Exhibit 4.02


 


CUSIP
NO. 5252M0DN4


ISIN NO. US5252M0DN44


 


	
  REGISTERED

  	
  PRINCIPAL AMOUNT:
  $20,000,000

  



No. R-1


 


LEHMAN BROTHERS HOLDINGS INC.


 


MEDIUM-TERM NOTE, SERIES I


 


BUFFERED RETURN ENHANCED NOTES LINKED TO


MARQCUS PORTFOLIO A (USD) INDEX
 DUE MARCH 1, 2011


 


THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY OR A NOMINEE OF THE DEPOSITORY. 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.


 


UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
NOTES IN CERTIFICATED FORM (A “CERTIFICATED NOTE”), THIS GLOBAL SECURITY MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.


 

















 


LEHMAN BROTHERS HOLDINGS
INC., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the “Company,” which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received, hereby promises to pay to CEDE & Co., or registered assigns,
on the Maturity Date, an amount equal to the Redemption Amount.


 


The
“Maturity Date” is March 1, 2011, or if such day is not a Business Day, on
the next following Business Day.


 


The “Redemption
Amount” is the amount equal to the sum of the principal amount of the Notes
plus the Adjustment Amount, which may be negative, rounded to the nearest whole
U.S. cent.  If the Adjustment Amount is
negative, the value of the Adjustment Amount will be subtracted from the
principal amount of the notes for purposes of calculating the Redemption
Amount.


 


The “Adjustment
Amount” is, for each note, a single U.S. dollar payment calculated by the
Calculation Agent equal to the principal amount of the note multiplied by:


 


(A) Leverage
x Index Return, if the Index Return is greater than or equal to 0.0%; or


 


(B) 0%,
if the Index Return is less than 0.0% but greater than the Buffer Level; or


 


(C) Index
Return + Protection Percentage, if the Index Return is less than the Buffer
Level.


 


The “Leverage”
is 260%.


 


The “Buffer
Level” is –5.0%.


 


The “Protection
Percentage” is 5.0%.


 


The “Trade
Date” is February 21, 2008.


 


The “Issue
Date” is February 29, 2008.


 


The “Valuation
Date” is February 22, 2011, or if such day is not an Index Business Day,
the immediately preceeding Index Business Day; provided that if the Final Index
Level is not available on the scheduled Valuation Date due to Index
Unavailability, as described under “Index Unavailability” below, the Valuation
Date may be postponed (as described below).


 


The “Index” is
the Lehman Brothers Macro Quantitative Currency Trading Strategies (“MarQCuS”)
Portfolio A (USD) Index, calculated and published by the Index Calculation
Agent.


 


The “Index
Return” is a quotient, the numerator of which is the Final Index Level minus
the Initial Index Level and the denominator of which is the Initial Index
Level, expressed as a percentage.


 


The “Final
Index Level” is the closing value of the Index on the Valuation Date, as
calculated by the Index Calculation Agent (subject to the occurrence of Index
Unavailability).


 


2

















 


The “Initial
Index Level” is 194.43, which is equal to the closing value of the Index on the
Trade Date, as calculated by the Index Calculation Agent.


 


The “Index
Level” is the closing level of the Index, as calculated by the Index
Calculation Agent and published on the Price Source, subject to adjustment in
accordance with the Index Adjustment below.


 


An “Index Business Day” is a day on which commercial
banks are open, including for dealings in foreign exchange in accordance with
market practice of the foreign exchange market, in both London and New York.


 


“Index Unavailability” means that the Index Level
for the Valuation Date is not published on the Price Source.


 


	
  MarQCuS
  Index

  	
   

  	
  Bloomberg Page

  (Price Source)*

  	
   

  	
  Reuters Page

  (Fallback Price Source)*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Forward Bias G10
  Index

  	
   

  	
  LBMQMFG
  <INDEX>

  	
   

  	
  .LBMQMFG

  	
   

  
	
  Forward Bias
  Emerging Market (EM) Index

  	
   

  	
  LBMQMFE
  <INDEX>

  	
   

  	
  .LBMQMFE

  	
   

  
	
  TurnRate Index
  and

  	
   

  	
  LBMQMTR
  <INDEX>

  	
   

  	
  .LBMQMTR

  	
   

  
	
  Major/Miner
  Index

  	
   

  	
  LBMQMMM
  <INDEX>

  	
   

  	
  .LBMQMMM

  	
   

  
	
  CoBALT Index
  LBFX GBP

  	
   

  	
  LBMQMCO
  <INDEX>

  	
   

  	
  .LBMQMCO

  	
   

  
	
  RAFT Index

  	
   

  	
  LBMQMRF
  <INDEX>

  	
   

  	
  .LBMQMRF

  	
   

  



 


For purposes of calculating the MarQCuS Portfolio A Index, the term “Price
Source” and “Fallback Price Source” includes any (a) successor page to
or (b) solely in the event the Index Calculation Agent determines in good
faith that the indicated Bloomberg or Reuters pages is no longer a
materially accurate source for the level of any MarQCuS Index, any replacement page for,
to the indicated Bloomberg and Reuters pages, respectively, on which the level
of the relevant MarQCuS Index may be published, as determined in the Index
Calculation Agent acting in good faith.


 


If the Index Calculation Agent determines in good
faith that the Index Level for the Valuation Date was not published on the
Price Source, the Calculation Agent will determine the Final Index Level using
the Index Level published on the Fallback Price Source for such Valuation
Date.  If the Index Calculation Agent
determines in good faith that the Index Level for the Valuation Date was also
not published on the Fallback Price Source, the Calculation Agent will
calculate the Index Return using as the Final Index Level the Index Level
published for the first Index Business Day succeeding the scheduled Valuation
Date; provided however that if no Index Level is published on the Price Source
or Fallback Price Source for each of the three scheduled Index Business Days
following the scheduled Valuation Date, then (a) the third scheduled Index
Business Day shall be deemed the Valuation Date and (b) the Calculation
Agent will determine the Final Index Level on such third scheduled Index
Business Day in good faith in accordance with the formula for and method of
calculating the Index last in effect prior to commencement of the Index
Unavailability, taking in to account the latest available Index Level and any
other information that it deems relevant.


 


3





















 


If the Index Calculation Agent discontinues publication
of the Index prior to, and such discontinuation is continuing on the Valuation
Date, and the Index Calculation Agent or another entity publishes a successor
or substitute index that the Calculation Agent determines in good faith to be
comparable to the discontinued Index (such index, a “Successor Index”), then
the Final Index Level will be determined by reference to the closing level of
such Successor Index on the Valuation Date; provided, however, that the
Calculation Agent may make such adjustments as it deems necessary, acting in
good faith, to the level of the Successor Index so that the level of the
Successor Index reflects the same level as that of the Index before it was
discontinued.  Upon any selection by the
Calculation Agent of a Successor Index, the Calculation Agent will cause
written notice thereof to be promptly furnished to the trustee, to the Issuer
and to the holders of the notes.


 


If the Index Calculation Agent discontinues
publication of the Index prior to, and such discontinuation is continuing on
the Valuation Date, and the Calculation Agent determines in good faith that no
Successor Index is available at such time, then the Calculation Agent will
determine the Final Index Level on the Valuation Date.  The Final Index Level will be computed by the
Calculation Agent in accordance with the formula for and method of calculating
the Index last in effect prior to such discontinuation, taking in to account
the latest available Index Level and any other information that it deems relevant.


 


In the event that there is any error in relation to
the calculation or publication of the Final Index Level and the Index
Calculation Agent publishes an adjustment or correction to such Final Index
Level on or prior to the Business Day immediately preceding the Maturity Date,
the Calculation Agent will calculate the Redemption Amount using the Final
Index Level as so adjusted or corrected.


 


If the Calculation Agent, acting in good faith,
determines that the Index has been or will be rebased on or prior to the
Valuation Date, the Index as so rebased will be used for purposes of
calculating the Redemption Amount; provided, however, that the Calculation
Agent may make such adjustments it considers necessary, if any, to the level of
the Index so rebased so that the Final Index Level reflects the same Index
Level for the Index on the Valuation Date before such rebasing.


 


If the Index Calculation Agent, acting in good
faith, determines that on any Index Business Day that a component MarQCuS Index
(a) is no longer available or (b) has been materially modified and
such modification will have a materially adverse effect on the MarQCuS
Portfolio A Index, the Index Calculation Agent shall remove or replace such
affected component MarQCuS Index with an alternative index or rate, variable or
other component, and may make such adjustments to the level of such replacement
index or rate, variable or other component as it considers necessary so that
the level of the MarQCuS Portfolio A Index after such removal or replacement
reflects a similar level to that calculated prior to the removal or
replacement, acting in good faith. 
Following the removal or replacement of a component MarQCuS Index, the
Index Calculation Agent will promptly publish a notice which specifies the component
MarQCuS Index removed or replaced and any designated replacement thereof.


 


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


 


4

















 


The “Calculation Agent” means Lehman Brothers Inc.


 


The “Index Calculation Agent” means Lehman Brothers International
(Europe).


 


Except as provided below, the Redemption Amount may, at the option of
the Company, be made by check mailed to the person entitled thereto at such
person’s address as it appears on the registry books of the Company.


 


Payment of any Redemption Amount will be made in immediately available
funds in accordance with the normal procedures of the Trustee (or any duly
appointed Paying Agent).


 


The Company will pay any administrative costs imposed by banks in making payments in
immediately available funds, but any tax, assessment or governmental charge
imposed upon payments hereunder, including, without limitation, any withholding
tax, will be borne by the Holder hereof.


 


References herein
to “U.S. dollars” or “U.S.$” or “$” or “USD” are to the coin or currency of the
United States as at the time of payment is legal tender for the payment of
public and private debts.


 


REFERENCE IS
HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
HEREOF.  SUCH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.


 


This Note shall
not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the
Indenture.


 


5

















 


IN WITNESS
WHEREOF, Lehman Brothers Holdings Inc. has caused this instrument to be signed
by its Chairman of the Board, its President, its Vice Chairman, its Chief
Financial Officer, one of its Vice Presidents or its Treasurer, by manual or
facsimile signature under its corporate seal, attested by its Secretary or one
of its Assistant Secretaries by manual or facsimile signature.


 


	
  Dated:  February 29, 2008

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Andrew M.W. Yeung

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
  Name: Cindy Buckholz

  
	
   

  	
   

  	
  Title:   Assistant Secretary

  



 


 


TRUSTEE’S
CERTIFICATE OF AUTHENTICATION


 


This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.


 


CITIBANK, N.A.


  as Trustee


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Officer

  



 


6

















 


[REVERSE
OF NOTE]




LEHMAN BROTHERS
HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I
 BUFFERED RETURN ENHANCED NOTES LINKED
TO MARQCUS PORTFOLIO A (USD) INDEX
 DUE MARCH 1, 2011




Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series I,
Buffered Return Enhanced Notes Linked to MarQCuS Portfolio A (USD) Index
(herein called the “Notes”).  The Notes are one of an indefinite
number of series of debt securities of the Company (collectively, the “Securities”)
issued or issuable under and pursuant to an indenture dated as of September 1,
1987, as amended and supplemented (the “Indenture”), duly executed and
delivered by the Company and Citibank, N.A., as Trustee (herein called the “Trustee”),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Securities.  The separate series of
Securities may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions or repurchase rights (if any), may be
subject to different sinking, purchase or analogous funds (if any), may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided.


 


Section 2.  Principal Amount for Indenture Purposes.  For the purpose of determining whether
Holders of the requisite amount of Notes of this series outstanding under the
Indenture have made a demand, given a notice or waiver or taken any other
action, the principal amount of this Note will be deemed to be the principal
amount of this Note then outstanding.


 


Section 3.  Modification and Waivers.  The Indenture contains provisions permitting
the Company and the Trustee, with the consent of the Holders of not less than
66-2/3% in aggregate principal amount of each series of the Securities at the
time Outstanding to be affected, evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Securities of all such series; provided, however, that no such supplemental
indenture shall, among other things, (i) change the fixed maturity of any
Security, or reduce the Adjustment Amount or the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or reduce any
premium or other amount payable on redemption, or make the Adjustment Amount or
the principal amount thereof, premium or other amount payable, if any, or
interest thereon payable in any coin or currency other than that herein above
provided, without the consent of the Holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security so affected.  It is also provided in the Indenture that,
prior to any declaration accelerating the maturity of any series of Securities,
the holders of a majority in aggregate principal amount of the Securities of
such series 


 

















 


outstanding may on behalf
of the holders of all the Securities of such series waive any past default or
Event of Default under the Indenture with respect to such series and its
consequences, except a default in the payment of interest, if any, on the
Adjustment Amount or the principal amount, or premium, if any, on any of the
Securities of such series, or in the payment of any sinking fund installment or
analogous obligation with respect to Securities of such series.  Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
holders and owners of this Note and any Notes of this series which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes of this series.


 


Section 4.  Obligations Unconditional.  No reference herein to the Indenture and no
provisions of this Note or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the Adjustment
Amount or the principal amount on this Note at the place, at the respective
times, at the rate, and in the coin or currency herein prescribed.


 


Section 5.  Defeasance.  The Indenture contains provisions for the
discharge of the Indenture and defeasance at any time of the indebtedness on
this Note upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.


 


Section 6.  Authorized Form and Denominations.  The Notes of this series are issuable in
registered form, without coupons.  Each
Note will be issued initially as either a Global Security or a Certificated
Note, at the option of the Company, in denominations of $100,000 or integral
multiples of $100,000, either at the office or agency to be designated and
maintained by the Company for such purpose in the Borough of Manhattan, New
York City, pursuant to the provisions of the Indenture or at any of such other
offices or agencies as may be designated and maintained by the Company for such
purpose pursuant to the provisions of the Indenture, and in the manner and
subject to the limitations provided in the Indenture, but without the payment
of any service charge, except for any tax or other governmental charges imposed
in connection therewith.  Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, except that Global Securities
will not be exchangeable for Certificated Notes of this series.


 


Section 7.  Registration of Transfer.  As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer, at the Corporate Trust Office or agency in a Place of
Payment for this Note, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar
requiring such written instrument of transfer duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Notes of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.


 


If at any time the
Depository notifies the Company that it is unwilling or unable to continue as
Depository or if at any time the Depository shall no longer be eligible under
the Indenture, the Company shall appoint a successor Depository.  If a successor Depository for the Notes of
this series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
issue, and the Trustee will


 

















 


authenticate and deliver,
Notes of this series in definitive form in an aggregate principal amount equal
to the principal amount of this Note.


 


No service charge
shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.


 


Prior to due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the person in whose name
this Note is registered as the owner hereof for all purposes, and neither the
Company nor the Trustee nor any agent of the Company or of the Trustee shall be
affected by any notice to the contrary.


 


Section 8.  Events of Default.  If an Event of Default with respect to Notes
of this series shall occur and be continuing, the amount that may be declared
due and payable upon any acceleration of the notes will be determined by the
Calculation Agent for the period from and including the Issue Date to but
excluding the date of early repayment and will equal, for each note, the
Redemption Amount, calculated as the date of early repayment were the Maturity
Date. If a bankruptcy proceeding is commenced in respect of Lehman Brothers Holdings,
the claim of the beneficial owner of a note for the period from and including
the Issue Date to but excluding the date of early repayment will be capped at
the Redemption Amount, calculated as though the date of the commencement of the
proceeding were the Maturity Date.


 


Section 9.  No Recourse Against Certain Persons.  No recourse for the payment of the Redemption
Amount or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any Indenture supplemental thereto or in any Note, or because
of the creation of any indebtedness represented thereby, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or future,
of the Company or of any successor corporation, either directly or through the
Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law or by the enforcement of any assessment or penalty
or otherwise, all such liability being, by the acceptance hereof and as part of
the consideration for the issue hereof, expressly waived and released.


 


Section 10.  Defined
Terms.  All terms used but not
defined in this Note are used herein as defined in the Indenture.


 


Section 11.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.