Exhibit 4.09
CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated
as of May 18, 2005 (this “ Agreement ”),
between Lehman Brothers Holdings Inc. (the “ Company
”) and Lehman Brothers Inc., as Calculation Agent.
WHEREAS, the Company proposes to
issue and sell its Notes, Performance Linked to the Value of a
Common Stock, a Stock Index, a Basket of Common Stocks or a Basket
of Stock Indices (the “ Notes ”) from time to
time;
WHEREAS, the terms of each series of
the Notes will be described in a pricing supplement (in connection
with the performance by the Calculation Agent of its services
hereunder with respect to a particular series of the Notes, the
prospectus supplement relating to such particular series of the
Notes is referred to herein as the “ relevant Pricing
Supplement ”) and a prospectus supplement, dated
May 18, 2005, to the prospectus dated May 18, 2005, as
supplemented by a prospectus supplement dated May 18,
2005;
WHEREAS, the Notes 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 each series of the Notes (in connection with the
performance by the Calculation Agent of its services hereunder with
respect to a particular series of the Notes, such particular series
of the Notes is referred to herein as the “ relevant
Notes ”);
NOW THEREFORE, the Company and the
Calculation Agent agree as follows:
1.
Appointment of Agent
. The Company hereby appoints
Lehman Brothers Inc. as Calculation Agent and Lehman Brothers Inc.
hereby accepts such appointment as the Company’s agent for
the purpose of performing the services hereinafter described upon
the terms and subject to the conditions hereinafter
mentioned.
2.
Calculations and Information
Provided . In
response to a request made by the Trustee for a determination of
the Maturity Payment Amount, the Redemption Payment Amount or the
Optional Repurchase Amount with respect to any series of the Notes,
the Calculation Agent shall determine the applicable Payment Amount
in accordance with the terms of the relevant Notes and this
Agreement and notify the Trustee of its determination. In
addition, the Calculation Agent shall also be responsible for
determining each of the following items for each series of the
Notes, to the extent applicable:
(a)
the Settlement Value and any
adjustments thereto;
(b)
in the case of Notes whose
performance is linked to a common stock or a basket of common
stocks:
(i)
the Closing Price of each Settlement
Value Security on any date that the Settlement Value is to be
determined,
(ii)
the Multiplier for each Settlement
Value Security, and
(iii)
whether and what adjustments to the
Multipliers should be made;
(c)
in the case of Notes whose
performance is linked to an index or a basket of
indices:
(i)
the Closing Level of each Relevant
Index on any date that the Settlement Value is to be
determined,
(ii)
whether and what adjustments to any
Relevant Index should be made,
(iii)
any successor or substitute index if
publication of a Relevant Index is discontinued, and
(iv)
the Closing Level of the Relevant
Index if the publisher of a Relevant Index discontinues publication
of such index and the Calculation Agent determines that no
successor index is available at such time, or if the publisher of
such Relevant Index fails to calculate and publish a Closing Level
for the Relevant Index on any date when it would ordinarily do so
in accordance with customary practice;
(d)
whether a Market Disruption Event
has occurred;
(e)
if Stock Settlement is applicable,
the number and kind of Settlement Value Securities to be delivered,
the value of any fractional shares thereof and whether cash or
other property shall be delivered in lieu of, or in addition to,
any Settlement Value Securities;
(f)
the Amortized Principal
Amount;
(g)
the amount payable upon repayment of
the Notes on any Optional Reset Date;
(h)
whether a particular day is a
Scheduled Trading Day;
(i)
the applicable Valuation Date;
and
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(j)
any other calculation, determination
or adjustment specified as being made by the Calculation Agent in
this Agreement, the relevant Pricing Supplement or the relevant
Notes.
The Calculation Agent shall notify
the Trustee of all such calculations, determinations and adjustment
or if a Market Disruption Event with respect to a series of Notes
has occurred. Annex A hereto sets forth the procedures the
Calculation Agent will use to determine the information described
in this Section 2 with respect to a series of
Notes.
3.
Calculations
. Any calculation or
determination by the Calculation Agent pursuant hereto shall be
made at the sole discretion of the Calculation Agent and 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 and not
as an agent 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 Notes;
(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 Notes 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
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specifying such removal and the date when it
shall become effective. Such resignation or removal shall
take effect upon the appointment by the Company, as hereinafter
provided, of a successor Calculation Agent and the acceptance of
such appointment by such successor Calculation Agent. In the
event a successor Calculation Agent has not been appointed and has
not accepted its duties within 90 days of the Calculation
Agent’s notice of resignation, the Calculation Agent may
apply to any court of competent jurisdiction for the designation of
a successor Calculation Agent.
(b)
In case at any time the Calculation
Agent shall resign, or shall be removed, or shall become incapable
of acting, or shall be adjudged bankrupt or insolvent, or make an
assignment for the benefit of its creditors or consent to the
appointment of a receiver or custodian of all or any substantial
part of its property, or shall admit in writing its inability to
pay or meet its debts as they mature, or if a receiver or custodian
of it or all or any substantial part of its property shall be
appointed, or if any public officer shall have taken charge or
control of the Calculation Agent or of its property or affairs, for
the purpose of rehabilitation, conservation or liquidation, a
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
. Capitalized terms not
otherwise defined herein or in Annex A hereto are used herein as
defined in the relevant Notes or, if not defined in the relevant
Notes, as defined in the Indenture.
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
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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) (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 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.
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IN WITNESS WHEREOF, this Agreement
has been entered into as of the day and year first above
written.
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LEHMAN BROTHERS HOLDINGS
INC.
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By:
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Name:
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Title:
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LEHMAN BROTHERS INC.,
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as Calculation
Agent
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By:
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Name:
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Title:
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6
ANNEX A
1.
Capitalized terms
not otherwise defined herein are used herein as defined in the
relevant Notes or, if not defined in the relevant Notes, as defined
in the Indenture.
2.
Determination
of the Payment Amount, Alternative Redemption Amount and Settlement
Value .
The Calculation Agent shall
determine the applicable Payment Amount in accordance with the
terms of the relevant Notes and this Agreement. In connection
therewith, the Calculation Agent shall also calculate the related
Alternative Redemption Amount and Settlement Value, all in
accordance with the terms of the relevant Notes and this
Agreement.
3.
Stock
Settlement .
If the relevant Notes may be settled
on the Stated Maturity Date or on the Optional Repurchase Date and
if Stock Settlement is applicable, the Calculation Agent will
determine the number and kind of Settlement Value Securities to be
delivered, and whether cash or other property shall be delivered in
lieu of, or in addition to, any Settlement Value Securities, all in
accordance with Section 4 hereof and the terms of the relevant
Notes.
4.
Adjustments to
the Multipliers and the Settlement Value Securities
.
Adjustments to a Multiplier and the
Settlement Value Securities shall be made by the Calculation Agent
in the circumstances described below. For purposes of the
following adjustments, except as noted below, ADSs shall be treated
like common stock if a comparable adjustment to the foreign shares
underlying the ADSs is made pursuant to the terms of the depositary
arrangement for the ADSs or if holders of ADSs are entitled to
receive property in respect of the underlying foreign
share.
(a)
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.
(b)
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 Settlement Value Security issued with respect to one share
of such Settlement Value Security and the prior
Multiplier.
(c)
If the issuer of
a Settlement Value Security, or if a Settlement Value Security is
an ADS, 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 Relevant
Exchange 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
A-1
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
i
