Exhibit 4.03


 


CUSIP
NO. 5252M0GR2


ISIN NO. US5252M0GR21


 


	
  REGISTERED

  	
  PRINCIPAL AMOUNT:
  $500,000

  
	
  No. R-1

  	
   

  



 


LEHMAN BROTHERS HOLDINGS INC.


 


MEDIUM-TERM NOTE, SERIES I


 


GOLD-LINKED RETURN ENHANCED NOTES
 DUE DECEMBER 30, 2011


 


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 December 30, 2011,
or if such day is not a Business Day, on the next following Business Day.


 


The “Valuation
Date” is December 22,
2011, or if such day is not a Valuation Business Day, the immediately preceding
Valuation 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 $10,000 note will be a single U.S. dollar payment on the Maturity
Date equal to:


 


(A)    $10,000, plus $10,000 times the Gold Return times
the Participation Rate, if the Gold Return is greater than 0.00%; or


 


(B)    $10,000, plus $10,000 times the Gold Return, if the
Gold Return is less than or equal to 0.00% but greater than –15.00%; or


 


(C)    $8,500, if the Gold Return is less than or equal to –15.00%.


 


The “Participation
Rate” is 120%.


 


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


 


The “Trade
Date” is June 27, 2008.


 


The “Issue
Date” is June 30, 2008.


 


The “Gold
Price” is  the official settlement price of the December 2011
futures contract expressed as the U.S. dollar price per troy ounce of Gold, as
made public by the Relevant Exchange (subject to the occurrence of a Disruption
Event).


 


The “Final
Gold Price” is the Gold Price on the Valuation Date.


 


The “Gold Strike” is $ 1,010.5
(equal to the Gold Price on June 25, 2008).


 


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


 


2

















 


A “Valuation 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 Gold Return
using the Final Gold Price on the immediately succeeding trading 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 Gold Price on such day in its sole
and absolute discretion taking into account the latest available quotation for
the Gold Price and any other information that in good faith it deems relevant.


 


If a Disruption Event identified in
clauses (D) or (E) below is in effect on the scheduled Valuation
Date, the Calculation Agent will determine the Final Gold Price on the
scheduled Valuation Date in its sole and absolute discretion taking into
account the latest available quotation for the Gold 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 Gold, or futures contracts or options related to
  Gold, on the Relevant Exchange;

  
	
   

  	
   

  	
   

  
	
  (B)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (C)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (D)

  	
   

  	
  the occurrence since the Trade
  Date of a material change in the content, composition, or constitution of
  Gold; or

  
	
   

  	
   

  	
   

  
	
  (E)

  	
   

  	
  the occurrence since the Trade
  Date of a material change in the formula for or the method of calculating the
  official daily settlement price of Gold.

  



 


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 trading 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 Gold, by reason of a price change reflecting the maximum
  permitted price change from the

  



 


3

















 


previous trading day’s official
daily 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.


 


For purposes of calculating the Gold Return in the event of a
Disruption Event in accordance with the above, “trading day” means a day, as
determined in good faith by the Calculation Agent, on which trading is generally
conducted on the Relevant Exchange.


 


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: June 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


GOLD-LINKED RETURN ENHANCED NOTES  
 DUE DECEMBER 30, 2011


 


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, Gold-Linked
Return Enhanced 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.