Exhibit 4.02


 


CUSIP
NO. 5252M0FY8


ISIN NO. US5252M0FY8


 




	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT:
  $1,500,000

  
	
  No. R-1

  	
   

  	
   

  






 


LEHMAN BROTHERS HOLDINGS INC.


 


MEDIUM-TERM NOTE, SERIES I


 


CRUDE OIL-LINKED CAPPED PARTICIPATION NOTES
 DUE MAY 30, 2013


 


THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY OR A NOMINEE OF THE DEPOSITORY. 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.


 


UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
NOTES IN CERTIFICATED FORM (A “CERTIFICATED NOTE”), THIS GLOBAL 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 THE 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.


 





















 


LEHMAN BROTHERS HOLDINGS
INC., a corporation duly organized and existing under the laws of the State of Delaware
(herein called the “Company,” which term includes any successor corporation
under the Indenture referred to on the reverse hereof), for value received,
hereby promises to pay to CEDE & Co., or registered assigns, on the
Maturity Date, an amount
equal to the Redemption Amount.


 


The
“Maturity Date” is May 30, 2013, or if such day is not a Business Day, on
the next following Business Day.


 


The “Valuation Date” is May 22, 2013, or if such day is not an Exchange Business
Day, the immediately preceding Exchange Business Day; provided
that if a Disruption Event is in effect on the scheduled Valuation Date, the
Valuation Date may be postponed (as described below).


 


The “Redemption Amount” for each $1,000 note will be
a single U.S. dollar payment on the Maturity Date equal to $1,000, plus:


 




	
  (A)

  	
   

  	
  $1,000 times the Crude Oil
  Return Cap, if the Crude Oil Return is greater than or equal to the Crude Oil
  Return Cap; or

  
	
   

  	
   

  	
   

  
	
  (B)

  	
   

  	
  $1,000 times the Crude Oil
  Return, if the Crude Oil Return is greater than 0.000%, but less than the
  Crude Oil Return Cap; or

  
	
   

  	
   

  	
   

  
	
  (C)

  	
   

  	
  Zero, if the Crude Oil Return
  is less than or equal to 0.000%.

  






 


“Crude Oil” is light sweet crude oil.


 


The “Crude Oil Return Cap” is 225%.


 


The
“Crude Oil Return” is a quotient, the numerator of which is the difference of
the Final Crude Oil Price minus the Crude Oil Strike and the denominator of
which is the Crude Oil Strike, expressed as a percentage rounded to three
decimal places.


 


The “Trade Date” is May 22, 2008.


 


The “Issue Date” is May 30, 2008.


 


The “Crude Oil Contract” is the first nearby month
futures contract (or, in the case of the last trading day of the first nearby
month contract, the second nearby month contract) for Crude Oil traded on the
Relevant Exchange.


 


The “Crude Oil Price” is the official settlement
price of the Crude Oil Contract, expressed as the U.S. dollar price per barrel
of Crude Oil, as made public by the Relevant Exchange (subject to the
occurrence of a Disruption Event).


 


The “Final Crude Oil Price” is the Crude Oil Price
on the Valuation Date.


 


The
“Crude Oil Strike” is $ 130.81 (equal to the Crude Oil Price on the Trade
Date).


 


2





















 


The “Relevant Exchange” is the NYMEX Division, or its
successor, of the New York Mercantile Exchange, Inc., or its successor;
or, if NYMEX is no longer the principal exchange or trading market for Crude
Oil options or futures contracts, such other exchange or principal trading
market for Crude Oil as determined in good faith by the Calculation Agent which
serves as the source of prices for Crude Oil, and any principal exchanges where
options or futures contracts on Crude Oil are traded.


 


An “Exchange Business Day” is a day, as determined
by the Calculation Agent, on which the Relevant Exchange is scheduled to be
(or, but for the occurrence of a Disruption Event, would have been) open for
trading during its regular trading session (notwithstanding the Relevant
Exchange closing prior to its scheduled closing time).


 


If a Disruption Event identified in clauses (A), (B) or
(C) below has occurred and is in effect on the scheduled Valuation Date,
the Calculation Agent will calculate the Final Crude Oil Price on the
immediately succeeding Exchange Business Day on which no Disruption Event
occurs or is continuing; provided
however that if a Disruption Event has occurred or is continuing on each of the
three scheduled trading days following the scheduled Valuation Date, then (a) that
third scheduled trading day shall be deemed the Valuation Date; and (b) the
Calculation Agent will determine the Final Crude Oil Price on such day in its
sole and absolute discretion taking into account the latest available quotation
for the Crude Oil Price and any other information that in good faith it deems
relevant.


 


If a Disruption Event identified in clauses (D) or
(E) is in effect on the scheduled Valuation Date, the Calculation Agent
will determine the Final Crude Oil Price on the scheduled Valuation Date in its
sole and absolute discretion taking into account the latest available quotation
for the Crude Oil Price and any other information that in good faith it deems
relevant.


 


A
“Disruption Event” means any of the following events, as determined in good
faith by the Calculation Agent:


 




	
  (A)

  	
   

  	
  the suspension of or material limitation on trading in
  the Crude Oil Contract or Crude Oil, or futures contracts or options related
  to the Crude Oil Contract or Crude Oil, on the Relevant Exchange;

  
	
   

  	
   

  	
   

  
	
  (B)

  	
   

  	
  either (i) the failure of trading to commence, or
  permanent discontinuance of trading, in the Crude Oil Contract or Crude Oil,
  or futures contracts or options related to the Crude Oil Contract or Crude
  Oil, on the Relevant Exchange, or (ii) the disappearance of, or of
  trading in, Crude Oil;

  
	
   

  	
   

  	
   

  
	
  (C)

  	
   

  	
  the failure of the Relevant Exchange to publish the
  official daily settlement price for that day for the Crude Oil Contract (or
  the information necessary for determining the settlement price);

  
	
   

  	
   

  	
   

  
	
  (D)

  	
   

  	
  the occurrence since the Original Trade Date of a
  material change in the content, composition, or constitution of Crude Oil or
  the Crude Oil Contract; or

  
	
   

  	
   

  	
   

  
	
  (E)

  	
   

  	
  the occurrence since the Original Trade Date of a
  material change in the formula for or the method of calculating the
  settlement price of the Crude Oil Contract.

  






 


3





















 




	
  For the purpose of determining
  whether a Disruption Event has occurred:

  
	
   

  	
   

  	
   

  
	
  (1)

  	
   

  	
  a limitation on the hours in a trading day and/or number
  of days of trading will not constitute a Disruption Event if it results from
  an announced change in the regular business hours of the Relevant Exchange;

  
	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  a suspension in trading on the Relevant Exchange (without
  taking into account any extended or after-hours trading session), in the
  Crude Oil Contract, by reason of a price change reflecting the maximum
  permitted price change from the previous trading day’s settlement price will
  constitute a Disruption Event; and

  
	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  a suspension of or material limitation on trading on the
  Relevant Exchange will not include any time when the Relevant Exchange is
  closed for trading under ordinary circumstances.

  






 


The “Calculation Agent” means Lehman Brothers
Commodity Services Inc, the determinations and calculations of which will be
binding absent manifest error.


 


Except as provided below, any Redemption Amount 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.


 


Payment of any Redemption Amount will be made in immediately available
funds in accordance with the normal procedures of the Trustee (or any duly
appointed Paying Agent).


 


The Company will pay any administrative costs imposed by banks
in making payments in immediately available funds, but any tax, assessment or
governmental charge imposed upon payments hereunder, including, without
limitation, any withholding tax, will be borne by the Holder hereof.


 


References herein
to “U.S. dollars” or “U.S.$” or “$” or “USD” are to the coin or currency of the
United States as at the time of payment is legal tender for the payment of
public and private debts.


 


REFERENCE IS
HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
HEREOF.  SUCH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.


 


This Note shall
not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the
Indenture.


 


4





















 


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: May 30,
  2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Andrew M.W. Yeung

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Cindy Buckholz

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
					



 


TRUSTEE’S
CERTIFICATE OF AUTHENTICATION


 


This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.


 


	
  CITIBANK, N.A.

  	
   

  
	
    as
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Officer

  	
   

  



 


5





















 


[REVERSE
OF NOTE]


 


LEHMAN BROTHERS
HOLDINGS INC.


MEDIUM-TERM NOTES,
SERIES I


CRUDE OIL-LINKED CAPPED PARTICIPATION NOTES  
 DUE MAY 30, 2013


 


Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series I, Crude
Oil-Linked Capped Participation Notes (herein called the “Notes”).  The
Notes are one of an indefinite number of series of debt securities of the Company
(collectively, the “Securities”) issued or issuable under and pursuant to an
indenture dated as of September 1, 1987, as amended and supplemented (the “Indenture”),
duly executed and delivered by the Company and Citibank, N.A., as Trustee
(herein called the “Trustee”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Securities.  The separate series of Securities may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption provisions or repurchase rights (if any), may be subject to
different sinking, purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary as in the
Indenture provided.


 


Section 2.  Principal Amount for Indenture Purposes.  For the purpose of determining whether
Holders of the requisite amount of Notes of this series outstanding under the
Indenture have made a demand, given a notice or waiver or taken any other
action, the principal amount of this Note will be deemed to be the principal
amount of this Note then outstanding.


 


Section 3.  Modification and Waivers.  The Indenture contains provisions permitting
the Company and the Trustee, with the consent of the Holders of not less than
66-2/3% in aggregate principal amount of each series of the Securities at the
time Outstanding to be affected, 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 Redemption Amount or the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or reduce any
premium or other amount payable on redemption, or make the Redemption Amount or
the principal amount thereof, premium or other amount payable, if any, or
interest thereon payable in any coin or currency other than that herein above
provided, without the consent of the Holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security so affected.  It is also provided in the Indenture that,
prior to any declaration accelerating the maturity of any series of Securities,
the holders of a majority in aggregate principal amount of the Securities of
such series


 





















 


Outstanding may on behalf
of the holders of all the Securities of such series waive any past default or
Event of Default under the Indenture with respect to such series and its
consequences, except a default in the payment of interest, if any, on the
Redemption Amount or the principal amount, or premium, if any, on any of the
Securities of such series, or in the payment of any sinking fund installment or
analogous obligation with respect to Securities of such series.  Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
holders and owners of this Note and any Notes of this series which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes of this series.


 


Section 4.  Obligations Unconditional.  No reference herein to the Indenture and no
provisions of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay any
Redemption Amount on this Note at the place, at the respective times, at the
rate, and in the coin or currency herein prescribed.


 


Section 5.  Defeasance.  The Indenture contains provisions for the
discharge of the Indenture and defeasance at any time of the indebtedness on
this Note upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.


 


Section 6.  Authorized Form and Denominations.  The Notes of this series are issuable in
registered form, without coupons.  Each
Note will be issued initially as either a Global Security or a Certificated
Note, at the option of the Company, in denominations of $1,000 or whole
multiples of $1,000, either at the office or agency to be designated and
maintained by the Company for such purpose in the Borough of Manhattan, New
York City, pursuant to the provisions of the Indenture or at any of such other
offices or agencies as may be designated and maintained by the Company for such
purpose pursuant to the provisions of the Indenture, and in the manner and
subject to the limitations provided in the Indenture, but without the payment
of any service charge, except for any tax or other governmental charges imposed
in connection therewith.  Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, except that Global Securities
will not be exchangeable for Certificated Notes of this series.


 


Section 7.  Registration of Transfer.  As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer, at the Corporate Trust Office or agency in a Place of
Payment for this Note, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar
requiring such written instrument of transfer duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Notes of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.


 


If at any time the
Depository notifies the Company that it is unwilling or unable to continue as
Depository or if at any time the Depository shall no longer be eligible under
the Indenture, the Company shall appoint a successor Depository.  If a successor Depository for the Notes of
this series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
issue, and the Trustee will


 





















 


authenticate and deliver,
Notes of this series in definitive form in an aggregate principal amount equal
to the principal amount of this Note.


 


No service charge
shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.


 


Prior to due presentment
of this Note for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the person in whose name this
Note is registered as the owner hereof for all 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.


 


Section 8.  Events of Default.  If an Event of Default with respect to Notes
of this series shall occur and be continuing, the amount that may be declared
due and payable upon any acceleration of the notes will be determined by the
Calculation Agent for the period from and including the Issue Date to but
excluding the date of early repayment and will equal, for each note, the
Redemption Amount, calculated as the date of early repayment were the Maturity
Date. If a bankruptcy proceeding is commenced in respect of Lehman Brothers
Holdings, the claim of the beneficial owner of a note for the period from and
including the Issue Date to but excluding the date of early repayment will be
capped at the Redemption Amount, calculated as though the date of the
commencement of the proceeding were the Maturity Date.


 


Section 9.  No Recourse Against Certain Persons.  No recourse for the payment of the Redemption
Amount or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any Indenture supplemental thereto or in any Note, or because
of the creation of any indebtedness represented thereby, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.


 


Section 10.  Defined
Terms.  All terms used but not
defined in this Note are used herein as defined in the Indenture.


 


Section 11.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.