Document:

EXHIBIT 4.03

                         LEHMAN BROTHERS HOLDINGS INC.

                          Notes Due November 14, 2007
             Performance Linked to Pfizer Inc. (PFE) Common Stock

Number R-1                                              $13,000,000
                                                        CUSIP 524908CS7

See Reverse for Certain Definitions

          THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE THEREOF.  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE
OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS 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 SUCH 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.  UNLESS THIS
SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO
LEHMAN BROTHERS HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

          LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and
existing under the laws of the State of Delaware (hereinafter called 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, on November 14, 2007, or if a Delaying Event
occurs, three Business Days after the Payment Determination Date (the "Stated
Maturity"), 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, for each $1,000 principal amount of the Securities represented
hereby, an amount equal to (i) the greater of (a) $1,000 and (b) the
Alternative Redemption Amount and (ii) accrued but unpaid interest through
the Stated Maturity (the "Maturity Payment Amount"), and to pay interest
computed on the basis of a 360-day year of twelve 30-day months, semi-
annually on May 14 and November 14 of each year, commencing May 14, 2001, on
said principal sum at said office or agency, in like coin or currency, at a
rate per annum equal to 0.25% from November 14, 2000 or the most recent May
14 or November 14 on which interest has been paid or duly provided for.

<PAGE>

          The interest so payable on any May 14 or November 14 shall, subject
to certain exceptions provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Security is registered at
the close of business on the first day of the month in which the interest
payment is made.  Interest may, at the option of the Company, be paid by
check mailed to the person entitled thereto at such person's address as it
appears on the registry books of the Company.

          Any amount payable, at Stated Maturity, Redemption or Repurchase,
hereon shall be paid only upon presentation and surrender of this Security.

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

                                      -2-

<PAGE>

          This Security 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.

Dated:  November 14, 2000                 LEHMAN BROTHERS HOLDINGS

                                          By:
                                             ---------------------------
                                             Name:
                                             Title:
[SEAL]

                                          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: November 14, 2000

CITIBANK, N.A.
  as Trustee

By:
     -------------------------------------
         Authorized Signatory

                                      -3-

<PAGE>

                         [Form of Reverse of Security]

                 This Security is one of a duly authorized series of
Securities of the Company designated as Notes Due November 14, 2007,
Performance Linked to Pfizer Inc. (PFE) Common Stock (herein called the
"Securities"), initially limited in aggregate principal amount to
$13,000,000.  The Company may, without the consent of the holders of the
Securities, create and issue additional securities ranking equally with the
Securities and otherwise similar in all respects so that such further
securities shall be consolidated and form a single series with the
Securities; provided that no additional Securities shall be issued if an
Event of Default has occurred with respect to the Securities. This series of
Securities is one of an indefinite number of series of debt securities of the
Company, issued and to be issued under an indenture, dated as of September 1,
1987, as amended (herein called the "Indenture"), duly executed and delivered
by the Company and Citibank N.A., as trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), 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 Company, the Trustee and the Holders of the
Securities.

                 The Securities are not redeemable prior to November 9, 2002.
The Securities may be redeemed, at the option of the Company, as a whole or
from time to time in part, on or after November 9, 2002 (the "Redemption"),
and prior to the Stated Maturity, upon the notice referred to below, at a
redemption price, for each $1,000 principal amount of the Securities
redeemed, equal to (i) the greater of (a) $1,000 and (b) the Alternative
Redemption Amount and (ii) any accrued but unpaid interest through the Non-
Delaying Event Redemption Date or, if a Delaying Event occurs, through the
Delaying Event Redemption Date (the "Redemption Payment Amount").

                 Notice of Redemption shall be given by mailing a notice to
the Holders of such Redemption (the "Redemption Notice") in accordance with
the Indenture.  A Redemption shall occur on the Non-Delaying Event Redemption
Date or, if a Delaying Event occurs, on the Delaying Event Redemption Date.

                 The Securities shall be repayable at the option of the
Holder thereof (the "Repurchase"), in whole or from time to time in part, at
any time prior to November 9, 2007, at a price for each $1,000 principal
amount of the Securities repurchased, equal to (i) the Alternative Redemption
Amount and (ii) any accrued but unpaid interest through the Non-Delaying
Event Repurchase Date or, if a Delaying Event occurs, through the Delaying
Event Repurchase Date (the "Repurchase Payment Amount").  In order for the
Holder to be repaid, the Company must receive at the Corporate Trust Office
of the Trustee (or at such other address of which the Company shall from time
to time notify the Holders of the Securities) on any Business Day but no
later than the eighth Business Day prior to November 9, 2007 (i) this
Security with the form entitled "Option to Elect Repayment" set forth below

<PAGE>

duly completed or (ii) unless the Holder is The Depository Trust Company or
its nominee or a successor securities depository or its nominee, a telegram,
telex, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers or a
commercial bank or a trust company in the United States of America setting
forth the name of the Holder of this Security, the principal amount of this
Security, the portion of this Security to be repaid, a statement that the
option to elect repayment is being exercised thereby and a guarantee that
this Security, together with the form entitled "Option to Elect Repayment"
set forth below duly completed, shall be received by the Company not later
than five Business Days after the date of such telegram, telex, facsimile
transmission or letter and this Security and form duly completed are received
by the Company by such fifth Business Day.  Any such election shall be
irrevocable.  All questions as to the validity, eligibility (including time
of receipt) and acceptance of any Security for repayment shall be determined
by the Company, whose determination shall be final and binding.  A Repurchase
shall occur on the Non-Delaying Event Repurchase Date or, if a Delaying Event
occurs, on the Delaying Event Repurchase Date.

                 The Settlement Value used to calculate the Alternative
Redemption Amount shall be determined by the Calculation Agent.

                 All percentages resulting from any calculation with respect
to the Securities shall be rounded at the Calculation Agent's discretion.

                 The Trustee shall fully rely on the determination by the
Calculation Agent of the Payment Amount and shall have no duty to make any
such determination.

                 This Security is not subject to any sinking fund.

                 If an Event of Default with respect to the Securities shall
occur and be continuing, the amounts payable on all of the Securities may be
declared due and payable 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 shall be equal to the Maturity Payment Amount
calculated as though the date of acceleration was the Stated Maturity and the
date three Business Days prior to the date of acceleration was the applicable
Payment Determination Date.

                 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 Securities at the time
Outstanding to be affected (each series voting as a class), 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

                                      -2-

<PAGE>

the rights of the holders of the Securities of all such series; provided,
however, that no such supplemental indenture shall, among other things,
without the consent of the Holder of each Outstanding Security affected
thereby, (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 therein payable in any
coin or currency other than that hereinabove provided 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.  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 or the principal of, 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 Security shall be conclusive and
binding upon such Holder and upon all future holders and owners of this
Security and any Securities which may be issued in exchange or substitution
hereof, irrespective of whether or not any notation thereof is made upon this
Security or such other Securities.

                 No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal amount
with respect to this Security.

                 The Securities are issuable in denominations of $1,000 and
any integral multiples of $1,000.

                 The Company, the Trustee, and any agent of the Company or of
the Trustee may deem and treat the registered holder (the "Holder") hereof as
the absolute owner of this Security (whether or not this Security 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 Security.

                 No recourse for the payment of the principal of, premium, if
any, or interest on this Security, or for any claim based hereon or otherwise

                                      -3-

<PAGE>

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 Security, 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.

                 As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable
in the Security Register, upon surrender of this Security for registration of
transfer at the Corporate Trust Office or agency in a Place of Payment for
this Security, 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 Securities of this series or of like
tenor and of authorized denominations and for the same aggregate principal
amount, shall  be issued to the designated transferee or transferees.

                                      -4-

<PAGE>

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

                 Set forth below are definitions of the terms used in this
Security.

                 "Alternative Redemption Amount" shall mean the product of
(a) the Issue Price divided by $52.3790 and (b) the Settlement Value on the
relevant Payment Determination Date.

                 "Business Day", notwithstanding the Indenture, shall mean
any day other than a Saturday, a Sunday or a day on which the New York Stock
Exchange is not open for trading or banking institutions or trust companies
in the City of New York are authorized or required by law or executive order
to remain closed.

                 "Calculation Agency Agreement" shall mean the Calculation
Agency Agreement, dated as of November 14, 2000, between the Company and the
Calculation Agent, as amended from time to time.

                 "Calculation Agent" shall mean the person that has entered
into the Calculation Agency Agreement with the Company providing for, among
other things, the determination of the Settlement Value and the Payment
Amount, which term shall, unless the context otherwise requires, includes its
successors and assigns.  The initial Calculation Agent is Lehman Brothers
Inc.

                 "Calculation Day" shall mean three Trading Days prior to (a)
for payment at Stated Maturity, November 14, 2007, (b) for payment upon a
Redemption, the Non-Delaying Event Redemption Date or (c) for a payment upon
a Repurchase, the Non-Delaying Event Repurchase Date.

                 "Close of Trading" shall mean 4:00 p.m., New York City time.

                 "Closing Price," means the following, determined by the
Calculation Agent based on information reasonably available to it:

                          (i)     If the Settlement Value Security is listed
         on a United States national securities exchange or trading system or
         is a security quoted on The Nasdaq Stock Market, Inc. ("NASDAQ"), the
         last reported sales price at the Close of Trading, regular way, on
         such day, on the primary securities exchange registered under the
         Securities Exchange Act of 1934 on which such Settlement Value
         Security is listed or admitted to trading or NASDAQ, as the case may
         be.

                                      -5-

<PAGE>

                          (ii)    If the Settlement Value Security is listed
         or quoted on a non-United States securities exchange, trading system
         (other than a bulletin board) or market, the last reported sale price
         at the Close of Trading, regular way, on such day, on the primary
         exchange, trading system or market on which such Settlement Value
         Security is listed, quoted or admitted to trading, as the case may
         be.  The Closing Price shall then be converted into U.S. dollars
         using the Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New
         York City time.  If there are several quotes for the Official W.M.
         Reuters Spot Closing Rate at that time, the first quoted rate
         starting at 11:00 a.m. shall be the rate used. If there is no such
         Official W.M. Reuters Spot Closing Rate for a country's currency at
         11:00 a.m., New York City time, the Closing Price shall be converted
         into U.S. dollars using the last available U.S. dollar cross-rate
         quote before 11:00 a.m., New York City time.

                          (iii)   If the Settlement Value Security is not
         listed on a national securities exchange or is not a NASDAQ security,
         and is listed or traded on a bulletin board, the average execution
         price that an affiliate of the Company receives upon the sale of such
         Settlement Value Security to hedge the Company's obligations for this
         Security.  If such Settlement Value Security is listed or traded on a
         non-United States bulletin board, the Closing Price shall then be
         converted into U.S. dollars using the Official W.M. Reuters Spot
         Closing Rate at 11:00 a.m., New York City time.  If there are several
         quotes for the Official W.M. Reuters Spot Closing Rate at that time,
         the first quoted rate starting at 11:00 a.m. shall be the rate used.
         If there is no such Official W.M. Reuters Spot Closing Rate for a
         country's currency at 11:00 a.m., New York City time, the Closing
         Price shall be converted into U.S. dollars using the last available
         U.S. dollar cross-rate quote before 11:00 a.m., New York City time.

                 "Delaying Event" shall mean a Market Disruption Event for a
Settlement Value Security that occurs on the relevant Calculation Day.

                 "Delaying Event Redemption Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Redemption, three Business Days
after the Payment Determination Date therefor.

                 "Delaying Event Repurchase Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Repurchase, three Business Days
after the Payment Determination Date therefor.

                 "Issue Price" shall mean $1,000 per each $1,000 principal
amount of Securities.

                                      -6-

<PAGE>

                 "Market Disruption Event" with respect to a Settlement Value
Security means any of the following events as determined by the Calculation
Agent:

                          (i)     A suspension, absence or material
         limitation of trading of such Settlement Value Security has occurred
         on that day, in each case, for more than two hours of trading or
         during the one-half hour period preceding the Close of Trading on the
         primary organized U.S. exchange or trading system on which such
         Settlement Value Security is traded or, if such Settlement Value
         Security is not listed or quoted in the United States, on the primary
         exchange, trading system or market for such Settlement Value
         Security.  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,
         trading system, or market, any other self regulatory organization or
         the Securities and Exchange Commission of similar scope or as a
         replacement for Rule 80B, may be considered material.
         Notwithstanding the first sentence of this paragraph, a Market
         Disruption Event for a Settlement Value Security traded on a bulletin
         board means a suspension, absence or material limitation of trading
         of such Settlement Value Security for more than two hours or during
         the one hour period preceding 4:00 p.m., New York City time.

                          (ii)    A suspension, absence or material
         limitation has occurred on that day, in each case, for more than two
         hours of trading or during the one-half hour period preceding the
         Close of Trading in options contracts related to such Settlement
         Value Security, whether by reason of movements in price exceeding
         levels permitted by an exchange, trading system or market on which
         such options contracts related to such Settlement Value Security are
         traded or otherwise.

                          (iii)   Information is unavailable on that date,
         through a recognized system of public dissemination of transaction
         information, for more than two hours of trading or during the
         one-half hour period preceding the Close of Trading, of accurate
         price, volume or related information in respect of such Settlement
         Value Security or in respect of options contracts related to such
         Settlement Value Security, in each case traded on any major U.S.
         exchange or trading system or, in the case of securities of a non-
         U.S. issuer, traded on the primary non-U.S. exchange, trading system
         or market.

                 For purposes of determining whether a Market Disruption
Event has occurred:

                                      -7-

<PAGE>

                          (i)     a limitation on the hours or number of days
         of trading shall not constitute a Market Disruption Event if it
         results from an announced change in the regular business hours of the
         relevant exchange, trading system or market;

                          (ii)    any suspension in trading in an option
         contract on a Settlement Value Security by a major securities
         exchange, trading system or market by reason of (a) a price change
         violating limits set by such securities market, (b) an imbalance of
         orders relating to those contracts, or (c) a disparity in bid and ask
         quotes relating to those contracts, shall  constitute a Market
         Disruption Event notwithstanding that the suspension or material
         limitation is less than two hours;

                          (iii)   a suspension or material limitation on an
         exchange, trading system or in a market shall  include a suspension
         or material limitation of trading by one class of investors provided
         that the suspension continues for more than two hours of trading or
         during the last one-half hour period preceding the Close of Trading
         on the relevant exchange, trading system or market but shall not
         include any time when the relevant exchange, trading system or market
         is closed for trading as part of that exchange's, trading system's or
         market's regularly scheduled business hours; and

                          (iv)    "trading systems" include bulletin board
         services.

                 "Multiplier" shall mean, with respect to any applicable
principal amount of Securities, the number of shares or other units
(including any fractional share or other unit expressed as a decimal) of each
Settlement Value Security included in the calculation of the Settlement Value
of such Securities.  The initial Multiplier relating to each Security with
principal amount of $1,000.00 shall be 1.0.

                 "NYSE" shall mean the New York Stock Exchange.

                 "Non-Delaying Event Redemption Date" shall mean the date set
forth in the Redemption Notice, which date shall not be less than 30 nor more
than 60 days after the date of the Redemption Notice.

                 "Non-Delaying Event Repurchase Date" shall mean the eighth
Business Day following the Business Day on which the Company receives notice
of a Repurchase from a Holder.

                 "Official W.M. Reuters Spot Closing Rates" shall mean the
closing spot rates published on Reuters page "WMRA" relevant for such
Settlement Value Security.

                                      -8-

<PAGE>

                 "Payment Amount" shall mean the Maturity Payment Amount, the
Redemption Payment Amount or the Repurchase Payment Amount, as the case may
be.

                 "Payment Determination Date" shall mean the relevant
Calculation Day, unless a Delaying Event occurs with respect to such Payment
Determination Date, in which case the first Trading Day after the Calculation
Day on which the Closing Prices for all Settlement Value Securities that have
been subject to a Delaying Event have been determined.

                 "Redemption" shall mean the option of the Company to redeem,
at any time on or after November 9, 2002, in whole or from time to time in
part, the Securities.

                 "Repurchase" shall mean the option of a beneficial holder to
elect to require the Company to repurchase, at any time prior to November 9,
2007, in whole or from time to time in part, such holder's Securities.

                 "Settlement Value", when used with respect to any Payment
Determination Date, shall equal the sum of (a)(i) the products of the Closing
Prices and the applicable Multipliers for each Settlement Value Security for
which a Delaying Event does not occur on the related Calculation Day or (ii)
if a Delaying Event occurs for a Settlement Value Security on the related
Calculation Day, the product of the Closing Price for such Settlement Value
Security on the next Trading Day on which a Market Disruption Event does not
occur for such Settlement Value Security and the Multiplier for such
Settlement Value Security and (b) in each case, any cash included in the
Settlement Value on such Calculation Day.

                 "Settlement Value Securities" shall mean the securities
included in the Settlement Value from time to time and shall initially be the
common stock of Pfizer Inc.  The Settlement Value Securities shall only be
adjusted by the Calculation Agent pursuant to the Calculation Agency
Agreement for certain extraordinary corporate events as set forth in the
Calculation Agency Agreement.

                 "Trading Day" shall mean a day on which trading generally is
conducted on the New York Stock Exchange, American Stock Exchange and The
Nasdaq Stock Market, Inc. and in the over-the-counter market for equity
securities as determined by the Calculation Agent.

                 All terms used but not defined in this Security are used
herein as defined in the Indenture.

                                      -9-

<PAGE>

                           OPTION TO ELECT REPAYMENT

                 The undersigned hereby irrevocably requests and instructs
the Company to repay the within Security (or portion thereof specified below)
pursuant to its terms at a price equal to the Alternative Redemption Amount
plus any accrued but unpaid interest.

                 For this Security to be repaid, the Company must receive at
the office of the Trustee, located at its Corporate Trust Office (or at such
other place or places of which the Company shall from time to time notify the
holder of the within Security) on any Business Day but not later than the
eighth Business Days prior to November 9, 2007 (i) this Security with this
"Option to Elect Repayment" form duly completed, or (ii) unless the Holder is
The Depository Trust Company or its nominee or a successor securities
depository or its nominee, a telegram, telex, facsimile transmission or
letter from a member of a national securities exchange or the National
Association of Securities Dealers or a commercial bank or a trust company in
the United States of America setting forth the name of the holder of the
within Security, the principal amount of the within Security, the portion of
the within Security to be repaid, a statement that the option to elect
repayment is being exercised thereby and a guarantee that the within Security
with this "Option to Elect Repayment" form duly completed shall  be received
by the Company not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter and the within Security and
form duly completed are received by the Company by such fifth Business Day.

                 If less than the entire amount of the within Security is to
be repaid, specify the portion thereof (which shall be an integral multiple
of $1,000 unless the total principal amount of Securities held by the holder
would be less than $1,000, in which case a holder cannot cause the Company to
repay a portion of the entire amount held by such holder and the minimum
denomination to be repaid shall be the total principal amount of Securities
held by such holder) which the holder elects to have repaid:  $          .  A
Security shall be issued to the holder in an amount equal to the portion not
being repaid.

Dated:

                 -----------------------------------------------------------
                 NOTE:  The Signature to this Option to Elect Repayment must
                 correspond with the name as written upon the face of the
                 within Security in every particular without alteration or
                 enlargement or any other change whatsoever.

<PAGE>

                        _______________________________

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

TEN COM -  as tenants in       UNIF GIFT MIN ACT - ______ Custodian ____________
           common                                  (Cust)              (Minor)

TEN ENT -  as tenants by the   Under Uniform Gifts to Minors
           entireties          Act ______________________________________
JT TEN -   as joint tenants             (State)
           with right of
           survivorship and
           not as tenants in
           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.)

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the within Security, and all rights thereunder, hereby irrevocably
constituting and appointing

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

                                      -2-

<PAGE>

         Dated:

                                  ______________________________________

                 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.

                                      -3-EXHIBIT 4.04

                         LEHMAN BROTHERS HOLDINGS INC.

                          Notes Due November 14, 2007
   Performance Linked to Marsh & McLennan Companies, Inc. (MMC) Common Stock

Number R-1                                              $13,000,000
                                                        CUSIP 524908CT5

See Reverse for Certain Definitions

          THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE THEREOF.  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE
OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS 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 SUCH 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.  UNLESS THIS
SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO
LEHMAN BROTHERS HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

          LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and
existing under the laws of the State of Delaware (hereinafter called 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, on November 14, 2007, or if a Delaying Event
occurs, three Business Days after the Payment Determination Date (the "Stated
Maturity"), 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, for each $1,000 principal amount of the Securities represented
hereby, an amount equal to (i) the greater of (a) $1,000 and (b) the
Alternative Redemption Amount and (ii) accrued but unpaid interest through
the Stated Maturity (the "Maturity Payment Amount"), and to pay interest
computed on the basis of a 360-day year of twelve 30-day months, semi-
annually on May 14 and November 14 of each year, commencing May 14, 2001, on
said principal sum at said office or agency, in like coin or currency, at a
rate per annum equal to 0.25% from November 14, 2000 or the most recent May
14 or November 14 on which interest has been paid or duly provided for.

<PAGE>

          The interest so payable on any May 14 or November 14 shall, subject
to certain exceptions provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Security is registered at
the close of business on the first day of the month in which the interest
payment is made.  Interest may, at the option of the Company, be paid by
check mailed to the person entitled thereto at such person's address as it
appears on the registry books of the Company.

          Any amount payable, at Stated Maturity, Redemption or Repurchase,
hereon shall be paid only upon presentation and surrender of this Security.

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

                                      -2-

<PAGE>

          This Security 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.

Dated:  November 14, 2000              LEHMAN BROTHERS HOLDINGS

                                       By:
                                          ---------------------------------
                                          Name:
                                          Title:
[SEAL]

                                       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: November 14, 2000

CITIBANK, N.A.
  as Trustee

By:
    --------------------------------------
         Authorized Signatory

                                      -3-

<PAGE>

                         [Form of Reverse of Security]

                 This Security is one of a duly authorized series of
Securities of the Company designated as Notes Due November 14, 2007,
Performance Linked to Marsh & McLennan Companies, Inc. (MMC) Common Stock
(herein called the "Securities"), initially limited in aggregate principal
amount to $13,000,000.  The Company may, without the consent of the holders
of the Securities, create and issue additional securities ranking equally
with the Securities and otherwise similar in all respects so that such
further securities shall be consolidated and form a single series with the
Securities; provided that no additional Securities shall be issued if an
Event of Default has occurred with respect to the Securities. This series of
Securities is one of an indefinite number of series of debt securities of the
Company, issued and to be issued under an indenture, dated as of September 1,
1987, as amended (herein called the "Indenture"), duly executed and delivered
by the Company and Citibank N.A., as trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), 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 Company, the Trustee and the Holders of the
Securities.

                 The Securities are not redeemable prior to November 9, 2002.
The Securities may be redeemed, at the option of the Company, as a whole or
from time to time in part, on or after November 9, 2002 (the "Redemption"),
and prior to the Stated Maturity, upon the notice referred to below, at a
redemption price, for each $1,000 principal amount of the Securities
redeemed, equal to (i) the greater of (a) $1,000 and (b) the Alternative
Redemption Amount and (ii) any accrued but unpaid interest through the Non-
Delaying Event Redemption Date or, if a Delaying Event occurs, through the
Delaying Event Redemption Date (the "Redemption Payment Amount").

                 Notice of Redemption shall be given by mailing a notice to
the Holders of such Redemption (the "Redemption Notice") in accordance with
the Indenture.  A Redemption shall occur on the Non-Delaying Event Redemption
Date or, if a Delaying Event occurs, on the Delaying Event Redemption Date.

                 The Securities shall be repayable at the option of the
Holder thereof (the "Repurchase"), in whole or from time to time in part, at
any time prior to November 9, 2007, at a price for each $1,000 principal
amount of the Securities repurchased, equal to (i) the Alternative Redemption
Amount and (ii) any accrued but unpaid interest through the Non-Delaying
Event Repurchase Date or, if a Delaying Event occurs, through the Delaying
Event Repurchase Date (the "Repurchase Payment Amount").  In order for the
Holder to be repaid, the Company must receive at the Corporate Trust Office
of the Trustee (or at such other address of which the Company shall from time
to time notify the Holders of the Securities) on any Business Day but no
later than the eighth Business Day prior to November 9, 2007 (i) this
Security with the form entitled "Option to Elect Repayment" set forth below

<PAGE>

duly completed or (ii) unless the Holder is The Depository Trust Company or
its nominee or a successor securities depository or its nominee, a telegram,
telex, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers or a
commercial bank or a trust company in the United States of America setting
forth the name of the Holder of this Security, the principal amount of this
Security, the portion of this Security to be repaid, a statement that the
option to elect repayment is being exercised thereby and a guarantee that
this Security, together with the form entitled "Option to Elect Repayment"
set forth below duly completed, shall be received by the Company not later
than five Business Days after the date of such telegram, telex, facsimile
transmission or letter and this Security and form duly completed are received
by the Company by such fifth Business Day.  Any such election shall be
irrevocable.  All questions as to the validity, eligibility (including time
of receipt) and acceptance of any Security for repayment shall be determined
by the Company, whose determination shall be final and binding.  A Repurchase
shall occur on the Non-Delaying Event Repurchase Date or, if a Delaying Event
occurs, on the Delaying Event Repurchase Date.

                 The Settlement Value used to calculate the Alternative
Redemption Amount shall be determined by the Calculation Agent.

                 All percentages resulting from any calculation with respect
to the Securities shall be rounded at the Calculation Agent's discretion.

                 The Trustee shall fully rely on the determination by the
Calculation Agent of the Payment Amount and shall have no duty to make any
such determination.

                 This Security is not subject to any sinking fund.

                 If an Event of Default with respect to the Securities shall
occur and be continuing, the amounts payable on all of the Securities may be
declared due and payable 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 shall be equal to the Maturity Payment Amount
calculated as though the date of acceleration was the Stated Maturity and the
date three Business Days prior to the date of acceleration was the applicable
Payment Determination Date.

                 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 Securities at the time
Outstanding to be affected (each series voting as a class), 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

                                      -2-

<PAGE>

the rights of the holders of the Securities of all such series; provided,
however, that no such supplemental indenture shall, among other things,
without the consent of the Holder of each Outstanding Security affected
thereby, (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 therein payable in any
coin or currency other than that hereinabove provided 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.  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 or the principal of, 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 Security shall be conclusive and
binding upon such Holder and upon all future holders and owners of this
Security and any Securities which may be issued in exchange or substitution
hereof, irrespective of whether or not any notation thereof is made upon this
Security or such other Securities.

                 No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal amount
with respect to this Security.

                 The Securities are issuable in denominations of $1,000 and
any integral multiples of $1,000.

                 The Company, the Trustee, and any agent of the Company or of
the Trustee may deem and treat the registered holder (the "Holder") hereof as
the absolute owner of this Security (whether or not this Security 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 Security.

                 No recourse for the payment of the principal of, premium, if
any, or interest on this Security, or for any claim based hereon or otherwise

                                      -3-

<PAGE>

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 Security, 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.

                 As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable
in the Security Register, upon surrender of this Security for registration of
transfer at the Corporate Trust Office or agency in a Place of Payment for
this Security, 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 Securities of this series or of like
tenor and of authorized denominations and for the same aggregate principal
amount, shall  be issued to the designated transferee or transferees.

                                      -4-

<PAGE>

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

                 Set forth below are definitions of the terms used in this
Security.

                 "Alternative Redemption Amount" shall mean the product of
(a) the Issue Price divided by $145.6855 and (b) the Settlement Value on the
relevant Payment Determination Date.

                 "Business Day", notwithstanding the Indenture, shall mean
any day other than a Saturday, a Sunday or a day on which the New York Stock
Exchange is not open for trading or banking institutions or trust companies
in the City of New York are authorized or required by law or executive order
to remain closed.

                 "Calculation Agency Agreement" shall mean the Calculation
Agency Agreement, dated as of November 14, 2000, between the Company and the
Calculation Agent, as amended from time to time.

                 "Calculation Agent" shall mean the person that has entered
into the Calculation Agency Agreement with the Company providing for, among
other things, the determination of the Settlement Value and the Payment
Amount, which term shall, unless the context otherwise requires, includes its
successors and assigns.  The initial Calculation Agent is Lehman Brothers
Inc.

                 "Calculation Day" shall mean three Trading Days prior to (a)
for payment at Stated Maturity, November 14, 2007, (b) for payment upon a
Redemption, the Non-Delaying Event Redemption Date or (c) for a payment upon
a Repurchase, the Non-Delaying Event Repurchase Date.

                 "Close of Trading" shall mean 4:00 p.m., New York City time.

                 "Closing Price," means the following, determined by the
Calculation Agent based on information reasonably available to it:

                          (i)     If the Settlement Value Security is listed
         on a United States national securities exchange or trading system or
         is a security quoted on The Nasdaq Stock Market, Inc. ("NASDAQ"), the
         last reported sales price at the Close of Trading, regular way, on
         such day, on the primary securities exchange registered under the
         Securities Exchange Act of 1934 on which such Settlement Value
         Security is listed or admitted to trading or NASDAQ, as the case may
         be.

                                      -5-

<PAGE>

                          (ii)    If the Settlement Value Security is listed
         or quoted on a non-United States securities exchange, trading system
         (other than a bulletin board) or market, the last reported sale price
         at the Close of Trading, regular way, on such day, on the primary
         exchange, trading system or market on which such Settlement Value
         Security is listed, quoted or admitted to trading, as the case may
         be.  The Closing Price shall then be converted into U.S. dollars
         using the Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New
         York City time.  If there are several quotes for the Official W.M.
         Reuters Spot Closing Rate at that time, the first quoted rate
         starting at 11:00 a.m. shall be the rate used. If there is no such
         Official W.M. Reuters Spot Closing Rate for a country's currency at
         11:00 a.m., New York City time, the Closing Price shall be converted
         into U.S. dollars using the last available U.S. dollar cross-rate
         quote before 11:00 a.m., New York City time.

                          (iii)   If the Settlement Value Security is not
         listed on a national securities exchange or is not a NASDAQ security,
         and is listed or traded on a bulletin board, the average execution
         price that an affiliate of the Company receives upon the sale of such
         Settlement Value Security to hedge the Company's obligations for this
         Security.  If such Settlement Value Security is listed or traded on a
         non-United States bulletin board, the Closing Price shall then be
         converted into U.S. dollars using the Official W.M. Reuters Spot
         Closing Rate at 11:00 a.m., New York City time.  If there are several
         quotes for the Official W.M. Reuters Spot Closing Rate at that time,
         the first quoted rate starting at 11:00 a.m. shall be the rate used.
         If there is no such Official W.M. Reuters Spot Closing Rate for a
         country's currency at 11:00 a.m., New York City time, the Closing
         Price shall be converted into U.S. dollars using the last available
         U.S. dollar cross-rate quote before 11:00 a.m., New York City time.

                 "Delaying Event" shall mean a Market Disruption Event for a
Settlement Value Security that occurs on the relevant Calculation Day.

                 "Delaying Event Redemption Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Redemption, three Business Days
after the Payment Determination Date therefor.

                 "Delaying Event Repurchase Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Repurchase, three Business Days
after the Payment Determination Date therefor.

                 "Issue Price" shall mean $1,000 per each $1,000 principal
amount of Securities.

                                      -6-

<PAGE>

                 "Market Disruption Event" with respect to a Settlement Value
Security means any of the following events as determined by the Calculation
Agent:

                          (i)     A suspension, absence or material
         limitation of trading of such Settlement Value Security has occurred
         on that day, in each case, for more than two hours of trading or
         during the one-half hour period preceding the Close of Trading on the
         primary organized U.S. exchange or trading system on which such
         Settlement Value Security is traded or, if such Settlement Value
         Security is not listed or quoted in the United States, on the primary
         exchange, trading system or market for such Settlement Value
         Security.  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,
         trading system, or market, any other self regulatory organization or
         the Securities and Exchange Commission of similar scope or as a
         replacement for Rule 80B, may be considered material.
         Notwithstanding the first sentence of this paragraph, a Market
         Disruption Event for a Settlement Value Security traded on a bulletin
         board means a suspension, absence or material limitation of trading
         of such Settlement Value Security for more than two hours or during
         the one hour period preceding 4:00 p.m., New York City time.

                          (ii)    A suspension, absence or material
         limitation has occurred on that day, in each case, for more than two
         hours of trading or during the one-half hour period preceding the
         Close of Trading in options contracts related to such Settlement
         Value Security, whether by reason of movements in price exceeding
         levels permitted by an exchange, trading system or market on which
         such options contracts related to such Settlement Value Security are
         traded or otherwise.

                          (iii)   Information is unavailable on that date,
         through a recognized system of public dissemination of transaction
         information, for more than two hours of trading or during the
         one-half hour period preceding the Close of Trading, of accurate
         price, volume or related information in respect of such Settlement
         Value Security or in respect of options contracts related to such
         Settlement Value Security, in each case traded on any major U.S.
         exchange or trading system or, in the case of securities of a non-
         U.S. issuer, traded on the primary non-U.S. exchange, trading system
         or market.

                 For purposes of determining whether a Market Disruption
Event has occurred:

                                      -7-

<PAGE>

                          (i)     a limitation on the hours or number of days
         of trading shall not constitute a Market Disruption Event if it
         results from an announced change in the regular business hours of the
         relevant exchange, trading system or market;

                          (ii)    any suspension in trading in an option
         contract on a Settlement Value Security by a major securities
         exchange, trading system or market by reason of (a) a price change
         violating limits set by such securities market, (b) an imbalance of
         orders relating to those contracts, or (c) a disparity in bid and ask
         quotes relating to those contracts, shall  constitute a Market
         Disruption Event notwithstanding that the suspension or material
         limitation is less than two hours;

                          (iii)   a suspension or material limitation on an
         exchange, trading system or in a market shall  include a suspension
         or material limitation of trading by one class of investors provided
         that the suspension continues for more than two hours of trading or
         during the last one-half hour period preceding the Close of Trading
         on the relevant exchange, trading system or market but shall not
         include any time when the relevant exchange, trading system or market
         is closed for trading as part of that exchange's, trading system's or
         market's regularly scheduled business hours; and

                          (iv)    "trading systems" include bulletin board
         services.

                 "Multiplier" shall mean, with respect to any applicable
principal amount of Securities, the number of shares or other units
(including any fractional share or other unit expressed as a decimal) of each
Settlement Value Security included in the calculation of the Settlement Value
of such Securities.  The initial Multiplier relating to each Security with
principal amount of $1,000.00 shall be 1.0.

                 "NYSE" shall mean the New York Stock Exchange.

                 "Non-Delaying Event Redemption Date" shall mean the date set
forth in the Redemption Notice, which date shall not be less than 30 nor more
than 60 days after the date of the Redemption Notice.

                 "Non-Delaying Event Repurchase Date" shall mean the eighth
Business Day following the Business Day on which the Company receives notice
of a Repurchase from a Holder.

                 "Official W.M. Reuters Spot Closing Rates" shall mean the
closing spot rates published on Reuters page "WMRA" relevant for such
Settlement Value Security.

                                      -8-

<PAGE>

                 "Payment Amount" shall mean the Maturity Payment Amount, the
Redemption Payment Amount or the Repurchase Payment Amount, as the case may
be.

                 "Payment Determination Date" shall mean the relevant
Calculation Day, unless a Delaying Event occurs with respect to such Payment
Determination Date, in which case the first Trading Day after the Calculation
Day on which the Closing Prices for all Settlement Value Securities that have
been subject to a Delaying Event have been determined.

                 "Redemption" shall mean the option of the Company to redeem,
at any time on or after November 9, 2002, in whole or from time to time in
part, the Securities.

                 "Repurchase" shall mean the option of a beneficial holder to
elect to require the Company to repurchase, at any time prior to November 9,
2007, in whole or from time to time in part, such holder's Securities.

                 "Settlement Value", when used with respect to any Payment
Determination Date, shall equal the sum of (a)(i) the products of the Closing
Prices and the applicable Multipliers for each Settlement Value Security for
which a Delaying Event does not occur on the related Calculation Day or (ii)
if a Delaying Event occurs for a Settlement Value Security on the related
Calculation Day, the product of the Closing Price for such Settlement Value
Security on the next Trading Day on which a Market Disruption Event does not
occur for such Settlement Value Security and the Multiplier for such
Settlement Value Security and (b) in each case, any cash included in the
Settlement Value on such Calculation Day.

                 "Settlement Value Securities" shall mean the securities
included in the Settlement Value from time to time and shall initially be the
common stock of Marsh & McLennan Companies, Inc.  The Settlement Value
Securities shall only be adjusted by the Calculation Agent pursuant to the
Calculation Agency Agreement for certain extraordinary corporate events as
set forth in the Calculation Agency Agreement.

                 "Trading Day" shall mean a day on which trading generally is
conducted on the New York Stock Exchange, American Stock Exchange and The
Nasdaq Stock Market, Inc. and in the over-the-counter market for equity
securities as determined by the Calculation Agent.

                 All terms used but not defined in this Security are used
herein as defined in the Indenture.

                                      -9-

<PAGE>

                           OPTION TO ELECT REPAYMENT

                 The undersigned hereby irrevocably requests and instructs
the Company to repay the within Security (or portion thereof specified below)
pursuant to its terms at a price equal to the Alternative Redemption Amount
plus any accrued but unpaid interest.

                 For this Security to be repaid, the Company must receive at
the office of the Trustee, located at its Corporate Trust Office (or at such
other place or places of which the Company shall from time to time notify the
holder of the within Security) on any Business Day but not later than the
eighth Business Days prior to November 9, 2007 (i) this Security with this
"Option to Elect Repayment" form duly completed, or (ii) unless the Holder is
The Depository Trust Company or its nominee or a successor securities
depository or its nominee, a telegram, telex, facsimile transmission or
letter from a member of a national securities exchange or the National
Association of Securities Dealers or a commercial bank or a trust company in
the United States of America setting forth the name of the holder of the
within Security, the principal amount of the within Security, the portion of
the within Security to be repaid, a statement that the option to elect
repayment is being exercised thereby and a guarantee that the within Security
with this "Option to Elect Repayment" form duly completed shall  be received
by the Company not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter and the within Security and
form duly completed are received by the Company by such fifth Business Day.

                 If less than the entire amount of the within Security is to
be repaid, specify the portion thereof (which shall be an integral multiple
of $1,000 unless the total principal amount of Securities held by the holder
would be less than $1,000, in which case a holder cannot cause the Company to
repay a portion of the entire amount held by such holder and the minimum
denomination to be repaid shall be the total principal amount of Securities
held by such holder) which the holder elects to have repaid:  $          .  A
Security shall be issued to the holder in an amount equal to the portion not
being repaid.

Dated:

                 -----------------------------------------------------------
                 NOTE:  The Signature to this Option to Elect Repayment must
                 correspond with the name as written upon the face of the
                 within Security in every particular without alteration or
                 enlargement or any other change whatsoever.

<PAGE>

                        _______________________________

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

TEN COM - as tenants in        UNIF GIFT MIN ACT - ______ Custodian ___________
          common                                   (Cust)              (Minor)

TEN ENT - as tenants by the    Under Uniform Gifts to Minors
          entireties           Act ___________________________________
JT TEN -  as joint tenants              (State)
          with right of
          survivorship and
          not as tenants
          in 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 Security, and all rights thereunder, hereby irrevocably
constituting and appointing

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

                                      -2-

<PAGE>

         Dated:

                                           ---------------------------------

                 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.

                                      -3-

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