-----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, GPbCt4ZhYhNW4n8aHziE2RmBFfQa7QOET+MmoFi9MOtxPzudVl386HC+WlMy3uW1 gzOfjp6jewNNsR0cvx4JEQ== 0000950136-04-000611.txt : 20040301 0000950136-04-000611.hdr.sgml : 20040301 20040301060238 ACCESSION NUMBER: 0000950136-04-000611 CONFORMED SUBMISSION TYPE: 8-A12B PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20040301 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: 04637329 BUSINESS ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 745 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125267000 MAIL ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 745 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 8-A12B 1 file001.txt FORM 8-A 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.) 745 SEVENTH AVENUE NEW YORK, NEW YORK 10019 (Address of principal executive offices, including zip code) Securities to be registered pursuant to Section 12(b) of the Act: NAME OF EACH EXCHANGE ON WHICH TITLE OF EACH CLASS TO BE SO REGISTERED: EACH CLASS IS TO BE REGISTERED: - ---------------------------------------- ------------------------------- 7.5% Yield Enhanced Equity Linked Debt The American Stock Exchange LLC Securities Due September 3, 2005, Performance Linked to Calpine Corporation (CPN) Common Stock If this form relates to the registration of a class of securities pursuant to Section 12(b) of the Exchange Act and is effective pursuant to General Instruction A.(c), check the following box. [X] If this form relates to the registration of a class of securities pursuant to Section 12(g) of the Exchange Act and is effective pursuant to General Instruction A.(d), check the following box. [ ] 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," "Calpine Common Stock," and "Description of Debt Securities," on pages S-10 to S-20 and pages 8 to 16 of the Prospectus Supplement dated February 27, 2004, and accompanying Prospectus dated June 21, 2001, filed with the Securities and Exchange Commission (the "Commission") 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) 2 1.07 Fifth Supplemental Indenture dated as of October 1, 1995 between the Registrant and Citibank (incorporated by reference to Exhibit 4(h) to Registration Statement No. 33-62085, filed with the Commission on August 24, 1995) 1.08 Sixth Supplemental Indenture dated as of June 26, 1997 between the Registrant and Citibank (incorporated by reference to Exhibit 4(h) to Registration Statement No. 33-38227, filed with the Commission on October 17, 1997) 1.09 Form of Global Security representing the Registrant's 7.5% Yield Enhanced Equity Linked Debt Securities Due September 3, 2005, Performance Linked to Calpine Corporation (CPN) Common Stock (filed herewith) 1.10 Form of Calculation Agency Agreement between the Registrant and Lehman Brothers Inc., as calculation agent, relating to the Registrant's 7.5% Yield Enhanced Equity Linked Debt Securities Due September 3, 2005, Performance Linked to Calpine Corporation (CPN) Common Stock (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/ Karen Corrigan ------------------------------------ Karen Corrigan Vice President Date: August 27, 2004 4 EXHIBIT INDEX ------------- Exhibit No. Exhibit - ----------- ------- 1.09 Form of Global Security representing the Registrant's 7.5% Yield Enhanced Equity Linked Debt Securities Due September 3, 2005, Performance Linked to Calpine Corporation (CPN) Common Stock 1.10 Form of Calculation Agency Agreement between the Registrant and Lehman Brothers Inc., as calculation agent, relating to the Registrant's 7.5% Yield Enhanced Equity Linked Debt Securities Due September 3, 2005, Performance Linked to Calpine Corporation (CPN) Common Stock 5 EX-99.1 3 file002.txt FORM OF GLOBAL SECURITY LEHMAN BROTHERS HOLDINGS INC. YEELDS(R) 7.5% Yield Enhanced Equity Linked Debt Securities Due September 3, 2005 Number R-1 $4,000,000 ISIN US524908LT55 CUSIP: 524908LT5 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 its registered assigns, at the office or agency of the Company in the Borough of Manhattan, The City of New York, on the Stated Maturity Date, 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 (such principal amount of Securities referred to herein as a "YEELD" and, in the aggregate, "YEELDS"), an amount equal to the Maturity Payment Amount, and to make coupon payments computed on the basis of a 360-day year of twelve 30-day months, quarterly on June 3, 2004, September 3, 2004, December 3, 2004, March 3, 2 2005, June 3, 2005 and the Stated Maturity Date (each a "Coupon Payment Date"), on said principal sum at said office or agency, in like coin and currency, at a rate per annum equal to [7.5]%, from and including March 3, 2004, June 3, 2004, September 3, 2004, December 3, 2004, March 3, 2005 or June 3, 2005 to which coupon payments have been made or duly provided for; provided, that any coupon payments to be made on any Coupon Payment Date that is not a Business Day shall be made on the next succeeding Business Day with the same force and effect as if made on such Coupon Payment Date, and no additional coupon payments shall accrue as a result of such delayed payment; provided further, that if a Market Disruption Event with respect to one or more of the Settlement Value Securities occurs on the Valuation Date, coupon payments will continue to accrue during the period from September 3, 2005 to and excluding the Stated Maturity Date. On the Stated Maturity Date, the Company, at its sole option and with not less than 15 days' prior written notice to the Trustee, may pay the Maturity Payment Amount in shares of the Settlement Value Securities based upon the Closing Price of the Settlement Value Securities on the Valuation Date (the "Stock Settlement Option"). If, however, the Company determines that it is prohibited from delivering such shares, or that it would be unduly burdensome to deliver such shares, on the Stated Maturity Date, it will pay the Maturity Payment Amount in cash. In the event the Company elects the Stock Settlement Option, the Holder will receive, subject to the preceding sentence, per $1,000 principal amount of YEELDS, a number of shares of the Settlement Value Securities (together with any cash that may be included in the calculation of the Settlement Value) that as of the Valuation Date has an aggregate value (based on the Closing Prices of the Settlement Value Securities on the Valuation Date) equal to the Maturity Payment Amount, all as determined by the Calculation Agent pursuant to the Calculation Agency Agreement. If the Company elects the Stock Settlement Option, in lieu of any fractional shares of the Settlement Value Securities, the Company will pay cash to the Holder in an amount equal to the market value of that fractional share based upon the Closing Price of the Settlement Value Security on the Valuation Date. The coupon payments due on any Coupon Payment Date shall, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be made to the person in whose name this Security is registered at the close of business on the date that is 15 days prior to such Coupon Payment Date. All coupon payments on this Security may, at the option of the Company, be made by check mailed to the person entitled thereto at such person's address as it appears on the registry books of the Company. Any amount payable on the Stated Maturity Date shall be paid only upon presentation and surrender of this Security. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. "YEELDS" is a registered trademark 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 President, its Vice Chairman, 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: March 3, 2004 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 herein referred to in the within-mentioned Indenture. Dated: March 3, 2004 CITIBANK, N.A., as Trustee By: __________________________________ Name: Title: (Reverse of Security) This Security is one of a duly authorized series of Securities of the Company designated as YEELDS(R), 7.5% Yield Enhanced Equity Linked Debt Securities Due September 3, 2005 (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 the 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 Valuation 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 to make coupon payments thereon or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or coupon payments 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 2 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 coupon payments 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 coupon payments 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 3 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. 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 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. "ADR" shall mean American Depositary Receipt. "Alternative Redemption Amount" shall mean, per YEELD, the product of (a) $1,000 and (b) the Settlement Value divided by $5.4675. "AMEX" shall mean the American Stock Exchange LLC. "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. "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 March 3, 2004, between the Company and the Calculation Agent, as amended from time to time, or any successor calculation agency agreement. "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. "Close of Trading" shall mean, in respect of any primary exchange or quotation system, the scheduled weekday closing time on a day on which the primary exchange or quotation system is scheduled to be open for trading for its respective regular trading session, without regard to after hours or any other trading outside of the regular trading session hours. "Closing Price" shall mean, for each Settlement Value Security, as determined by the Calculation Agent based on information reasonably available to it: (i) If the Settlement Value Security is listed on a United States national securities exchange or quotation system or is a security quoted on Nasdaq, the last 4 reported sale price per share at the Close of Trading, regular way, on such day, on the primary securities exchange registered under the Securities Exchange Act of 1934 on which such Settlement Value Security is listed or admitted to trading or on Nasdaq, as the case may be. (ii) If the Settlement Value Security is listed or quoted on a non-United States securities exchange, quotation 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, quotation system or market on which such Settlement Value Security is listed or admitted to trading, as the case may be. The Closing Price per share shall then be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New York City time. If there are several quotes for the Official W.M. Reuters Spot Closing Rate at that time, the first quoted rate starting at 11:00 a.m. shall be the rate used. If there is no such Official W.M. Reuters Spot Closing Rate for a country's currency at 11:00 a.m., New York City time, the Closing Price shall be converted into U.S. dollars using the last available U.S. dollar cross-rate quote before 11:00 a.m., New York City time. (iii) If the Settlement Value Security is not listed on a national securities exchange or quotation system or is not a Nasdaq security, and is listed or traded on a bulletin board, the Average Execution Price per share of the Settlement Value Security. If such Settlement Value Security is listed or traded on a non-United States bulletin board, the Closing Price will then be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New York City time. If there are several quotes for the Official W.M. Reuters Spot Closing Rate at that time, the first quoted rate starting at 11:00 a.m. shall be the rate used. If there is no such Official W.M. Reuters Spot Closing Rate for a country's currency at 11:00 a.m., New York City time, the Closing Price shall be converted into U.S. dollars using the last available U.S. dollar cross-rate quote before 11:00 a.m., New York City time. "Company" shall have the meaning set forth on the face of this Security. "Coupon Payment Date" shall have the meaning set forth on the face of this Security. "Ending Multiplier" shall mean, for each Settlement Value Security, the initial Multiplier for such Settlement Value Security adjusted from time to time for the occurrence, prior to the Close of Trading on the Valuation Date, of any of the extraordinary corporate transactions described in Section 4 of Annex A of the Calculation Agency Agreement. "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. "Issue Date" shall mean March 3, 2004. "Market Disruption Event", with respect to a Settlement Value Security, shall mean any of the following events has occurred on any day as determined by the Calculation Agent: 5 (i) A material suspension of or limitation imposed on trading relating to such Settlement Value Security by the Relevant Exchange, at any time during the one-hour period that ends at the Close of Trading on such day, whether by reason of movements in price exceeding limits permitted by that primary exchange or quotation system or otherwise. 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, quotation 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. (ii) A material suspension of or limitation imposed on trading in futures or options contracts relating to such Settlement Value Security by the primary exchange or quotation system on which those futures or options contracts are traded, at any time during the one-hour period that ends at the Close of Trading on such day, whether by reason of movements in price exceeding limits permitted by that primary exchange or quotation system or otherwise. (iii) Any event, other than an early closure, that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, that Settlement Value Security on the primary U.S. exchange or quotation system on which that Settlement Value Security is traded, or in the case of a Settlement Value Security not listed or quoted in the United States, on the primary exchange, quotation system or market for such Settlement Value Security, at any time during the one hour period that ends at the Close of Trading on such day. (iv) Any event, other than an early closure, that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, the futures or options contracts relating to such Settlement Value Security on the primary exchange or quotation system on which those futures or options contracts are traded at any time during the one hour period that ends at the Close of Trading on such day. (v) The closure of the primary exchange or quotation system on which that Settlement Value Security is traded or on which futures or options contracts relating to that Settlement Value Security are traded prior to its scheduled closing time unless the earlier closing time is announced by the primary exchange or quotation system at least one hour prior to the earlier of (i) the actual closing time for the regular trading session on the primary exchange or quotation system and (ii) the submission deadline for orders to be entered into the primary exchange or quotation system for execution at the Close of Trading on such day. (vi) The Company, or any of its affiliates, is unable, after using commercially reasonable efforts to unwind or dispose of, or realize, recover or remit the proceeds of, any transactions or assets it deems necessary to hedge the equity price risk of entering into and performing its obligations with respect to the Securities. 6 "Maturity Payment Amount" shall equal, for each $1,000 principal amount of YEELDS, (i) the lesser of (a) the Alternative Redemption Amount and (b) $1,450 and (ii) any accrued but unpaid coupon payments through the Stated Maturity Date. "Multiplier", relating to each Settlement Value 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 Settlement Value Security included in the calculation of the Settlement Value. The initial Multiplier relating to Calpine Corporation common stock shall be 1.0. "Nasdaq" shall mean The Nasdaq Stock Market, Inc. ------ "NYSE" shall mean The New York Stock Exchange, Inc. ---- "Official W.M. Reuters Spot Closing Rate" shall mean the closing spot rate published on Reuters page "WMRA" relevant for a Settlement Value Security. "Relevant Exchange" shall mean for each Settlement Value Security, the primary United States national securities exchange, quotation system, including any bulletin board service, or market on which such Settlement Value Security is traded, or in case such Settlement Value Security is not listed or quoted in the United States, the primary exchange, quotation system or market for such Settlement Value Security. "Scheduled Trading Day" shall mean any day on which each Relevant Exchange is scheduled to be open for trading for its respective regular trading session. "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. "Settlement Value" shall mean the sum of (a) the products of the Closing Prices and the applicable Ending Multipliers for each Settlement Value Security on the Valuation Date and (b) any cash included in the Settlement Value on the Valuation Date; provided, that if a Market Disruption Event occurs on the Valuation Date, the Settlement Value will be determined based on (i) with respect to Settlement Value Securities that have not been subject to a Market Disruption Event, the Closing Price of each such Settlement Value Security on the postponed Valuation Date, and (ii) with respect to Settlement Value Securities that have been subject to a Market Disruption Event, the Average Execution Price on the postponed Valuation Date. "Settlement Value Securities" shall mean the securities included in the calculation of the Settlement Value from time to time and shall initially consist only of the common stock of Calpine Corporation. "Stated Maturity Date" shall mean September 3, 2005 (or if September 3, 2005 is not a Business Day, on the next succeeding Business Day); provided, that if a Market Disruption Event occurs on the Valuation Date, the Stated Maturity Date shall be the third Business Day following the date the Settlement Value is determined. "Stock Settlement Option" shall have the meaning set forth on the face of this Security. 7 "Trustee" shall have the meaning set forth on the reverse of this Security. "Valuation Date" shall mean August 31, 2005; provided, that if such date is not a Scheduled Trading Day, the Valuation Date shall mean the next succeeding Scheduled Trading Day; provided further, that if a Market Disruption Event occurs on such date, the Valuation Date will be the next succeeding Scheduled Trading Day on which no Market Disruption Event occurs. "YEELD" and "YEELDS" shall have the meaning set forth on the face of this Security. 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: Signature:___________________________________ 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-99.2 4 file003.txt FORM OF CALCULATION AGENCY AGREEMENT CALCULATION AGENCY AGREEMENT CALCULATION AGENCY AGREEMENT, dated as of March 3, 2004 (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 $4,000,000 aggregate principal amount of YEELDS(R) 7.5% Yield Enhanced Equity Linked Debt Securities Due September 3, 2005 (a "YEELD" or a "Security" and, in the aggregate, "YEELDS" or 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, (b) the Settlement Value, (c) the Closing Price of each Settlement Value Security on the Valuation Date, (d) the Multipliers for each of the Settlement Value Securities, (e) whether adjustments to the Multipliers should be made, (f) whether a Market Disruption Event has occurred and (g) if the Company elects the Stock Settlement Option, the number of shares of each of the Settlement Value Securities (together with any cash that may be included in the calculation of the Settlement Value) equal to the Maturity Payment Amount. 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. - ---------------------- * "YEELDS" is a registered trademark 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 745 Seventh Avenue, New York, New York 10019 (facsimile: (646) 758-3204) (telephone: (212) 526-7000), Attention: Treasurer, with a copy to 399 Park Avenue, New York, New York 10022 (facsimile: (212) 526-0357) 4 (telephone: (212) 526-7000), Attention: Corporate Secretary, (b) in the case of the Calculation Agent, to it at 745 Seventh Avenue, New York, New York 10019 (facsimile: (646) 758-4942) (telephone: (212) 526-7000), 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 construed 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: Title: LEHMAN BROTHERS INC., as Calculation Agent By: -------------------------- Name: Title: ANNEX A 1. Settlement Value Securities. The "Settlement Value Securities" shall mean the securities included in the calculation of the Settlement Value from time to time and shall initially be the common stock of Calpine Corporation, unless adjusted for certain extraordinary corporate events as described herein. 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 YEELDS (the "Maturity Payment Amount"). The Maturity Payment Amount shall equal (i) the lesser of (a) the Alternative Redemption Amount and (b) $1,450 and (ii) any accrued but unpaid coupon payments through the Stated Maturity Date. 3. Multipliers. "Multiplier" shall mean, with respect to each Settlement Value Security, the number of shares or other units (including any fractional share or other unit expressed as a decimal) of the Settlement Value Security included in the calculation of the Settlement Value. The initial Multiplier relating to Calpine Corporation, initially the only Settlement Value Security, shall be 1.0. The initial Multiplier for any other security which may subsequently become a Settlement Value Security shall be the number of shares or other units of such security which are to be included in the calculation of the Settlement Value at the time the security becomes a Settlement Value Security. The Multiplier with respect to any Settlement Value Security shall remain constant unless adjusted for certain extraordinary corporate events as described below. 4. Adjustments to the Multipliers and the Settlement Value Securities. Adjustments to a Multiplier and the Settlement Value Securities shall be made in the circumstances described below. For purposes of these adjustments, except as noted below, ADRs are treated like Settlement Value 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 a Settlement Value Security is subject to a stock split or reverse stock split, then once the split has become effective, the Multiplier relating to such Settlement Value Security shall be adjusted. The Multiplier shall be adjusted to equal the product of the number of shares outstanding of the Settlement Value Security after the split with respect to each share of such Settlement Value Security immediately prior to effectiveness of the split and the prior Multiplier. o If a Settlement Value Security is subject to an extraordinary stock dividend or extraordinary stock distribution that is given equally to all holders of shares, then once the Settlement Value Security is trading ex-dividend, the Multiplier for such Settlement Value Security shall be increased by the product of the number of shares of such 2 Settlement Value Security issued with respect to one share of such Settlement Value Security and the prior Multiplier. o If the issuer of a Settlement Value Security, or if a Settlement Value Security is an ADR, the foreign issuer of the underlying foreign share, is being liquidated or dissolved or is subject to a proceeding under any applicable bankruptcy, insolvency or other similar law, such Settlement Value Security shall continue to be included in the calculation of the Settlement Value so long as the primary exchange, quotation system or market is reporting a market price for the Settlement Value Security. If a market price, including a price on a bulletin board service, is no longer available for a Settlement Value Security, then the value of the Settlement Value Security shall equal zero for so long as no market price is available, and no attempt shall be made to find a replacement stock or increase the Settlement Value to compensate for the deletion of such Settlement Value Security. o If the issuer of a Settlement Value Security, or if a Settlement Value Security is an ADR, the foreign issuer of the underlying foreign share, has been subject to a merger or consolidation and is not the surviving entity and holders of the Settlement Value Security are entitled to receive cash, securities, other property or a combination thereof in exchange for the Settlement Value Security, then the following shall be included as Settlement Property: o To the extent cash is received, the Settlement Property shall include an amount of cash equal to the product of (1) the cash consideration per share of Settlement Value Security, (2) the Multiplier for the Settlement Value Security and (3) the number of Securities outstanding, each determined as of the time the holders of the Settlement Value Security are entitled to receive the cash consideration (the "M&A Cash Component"), plus accrued interest. If the cash received is denominated in a foreign currency, such cash shall then be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New York City time. If there are several quotes for the Official W.M. Reuters Spot Closing Rate at that time, the first quoted rate starting at 11:00 a.m. shall be the rate used. If there is no such Official W.M. Reuters Spot Closing Rate for a country's currency at 11:00 a.m., New York City time, the foreign currency-denominated cash shall be converted into U.S. dollars using the last available U.S. dollar cross-rate quote before 11:00 a.m., New York City time. Interest shall accrue beginning the first London Business Day after the day that holders of the Settlement Value Security receive the cash consideration until the Stated Maturity Date (the "M&A Cash Component Interest Accrual Period"). Interest shall accrue on the M&A Cash Component at a rate equal to the London Interbank Offered Rate ("LIBOR") with a term corresponding to the M&A Cash Component Interest Accrual Period. o To the extent that equity securities that are traded or listed on an exchange, quotation system or market are received, once the exchange for the new securities has become effective, the former Settlement Value Security shall be removed from the calculation of the Settlement Value and the Settlement Property will include a number of shares of the new security per outstanding Security equal to the Multiplier for the new security as a new Settlement Value Security. The Multiplier for the new Settlement Value Security shall equal the product of the 3 last value of the Multiplier of the original Settlement Value Security and the number of securities of the new Settlement Value Security exchanged with respect to one share of the original Settlement Value Security. o To the extent that equity securities that are not traded or listed on an exchange, quotation system or market or non-equity securities or other property (other than cash) is received, the Calculation Agent shall determine the "Fair Market Value" of the securities or other property received per share of Settlement Value Security based on the Average Execution Price. The Settlement Property shall include an amount of cash equal to the product of (1) the Fair Market Value per share of Settlement Value Security, (2) the Multiplier for the Settlement Value Security and (3) the number of Securities outstanding (the "M&A Sale Component"). The Multiplier and the number of Securities outstanding will be determined as of the time holders of the Settlement Value Security are entitled to receive the securities or other property. The Settlement Value shall also include accrued interest on the M&A Sale Component. Interest shall accrue beginning the first London Business Day after the day that an affiliate of Holdings sells the securities or other property used to hedge Holdings' obligations under the Securities until the Stated Maturity Date (the "M&A Sale Component Interest Accrual Period"). Interest shall accrue at a rate equal to LIBOR with a term corresponding to the M&A Sale Component Interest Accrual Period. o If all of the shares of a Settlement Value Security of an issuer are converted into or exchanged for the same or a different number of shares of any class or classes of common stock other than such Settlement Value Security, whether by capital reorganization, recapitalization or reclassification or otherwise, then, once the conversion has become effective, the former Settlement Value Security shall be removed from the calculation of the Settlement Value and the Settlement Property will include a number of shares of the new common stock per outstanding Security equal to the Multiplier for the new common stock as a new Settlement Value Security. The Multiplier for each new Settlement Value Security shall equal the product of the last value of the Multiplier of the original Settlement Value Security and the number of shares of the new Settlement Value Security issued with respect to one share of the original Settlement Value Security. o If the issuer of a Settlement Value Security, or if a Settlement Value Security is an ADR, the issuer of the underlying foreign share, issues to all of its shareholders common stock or another equity security that is traded or listed on an exchange, quotation system or market of an issuer other than itself, then the Settlement Property shall include a number of shares of the new common stock per outstanding Security equal to the Multiplier for the new common stock or other equity security as a new Settlement Value Security. The Multiplier for the new Settlement Value Security shall equal the product of the last value of the Multiplier with respect to the original Settlement Value Security and the number of shares of the new Settlement Value Security with respect to one share of the original Settlement Value Security. 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 Stock Market, then the ADR shall be removed from the calculation of the Settlement Value, the foreign share underlying the ADR shall be 4 deemed to be a new common stock and the Settlement Property shall include a number of shares of new common stock per outstanding Security equal to the Multiplier for the new common stock as a new Settlement Value Security. The initial Multiplier for that new Settlement Value Security shall equal the product of the last value of the Multiplier with respect to the original ADR and the number of underlying foreign shares represented by a single such ADR. o If a Settlement Value Security is subject to an extraordinary dividend or an extraordinary distribution, including upon liquidation or dissolution, of cash, equity securities that are not traded or listed on an exchange, quotation system or market, non-equity securities or other property of any kind which is received equally by all holders of such Settlement Value Security, then the Settlement Property shall include the following: o To the extent cash is entitled to be received, the Settlement Property shall include on each day after the time that the Settlement Value Security trades ex-dividend until the date the cash consideration is entitled to be received, the present value of the cash to be received per share of Settlement Value Security multiplied by the Multiplier for the Settlement Value Security on such day and by the number of Securities outstanding on such day, discounted at a rate equal to LIBOR, with a term beginning that day and ending on the date that the cash is entitled to be received (the "PV Extraordinary Cash Component"). When the cash consideration is received, the PV Extraordinary Cash Component shall be deleted from the Settlement Value and the Settlement Property shall include an amount of cash equal to the product of (1) the cash consideration per share of Settlement Value Security, (2) the Multiplier for the Settlement Value Security and (3) the number of Securities outstanding, each determined as of the time the holders of the Settlement Value Security are entitled to receive the cash consideration (the "Extraordinary Cash Component"), plus accrued interest. If the cash consideration received or entitled to be received is denominated in a foreign currency, such cash or the present value of such cash, as the case may be, shall be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New York City time. If there are several quotes for the Official W.M. Reuters Spot Closing Rate at that time, the first quoted rate starting at 11:00 a.m. shall be the rate used. If there is no such Official W.M. Reuters Spot Closing Rate for a country's currency at 11:00 a.m., New York City time, the foreign currency-denominated cash shall be converted into U.S. dollars using the last available U.S. dollar cross-rate quote before 11:00 a.m., New York City time. Interest shall accrue on the Extraordinary Cash Component beginning the first London Business Day after the day that holders of the Settlement Value Security are entitled to receive the Extraordinary Cash Component until the Stated Maturity Date (the "Extraordinary Cash Component Interest Accrual Period"). Interest shall accrue at a rate equal to LIBOR with a term corresponding to the Extraordinary Cash Component Interest Accrual Period. o To the extent that equity securities that are not traded or listed on an exchange, quotation system or market or non-equity securities or other property (other than cash) is received, the Calculation Agent shall determine the Fair Market Value of the securities or other property received per share of Settlement Value Security based on the Average Execution Price and the Settlement Property shall include 5 an amount of cash equal to the product of (1) the Fair Market Value per share of Settlement Value Security , (2) the Multiplier for the Settlement Value Security and (3) the number of Securities outstanding (the "Extraordinary Sale Component"). The Multiplier and the number of Securities outstanding will be determined as of the time the holders of the Settlement Value Security are entitled to receive the securities or other property. The Settlement Property shall also include accrued interest on the Extraordinary Sale Component. Interest shall accrue beginning the first London Business Day after the day that an affiliate of Holdings sells the securities or other property used to hedge Holdings' obligations under the Securities until the Stated Maturity Date (the "Extraordinary Sale Component Interest Accrual Period"). Interest shall accrue at a rate equal to LIBOR with a term corresponding to the Extraordinary Sale Component Interest Accrual Period. o If similar corporate events occur with respect to the issuer of an equity security other than a Settlement Value Security, 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 a Settlement Value Security, adjustments will be made to reflect the economic substance of such events. The payment of an ordinary cash dividend by an issuer of a Settlement Value Security, or if a Settlement Value Security is an ADR, by a foreign issuer of the underlying foreign share, from current income or retained earnings shall not result in an adjustment to the Multiplier. No adjustments of any Multiplier of a Settlement Value Security shall be required unless the adjustment would result in a change of at least .1% (.001) in the Multiplier then in effect. Adjustments which result in a change of less than .1% (.001) shall be carried forward and included in the next adjustment, if any. The Multiplier resulting from any of the adjustments specified above shall be rounded at the Calculation Agent's discretion. 5. Definitions. Set forth below are the terms used in the Agreement and in this Annex A. "ADR" shall mean American Depositary Receipt. "Alternative Redemption Amount" shall mean, per YEELD, the product of (a) $1,000 and (b) the Settlement Value divided by $5.4675. "AMEX" shall mean the American Stock Exchange LLC. "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. "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. 6 "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. "Close of Trading" shall mean, in respect of any primary exchange or quotation system, the scheduled weekday closing time on a day on which the primary exchange or quotation system is scheduled to be open for trading for its respective regular trading session, without regard to after hours or any other trading outside of the regular trading session hours. "Closing Price" shall mean, for each Settlement Value Security, as determined by the Calculation Agent based on information reasonably available to it: (i) If the Settlement Value Security is listed on a United States national securities exchange or quotation system or is a security quoted on Nasdaq, the last reported sale price per share at the Close of Trading, regular way, on such day, on the primary securities exchange registered under the Securities Exchange Act of 1934 on which such Settlement Value Security is listed or admitted to trading or on Nasdaq, as the case may be. (ii) If the Settlement Value Security is listed or quoted on a non-United States securities exchange, quotation 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, quotation system or market on which such Settlement Value Security is listed or admitted to trading, as the case may be. The Closing Price per share shall then be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New York City time. If there are several quotes for the Official W.M. Reuters Spot Closing Rate at that time, the first quoted rate starting at 11:00 a.m. shall be the rate used. If there is no such Official W.M. Reuters Spot Closing Rate for a country's currency at 11:00 a.m., New York City time, the Closing Price shall be converted into U.S. dollars using the last available U.S. dollar cross-rate quote before 11:00 a.m., New York City time. (iii) If the Settlement Value Security is not listed on a national securities exchange or quotation system or is not a Nasdaq security, and is listed or traded on a bulletin board, the Average Execution Price per share of the Settlement Value Security. If such Settlement Value Security is listed or traded on a non-United States bulletin board, the Closing Price will then be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New York City time. If there are several quotes for the Official W.M. Reuters Spot Closing Rate at that time, the first quoted rate starting at 11:00 a.m. shall be the rate used. If there is no such Official W.M. Reuters Spot Closing Rate for a country's currency at 11:00 a.m., New York City time, the Closing Price shall be converted into U.S. dollars using the last available U.S. dollar cross-rate quote before 11:00 a.m., New York City time. "Company" shall have the meaning set forth in the preamble to this Agreement. "Ending Multiplier" shall mean, for each Settlement Value Security, the initial Multiplier for such Settlement Value Security adjusted from time to time for the occurrence, 7 prior to the Close of Trading on the Valuation Date, of any of the extraordinary corporate transactions described in Section 4 of this Annex A. "Indenture" shall have the meaning set forth in the preamble to this Agreement. "Issue Date" shall mean March 3, 2004. "LIBOR" shall mean London Interbank Offered Rate. "London Business Day" 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", with respect to a Settlement Value Security, shall mean any of the following events has occurred on any day as determined by the Calculation Agent: (i) A material suspension of or limitation imposed on trading relating to such Settlement Value Security by the Relevant Exchange, at any time during the one-hour period that ends at the Close of Trading on such day, whether by reason of movements in price exceeding limits permitted by that primary exchange or quotation system or otherwise. 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, quotation 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. (ii) A material suspension of or limitation imposed on trading in futures or options contracts relating to such Settlement Value Security by the primary exchange or quotation system on which those futures or options contracts are traded, at any time during the one-hour period that ends at the Close of Trading on such day, whether by reason of movements in price exceeding limits permitted by that primary exchange or quotation system or otherwise. (iii) Any event, other than an early closure, that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, that Settlement Value Security on the primary U.S. exchange or quotation system on which that Settlement Value Security is traded, or in the case of a Settlement Value Security not listed or quoted in the United States, on the primary exchange, quotation system or market for such Settlement Value Security, at any time during the one hour period that ends at the Close of Trading on such day. (iv) Any event, other than an early closure, that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, the futures or options contracts relating to such Settlement Value Security on the primary exchange or quotation system on which those futures or options contracts are traded at any time during the one hour period that ends at the Close of Trading on such day. (v) The closure of the primary exchange or quotation system on which that Settlement Value Security is traded or on which futures or options contracts relating to 8 that Settlement Value Security are traded prior to its scheduled closing time unless the earlier closing time is announced by the primary exchange or quotation system at least one hour prior to the earlier of (i) the actual closing time for the regular trading session on the primary exchange or quotation system and (ii) the submission deadline for orders to be entered into the primary exchange or quotation system for execution at the Close of Trading on such day. (vi) The Company, or any of its affiliates, is unable, after using commercially reasonable efforts to unwind or dispose of, or realize, recover or remit the proceeds of, any transactions or assets it deems necessary to hedge the equity price risk of entering into and performing its obligations with respect to the Securities. "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, Inc. "Official W.M. Reuters Spot Closing Rate" shall mean the closing spot rate published on Reuters page "WMRA" relevant for a Settlement Value Security. "Prospectus Supplement" shall mean the prospectus supplement, dated February 27, 2004, issued by the Company relating to the Securities. "Relevant Exchange" shall mean for each Settlement Value Security, the primary United States national securities exchange, quotation system, including any bulletin board service, or market on which such Settlement Value Security is traded, or in case such Settlement Value Security is not listed or quoted in the United States, the primary exchange, quotation system or market for such Settlement Value Security. "Scheduled Trading Day" shall mean any day on which each Relevant Exchange is scheduled to be open for trading for its respective regular trading session. "Security" and "Securities" shall have the meaning set forth in the preamble to this Agreement. "Settlement Property" shall mean the property described in Section 4 of this Annex A. "Settlement Value" shall mean the sum of (a) the products of the Closing Prices and the applicable Ending Multipliers for each Settlement Value Security on the Valuation Date and (b) any cash included in the Settlement Value on the Valuation Date; provided, that if a Market Disruption Event occurs on the Valuation Date, the Settlement Value will be determined based on (i) with respect to Settlement Value Securities that have not been subject to a Market Disruption Event, the Closing Price of each such Settlement Value Security on the postponed Valuation Date, and (ii) with respect to Settlement Value Securities that have been subject to a Market Disruption Event, the Average Execution Price on the postponed Valuation Date. 9 "Settlement Value Securities" shall have the meaning set forth in Section 1 of this Annex A. "Stated Maturity Date" shall mean September 3, 2005 (or if September 3, 2005 is not a Business Day, on the next succeeding Business Day); provided, that if a Market Disruption Event occurs on the Valuation Date, the Stated Maturity Date shall be the third Business Day following the date the Settlement Value is determined. "Stock Settlement Option" shall mean the Company's option, exercisable in its sole discretion with not less than 15 days' notice to the Trustee and the registered holders of the Securities, to pay the Maturity Payment Amount in shares of the Settlement Value Securities, rather than in cash, as described in the Prospectus Supplement. "Trustee" shall have the meaning set forth in the preamble to this Agreement. "Valuation Date" shall mean August 31, 2005; provided, that if such date is not a Scheduled Trading Day, the Valuation Date shall mean the next succeeding Scheduled Trading Day; provided further, that if a Market Disruption Event occurs on such date, the Valuation Date will be the next succeeding Scheduled Trading Day on which no Market Disruption Event occurs. "YEELD" and "YEELDS" shall have the meaning set forth in the preamble to this Agreement. -----END PRIVACY-ENHANCED MESSAGE-----