been obtained. (v) Such counsel does not know of any contracts or other documents which are required by the Securities Act or by the Rules to be filed as exhibits to the Registration Statement which have not been filed as exhibits to the Registration Statement or incorporated therein by reference as permitted by the Rules. (vi) To the best of such counsel's knowledge, neither the Company nor any Significant Subsidiary that is organized under the laws of the United States or any State or territory thereof (a "Domestic Significant Subsidiary") is in violation of its corporate charter or by-laws, or in default under any material agreement, 14 indenture or instrument known to such counsel, the effect of which violation or default would be material to the Company and its subsidiaries taken as a whole. (vii) This Agreement and, to the extent applicable, the Delayed Delivery Contracts have been duly authorized, executed and delivered by the Company; the execution, delivery and performance of this Agreement and any Delayed Delivery Contracts by the Company will not conflict with, or result in the creation or imposition of any material lien, charge or encumbrance upon any of the assets of the Company or any Domestic Significant Subsidiary pursuant to the terms of, or constitute a default under, any material agreement, indenture or instrument known to such counsel and to which the Company or any Domestic Significant Subsidiary is a party or is bound, or result in a violation of the corporate charter or by-laws of the Company or any Domestic Significant Subsidiary or any order, rule or regulation known to such counsel of any court or governmental agency having jurisdiction over the Company, any Domestic Significant Subsidiary or any of their respective properties, the effect of which would be material to the Company and its subsidiaries taken as a whole. (viii) The Registration Statement has become effective under the Securities Act and, if applicable, each Form 8-A has become effective under the Exchange Act, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement or any Form 8-A has been issued and no proceeding for that purpose is pending or threatened by the Commission. (ix) The Registration Statement, the Final Prospectus and each amendment thereof or supplement thereto (except that no opinion need be expressed as to the financial statements or other financial or statistical data or any Form T-1 included or incorporated by reference therein) comply as to form in all material respects with the requirements of the Securities Act and the Rules. (x) If the Securities are required to be listed on an Exchange prior to issuance, as indicated on Schedule I hereto, authorization for the listing of such Securities on such Exchange has been given, subject to official notice of issuance and evidence of satisfactory distribution[; and if the Securities otherwise are to be listed on an Exchange, the Company has filed a preliminary listing application and all required supporting documents with respect to the Securities with such Exchange, and such counsel has no reason to believe that the Securities will not be authorized for listing, subject to official notice of issuance and evidence of satisfactory distribution]. (xi) Each Domestic Significant Subsidiary is a duly organized and validly existing corporation in good standing under the laws of the jurisdiction of its incorporation with all requisite corporate power and authority to own and operate its properties and to conduct its business as described in the Final Prospectus; each of the Company and its Domestic Significant Subsidiaries is duly qualified 15 to do business as a foreign corporation, is in good standing and is duly registered as a broker-dealer, broker, dealer or investment advisor, as the case may be, in each jurisdiction in which the nature of the business conducted by it or in which the ownership or holding by lease of the properties owned or held by it require such qualification or registration and where the failure to so qualify or register would have a Material Adverse Effect. (xii) All the outstanding shares of capital stock of each Domestic Significant Subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable and, except for directors' qualifying shares, are owned by the Company or a subsidiary of the Company free and clear of any claims, liens, encumbrances and security interests. (xiii) Such counsel does not know of any litigation or any governmental proceeding pending or threatened against the Company or any of its subsidiaries which would affect the subject matter of this Agreement or is required to be disclosed in the Final Prospectus which is not disclosed and correctly summarized therein. If the Securities include Debt Securities, Warrants or Purchase Contracts that may be exercised for or settled by delivery of Underlying Company Securities or Other Underlying Securities, such opinion will cover the additional matters set forth in Schedule IV hereto. Such opinion shall also contain a statement that although such counsel is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Final Prospectus (except as to those matters stated in paragraph (d)(ii), above), such counsel has no reason to believe that (i) the Registration Statement, as of its effective date, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or (ii) the Final Prospectus contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion need be expressed as to the financial statements or other financial or statistical data or the Form T-1 included or incorporated by reference therein). In rendering such opinion, such counsel may rely upon opinions of local counsel satisfactory to the Representatives for matters not governed by New York law and may rely as to matters of fact, to the extent he or she deems proper, upon certificates or affidavits of officers of the Company. If the Securities include Debt Securities, Debt Warrants or Prepaid Purchase Contracts, such counsel may rely on a certificate of the Trustee with respect to the execution of the Securities by the Company and the authentication thereof by the Trustee. Further, if any of the Securities are denominated or settled in any currency other than U.S. dollars, such counsel may (A) state that, with respect to those matters set forth in paragraph (iii), above, regarding the validity and 16 enforceability of the Indenture (if such Securities are Debt Securities, Debt Warrants or Prepaid Purchase Contracts), the Warrant Agreements (if such Securities are Warrants), the Unit Agreements or other documents identified in Schedule I hereto (if such Securities are Non-Prepaid Purchase Contracts), the Unit Agreements (if such Securities are Units) and such Securities, and, with respect to these matters set forth in paragraphs (iv) and (vii), above, regarding any order, rule or regulation of any court or governmental agency and the authority of the Company to authorize, issue and sell such Securities, such counsel has assumed that under the laws of any country in whose currency such Securities are denominated or settled, if other than in U.S. dollars, that no consent, approval, authorization, or order of, or filing with any governmental agency, body or court is required for the consummation of the transactions contemplated hereunder in connection with the issuance and sale of such Securities and compliance with the terms and provisions thereof will not result in any breach or violation of any of the terms and provisions in any statute, rule, regulation or order of any governmental agency or body or any court and (B) note that (a) a New York statute provides that with respect to a foreign currency obligation, a court of the State of New York shall render a judgment or decree in such foreign currency and such judgment or decree shall be converted into the currency of the United States at the rate of exchange prevailing on the date of entry of such judgment or decree and (b) with respect to a foreign currency obligation, a United States Federal court in New York may award judgment in U.S. dollars, provided that such counsel expresses no opinion as to the rate of exchange such court should apply. (e) If any of the Securities are denominated or settled in any currency other than U.S. dollars, the Representatives shall have received from counsel, satisfactory to the Representatives, such opinion or opinions, dated such Delivery Date, with respect to compliance with the laws of any country, other than the United States, in whose currency such Securities are denominated or settled, the validity of the Securities, the Prospectus and other related matters as they may require, and the Company shall have furnished to such counsel such documents as they request for the purposed of enabling them to pass upon such matters. (f) The Representatives shall have received from Underwriters' Counsel such opinion or opinions, dated the day of such Delivery Date, with respect to the issuance and sale of the Securities, the Registration Statement, the Final Prospectus and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (g) If the Securities are required to be listed on an Exchange prior to issuance, as indicated on Schedule I hereto, the Securities shall have been authorized for listing, subject to official notice of issuance and evidence of satisfactory distribution, no order suspending trading or striking or withdrawing such Securities from listing on any Exchange or registration under the Exchange Act shall be in effect, no proceedings for such purpose shall be pending before or threatened by any Exchange or by the Commission and any Form 8-A shall have become effective under the Exchange Act. 17 (h) The Company shall have furnished to the Representatives a certificate of its Chief Executive Officer, its President or any Managing Director or Vice President and its Chief Financial Officer or its Treasurer, dated the day of such Delivery Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Final Prospectus and this Agreement, and that, to the best of their knowledge after due inquiry: (i) The representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of such Delivery Date with the same effect as if made on such Delivery Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such Delivery Date. (ii) No stop order suspending the effectiveness of the Registration Statement or any Form 8-A has been issued and no proceedings for that purpose have been instituted or threatened. (iii) (x) The Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (y) the Final Prospectus does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (z) since the effective date of the Registration Statement there has not occurred any event required to be set forth in an amended or supplemented prospectus which has not been so set forth. (i) At each Delivery Date, a nationally recognized firm of independent public accountants shall have furnished to the Representatives a letter, dated the day of such Delivery Date, confirming that they are independent auditors with respect to the Company within the meaning of the Securities Act and in form and substance satisfactory to the Representatives, stating in effect that: (i) In their opinion, the consolidated financial statements of the Company and its subsidiaries, and the supporting schedules, included in the Registration Statement and the Final Prospectus and audited by them comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act and the related published rules and regulations thereunder. (ii) On the basis of a reading of the unaudited consolidated financial statements of the Company and its subsidiaries, if any, included in the Registration Statement and the Final Prospectus and of the latest unaudited consolidated financial statements made available by the Company and Lehman Brothers Inc., carrying out certain specified procedures (but not an audit in accordance with generally accepted auditing standards), a reading of the minutes 18 of the meetings of the directors of the Company and Lehman Brothers Inc., and inquiries of certain officials of the Company and its subsidiaries, who have responsibility for financial and accounting matters of the Company and its subsidiaries, as to transactions and events subsequent to the date of the most recent audited consolidated financial statements included in the Registration Statement and the Final Prospectus, nothing came to their attention that caused them to believe that: (A) any material modifications should be made to the unaudited consolidated financial statements of the Company and its subsidiaries, if any, included in the Registration Statement and the Final Prospectus, for them to be in conformity with generally accepted accounting principles; and such financial statements do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the published instructions, rules and regulations thereunder; (B) the unaudited capsule information of the Company and its subsidiaries, if any, included in the Registration Statement and the Final Prospectus does not agree with the amounts set forth in the unaudited consolidated financial statements of the Company from which it was derived or was not determined on a basis substantially consistent with that of the corresponding financial information in the latest audited financial statements of the Company included in the Registration Statement and the Final Prospectus; (C) (I) as of the latest date as of which the Company and its subsidiaries have monthly financial statements, there was any decrease in the capital stock, additional paid-in capital or retained earnings, or increase in long-term indebtedness of the Company and its subsidiaries, as compared with the amounts shown in the most recent consolidated statement of financial condition of the Company and its subsidiaries included in the Registration Statement and the Final Prospectus, (II) with respect to the period subsequent to the date of the most recent financial statements included in the Registration Statement and the Final Prospectus and extending through the latest date as of which the Company and its subsidiaries have monthly financial statements, there was a consolidated net loss or (III) with respect to the amounts of net capital or excess net capital of Lehman Brothers Inc. determined pursuant to Commission Rule 15c3-1 and shown in the most recent financial statement of Lehman Brothers Inc. filed pursuant to Commission Rule 17a-5, there has been any decrease in such amounts as compared with the amounts shown in the most recent consolidated financial statements included in the Registration Statement and the Final Prospectus; and (D) as of a specified date not more than three business days prior to the date of the letter, there was any decrease in the capital stock or 19 additional paid-in capital, or increase in long-term indebtedness of the Company and its subsidiaries, as compared with the amounts shown in the most recent consolidated statement of financial condition of the Company and its subsidiaries included in the Registration Statement and the Final Prospectus; except in all instances for increases or decreases set forth in such letter, in which case the letter shall be accompanied by an explanation by the Company as to the significance thereof, unless said explanation is not deemed necessary by the Representatives. (iii) If pro forma financial statements are included in the Registration Statement or the Final Prospectus, (x) they have read such pro forma financial statements, (y) they have made inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company as to the basis for their determination of the pro forma adjustments and whether such pro forma financial statements comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X and (z) they have proved the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts; and as a result thereof, nothing came to their attention that caused them to believe that such pro forma financial statements do not so comply with Rule 11-02 of Regulation S-X and that such pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements. (iv) They have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is expressed in dollars, or percentages derived from dollar amounts, and has been obtained from the general accounting records of the Company) set forth in the Registration Statement, as amended, and the Final Prospectus, as amended or supplemented, and in Exhibit 12 to the Registration Statement, including specified information, if any, included or incorporated from the Company's Annual Report on Form 10-K incorporated therein or specified information, if any, included or incorporated from any of the Company's Quarterly Reports on Form 10-Q or its Current Reports on Form 8-K incorporated therein, agrees with the accounting records of the Company and its subsidiaries or computations made therefrom, excluding any questions of legal interpretation. (j) So long as historical financial information with respect to any entity acquired by the Company is required to be included in the Registration Statement or the Final Prospectus, at such Delivery Date, a nationally recognized firm of independent public accountants shall have furnished to the Representatives a letter, dated the day of such Delivery Date, in form and substance satisfactory to the Representatives, confirming that they are, or were as of a stated time, independent public accountants within the meaning of the Securities Act and the Rules and stating in effect that: 20 (i) In their opinion the audited consolidated financial statements of such entity acquired by the Company, and the supporting schedules, included in the Registration Statement and Final Prospectus and examined by them, comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published rules and regulations of the Commission thereunder. (ii) They have performed certain other specified procedures as a result of which they determined that certain historical financial information relating to such entity acquired by the Company as required to be reported pursuant to rules and regulations promulgated under the Exchange Act agree with the accounting records of such entity acquired by the Company or computations made therefrom, excluding any questions of legal interpretation. (k) Subsequent to the execution of this Agreement, there shall not have been any decrease in the ratings of any of the Company's debt securities by Moody's Investors Service, Inc. or Standard & Poor's Ratings Group. (l) The Company shall have accepted Delayed Delivery Contracts in any case where sales of Contract Securities arranged by the Underwriters have been approved by the Company. (m) Prior to such Delivery Date, the Company shall have furnished to the Representatives such further information, certificates and documents as the Representatives or Underwriters' Counsel may reasonably request. If the Securities include Debt Securities, Warrants or Purchase Contracts that may be exercised for or settled by delivery of Underlying Company Securities or Other Underlying Securities, the obligations of the Underwriters to purchase the Securities shall be subject to the additional conditions set forth in Schedule IV hereto. If any of the conditions specified in this Section 6 (or, if applicable, in Schedule IV hereto) shall not have been fulfilled when and as required by this Agreement, or if any of the certificates or opinions furnished to the Representatives or Underwriters' Counsel pursuant to this Section 6 shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and to Underwriters' Counsel, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, such Delivery Date by the Representatives. Notice of such cancellation shall be given to the Company in writing or by telegraph confirmed in writing. 7. EXPENSES. (a) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company will pay all costs and expenses incident to the performance of the obligations of the Company hereunder, including, without limiting the generality of the foregoing, all costs, taxes and expenses incident to the issuance, sale and delivery of the Securities to the Underwriters, all fees and expenses of the Company's counsel and accountants, all costs and expenses incident to the preparing, printing and filing of 21 the Registration Statement (including all exhibits thereto), any Interim Prospectus, the Basic Prospectus, the Final Prospectus and any amendments thereof or supplements thereto, the Indenture, any Warrant Agreement, any Unit Agreement and any other document identified in Schedule I hereto, and the rating of the Securities by one or more rating agencies, all costs and expenses (including fees of Underwriters' Counsel and their disbursements) incurred in connection with blue sky qualifications, advising on the legality of the Securities for investment, the filing requirements, if any, of the National Association of Securities Dealers, Inc. in connection with its review of corporate financings, the fee for listing the Securities on any Exchange or Exchanges, the fees and expenses of the Trustee, Warrant Agents and Unit Agents, as applicable, and all costs and expenses of the printing and distribution of all documents in connection with such offering. Except as provided in this Section 7, the Company will have no responsibility to the Underwriters for the Underwriters' own costs and expenses, including the fees of Underwriters' Counsel and any advertising expenses in connection with any offer the Underwriters may make. (b) If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 6 hereof is not satisfied or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof, the Company will, subject to demand by the Representatives, reimburse the Underwriters for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities. 8. INDEMNIFICATION. (a) The Company agrees to indemnify and hold harmless each Underwriter and each person who controls such Underwriter within the meaning of the Securities Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, as originally filed or in any amendment thereof, or in any Interim Prospectus, the Basic Prospectus or the Final Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that (i) the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company as herein stated by the Representatives on behalf of any Underwriters specifically for use in connection with the preparation thereof, and (ii) such indemnity with respect to the Basic Prospectus or any Interim Prospectus shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) from whom the person asserting any such loss, claim, damage or liability purchased the Securities which are the subject thereof if such person did not receive a copy of the Final Prospectus at or prior to the confirmation of the sale of such Securities to such person 22 in any case where such delivery is required by the Securities Act and the untrue statement or omission of a material fact contained in the Basic Prospectus or any Interim Prospectus was corrected in the Final Prospectus, unless such failure to deliver the Final Prospectus was a result of noncompliance by the Company with Section 5(d) hereof. This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each Underwriter severally agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person, if any, who controls the Company within the meaning of the Securities Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, any Interim Prospectus or the Final Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that the same was made therein in reliance upon and in conformity with written information furnished to the Company as herein stated by the Representatives on behalf of such Underwriters specifically for use in the preparation thereof, and agrees to reimburse each such indemnified party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. The statements set forth in the last paragraph of the cover page and under the heading "Underwriting" in the Final Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in the Registration Statement and the Final Prospectus, as the case may be, and you, as the Representatives, confirm that such statements are correct. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under this Section 8. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and to the extent that it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof, with counsel satisfactory to such indemnified party; PROVIDED, HOWEVER, if the defendants in any such action include both the indemnified party and the indemnifying party and either (i) the indemnifying party or parties and the indemnified party or parties mutually agree or (ii) representation of both the indemnifying party or parties and the indemnified party or parties by the same counsel is inappropriate under applicable standards of professional conduct due to actual or potential differing interests between them, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such 23 indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed counsel in connection with the assumption of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Representatives in the case of subparagraph (a) representing the indemnified parties under subparagraph (a), as the case may be, who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with its written consent or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. (d) In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in subparagraph (a) of this Section 8 is due in accordance with its terms but is for any reason held by a court to be unavailable from the Company on grounds of policy or other similar grounds, the Company and the Underwriters shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) to which the Company and one or more of the Underwriters may be subject in such proportion so that the Underwriters are responsible for that portion represented by the percentage that the underwriting discounts appearing on the cover page of the Final Prospectus bear to the public offering prices appearing thereon and the Company is responsible for the balance; PROVIDED, HOWEVER, that (i) in no case shall any Underwriter (except as may be provided in any agreement among underwriters) be responsible for any amount in excess of the underwriting discounts applicable to the Securities purchased by such Underwriter hereunder and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls an Underwriter within the meaning of the Securities Act shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case 24 to clauses (i) and (ii) of this subparagraph (d). Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this subparagraph (d), notify such party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have hereunder or otherwise than under this subparagraph (d). 9. DEFAULT BY AN UNDERWRITER. If, on any Delivery Date, any one or more Underwriters shall fail to purchase and pay for all of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the principal amount of Debt Securities and/or number of each type of Warrant, Purchase Contract or Unit set forth opposite their names in Schedule II hereto bear to the aggregate principal amount of Debt Securities and/or number of such type of Warrant, Purchase Contract or Unit set opposite the names of the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; PROVIDED, HOWEVER, that in the event that the aggregate principal amount of Debt Securities and/or number of each type of Warrant, Purchase Contract or Unit which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate principal amount of the Debt Securities and/or number of such type of Warrant, Purchase Contract or Unit, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such non-defaulting Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any non-defaulting Underwriters or the Company. In the event of a default by any Underwriter as set forth in this Section 9, such Delivery Date shall be postponed for such period, not exceeding seven days, as the Representatives shall determine in order that the required changes in the Registration Statement and the Final Prospectus or in any other documents or arrangements may be effected. Nothing herein contained shall relieve any defaulting Underwriter of its liability, if any, to the Company and any non-defaulting Underwriter for damages occasioned by its default hereunder. 10. TERMINATION. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to the Company at or prior to delivery of and payment for all the Securities, if, prior to such time (i) trading in securities generally on the NYSE, any other Exchange on which any of the Securities are to be listed or the over-the-counter market shall have been suspended or limited or minimum prices shall have been established on the NYSE, any such Exchange or the over-the-counter market, (ii) a banking moratorium shall have been declared either by federal or New York State authorities, (iii) any new restriction materially affecting the distribution of the Securities shall have become effective, trading in any securities of the Company shall have been suspended or halted by any national securities exchange, the National Association of Securities Dealers, Inc. or the Commission, (iv) the United States (or, if any of the Securities are denominated or settled in a currency other than U.S. dollars, any country which is the issuer of a currency with respect to which the amount of any payment on such Security is determined or in whose currency any Securities are denominated or settled) becomes engaged in hostilities or there is an escalation in hostilities 25 involving the United States (or such other country) or there is a declaration of a national emergency or war by the United States (or such other country) or (v) there shall have been such a material adverse change in national or international political, financial or economic conditions, national or international equity markets or currency exchange rates or controls as to make it, in the judgment of the Representatives, inadvisable or impracticable to proceed with the payment for and delivery of the Securities. 11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers (as such officers) and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter or the Company or any of its officers or directors or any controlling person within the meaning of the Securities Act, and will survive delivery of the payment for the Securities. 12. NOTICES. All communications hereunder will be in writing, and, if sent to the Representatives will be mailed, delivered, telegraphed or telexed and confirmed to them, at the address specified in Schedule I hereto; or, if sent to the Company will be mailed, delivered, telegraphed or telexed and confirmed to it at Three World Financial Center, New York, New York 10285, Attention: Chief Financial Officer. 13. SUCCESSORS. This Agreement will inure to the benefit of and be binding upon the parties hereto and their successors and, to the extent and only to the extent stated in Section 8 hereof, the officers and directors and controlling persons referred to in Section 8 hereof, and except as provided in Section 8 hereof, no person other than the parties hereto and their respective successors will have any right or obligation hereunder. 14. APPLICABLE LAW. This Agreement will be governed by and construed in accordance with the laws of the State of New York. 26 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters. Very truly yours, LEHMAN BROTHERS HOLDINGS INC. By ---------------------------------- Name: Title: The foregoing Agreement is hereby confirmed and accepted as of the date first above written. LEHMAN BROTHERS INC. By ------------------------------------------ Name: Title: Acting on behalf of the several Underwriters named in Schedule II annexed hereto. SCHEDULE I [EXAMPLE ONLY--TO BE MODIFIED AS NECESSARY TO APPLY TO PARTICULAR SECURITY] Date of Underwriting Agreement: , 20 Registration Statement No.: 333-______________ Representatives and Addresses: Lehman Brothers Inc. Three World Financial Center New York, New York 10285 Title of Securities: Principal Amount or Number of Firm Securities to be issued: Maximum Principal Amount or Number of Option Securities to be issued: Issue Price: [Stated Maturity] [Expiration Date] [Settlement Date]: Payments: [Indenture][Warrant Agreement] [Unit Agreement][Other Document]: [Trustee][Warrant Agent] [Unit Agent][Other Issuing Agent]: 2 Calculation Agent: Form of Securities: Issuable jointly with other Securities: Repurchase provisions: Redemption provisions: Listing: Price to public: Purchase price: Currency of purchase: Form of Payment: First Delivery Date, Time and Location: Date: Time: Location: Lehman Brothers Holdings Inc. Three World Financial Center New York, New York 10285 Delayed Delivery Arrangements: SCHEDULE II UNDERWRITERS ------------ Lehman Brothers Inc........................... Total......................................... SCHEDULE III DELAYED DELIVERY CONTRACT , 20 [Insert name and address of lead Representative] Dear Sirs: The undersigned hereby agrees to purchase from Lehman Brothers Holdings Inc. (the "Company"), and the Company agrees to sell to the undersigned, [$] [principal amount] [number] of the Company's [Title of Securities] (hereinafter called the "Securities"), offered by the Company's Prospectus dated , 20 , and Prospectus Supplement dated , 20 , receipt of a copy of which is hereby acknowledged, at a purchase price of [ % of the principal amount thereof, plus accrued interest from the date from which interest accrues as set forth below] [ per Warrant, Purchase Contract or Unit], and on the further terms and conditions set forth in this contract. [The undersigned will purchase the Securities from the Company on , 20 , (the "Delivery Date") [and interest on the Securities so purchased will accrue from , 20 )]. [The undersigned will purchase the Securities from the Company on the delivery date or dates and in the principal amount or amounts set forth below:
Number of Warrants, Principal Purchase Amount of Contracts Debt Date from Which or Units Securities Delivery Date Interest Accrues - --------------------------------------------------------------------------- [$] , 20 , 20 [$] , 20 , 20
Each such date on which Securities are to be purchased hereunder is hereinafter referred to as a "Delivery Date"]. Payment for the Securities to be purchased by the undersigned shall be made on or before [a.m.][p.m.], New York City time, on [the] [each] Delivery Date to or upon the order of the Company in New York Clearing House (next day) funds, at your office or at such other place as shall be agreed between the Company and the undersigned upon delivery to the undersigned of the Securities in definitive fully registered form and in such authorized denominations and registered in such names as the undersigned may request by written or telegraphic communication addressed to the Company not less than five full business days prior to the Delivery Date. If no request is received, the Securities will be registered in the name of the undersigned and issued in a denomination equal to the aggregate principal amount of Securities to be purchased by the undersigned on the Delivery Date. 2 The obligation of the undersigned to take delivery of and make payment for Securities on [the][each] Delivery Date, and the obligation of the Company to sell and deliver Securities on the Delivery Date, shall be subject to the conditions (and neither party shall incur any liability by reason of the failure thereof) that (1) the purchase of Securities to be made by the undersigned, which purchase the undersigned represents is not prohibited on the date hereof, shall not on [the][each] Delivery Date be prohibited under the laws of the jurisdiction to which the undersigned is subject, and (2) the Company, on or before [the][each] Delivery Date, shall have sold to certain underwriters (the "Underwriters") such principal amount of Debt Securities and/or number of Warrants, Purchase Contracts or Units as is to be sold to them pursuant to the Underwriting Agreement referred to in the Prospectus and Prospectus Supplement mentioned above. Promptly after completion of such sale to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith. The obligation of the undersigned to take delivery of and make payment for the Securities, and the obligation of the Company to cause the Securities to be sold and delivered, shall not be affected by the failure of any purchaser to take delivery of and make payment for the Securities pursuant to other contracts similar to this contract. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. It is understood that acceptance of this contract and other similar contracts is in the Company's sole discretion and, without limiting the foregoing, need not be on a first come, first served basis. If this contract is acceptable to the Company, it is required that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the undersigned, as of the date first above written, when such counterpart is so mailed or delivered. 3 This agreement shall be governed by and construed in accordance with the laws of the State of New York. Very truly yours, ----------------------------------- (Name of Purchaser) By --------------------------------- (Signature and Title of Officer) --------------------------------- (Address) Accepted: Lehman Brothers Holdings Inc. By ------------------------------------ (Authorized Signature) SCHEDULE IV A. ADDITIONAL REPRESENTATIONS AND WARRANTIES The Company further represents and warrants to each Underwriter that: B. ADDITIONAL AGREEMENTS The Company further agrees with the several Underwriters that: C. ADDITIONAL OPINIONS The opinion of an Associate General Counsel or Deputy General Counsel or the Chief Legal Officer for the Company shall be to the further effect that: D. ADDITIONAL CONDITIONS PRECEDENT The obligations of the Underwriters to purchase the Securities shall be subject to the further conditions that: EX-4.09 3 a2048768zex-4_09.txt EXHIBIT 4.09 EXHIBIT 4.09 [Form of Senior Debt Security-Fixed Rate Note] [FORM OF FACE OF SECURITY] LEHMAN BROTHERS HOLDINGS INC. $ CUSIP % NOTE DUE LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company"), for value received, hereby promises to pay to or registered assigns, at the office or agency of the Company in the Borough of Manhattan, The City of New York, the principal sum of Dollars, on , 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, and to pay interest (computed on the basis of a 360-day year of twelve 30-day months), semiannually on and of each year, commencing , on said principal sum at said office or agency, in like coin or currency, at the rate per annum specified in the title of this Note, [and (to the extent that the payment of such interest shall be legally enforceable), at such rate per annum on any overdue principal and premium and on any overdue installment of interest] from the or the , as the case may be, next preceding the date of this Note to which interest has been paid or duly provided for, unless the date hereof is a date to which interest has been paid or duly provided for, in which case from the date of this Note, or, if no interest has been paid or duly provided for on the Notes, from , until payment of said principal sum has been made or duly provided for. The interest so payable on any or will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note is registered at the close of business on the [last] [fifteenth] day of the calendar month preceding such or . 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. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. 1 This Note 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, any Vice Chairman, its President, its Chief Financial Officer 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: LEHMAN BROTHERS HOLDINGS INC. By ___________________________ [Title] Attest: ___________________________ [Title] 2 [FORM OF REVERSE OF SECURITY] LEHMAN BROTHERS HOLDINGS INC. % NOTE DUE This Note is one of a duly authorized series of Notes of the Company designated as the % Notes Due of the Company (herein called the "Notes"), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $ . The Notes are one of an indefinite number of series of debt securities of the Company (herein collectively called the "Securities") issued or issuable under and pursuant to an indenture dated as of (herein called the "Indenture"), duly executed and delivered by the Company and . Trustee (herein called the "Trustee"), 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 Trustee, the Company and the holders of the Securities. The separate series of Securities may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions or repayment or repurchase rights (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided. In case an Event of Default with respect to the Notes, as defined in the Indenture, shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66 2/3% in aggregate principal amount of each series of the Securities at the time Outstanding to be affected (each series voting as a class), evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; provided, however, that no such supplemental indenture shall, among other things, (i) extend 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 thereon payable in any coin or currency other than that hereinabove provided, without the consent of the holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of all the Securities of such series waive any past default or Event 3 of Default under the Indenture with respect to such series and its consequences, except a default in the payment of interest, if any, on 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 Note shall be conclusive and binding upon such holder and upon all future holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Note at the place, at the respective times, at the rate, and in the coin or currency herein prescribed. The Notes are issuable in registered form without coupons in denominations of $ and any multiple of $ . At the option of the holders thereof, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, pursuant to the provisions of the Indenture or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, and in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, except for any tax or other governmental charges imposed in connection therewith, Notes may be exchanged for an equal aggregate principal amount of Notes of other authorized denominations. [The Notes may not be redeemed before , . On and after that date and prior to maturity the Company may, at its option, redeem the Notes, either as a whole or from time to time in part, at the redemption price of 100% of the principal amount of the Notes being redeemed, together with accrued interest to the date fixed for redemption.] [Other Alternative Redemption or Sinking Fund Provisions.] [As provided in the Indenture, notice of redemption to the holders of Notes to be redeemed as a whole or in part shall be given by mailing a notice of redemption not less than 30 nor more than 60 days prior to the date fixed for redemption to their last addresses as they appear on the registry books of the Company.] The Company, the Trustee, and any agent of the Company or of the Trustee may deem and treat the registered holder hereof as the absolute owner of this Note (whether or not this Note 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 Note. 4 No recourse for the payment of the principal of, premium, if any, or interest on this Note, 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 Note, 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. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 5 EX-4.10 4 a2048768zex-4_10.txt EXHIBIT 4.10 EXHIBIT 4.10 [Form of Senior Debt Security-Variable Rate Note] [FORM OF FACE OF SECURITY] LEHMAN BROTHERS HOLDINGS INC. $ CUSIP VARIABLE RATE NOTE DUE LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company"), for value received, hereby promises to pay to or registered assigns, at the office or agency of the Company in the Borough of Manhattan, The City of New York, the principal sum of Dollars, on , 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, and to pay interest (computed on the basis of a 360-day year of twelve 30-day months), semi-annually(1) on and of each year, commencing , on said principal sum at said office or agency, in like coin or currency, at the rate per annum from time to time in effect as described below, [and (to the extent that the payment of such interest shall be legally enforceable), at such rate per annum on any overdue principal and premium and on any overdue installment of interest] from the or the , as the case may be, next preceding the date to which interest has been paid or duly provided for, unless the date hereof is a date to which interest has been paid or duly provided for, in which case from the date of this Note, or, if no interest has been paid or duly provided for on the Notes, from , until payment of said principal sum has been made or duly provided for. Such interest payments will include interest accrued through the last day of the preceding calendar month, provided that the interest payment to be made at maturity will include interest accrued through the day preceding the maturity date. The interest so payable on any or will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note is registered at the close - ---------- (1) This form provides for semi-annual interest payments. The form, as used, may be modified to provide, alternatively, for annual, quarterly or other periodic interest payments. 1 of business on the [last] [fifteenth] day of the calendar month preceding such or . 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. [Provisions for the determination of the interest rate.] The interest rate applicable to each [insert interest payment period] will be determined as promptly as practicable by the Company as described herein and the Company will furnish the Trustee with an Officers' Certificate setting forth the interest rate applicable to each [insert interest payment period] promptly after such rate has been determined. The resulting rate will be rounded to the nearest five decimal places. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. This Note 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, SHEARSON LEHMAN BROTHERS HOLDINGS INC. has caused this instrument to be signed by its Chairman of the Board, any Vice Chairman, its President, its Chief Financial Officer 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: LEHMAN BROTHERS HOLDINGS INC. By -------------------------- [Title] Attest: - ---------------------------- [Title] 2 [FORM OF REVERSE OF SECURITY] LEHMAN BROTHERS HOLDINGS INC VARIABLE RATE NOTE DUE This Note is one of a duly authorized series of Notes of the Company designated as the Variable Rate Notes Due of the Company (herein called the "Notes"), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $ . The Notes are one of an indefinite number of series of debt securities of the Company (herein collectively called the "Securities") issued or issuable under and pursuant to an indenture dated as of (herein called the "Indenture"), duly executed and delivered by the Company and , Trustee (herein called the "Trustee"), 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 Trustee, the Company and the holders of the Securities. The separate series of Securities may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions or repayment or repurchase rights (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided. In the case an Event of Default with respect to the Notes, as defined in the Indenture, shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66 2/3% in aggregate principal amount of each series of the Securities at the time Outstanding to be affected (each series voting as a class), evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the securities of all such series; provided, however, that no such supplemental indenture shall, among other things, (i) extend 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 thereon payable in any coin or currency other than that hereinabove provided, without the consent of the holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of all the Securities waive any past default or Event of Default 3 under the Indenture with respect to such series and its consequences, except a default in the payment of interest on 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 Note shall be conclusive and binding upon such holder and upon all future holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Note at the place, at the respective times, at the rate, and in the coin or currency herein prescribed. The Notes are issuable in registered form without coupons in denominations of $ and any multiple of $ . At the option of the holders thereof, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, The City of New York pursuant to the provisions of the Indenture or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, and in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, except for any tax or other governmental charges imposed in connection therewith, Notes may be exchanged for an equal aggregate principal amount of Notes of other authorized denominations. [Alternative Redemption or Repayment Options Provisions] [As Provided in the Indenture, notice of redemption to the holders of Notes to be redeemed as a whole or in part shall be given by mailing a notice of redemption not less than nor more than 60 days prior to the date fixed for redemption to their last addresses as they appear on the registry books of the Company.] The Company, the Trustee, and any agent of the Company or of the Trustee may deem and treat the registered holder hereof as the absolute owner of this Note (whether or not this Note 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 Note. No recourse for the payment of the principal of, premium, if any, or interest on this Note, 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 Note; or because of the creation of any indebtedness represented thereby, shall be had against an incorporator, stockholder, officer or director, as such, past, 4 present or future, of the Company or of any successor corporation, either directly or through the Company of 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 here of, expressly waived and released. All terms used in this Note which are defined in Indenture shall have the meanings assigned to them in the Indenture. 5 EX-4.11 5 a2048768zex-4_11.txt EXHIBIT 4.11 EXHIBIT 4.11 [FORM OF SENIOR DEBT SECURITY--ZERO COUPON NOTE] [FORM OF FACE OF SECURITY] FOR PURPOSES OF SECTIONS 1272 AND 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF THIS NOTE IS $ PER $1,000.00 OF FACE AMOUNT, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS NOTE IS $ PER $1,000 OF FACE AMOUNT, THE ISSUE DATE IS , , AND THE YIELD TO MATURITY IS %. NUMBER $ CUSIP LEHMAN BROTHERS HOLDINGS INC. ZERO COUPON NOTE DUE LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company"), for value received, hereby promises to pay to or registered assigns, at the office or agency of the Company in the Borough of Manhattan, The City of New York, the principal sum of DOLLARS, which amount includes accrued amortization of the original Issue discount, on in such coin or currently of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. There is no periodic payment of interest on this Note. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. This Note 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 President, its Chief Financial Officer 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 LEHMAN BROTHERS HOLDINGS INC. By: ________________________ Title: Attest:________________________ Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within mentioned Indenture. CITIBANK, N.A. as Trustee By:_________________________ Title: 2 [FORM OF REVERSE OF SECURITY] LEHMAN BROTHERS HOLDINGS INC. ZERO COUPON NOTE DUE This note is one of a duly authorized series of Notes of the Company designated as the Zero Coupon Senior Notes Due of the Company (herein called the "Notes"), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $ . The Notes are one of an indefinite number of series of debt securities of the Company (herein collectively called the "Securities") issued or issuable under and pursuant to 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"), 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 Trustee, the Company and the holders of the Securities. The separate series of Securities may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions or repayment or repurchase rights (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided. [Prior to maturity the Company may, at its option, redeem the Notes,] either as a whole or from time to time in part, at the redemption price of 100% of the principal amount at Stated Maturity of the Notes being redeemed.] [As provided in the Indenture, notice of redemption to the holders of] Notes to be redeemed as a whole, or in part shall be given by mailing a notice of redemption not less than 30 nor more than 60 days prior to the date fixed for redemption to their last addresses as they appear on the registry books of the Company. If fewer than all of the Notes are to be redeemed, the Company may specify the maturity or maturities of the Notes to be redeemed.] The Notes are not entitled to any sinking fund. In case an Event of Default with respect to the Notes, as defined in the Indenture, shall have occurred and be continuing, an amount equal to the sum of (i) the issue price of the Notes plus (ii) the accrued amortization of original issue discount attributable on a ratable basis from the date of issuance to the date of declaration, may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66-2/3% in aggregate principal amount of each series of the 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 3 things, (i) extend 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 thereon payable in any coin or currency other than as hereinabove provided, without the consent of the holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental Indenture, without the consent of the holders of each Security so affected. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of all the Securities of such series waive any past Default or Event of Default under the Indenture with respect to such series and the consequences, except a default in the payment of interest, if any, on 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 Note shall be conclusive and binding upon such holder and upon all future holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Note at the place, at the time and in the coin or currency herein prescribed. The Notes are issuable in registered form without coupons in denominations of $1,000 and any multiple of $1,000. At the option of the holders thereof, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, pursuant to the provisions of the Indenture or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, and in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, except for any tax or other governmental charges imposed in connection therewith, Notes may be exchanged for an equal aggregate principal amount of Notes of other authorized denominations. The Company, the Trustee, and any agent of the Company or of the Trustee may deem and treat the registered holder hereof as the absolute owner of this Note (whether or not this Note 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 Note. No recourse for the payment of the principal of this Note, 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 Note, 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 4 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 Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of this Note is payable, 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 his attorney duly authorized in writing, and thereupon one or more new Notes of this series of like tenor or authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees. The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 5 EX-4.12 6 a2048768zex-4_12.txt EXHIBIT 4.12 EXHIBIT 4.12 [Form of Senior Debt Security--Index Note] LEHMAN BROTHERS HOLDINGS INC. [Title of Security] Number R-1 $ CUSIP 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 , , or if a Market Disruption Event occurs, Business Days after the Payment Determination Date (the "Stated Maturity"), in such coin or currency of the United States of America at the time of payment shall be legal tender for the payment of public and private debts, for each $1,000 principal amount of the Securities represented hereby, an amount equal to (the "Maturity Payment Amount"). Any amount payable at Stated Maturity hereon will be paid only upon presentation and surrender of this Security. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. 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: LEHMAN BROTHERS HOLDINGS INC. By: ---------------------------------- Name: Title: Attest: ------------------------------ Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: CITIBANK, N.A. as Trustee By: -------------------------------------------- Name: Title: Authorized Signatory 2 (Reverse of Security) This Security is one of a duly authorized series of Securities of the Company designated as Due , (herein called the "Securities"). The Company may, without the consent of the holders of the Securities, create and issue additional notes ranking equally with the Securities and otherwise similar in all respects so that such further notes shall be consolidated and form a single series with the Securities; provided that no additional notes can 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 , as amended and supplemented (herein called the "Indenture"), duly executed and delivered by the Company and , 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 Maturity Payment Amount shall be determined by the Calculation Agent pursuant to the Calculation Agency Agreement. All percentages resulting from any calculation with respect to the Securities will be rounded at the Calculation Agent's discretion, except that any calculation with respect to the interest rate, if any, of the Securities shall be rounded upwards or downward, as appropriate, to the next higher or lower one-hundred thousandth of a percentage point. The Trustee shall fully rely on the determination by the Calculation Agent of the Maturity Payment Amount and shall have no duty to make any such determination. This Security is not subject to any sinking fund and is not redeemable prior to its Stated Maturity. If an Event of Default with respect to the Securities shall occur and be continuing, the amounts payable on all of the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. The amount payable to the Holder hereof upon any acceleration permitted under the Indenture will be equal to the Maturity Payment Amount calculated as though the date of acceleration was the Stated Maturity and the date Business Days prior thereto was the Payment Determination Date. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66 2/3% in aggregate principal amount of each series of Securities at the time Outstanding to be affected (each series voting as a class), evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to, or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; PROVIDED, HOWEVER, that no such supplemental indenture shall, among other things, (i) change the fixed maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or interest therein payable in any coin or currency other than that hereinabove provided, without the consent of the holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the 3 holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences, except a default in the payment of interest, if any or the principal of, or premium if any, on any of the Securities of such series, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future holders and owners of this Security and any Securities which may be issued in exchange or substitution hereof, irrespective of whether or not any notation thereof is made 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, will be issued to the designated transferee or transferees. 4 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. "Business Day", notwithstanding any provision in the Indenture, shall mean any day that is not a Saturday, a Sunday or a day on which the NYSE or is not open for trading or banking institutions or trust companies in the City of New York are authorized or obligated by law or executive order to close. "Calculation Agency Agreement" shall mean the Calculation Agency Agreement, dated as of , , between the Company and the Calculation Agent, as amended from time to time. "Calculation Agent" shall mean the person that has entered into an agreement with the Company providing for, among other things, the determination of the Maturity 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 Business Days prior to , . "Close of Trading" shall mean 4:00 p.m., New York City time. "Closing Level" shall mean the last reported level of the Index or the Successor Index, as the case may be, at 4:00 p.m., New York City time, as reported by or the publisher of the Successor Index, as the case may be. "Index" shall mean , as calculated by . "Market Disruption Event", on any day, shall mean any of the following events as determined by the Calculation Agent: (i) A suspension, absence or material limitation of trading in 20% of more of the underlying stocks which then comprise the Index or any Successor Index, as the case may be, 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 stocks are traded or, in the case of a common stock not listed or quoted in the United States, on the primary exchange, trading system or market for that 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 SEC 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 security traded on a bulletin board means a suspension, absence or material limitation of trading of that security for more than two hours or during the one hour period preceding 4:00 p.m., New York City time. 5 (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 the Index or any Successor Index, as the case may be, whether by reason of movements in price exceeding levels permitted by an exchange, trading system or market on which such options contracts 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 20% or more of the underlying stocks which then comprise the Index or any Successor Index, as the case may be, or in respect of options contracts related to the Index or any Successor Index, as the case may be, 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 options contract on the Index or any Successor Index, as the case may be, 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. "NYSE" shall mean the New York Stock Exchange. "Payment Determination Date" shall mean the Calculation Day; unless a Market Disruption Event occurs on the Calculation Day, in which case the first Business Day after the Calculation Day on which a Market Disruption Event does not occur. 6 "Stated Maturity" shall mean , , or (i) if , , is not a Business Day, the next Business Day, or (ii) if a Market Disruption Event occurs on the Calculation Day, Business Days after the Payment Determination Date on which has been determined. "Successor Index" shall mean such substitute index as the Calculation Agent may select pursuant to the Calculation Agency Agreement upon discontinuance of the Index. All terms used but not defined in this Security are used herein as defined in the Indenture. 7 EX-4.15 7 a2048768zex-4_15.txt EXHIBIT 4.15 EXHIBIT 4.15 [Form of Subordinated Debt Security] [FORM OF FACE OF DEBENTURE] [IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE FOLLOWING: THIS DEBENTURE IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS DEBENTURE IS EXCHANGEABLE FOR DEBENTURES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE CO., HAS AN INTEREST HEREIN.] NO. D- $____________ CUSIP NO. LEHMAN BROTHERS HOLDINGS INC. [___% QUARTERLY INCOME CAPITAL SECURITIES (SERIES _ SUBORDINATED INTEREST DEFERRABLE DEBENTURE DUE ____] [____% JUNIOR SUBORDINATED DEBENTURE DUE ___]] Lehman Brothers Holdings Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company"), for value received, hereby promises to pay to ____________, at the office or agency of the Company in the Borough of Manhattan, the City of New York, the principal sum of _________________ DOLLARS on ________ __, ____, 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, and to pay interest on said principal sum at said office or agency, in like coin or currency, at the rate per annum specified in the title of this Debenture until the principal hereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum during the period in which such principal is overdue, compounded [quarterly], to the registered holder of this Debenture, until payment of said principal sum has been made or duly provided for. Interest on this Debenture, (computed as set forth herein) shall be payable [quarterly] [If the Debenture is a QUICs Debenture, insert the following: (subject to deferral as set forth herein)] in arrears on [______ __, ______ __, ______ __ and ______ __] of each year (each an "Interest Payment Date"), commencing ______ __, ____, from the Interest Payment Date next preceding the date of this Debenture to which interest has been paid or duly provided for, unless the date hereof is a date to which interest has been paid or duly provided for, in which case from the date of this Debenture, or, if no interest has been paid or duly provided for on this Debenture, from ______ __,____. The interest so payable on any Interest Payment Date will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Debenture (or one or more Predecessor Securities, as defined in said Indenture) is registered at the close of business on the fifteenth day of the calendar month (each a "Record Date") in which such Interest Payment Date occurs. 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 in the registry books of the Company. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS DEBENTURE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. This Debenture 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. ` LEHMAN BROTHERS HOLDINGS INC. By:________________________________ Name: Title: Attest: _____________________________________ Name: Title: 2 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: THE CHASE MANHATTAN BANK, as Trustee By:___________________________ Name: Title: 3 [FORM OF REVERSE OF DEBENTURE] (Reverse of Debenture) LEHMAN BROTHERS HOLDINGS INC. [___% QUARTERLY INCOME CAPITAL SECURITIES (SERIES _ SUBORDINATED INTEREST DEFERRABLE DEBENTURE, DUE ____)] [___% JUNIOR SUBORDINATED DEBENTURE, DUE ____] This Debenture is one of a duly authorized series of Debentures of the Company designated as the [If this Debenture is a QUICs Debenture, insert the following: ____% Quarterly Income Capital Securities (Series _ Subordinated Interest Deferrable Debentures, Due ____)] [If this Debenture is not a QUICs Debenture, insert the following: ___% Junior Subordinated Debenture, Due ____] of the Company (herein called the "Debentures"), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $____________. The Debentures are one of an indefinite number of series of debt securities of the Company (herein collectively called the "Securities"), issued or issuable under and pursuant to an indenture, dated as of February 1, 1996, as amended and supplemented (herein called the "Indenture"), between the Company and Chase Manhattan Bank, formerly known as Chemical Bank, as Trustee (herein called the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Debentures. The separate series of Securities may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions or repayment or repurchase rights (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default, as defined in the Indenture, and may otherwise vary as provided in the Indenture. Payment of the principal of and interest on this Debenture is, to the extent provided in the Indenture, subordinated and subject in right of payment to the prior payment in full when due of the principal of (and premium, if any) and interest, if any, on all Senior Debt, as defined in the Indenture, of the Company and this Debenture is issued subject to the provisions of the Indenture with respect thereto. Each registered holder of this Debenture, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and expressly directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee as his or her attorney-in-fact for any and all such purposes. Each registered holder hereof, by his or her acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Debt, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. 4 Subject to Article Eleven of the Indenture, at any time on or after _________ __,____ and prior to maturity, the Company shall have the right to redeem this Debenture at the option of the Company, in whole or in part, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest thereon to the date fixed for redemption. Any redemption pursuant to this paragraph shall be made upon not less than 30 nor more than 60 days notice to the Trustee and Holders of the Debentures. If less than all the Debentures are to be redeemed by the Company, the Debentures to be redeemed will be selected by lot or by such other method as the Trustee shall deem fair and appropriate. The Debentures are not subject to a sinking fund. In the event of redemption of this Debenture in part only, a new Debenture or Debentures of this series for the unredeemed portion hereof will be issued in the name of the registered holder hereof upon the surrender hereof at a Place of Payment (as defined in the Indenture). In case an Event of Default (as defined in the Indenture) with respect to the Debentures shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The omission by the Company to pay interest during a Deferral Period (as defined below) as permitted hereby shall not constitute an Event of Default under Section 501 of the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66-2/3% in aggregate principal amount of each series of the Securities at the time Outstanding to be affected (each series voting as a class), evidenced as provided in the Indenture, to execute supplemental indentures adding any provisions to, or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; PROVIDED, HOWEVER, that no such supplemental indenture shall, among other things, (i) change the fixed maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or interest thereon payable in any coin or currency other than that hereinabove provided, or amend the Indenture to modify its provisions relating to the subordination of each Security in a manner adverse to the holder thereof, without the consent of the holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences, except a default in the payment of interest, if any, on or the principal of, or premium, if any, on any of the Securities of such series. Any such consent or waiver by the holder of this Debenture shall be conclusive and binding upon such holder and upon all future holders and owners of this Debenture and any Debentures which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Debenture or such other Debentures. 5 No reference herein to the Indenture and no provisions of this Debenture or of the Indenture shall alter or impair the obligations of the Company, which is absolute and unconditional, to pay the principal of this Debenture at the place, at the time and in the coin or currency herein prescribed. The amount of interest payable for any period will be computed on the basis of twelve 30-day months and a 360-day year and for any period shorter than a full quarterly interest period, on the basis of the actual number of days elapsed in such period divided by 360 days. In the event that any date on which interest is payable on this Debenture is not a Business Day (as defined in the Indenture), then payment of the amount payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the original Interest Payment Date [,If this Debenture is a QUICs Debenture, insert the following: subject to certain rights of deferral described below]. [If this Debenture is a QUICs Debenture, insert the following: The Company shall have the right at any time, on one or more occasions, so long as an Event of Default has not occurred and is not continuing under the Indenture, to extend any interest payment period on this Debenture for a period (a "Deferral Period") not to exceed [20 consecutive quarterly] interest payment periods; provided that the date on which such Deferral Period ends must be on an Interest Payment Date and must be no later than ________ __, ____ or any date on which any Debentures are fixed for redemption, and, as a consequence, the [quarterly] interest payment on the Debentures would be deferred (but would continue to accrue with interest thereon compounded [quarterly] at the rate of interest on the Debentures, except to the extent payment of such interest is prohibited by law) during any such Deferral Period. On the Interest Payment Date at the end of each Deferral Period, the Company shall pay all interest then accrued and unpaid (compounded [quarterly], at the rate of interest on the Debentures, except to the extent payment of such interest is prohibited by law) to the date of payment, to the persons in whose name the Debentures are registered on the Record Date immediately preceding the Interest Payment Date at the end of such Deferral Period. The Company shall give the Trustee and the registered holders of Debentures (with the Trustee to be notified at least three days prior to notice to such holders) written notice of its election to defer interest payments or to extend the Deferral Period prior to the earlier of (i) the next scheduled [quarterly] Interest Payment Date or (ii) the date the Company is required to give notice of the record date of such related interest payment to the New York Stock Exchange or other applicable self-regulatory organization or to the registered holders of the Debentures but in ny event not less than two Business Days prior to such Record Date. During the Deferral Period, the Company will not, and will not permit any subsidiary to, (x) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company's capital stock or (y) make any payment of principal, interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank on a parity with or junior in interest to this Debenture or make any guarantee payments with respect to any guarantee by the Company of the debt securities of any Subsidiary of the Company if such guarantee ranks on a parity with or junior in interest to this Debenture (other than (a) dividends or distributions in common stock of the Company, (b) any declaration of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, and (c) purchases of common stock related to the issuance of common 6 stock or rights under any of the Company's benefit plans). During any Deferral Period, the Company may continue to extend the interest payment period by extending the Deferral Period, on one or more occasions by giving notice as aforesaid; provided that such Deferral Period, as extended, must end on an Interest Payment Date and in no event shall the aggregate Deferral Period, as extended, exceed [20 consecutive quarterly] interest payment periods or extend beyond __________ __, ____ or any date on which any of the Debentures are fixed for redemption. No interest shall be due and payable on the Debentures during a Deferral Period except at the end thereof.] Notwithstanding the provisions of Section 401(a)(B) of the Indenture, the Company may satisfy and discharge the entire indebtedness on all the Debentures as provided therein only when the Debentures are by their terms due and payable within one year. The Debentures are issuable in registered form without coupons in denominations of $__ and any multiple of $__. At the option of the holders thereof, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, pursuant to the provisions of the Indenture or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, and in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, except for any tax or other governmental charges imposed in connection therewith. Debentures may be exchanged for an equal aggregate principal amount of Debentures of like tenor and of other authorized denominations. The Company, the Trustee, and any agent of the Company or of the Trustee may deem and treat the registered holder hereof as the absolute owner of this Debenture (whether or not this Debenture 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 Debenture. No recourse for the payment of the principal of or the interest on this Debenture, 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 Debenture, 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. 7 As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Debenture is registrable in the Security Register, upon surrender of this Debenture for registration of transfer at the office or agency of the Company in any place where the principal of this Debenture is payable, 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 Debentures of this series of like tenor and of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees. THE INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. All items used in this Debenture which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 8 EX-5.01 8 a2048768zex-5_01.txt EXHIBIT 5.01 Exhibit 5.01 [LOGO OMITTED] LETTERHEAD OF LEHMAN BROTHERS HOLDINGS INC. BARRETT S. DiPAOLO Vice President Associate General Counsel Office of the General Counsel May 30, 2001 Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549 Ladies and Gentlemen: I am a Vice President and Associate General Counsel of Lehman Brothers Holdings Inc., a Delaware corporation ("the Company"). A Registration Statement on Form S-3 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), was filed by the Company with the Securities and Exchange Commission (the "SEC") on the date hereof. The Registration Statement relates to the registration of (i) debt securities consisting of senior debt (the "Senior Debt Securities") and subordinated debt (the "Subordinated Debt Securities"; together with the Senior Debt Securities, "Debt Securities"), (ii) warrants to purchase Debt Securities ("Debt Warrants"), (iii) warrants to purchase or sell, or representing the right to receive a cash value determined by reference to the performance, level, or value of, securities of the Company and/or one or more other issuers, one or more interest rates, one or more currencies, one or more commodities, any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, or one or more indices or baskets of the foregoing ("Universal Warrants", and, together with the Debt Warrants, the "Warrants"), all as shall be designated by the Company at the time of offering, (iv) contracts to purchase or sell, or representing the right to receive a cash value determined by reference to the performance, level, or value of, securities of the Company and/or one or more other issuers, one or more interest rates, one or more currencies, one or more commodities, any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event or circumstance, or one or more indices or baskets of the foregoing ("Purchase Contracts"), all as shall be designated by the Company at the time of offering, and (v) units ("Units") comprised of one or more Debt Securities, Debt Warrants, Universal Warrants and Purchase Contracts, for aggregate proceeds of up to U.S.$1,100,000,000 or the equivalent thereof in one or more foreign currencies or foreign currency units, all of which the Company may offer from time to time in one or more series. Purchase Contracts requiring the holders thereof to satisfy their obligations at the time of issuance are hereinafter referred to as "Prepaid Purchase Contracts", and other Purchase Contracts are hereinafter referred to as "Non-Prepaid Purchase Contracts". The Senior Debt Securities, Subordinated Debt Securities, Debt Warrants, Universal Warrants, Purchase Contracts and Units are hereinafter referred to as the "Securities". In connection with the foregoing, I have examined or have had members of my staff examine, and have relied on, originals or copies, certified or otherwise identified to our Securities and Exchange Commission May 30, 2001 Page 2 satisfaction, of such corporate records and documents as I have deemed necessary or relevant as the basis for my opinions hereinafter expressed, including, without limitation, the resolutions adopted by the Executive Committee of the Board of Directors of the Corporation authorizing the issuance of the Securities (the "Resolutions"). In such examination, I have assumed the genuineness of all signatures, the legal capacity of all persons executing such documents, the authenticity of all documents submitted to us as originals, the conformity to authentic original documents of all documents submitted to us as certified, conformed or photostatic copies and the truth and correctness of any representations and warranties contained therein. Based upon and subject to the foregoing, I am of the opinion that: 1. The Senior Debt Securities have been duly authorized, and the Indenture dated as of September 1, 1987, as amended and supplemented by the Supplemental Indenture dated as of November 25, 1987, the Second Supplemental Indenture dated as of November 27, 1990, the Third Supplemental Indenture dated as of September 13, 1991, the Fourth Supplemental Indenture dated as of October 4, 1993, the Fifth Supplemental Indenture dated as of October 1, 1995, and the Sixth Supplemental Indenture dated as of June 26, 1997 (collectively, the "Senior Indenture"), between the Company and Citibank, N.A., as Trustee (the "Senior Debt Trustee"), pursuant to which the Senior Debt Securities will be issued, has been duly executed and delivered; and when the Registration Statement has become effective under the Act, the terms of the Senior Debt Securities have been established in conformity with the Resolutions and the Senior Indenture and the Senior Debt Securities have been duly executed by the Company, authenticated by the Senior Debt Trustee in accordance with the terms of the Senior Indenture and issued and delivered against payment therefor, the Senior Debt Securities will be legally issued and will constitute valid and binding obligations of the Company, entitled to the benefits of the Senior Indenture, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. The Senior Debt Securities referred to in this paragraph include any Senior Debt Securities that may be issued as part of any Unit or upon exercise or otherwise pursuant to the terms of any other Security. 2. The Subordinated Debt Securities have been duly authorized, and the Indenture dated as of February 1, 1996, as amended and supplemented by the First Supplemental Indenture dated as of February 1, 1996 (collectively, the "Subordinated Indenture"), between the Company and The Chase Manhattan Bank, as successor to Chemical Bank, as Trustee (the "Subordinated Debt Trustee"), pursuant to which the Subordinated Debt Securities will be issued, has been duly executed and delivered; and when the Registration Statement has become effective under the Act, the terms of the Subordinated Debt Securities have been established in conformity with the Resolutions and the Subordinated Indenture and the Subordinated Debt Securities have been duly executed by the Company, authenticated by the Subordinated Debt Trustee in accordance with the terms of the Subordinated Indenture and issued and delivered against payment Securities and Exchange Commission May 30, 2001 Page 3 therefor, the Subordinated Debt Securities will be legally issued and will constitute valid and binding obligations of the Company, entitled to the benefits of the Subordinated Indenture, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. The Subordinated Debt Securities referred to in this paragraph include any Subordinated Debt Securities that may be issued as part of any Unit or upon exercise or otherwise pursuant to the terms of any other Security. 3. The Warrants have been duly authorized; and when the Registration Statement has become effective under the Act, the terms of the Warrants have been established in conformity with the Resolutions, a warrant agreement pursuant to which the Warrants will be issued (any such agreement, a "Warrant Agreement") between the Company and a warrant agent (the "Warrant Agent") has been duly executed and delivered and the Warrants have been duly executed by the Company, authenticated by the Warrant Agent in accordance with the terms of the applicable Warrant Agreement and issued and delivered against payment therefor, the Warrants will be legally issued and will constitute valid and binding obligations of the Company, entitled to the benefits of the applicable Warrant Agreement, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. The Warrants referred to in this paragraph include any Warrants that may be issued as part of any Unit or upon exercise or otherwise pursuant to the terms of any other Security. 4. The Prepaid Purchase Contracts have been duly authorized; and when the Registration Statement has become effective under the Act, the terms of the Prepaid Purchase Contracts have been established in conformity with the Resolutions and the Senior Indenture or the Subordinated Indenture, as the case may be, and the Prepaid Purchase Contracts have been duly executed by the Company, authenticated by the Senior Debt Trustee or the Subordinated Debt Trustee, as the case may be, in accordance with the terms of the Senior Indenture or the Subordinated Indenture, as the case may be, and issued and delivered against payment therefor, the Prepaid Purchase Contracts will be legally issued and will constitute valid and binding obligations of the Company, entitled to the benefits of the Senior Indenture or the Subordinated Indenture, as the case may be, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. The Prepaid Purchase Contracts referred to in this paragraph include any Prepaid Purchase Contracts that may be issued as part of any Unit or upon exercise or otherwise pursuant to the terms of any other Security. 5. The Non-Prepaid Purchase Contracts have been duly authorized; and when the Securities and Exchange Commission May 30, 2001 Page 4 Registration Statement has become effective under the Act, the terms of the Non-Prepaid Purchase Contracts have been established in conformity with the Resolutions, the governing document pursuant to which the Purchase Contracts will be issued has been duly executed and delivered and the Non-Prepaid Purchase Contracts have been duly executed by the Company, authenticated in accordance with the terms of the applicable governing document and issued and delivered against payment therefor, the Non-Prepaid Purchase Contracts will be legally issued and will constitute valid and binding obligations of the Company, entitled to the benefits of the applicable governing document, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. The Non-Prepaid Purchase Contracts referred to in this paragraph include any Non-Prepaid Purchase Contracts that may be issued as part of any Unit or upon exercise or otherwise pursuant to the terms of any other Security. 6. The Units have been duly authorized; and when the Registration Statement has become effective under the Act, the terms of the Units have been established in conformity with the Resolutions, a unit agreement pursuant to which the Warrants will be issued (any such agreement, a "Unit Agreement") between the Company and a unit agent (the "Unit Agent") has been duly executed and delivered and the Units have been executed by the Company, authenticated by the Unit Agent in accordance with the terms of the applicable Unit Agreement and issued and delivered against payment therefor, the Units will be legally issued and will constitute valid and binding obligations of the Company, entitled to the benefits of the applicable Unit Agreement, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. The Units referred to in this paragraph include any Units that may be issued upon exercise or otherwise pursuant to the terms of any other Security. With respect any Securities that are denominated or settled in any currency other than U.S. dollars, I note that (i) a court of the State of New York would be required to render a judgment or decree for money in an action on such a Security in such foreign currency, and such judgment or decree would be converted into the currency of the United States at the rate of exchange prevailing on the date of entry of such judgment or decree, and (ii) a United States federal court in New York may render a judgment or decree for money in an action on such a Security in U.S. dollars; provided that in either case I express no opinion as to the rate of exchange such court will actually apply. Securities and Exchange Commission May 30, 2001 Page 5 I am a member of the bar of the State of New York, and I express no opinion as to the laws of any jurisdiction other than the General Corporation Law of the State of Delaware, the laws of the State of New York and the laws of the United States of America. I hereby consent to the filing of this opinion (and this consent) as an exhibit to the Registration Statement and to the reference to me under the caption "Legal Matters" in the Registration Statement, without admitting that I am an "expert" under the Act, or the rules and regulations of the SEC issued thereunder, with respect to any part of the Registration Statement, including this exhibit. Very truly yours, /s/ Barrett S. DiPaolo Barrett S. DiPaolo Associate General Counsel EX-23.02 9 a2048768zex-23_02.txt EXHIBIT 23.02 Exhibit 23.02 Consent of Independent Auditors We consent to the reference to our firm as experts under the caption "Experts" in this Registration Statement on Form S-3 and related Prospectuses of Lehman Brothers Holdings Inc. (the "Company") for the registration of $1,100,000,000 of Debt Securities of the Company, Warrants of the Company, Purchase Contracts of the Company and Units of the Company, and to the incorporation by reference therein of our report dated January 4, 2001 with respect to the consolidated financial statements and financial statement schedule of the Company included in its Annual Report on Form 10-K for the year ended November 30, 2000, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP ERNST & YOUNG LLP New York, New York May 30, 2001 EX-24.01 10 a2048768zex-24_01.txt EXHIBIT 24.01 Exhibit 24.01 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Thomas A. Russo, Jeffrey A. Welikson and Barrett S. Di Paolo and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign the Registration Statement on Form S-3 of Lehman Brothers Holdings Inc. filed concurrently herewith, and any and all amendments (including post-effective amendments) and supplements to such Registration Statement and any Registration Statement previously filed by the Registrant or a predecessor in interest, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof. Dated: May 30, 2001 Signature Title --------- ----- /s/ Richard S. Fuld, Jr. Chief Executive Officer and - ---------------------------------- Chairman of the Board of Directors Richard S. Fuld, Jr. (principal executive officer) /s/ David Goldfarb Chief Financial Officer - ---------------------------------- (principal financial and accounting David Goldfarb officer) /s/ Michael L. Ainslie Director - ---------------------------------- Michael L. Ainslie /s/ John F. Akers Director - ---------------------------------- John F. Akers /s/ Roger S. Berlind Director - ---------------------------------- Roger S. Berlind /s/ Thomas H. Cruikshank Director - ---------------------------------- Thomas H. Cruikshank /s/ Henry Kaufman Director - ---------------------------------- Henry Kaufman /s/ John D. Macomber Director - ---------------------------------- John D. Macomber /s/ Dina Merrill Director - ---------------------------------- Dina Merrill EX-25.01 11 a2048768zex-25_01.txt EXHIBIT 25.01 EXHIBIT 25.01 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE Check if an application to determine eligibility of a Trustee pursuant to Section 305 (b)(2) ____ ------------------------ CITIBANK, N.A. (Exact name of trustee as specified in its charter) 13-5266470 (I.R.S. employer identification no.) 399 Park Avenue, New York, New York 10043 (Address of principal executive office) (Zip Code) ----------------------- LEHMAN BROTHERS HOLDINGS INC. (Exact name of obligor as specified in its charter) Delaware 13-3216325 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 3 World Financial Center New York, New York 10285 (Address of principal executive offices) (Zip Code) ------------------------- Debt Securities (Title of the indenture securities) Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. NAME ADDRESS ---- ------- Comptroller of the Currency Washington, D.C. Federal Reserve Bank of New York 33 Liberty Street New York, NY Federal Deposit Insurance Corporation Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. Item 16. List of Exhibits. List below all exhibits filed as a part of this Statement of Eligibility. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as exhibits hereto. Exhibit 1 - Copy of Articles of Association of the Trustee, as now in effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983) Exhibit 2 - Copy of certificate of authority of the Trustee to commence business. (Exhibit 2 to T-1 to Registration Statement No. 2-29577). Exhibit 3 - Copy of authorization of the Trustee to exercise corporate trust powers. (Exhibit 3 to T-1 to Registration Statement No. 2-55519) 2 Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1 to Registration Statement No. 33-34988) Exhibit 5 - Not applicable. Exhibit 6 - The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration Statement No. 33-19227.) Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A. (as of March 31, 2001-attached) Exhibit 8 - Not applicable. Exhibit 9 - Not applicable. ------------------ SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, Citibank, N.A., a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York and State of New York, on the 30th day of May, 2001. CITIBANK, N.A. By /S/ Wafaa Orfy ------------------------------ Wafaa Orfy Assistant Vice President 3 EXHIBIT 7 TO FORM T-1 Charter No. 1461 Comptroller of the Currency Northeastern District REPORT OF CONDITION CONSOLIDATED DOMESTIC AND FOREIGN SUBSIDIARIES OF CITIBANK, N.A. OF NEW YORK IN THE STATE OF NEW YORK, AT THE CLOSE OF BUSINESS ON MARCH 31, 2001, PUBLISHED IN RESPONSE TO CALL MADE BY COMPTROLLER OF THE CURRENCY, UNDER TITLE 12, UNITED STATES CODE, SECTION 161. CHARTER NUMBER 1461 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT.
ASSETS THOUSANDS OF DOLLARS Cash & balances due: Noninterest-bearing balances ............................$ 8,899,000 Interest-bearing balances ............................... 21,247,000 Securities: Held-to-Maturity securities ............................ 0 Available-for-sale securities............................ 39,868,000 Federal funds sold.......................................... 11,252,000 Loans and leases held for sale ............................ 4,215,000 Loans and leases, net of unearned income ...... 242,480,000 LESS: Allowance for loan and lease losses...... 4,544,000 ----------- Loans and leases, net of earned income and allowance ....... 237,936,000 Trading assets.............................................. 39,123,000 Premises and fixed assets .................................. 3,974,000 Other real estate owned .................................... 286,000 Investments in unconsolidated subsidiaries .............................................. 867,000 Customers' liability on acceptances outstanding ................................. 1,528,000 Intangible assets: Goodwill ................................................... 2,273,000 Other intangible assets..................................... 3,595,000 Other assets................................................ 20,806,000 ------------ TOTAL ASSETS ...............................................$395,869,000 ===========
4 LIABILITIES Deposits: In domestic offices......................................$ 71,054,000 Noninterest-bearing...................... 12,620,000 Interest-bearing ........................ 58,434,000 In foreign offices....................................... 212,602,000 Noninterest-bearing...................... 14,351,000 Interest-bearing......................... 198,251,000 Federal funds purchased and securities sold................. 6,932,000 Trading liabilities ........................................ 29,238,000 Other borrowed money ....................................... 23,697,000 Bank's liability on acceptances ............................ 1,528,000 Subordinated notes and debentures........................... 8,675,000 Other liabilities........................................... 14,481,000 ------------ TOTAL LIABILITIES ..........................................$368,207,000 ------------ EQUITY CAPITAL Perpetual preferred stock...................................$ 0 Common stock................................................ 751,000 Surplus .................................................... 11,554,000 Retained earnings .......................................... 15,961,000 Accumulated other comprehensive income ..................... (813,000) Other equity capital components............................. 0 ------------ TOTAL EQUITY CAPITAL........................................$ 27,453,000 ------------ TOTAL LIABILITIES, MINORITY INTEREST AND EQUITY CAPITAL.....................................................$395,869,000 ============
I, Roger W. Trupin, Controller of the abovenamed bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. ROGER W. TRUPIN CONTROLLER We, the undersigned directors, attest to the correctness of this Report of Condition. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. VICTOR J. MENEZES WILLIAM R. RHODES ALAN S. MACDONALD DIRECTORS 5 EX-25.02 12 a2048768zex-25_02.txt EXHIBIT 25.02 EXHIBIT 25.02 ------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE Check if an application to determine eligibility of a Trustee pursuant to section 305(b)(2) ________ ---------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- LEHMAN BROTHERS HOLDINGS INC. (Exact name of obligor as specified in its charter) DELAWARE 13-3216325 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) THREE WORLD FINANCIAL CENTER 10285 NEW YORK, NEW YORK (Zip Code) (Address of principal executive offices) ---------------------------------------- DEBT SECURITIES (Title of the indenture securities) ----------------------------------------- Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th day of May, 2001. THE CHASE MANHATTAN BANK By /s/ F. Springer ------------------------------------------ F. Springer Vice President EXHIBIT 7 TO FORM T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin...................................$ 22,648 Interest-bearing balances........................... 6,608 Securities: Held to maturity securities......................... 556 Available for sale securities....................... 66,556 Federal funds sold and securities purchased under agreements to resell.............................. 35,508 Loans and lease financing receivables: Loans and leases, net of unearned income... $158,034 Less: Allowance for loan and lease losses.. 2,399 Less: Allocated transfer risk reserve ..... 0 -------- Loans and leases, net of unearned income, allowance, and reserve............................ 155,635 Trading Assets......................................... 59,802 Premises and fixed assets (including capitalized leases)................................. 4,398 Other real estate owned................................ 20 Investments in unconsolidated subsidiaries and associated companies................................ 338 Customers' liability to this bank on acceptances outstanding......................................... 367 Intangible assets...................................... 4,794 Other assets........................................... 19,886 -------- TOTAL ASSETS........................................... $377,116 ========
- 4 - LIABILITIES Deposits In domestic offices................................. $132,165 Noninterest-bearing .................... $ 54,608 Interest-bearing ....................... 77,557 In foreign offices, Edge and Agreement subsidiaries and IBF's ............................. 106,670 Noninterest-bearing .................... $ 6,059 Interest-bearing ....................... 100,611 Federal funds purchased and securities sold under agreements to repurchase ........................... 45,967 Demand notes issued to the U.S. Treasury .............. 500 Trading liabilities.................................... 41,384 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less ...... 6,722 With a remaining maturity of more than one year through three years.......................... 0 With a remaining maturity of more than three years.. 276 Bank's liability on acceptances executed and outstanding ........................................ 367 Subordinated notes and debentures ..................... 6,349 Other liabilities ..................................... 14,515 -------- TOTAL LIABILITIES ..................................... $354,915 --------
EQUITY CAPITAL Perpetual preferred stock and related surplus ......... $ 0 Common stock .......................................... 1,211 Surplus (exclude all surplus related to preferred stock).................................... 12,614 Undivided profits and capital reserves ................ 8,658 Net unrealized holding gains (losses) on available-for-sale securities ................... (298) Accumulated net gains (losses) on cash flow hedges .... 0 Cumulative foreign currency translation adjustments ... 16 TOTAL EQUITY CAPITAL .................................. 22,201 -------- TOTAL LIABILITIES AND EQUITY CAPITAL .................. $377,116 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. DOUGLAS A. WARNER III ) WILLIAM B. HARRISON JR. )DIRECTORS ELLEN V. FUTTER ) -5- -----END PRIVACY-ENHANCED MESSAGE-----