CUSIP
NO. 52517PC90


 


	
  REGISTERED

  	
   

  	
  PRINCIPAL
  AMOUNT: $8,670,000

  
	
  No. R-1

  	
   

  	
   

  



 


LEHMAN BROTHERS HOLDINGS INC.


 


MEDIUM-TERM NOTE, SERIES H


 


PRINCIPAL PROTECTED GLOBAL GROWTH BASKET
FX-LINKED NOTE
DUE NOVEMBER 26, 2007


 


 


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 Stated
Maturity Date, an amount equal to the Repayment Amount.  The Notes do not bear interest. No payments
on the Notes will be made until the Stated Maturity Date.


 


The “Stated Maturity Date” is November 26, 2007,
or if such day is not a Business Day, on the next following Business Day,
provided that if the Valuation Date for any Basket Currency is postponed as
described below, then the Maturity Date will be two Business Days following the
latest postponed Valuation Date.


 


The Repayment Amount, for each $1 principal amount of
the Notes represented hereby, is the amount equal to the sum of (a) $1 plus (b) the Additional Amount.


 


The “Additional Amount”, for each $1 principal amount
of the Notes represented hereby, equals 450% times the greater of (i) zero
and (ii) the Basket Value.


 


The “Basket Currencies” are
the Australian Dollar (AUD), Canadian Dollar (CAD), Swedish Kroner (SEK),
Norwegian Kroner (NOK), Euro (EUR) and Swiss Franc (CHF).


 


The “Basket Value” equals
the sum of:


 


(i) a quotient, the numerator of which
is 0.342607 and the denominator
of which is the Final Currency Value for AUD plus


 


(ii) a quotient, the numerator of which
is 0.298175 and the denominator of which is the Final
Currency Value for CAD plus


 


(iii) a quotient, the numerator of which
is 2.060950 and the denominator
of which is the Final Currency Value for SEK plus


 


(iv) a quotient, the numerator of which
is 1.672775 and the denominator of which is the Final
Currency Value for NOK plus


 


(v) a quotient, the numerator of which
is -0.428706  and
the denominator of which is the Final Currency Value for EUR plus


 


(vi) a quotient, the numerator of which
is -0.663350 and the denominator of which is the Final
Currency Value for CHF.


 


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The “Final
Currency Value” of each Basket Currency equals the spot exchange rate
between the applicable Basket Currency and the U.S. Dollar expressed as the
amount of Basket Currency per U.S. Dollar for customary settlement in the
interbank market for each Basket Currency on the Valuation Date, as reported by
Reuters on the applicable page, or any substitute page, and at the approximate
time set forth in the following table:


 


	
  Basket

  Currency

  	
   

  	
  Reuters Page

  	
   

  	
  Rate

  	
   

  	
  Applicable

  Currency

  Business Day

  	
   

  
	
  AUD

  	
   

  	
  1FEE

  	
   

  	
  Quotient, the
  numerator of which is 1 and the denominator of which is the daily spot rate
  reported under the heading “AUD” at 12:00 p.m. New York Time

  	
   

  	
  New York

  	
   

  
	
  CAD

  	
   

  	
  1FED

  	
   

  	
  Daily spot rate
  reported under the heading “CAD” at 10:00 a.m. New York Time

  	
   

  	
  New York

  	
   

  
	
  SEK

  	
   

  	
  1FED

  	
   

  	
  Daily spot rate
  reported under the heading “SEK” at 10:00 a.m. New York Time

  	
   

  	
  New York

  	
   

  
	
  NOK

  	
   

  	
  1FED

  	
   

  	
  Daily spot rate
  reported under the heading “NOK” at 10:00 a.m. New York Time

  	
   

  	
  New York

  	
   

  
	
  EUR

  	
   

  	
  1FED

  	
   

  	
  Quotient, the
  numerator of which is 1 and the denominator of which is the daily spot rate
  reported under the heading “EUR” at 10:00 a.m. New York Time

  	
   

  	
  New York

  	
   

  
	
  CHF

  	
   

  	
  1FED

  	
   

  	
  Daily spot rate
  reported under the heading “CHF” at 10:00 a.m. New York Time

  	
   

  	
  New York

  	
   

  



 


The “Valuation
Date” is, with respect to any Basket Currency, the latest Currency Business Day
for that Basket Currency that is at least two Business Days prior to November 26,
2007, subject to postponement in the event of a Market Disruption Event.


 


A “Currency Business Day” is, with
respect to any Basket Currency, any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close
(including for dealings in foreign exchange in accordance with the practice of
the foreign exchange market) in the city listed above under “Applicable
Currency Business Day” for that Basket Currency.


 


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.


 


If no spot quotation
is available for a Basket Currency from the applicable Reuters page described
under “Final Currency Value” above or there occurs an event that generally
makes it impossible to convert any of the Basket Currencies into U.S. dollars
through customary legal channels, or to obtain a firm quote of any of the
exchange rates between the Basket Currencies and the U.S. dollar on the
Valuation Date, that, in the good faith determination of the Calculation Agent,
affects the valuation of the Final Basket Value or the Company’s ability or any
similarly situated party to hedge its exposure or to unwind all or a material
portion of a hedge with respect to this Note (“Market Disruption Event”), then
the Valuation Date for that Basket Currency will be postponed to the next
succeeding Currency Business Day for that Basket Currency; provided, that if the Final Currency Value
for any Basket Currency is not capable of calculation as of the next succeeding
Currency Business Day because of an occurring or


 


3





















 


continuing Market Disruption
Event, the Calculation Agent will determine the Final Currency Value for that
Basket Currency taking into consideration all available information that in
good faith it deems relevant.


 


Except
as provided below, the Repayment 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 the Repayment Amount 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.


 


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.  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.


 


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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:  November 25, 2005


 


	
  [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

  	
   

  
				



 


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[REVERSE OF NOTE]


 


LEHMAN BROTHERS HOLDINGS INC.


MEDIUM-TERM NOTES, SERIES H


PRINCIPAL PROTECTED GLOBAL GROWTH BASKET
FX-LINKED NOTE
DUE NOVEMBER 26, 2007


 


 


Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series H,
Principal Protected Global Growth Basket FX-Linked Note (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 Repayment 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 Repayment 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 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 interest, if any, on the
Repayment 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
Repayment 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 $10,000 or whole
multiples of $5,000, 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 declared due and
payable upon any acceleration of the Notes will be determined by the
Calculation Agent and will equal the Repayment Amount calculated as though the
maturity of the Notes were the date of early repayment in the manner and with
the effect provided in the Indenture. 
The amount payable to the Holder hereof upon any acceleration permitted
under the Indenture will be equal to the Repayment Amount calculated as though
the date to which the maturity has been accelerated were the Stated Maturity
Date as determined by the Calculation Agent.


 


Section 9.  No Recourse Against Certain Persons.  No recourse for the payment of the Repayment
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.  Tax Treatment.  The Company agrees, and by acceptance of
beneficial ownership interest in the Notes of this series, each Holder of such
Notes will be deemed to have agreed, for United States federal income tax
purposes, (i) to treat the Notes of this series as indebtedness that is
subject to Treas. Reg. Sec. 1.1275-4 (the “Contingent Payment Regulations”) and
(ii) to be bound by the Company’s determination of the “comparable yield”
and “projected payment schedule,” within the meaning of the Contingent Payment
Regulations, with respect to the Notes of this series.


 


Section 11.  Defined
Terms.  All terms used but not
defined in this Note are used herein as defined in the Indenture.


 


Section 12.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.