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                                                                    EXHIBIT 4.10


                          [Form of Variable Rate Note]

                           [FORM OF FACE OF SECURITY]

                          LEHMAN BROTHERS HOLDINGS INC.

$                                                   CUSIP

                             VARIABLE RATE NOTE DUE

      LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized
and existing under the laws of the State of Delaware (herein referred to as
the "Company"), for value received, hereby promises to pay to             or
registered assigns, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, the principal sum of         Dollars, on
     , in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest (computed on the basis of a 360-day year of twelve
30-day months), semi-annually(1) on         and          of each year,
commencing          , on said principal sum at said office or agency, in like
coin or currency, at the rate per annum from time to time in effect as
described below, [and (to the extent that the payment of such interest shall be
legally enforceable), at such rate per annum on any overdue principal and
premium and on any overdue installment of interest] from the             or
the            , as the case may be, next preceding the date to which interest
has been paid or duly provided for, unless the date hereof is a date to which
interest has been paid or duly provided for, in which case from the date of
this Note, or, if no interest has been paid or duly provided for on the Notes,
from        , until payment of said principal sum has been made or duly
provided for. Such interest payments will include interest accrued through
the last day of the preceding calendar month, provided that the interest
payment to be made at maturity will include interest accrued through the day
preceding the maturity date.

      The interest so payable on any or     will, subject to certain
exceptions provided in the Indenture referred to on the reverse hereof, be
paid to the person in whose name this Note is registered at the close

----------
(1) This form provides for semi-annual interest payments. The
    form, as used, may be modified to provide, alternatively, for annual,
    quarterly or other periodic interest payments.


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of business on the [last] [fifteenth] day of the calendar month preceding
such         or        . Interest may at the option of the Company be paid by
check mailed to the person entitled thereto at such person's address as it
appears on the registry books of the Company.

            [Provisions for the determination of the interest rate.]

      The interest rate applicable to each [insert interest payment period]
will be determined as promptly as practicable by the Company as described
herein and the Company will furnish the Trustee with an Officers' Certificate
setting forth the interest rate applicable to each [insert interest payment
period] promptly after such rate has been determined. The resulting rate will
be rounded to the nearest five decimal places.

      REFERENCE IS 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 THOUGH FULLY 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 referred to on the reverse hereof.

      IN WITNESS WHEREOF, SHEARSON LEHMAN BROTHERS HOLDINGS INC. has caused
this instrument to be signed by its Chairman of the Board, any Vice Chairman,
its President, its Chief Financial Officer 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:

                                           LEHMAN BROTHERS HOLDINGS INC.


                                           By
                                              --------------------------
                                                             [Title]

Attest:


----------------------------
         [Title]


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                         [FORM OF REVERSE OF SECURITY]

                          LEHMAN BROTHERS HOLDINGS INC

                             VARIABLE RATE NOTE DUE

      This Note is one of a duly authorized series of Notes of the Company
designated as the Variable Rate Notes Due         of the Company (herein
called the "Notes"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $      . The Notes are
one of an indefinite number of series of debt securities of the Company
(herein collectively called the "Securities") issued or issuable under and
pursuant to an indenture dated as of          (herein called the "Indenture"),
duly executed and delivered by the Company and            , 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 repayment 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.

      In the case an Event of Default with respect to the Notes, as defined
in the Indenture, shall have occurred and be continuing, the principal hereof
may be declared, and upon such declaration shall become, due and payable, in
the manner, with the effect and subject to the conditions provided in the
Indenture.

      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 (each series voting as a class), 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)
extend the fixed maturity of any Security, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon
or reduce any premium payable on redemption, or make the principal thereof,
or premium, if any, or interest thereon payable in any coin or currency other
than that hereinabove 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 waive any past default or Event of Default

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under the Indenture with respect to such series and its consequences, except
a default in the payment of interest on or the principal of, 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 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.

      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 principal of, premium, if any, and
interest on this Note at the place, at the respective times, at the rate, and
in the coin or currency herein prescribed.

      The Notes are issuable in registered form without coupons in
denominations of $      and any multiple of $      . At the option of the
holders thereof, either at the office or agency to be designated and
maintained by the Company for such purpose in the Borough of Manhattan, The
City of New York 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 may be exchanged
for an equal aggregate principal amount of Notes of other authorized
denominations.

      [Alternative Redemption or Repayment Options Provisions]


[As Provided in the Indenture, notice of redemption to the holders of Notes to
be redeemed as a whole or in part shall be given by mailing a notice of
redemption not less than       nor more than 60 days prior to the date fixed for
redemption to their last addresses as they appear on the registry books of the
Company.]

      The Company, the Trustee, and any agent of the Company or of the
Trustee may deem and treat the registered holder hereof as the absolute owner
of this Note (whether or not this Note shall be overdue and notwithstanding
any notation of ownership or other writing hereon), for the purpose of
receiving payment hereof, or on account hereof, and for all other 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. All such
payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, effectually satisfy and discharge liability
for moneys payable on this Note.

      No recourse for the payment of the principal of, premium, if any, or
interest on this Note, 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 an incorporator, stockholder, officer or director, as
such, past,

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present or future, of the Company or of any successor corporation, either
directly or through the Company of 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 here of,
expressly waived and released.

      All terms used in this Note which are defined in Indenture shall have
the meanings assigned to them in the Indenture.

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