Exhibit 4.03


THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED
EXCEPT IN LIMITED CIRCUMSTANCES.


UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY 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
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE CO., HAS AN INTEREST HEREIN.


REPAYMENT OF THE NOTES IS NOT PROTECTED BY ANY
FEDERAL AGENCY OR THE SECURITIES INVESTOR PROTECTION CORPORATION


NO.  R-                                                                   $                  


CUSIP
NO. 524908R36


ISIN
NO. US524908R366


LEHMAN BROTHERS HOLDINGS
INC.


6.50% SUBORDINATED NOTE DUE 2017


Lehman Brothers Holdings Inc., a corporation duly
organized and existing under the laws of the State of Delaware (herein referred
to as the “Company”), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, at the office or agency of the Company in the
Borough of Manhattan, the City of New York, the principal sum of                                  
DOLLARS on July 19, 2017, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest on said principal sum at said
office or agency, in like coin or currency, at the rate per annum specified in
the title of this Note until the principal hereof becomes due and payable, and
on any overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum during the period in which such principal is overdue,
compounded semi-annually, to the registered holder of this Note, until payment
of said principal sum has been made or duly provided for.


The Stated Maturity of the Note shall be July 19,
2017.  Interest on this Note (computed as
set forth herein) shall be payable semi-annually in arrears on July 19 and
January 19 of each year (each an “Interest Payment Date”), commencing January
19, 2008, from the Interest Payment Date next preceding the date of this Note
to which interest has been paid or duly provided for. Interest on this Note
shall be payable to the holder in whose name the Note is registered at the
close of business on the applicable 













Record Date. The Record Date for any Interest
Payment Date for the Note will be the date, whether or not a Business Day, 15
calendar days immediately preceding the Interest Payment Date. Notwithstanding
the foregoing, any Interest Payment Date that would otherwise be a day that is
not a Business Day shall instead be the next succeeding Business Day, and no
additional interest shall accrue as a result of such delayed payment. Interest
on the Note shall be computed on the basis of a 360-day year of twelve 30-day months.


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


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













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


	
  

  	
  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
therein referred to in the within-mentioned Indenture.


Dated:


	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  



 


















(Reverse of Note)


LEHMAN BROTHERS HOLDINGS
INC.


6.50% SUBORDINATED NOTE,
DUE 2017


This Note is one of a duly authorized series of
Securities of the Company designated as the 6.50% Subordinated Notes Due 2017
of the Company (herein called the “Notes”), limited (except as otherwise
provided in the Indenture referred to below) in aggregate principal amount to
$2,000,000,000.  The Notes are one of an
indefinite number of series of debt securities of the Company (herein collectively
called the “Securities”), issued or issuable under and pursuant to an
indenture, dated as of February 1, 1996, as amended and supplemented from time
to time and as amended and supplemented with respect to the Notes herein by the
Thirteenth Supplemental Indenture dated as of July 19, 2007 between the Company
and the Trustee (as so amended and supplemented, the “Indenture”), between the
Company and The Bank of New York, successor trustee to JPMorgan Chase Bank,
N.A., as Trustee (herein called the “Trustee”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.  The separate series of Securities may be issued
in various aggregate principal amounts, may mature at different times, may bear
interest (if any) at different rates, may be subject to different redemption
provisions or repayment or repurchase rights (if any), may be subject to
different sinking, purchase or analogous funds (if any), may be subject to
different covenants and Events of Default, as defined in the Indenture, and may
otherwise vary as provided in the Indenture.


Payment of the principal of and interest on this
Note is, to the extent provided in the Indenture, subordinated and subject in
right of payment to the prior payment in full when due of the principal of (and
premium, if any) and interest, if any, on all Senior Debt, as defined in the
Indenture and this Note is issued subject to the provisions of the Indenture
with respect thereto.  In addition, upon
the dissolution, winding-up, liquidation or reorganization of the Company, this
Note is, to the extent provided in the Indenture, subordinated and subject in
right of payment to the prior payment in full when due of the principal of (and
premium, if any) and interest, if any, on all Other Financial Obligations, as
defined in the Indenture. Each registered holder of this Note, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
expressly directs the Trustee on his or her behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee as his or her attorney-in-fact for any and all such
purposes.  Each registered holder hereof,
by his or her acceptance hereof, hereby waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Debt and Other Financial Obligations, whether now outstanding
or hereafter incurred, and waives reliance by each such holder upon said
provisions.


As provided in the Indenture and subject to certain
limitations therein set forth, the Company may at its option redeem the Notes
in whole or from time to time in part at any time.


As provided in the Indenture
and subject to certain limitations therein set forth, the Company will pay to a
Holder who is a United States Alien such Additional Amounts as may be necessary
so that every net payment of principal of and interest on the Notes, after
deduction or withholding for or on account of any present or future tax,
assessment or other governmental charge imposed upon such Holder, or by reason
of the making of such payment, by the United States or any taxing authority
thereof or therein, will not be less than the amount provided for in the Notes
to be then due and payable.













As
provided in the Indenture and subject to certain limitations therein set forth,
the Notes may be redeemed at the option of the Company in whole if the Company
determines that as a result of any change in or amendment to the laws or
treaties, or any regulations or rulings promulgated thereunder, of the United
States or of any political subdivision or taxing authority thereof or therein
affecting taxation, or any proposed change in such laws, treaties or
regulations or rulings, or any change in the official application, enforcement
or interpretation of such laws, treaties or regulations or filings (including a
holding by a court of competent jurisdiction in the United States) or any other
action (other than an action predicated on law generally known on or before the
date specified in such Note except for proposals before the Congress before
such date) taken by any taxing authority or a court of competent jurisdiction
in the United States, or the official proposal of any such action, whether or
not such action or proposal was taken or made with respect to the Company, (A)
the Company has or will become obligated to pay any Additional Amounts referred
to in the foregoing paragraph pursuant to the Indenture on the Note or (B)
there is a substantial possibility that the Company will be required to pay
such Additional Amounts.


The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the holders of not less than
66-2/3% in aggregate principal amount of each series of the Securities at the
time Outstanding to be affected (each series voting as a class), evidenced as
provided in the Indenture, 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 principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon
or reduce any premium payable on redemption, or make the principal thereof, or
premium, if any, or interest thereon payable in any coin or currency other than
that hereinabove provided, or amend the Indenture to modify its provisions
relating to the subordination of each Security in a manner adverse to the
holder thereof, 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 or the principal of, or premium,
if any, on any of the Securities of such series.  Any such consent or waiver by the holder of
this Note shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in exchange
or substitution herefor, irrespective of whether or not any notation thereof is
made upon this Note or such other Notes.


As provided in the Indenture and subject to certain
limitations therein set forth, in case an Event of Default with respect to the Notes shall have
occurred and be continuing, the principal hereof may be declared, and upon such
declaration shall become due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.


No reference herein to the Indenture and no
provisions of this Note or of the Indenture shall alter or impair the
obligations of the Company, which is absolute and unconditional, to pay the
principal and interest of this Note at the place, at the time and in the coin
or currency herein prescribed.


The Company may omit to comply with any term, provision or condition
set forth in Section 801 of the Indenture, and any such omission with respect
to such Section shall not be an Event of Default, in each case with respect to
the Notes, provided that the conditions of Section 1009 of the Indenture have
been satisfied.



 2
 









The covenant set forth in Section 1005 of the Indenture shall not apply
to the Notes.


Notwithstanding the provisions of Section 401(a)(B)
of the Indenture, the Company may satisfy and discharge the entire indebtedness
on all the Notes as provided therein only when the Notes are by their terms due
and payable within one year.


The Company, the Trustee, and any agent of the
Company or of the Trustee may deem and treat the registered holder hereof as
the absolute owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment hereof, or on account hereof, and for all other
purposes, and neither the Company nor the Trustee nor any agent of the Company
or of the Trustee shall be affected by any notice to the contrary.  All such payments made to or upon the order
of such registered holder shall, to the extent of the sum or sums paid,
effectually satisfy and discharge liability for moneys payable on this Note.


The Notes are issuable in registered form without
coupons in denominations of $1,000 and any multiple of $1,000.  At the option of the holders thereof, either
at the office or agency to be designated and maintained by the Company for such
purpose in the Borough of Manhattan, The City of New York, pursuant to the
provisions of the Indenture or at any of such other offices or agencies as may
be designated and maintained by the Company for such purpose pursuant to the
provisions of the Indenture, and in the manner and subject to the limitations
provided in the Indenture, but without the payment of any service charge,
except for any tax or other governmental charges imposed in connection
therewith, Notes may be exchanged for an equal aggregate principal amount of
Notes of like tenor and of other authorized denominations.


As provided in the Indenture and subject to certain
limitations 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 office or agency of the Company in any place where the principal of this
Note is payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the holder hereof or such holder’s attorney duly authorized in
writing, and thereupon one or more new Notes of this series of like tenor and
of authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees.


No recourse for the payment of the principal of or
the interest on this Note, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Note, or because of the creation of any indebtedness represented
thereby, shall be had against 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.


THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


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



 3
 









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


TEN ENT  –           as tenants by their entireties


JT TEN  –              as joint tenants with right of
survivorship and not as tenants in common


UNIF GIFT MIN ACT  –                     
Custodian                    
under Uniform Gifts to


(Cust)                                        (Minor)


Minors Act                             


(State)


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



 4
 









ASSIGNMENT


	
  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, and all rights thereunder, hereby
irrevocably constituting and appointing


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


	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: The signature to this assignment must
  correspond

  
	
   

  	
   

  	
  with the name as it appears upon the face of the
  within Note 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.



 5