Document:

Exhibit 10.4

Amendment
1 to

Alliant
Techsystems Inc. Management Compensation Plan

(as restated effective April 1, 2002)

The
Alliant Techsystems Inc. Management Compensation Plan (as restated effective
April 1, 2002) (the “Plan”) is hereby amended as follows:

Notwithstanding any provisions in the Plan
requiring annual incentive payments to 162(m) Employees to be based upon the
achievement of pre-established performance goals established in writing by the
Committee no later than 90 days after the commencement of a Performance Period,
provided that the outcome is substantially uncertain at the time the Committee
actually establishes the goal, the Committee, in its discretion, may:

1.               determine that compliance with the provisions
of Section 162(m) of the Internal Revenue Code in certain circumstances with
respect to the administration of the Plan is not in the best interests of the
Corporation, and

2.               specify at a time later than 90 days after
the commencement of the Performance Period that the achievement of the
Performance Goals will be determined and calculated without regard to the
negative or positive effect of certain events affecting the Company.

Capitalized terms used herein and not defined
herein shall have the respective meanings assigned to them in the Plan.

Except as expressly amended herein, the Plan
shall remain in full force and effect in accordance with the terms and
provisions as in effect on the date this Amendment 1 is adopted by the Board of
Directors of the Company.Exhibit 4.01

CUSIP NO. 52517PS77

ISIN NO. US52517PS778

	
  REGISTERED

  	
  PRINCIPAL AMOUNT:
  $125,000,000

  
	
  No. R-1

  

 

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

ONE-YEAR TRACKER NOTES LINKED TO THE LEHMAN
BROTHERS COMMODITY INDEX TOTAL RETURN DUE JANUARY 30, 2008

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 at Maturity.

The
“Maturity Date” is January 30, 2008, or if such day is not a Business Day, on
the next following Business Day; provided that,
if as a result of a Market Disruption Event the Valuation Date for one or more
Index Contracts is postponed so that it falls less than three Business Days
prior to the scheduled Maturity Date, the Maturity Date will be the third
Business Day following the latest occurring postponed Valuation Date.

The “Valuation
Date” is January 23, 2008, or if such day is not an Index Business Day, the
immediately preceding Index Business Day; provided that if a Market Disruption
Event is in effect for one or more Index Contracts on the scheduled Valuation
Date, the Valuation Date may be postponed as described below.

The “Redemption Amount at Maturity” for each $10,000 note
will be a single U.S. dollar payment on the Maturity Date equal to $10,000
multiplied by the sum of the Index Performance and the Adjustment Percentage.

The “Index Performance” is equal to the quotient of the
Final Index Value divided by the Initial Index Value.

The “Initial Index Value” is 85.3935, equal to the closing value of the
Index on the Trade Date, as determined and published by the Index Sponsor,
rounded to four decimal places.

The “Trade Date” is the January 23, 2007.

The “Final Index Value” will be the closing value of the Index on the
Valuation Date, as determined and published by the Index Sponsor (subject to
the occurrence of a Market Disruption Event or an Index Unavailability Event),
rounded to four decimal places.

The “Adjustment Percentage” is 0.05%.

An “Index Business Day” is a day, as determined in good faith by the
Calculation Agent, on which trading is generally conducted on the Relevant
Exchange for each Index Contract then comprising the Index or any Successor
Index.

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.

The “Index” is the Lehman Brothers Commodity Index Total Return
calculated and published by the Index Sponsor, subject to adjustment as
described below.

The “Index Sponsor” is Lehman Brothers Inc.

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The “Index Contracts” means the commodities contracts underlying the
Index or any Successor Index.

The “Relevant Exchange” means any organized exchange or market of
trading for any futures contract (or any combination thereof) included in the
Index or any Successor Index.

If a Market Disruption Event relating to one or more Index
Contracts is in effect on the scheduled Valuation Date, the Calculation Agent
will calculate the Final Index Value in good faith in accordance with the
formula for and method of calculating the Index last in effect prior to
commencement of the Market Disruption Event, using:

·                                          for each Index Contract
that did not suffer a Market Disruption Event on the scheduled Valuation Date,
the settlement price on the applicable Relevant Exchange of such Index Contract
on the scheduled Valuation Date, and

·                                          for each Index Contract
that did suffer a Market Disruption Event on the scheduled Valuation Date, the
settlement price of such Index Contract on the applicable Relevant Exchange on
the immediately succeeding trading day on which no Market Disruption Event
occurs or is continuing  with respect to
such Index Contract;

provided however that if a Market
Disruption Event has occurred or is continuing with respect to such Index
Contract on each of the eight scheduled trading days following the scheduled
Valuation Date, then (a) the eighth scheduled trading day shall be deemed the
Valuation Date for such Index Contract and (b) the Calculation Agent will
determine the price for such Index Contract on such eighth scheduled trading
day in accordance with the Fallback Price Determination.

A “Market Disruption Event” means any of the following
events as determined in good faith by the Calculation Agent:

(A)                              the termination or suspension of, or material limitation or
disruption in the trading on a Relevant Exchange of any Index Contract;

(B)                                the settlement price on a
Relevant Exchange of any Index Contract has increased or decreased by an amount
equal to the maximum permitted price change from the previous day’s settlement
price; or

(C)                                the settlement price of
any Index Contract is not published by the Relevant Exchange.

Notwithstanding the foregoing, the following events will
not constitute Market Disruption Events:

(1)                                  a limitation on the hours
in a trading day and/or number of days of trading, if it results from an
announced change in the regular business hours of the Relevant Exchange; or

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(2)                                  a decision to permanently
discontinue trading in the Index Contract or options or futures contracts
relating to the Index or the Index Contract.

In the event that the “Fallback Price Determination” is
invoked, the Calculation Agent will determine the price for an Index Contract
by requesting four leading dealers in the underlying market for such Index
Contract (selected in the sole discretion of the Calculation Agent) to provide
price quotations for the price for such Index Contract.  If at least two quotations are provided, the
price for the Index Contract will be the arithmetic mean of such
quotations.  If only one dealer provides
a price quotation, then the Calculation Agent, in its sole discretion, will
determine whether that quotation is reasonable to be used.  If the Calculation Agent determines that such
single price quotation is not reasonable to be used, or if no price quotation
is provided, the Calculation Agent will determine the price for the Index
Contract in its sole and absolute discretion taking into account the latest
available quotation for the settlement price of such Index Contract and any
other information that in good faith it deems relevant.

If an Index Unavailability Event is in effect on the
scheduled Valuation Date (and no Market Disruption Event is then in effect),
the Calculation Agent will determine the Final Index Value on the Valuation
Date 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
Event using the closing price on the Relevant Exchanges of each Index Contract.

An “Index Unavailability Event” means that the Index is not
calculated by the Index Sponsor or any Successor Index is not calculated and
published by the sponsors thereof.

If Lehman Brothers Inc. discontinues publication of the
Index and Lehman Brothers Inc. or another entity publishes a successor or
substitute index that the Calculation Agent determines, in its sole discretion,
to be comparable to the discontinued Index (such index, a “Successor Index”),
then the Final Index Value will be determined by reference to the level of such
Successor Index at the close of trading on the Relevant Exchange or market of the Successor Index last to close on the
Valuation Date; provided, however, that the Calculation Agent, in its sole
discretion, may make such adjustments as it deems necessary 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 Company and to the Holders of
the notes.

If
Lehman Brothers Inc. discontinues publication of the Index prior to, and such
discontinuation is continuing on, the Valuation Date, and the Calculation Agent
determines, in its sole discretion, that no Successor Index is available at
such time, then the Calculation Agent will determine the Final Index Value on
the Valuation Date.  The Final Index
Value 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, using the settlement prices
on the Relevant Exchanges (or, if trading in an Index Contract has been
materially suspended or materially limited, its good faith estimate of the
settlement price that would have prevailed but for such suspension or
limitation) at the close of trading on the Valuation Date.

If at
any time the method of calculating the Index or a Successor Index, or the level
thereof, is, in the good faith judgment of the Calculation Agent, changed or
modified in a material respect, the Calculation Agent may (but is not obligated
to) make such adjustments to

 4
 

 

the Index or Successor Index or
their respective methods of calculation as, in the good faith judgment of the
Calculation Agent, may be necessary in order to arrive at a level of a
commodity index comparable to the Index or such Successor Index, as the case
may be, as if such changes or modifications had not been made, and the
Calculation Agent will calculate the Final Index Value with reference to the
Index or such Successor Index as adjusted. 
Accordingly, if the method of calculating the Index or a Successor Index
is modified or rebased so that the level of the Index or Successor Index is a
fraction or multiple of what it would have been if it had not been modified or
rebased, then the Calculation Agent will adjust the level of the Index or
Successor Index in order to arrive at a level of the Index or Successor Index
as if it has not been modified or rebased.

The “Calculation
Agent” means Lehman Brothers Inc., the determinations and calculations of which
will be binding in absence of manifest error.

Except
as provided below, any Redemption Amount at Maturity 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 at Maturity 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.

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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:  January
30, 2007

	
  [SEAL]

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Andrew M.W. Yeung

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jin Lee

  
	
   

  	
   

  	
  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

ONE-YEAR TRACKER NOTES LINKED TO THE LEHMAN BROTHERS

COMMODITY INDEX TOTAL RETURN

DUE  JANUARY 30, 2008

 

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, One-Year Tracker Notes Linked to the Lehman
Brothers Commodity Index Total Return (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 Redemption Amount at Maturity 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 Redemption Amount at Maturity 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 Redemption 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 any Redemption 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 $10,000, 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 Trade Date to but
excluding the date of early repayment and will equal, for each $10,000
denominated note, $10,000 multiplied by the sum of the Index Performance and
the Adjustment Percentage, calculated as though the maturity of the notes were
the date of early repayment. If a bankruptcy proceeding is commenced in respect
of Lehman Brothers Holdings, the claim of the beneficial owner of a $10,000
denominated note for the period from and including the Trade Date to but
excluding the date of early repayment will be capped at $10,000 multiplied by
the sum of the Index Performance and the Adjustment Percentage, calculated as
though the maturity of the notes were the date of the commencement of the
proceeding.

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.

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