<PAGE>

                                                                    EXHIBIT 4.04



                          CALCULATION AGENCY AGREEMENT

            AGREEMENT, dated as of July 3, 2001, between Lehman Brothers
Holdings Inc. (the "Company") and Lehman Brothers Inc., as Calculation Agent.

            WHEREAS, the Company has authorized the issuance of up to $5,750,000
aggregate principal amount of 10 Uncommon Values(R) Index SUNS(SM), Stock Upside
Note Securities(SM) Notes Due July 3, 2004* (the "Securities");

            WHEREAS, the Securities will be issued under an Indenture Agreement
dated as of September 1, 1987, between the Company and Citibank, N.A., as
Trustee (the "Trustee"), as supplemented and amended by supplemental indentures
dated as of November 25, 1987, November 27, 1990, September 13, 1991, October 4,
1993, October 1, 1995, and June 26, 1997, and incorporating Standard Multiple
Series Indenture Provisions dated July 30, 1987, as amended November 16, 1987
(collectively, the "Indenture"); and

            WHEREAS, the Company requests the Calculation Agent to perform
certain services described herein in connection with the Securities;

            NOW THEREFORE, the Company and the Calculation Agent agree as
follows:

            1. APPOINTMENT OF AGENT. The Company hereby appoints Lehman Brothers
Inc. as Calculation Agent and Lehman Brothers Inc. hereby accepts such
appointment as the Company's agent for the purpose of performing the services
hereinafter described upon the terms and subject to the conditions hereinafter
mentioned.


----------
*     "10 Uncommon Values" is a registered trademark of, and "Stock Upside Note
      Securities" and "SUNS" are service marks of, Lehman Brothers Inc.

<PAGE>

                                                                               2



            2. CALCULATIONS AND INFORMATION PROVIDED. In response to a request
made by the Trustee for a determination of the Maturity Payment Amount due at
Stated Maturity of the Securities, the Calculation Agent shall determine the
Maturity Payment Amount due at Stated Maturity and notify the Trustee of its
determination. The Calculation Agent shall also be responsible for (a) the
determination of the Index Level on each Calculation Date, (b) the determination
of the Rollover Closing Level of the 10 Uncommon Values Index for each
Twelve-Month Period, (c) determining if any adjustments to the 10 Uncommon
Values Index and/or the Multipliers should be made and (d) whether a Market
Disruption Event has occurred. The Calculation Agent shall notify the Trustee of
any such adjustment or if a Market Disruption Event has occurred. In addition,
the Calculation Agent shall provide information to the American Stock Exchange
("AMEX") that is necessary for the AMEX's daily calculation and dissemination of
the level of the 10 Uncommon Values Index if the AMEX is unable to obtain such
information. Annex A hereto sets forth the procedures the Calculation Agent will
use to determine the information described in this Section 2.

            3. CALCULATIONS. Any calculation or determination by the Calculation
Agent pursuant hereto shall (in the absence of manifest error) be final and
binding. Any calculation made by the Calculation Agent hereunder shall, at the
Trustee's request, be made available at the Corporate Trust Office.

            4. FEES AND EXPENSES. The Calculation Agent shall be entitled to
reasonable compensation for all services rendered by it as agreed to between the
Calculation Agent and the Company.
<PAGE>

                                                                               3


            5. TERMS AND CONDITIONS. The Calculation Agent accepts its
obligations herein set out upon the terms and conditions hereof, including the
following, to all of which the Company agrees:

            (i) in acting under this Agreement, the Calculation Agent is acting
      solely as an independent expert and not as agent of the Company and does
      not assume any obligation toward, or any relationship of agency or trust
      for or with, any of the holders of the Securities;

            (ii) unless otherwise specifically provided herein, any order,
      certificate, notice, request, direction or other communication from the
      Company or the Trustee made or given under any provision of this Agreement
      shall be sufficient if signed by any person who the Calculation Agent
      reasonably believes to be a duly authorized officer or attorney-in-fact of
      the Company or the Trustee, as the case may be;

            (iii) the Calculation Agent shall be obliged to perform only such
      duties as are set out specifically herein and any duties necessarily
      incidental thereto;

            (iv) the Calculation Agent, whether acting for itself or in any
      other capacity, may become the owner or pledgee of Securities with the
      same rights as it would have had if it were not acting hereunder as
      Calculation Agent; and

            (v) the Calculation Agent shall incur no liability hereunder except
      for loss sustained by reason of its gross negligence or wilful misconduct.

            6. RESIGNATION; REMOVAL; SUCCESSOR. (a) The Calculation Agent may at
any time resign by giving written notice to the Company of such intention on its
part, specifying the date on which its desired resignation shall become
effective, subject to the appointment of a successor Calculation Agent and
acceptance of such appointment by such successor Calculation Agent, as
hereinafter provided. The Calculation Agent hereunder may be removed at any time
by the filing with it of an instrument in writing signed by or on behalf of the
Company and specifying such removal and the date when it shall become effective.
Such resignation or removal shall take effect upon the appointment by the
Company, as hereinafter provided, of a successor Calculation Agent and the
acceptance of such appointment by such successor

<PAGE>

                                                                               4


Calculation Agent. In the event a successor Calculation Agent has not been
appointed and has not accepted its duties within 90 days of the Calculation
Agent's notice of resignation, the Calculation Agent may apply to any court of
competent jurisdiction for the designation of a successor Calculation Agent.

            (b) In case at any time the Calculation Agent shall resign, or shall
be removed, or shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or make an assignment for the benefit of its creditors or consent
to the appointment of a receiver or custodian of all or any substantial part of
its property, or shall admit in writing its inability to pay or meet its debts
as they mature, or if a receiver or custodian of it or all or any substantial
part of its property shall be appointed, or if any public officer shall have
taken charge or control of the Calculation Agent or of its property or affairs,
for the purpose of rehabilitation, conservation or liquidation, a successor
Calculation Agent shall be appointed by the Company by an instrument in writing,
filed with the successor Calculation Agent. Upon the appointment as aforesaid of
a successor Calculation Agent and acceptance by the latter of such appointment,
the Calculation Agent so superseded shall cease to be Calculation Agent
hereunder.

            (c) Any successor Calculation Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor, to the Company and to the
Trustee an instrument accepting such appointment hereunder and agreeing to be
bound by the terms hereof, and thereupon such successor Calculation Agent,
without any further act, deed or conveyance, shall become vested with all the
authority, rights, powers, trusts, immunities, duties and obligations of such
predecessor with like effect as if originally named as Calculation Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Calculation Agent shall

<PAGE>

                                                                               5


be entitled to receive, all moneys, securities and other property on deposit
with or held by such predecessor, as Calculation Agent hereunder.

            (d) Any corporation into which the Calculation Agent hereunder may
be merged or converted or any corporation with which the Calculation Agent may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Calculation Agent shall be a party, or any
corporation to which the Calculation Agent shall sell or otherwise transfer all
or substantially all of the assets and business of the Calculation Agent shall
be the successor Calculation Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto.

            7. CERTAIN DEFINITIONS. Terms not otherwise defined herein or in
Annex A hereto are used herein as defined in the Indenture or the Securities.

            8. INDEMNIFICATION. The Company will indemnify the Calculation Agent
against any losses or liability which it may incur or sustain in connection with
its appointment or the exercise of its powers and duties hereunder except such
as may result from the gross negligence or wilful misconduct of the Calculation
Agent or any of its agents or employees. The Calculation Agent shall incur no
liability and shall be indemnified and held harmless by the Company for or in
respect of any action taken or suffered to be taken in good faith by the
Calculation Agent in reliance upon written instructions from the Company.

            9. NOTICES. Any notice required to be given hereunder shall be
delivered in person, sent (unless otherwise specified in this Agreement) by
letter, telex or facsimile transmission or communicated by telephone (confirmed
in a writing dispatched within two Business Days), (a) in the case of the
Company, to it at Three World Financial Center, New York, New York 10285
(facsimile: (212) 526-3772) (telephone: (212) 526-4841), Attention:

<PAGE>

                                                                               6


Legal Counsel, (b) in the case of the Calculation Agent, to it at Three World
Financial Center, 200 Vesey Street, New York, New York 10285-0600 (facsimile:
(212) 526-2755) (telephone: (212) 526-0900), Attention: Equity Derivatives
Trading and (c) in the case of the Trustee, to it at 111 Wall Street, 5th Floor,
New York, New York 10043 (facsimile: (212) 657-3836) (telephone: (212)
657-7805), Attention: Corporate Trust Department or, in any case, to any other
address or number of which the party receiving notice shall have notified the
party giving such notice in writing. Any notice hereunder given by telex,
facsimile or letter shall be deemed to be served when in the ordinary course of
transmission or post, as the case may be, it would be received.

            10. GOVERNING LAW. This Agreement shall be governed by and continued
in accordance with the laws of the State of New York.

            11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

            12. BENEFIT OF AGREEMENT. This Agreement is solely for the benefit
of the parties hereto and their successors and assigns, and no other person
shall acquire or have any rights under or by virtue hereof.


<PAGE>

                                                                               7


            IN WITNESS WHEREOF, this Calculation Agency Agreement has been
entered into as of the day and year first above written.

                                          LEHMAN BROTHERS HOLDINGS INC.


                                          By:  /s/ Barrett S. DiPaolo
                                              ---------------------------------
                                              Name:  Barrett S. DiPaolo
                                              Title: Vice President

                                          LEHMAN BROTHERS INC.,
                                            as Calculation Agent

                                          By:   /s/ Barrett S. DiPaolo
                                              ---------------------------------
                                              Name:  Barrett S. DiPaolo
                                              Title: Vice President


<PAGE>

                                                                               8



                                     ANNEX A

      1. 10 UNCOMMON VALUES INDEX.

      Each year, the Investment Policy Committee of Lehman Brothers Inc., with
the assistance of its Equity Research Department, selects a portfolio of 10
common stocks or other equity securities that it believes are attractive
investments over the year for which they are chosen (the "10 Uncommon Values").

      The "10 Uncommon Values Index" represents an equal dollar-weighted
portfolio of the common stocks or other equity securities of the ten companies
underlying the 10 Uncommon Values for each Twelve-Month Period during the period
beginning on the date of announcement of the 10 Uncommon Values in 2001 and
ending on the Stated Maturity, as adjusted by certain extraordinary corporate
events involving the issuers of the Index Securities as described herein. The
announcement of the ten common stocks that shall make up the 10 Uncommon Values
Index shall be made on or about July 1 (such date of announcement, the
"Announcement Day") of each year preceding the initial issuance of and during
the term of the Securities. Except as set forth below, the Index Securities in
the 10 Uncommon Values Index shall remain constant for each Twelve-Month Period.

      2. DETERMINATION OF THE MATURITY PAYMENT AMOUNT.

      The Calculation Agent shall determine the Index Level on each Calculation
Date, the Average Index Level and the Maturity Payment Amount payable for each
Security.

      The amount payable at Stated Maturity for each $1,000 principal amount of
Securities (the "Maturity Payment Amount") shall equal the greater of (a) $1,000
and (b) the Alternative Redemption Amount.

      3. DETERMINATION OF THE ROLLOVER CLOSING LEVEL OF THE 10 UNCOMMON VALUES
INDEX.

      The Calculation Agent shall determine the Rollover Closing Level of the 10
Uncommon Values Index for each Twelve-Month Period after the Close of Trading on
the Trading Date prior to each Announcement Day (the "Rollover Determination
Date"). The "Rollover Closing Level" shall equal the sum of (a) the sum of the
products of the Closing Prices and the applicable Multipliers for each Index
Security and (b) the Cash Included in the 10 Uncommon Values Index at the
Closing of Trading, in each case on the Rollover Determination Date. The
Rollover Closing Level shall then be assumed to be used to buy, on the ensuing
Announcement Day, equal dollar amounts of the ten common stocks that shall
initially be the Index Securities for the next Twelve-Month Period at each Index
Security's Average Execution Price.
<PAGE>

                                                                               9


      4. MULTIPLIERS.

      The Multiplier relating to each Index Security is the number of shares
(including fractional shares, expressed as a decimal) of such Index Security
included in the 10 Uncommon Values Index. The Multipliers shall be determined by
the Calculation Agent and shall be based on each Index Security's Average
Execution Price. The number of shares of an Index Security constituting the
"Multiplier" for such Index Security shall equal the number of shares (or
fraction of one share) of such Index Security that, when multiplied by the
Average Execution Price for such Index Security, results in the Index Security
initially accounting on the Announcement Day for 10% of the level of 10 Uncommon
Values Index on an equal dollar-weighted basis. The Multipliers with respect to
each Index Security shall remain constant for the Twelve-Month Period that such
Index Security is part of the 10 Uncommon Values Index unless adjusted for
certain extraordinary corporate events as described below. Each Multiplier shall
be rounded at the Calculation Agent's discretion.

      5. ADJUSTMENTS TO THE MULTIPLIERS AND THE 10 UNCOMMON VALUES INDEX.

      Adjustments to a Multiplier and the 10 Uncommon Values Index shall be made
in the following circumstances. For purposes of these adjustments, except as
noted below, American Depository Receipts ("ADRs") are treated like common stock
if a comparable adjustment to the foreign shares underlying the ADRs is made
pursuant to the terms of the depository agreement for the ADRs or if the holders
of ADRs are entitled to receive property in respect of the underlying foreign
share.

      (a) If an Index Security is subject to a stock split or reverse stock
split, then once the split has become effective, the Multiplier relating to the
Index Security shall be adjusted. The Multiplier shall be adjusted to equal the
product of the number of shares outstanding of the Index Security after the
split with respect to each share of such Index Security immediately prior to
effectiveness of the split and the prior Multiplier.

      (b) If an Index Security is subject to an extraordinary stock dividend or
extraordinary stock distribution that is given equally to all holders of shares,
then once the Index Security is trading ex-dividend, the Multiplier for such
Index Security shall be increased by the product of the number of shares of such
Index Security issued with respect to one share of such Index Security and the
prior Multiplier.

      (c) If the issuer of an Index Security, or if an Index Security is an ADR,
the issuer of the underlying foreign share is being liquidated or dissolved or
is subject to a proceeding under any applicable bankruptcy, insolvency or other
similar law, such Index Security shall continue to be included in the 10
Uncommon Values Index so long as the primary exchange, trading system or market
is reporting a market price for the Index Security. If a market price, including
a price on a bulletin board service, is no longer available for an Index
Security, then the value of the Index Security shall equal zero for so long as
no market price is available, and no attempt shall be made to find a replacement
stock or increase the level of the 10 Uncommon Values Index to compensate for
the deletion of such Index Security.


<PAGE>

                                                                             10


      (d) If the issuer of an Index Security, or if an Index Security is an ADR,
the issuer of the underlying foreign share, has been subject to a merger or
consolidation and is not the surviving entity and holders of the Index Security
are entitled to receive cash, securities, other property or a combination
thereof in exchange for the Index Security, then the following shall be included
in the 10 Uncommon Values Index:

            (i) To the extent cash is received, the 10 Uncommon Values Index
      shall include the amount of the cash consideration at the time holders are
      entitled to receive the cash consideration (the "M&A Cash Component"),
      plus accrued interest. Interest shall accrue beginning the first London
      Business Day after the day that holders are entitled to receive the cash
      consideration until the next Announcement Day (the "M&A Cash Component
      Interest Accrual Period"). Interest shall accrue on the M&A Cash Component
      at a rate equal to the London Interbank Offered Rate ("LIBOR") with a term
      corresponding to the M&A Cash Component Interest Accrual Period.

            (ii) To the extent that equity securities that are traded or listed
      on an exchange, trading system or market are received, once the exchange
      for the new securities has become effective, the former Index Security
      shall be removed from the 10 Uncommon Values Index and the new security
      shall be added to the 10 Uncommon Values Index as a new Index Security.
      The Multiplier for the new Index Security shall equal the product of the
      last value of the Multiplier of the original Index Security and the number
      of securities of the new Index Security exchanged with respect to one
      share of the original Index Security.

            (iii) To the extent that equity securities that are not traded or
      listed on an exchange, trading system or market or non-equity securities
      or other property (other than cash) are received, the Calculation Agent
      shall determine the "Fair Market Value" of the securities or other
      property received based on the Average Execution Price. The 10 Uncommon
      Values Index shall include an amount of cash equal to the product of the
      Multiplier of the Index Security and the Fair Market Value (the "M&A Sale
      Component"). The 10 Uncommon Values Index shall also include accrued
      interest on the M&A Sale Component. Interest shall accrue beginning the
      first London Business Day after the day that an affiliate of Holdings
      sells the securities or other property used to hedge Holdings' obligations
      under the Securities until the next Announcement Day (the "M&A Sale
      Component Interest Accrual Period"). Interest shall accrue at a rate equal
      to LIBOR with a term corresponding to the M&A Sale Component Interest
      Accrual Period.

      (e) If all of an Index Security of an issuer is converted into or
exchanged for the same or a different number of shares of any class or classes
of common stock other than the Index Security, whether by capital
reorganization, recapitalization or reclassification or otherwise, then, once
the conversion has become effective, the former Index Security shall be removed
from the 10 Uncommon Values Index and the new common stock shall be added to the
10 Uncommon Values Index as a new Index Security. The Multiplier for each new
Index Security shall equal

<PAGE>

                                                                              11




the product of the last value of the Multiplier of the original Index Security
and the number of shares of the new Index Security issued with respect to one
share of the original Index Security.

      (f) If the issuer of an Index Security issues to all of its shareholders
common stock or another equity security that is traded or listed on an exchange,
trading system or market of an issuer other than itself, then the new common
stock or other equity security shall be added to the 10 Uncommon Values Index as
a new Index Security. The multiplier for the new Index Security shall equal the
product of the last value of the Multiplier with respect to the original Index
Security and the number of shares of the new Index Security with respect to one
share of the original Index Security.

      (g) If an ADR is no longer listed or admitted to trading on a United
States securities exchange or trading system registered under the Securities
Exchange Act or is no longer a security quoted on the NASDAQ Stock Market, Inc.
then the foreign share underlying the ADR shall be deemed added to the 10
Uncommon Values Index as a new Index Security. The initial Multiplier for that
new Index Security shall equal the last value of the Multiplier for the ADR
multiplied by the number of underlying foreign shares represented by a single
ADR.

      (h) If an Index Security is subject to an extraordinary dividend or an
extraordinary distribution, including upon liquidation or dissolution, of cash,
equity securities that are not traded or listed on an exchange, trading system
or market, non-equity securities or other property of any kind which is received
equally by all holders of such Index Security, then the 10 Uncommon Values Index
shall include the following:

            (i) To the extent cash is entitled to be received, the 10 Uncommon
      Values Index shall include on each day after the time that the Index
      Security trades ex-dividend until the date the cash consideration is
      entitled to be received, the present value of the cash to be received,
      discounted at a rate equal to LIBOR, with a term beginning that day and
      ending on the date that the cash is entitled to be received (the "PV
      Extraordinary Cash Component"). When the cash consideration is received,
      the PV Extraordinary Cash Component will be deleted from the 10 Uncommon
      Values Index and the 10 Uncommon Values Index shall include the amount of
      the cash consideration (the "Extraordinary Cash Component"), plus accrued
      interest. Interest shall accrue on the Extraordinary Cash Component
      beginning the first London Business Day after the day that holders are
      entitled to receive the Extraordinary Cash Component until the next
      Announcement Day (the "Extraordinary Cash Component Interest Accrual
      Period"). Interest shall accrue at a rate equal to LIBOR with a term
      corresponding to the Extraordinary Cash Component Interest Accrual Period.

            (ii) To the extent that equity securities that are not traded or
      listed on an exchange, trading system or market or non-equity securities
      or other property (other than cash) is received, the Calculation Agent
      shall determine the fair market value of the securities or other property
      received based on the Average Execution Price and the 10 Uncommon Values
      Index shall include an amount of cash equal to the product of the
      Multiplier of the Index Security and the fair market value (the
      "Extraordinary Sale

<PAGE>

                                                                              12


      Component"). The 10 Uncommon Values Index shall also include accrued
      interest on the Extraordinary Sale Component. Interest shall accrue
      beginning the first London Business Day after the day that an affiliate of
      Holdings sells the securities or other property used to hedge Holdings'
      obligations under the Securities until the next Announcement Day (the
      "Extraordinary Sale Component Interest Accrual Period"). Interest shall
      accrue at a rate equal to LIBOR with a term corresponding to Extraordinary
      Sale Component Interest Accrual Period.

            (iii) If similar corporate events occur with respect to the issuer
      of an equity security other than common stock that is included in the 10
      Uncommon Values Index, adjustments similar to the above will be made for
      that equity security.

      The payment of an ordinary cash dividend by an issuer of an Index Security
from current income or retained earnings shall not result in an adjustment to
the Multiplier.

      No adjustments of any Multiplier of an Index Security shall be required
unless the adjustment would require a change of at least .1% (.001) in the
Multiplier then in effect. The Multiplier resulting from any of the adjustments
specified above shall be rounded at the Calculation Agent's discretion.

      6. DETERMINATION OF DAILY LEVEL OF THE 10 UNCOMMON VALUES.

      If the AMEX is unable to obtain certain information necessary for its
daily calculation and dissemination of the level of the 10 Uncommon Values
Index, the Calculation Agent shall provide the necessary information as follows
below.

      In order to determine the value of an Index Security that is listed on a
non-United States exchange, trading system or market (the "Foreign Value"), the
Calculation Agent shall, once per Trading Day, value the Index Security using
the most recent sales price of such Index Security available from the primary
exchange, trading system or market in the Index Security's home market, quoted
as of the Close of Trading.

      In order to convert the Foreign Value into U.S. dollars, the
Calculation Agent shall use the Official W.M. Reuters Spot Closing Rate.  If
there are several quotes for the Official W.M. Reuters Spot Closing Rate, the
first quoted rate starting at 11:00 A.M. shall be the rate used. If there is
no such Official W.M. Reuters Spot Closing Rate for a country's currency at
11:00 A.M., New York City time, the Foreign Value shall be determined using
the last available U.S. dollar cross-rate quote before 11:00 A.M., New York
City time.

      In order to determine the value of an Index Security that is listed or
quoted on a bulletin board service, the Calculation Agent shall use the average
of the midpoint of the bid and ask prices provided by three market makers in
that Index Security. The Calculation Agent shall obtain the bid and ask prices
promptly upon the opening of trading on that Trading Day at 9:30 A.M., New York
City time or at such other time as the Calculation Agent determines.
<PAGE>

                                                                              13


      The Calculation Agent shall provide AMEX with the value of the M&A Cash
Component, the M&A Sale Component, the PV Extraordinary Cash Component, the
Extraordinary Cash Component and the Extraordinary Sale Component as soon as
such values are available. The Calculation Agent shall, once per Trading Day,
provide AMEX with the interest accrued on the Cash Included in the 10 Uncommon
Values Index.

      7. DEFINITIONS.

      Set forth below are some of the terms used in this Annex A to the
Calculation Agent Agreement.

            "ADRs" shall have the meaning assigned thereto in paragraph 5.

            "Alternative Redemption Amount" shall mean the lesser of (a) $1,465;
and (b) the product of:

            (1)   $1,000; and

            (2)   the Average Index Level, divided by 100.

            "AMEX" shall mean the American Stock Exchange.

            "Announcement Day" shall have the meaning assigned thereto in
paragraph 1.

            "Average Execution Price" for a security or other property shall
mean the average execution price that an affiliate of the Company receives or
pays for such security or property, as the case may be, to hedge the Company's
obligations under the Securities.

            "Average Index Level" shall mean the arithmetic average of the Index
Level on each of the Calculation Dates.

            "Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which either the NYSE or the AMEX is not open for securities trading or
commercial banks in New York City are authorized or required by law or executive
order to remain closed.

            "Calculation Agent" shall mean the person that has entered into an
agreement with the Company providing for, among other things, the determination
of the Index Level and the Maturity Payment Amount, which term shall, unless the
context otherwise requires, include its successors and assigns. The initial
Calculation Agent is Lehman Brothers Inc.

            "Calculation Date" shall mean each of September 28, 2001, December
28, 2001, March 28, 2002, June 28, 2002, September 28, 2002, December 28, 2002,
March 28, 2003, June 28, 2003, September 28, 2003, December 28, 2003, March 28,
2004 and June 28, 2004. If any of these dates is not a Business Day, the Index
Level on the next date on which the Index Level can be calculated will be used
unless that next date is the date on which the 10 Uncommon Values

<PAGE>

                                                                              14


for the next year is being announced. In that case, the preceding date on which
the 10 Uncommon Values Index can be calculated will be used.

            "Cash Included in the 10 Uncommon Values Index" shall mean the M&A
Cash Component, the M&A Sale Component, the PV Extraordinary Cash Component, the
Extraordinary Cash Component, the Extraordinary Sale Component, and interest
accrued thereon as provided for herein.

            "Close of Trading" shall mean 4:00 p.m., New York City time.

            "Closing Price" means the following, determined by the Calculation
Agent based on information reasonably available to it:

            (i) If the Index Security is listed on a United States national
      securities exchange or trading system or is a NASDAQ Stock Market, Inc.
      security, the last reported sale price at the Close of Trading, regular
      way, on such day, on the primary securities exchange registered under the
      Securities Exchange Act of 1934 on which such Index Security is listed or
      admitted to trading or NASDAQ Stock Market, Inc., as the case may be.

            (ii) If the Index Security is listed on a non-United States
      securities exchange, trading system (other than a bulletin board) or
      market, the last reported sale price at the Close of Trading, regular way,
      on such day, on the primary exchange, trading system or market on which
      such Index Security is listed or admitted to trading, as the case may be.
      The Closing Price shall then be converted into U.S. dollars using the
      Official W.M. Reuters Spot Closing Rate.

            (iii) If the Index Security is not listed on a national securities
      exchange or trading system or is not a NASDAQ Stock Market, Inc. security,
      and is listed or traded on a bulletin board, the Average Execution Price
      of the Index Security. If such Index Security is listed or traded on a
      non-United States bulletin board, the Closing Price will then be converted
      into U.S. dollars using the Official W.M. Reuters Spot Closing Rate.

            (iv) If a Market Disruption Event has occurred for an Index Security
      on a day on which the Closing Price for such Index Security is to be
      calculated, the Closing Price for such Index Security shall initially be
      determined using the Closing Price for such Index Security on the next
      preceding Trading Day on which a Market Disruption Event did not occur.
      Once the Market Disruption Event has ceased, the Closing Price of such
      Index Security shall then be adjusted to equal the Average Execution Price
      of the Index Security. The Rollover Closing Level and the resulting
      Multipliers shall then be recalculated and adjusted accordingly.

            "Extraordinary Cash Component" shall have the meaning assigned
thereto in paragraph 5(h)(i).
<PAGE>

                                                                              15


            "Extraordinary Cash Component Interest Accrual Period" shall have
the meaning assigned thereto in paragraph 5(h)(i).

            "Extraordinary Sale Component" shall have the meaning assigned
thereto in paragraph 5(h)(ii).

            "Extraordinary Sale Component Interest Accrual Period" shall have
the meaning assigned thereto in paragraph 5(h)(ii).

            "Foreign Value" shall have the meaning assigned thereto in paragraph
6.

            "Index Level", when used with respect to any Calculation Date, shall
equal the sum of (a) the sum of the products of the Closing Prices and the
applicable Multipliers for each Index Security for which a Market Disruption
Event does not occur on such Calculation Date, (b) if a Market Disruption Event
occurs for an Index Security on such Calculation Date, the product of the
Closing Price for such Index Security and the Multiplier for such Index Security
and (c) any Cash included in the 10 Uncommon Values Index on such Calculation
Date.

            "Index Securities" shall mean the securities included in the 10
Uncommon Values Index from time to time.

            "Issue Price" shall mean $1,000.

            "M&A Cash Component" shall have the meaning assigned thereto in
paragraph 5(d)(i).

            "M&A Cash Component Interest Accrual Period" shall have the meaning
assigned thereto in paragraph 5(d)(i).

            "M&A Sale Component" shall have the meaning assigned thereto in
paragraph 5(d)(ii).

            "M&A Sale Component Interest Accrual Period" shall have the meaning
assigned thereto in paragraph 5(d)(ii).

            "Market Disruption Event" with respect to an Index Security means
any of the following events as determined by the Calculation Agent:

            (i) A suspension, absence or material limitation of trading of such
      Index Security has occurred on that day, in each case, for more than two
      hours of trading or during the one-half hour period preceding the Close of
      Trading on the primary organized U.S. exchange or trading system on which
      such Index Security is traded or, in the case of an Index Security not
      listed or quoted in the United States, on the primary exchange, trading
      system or market for such Index Security. Limitations on trading during
      significant market fluctuations imposed pursuant to NYSE Rule 80B or any
      applicable

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                                                                            16


      rule or regulation enacted or promulgated by the NYSE, any other exchange,
      trading system, or market, any other self regulatory organization or the
      Securities and Exchange Commission of similar scope or as a replacement
      for Rule 80B, may be considered material. Notwithstanding the first
      sentence of this paragraph, a Market Disruption Event for an Index
      Security traded on a bulletin board means a suspension, absence or
      material limitation of trading of such Index Security for more than two
      hours or during the one hour period preceding 4:00 p.m., New York City
      time.

            (ii) A suspension, absence or material limitation has occurred on
      that day, in each case, for more than two hours of trading or during the
      one-half hour period preceding the Close of Trading in options contracts
      related to such Index Security, whether by reason of movements in price
      exceeding levels permitted by an exchange, trading system or market on
      which options contracts related to such Index Security are traded or
      otherwise.

            (iii) Information is unavailable on that date, through a recognized
      system of public dissemination of transaction information, for more than
      two hours of trading or during the one-half hour period preceding the
      Close of Trading, of accurate price, volume or related information in
      respect of such Index Security or in respect of options contracts related
      to such Index Security, in each case traded on any major U.S. exchange or
      trading system or in the case of Index Securities of a non-U.S. issuer,
      the primary non-U.S. exchange, trading system or market.

      For purposes of determining whether a Market Disruption Event has
occurred:

            (i) a limitation on the hours or number of days of trading shall not
      constitute a Market Disruption Event if it results from an announced
      change in the regular business hours of the relevant exchange, trading
      system or market;

            (ii) any suspension in trading in an option contract on an Index
      Security by a major securities exchange, trading system or market by
      reason of (a) a price change violating limits set by such securities
      market, (b) an imbalance of orders relating to those contracts, or (c) a
      disparity in bid and ask quotes relating to those contracts shall
      constitute a Market Disruption Event notwithstanding that the suspension
      or material limitation is less than two hours;

            (iii) a suspension or material limitation on an exchange, trading
      system or in a market shall include a suspension or material limitation of
      trading by one class of investors provided that the suspension continues
      for more than two hours of trading or during the last one-half hour period
      preceding the Close of Trading on the relevant exchange, trading system or
      market but shall not include any time when the relevant exchange, trading
      system or market is closed for trading as part of that exchange's, trading
      system's or market's regularly scheduled business hours; and

            (iv)  "Trading systems" include bulletin board services.
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                                                                              17


            "Maturity Payment Amount" shall have the meaning assigned thereto in
paragraph 2.

            "Multiplier" shall have the meaning assigned thereto in paragraph 4.

            "NYSE" shall mean the New York Stock Exchange.

            "Official W.M. Reuters Spot Closing Rates" shall mean the closing
spot rates published on Reuters page "WMRA" relevant for such Index Security.

            "PV Extraordinary Cash Component" shall have the meaning assigned
thereto in paragraph 5(h)(i).

            "Rollover Closing Level" shall have the meaning assigned thereto in
paragraph 3.

            "Rollover Determination Date" shall have the meaning assigned
thereto in paragraph 3.

            "Stated Maturity" shall mean July 3, 2004, or if a Market Disruption
Event occurs on July 3, 2004 (or if July 3, 2004 is not a Business Day, on the
next Business Day on which the Index Level can be calculated), on the fifth
Business Day after the date that an affiliate of the Company completes the sale
of the Index Security with respect to which such Market Disruption Event
occurred to hedge the Company's obligations under the securities.

            "Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, AMEX and NASDAQ Stock Market, Inc. and in the
over-the-counter market for equity securities as determined by the Calculation
Agent.

            "Twelve-Month Period" shall mean the period beginning on an
Announcement Day and ending (i) in the case of 2001, 2002 and 2003, at the Close
of Trading on the Trading Day prior to the next Announcement Day, and (ii) in
the case of 2004, the Stated Maturity.