0000950136-01-501496.txt : 20011009 0000950136-01-501496.hdr.sgml : 20011009 ACCESSION NUMBER: 0000950136-01-501496 CONFORMED SUBMISSION TYPE: 8-A12B PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20011003 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: 8-A12B SEC ACT: 1934 Act SEC FILE NUMBER: 001-09466 FILM NUMBER: 1751079 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 8-A12B 1 file001.txt FORM 8-A12B =============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-A FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 LEHMAN BROTHERS HOLDINGS INC. (Exact name of registrant as specified in its charter) DELAWARE (State of incorporation or organization) 13-3216325 IRS Employer Identification No.) 3 WORLD FINANCIAL CENTER NEW YORK, NEW YORK 10285 (Address of principal executive offices, including zip code) Securities to be registered pursuant to Section 12(b) of the Act: TITLE OF EACH CLASS TO BE SO REGISTERED: NAME OF EACH EXCHANGE ON WHICH EACH CLASS IS TO BE REGISTERED: RAPIDS(sm) Return Accelerated PortfolIo Debt Securities Notes Due November 5, 2002 The American Stock Exchange LLC If this form relates to the registration of a class of securities pursuant to Section 12(b) of the Exchange Act and is effective pursuant to General Instruction A.(c), check the following box. [X] If this form relates to the registration of a class of securities pursuant to Section 12(g) of the Exchange Act and is effective pursuant to General Instruction A.(d), check the following box. [ ] Securities Act registration statement file number to which this form relates: 333-61878 Securities to be Registered Pursuant to Section 12(g) of the Act: NONE =============================================================================== ITEM 1 Description Of Registrant's Securities To Be Registered. ------ ------------------------------------------------------- The Registrant hereby incorporates by reference the descriptions set forth under the captions "Description of the Notes", "The Basket", and "Description of Debt Securities", on pages S-10 to S-25 and pages 8 to 16 of the Prospectus Supplement dated October 2, 2001, and accompanying Prospectus dated June 21, 2001, filed with the Securities and Exchange Commission (the "Commission") on October 3, 2001, pursuant to Rule 424(b)(2) under the Securities Act of 1933. ITEM 2 Exhibits. ------ -------- The securities described herein are to be registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") on an exchange on which other securities of the Registrant are currently registered. In accordance with the instructions regarding exhibits to Form 8-A, the following exhibits are filed herewith or incorporated herein by reference: 1.01 Standard Multiple Series Indenture Provisions dated July 30, 1987 and as amended November 16, 1987 (incorporated by reference to Exhibit 4(a) to Post-Effective Amendment No. 1 to Registration Statement No. 33-16141, filed with the Commission on November 16, 1987) 1.02 Indenture dated as of September 1, 1987 between the Registrant and Citibank, N.A., as Trustee ("Citibank") (incorporated by reference to Exhibit 4(b) to Post-Effective Amendment No. 1 to Registration Statement No. 33-16141, filed with the Commission on November 16, 1987) 1.03 Supplemental Indenture dated as of November 25, 1987 between the Registrant and Citibank (incorporated by reference to Exhibit 4(m) to Registration Statement No. 33-25797, filed with the Commission on November 25, 1988) 1.04 Second Supplemental Indenture dated as of November 27, 1990 between the Registrant and Citibank (incorporated by reference to Exhibit 4(e) to Registration Statement No. 33-49062, filed with the Commission on June 30, 1992) 1.05 Third Supplemental Indenture dated as of September 13, 1991 between the Registrant and Citibank (incorporated by reference to Exhibit 4(f) to Registration Statement No. 33-46146, filed with the Commission on March 10, 1992) 1.06 Fourth Supplemental Indenture dated as of October 4, 1993 between the Registrant and Citibank (incorporated by reference to Exhibit 4(f) to Form 8-A, filed with the Commission on October 7, 1993) 1.07 Fifth Supplemental Indenture dated as of August 1, 1995 between the Registrant and Citibank (incorporated by reference to Exhibit 4(h) to Registration Statement No. 33- 2 62085, filed with the Commission on August 24, 1995) 1.08 Sixth Supplemental Indenture dated as of June 26, 1997 between the Registrant and Citibank (incorporated by reference to Exhibit 4(h) to Registration Statement No. 33-38227, filed with the Commission on October 17, 1997) 1.09 Form of Global Security representing the Registrant's RAPIDS(sm) Return Accelerated PortfolIo Debt Securities Notes Due November 5, 2002 (filed herewith) 1.10 Form of Calculation Agency Agreement between the Registrant and Lehman Brothers Inc., as calculation agent, relating to the Registrant's RAPIDS(sm) Return Accelerated PortfolIo Debt Securities Notes Due November 5, 2002 (filed herewith) 3 SIGNATURE Pursuant to the requirements of Section 12 of the Exchange Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized. LEHMAN BROTHERS HOLDINGS INC. By: /s/ Barrett S. DiPaolo ---------------------------- Barrett S. DiPaolo Vice President Date: October 3, 2001 4 EXHIBIT INDEX Exhibit No. Exhibit 1.09 Form of Global Security representing the Registrant's RAPIDSSM Return Accelerated PortfolIo Debt Securities Notes Due November 5, 2002 1.10 Form of Calculation Agency Agreement between the Registrant and Lehman Brothers Inc., as calculation agent, relating to the Registrant's RAPIDS(sm) Return Accelerated PortfolIo Debt Securities Notes Due November 5, 2002 5 EX-1.09 3 file002.txt FORM OF GLOBAL SECURITY EXHIBIT 1.09 LEHMAN BROTHERS HOLDINGS INC. RAPIDS(sm) Return Accelerated PortfolIo Debt Securities Notes Due November 5, 2002 Number R-1 $____________ CUSIP: 524908 DT 4 See Reverse for Certain Definitions THIS SECURITY (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, at 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 on the Stated Maturity Date will be paid only upon presentation and surrender of this Security. 2 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. "RAPIDS" is a servicemark of Lehman Brothers Inc. This Security shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Trustee under the Indenture referred to on the reverse hereof. 3 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: October 5, 2001 LEHMAN BROTHERS HOLDINGS INC. By: ___________________________ Name: Barrett S. DiPaolo Title: Vice President Attest: _________________________ Name: Title: Assistant Secretary TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: October 5, 2001 CITIBANK, N.A., as Trustee By: _____________________________ Name: Title: Authorized Signatory (Reverse of Security) This Security is one of a duly authorized series of Securities of the Company designated as RAPIDS(sm), Return Accelerated PortfolIo Debt Securities Notes Due November 5, 2002 (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 September 1, 1987, as amended (herein called the "Indenture"), duly executed and delivered by the Company and Citibank N.A., as trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities. The 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. 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 Date. 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 Date and the date three Business Days prior thereto was the Calculation 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 2 to institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences, except a default in the payment of interest, if any, or the principal of, or premium, if any, on any of the Securities of such series, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future holders and owners of this Security and any Securities which may be issued in exchange or substitution hereof, irrespective of whether or not any notation thereof is made 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 3 this series or of like tenor and of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Company intends to treat and, by purchasing this Security, the Holder hereof agrees to treat, for all tax purposes, this Security as a financial contract for cash settlement, rather than as a debt instrument. 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. "AMEX" shall mean the American Stock Exchange. "Adjusted Value" shall mean, with respect to each Underlying Equity Security: (a) if the Ending Value is greater than or equal to the Starting Value, the lesser of: (i) $132; and (ii) the product obtained by multiplying (A) $100 by (B) 2 x Ending Value ( ---------------- -1); Starting Value or (b) if the Ending Value is less than the Starting Value: the product obtained by multiplying (A) $100 by (B) the quotient obtained by dividing the Ending Value by the Starting Value. "Average Execution Price" shall mean, for a security or other property, the average execution price that an affiliate of the Company receives or pays for such security or property, as the case may be, to hedge the Company's obligations under the Securities. "Basket" shall mean the basket composed of the Underlying Equity Securities. "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, Nasdaq or AMEX 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 October 5, 2001, between the Company and the Calculation Agent, as amended from time to time. 4 "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 Date" shall mean three Business Days prior to the Stated Maturity Date; provided that if a Market Disruption Event occurs on such date, the Calculation Date shall be the previous Business Day on which there was not a Market Disruption Event. "Close of Trading" shall mean 4:00 p.m., New York City time. "Company" shall have the meaning set forth on the face of this Security. "Ending Multiplier" shall mean, for each Underlying Equity Security, the Starting Multiplier for such Underlying Equity Security adjusted from time to time for the occurrence, prior to the Close of Trading on the Calculation Date, of any of the extraordinary corporate transactions described in Section 4 of Annex A of the Calculation Agency Agreement. "Ending Price" shall mean, for each Underlying Equity Security, as determined by the Calculation Agent based on information reasonably available to it, subject to any Ending Price Adjustment: (i) If the Underlying Equity Security is listed on a United States national securities exchange or trading system or is a Nasdaq security, the last reported sale price at the Close of Trading, regular way, on such day, on the primary securities exchange registered under the Securities Exchange Act of 1934 on which such Underlying Equity Security is listed or admitted to trading or on Nasdaq, as the case may be. (ii) If the Underlying Equity Security is listed on a non-United States securities exchange, trading system (other than a bulletin board) or market, the last reported sale price at the Close of Trading, regular way, on such day, on the primary exchange, trading system or market on which such Underlying Equity Security is listed or admitted to trading, as the case may be. The Ending Price shall then be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate. (iii) If the Underlying Equity Security is not listed on a national securities exchange or trading system or is not a Nasdaq security, and is listed or traded on a bulletin board, the Average Execution Price of the Underlying Equity Security. If such Underlying Equity Security is listed or traded on a non-United States bulletin board, the Ending Price will then be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate. (iv) If a Market Disruption Event has occurred for an Underlying Equity Security on a day on which the Ending Price for such Underlying Equity Security is to be calculated, the Ending Price for such Underlying Equity Security shall initially be determined using the Ending Price for such Underlying Equity Security on the next preceding Trading Day on which a Market Disruption Event did not occur. Once the Market Disruption Event has ceased, the Ending Price of such Underlying Equity Security shall then be adjusted to equal the Average Execution Price of the Underlying Equity Security. 5 "Ending Price Adjustment" shall mean an adjustment made by the Calculation Agent to an Underlying Equity Security's initial Ending Price due to the occurrence of a Market Disruption Event three Business Days prior to the Stated Maturity Date. An Ending Price Adjustment shall adjust such initial Ending Price, once such Market Disruption Event ceases to exist, to equal the Average Execution Price received upon the sale of that Underlying Equity Security. "Ending Value" shall mean the Ending Price, plus any cash or other equity securities attributable to one share or unit of the Underlying Equity Security as described in Section 4 of Annex A of the Calculation Agency Agreement, multiplied by the Ending Multiplier. "Holder" shall have the meaning set forth on the reverse of this Security. "Indenture" shall have the meaning set forth on the reverse of this Security. "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 an Underlying Equity Security has occurred on that day, in each case, for more than two hours of trading or during the one-half hour period preceding the Close of Trading on the primary organized U.S. exchange or trading system on which that security is traded or, in the case of an Underlying Equity Security 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 the rules of any primary organized U.S. exchange or trading system similar to NYSE Rule 80B or any applicable rule or regulation enacted or promulgated by the NYSE, any other exchange, trading system or market, any other self regulatory organization or the Securities and Exchange Commission of similar scope or as a replacement for Rule 80B, may be considered material. Notwithstanding the first sentence of this paragraph, a Market Disruption Event for a 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 the Close of Trading. (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 an Underlying Equity Security, 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 an Underlying Equity Security or in respect of options contracts related to an Underlying Equity Security, in each case traded on any major U.S. exchange or trading system or, in the case of securities of a non-U.S. issuer, traded on the primary non-U.S. exchange, trading system or market. For purposes of determining whether a Market Disruption Event has occurred: 6 (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 an Underlying Equity Security by a major securities exchange, trading system or market by reason of (a) a price change violating limits set by such securities market, (b) an imbalance of orders relating to those contracts, or (c) a disparity in bid and ask quotes relating to those contracts, shall constitute a Market Disruption Event notwithstanding that the suspension or material limitation is less than two hours; (iii) a suspension or material limitation on an exchange, trading system or in a market shall include a suspension or material limitation of trading by one class of investors provided that the suspension continues for more than two hours of trading or during the last one-half hour period preceding the Close of Trading on the relevant exchange, trading system or market, but shall not include any time when the relevant exchange, trading system or market is closed for trading as part of that exchange's, trading system's or market's regularly scheduled business hours; and (iv) "trading systems" include bulletin board services. "Maturity Payment Amount" shall equal, for each $1,000 principal amount of Securities, the sum of the Adjusted Values of each Underlying Equity Security. In the event that the Calculation Agent makes an Ending Price Adjustment due to the occurrence of a Market Disruption Event, the payment by the Company of the Maturity Payment Amount will be postponed until the date three Business Days after the date of determination of any such Ending Price Adjustment. "Multiplier", relating to each Underlying Security, shall mean the number of shares or other units (including ADRs) (or fraction of a share or other unit expressed as a decimal) of such Underlying Equity Security included in the Basket. "Nasdaq" shall mean The Nasdaq Stock Market, Inc. "NYSE" shall mean the New York Stock Exchange. "Official W.M. Reuters Spot Closing Rate" shall mean the closing spot rate published on Reuters page "WMRA" relevant for an Underlying Equity Security. "Prospectus Supplement" shall mean the prospectus supplement, dated October 2, 2001, issued by the Company relating to $7,500,000 aggregate principal amount of the Securities. "Securities" shall have the meaning set forth on the reverse of this Security. "Security" shall have the meaning set forth on the face of this Security. "Starting Multiplier" shall mean, for each Underlying Equity Security, the following: 7
Underlying Equity Security Starting Multiplier (number of shares) American International Group, Inc. 1.274697 AOL Time Warner Inc. 3.039514 Citigroup Inc. 2.366864 Exxon Mobil Corporation 2.500625 General Electric Corporation 2.628121 Intel Corporation 5.117707 Internal Business Machines Corporation 1.066439 Microsoft Corporation 1.885014 Pfizer Inc. 2.409639 Wal-Mart Stores, Inc. 1.923077
"Starting Value" shall mean $100 for each Underlying Equity Security. "Stated Maturity Date" shall mean November 5, 2002. "Trading Day" shall mean a day on which trading generally is conducted on the NYSE, AMEX and Nasdaq and in the over-the-counter market for equity securities, as determined by the Calculation Agent. "Trustee" shall have the meaning set forth on the reverse of this Security. "Underlying Equity Securities" shall mean the securities included in the Basket from time to time and shall initially be the following 10 common stocks: American International Group, Inc., AOL Time Warner Inc., Citigroup Inc., Exxon Mobil Corporation, General Electric Corporation, Intel Corporation, International Business Machines Corporation, Microsoft Corporation, Pfizer Inc. and Wal-Mart Stores, Inc. The Underlying Equity Securities shall only be adjusted by the Calculation Agent pursuant to the Calculation Agency Agreement for certain extraordinary transactions. All terms used but not defined in this Security are used herein as defined in the Indenture. -------------------------------- The following abbreviations, when used in the inscription on the face of the within Security, shall be construed as though they were written out in full according to applicable laws or regulations:
---------------------------------------------------------------------------------------------------------------------- TEN COM - as tenants in common UNIF GIFT MIN ACT - ________ Custodian ________ ---------------------------------------------------------------------------------------------------------------------- (Cust) (Minor) ---------------------------------------------------------------------------------------------------------------------- TEN ENT - as tenants by the entireties under Uniform Gifts to Minors ---------------------------------------------------------------------------------------------------------------------- JT TEN - as joint tenants with right of Act _________________________ ---------------------------------------------------------------------------------------------------------------------- Survivorship and not as tenants in (State) common ---------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------- Additional abbreviations may also be used though not in the above list. --------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE -------------------------------- | | -------------------------------- ----------------------------------------------------------------------------- (Name and Address of Assignee, including zip code, must be printed or typewritten.) ----------------------------------------------------------------------------- the within Security, and all rights thereunder, hereby irrevocably constituting and appointing ----------------------------------------------------------------------------- to transfer the said Security on the books of the Company, with full power of substitution in the premises. Dated: ---------------------------------------- NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Security in every particular, without alteration or enlargement or any change whatever. Signature(s) Guaranteed: --------------------------- THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. EX-1.10 4 file003.txt FORM OF CALCULATION AGENCY AGREEMENT BETWEEN THE EXHIBIT 1.10 CALCULATION AGENCY AGREEMENT CALCULATION AGENCY AGREEMENT, dated as of October 5, 2001 (the "Agreement"), between Lehman Brothers Holdings Inc. (the "Company") and Lehman Brothers Inc., as Calculation Agent. WHEREAS, the Company has authorized the issuance of up to $8,625,000 aggregate principal amount of RAPIDS(sm), Return Accelerated PortfolIo Debt Securities Notes Due November 5, 2002 (the "Securities")*; WHEREAS, the Securities will be issued under an Indenture, dated as of September 1, 1987, between the Company and Citibank, N.A., as Trustee (the "Trustee"), as supplemented and amended by supplemental indentures dated as of November 25, 1987, November 27, 1990, September 13, 1991, October 4, 1993, October 1, 1995, and June 26, 1997, and incorporating Standard Multiple Series Indenture Provisions dated July 30, 1987, as amended November 16, 1987 (collectively, the "Indenture"); and WHEREAS, the Company requests the Calculation Agent to perform certain services described herein in connection with the Securities; NOW THEREFORE, the Company and the Calculation Agent agree as follows: 1. Appointment of Agent. The Company hereby appoints Lehman Brothers Inc. as Calculation Agent and Lehman Brothers Inc. hereby accepts such appointment as the Company's agent for the purpose of performing the services hereinafter described upon the terms and subject to the conditions hereinafter mentioned. 2. Calculations and Information Provided. The Calculation Agent shall determine (a) the Maturity Payment Amount on the Calculation Date, (b) the Starting Value of each of the Underlying Equity Securities in the Basket, (c) the Ending Value of each of the Underlying Equity Securities in the Basket, (d) the Adjusted Value for each of the Underlying Equity Securities in the Basket, (e) the sum of the Adjusted Values for all of the Underlying Equity Securities in the Basket, (f) the Starting Multipliers and Ending Multipliers for each of the Underlying Equity Securities in the Basket, (g) any required adjustments to the Multipliers of the Underlying Equity Securities in the Basket and (h) whether a Market Disruption Event has occurred. The Calculation Agent shall notify the Trustee of all such determinations and any such adjustment or if a Market Disruption Event has occurred. Annex A hereto sets forth the procedures the Calculation Agent will use to determine the information described in this Section 2. ---------------------------- * "RAPIDS" is a servicemark of Lehman Brothers Inc. 2 3. Calculations. Any calculation or determination by the Calculation Agent pursuant hereto shall (in the absence of manifest error) be final and binding. Any calculation made by the Calculation Agent hereunder shall, at the Trustee's request, be made available at the Corporate Trust Office. 4. Fees and Expenses. The Calculation Agent shall be entitled to reasonable compensation for all services rendered by it as agreed to between the Calculation Agent and the Company. 5. Terms and Conditions. The Calculation Agent accepts its obligations herein set out upon the terms and conditions hereof, including the following, to all of which the Company agrees: (a) in acting under this Agreement, the Calculation Agent is acting solely as an independent expert of the Company and does not assume any obligation toward, or any relationship of agency or trust for or with, any of the holders of the Securities; (b) unless otherwise specifically provided herein, any order, certificate, notice, request, direction or other communication from the Company or the Trustee made or given under any provision of this Agreement shall be sufficient if signed by any person who the Calculation Agent reasonably believes to be a duly authorized officer or attorney-in-fact of the Company or the Trustee, as the case may be; (c) the Calculation Agent shall be obliged to perform only such duties as are set out specifically herein and any duties necessarily incidental thereto; (d) the Calculation Agent, whether acting for itself or in any other capacity, may become the owner or pledgee of Securities with the same rights as it would have had if it were not acting hereunder as Calculation Agent; and (e) the Calculation Agent shall incur no liability hereunder except for loss sustained by reason of its gross negligence or wilful misconduct. 6. Resignation; Removal; Successor. (a) The Calculation Agent may at any time resign by giving written notice to the Company of such intention on its part, specifying the date on which its desired resignation shall become effective, subject to the appointment of a successor Calculation Agent and acceptance of such appointment by such successor Calculation Agent, as hereinafter provided. The Calculation Agent hereunder may be removed at any time by the filing with it of an instrument in writing signed by or on behalf of the Company and specifying such removal and the date when it shall become effective. Such resignation or removal shall take effect upon the appointment by the Company, as hereinafter provided, of a successor Calculation Agent and the acceptance of such appointment by such successor Calculation Agent. In the event a successor Calculation Agent has not been appointed and has not accepted its duties within 90 days of the Calculation Agent's notice of resignation, the Calculation Agent may apply to any court of competent jurisdiction for the designation of a successor Calculation Agent. 3 (b) In case at any time the Calculation Agent shall resign, or shall be removed, or shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or make an assignment for the benefit of its creditors or consent to the appointment of a receiver or custodian of all or any substantial part of its property, or shall admit in writing its inability to pay or meet its debts as they mature, or if a receiver or custodian of it or all or any substantial part of its property shall be appointed, or if any public officer shall have taken charge or control of the Calculation Agent or of its property or affairs, for the purpose of rehabilitation, conservation or liquidation, a successor Calculation Agent shall be appointed by the Company by an instrument in writing, filed with the successor Calculation Agent. Upon the appointment as aforesaid of a successor Calculation Agent and acceptance by the latter of such appointment, the Calculation Agent so superseded shall cease to be Calculation Agent hereunder. (c) Any successor Calculation Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor, to the Company and to the Trustee an instrument accepting such appointment hereunder and agreeing to be bound by the terms hereof, and thereupon such successor Calculation Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor with like effect as if originally named as Calculation Agent hereunder, and such predecessor, upon payment of its charges and disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay over, and such successor Calculation Agent shall be entitled to receive, all moneys, securities and other property on deposit with or held by such predecessor, as Calculation Agent hereunder. (d) Any corporation into which the Calculation Agent hereunder may be merged or converted or any corporation with which the Calculation Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Calculation Agent shall be a party, or any corporation to which the Calculation Agent shall sell or otherwise transfer all or substantially all of the assets and business of the Calculation Agent shall be the successor Calculation Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto. 7. Certain Definitions. Terms not otherwise defined herein or in Annex A hereto are used herein as defined in the Indenture or the Securities. 8. Indemnification. The Company will indemnify the Calculation Agent against any losses or liability which it may incur or sustain in connection with its appointment or the exercise of its powers and duties hereunder except such as may result from the gross negligence or wilful misconduct of the Calculation Agent or any of its agents or employees. The Calculation Agent shall incur no liability and shall be indemnified and held harmless by the Company for or in respect of any action taken or suffered to be taken in good faith by the Calculation Agent in reliance upon written instructions from the Company. 9. Notices. Any notice required to be given hereunder shall be delivered in person, sent (unless otherwise specified in this Agreement) by letter, telex or facsimile transmission or communicated by telephone (confirmed in a writing dispatched within two Business Days), (a) in the case of the Company, to it at Three World Financial Center, New York, New York 10285 (facsimile: (212) 526-3774) (telephone: (212) 526-1936), Attention: Legal Counsel, (b) in the case of the Calculation Agent, to it at Three World Financial Center, 4 200 Vesey Street, New York, New York 10285-0600 (facsimile: (212) 526-2755) (telephone: (212) 526-0900), Attention: Equity Derivatives Trading and (c) in the case of the Trustee, to it at 111 Wall Street, 5th Floor, New York, New York 10043 (facsimile: (212) 657-3836) (telephone: (212) 657-7805), Attention: Corporate Trust Department or, in any case, to any other address or number of which the party receiving notice shall have notified the party giving such notice in writing. Any notice hereunder given by telex, facsimile or letter shall be deemed to be served when in the ordinary course of transmission or post, as the case may be, it would be received. 10. Governing Law. This Agreement shall be governed by and continued in accordance with the laws of the State of New York. 11. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 12. Benefit of Agreement. This Agreement is solely for the benefit of the parties hereto and their successors and assigns, and no other person shall acquire or have any rights under or by virtue hereof. 5 IN WITNESS WHEREOF, this Agreement has been entered into as of the day and year first above written. LEHMAN BROTHERS HOLDINGS INC. By: ___________________________ Name: Barrett S. DiPaolo Title: Vice President LEHMAN BROTHERS INC., as Calculation Agent By: __________________________ Name: Barrett S. DiPaolo Title: Vice President ANNEX A 1. The Basket. The Basket shall be composed of the Underlying Equity Securities (the "Basket"). 2. Determination of the Maturity Payment Amount. The Calculation Agent shall determine the amount payable on the Stated Maturity Date for each $1,000 principal amount of Securities (the "Maturity Payment Amount"). The Maturity Payment Amount shall equal the sum of the Adjusted Values of each Underlying Equity Security. In the event that the Calculation Agent makes an Ending Price Adjustment due to the occurrence of a Market Disruption Event, the payment by the Company of the Maturity Payment Amount will be postponed until the date three Business Days after the date of determination of any such Ending Price Adjustment. 3. Multipliers for the Common Stocks in the Basket. The multiplier for each Underlying Equity Security in the Basket shall be the number of shares or other units (including ADRs) (or fraction of a share or other unit expressed as a decimal) of such Underlying Equity Security included in the Basket (the "Multiplier"). The Multiplier shall be adjusted from time to time during the term of the Securities to give effect to the extraordinary corporate transactions described below in Section 4. The price used to determine the Starting Multiplier for each Underlying Equity Security shall be determined based on the Average Execution Price for each Underlying Equity Security. The Starting Multiplier for each Underlying Equity Security in the Basket will remain constant unless adjusted. No adjustment to a Multiplier will be required unless the adjustment would require a change of at least 0.1% in the Multiplier then in effect. Each Multiplier, and any adjustments to a Multiplier, will be rounded at the Calculation Agent's discretion. 4. Adjustments to the Common Stocks in the Basket. Adjustments to the Underlying Equity Securities included in the Basket will be made (i) by adjusting the Multiplier then in effect for an Underlying Equity Security in the Basket, (ii) by adding new Underlying Equity Securities, other securities or cash to the Basket and/or (iii) by removing Underlying Equity Securities in the Basket, each as described below. For purposes of these adjustments, except as noted below, ADRs are treated like Underlying Equity Securities if a comparable adjustment to the foreign shares underlying the ADRs is made pursuant to the terms of the depositary arrangement for the ADRs or if holders of ADRs are entitled to receive property in respect of the underlying foreign shares. o If an Underlying Equity Security is subject to a stock split or reverse stock split, then once the split has become effective, the Multiplier then in effect relating to that Underlying Equity Security will be adjusted. The Multiplier will be adjusted to equal the product of the number of shares outstanding after the split with respect to each share immediately prior to effectiveness of the split and the prior Multiplier. o If an Underlying Equity Security is subject to an extraordinary stock dividend or extraordinary stock distribution in common stock that is given equally to all holders of shares, then once the Underlying Equity Security is trading ex-dividend, the Multiplier 2 will be increased by the product of the number of shares issued with respect to one share and the prior Multiplier. o If the issuer of an Underlying Equity Security, or, if an Underlying Equity Security is an ADR, the foreign issuer of the underlying foreign share, is being liquidated or dissolved or is subject to a proceeding under any applicable bankruptcy, insolvency or other similar law, the Underlying Equity Security will continue to be included in the Basket so long as the primary exchange, trading system or market is reporting a market price for the Underlying Equity Security. If a market price, including a price on a bulletin board service, is no longer available for an Underlying Equity Security included in the Basket, then the value of that Underlying Equity Security will equal zero for so long as no market price is available, and no attempt will be made to find a replacement stock or increase the Basket to compensate for the deletion of that Underlying Equity Security. o If the issuer of an Underlying Equity Security, or, if an Underlying Equity Security is an ADR, the foreign issuer of the underlying foreign share, has been subject to a merger or consolidation and is not the surviving entity and holders of the issuer's common stock are entitled to receive cash, securities, other property or a combination of those in exchange for their common stock, then the following will be included in the Basket: o To the extent cash is received, the Basket will include the amount of the cash consideration at the time holders are entitled to receive the cash consideration, plus accrued interest. Interest will accrue beginning on the first London Business Day after the day on which holders receive the cash consideration until the Stated Maturity Date. Interest will accrue at a rate equal to LIBOR with a term corresponding to the interest accrual period stated in the preceding sentence. o To the extent that equity securities that are traded or listed on an exchange, trading system or market are received, once the exchange for the new securities has become effective, the former Underlying Equity Security will be removed from the Basket and the new securities will be added to the Basket. The Multiplier for the new securities will equal the product of the last value of the Multiplier of the original Underlying Equity Security and the number of securities of the new security exchanged with respect to one share of the original Underlying Equity Security. o To the extent that equity securities that are not traded or listed on an exchange, trading system or market or non-equity securities or other property (other than cash) is received, the calculation agent will determine the fair market value of the securities or other property received and the Basket will include an amount of cash equal to the product of the Multiplier and the fair market value. The Basket will also include accrued interest on that amount. Interest will accrue beginning on the first London Business Day after the day that an affiliate of the Company sells the securities or other property used to hedge the Company's obligations under the notes until the Stated Maturity Date. Interest will accrue at a rate equal to LIBOR with a term corresponding to the interest accrual period stated in the preceding sentence. 3 o If all of the shares of the class of common stock of which an Underlying Equity Security is a part are converted into or exchanged for the same or a different number of shares of any class or classes of common stock other than that class of common stock of which the Underlying Equity Security is a part, whether by capital reorganization, recapitalization or reclassification, then, once the conversion has become effective, the former Underlying Equity Security will be removed from the Basket and the new common stock will be added to the Basket as an Underlying Equity Security. The Multiplier for each new Underlying Equity Security added to the Basket will equal the product of the last value of the Multiplier of the original Underlying Equity Security and the number of shares of the new Underlying Equity Security issued with respect to one share of the original Underlying Equity Security. o If the issuer of an Underlying Equity Security in the Basket, or if an Underlying Equity Security is an ADR, the issuer of the underlying foreign share, issues to all of its shareholders common stock or another equity security that is traded or listed on an exchange, trading system or market of an issuer other than itself, then the new common stock or other equity security will be added to the Basket as an Underlying Equity Security. The Multiplier for the new Underlying Equity Security will equal the product of the last value of the Multiplier with respect to the original Underlying Equity Security and the number of shares of the new Underlying Equity Security issued with respect to one share of the original Underlying Equity Security. o If an ADR is no longer listed or admitted to trading on a United States securities exchange registered under the Securities Exchange Act of 1934 or is no longer a security quoted on the Nasdaq, then the foreign share underlying the ADR will be deemed to be a new common stock included in the Basket. The initial Multiplier for that new Underlying Equity Security will equal the last value of the Multiplier for the ADR multiplied by the number of underlying foreign shares represented by a single ADR. o If an Underlying Equity Security is subject to an extraordinary dividend or an extraordinary distribution (including upon liquidation or dissolution) of cash, equity securities that are not traded or listed on an exchange, trading system or market, non-equity securities or other property of any kind which is received equally by all holders of the class of common stock of which the Underlying Equity Security is a part, then the Basket will include the following: o To the extent cash is entitled to be received, the Basket will include on each day after the time that the Underlying Equity Security trades ex-dividend until the date the cash consideration is entitled to be received, the present value of the cash to be received, discounted at a rate equal to LIBOR, with a term beginning that day and ending on the date that the cash is entitled to be received. When the cash consideration is received, the Basket will include the amount of the cash consideration, plus accrued interest. Interest will accrue beginning the first London Business Day after the day that holders receive the cash consideration until the Stated Maturity Date. Interest will accrue at a rate equal to LIBOR with a term corresponding to the interest accrual period stated in the preceding sentence. o To the extent that equity securities that are not traded or listed on an exchange, trading system or market or non-equity securities or other property (other than cash) are received, the Calculation Agent will determine the fair market value of the securities or other property received and the Basket will include an amount of cash equal to the product of the Multiplier and the fair market value. The Basket will also include accrued interest on that amount. Interest will accrue beginning on the first London Business Day after the day that an affiliate of the Company sells the securities or other property used to hedge the Company's obligations under the notes until the Stated Maturity Date. Interest will accrue at a rate equal to LIBOR with a term corresponding to the interest accrual period stated in the preceding sentence. 4 o If similar corporate events occur with respect to the issuer of an equity security other than an Underlying Equity Security that is included in the Basket, adjustments similar to the above will be made for that equity security. In addition, if any other corporate events occur with respect to the issuer of an Underlying Equity Security included in the Basket, adjustments will be made to reflect the economic substance of those events. The payment of an ordinary cash dividend from current income or retained earnings will not result in an adjustment to the Multiplier. 5. Definitions. Set forth below are the terms used in the Agreement and in this Annex A. "ADR" shall mean American depositary receipt. "AMEX" shall mean the American Stock Exchange. "Adjusted Value" shall mean, with respect to each Underlying Equity Security: (a) if the Ending Value is greater than or equal to the Starting Value, the lesser of: (i) $132; and (ii) the product obtained by multiplying (A) $100 by (B) 2 x Ending Value ( ---------------- - 1); Starting Value or (b) if the Ending Value is less than the Starting Value: the product obtained by multiplying (A) $100 by (B) the quotient obtained by dividing the Ending Value by the Starting Value. "Average Execution Price" shall mean, for a security or other property, the average execution price that an affiliate of the Company receives or pays for such security or property, as the case may be, to hedge the Company's obligations under the Securities. 5 "Basket" shall have the meaning set forth in Section 1 of this Annex A. "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, Nasdaq or AMEX 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 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 Date" shall mean three Business Days prior to the Stated Maturity Date; provided that if a Market Disruption Event occurs on such date, the Calculation Date shall be the previous Business Day on which there was not a Market Disruption Event. "Close of Trading" shall mean 4:00 p.m., New York City time. "Company" shall have the meaning set forth in the preamble to this Agreement. "Ending Multiplier" shall mean, for each Underlying Equity Security, the Starting Multiplier for such Underlying Equity Security adjusted for the occurrence from time to time, prior to the Close of Trading on the Calculation Date, of any of the extraordinary corporate transactions described in Section 4 of this Annex A. "Ending Price" shall mean, for each Underlying Equity Security, as determined by the Calculation Agent based on information reasonably available to it, subject to any Ending Price Adjustment: (i) If the Underlying Equity Security is listed on a United States national securities exchange or trading system or is a Nasdaq security, the last reported sale price at the Close of Trading, regular way, on such day, on the primary securities exchange registered under the Securities Exchange Act of 1934 on which such Underlying Equity Security is listed or admitted to trading or on Nasdaq, as the case may be. (ii) If the Underlying Equity Security is listed on a non-United States securities exchange, trading system (other than a bulletin board) or market, the last reported sale price at the Close of Trading, regular way, on such day, on the primary exchange, trading system or market on which such Underlying Equity Security is listed or admitted to trading, as the case may be. The Ending Price shall then be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate. (iii) If the Underlying Equity Security is not listed on a national securities exchange or trading system or is not a Nasdaq security, and is listed or traded on a bulletin board, the Average Execution Price of the Underlying Equity Security. If such Underlying Equity Security is listed or traded on a non-United States bulletin board, the Ending Price will then be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate. (iv) If a Market Disruption Event has occurred for an Underlying Equity Security on a day on which the Ending Price for such Underlying Equity Security is to be calculated, the Ending Price for such Underlying Equity Security shall initially be determined using the Ending Price for such Underlying Equity Security on the next preceding Trading Day on which a Market Disruption Event did not occur. Once the Market Disruption Event has ceased, the Ending Price of such Underlying Equity Security shall then be adjusted to equal the Average Execution Price of the Underlying Equity Security. "Ending Price Adjustment" shall mean an adjustment made by the Calculation Agent to an Underlying Equity Security's initial Ending Price due to the occurrence of a Market Disruption Event three Business Days prior to the Stated Maturity Date. An Ending Price Adjustment shall adjust such initial Ending Price, once such Market Disruption Event ceases to exist, to equal the Average Execution Price received upon the sale of that Underlying Equity Security. "Ending Value" shall mean the Ending Price, plus any cash or other equity securities attributable to one share or unit of the Underlying Equity Security as described in Section 4 of Annex A of the Calculation Agency Agreement, multiplied by the Ending Multiplier. "Indenture" shall have the meaning set forth in the preamble to this Agreement. "LIBOR" shall mean London Interbank Offered Rate. "London Business Day" shall mean shall mean any day in the United Kingdom that is not a Saturday, a Sunday or a day on which the London Stock Exchange is not open for trading or banking institutions or trust companies in the City of London are authorized or obligated by law or parliamentary order to close. "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 an Underlying Equity Security has occurred on that day, in each case, for more than two hours of trading or during the one-half hour period preceding the Close of Trading on the primary organized U.S. exchange or trading system on which that security is traded or, in the case of an Underlying Equity Security 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 the rules of any primary organized U.S. exchange or trading system similar to NYSE Rule 80B or any applicable rule or regulation enacted or promulgated by the NYSE, any other exchange, trading system or market, any other self regulatory organization or the Securities and Exchange Commission of similar scope or as a replacement for Rule 80B, may be considered material. Notwithstanding the first sentence of this paragraph, a Market Disruption Event for a 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 the Close of Trading. (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 an Underlying Equity 7 Security, 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 an Underlying Equity Security or in respect of options contracts related to an Underlying Equity Security, in each case traded on any major U.S. exchange or trading system or, in the case of securities of a non-U.S. issuer, traded on the primary non-U.S. exchange, trading system or market. For purposes of determining whether a Market Disruption Event has occurred: (i) a limitation on the hours or number of days of trading shall not constitute a Market Disruption Event if it results from an announced change in the regular business hours of the relevant exchange, trading system or market; (ii) any suspension in trading in an options contract on an Underlying Equity Security by a major securities exchange, trading system or market by reason of (a) a price change violating limits set by such securities market, (b) an imbalance of orders relating to those contracts, or (c) a disparity in bid and ask quotes relating to those contracts, shall constitute a Market Disruption Event notwithstanding that the suspension or material limitation is less than two hours; (iii) a suspension or material limitation on an exchange, trading system or in a market shall include a suspension or material limitation of trading by one class of investors provided that the suspension continues for more than two hours of trading or during the last one-half hour period preceding the Close of Trading on the relevant exchange, trading system or market, but shall not include any time when the relevant exchange, trading system or market is closed for trading as part of that exchange's, trading system's or market's regularly scheduled business hours; and (iv) "trading systems" include bulletin board services. "Maturity Payment Amount" shall have the meaning set forth in Section 2 of this Annex A. "Multiplier" shall have the meaning set forth in Section 3 of this Annex A. "Nasdaq" shall mean The Nasdaq Stock Market, Inc. "NYSE" shall mean the New York Stock Exchange. "Official W.M. Reuters Spot Closing Rate" shall mean the closing spot rate published on Reuters page "WMRA" relevant for an Underlying Equity Security. "Prospectus Supplement" shall mean the prospectus supplement, dated October 2, 2001, issued by the Company relating to $7,500,000 aggregate principal amount of the Securities. 8 "Starting Multiplier" shall mean, for each Underlying Equity Security, the following:
Underlying Equity Security Starting Multiplier (number of shares) -------------------------- -------------------------------------- American International Group, Inc. 1.274697 AOL Time Warner Inc. 3.039514 Citigroup Inc. 2.366864 Exxon Mobil Corporation 2.500625 General Electric Corporation 2.628121 Intel Corporation 5.117707 Internal Business Machines Corporation 1.066439 Microsoft Corporation 1.885014 Pfizer Inc. 2.409639 Wal-Mart Stores, Inc. 1.923077
"Starting Value" shall mean $100 for each Underlying Equity Security. "Stated Maturity Date" shall mean November 5, 2002. "Trading Day" shall mean a day on which trading generally is conducted on the NYSE, AMEX and Nasdaq and in the over-the-counter market for equity securities, as determined by the Calculation Agent. "Trustee" shall have the meaning set forth in the preamble to this Agreement. "Underlying Equity Securities" shall mean the securities included in the Basket from time to time and shall initially be the following 10 common stocks: American International Group, Inc., AOL Time Warner Inc., Citigroup Inc., Exxon Mobil Corporation, General Electric Corporation, Intel Corporation, International Business Machines Corporation, Microsoft Corporation, Pfizer Inc. and Wal-Mart Stores, Inc. The Underlying Equity Securities shall be adjusted only by the Calculation Agent pursuant to this Agreement.