Exhibit 4.01


 


CUSIP
NO. 52517PD99


 


	
  REGISTERED

  	
   

  	
  PRINCIPAL
  AMOUNT: $4,780,000

  
	
  No. R-1

  	
   

  	
   

  



 


LEHMAN BROTHERS HOLDINGS INC.


 


MEDIUM-TERM NOTE, SERIES H


 


FX RANGE RESETTING NOTE
DUE JANUARY 19, 2007


 


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
applicable Interest Payment Date, an amount equal to the Interest Amount and,
on the Maturity Date, 100% of the principal amount of the Notes.


 


The “Maturity Date” is January 19, 2007, or if
such day is not a Business Day, on the next following Business Day.


 


The “Interest Payment Dates” are April 20, 2006, July 18,
2006, October 18, 2006 and January 19, 2007.


 


The “Interest Amount” is a single U.S. Dollar payment calculated by the
calculation agent on each corresponding Interest Payment Date equal to the
principal amount of the Notes multiplied by (subject to the occurrence of a
Disruption Event):


 


(A)          2.7%,
if the Reference Exchange Rate has traded strictly within the applicable
Reference Range (or on either of the applicable Range Boundaries) on every day
from and including the applicable Start Date at 10:00 p.m. EST, to but
excluding the applicable End Date at 10:00 p.m. EST, of the applicable
Reference Range period, as observed on the continuous trading EBS (Electronic
Broking Service) Spot Dealing System; or


 


(B)           0%,
if the Reference Exchange Rate trades outside the applicable Reference Range on
any day from and including the applicable Start Date at 10:00 p.m. EST, to
but excluding the applicable End Date at 10:00 p.m. EST, as observed on
the continuous trading EBS Spot Dealing System.


 


Each “Reference
Range”, which corresponds to a particular Reference Range period, is as
follows: 


 


	
  Range

  Period

  	
   

  	
  Start
  Date

  	
   

  	
  End
  Date

  	
   

  	
  Range
  Midpoint

  (RMi)

  	
   

  	
  Range
  Lower

  Boundary

  	
   

  	
  Range
  Upper

  Boundary

  	
   

  
	
  1

  	
   

  	
  January 11, 2006

  	
   

  	
  April 11, 2006

  	
   

  	
  1.2113

  	
   

  	
  1.1613

  	
   

  	
  1.2613

  	
   

  
	
  2

  	
   

  	
  April 11,
  2006

  	
   

  	
  July 11,
  2006

  	
   

  	
  RM2

  	
   

  	
  RM2-0.05

  	
   

  	
  RM2+0.05

  	
   

  
	
  3

  	
   

  	
  July 11,
  2006

  	
   

  	
  October 11,
  2006

  	
   

  	
  RM3

  	
   

  	
  RM3-0.05

  	
   

  	
  RM3+0.05

  	
   

  
	
  4

  	
   

  	
  October 11,
  2006

  	
   

  	
  January 11,
  2007

  	
   

  	
  RM4

  	
   

  	
  RM4-0.05

  	
   

  	
  RM4+0.05

  	
   

  



 


If any
Start Date or End Date is not a Valuation Business Day, such Start Date or End
Date shall be the next succeeding Valuation Business Day.


 


The “Range Midpoint” is the Reference Exchange Rate observed on the
Valuation Date observed in accordance with the Settlement Rate Option (subject
to the occurrence of a Price Source Unavailability Event).


 


2





















 


The “Valuation Date” for each Reference Range
period, is the Start Date for such period.


 


A “Valuation Business Day” means any day, other than
a Saturday or Sunday, that is neither a legal holiday nor a day on which
commercial banks are authorized or required by law, regulation or executive
order to close (including for dealings in foreign exchange in accordance with
the practice of the foreign exchange market) in the city indicated in the Settlement
Rate Option.


 


The “Reference Exchange Rate” is the spot exchange rate for the
Reference Currency quoted against the U.S. Dollar expressed as the number of
U.S. Dollars per unit of the Reference Currency.


 


The “Reference Currency” is the Euro (EUR).


 


The “Settlement Rate Option” is the U.S. Dollar/Euro
official fixing rate, expressed as the amount of U.S. Dollars per one Euro, for
settlement in two Business Days reported by the Federal Reserve Bank of New
York which appears on Reuters Screen 1FED to the right of the caption “EUR” at
approximately 10.00 a.m., New York time, on the relevant Valuation Date.


 


Upon the occurrence of a Disruption Event with
respect to the Reference Currency on any day during the term of the Notes, the
calculation agent shall determine the Interest Amount payable on each Interest
Payment Date following the date on which the Disruption Event occurred in good
faith and in a commercially reasonable manner.


 


A “Disruption Event” means any of the following
events (other than a Price Source Unavailability Event), as determined in good
faith by the calculation agent:


 


(A)          the
occurrence and/or existence of an event on any day that has the effect of
preventing or making impossible the conversion of the Reference Currency into
USD through customary legal channels;


 


(B)           the
occurrence of any event causing the Reference Exchange Rate to be split into
dual or multiple currency exchange rates; or


 


(C)           the occurrence and/or existence of any event
(other than those set forth in (A) or (B) above or those constituting
a Price Source Unavailability Event) with respect to the
Reference Currency that prevents or makes impossible (x) the calculation agent’s
ability to calculate the Interest Amount, (y) the Company’s fulfillment of its
obligations under the Notes, or (z) the ability of the Company or any of its
affiliates through which it hedges its position under the Notes to hedge such
position or to unwind all or a material portion of such hedge.


 


Upon the occurrence of a Price Source Unavailability
Event on any day in any Reference Range period or on the Valuation Date, as
applicable, and in respect of any Price Source Unavailability Event other than
with respect to the determination of any Range Midpoint, for so long as such
Price Source Unavailability Event is continuing, the Reference Exchange Rate
will be determined in accordance with the Fallback Rate Observation
Methodology.


 


3





















 


A “Price Source Unavailability Event” means, as determined in good
faith by the calculation agent, the Reference Exchange Rate being unavailable, or the
occurrence of an event (other than an event constituting a Disruption Event)
that generally makes it impossible to obtain the Reference Exchange Rate, (a) for
purposes of determining any related Range Midpoint, on the relevant Valuation Date,
in accordance with the Settlement Rate Option, or (b) on any day in any Reference Range
period other than for purposes of determining any Range Midpoint, on the EBS
(Electronic Broking Service) Spot Dealing System.


 


The “Fallback Rate Observation Methodology” means
that, in respect of a Price Source Unavailability
Event occurring on any day in any Reference Range period (other than for
purposes of determining any Range Midpoint on the relevant Valuation Date), the
Reference Exchange Rate will be determined on a daily basis in accordance with
the Settlement Rate Option on that day. 
If the Reference Exchange Rate is not available in accordance with the Settlement
Rate Option on such day, or on the Valuation Date for the purposes of
determining any Range Midpoint, the Reference Exchange Rate will be calculated
on the basis of the arithmetic mean of the applicable spot quotations received
by the calculation agent at approximately 10:00 a.m., New York City time,
on the Valuation Business Day next succeeding that day for the purchase or sale
for deposits in the Reference Currency by the Reference Banks.  If fewer than three Reference Banks provide
spot quotations, then the Reference Exchange Rate will be calculated on the
basis of the arithmetic mean of the applicable spot quotations received by the
calculation agent at approximately 10:00 a.m., New York City time, on the
relevant date from two Reference Banks (selected in the sole discretion of the
calculation agent), for the purchase or sale for deposits in the Reference
Currency.  If these spot quotations are
available from only one Reference Bank, then the calculation agent, in its sole
discretion, will determine which quotation is available and reasonable to be
used.  If no spot quotation is available,
then the Reference Exchange Rate will be determined by the calculation agent in
good faith and in a commercially reasonable manner.


 


The “Reference
Banks” means the New York offices of three leading banks engaged in the
interbank market selected in the sole discretion of the Calculation Agent.


 


A “Business Day”, notwithstanding any
provision in the Indenture, is any day that is not is not a Saturday or Sunday
and that is not a day on which banking institutions in New York City generally
are authorized or obligated by law or executive order to be closed.


 


Except
as provided below, an Interest 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 the Interest 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.


 


4





















 


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.


 


5





















 


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:  January 19, 2006


 


	
  [SEAL]

  	
  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.


 


CITIBANK, N.A.


  as Trustee


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Officer

  



 


6





















 


[REVERSE OF NOTE]


 


LEHMAN BROTHERS HOLDINGS INC.


MEDIUM-TERM NOTES, SERIES H


FX RANGE RESETTING NOTE
DUE JANUARY 19, 2007


 


Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series H, FX
Range Resetting Note (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 Interest 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 Interest 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
Interest 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 the
Interest Amount or the principal 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 $10,000 or whole
multiples of $5,000, 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 and will equal, for each Note, the principal amount plus the Interest
Amount, if any, payable in respect of the Reference Range period during which
the event of default occurred, which Interest Amount shall equal the
portion of the Interest Amount deemed to have accrued for such Reference Range
period from and including the Start Date for such Reference Range period to but
excluding the date of early repayment calculated on the basis of a 360-day year
consisting of 12 months of 30 days each, and, in the case of an incomplete
month, the number of days elapsed.  If a bankruptcy proceeding is
commenced in respect of the Company, the claim of the beneficial owner of a
Note will be capped at the principal amount plus the Interest Amount, if any,
payable in respect of the Reference Range period during which the date of the commencement
of the proceeding occurred, which Interest Amount shall equal the portion of
the Interest Amount deemed to have accrued for such Reference Range period from
and including the Start Date for such Reference Range period to but excluding
the date of early repayment calculated on the basis of a 360-day year
consisting of 12 months of 30 days each, and, in the case of an incomplete
month, the number of days elapsed.  For purposes of determining whether
any Interest Amount is payable in respect of any Reference Range period during
which an event of default occurred or a bankruptcy proceeding was commenced,
the End Date for such Reference Range period shall be deemed to be the date on
which such event of default occurred or such proceeding commenced, respectively.


 


Section 9.  No Recourse Against Certain Persons.  No recourse for the payment of the Interest
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.  Tax Treatment.  The Company agrees, and by acceptance of Notes of this series, each
Holder of such Notes will be deemed to have agreed to treat the Notes of this
series as “variable rate debt instruments” for United States federal income tax
purposes.


 


Section 11.  Defined
Terms.  All terms used but not
defined in this Note are used herein as defined in the Indenture.


 


Section 12.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.