Lehman Brothers Supplemental Listing Document Stock Code: 9437/3422/3524/3567
SUPPLEMENTAL LISTING DOCUMENT
Lehman Brothers Holdings Inc.
(incorporated in the State of Delaware)
Supplemental Listing Document relating to
an offer of
75,000,000 European Style (Cash Settled)
Call Warrants 2007-2008 due 27 June 2008
relating to the existing issued ordinary H shares of RMB1.00 each of
Industrial and Commercial Bank of China Limited
(Stock Code: 9437)
150,000,000 European Style (Cash Settled)
Call Warrants 2007-2008 due 27 June 2008
relating to the existing issued ordinary H shares of RMB1.00 each of
China Communications Construction Company Limited
(Stock Code: 3422)
150,000,000 European Style (Cash Settled)
Call Warrants 2007-2008 due 27 June 2008
relating to the existing issued ordinary H shares of RMB1.00 each of
PICC Property and Casualty Company Limited
(Stock Code: 3524)
100,000,000 European Style (Cash Settled)
Call Warrants 2007-2008 due 27 June 2008
relating to the existing issued ordinary H shares of RMB1.00 each of
China Life Insurance Company Limited
(Stock Code: 3567)
This document includes particulars given in compliance with the Rules Governing the Listing of Securities
on The issuer accepts full responsibility for the accuracy of the information contained in the base
listing document dated 25 May 2007, as supplemented by the addendum to the base listing document dated
26 October 2007 and the information contained in this document and confirms, having made all reasonable
enquiries, that to the best of its knowledge and belief there are no other facts the omission of which would
make any statement in the base listing document, the addendum to the base listing document and/or this
document misleading.
Investors are warned that the price of the warrants may fall in value as rapidly as it may rise and holders may
sustain a total loss of their investment. Prospective purchasers should therefore ensure that they understand
the nature of the warrants and carefully study the risk factors set out in the base listing document, the
addendum to the base listing document and this document and, where necessary, seek professional advice,
before they invest in the warrants.
The warrants constitute general unsecured contractual obligations of the issuer and of no other person and if
you purchase the warrants you are relying upon the creditworthiness of the issuer and have no rights under
the warrants against the company which has issued the underlying securities.
Dated 8 November 2007
IMPORTANT
If you are in any doubt as to any of the contents of this document, you should consult your stockbroker
or other registered dealer in securities, bank manager, solicitor, professional accountant or other
professional adviser.
You should read this document as well as our base listing document dated 25 May 2007 (as amended
or updated from time to time) (base listing document) and our addendum to the base listing document
dated 26 October 2007 (addendum) before deciding whether to invest in the warrants.
Lehman Brothers Holdings Inc. (Lehman Brothers, we or us) cannot give you investment advice. You
must decide for yourself whether the warrants meet your investment needs, taking professional advice
if appropriate. This document is not intended to be, and should not be considered as, a
recommendation or advice by us or any of our affiliates that you should purchase any of our structured
products, and you must make your own independent investigation of our financial condition and
affairs and your own appraisal of our creditworthiness.
We undertake during the period in which the warrants are listed on the stock exchange to make
available to you for inspection at the office of Computershare Hong Kong Investor Services Limited,
which is presently at Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong
Kong:
(a) a copy of our base listing document and our addendum together with any further addenda or
successor to the base listing document (both the English version and the Chinese translation);
(b) a copy of this supplemental listing document (both the English version and the Chinese
translation);
(c) a copy of our latest publicly available annual report and interim report or quarterly financial
statements (if any); and
(d) copies of the consent letters of our auditors referred to in our base listing document and our
addendum.
(a)
(b)
(c)
(d)
Our warrants are not available to, or for the benefit of, U.S. persons (as defined in the U.S. Securities
Act of 1933, as amended) (the Securities Act).
—2—
>TABLE OF CONTENTS
|
| RISK FACTORS | 4
|
| SUMMARY OF THE ISSUES | 5
|
| TERMS AND CONDITIONS OF THE WARRANTS | 9
|
| INFORMATION RELATING TO THE COMPANIES | 10
|
| INFORMATION ON THE LIQUIDITY PROVIDER | 11
|
| FURTHER INFORMATION | 13
|
| MORE INFORMATION ABOUT OUR WARRANTS | 14
|
| — 3 — |
RISK FACTORS
You should consider the following summary of risks and the risk factors set out in our base listing
document, together with all other information in this document, our base listing document and
our addendum before making any investment decision. The following summary does not
necessarily set out all the risks related to the warrants and you should not rely on it without
reference to the conditions (which are set out in the section “Terms and Conditions of the Call
Warrants (Cash Settled)” (the call warrants conditions) and “Terms and Conditions of the Put
Warrants (Cash Settled)” (the put warrants conditions, as the case may be, and together with the
call warrants conditions, the conditions) of our base listing document as amended in this
document). If you have any concerns or doubts about the warrants, you should obtain
independent professional advice.
(1) The price of the warrants may fall or rise
rapidly in value and the warrants may expire
worthless, resulting in a total loss of your
investment.
(2) We (acting through our appointed liquidity
provider) may be the only person quoting
prices on the stock exchange for the
warrants. Therefore, the secondary market
may be limited.
(3) If you purchase the warrants, you rely on
our creditworthiness and you have no rights
under the warrants against any company
which issues the underlying shares.
(4) If trading in the underlying shares is
suspended on the stock exchange, trading in
the warrants will be suspended for a similar
period.
(5) There is a time lag between exercise of the
warrants and payment to the holders of the
warrants.
(6) Events may occur which may affect the
value of the underlying share and require an
adjustment to the warrants. However, even
if such event does not require an adjustment
to the warrants, the price of the warrants
may be affected.
(7) The value of the warrants may not correlate
with the movements of the underlying share
price and may be affected by the time
remaining to expiry.
(8) Various potential and actual conflicts of
interest may arise from our overall activities
or activities of our subsidiaries and
affiliates. In the ordinary course of our
business, we may effect transactions on our
own account or for the account of our
customers and hold positions in the
underlying shares.
(9) As the warrants are issued in global
registered form, HKSCC Nominees Limited
will be the only legal owner of the warrants.
You will have to rely on Central Clearing
and Settlement System (CCASS) and/or
your brokers to (a) determine your
beneficial interest in the warrants, (b)
receive announcements and/or information
relating to the warrants and (c) receive
payments under the warrants.
— 4 —
SUMMARY OF THE ISSUES
The following is only a summary of the terms of the warrants. You should read this document together
with our base listing document and our addendum. Terms used in this summary shall have the meaning
provided in the section headed “Terms and conditions of the warrants”.
Launch date 2 November 2007 2 November 2007 2 November 2007 2 November 2007
Stock code 9437 3422 3524 3567
Underlying company Industrial and
Commercial Bank
of China Limited
China
Communications
Construction
Company Limited
PICC Property and
Casualty Company
Limited
China Life
Insurance Company
Limited
Issue size 75,000,000 150,000,000 150,000,000 100,000,000
Style European style cash
settled
European style cash
settled
European style cash
settled
European style cash
settled
Type Call Call Call Call
Shares Existing issued
ordinary H shares
of RMB1.00 each
of the underlying
company.
Existing issued
ordinary H shares
of RMB1.00 each
of the underlying
company.
Existing issued
ordinary H shares
of RMB1.00 each
of the underlying
company.
Existing issued
ordinary H shares
of RMB1.00 each
of the underlying
company.
If a corporate event occurs in respect of the company, for example, if there is a rights issue,
bonus issue, sub-division or consolidation of its shares, we may adjust the terms of the
affected warrants to take into account the consequences of such events. Please refer to
condition 6 of the conditions in our base listing document for further details as to what the
adjustments will be in these circumstances.
Website of
underlying
company
www.icbc-ltd.com www.ccccltd.cn www.piccnet.com.cn www.e-chinalife.com
Issue price HK$1.058 per
warrant
HK$0.341 per
warrant
HK$0.383 per
warrant
HK$0.729 per
warrant
Board lot 1,000 warrants 1,000 warrants 2,000 warrants 1,000 warrants
Exercise price HK$8.38 per
warrant
HK$29.88 per
10 warrants
HK$19.98 per
10 warrants
HK$63.88 per
10 warrants
Expiry date 27 June 2008 27 June 2008 27 June 2008 27 June 2008
If such day is not a business day, the immediately preceding business day.
Exercise amount 1 warrant 10 warrants 10 warrants 10 warrants
Entitlement 1 share 1 share 1 share 1 share
Number of shares to
which the
warrants relate
75,000,000 15,000,000 15,000,000 10,000,000
— 5 —
Cash settlement amount For each exercise amount, you will receive a cash settlement
amount (if any) in Hong Kong dollars and is calculated by us
using the following formula:
For call warrants: [entitlement x (closing price - exercise
price)] - exercise expenses
For put warrants: [entitlement x (exercise price - closing
price)] - exercise expenses
Closing price The arithmetic mean of the closing price of one share (which
is obtained from the daily quotation sheet of the stock
exchange (subject to any adjustments as provided in condition
2 of the conditions) for each valuation date.
Valuation dates Each of the five business days immediately before the
relevant expiry date.
A day is a business day if the stock exchange is open for
dealings in Hong Kong and banks are open for business in
Hong Kong (excluding Saturday).
If a market disruption event occurs on a valuation date, then
such valuation date will be postponed. Please refer to
condition 4B(d) of the conditions for details on what will
happen in such circumstances and when we may have to make
a good faith estimate of the value of the shares.
Exercise at expiry Warrants are exercisable only on the expiry date in integral
multiples of the relevant board lot stated above.
If on the relevant expiry date the cash settlement amount is
greater than zero, the warrants will be exercised automatically
on the expiry date. You will not be required to deliver any
exercise notice.
If on the relevant expiry date the cash settlement amount
is less than or equal to zero, you will lose the value of your
investment.
Payment of cash settlement
amount
If the warrants are automatically exercised on the expiry date,
we will pay you the cash settlement amount (if any).
You must pay your own exercise expenses on automatic
exercise of the warrants on their expiry date. Payment of
the exercise expenses is reflected in the calculation of the
cash settlement amount.
— 6 —
We will pay the cash settlement amount no later than three
business days following the expiry date. Under the conditions
of our warrants, HKSCC Nominees Limited is, legally, the
only “warrantholder” so far as we are concerned. Any cash
settlement amount will be delivered to HKSCC Nominees
Limited as the registered holder of the warrants and will be
delivered to you through CCASS or to your broker/custodian
in accordance with the General Rules of CCASS and the
CCASS Operational Procedures. You may have to rely on
your broker/custodian to ensure the cash settlement amount is
credited to your account with them. Payment of the cash
settlement amount may be delayed if a settlement disruption
event occurs and we are unable to deliver such amount
through CCASS. Please refer to condition 4B(d) for details on
what will happen in such circumstances.
Exercise and trading currency Hong Kong dollars.
Listing We have made an application to the stock exchange for, and
the stock exchange has agreed in principle to, the listing of
and dealings in, the warrants. The issue of the warrants is
conditional on such listing being granted. It is expected that
dealings in the warrants on the stock exchange will commence
on or about 9 November 2007.
We do not intend to apply for a listing of the warrants on any
other stock exchange other than the stock exchange.
Admission into CCASS All necessary arrangements have been made to enable the
warrants to be admitted to CCASS. All activities in CCASS
are subject to the General Rules of CCASS and CCASS
Operational Procedures in effect from time to time. If you are
a CCASS investor participant you may hold your warrants in
your account with CCASS. If you do not have a CCASS
account, your broker (as a CCASS participant) will arrange to
hold the warrants for you in an account at CCASS.
Form The warrants are represented by a global certificate registered
in the name of HKSCC Nominees Limited. You are not
entitled to definitive certificates. Computershare Hong Kong
Investor Services Limited will maintain a register in Hong
Kong showing HKSCC Nominees Limited as the registered
holder of the warrants. Any notices delivered to HKSCC
Nominees Limited as the registered holder of the warrants
will be communicated to you or your broker/custodian as
CCASS participants in accordance with the General Rules of
CCASS and the CCASS Operational Procedures. You may
have to rely on your broker/custodian to ensure that the
notices reach you.
— 7 —
You, as a beneficial holders of the warrants, are not entitled
to any certificate representing their interests in the warrants.
You can refer to the records of CCASS or their
brokers/custodians and the statements you receive from
CCASS or their brokers/custodians to determine their
beneficial interests in the warrants.
Transfers of warrants You can only transfer your warrants in board lots or integral
multiples thereof in CCASS in accordance with the General
Rules of CCASS and the CCASS Operational Procedures. If
you transfer your warrants through the stock exchange,
settlement must currently be made not later than two trading
days after the dealing was entered into.
Status of the Warrants upon
liquidation
The warrants will constitute our general unsecured
contractual obligations. They are not obligations of any other
person. The warrants will rank equally among themselves and
(save for certain obligations required to be preferred by law)
equally with all our other unsecured obligations.
Governing law Hong Kong law.
Maintenance of register Computershare Hong Kong Investor Services Limited will
maintain the register for the warrants.
Liquidity provider Lehman Brothers Securities Asia Limited
(Broker ID Number: 9549)
26th Floor
Two International Finance Centre
8 Finance Street
Central, Hong Kong
Tel: (852) 2252 6701
— 8 —
TERMS AND CONDITIONS OF THE WARRANTS
The conditions applicable to the warrants are set out in the section “Terms and Conditions of the Call
Warrants (Cash Settled)” and “Terms and Conditions of the Put Warrants (Cash Settled)”, as the case
may be, in our base listing document. For the purposes of the conditions, the terms below shall have
the following meanings:
Board Lot: 1,000 Warrants 1,000 Warrants 2,000 Warrants 1,000 Warrants
Company: Industrial and
Commercial Bank
of China Limited
China
Communications
Construction
Company Limited
PICC Property and
Casualty Company
Limited
China Life
Insurance Company
Limited
Dealing
Commencement
Date:
9 November 2007 9 November 2007 9 November 2007 9 November 2007
Entitlement: 1 Share 1 Share 1 Share 1 Share
Exercise Amount: 1 Warrant 10 Warrants 10 Warrants 10 Warrants
Exercise Price: HK$8.38 per
Warrant
HK$29.88 per 10
Warrants
HK$19.98 per
10 Warrants
HK$63.88 per
10 Warrants
Issue Date: 8 November 2007 8 November 2007 8 November 2007 8 November 2007
Maturity Date: 27 June 2008 27 June 2008 27 June 2008 27 June 2008
Shares: Existing issued
ordinary H shares
of RMB1.00 each
of the Company
Existing issued
ordinary H shares
of RMB1.00 each
of the Company
Existing issued
ordinary H shares
of RMB1.00 each
of the Company
Existing issued
ordinary H shares
of RMB1.00 each
of the Company
Warrants: 75,000,000
European Style
(Cash Settled)
Call Warrants in
Global Registered
Form due 27 June
2008 relating to the
Shares
150,000,000
European Style
(Cash Settled)
Call Warrants in
Global Registered
Form due 27 June
2008 relating to the
Shares
150,000,000
European Style
(Cash Settled)
Call Warrants in
Global Registered
Form due 27 June
2008 relating to the
Shares
100,000,000
European Style
(Cash Settled)
Call Warrants in
Global Registered
Form due 27 June
2008 relating to the
Shares
— 9 —
INFORMATION RELATING TO THE COMPANIES
Where can you obtain information on the companies, such as their published consolidated
financial statements and their interim financial statements, if any?
You can do the following:
• talk to your financial advisers
• view the website of the stock exchange (www.hkex.com.hk)
• view the website of each of the companies (please refer to the “Summary of the Issues” in
this document). Each company may not always maintain a website and may change or add
a new website or websites, or may amend, or remove any information posted on such
websites. You should conduct your own web searches to ensure that you are viewing the most
up to date version of each company’s website. We accept no responsibility for that
information, including whether that information is accurate, complete or up-to-date.
— 10 —
INFORMATION ON THE LIQUIDITY PROVIDER
Will there be a market for the warrants?
The stock exchange requires us to provide
liquidity in the warrants to ensure that there will
always be a market price available for the
purchase and sale of the warrants (subject to the
circumstances described below). We have
appointed Lehman Brothers Securities Asia
Limited (ID Number 9549) as the liquidity
provider for the warrants.
What is a liquidity provider?
The liquidity provider is one of our affiliates. The
liquidity provider is a stock exchange participant
and is therefore subject to prudential and conduct
regulation by the stock exchange and the
Securities and Futures Commission. The liquidity
provider has agreed to act as our agent in
providing liquidity in the warrants. If the
liquidity provider is unable to perform its
functions, we will appoint a substitute liquidity
provider for the warrants.
How will the liquidity provider provide
liquidity?
The liquidity provider will use its reasonable
endeavours to make a market in the warrants by
responding to requests for bid and offer prices.
You can request for a price by calling (852) 2252
6701. The liquidity provider will respond to your
request within 15 minutes of your request.
All quotes will be displayed on the designated
stock page for the warrants. The liquidity
provider will provide quotes with a maximum of
a 25 tick spread (where ‘spread’ is as prescribed
under the rules of the stock exchange) between
bid and offer prices, for a minimum of ten board
lots of the warrants. The liquidity provider will
provide you with prices for the warrants in the
secondary market during the life of the warrants.
Such prices will be available on each business
day on which the warrants are traded on the stock
exchange from five minutes after each morning
trading session or after trading commences for the
first time on any business day until the market
closes.
How are the prices calculated?
Any price provided by the liquidity provider on
our behalf will be based on our pricing model
which takes into account such factors as we deem
appropriate, including, without limitation, the
volatility and price or level of the shares, the time
left to the expiry of the warrants, the exercise
price of the warrants, the dividend history of the
shares and the prevailing interest rate climate.
Are there circumstances that the liquidity
provider cannot provide liquidity?
There will be circumstances under which the
liquidity provider may not be able to, and will not
be obliged to, provide liquidity. Such
circumstances may include:
(i) when the warrants are suspended from
trading for any reason including, but
without limitation, as a result of the shares
being suspended from trading;
(ii) when there are no warrants available for
market making activities by the liquidity
provider (in which event, only a bid price
for the warrants will be available), and for
the avoidance of doubt, in determining
whether warrants are available for market
making activities, warrants held by us or
any of our affiliates in a fiduciary or agency
(as opposed to proprietary) capacity shall be
deemed to be not available for market
making activities;
(iii) if the liquidity provider is not able to short
sell the shares (in which case for a put
warrant a bid price will not be available and
for a call warrant an offer price will not be
available);
— 11 —
(iv) during the period of five business days
immediately prior to the expiry date of the
warrants;
(v) operational and technical problems affecting
the ability of the liquidity provider to
provide liquidity or operational and
technical problems affecting the proper
functioning of the stock exchange;
(vi) if the stock market experiences exceptional
price movement and volatility, i.e. during
fast markets;
(vii) the occurrence of market disruption events,
including, without limitation, any
suspension of or limitation imposed on
trading (caused by movements in price
exceeding limits permitted by the relevant
exchange or otherwise) in the shares or any
warrants, options contracts or futures
contracts relating to the shares;
(viii)when the ability of the liquidity provider
acting on our behalf to source a hedge or
unwind an existing hedge, as determined by
the liquidity provider in its discretion acting
in good faith, is materially affected by
prevailing market conditions (in which case
either only a bid price or only an offer price
of the warrants shall be made but not both);
and
(ix) when the theoretical value of each warrant
(as determined by the liquidity provider
based on the pricing model) is less than
HK$0.01, then the liquidity provider will
not be obliged to provide a bid price for the
warrants.
— 12 —
FURTHER INFORMATION
Are we regulated by any bodies under the
rules?
We are not regulated by any of the bodies referred
to in rule 15A.13(2) or (3) of the rules. We are
subject to the reporting requirements of the U.S.
Securities and Exchange Commission.
Have we been rated by any credit rating
agency?
As of the date of this document, our senior long
term debt was rated A1 by Moody’s Investors
Service, Inc., A+ by Standard and Poor’s Ratings
Group.
Are we involved in any litigation?
As of the date of this document and except as set
out in this document, in our base listing document
and our addendum, Lehman Brothers and its
group companies are not involved in any
litigation, claims or arbitration proceedings
which are material in the context of the issue of
the warrants. Also, we are not aware of any
proceedings or claims which are threatened or
pending against Lehman Brothers or its group
companies.
Has there been any material adverse change?
Except as set out in this document, in our base
listing document and our addendum, there has
been no material adverse change in the financial
or trading position of Lehman Brothers or its
group companies, since 30 November 2006.
Who makes determinations and calculations?
We will make any necessary determinations or
calculations in respect of the warrants.
Where can you find out information about us?
You can find out more about us on the website of
the group of companies to which we belong,
which is www.lehman.com.
Are there any experts/auditors involved?
Our auditors, Ernst & Young LLP, have given and
have not withdrawn their written consent to the
inclusion of (i) their report dated 13 February
2007, in our base listing document and (ii) their
report dated 10 October 2007 (which relates to
our quarterly report for the quarterly period ended
31 August 2007) in our addendum, in each case,
in the form and context in which it is included.
The reports were not prepared for incorporation
in our base listing document and our addendum.
Our auditors do not have any shareholding in our
company or in any member of our group, nor do
they have the right (whether legally enforceable
or not) to subscribe for or to nominate persons to
subscribe for our securities or securities in any
member of our group.
Are there any arrangements with brokers?
We do not have any operational arrangements is
place with any brokers with respect to the
distribution of the warrants.
Do the stock exchange and the Securities and
Futures Commission charge any fees?
The stock exchange charges a trading fee of 0.005
per cent. and the Securities and Futures
Commission charges a transaction levy of 0.004
per cent. in respect of each transaction effected
on the stock exchange payable by each of the
seller and the buyer and calculated on the value of
the consideration for the relevant securities. The
levy for the investor compensation fund is
currently suspended.
Is stamp duty payable?
There is no stamp duty payable in Hong Kong on
the transfer of the warrants.
Has there been any updated information about
us since the date of our base listing document
and our addendum?
There is no supplemental information about us
except as set out in this document. The
information in our base listing document as
supplemented by our addendum is up-to-date and
is true and accurate as of the date of this
document, except as modified and supplemented
in this document.
— 13 —
MORE INFORMATION ABOUT OUR WARRANTS
What happens if a market disruption event
occurs on a valuation date?
Generally, if we decide that a market disruption
event has occurred on a valuation date, then that
valuation date will be postponed until the next
business day on which there is no market
disruption. However, if the postponed valuation
date falls on the expiry date (or after), then the
business day before the expiry date will be the
valuation date even if there may be market
disruption on that day. In this case, we will make
a good faith estimate of the value of the shares on
that valuation date. Please refer to condition 2(c)
of the call warrants conditions or the put warrants
conditions, as the case may be for a list of events
constituting a market disruption event and
condition 4(B)(d) of the call warrants conditions
or the put warrants conditions, as the case may be
for details.
Who should buy the warrants? Are they
suitable for everyone?
The warrants are not suitable for everyone. You
should make sure you fully understand the terms
of the warrants, how the warrants work and the
associated risks. The risk factor sections in our
base listing document and in this document
highlight some of the associated risks and you
should study them carefully. You should also
consider your financial position and investment
objectives before deciding to invest in the
warrants. Most importantly, you should consult
your financial advisers, accounting and tax
professionals where necessary.
Where can you find more information about us
and the warrants?
Our warrants are issued under our Hong Kong
listed structured products programme. The
programme is described in our base listing
document. Please read our base listing document
and our addendum together with this document
carefully before you decide whether to buy our
warrants. Our base listing document and our
addendum contain important information,
including information about:
• our business, financial condition and
profitability;
• the risks of buying our warrants;
• Hong Kong taxation issues in relation to our
warrants; and
• the legally binding terms and conditions of
the warrants.
We have not authorised anyone to give you any
information about our warrants other than the
information in this document, our base listing
document and our addendum. You should not rely
on any other information and we will not be
responsible for any losses arising from such other
information. Our base listing document, our
addendum and this document are also available in
a Chinese translation if you prefer.
— 14 —
PARTIES INVOLVED
Issuer
Head Office of the Issuer
Lehman Brothers Holdings Inc.
745 Seventh Avenue
New York, New York 10019
USA
Registrar
Computershare Hong Kong Investor Services Limited
Rooms 1712-1716, 17th Floor, Hopewell Centre
183 Queen’s Road East
Hong Kong
Auditors
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
USA
Legal Advisers
As to Hong Kong law
Allen & Overy
9th Floor
Three Exchange Square
Central
Hong Kong
Liquidity Provider
Lehman Brothers Securities Asia Limited
26th Floor
Two International Finance Centre
8 Finance Street
Central
Hong Kong
