Exhibit
4.19


 


	
  REGISTERED

  	
   

  	
  PRINCIPAL
  AMOUNT:

  
	
  No. R-

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CUSIP NO.

  	
   

  	
  ISIN:

  



 


LEHMAN BROTHERS HOLDINGS INC.


MEDIUM-TERM NOTE, SERIES I


RANGERS PlusSM


RISK ADJUSTING EQUITY RANGE SECURITIES PlusSM


PERFORMANCE LINKED TO THE VALUE OF A STOCK
INDEX


 


If the registered owner of this Note (as indicated
below) is The Depository Trust Company (the “Depository”) or a nominee of the
Depository, this Note is a Note in global form (a “Global Security”) and the
following legends are applicable except as specified on the reverse hereof:


 


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 MSUCH 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.


 

















 


 


ISSUE PRICE:     % of the Principal

Amount


 


AGGREGATE PRINCIPAL 

AMOUNT:  $


 


AUTHORIZED DENOMINATIONS:


$[1,000] and integral
multiples thereof


 


ISSUE DATE: 


 


STATED MATURITY DATE: 


 


VALUATION DATE:


 


COUPON RATE:    % per annum


 


ACCRUE TO PAY:


o YES  o NO


 


COUPON PAYMENT
DATES:       


and      of each year, beginning on      


 


REGULAR RECORD DATES:

calendar days prior to each Interest 

Payment Date


 


INDEX:      


 


INITIAL INDEX LEVEL:


 


UPSIDE PARTICIPATION
RATE:     %


 


DOWNSIDE PROTECTION RATE:     %


 


DETERMINATION PERIOD:

Business Days


 


DEPOSITORY: [The
Depository Trust 

Company]


 


Currency Exchanges and Payments


 


SPECIFIED CURRENCY:     


 


EXCHANGE RATE AGENT:      


 


Redemption


 


REDEEMABLE NOTE:


o YES  o NO


 


INITIAL REDEMPTION
DATE:      


 


REDEMPTION NOTICE
PERIOD:       


Business Days


 


Sinking Funds and Amortizing Notes


 


SINKING FUND:    


 


AMORTIZING NOTE:


o YES  o NO


 


Optional Repurchase


 


OPTIONAL REPURCHASE:


o YES  o NO


 


OPTIONAL REPURCHASE
CUTOFF 

PERIOD:       Business Days


 


Optional Interest Reset


 


OPTIONAL INTEREST RATE
RESET:


o YES  o NO


 


OPTIONAL RESET
DATES:      


 


Discount Notes


 


DISCOUNT NOTE:


o YES  o NO


 


TOTAL AMOUNT OF
DISCOUNT:      


 


YIELD TO MATURITY:     


 


INITIAL ACCRUAL PERIOD 


DISCOUNT:


 


DISCOUNT NOTE PREPAYMENT 


AMOUNT:


 


Dual Currency Notes


 


DUAL CURRENCY NOTE:


o YES  o NO


 


OPTIONAL PAYMENT


CURRENCY:     


 


DESIGNATED EXCHANGE


RATE:      


 


OPTION ELECTION
DATES:     


 


OPTION TO RECEIVE
PAYMENTS


IN THE SPECIFIED
CURRENCY:


o YES  o NO


 


OPTION VALUE CALCULATION


AGENT:      


 


DUAL CURRENCY NOTE
PREPAYMENT AMOUNT:


 


Extension of Maturity Notes


 


EXTENSION OF MATURITY
NOTE:


o YES  o NO


 


EXTENSION PERIOD:      


 


NUMBER OF EXTENSION
PERIODS:


 


Extendible Notes


 


EXTENDIBLE NOTE:


o YES  o NO


 


INITIAL MATURITY
DATE:     


 


SPECIAL ELECTION
INTERVAL:     


 


EXTENDIBLE IN PART:


o YES  o NO


 


AUTHORIZED EXTENDIBLE
AMOUNTS:


 


SPECIAL ELECTION
PERIOD:     


 


Miscellaneous


 


OTHER TERMS:


 

















 


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 Stated Maturity Date, for each $1,000 principal
amount of the Notes represented hereby not previously repurchased or redeemed,
an amount equal to the Maturity Payment Amount and, if so specified above, to
make coupon payments on the principal amount hereof from the Issue Date
specified above or from the most recent Coupon Payment Date specified above to
which coupon payments have been paid or duly provided for at the Coupon Rate
specified above until the amount due on the Stated Maturity Date, the Optional
Repurchase Date or the Redemption Date, as the case may be, is paid in full or
made available for payment and (to the extent that the payment of such coupon
payments shall be legally enforceable) at such rate per annum on any overdue
Payment Amount, premium, if any, and overdue installment of coupon
payments.  


 


Unless otherwise specified above, and except as
provided in Section 8 on the reverse hereof if this Note is a Dual Currency
Note, payments of the applicable Payment Amount, premium, if any, and coupon
payments hereon will be made in U.S. dollars; if the Specified Currency set
forth above is a currency other than U.S. dollars (a “Foreign Currency”), such
payments will be made in U.S. dollars based on the equivalent of that Foreign
Currency converted into U.S. dollars in the manner set forth in Section 2 on
the reverse hereof.  If the Specified
Currency is a Foreign Currency and it is so provided above, the Holder may
elect to receive such payments in that Foreign Currency by delivery of a
written request to the Trustee (or to any duly appointed Paying Agent) at the
Corporate Trust Office (as defined below) not later than 10 calendar days prior
to the applicable payment date, and such election will remain in effect for the
Holder until revoked by written notice to the Trustee (or to any such Paying
Agent) at the Corporate Trust Office received not later than 10 calendar days
prior to the applicable payment date; provided, however, no such
election or revocation may be made if, with respect to this Note, (i) an Event
of Default has occurred, (ii) the Company has exercised any discharge or
defeasance options or (iii) the Company has given a notice of redemption.  In the event the Holder makes any such
election pursuant to the preceding sentence, such election will not be
effective on any transferee of such Holder and such transferee shall be paid in
U.S. dollars unless such transferee makes an election pursuant to the preceding
sentence; provided, however, that such election, if in effect
while funds are on deposit with the Trustee to satisfy and discharge this Note,
will be effective on any such transferee unless otherwise specified above.   


 


If so specified above under “Coupon Payments” and
related captions, and subject to any additional or other provisions set forth
above, the Company will, except as provided in the following paragraph, make
coupon payments on the Coupon Payment Dates specified above, commencing with
the first Coupon Payment Date next succeeding the Issue Date, and on the
applicable Principal Payment Date; provided that any payment of the
Payment Amount, premium, if any, or coupon payments to be made on any Coupon
Payment Date or on the Principal Payment Date that is not a Business Day shall
be made on the next succeeding Business Day, unless the next succeeding
Business Day falls in the next calendar month, in which case payment will be
made on the first  preceding Business
Day, in each case with the same force and effect as if made on such Coupon
Payment Date or such Principal Payment Date, as the case may be, and, unless
Accrue to Pay is specified on the face of this Note, no additional coupon payments
shall accrue as a result of such delayed payment; provided  further
that if the


 


2

















 


applicable Principal Payment Date is
postponed due to a Market Disruption Event, coupon payments will continue to
accrue during the period from the originally scheduled Principal Payment Date
to but excluding the postponed Principal Payment Date.  If Accrue to Pay is specified on the face of
this Note, any coupon payment on the Coupon Payment Date will include coupon
payments accrued through the day before the Coupon Payment Date. Each coupon
payment hereon shall include coupon payments accrued through the day before the
Coupon Payment Date or applicable Principal Payment Date, as the case may be.  Unless otherwise specified above, coupon
payments on this Note will be computed on the basis of a 360-day year of twelve
30-day months or in the case of an incomplete month, the number of days
elapsed.  In no event shall the coupon
rate of this Note be higher than the maximum rate permitted by applicable law,
as the same may be modified by United States law of general application.  


 


Unless otherwise specified above, the coupon
payments due on any Coupon Payment Date will, as provided in the Indenture, be
paid to the person in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on the Regular Record Date indicated
above (whether or not a Business Day) next preceding such Coupon Payment Date; provided
that, notwithstanding any provision of the Indenture to the contrary, coupon
payments due on a Principal Payment Date shall be payable to the Person to whom
the related Payment Amount shall be payable; and provided, further,
that, unless otherwise specified above, in the case of a Note initially issued
between a Regular Record Date and the Coupon Payment Date relating to such
Regular Record Date, coupon payments for the period beginning on the Issue Date
and ending on such Coupon Payment Date shall be paid on the Coupon Payment Date
following the next succeeding Regular Record Date to the registered Holder on
such next succeeding Regular Record Date.


 


Unless otherwise specified above and except as
provided below, all coupon payments on this Note 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.


 


Payments of the Payment Amount, premium, if any, and
any coupon payments due on the related Principal Payment Date will be made in
immediately available funds upon surrender of this Note at the corporate trust
office or agency of the Trustee (or any duly appointed Paying Agent) maintained
for that purpose in the Borough of Manhattan, New York City (the “Corporate
Trust Office”), provided that this Note is presented to the Trustee (or any
such Paying Agent) in time for the Trustee (or any such Paying Agent) to make
such payments in such funds in accordance with its normal procedures.


 


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.


 


3

















 


References herein to “U.S. dollars” or “U.S.$” or “$”
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, INCLUDING THE DEFINITIONS OF
CERTAIN TERMS.  SUCH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.


 


“RANGERS Plus”
and “Risk AdjustiNG Equity Range Securities Plus”
are service marks of Lehman Brothers Inc.


 


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: 
     


 


[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

  



 


5

















 


[REVERSE OF NOTE]


 


LEHMAN BROTHERS HOLDINGS INC. 


MEDIUM-TERM NOTES, SERIES I


RANGERS PlusSM


RISK ADJUSTING EQUITY RANGE SECURITIES PlusSM


PERFORMANCE LINKED TO THE VALUE OF A STOCK
INDEX


 


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, RANGERS PlusSM, Risk AdjustiNG Equity
Range Securities PlusSM
of the Company (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 coupon payments (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.  Currency Exchanges and Payments.  If the Holder elects to receive all or a
portion of payments of principal of, premium, if any, and coupon payments on
this Note, if denominated in a Foreign Currency, in U.S. dollars, the exchange
rate agent specified on the face of this Note or a successor thereto (the “Exchange
Rate Agent”), will convert such payments into U.S. dollars. In the event of
such an election, payment to the Holder will be based upon the exchange rate as
determined by the Exchange Rate Agent based on the highest bid quotation in New
York City received by the Exchange Rate Agent at approximately 11:00 a.m., New
York City time, on the second Business Day preceding the applicable payment
date from three recognized foreign exchange dealers (one of which may be the Exchange
Rate Agent unless the Exchange Rate Agent is an affiliate of the Company) for
the purchase by the quoting dealer of the Foreign Currency for U.S. dollars for
settlement on such payment date in the amount of the Foreign Currency payable
in the absence of such an election to such Holder and at which the applicable
dealer commits to execute a contract. If such bid quotations are not available,
such payment will be made in the Foreign Currency. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments. 


 


Unless otherwise specified on the face of this Note,
if payment hereon is required to be made in a Foreign Currency and such
currency is unavailable to the Company for making payments thereof due to the
imposition of exchange controls or other circumstances beyond the Company’s
control, or is no longer used by the government of the country which issued
such currency or for the settlement of transactions by public institutions of
or within the international banking community, then the Company will be
entitled to make payments with respect hereto in U.S. dollars until such
Foreign Currency is again available or so used. 
The amount so payable on any date in such Foreign Currency shall be
converted into U.S. dollars at a rate determined by the Exchange Rate Agent on
the basis of the noon buying rate in New York City for cable


 

















 


transfers in the Foreign Currency as
certified for customs purposes by the Federal Reserve Bank of New York (the “Market
Exchange Rate”) for such Foreign Currency on the second Business Day prior to
such payment date, or on such other basis as may be specified on the face of
this Note.  In the event such Market
Exchange Rate is not then available, the Company will be entitled to make
payments in U.S. dollars (i) if such Foreign Currency is not a composite
currency, on the basis of the most recently available Market Exchange Rate for
such Foreign Currency or (ii) if such Foreign Currency is a composite currency
in an amount determined by the Exchange Rate Agent to be the sum of the results
obtained by multiplying the number of units of each component currency of such
composite currency, as of the most recent date on which such composite currency
was used, by the Market Exchange Rate for such component currency on the second
Business Day prior to such payment date (or if such Market Exchange Rate is not
then available, by the most recently available Market Exchange Rate for such
component currency, or as otherwise specified on the face of this Note).  Any payment in respect hereof made under such
circumstances in U.S. dollars will not constitute an Event of Default under the
Indenture.


 


If the official unit of any component currency of a
composite currency is altered by way of combination or subdivision, the number
of units of that currency as a component shall be divided or multiplied in the
same proportion.  If two or more
component currencies are consolidated into a single currency, the amounts of
those currencies as components shall be replaced by an amount in such single
currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. 
If any component currency is divided into two or more currencies, the
amount of that original component currency as a component shall be replaced by
amounts of such two or more currencies having an aggregate value on the date of
division equal to the amount of the former component currency immediately
before such division.


 


In the event of an official redenomination of the
Specified Currency or the Optional Payment Currency (including, without
limitation, an official redenomination of any such currency that is a composite
currency), the obligations of the Company to make payments in or with reference
to such currency shall, in all cases, be deemed immediately following such
redenomination to be obligations to make payments in or with reference to that
amount of redenominated currency representing the amount of such currency
immediately before such redenomination. 
In no event shall any adjustment be made to any amount payable hereunder
as a result of (i) any redenomination of any component currency of any
composite currency (unless such composite currency is itself officially
redenominated) or (ii) any change in the value of the specified currency or the
Optional Payment Currency relative to any other currency due solely to
fluctuations in exchange rates.


 


All determinations referred to above made by the
Exchange Rate Agent shall be at its sole discretion (except to the extent
expressly provided herein that any determination is subject to approval by the
Company) and, in the absence of manifest error, shall be conclusive for all
purposes and binding on the Holder hereof, and the Exchange Rate Agent shall
have no liability therefor.


 


All currency exchange costs will be borne by the
Holder hereof by deduction from the payments made hereon.


 


2

















 


Section 3.  Redemption.  Unless otherwise specified on the face of
this Note, this Note will not be subject to redemption by the Company. If it is
so specified on the face of this Note that this Note is subject to redemption,
the Company may, at its option, redeem this Note in whole or from time to time
in part on or after the date designated as the Initial Redemption Date on the
face of this Note at the Redemption Payment Amount, together with accrued
coupon payments, if applicable, to but excluding the Redemption Date.  


 


The
Company may exercise such option by causing the Trustee to mail by first-class
mail to the Holder hereof a notice (the “Redemption Notice”) of such redemption
at least 30 but not more than 60 days (or such other period as is specified as
the “Redemption Notice Period” on the face of this Note) prior to the Redemption
Date.  In the event of redemption of this Note in
part only, a new Note or Notes of this series for the unredeemed portion hereof
shall be issued in the name of the Holder hereof upon the cancellation hereof
in accordance with the terms of the Indenture. 
Unless otherwise specified on the face of this Note, if less than all of
the Notes of this series are to be redeemed, the Notes of this series to be
redeemed shall be selected by the Trustee by such method as the Trustee shall
deem fair and appropriate.


 


Section 4.  Sinking
Funds and Amortizing Notes.  Unless
otherwise specified on the face of this Note or unless this Note is an
Amortizing Note, this Note will not be subject to any sinking fund.  If it is specified on the face of this Note
that this Note is an Amortizing Note, the Company will make payments combining
Redemption Payment Amount and coupon payments on the dates and in the amounts
set forth in the table appearing in Schedule I attached to this Note or as
otherwise specified on the face of this Note. 
If this Note is an Amortizing Note, payments made hereon will be applied
first to any coupon payments due and payable on each such payment date and then
to the reduction of the then outstanding principal amount.  


 


Section 5.  Optional
Repurchase.  Unless otherwise
specified on the face of this Note, this Note will not be subject to repurchase
by the Company at the option of the Holder. If it is specified on the face of
this Note that this Note is subject to optional repurchase, the Holder may, at its
option, cause the Company to repurchase this Note, subject to the conditions
specified below, on the Optional Repurchase Date at the Optional Repurchase
Amount, together with accrued coupon payments to but excluding the Optional
Repurchase Date. 


 


Unless otherwise specified on the face of this Note,
in order for this Note to be so repurchased, the Trustee must receive, before
the earlier of (a) the date the Company gives notice of its intention to redeem
this Note pursuant to Section 3 of this Note or (b) eight Business Days (or
such other period as is specified as the “Optional Repurchase Cutoff Period” on
the face of this Note) before the Stated Maturity Date, either (i) this Note with the form below
entitled “Option to Elect Repurchase” duly completed or (ii) a telegram, telex,
fax or letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
in the United States setting forth the name of the Holder hereof, the then
outstanding principal amount of this Note, the principal amount of this Note to
be repaid, the certificate number hereof or a description of the tenor and
terms of this Note, a statement that the option to elect repurchase is being
exercised thereby and a guarantee that this Note with the form below entitled “Option
to Elect Repurchase” duly completed will be received by the Paying Agent not
later than five Business Days after the date of such telegram, telex, fax or
letter and this Note and form duly completed are received by the Paying Agent
by such fifth Business Day.  Exercise of
this repurchase option shall be irrevocable, except as otherwise provided under
Section 6 of this Note or Section 9 of this Note.  The repurchase option may be


 


3

















 


exercised by the Holder of this Note with
respect to less than the principal amount of this Note then outstanding
provided that the principal amount of this Note remaining outstanding after
repurchase is an authorized denomination. 
Upon such partial repurchase this Note shall be cancelled and a new Note
or Notes of this series for the remaining principal amount of this Note shall
be issued in the name of the Holder of this Note.


 


If this Note is a Global Security, the Holder of
this Note, the nominee of the Depositary, will be the only entity that can
exercise a right to repurchase.  In order
to ensure that the nominee of the depositary will timely exercise a right to
repurchase relating to this Note, the Holder must instruct the broker or other
direct or indirect participant through which it holds an interest in this Note
to notify the Depositary of its desire to exercise a right to repurchase.


 


Section 6.  Optional
Coupon Reset.  If so specified on the
face of this Note, the Coupon Rate on this Note may be reset at the option of
the Company, in the manner set forth below (unless otherwise specified on the
face of this Note), on the Optional Reset Date or Optional Reset Dates
specified on the face of this Note.  The
Company may exercise such option by notifying the Trustee in writing of such
exercise at least 45 but not more than 60 days prior to an Optional Reset
Date.  Not later than five Business Days
after receipt thereof, the Trustee will mail by first-class mail to the Holder
of this Note a notice (the “Reset Notice”) setting forth (i) the election of
the Company to reset the coupon rate, (ii) such new coupon rate and (iii) the
provisions, if any, for redemption during the period from such Optional Reset
Date to the next Optional Reset Date or, if there is no such next Optional
Reset Date, to the Stated Maturity Date of this Note (each such period a “Subsequent
Coupon Period”), including the date or dates on which or the period or periods
during which and the price or prices at which such redemption may occur during
such Subsequent Coupon Period.  The Reset
Notice shall be substantially in the form of Exhibit A to this Note.  Upon the transmittal by the Trustee of a
Reset Notice to the Holder of this Note, such new coupon rate shall take effect
automatically, and, except as modified by the Reset Notice and as described in
the next paragraph, this Note will have the same terms as prior to the
transmittal of such Reset Notice.


 


Notwithstanding the foregoing, not later than 20
days prior to an Optional Reset Date, the Company may, at its option, revoke
the coupon rate provided for in the Reset Notice and establish a coupon rate
that is higher than the coupon rate provided for in the Reset Notice for the
Subsequent Coupon Period commencing on such Optional Reset Date by causing the
Trustee to mail by first-class mail notice of such higher coupon rate to the
Holder of this Note.  Such notice shall
be irrevocable and shall be mailed by the Trustee within five Business Days
after receipt thereof.  All Notes of this
series with respect to which the coupon rate is reset on an Optional Reset Date
will bear such higher coupon rate for the Subsequent Coupon Period.


 


If the Company elects to reset the coupon rate of
this Note, the Holder of this Note will have the option to elect repurchase by
the Company of this Note, or any portion hereof, on any Optional Reset Date at
a price calculated with reference to (a) the then outstanding principal amount
of this Note, (b) the Maturity Payment Amount calculated as though the Optional
Reset Date were the Stated Maturity Date and the date that is a number of
business days equal to the Determination Period before that date were the
Valuation Date, or (c) such other amount or amounts, in each case as specified
on the face of this Note, plus any coupon payments accrued to, such Optional
Reset Date.  In order to obtain
repurchase on an Optional Reset Date, the Holder must follow the procedures set
forth above in Section 5 of this Note for Optional Repurchase except that the
period for delivery or notification to the Trustee shall be at least 25


 


4

















 


but not more than 35 days prior to such
Optional Reset Date and except that, if the Holder has tendered this Note for
repurchase pursuant to the Reset Notice, the Holder may, by written notice to
the Trustee, revoke such tender for repurchase until the close of business on
the tenth day prior to such Optional Reset Date; provided, however,
that if such day is not a Business Day, then such notice may be given on the
next succeeding Business Day.


 


Section 7.  Discount
Notes.  If this Note is a Discount
Note, the amount payable in the event of Redemption, Optional Repurchase or
acceleration of maturity shall be (i) the Amortized Principal Amount of this
Note as of the Redemption Date, Optional Repurchase Date or date of such
acceleration, as the case may be, rather than the relevant Payment Amount of
this Note or (ii) such other amount as specified on the face of this Note (such
amount, the “Discount  Note Prepayment
Amount”).


 


Section 8.  Dual
Currency Notes.  If it is specified
on the face of this Note that this Note is a Dual Currency Note, the Company
has a one time option, exercisable on any one of the Option Election Dates
specified on the face of this Note in whole, but not in part, with respect to
all Dual Currency Notes of this series, of thereafter making all payments of
Maturity Payment Amount, premium, if any, and coupon payments (which payments
would otherwise be made in the Specified Currency of such Notes) in the
Optional Payment Currency specified on the face of this Note.  If the Company makes such an election, the
amount of Optional Payment Currency payable in respect hereof shall be
determined by the Exchange Rate Agent by converting the amount of Specified
Currency that would otherwise be payable into the Optional Payment Currency at
the Designated Exchange Rate specified on the face of this Note.


 


The Company may exercise such option by notifying
the Trustee of such exercise on or prior to the Option Election Date.  The Trustee will mail by first-class mail to
each holder of a Note of this series a notice of such election within five
Business Days of the Option Election Date which shall state (i) the first
date, whether a Coupon Payment Date and/or the Stated Maturity Date, on which
scheduled payments in the Optional Payment Currency will be made and
(ii) the Designated Exchange Rate. 
Any such notice by the Company, once given, may not be withdrawn.


 


If this Note is a Dual Currency Note,
notwithstanding any prior election made by the Company, the amount payable
hereon in the event of any Redemption, any Optional Repurchase, any
acceleration of the maturity of this Note or other prepayment of this Note prior
to the Stated Maturity Date shall be (a) an amount equal to the amount
otherwise due and payable plus accrued coupon payments to but excluding the
Redemption Date, Optional Repurchase Date, date of acceleration or other
prepayment minus the Total Option Value multiplied by a fraction, the
numerator of which is the then outstanding principal amount of this Note and
the denominator of which is the aggregate principal amount of all Dual Currency
Notes of this series then outstanding or (b) such other amount as specified on
the face of this Note (such amount, the “Dual Currency Note Prepayment Amount”).  In no event will such payment be less than
zero.  Notwithstanding any prior election
made by the Company, such payment shall be made in the Specified Currency
unless otherwise provided on the face of this Note.


 


All determinations referred to above made by the
Exchange Rate Agent or the Option Value Calculation Agent shall be at their
sole discretion (except to the extent expressly provided herein that any determination
is subject to approval by the Company) and, in the absence of manifest error,
shall be conclusive for all purposes and binding on the Holder hereof,


 


5

















 


and neither the Exchange Rate Agent nor the
Option Value Calculation Agent shall have any liability therefor.


 


Section 9.  Extension
of Maturity Notes.  If it is
specified on the face of this Note that this Note is an Extension of Maturity
Note, the Company has the option to extend the Stated Maturity Date for the
number of Extension Periods set forth on the face of this Note, each of which
Extension Periods shall be a period of from one to five whole years.  Unless otherwise specified on the face of
this Note, the following procedures shall apply if this Note is an Extension of
Maturity Note.


 


The Company may exercise its option by notifying the
Trustee of such exercise at least 45 but not more than 60 days prior to the
Stated Maturity Date in effect prior to the exercise of such option (the “Original
Stated Maturity”).  Not later than five
Business Days after receipt thereof, the Trustee will mail to the Holder a
notice (the “Extension Notice”), first class, postage prepaid, setting forth
(i) the election of the Company to extend the Stated Maturity Date, (ii) the
new Stated Maturity Date, (iii) the Coupon Rate applicable to the Extension
Period and (iv) the provisions, if any, for redemption during the Extension
Period, including the date on which or the period or periods during which and
the price at which such redemption may occur during the Extension Period.  Upon the mailing by the Trustee of an
Extension Notice to the Holder, the Stated Maturity Date hereof shall be
extended automatically, and, except as modified by the Extension Notice and as
described in the next paragraph, this Note will have the same terms as prior to
the mailing of such Extension Notice.


 


Notwithstanding the foregoing, not later than 20
days prior to the Original Stated Maturity hereof, the Company may, at its
option, revoke the coupon rate provided for in the Extension Notice and
establish a higher coupon rate for the Extension Period by causing the Trustee
to mail notice of such higher coupon rate, first class, postage prepaid, to the
Holder.  Such notice shall be irrevocable
and shall be mailed by the Trustee within three Business Days after receipt
thereof.  This Note will bear such higher
coupon rate for the Extension Period, whether or not tendered for repurchase.


 


If the Company extends the Stated Maturity Date of
this Note, the Holder will have the option to elect repurchase by the Company
of this Note, or any portion hereof, on the Original Stated Maturity at a price
calculated with reference to (a) the then outstanding principal amount of this
Note, (b) the Optional Repurchase Amount calculated as though the Original
Stated Maturity were the Stated Maturity Date and the date that is a number of
business days equal to the Determination Period before that date were the
Valuation Date, or (c) such other amount or amounts, in each case as specified
on the face of this Note.  In order for
this Note to be so repaid on the Original Stated Maturity, the Holder must
follow the procedures set forth in Section 4 of this Note for Optional Repurchase,
except that the period for delivery of this Note or notification to the Trustee
shall be at least 25 but not more than 35 days prior to the Original Stated
Maturity and except that the Holder may, by written notice to the Trustee,
revoke any such tender for repurchase until the close of business on the tenth
day prior to the Original Stated Maturity; provided, however,
that if such day is not a Business Day, then such notice may be given on the
next succeeding Business Day.


 


Section 10.  Extendible
Notes.  If it is specified on the face
of this Note that this Note is an Extendible Note, this Note will mature on the
Stated Maturity Date specified on the


 


6

















 


face of this Note unless the maturity of all
or any portion of this Note is extended in accordance with the procedures
described below.


 


On the Coupon Payment Date occurring in the sixth
month (unless a different Special Election Interval is specified on the face of
this Note) prior to the Initial Stated Maturity Date specified on the face of
this Note (the “Initial Maturity Extension Date”) and on the Coupon Payment
Date occurring in each sixth month (or the last month of each Special Election
Interval) after such Initial Maturity Extension Date (each, together with the
Initial Maturity Extension Date, a “Maturity Extension Date”), the Stated
Maturity Date of this Note will be extended to the Coupon Payment Date
occurring in the twelfth month (or, if a Special Election Interval is specified
on the face of this Note, the last month in a period equal to twice the Special
Election Interval) after such Maturity Extension Date, unless the Holder elects
to terminate the extension of the Stated Maturity Date hereof or any portion
hereof as described below.


 


If the Holder elects to terminate the extension of
the Stated Maturity Date of any portion of the principal amount of this Note
during the specified period prior to any Maturity Extension Date, such portion
will become due and payable on the Coupon Payment Date occurring in the sixth
month (or the last month in the Special Election Interval) after such Maturity
Extension Date (the “Extended Stated Maturity Date”).


 


The Holder may elect to extend the Stated Maturity
Date of this Note, or if so specified above, any portion hereof, by delivering
a notice to such effect to the Trustee (or any duly appointed Paying Agent) at
the Corporate Trust Office not less than 3 nor more than 15 days prior to such
Maturity Extension Date (unless another period is specified on the face of this
Note as the “Special Election Period”). 
Such election will be irrevocable and will be binding upon each
subsequent Holder of this Note.  An
election to extend the Stated Maturity Date of this Note may be exercised with
respect to less than the entire principal amount of this Note then outstanding
only if so specified on the face of this Note and only in such principal
amount, or any integral multiple in excess thereof, as is specified on the face
of this Note.  Notwithstanding the foregoing,
the maturity of this Note will not be extended beyond the Stated Maturity Date
specified on the face of this Note.


 


Unless otherwise specified above, any
election not to extend will be effective only if this Note is presented to the
Trustee (or any duly appointed Paying Agent) as soon as practicable.  Following receipt of this Note the Trustee
(or any duly appointed Paying Agent) shall issue in exchange herefor in the
name of the Holder (i) a Note, in a face amount equal to the principal amount
of this Note for which no election to extend was exercised, with terms
identical to those specified herein (except for the Issue Date and the Initial
Coupon Rate and except that such Note shall have a fixed, non-extendable
maturity on the Extended Stated Maturity Date) and (ii) if such election not to
extend is made with respect to less than the principal amount of this Note then
outstanding, a replacement Extendible Note, in a face amount equal to the
principal amount of this Note for which an election to extend was made, with
terms identical to this Note.


 


Section 11.  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; provided,
however, if this Note is a Discount Note, the outstanding principal


 


7

















 


amount of this Note will be deemed to be the
amount of the principal thereof that would be due and payable as of the date of
such determination upon a declaration of acceleration of the maturity thereof.


 


Section 12.  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 Payment Amount or the principal
amount thereof, or reduce the rate or extend the time to make coupon payments
thereon or reduce any premium or other amount payable on redemption, or make
the Payment Amount or the principal amount thereof, premium or other amount
payable, if any, or coupon payments 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 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 coupon payments, if any, on
the Payment 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 13.  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 Payment Amount or the principal amount, premium, if any, and coupon
payments, if any, on this Note at the place, at the respective times, at the
rate, and in the coin or currency herein prescribed.


 


Section 14.  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 15.  Authorized
Form and Denominations.  The Notes of
this series are issuable in registered form, without coupons.  Notes of this series denominated in U.S.
dollars shall be issued in principal amount denominations specified on the face
of this Note.  Notes of this series
denominated in a Foreign Currency will be issued in a denomination
approximately equivalent to Notes of this series denominated in U.S.
dollars.  Each Note will be issued
initially as either a Global Security or a Certificated Note, at the option of
the Company, either at the office or agency to be designated and maintained by
the Company for such purpose in the


 


8

















 


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 16.  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 this Note is a Global Security and 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 17.  Events
of Default.  If an Event of Default
with respect to Notes of this series shall occur and be continuing, the
principal of the Notes of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.  Unless otherwise provided on the face of this
Note, the amount payable to the Holder hereof upon any acceleration permitted
under the Indenture will be equal to the Maturity Payment Amount calculated as
though the date to which the maturity has been accelerated were the Stated
Maturity Date and the date that is a number of business days equal to the Determination
Period before that date were the Valuation Date.  Upon payment (i) of the aggregate applicable
amounts on the Notes of this series so declared due and payable and (ii) of
coupon payments on any overdue Payment Amount and overdue coupon payments (in
each case to the extent that the payment of such coupon payments shall be
legally enforceable), all of the Company’s obligations in respect of the


 


9

















 


payment of the Maturity Payment Amount and
coupon payments, if any, on the Notes of this series shall terminate.


 


Section 18.  No
Recourse Against Certain Persons.  No
recourse for the payment of Payment Amount, premium, if any, or coupon payments
on this Note, if any, 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 19.  Defined
Terms.  All terms used but not
defined in this Note are used herein as defined in the Indenture.


 


Section 20.  Tax
Treatment.  The Company intends to
treat and, by purchasing this Note, the Holder hereof agrees to treat, for all
tax purposes, this Note as a cash-settled financial contract giving rise to
capital gain or loss, rather than as a debt instrument.


 


Section 21.  GOVERNING
LAW.  THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


Section 22.  Definitions.  Set forth below are definitions of certain of
the terms used in this Note.  The
definitions set forth below are subject to the terms and provisions on the face
of this Note.  If any definition below is
different than, or inconsistent with, the terms and provisions on the face of
this Note, the terms and provisions on the face shall prevail.


 


“ADS” shall mean American Depositary Share.


 


“AMEX” shall mean the American Stock Exchange
LLC.


 


“Amortized Principal Amount” of this Note at
any time shall mean the amount equal to (a) the Issue Price multiplied by the
then outstanding principal amount of this Note plus (b) that portion of the
difference between the amount calculated pursuant to clause (a) and the
principal amount of this Note that has accrued at the Yield to Maturity set
forth on the face of this Note (computed in accordance with generally accepted
United States bond yield computation principles) at the date as of which the
Amortized Principal Amount is calculated, but in no event shall the Amortized
Principal Amount of this Note exceed the principal amount of this Note.


 


“Business Day”, notwithstanding any provision
in the Indenture, shall mean, unless otherwise set forth on the face of this
Note, any day that is not a Saturday, a Sunday or a day on which the NYSE, the
Nasdaq or the AMEX is not open for trading or banking institutions or trust
companies in New York City are authorized or obligated by law or executive
order to close, and, (a) if the Specified Currency is a Foreign Currency other
than Euros, not a day on which banking institutions are authorized or required
by law to close in the Principal Financial Center of the country issuing the
Foreign Currency and (b) if the Specified Currency is Euros, a day on which the
Trans-European Automated Real-Time Gross Settlement Express Transfer


 


10

















 


System is open.  “Principal Financial Center” shall mean the
capital city of the country issuing the specified currency.  However, for U.S. dollars, Australian
dollars, Canadian dollars and Swiss francs, the Principal Financial Center will
be New York City, Sydney, Toronto and Zurich, respectively.


 


“Calculation Agency Agreement” shall mean the
Calculation Agency Agreement, dated as of May 30,  2006, between the Company and the Calculation
Agent, as amended from time to time, or any successor calculation agency
agreement.


 


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


 


“Close of Trading” shall mean, in
respect of any Relevant Exchange or other exchange or quotation system, the
scheduled weekday closing time on a day on which the Relevant Exchange or other
exchange or quotation system is scheduled to be open for trading for its
respective regular trading session, without regard to after hours or any other
trading outside of the regular trading session hours.


 


“Closing
Level”, shall mean, when used with respect to any Relevant Index on any
particular day, (a) the closing level of the Relevant Index on such day as
reported by the publisher of the Relevant Index, as determined and adjusted by
the Calculation Agent pursuant to the Calculation Agency Agreement, or (b) as
otherwise determined by the Calculation Agent pursuant to the Calculation
Agency Agreement if the Relevant Index has been discontinued or in the
circumstances described in the definition of the term “Valuation Date” herein.


 


“common stock” shall mean common stock or any
other equity security (which may be an ADS).


 


“Company” shall have the meaning set forth on
the face of this Note.


 


“Coupon Payment Date” shall have the meaning
set forth on the face of this Note.


 


“Coupon Rate” shall have the meaning set
forth on the face of this Note.


 


“Downside Protection Rate” shall be the rate
specified as such on the face of this Note.


 


“Designated Exchange Rate” shall mean the
exchange rate specified as such on the face of this Note.


 


“Determination Period” shall be the number of
days specified as such on the face of this Note.


 


“Discount Note” shall mean any Note that has
been issued at an Issue Price less than 100%.


 


“Discount Note Prepayment Amount” shall have
the meaning set forth in Section 7 of this Note.


 


11

















 


“Dual Currency Note” shall mean any Note
designated as such on the face of this Note.


 


“Dual Currency Note Prepayment Amount” shall
have the meaning set forth in Section 8 of this Note.


 


“Exchange Rate Agent” shall have the meaning
set forth in Section 2 of this Note.


 


“Extended Stated Maturity Date” shall
have the meaning set forth in Section 10 of this Note.


 


“Extension Notice” shall have the meaning set
forth in Section 9 of this Note.


 


“Final Index Level” shall mean the Closing
Level of the Index on the applicable Valuation Date.


 


“Foreign Currency” shall mean any currency other
than U.S. dollars.


 


“Global Security” shall have the meaning set
forth on the face of this Note.


 


“Indenture” shall have the meaning set
forth in Section 1 of this Note.


 


“Index” shall be the stock index specified as
such on the face of this Note.


 


“Initial Index Level” shall be the index
level specified as such on the face of this Note.


 


“Initial Maturity Extension Date” shall have
the meaning set forth in Section 10 of this Note.


 


“Initial Redemption Date” shall mean the date
specified as such on the face of this Note.


 


“Issue Date” shall have the meaning set forth
on the face of this Note.


 


“Issue Price” shall mean the price specified
as such on the face of this Note.


 


“Market Disruption Event”, unless
indicated otherwise on the face of this Note, with respect to the Relevant
Index shall mean any of the following events has occurred on any day as
determined by the Calculation Agent in accordance with the Calculation Agency
Agreement:


 


(1)           A material suspension of or
limitation imposed on trading relating to the securities that then comprise 20%
or more of the Relevant Index, by the Relevant Exchange for each security, at
any time during the one-hour period that ends at the Close of Trading on such
day, whether by reason of movements in price exceeding limits permitted by that
Relevant Exchange or otherwise. 
Limitations on trading during significant market fluctuations imposed
pursuant to NYSE Rule 80B or any applicable rule or regulation enacted or
promulgated by the NYSE, any other exchange, quotation system or market, any
other self


 


12

















 


regulatory organization
or the Securities and Exchange Commission of similar scope or as a replacement
for Rule 80B may be considered material.


 


(2)           A material suspension of or
limitation imposed on trading in futures or options contracts relating to the
Relevant Index by the primary exchange or quotation system on which those
futures or options contracts are traded, at any time during the one-hour period
that ends at the Close of Trading on such day, whether by reason of movements
in price exceeding limits permitted by that primary exchange or quotation
system or otherwise.


 


(3)           Any event, other than an early
closure, that disrupts or impairs the ability of market participants in general
to effect transactions in, or obtain market values for, the securities that
then comprise 20% or more of the Relevant Index on the Relevant Exchanges for
those securities, or in the case of a security not listed or quoted in the
United States, on the primary exchange, quotation system or market for such
security, at any time during the one hour period that ends at the Close of
Trading on such day.


 


(4)           Any event, other than an early
closure, that disrupts or impairs the ability of market participants in general
to effect transactions in, or obtain market values for, the futures or options
contracts relating to the Relevant Index on the primary exchange or quotation
system on which those futures or options contracts are traded at any time during
the one hour period that ends at the Close of Trading on such day.


 


(5)           The closure of the Relevant Exchanges
for securities that then comprise 20% or more of the Relevant Index or the
primary exchange or quotation system on which futures or options contracts
relating to the Relevant Index are traded prior to its scheduled closing time
unless the earlier closing time is announced by the exchanges or quotation
system at least one hour prior to the earlier of (i) the actual closing time
for the regular trading session on the exchanges or quotation system and (ii)
the submission deadline for orders to be entered into the exchanges or
quotation system for execution at the Close of Trading on such day.


 


For
purposes of determining whether a Market Disruption Event has occurred the
relevant percentage contribution of a security to the level of the Relevant
Index will be based on a comparison of (x) the portion of the level of the
Index attributable to that security and (y) the overall level of the Index, in
each case immediately before the occurrence of the Market Disruption Event.


 


“Market Exchange Rate” shall have the meaning
set forth in Section 2 of this Note.


 


 “Maturity
Extension Date” shall have the meaning set forth in Section 10 of this
Note.


 


“Maturity Payment Amount” shall, mean for
each $1,000 principal amount of the Notes represented hereby:


 


13

















 


If
the Final Index Level is greater
than the Initial Index Level, the sum
of:


 


	
   

  	
  (1)

  	
  $1,000; and

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (2)

  	
  $1,000

  	
  x

  	
  Upside
  Participation

  	
   

  	
  x

  	
   

  	
  Final

  Index Level

  	
   

  	
  -

  	
   

  	
  Initial

  Index Level

  
	
   

  	
   

  	
   

  	
   

  	
  Rate

  	
   

  	
   

  	
   

  	
  Initial
  Index Level

  



 


If
the Final Index Level is less
than or equal to the Initial Index Level, the lesser
of:


 


(1)           $1,000; and


 


	
   

  	
  (1)

  	
  $1,000; and

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Downside

  	
   

  
	
   

  	
  (2)

  	
  $1,000

  	
  x

  	
  (

  	
  Final
  Index Level

  	
   

  	
  +

  	
   

  	
  Protection

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
  Initial
  Index Level

  	
   

  	
   

  	
   

  	
  Rate

  	
   

  
											



 


“Nasdaq” shall mean The Nasdaq Stock Market,
Inc.


 


“Notes” shall have the meaning set forth in
Section 1 of this Note.


 


“NYSE” shall mean The New York Stock
Exchange, Inc.


 


“Option Election Dates” shall mean the
date(s) specified as such on the face of this Note.


 


“Option Value” shall mean, with respect to a
Coupon Payment Date or the Stated Maturity Date, the amount calculated by the
Option Value Calculation Agent to be the arithmetic average of the prices
quoted on the date of calculation by three reference banks (which banks shall
be selected by the Option Value Calculation Agent and shall be reasonably
acceptable to the Company) for the right on the Option Election Date
immediately preceding such Coupon Payment Date or Stated Maturity Date to
purchase for value on such Coupon Payment Date or Stated Maturity Date from
such reference banks (A) the aggregate amount of the Specified Currency due on such
Coupon Payment Date or Stated Maturity Date with respect to all of the Dual
Currency Notes of this series in exchange for (B) the amount of the Optional
Payment Currency that would be received if the amount in clause (A) were
converted into the Optional Payment Currency at the Designated Exchange Rate.


 


“Optional
Payment Currency” shall mean the currency specified as such on the face of
this Note.


 


“Optional Repurchase” shall mean the option
of a Holder to elect to require the Company to repurchase Notes of this series
pursuant to Section 5 of this Note.


 


“Optional
Repurchase Amount” shall
equal, for each $1,000 principal amount of Notes represented hereby, the
Maturity Payment Amount calculated as though the date of repurchase were the
Stated Maturity Date and the date that is a number of business days equal to
the Determination Period before that date were the Valuation Date, as specified
on the face of this Note, or such other amount or amounts, as specified on the
face of this Note.


 


14

















 


“Optional Repurchase Cutoff  Period” shall by the number of days
specified as such on the face of this Note.


 


“Optional Repurchase Date”
shall mean the date specified as such on the face of this Note; provided,
however, if the Calculation Agent determines that a Market Disruption
Event with respect to any Relevant Index has occurred on the day that would
otherwise be the applicable Valuation Date, or if the applicable Valuation Date
is not a Scheduled Trading Day, then the Optional Repurchase Date shall be
postponed by a number of Business Days equal to the number of Scheduled Trading
Days by which the applicable Valuation Date is postponed.


 


“Optional Reset Dates”
shall be the dates specified as such on the face of this Note.


 


“Original Stated Maturity”
shall have the meaning set forth in Section 7 of this Note.


 


“Payment Amount” shall mean the
Maturity Payment Amount, the Redemption Payment Amount or the Optional
Repurchase Amount, as the case may be.


 


“Principal Payment Date” shall mean the
Stated Maturity Date, the Redemption Date or the Optional Repurchase Date, as
the case may be.


 


“Redemption” shall mean the option of the
Company to redeem, at any time on or after the date specified on the face of
this Note, in whole or from time to time in part, the Notes of this series
pursuant to Section 3 of this Note.


 


“Redemption
Date” shall mean the date specified as such in the notice demanded in
Section 3 of this Note; provided, however, if the Calculation
Agent determines that a Market Disruption Event with respect to any Relevant
Index has occurred on a day that would otherwise be the applicable Valuation
Date, or if the applicable Valuation Date is not a Scheduled Trading Day, then
the Redemption Date shall be postponed by a number of Business Days equal to
the number of Scheduled Trading Days by which the applicable Valuation Date is
postponed.


 


“Redemption Notice”
shall mean the notice of redemption mailed to the Holders pursuant to Section 3
of this Note.


 


“Redemption
Notice Period” shall
have the meaning set forth in Section 3 of this Note.


 


“Redemption
Payment Amount” shall mean, for each $1,000 principal amount of Notes
represented hereby, (a) $1,000 or (b) the Maturity Payment Amount calculated as though the Redemption Date
were the Stated Maturity Date and the date that is a number of Business Days
equal to the Determination Period before that date were the Valuation Date, as
specified on the face of this Note, or such other amount or amounts as
specified on the face of this Note.


 


“Relevant
Exchange” shall mean, for each security included in a Relevant Index, the
primary United States national securities exchange, quotation system, including
any bulletin board service, or market on which such security is traded, or in case
such security is not listed or quoted in the United States, the primary
exchange, quotation system or market for such security.


 


15

















 


“Relevant Index” shall mean any stock index
designated as such by the Calculation Agent in accordance with the Calculation
Agency Agreement, including any successor or substitute index selected by the
Calculation Agent in accordance with the Calculation Agency Agreement upon
discontinuance of an index. The Relevant Index will initially consist of the
stock index designated as the Index on the face of this Note.


 


“Reset Notice” shall
have the meaning specified in Section 5 of this Note.


 


“Scheduled Trading Day” shall mean any
day on which a Relevant Index is published by its publisher or otherwise
determined by the Calculation Agent pursuant to the Calculation Agency
Agreement.


 


“Securities” shall have the meaning set forth
in Section 1 of this Note.


 


“Special Election Interval” shall be the
number of days specified as such on the face of this Note.


 


“Special Election Period” shall be the number
of days specified as such on the face of this Note.


 


“Specified Currency” shall mean U.S. dollars
or such other currency as is specified as such on the face of this Note.


 


“Stated
Maturity Date” shall mean the date specified as such on the face of this
Note (except as otherwise provided in the case of an Extension of Maturity Note
or an Extendible Note); provided, that if a Market Disruption Event with
respect to any Relevant Index occurs on the applicable Valuation Date, or if
the applicable Valuation Date is not a Scheduled Trading Day, then the Stated
Maturity Date shall be postponed by a number of Business Days equal to the
number of Scheduled Trading Days by which the applicable Valuation Date is
postponed. In the event of any acceleration of the maturity of this Note prior
to the Stated Maturity Date specified on the face of this Note, the term “Stated
Maturity Date” when used herein shall refer, where applicable, to the date of
acceleration of this Note.


 


“Subsequent Coupon Period” shall have
the meaning set forth in Section 6 of this Note.


 


“Total Option Value” shall mean, with respect
to any Dual Currency Note on any date, an amount (calculated as of such date by
the Option Value Calculation Agent specified on the face of this Note) equal to
the sum of the Option Values (calculated as of such date by the Option Value
Calculation Agent) for all Coupon Payment Dates occurring after the date of
calculation up to and including the Stated Maturity Date.


 


“Trustee” shall have the meaning set forth in
Section 1 of this Note.


 


“Upside Participation Rate” shall be the rate
specified as such on the face of this Note.


 


“Valuation
Date” shall mean, unless otherwise specified on the face of this Note, (a)
in the case of payment on the Stated Maturity Date, the third Business Day
prior to the Stated Maturity Date, (b) in the case of Redemption, the date that
the Redemption Notice is mailed and


 


16

















 


(c) in the case of Optional Repurchase, the date that is a number of
Business Days equal to the Determination Period before the Optional Repurchase
Date; provided, however, in each case, if a Market Disruption
Event occurs on any such date as determined by the Calculation Agent pursuant
to the Calculation Agency Agreement, or if such date is not a Scheduled Trading
Day, the Valuation Date shall be postponed to the next Scheduled Trading Day on
which no Market Disruption Event occurs; provided, further, if a
Market Disruption Event occurs on each of the eight Scheduled Trading Days
following the originally scheduled Valuation Date, then that eighth Scheduled
Trading Day shall be deemed the Valuation Date and the Calculation Agent shall
determine, in accordance with the Calculation Agency Agreement, the Closing
Level of the Relevant Index based upon its estimate of the value of any
Relevant Index, as of the Close of Trading on that eighth Scheduled Trading
Day.


 


“Yield to Maturity” shall mean the percentage
specified as such on the face of this Note.


 


17

















 


OPTION
TO ELECT REPURCHASE


 


The undersigned owner of this Note hereby
irrevocably elects to have the Company repurchase the principal amount of this
Note or portion hereof below designated at (i) the Optional Repurchase Amount
plus any accrued coupon payments to but excluding the Optional Repurchase Date,
if this Note is to be repurchased pursuant to the Optional Repurchase provision
described in Section 5 of this Note, or (ii) the price specified pursuant to
the Optional Coupon Reset provision described in Section 6 of this Note or the
Extension of Maturity Notes provision described in Section 9 of this
Note.  Any such election is irrevocable
except as provided in Section 6 of this Note or Section 9 of this Note.


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  Sign exactly
  as name appears on the front of this Note [SIGNATURE GUARANTEED - required
  only if Notes of this series are to be issued and delivered to other than the
  registered Holder]

  
	
   

  	
   

  	
   

  	
   

  
	
  Principal
  Amount to be repurchased, if amount to be repurchased is less than the
  principal amount of this Note (principal amount remaining must be an
  authorized denomination)

  	
  Fill in for
  registration of Notes of this series if to be issued otherwise than to the
  registered Holder:

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
  (Please
  print name and address including zip code)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  SOCIAL
  SECURITY OR

  
	
   

  	
   

  	
   

  	
  OTHER
  TAXPAYER ID NUMBER:

  
										



 

















 


OPTION TO ELECT TERMINATION
OF AUTOMATIC EXTENSION


 


The undersigned owner of this Note hereby
irrevocably elects to terminate the automatic extension of this Note or of the
portion of the principal amount of this Note below designated.  Any such election is irrevocable and will be
binding on any subsequent Holder hereof.


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  Sign exactly
  as name appears on the front of this Note [SIGNATURE GUARANTEED - required
  only if Notes of this series are to be issued and delivered to other than the
  registered Holder]

  
	
   

  	
   

  	
   

  	
   

  
	
  Principal
  Amount to be terminated, if 

  	
   

  	
  Fill in for
  registration of Notes of this series if to be issued otherwise 

  
	
  amount to be
  terminated is less than the 

  	
   

  	
  than to the
  registered Holder:

  
	
  principal
  amount of this Note (such 

  	
   

  	
   

  
	
  principal
  amount must be an authorized 

  	
   

  	
  Name:

  	
   

  	
   

  
	
  denomination)

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
  (Please
  print name and address including zip code)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  SOCIAL
  SECURITY OR

  
	
   

  	
   

  	
   

  	
  OTHER
  TAXPAYER ID NUMBER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
											



 

















 


The following
abbreviations, when used in the inscription on the face of the within Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:


 


	
  TEN COM -

  	
  as tenants in common

  	
   

  	
  UNIF GIFT MIN ACT -               Custodian

  
	
   

  	
   

  	
   

  	
   

  	
                                    (Cust)                    (Minor)

  	
   

  
	
  TEN ENT -

  	
  as tenants by the entireties

  	
  under Uniform Gifts to Minors

  	
   

  
	
  JT TEN -

  	
  as joint tenants with right of

  	
  Act

  	
   

  	
   

  
	
   

  	
  Survivorship and not as tenants in

  	
  (State)

  	
   

  
	
   

  	
  common

  	
   

  	
   

  	
   

  	
   

  
									



 


Additional abbreviations may also be used
though not in the above list.


 


FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto


 


PLEASE INSERT
SOCIAL SECURITY OR OTHER


IDENTIFYING
NUMBER OF ASSIGNEE


 


                                                                                                                                                                                                                       


(Name and
Address of Assignee, including zip code, must be printed or typewritten.)


 


                                                                                                                                                                                                                       


the within
Note of Lehman Brothers Holdings, Inc., and all rights thereunder, hereby
irrevocably constituting and appointing


 


                                                                                                                                                                                                                       


to transfer
the said Note on the books of the within-named Company, with full power of
substitution in the premises.


 


	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  



 


NOTICE:  The signature to this
assignment must correspond with the name as it appears upon the face of the
within Security in every particular, without alteration or enlargement or any
change whatever.


 


Signature(s)
Guaranteed:


 


                                           


THE
SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.


 

















 


Schedule I


 


Amortization Table


 


	
  Date

  	
   

  	
  Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 

















 


EXHIBIT A


 


RESET NOTICE


 


LEHMAN BROTHERS HOLDINGS INC.


Medium-Term Notes, Series I


RANGERS PlusSM


Risk AdjustiNG Equity Range Securities PlusSM


Performance Linked to the Value of a Stock Index


CUSIP No.


Registered Nos.      -    


 


LEHMAN BROTHERS HOLDINGS INC., a corporation duly
organized and existing under the laws of the State of Delaware (the “Company”),
is the issuer of the above-referenced Notes (the “Notes”).  Capitalized terms used herein and not defined
are used as defined in the Notes.


 


The Company hereby elects to reset the Coupon Rate
set forth on the face of the Notes.  On
and after                  (1),
the Coupon Rate shall be                .


 


Each Holder of a Note has the option to elect
repurchase by the Company of such Note, or any portion thereof, on any Optional
Reset Date pursuant to the terms of such Note. 
The Notes may be repaid on the dates and at the prices set forth below:


 


	
  Date

  	
   

  	
  Redemption
  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


IN WITNESS WHEREOF, Lehman Brothers Holdings Inc.
has caused this Reset Notice 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 and to be attested by its Secretary or one of its Assistant
Secretaries.


 


	
  Dated:

  	
  LEHMAN
  BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   Title:

  
						



 






(1)           Insert applicable
Optional Reset Date.