Document:

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                                                                    Exhibit 4.01

                          LEHMAN BROTHERS HOLDINGS INC.

                               PORTFOLIO RANGERSSM

            PORTFOLIO Risk AdjustiNG Equity Range SecuritiesSM Notes

                               Due August 21, 2003

Number R-1                                                          $10,100,000
                                                              CUSIP: 524908 DS 6

See Reverse for Certain Definitions

      THIS SECURITY (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, at Stated Maturity, in such coin or currency of the United States of
America 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 the Maturity Payment Amount.

      Any amount payable on the Stated Maturity Date will 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.

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                                                                               2

            "RANGERS" and "Risk AdjustiNG Equity Range Securities" are
servicemarks of Lehman Brothers Inc.

            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.

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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 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:  August 21, 2001                    LEHMAN BROTHERS HOLDINGS INC.

                                           By:      /s/ Oliver Budde
                                                    Name:    Oliver Budde
                                                    Title:   Vice President

                                           Attest:  /s/ Eileen Bannon
                                                    Name:    Eileen Bannon
                                                    Title:   Assistant Secretary

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated:  August 21, 2001

CITIBANK, N.A.,
  as Trustee

By: /s/ Wafaa Orfy
    Name:    Wafaa Orfy
    Title:   Authorized Signatory

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                              (Reverse of Security)

            This Security is one of a duly authorized series of Securities of
the Company designated as PORTFOLIO RANGERSSM, PORTFOLIO Risk AdjustiNG Equity
Range SecuritiesSM Notes Due August 21, 2003 (herein called the "SECURITIES").
The Company may, without the consent of the holders of the Securities, create
and issue additional notes ranking equally with the Securities and otherwise
similar in all respects so that such further notes shall be consolidated and
form a single series with the Securities; provided that no additional notes can
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 Maturity Payment Amount shall be determined by the Calculation
Agent pursuant to the Calculation Agency Agreement.

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

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

            This Security is not subject to any sinking fund and is not
redeemable prior to its Stated Maturity Date.

            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 will be equal to the Maturity Payment Amount calculated as though the
date of acceleration was the Stated Maturity Date and the date three Business
Days prior thereto was the Calculation 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 the rights of the
holders of the Securities of all such series; PROVIDED, HOWEVER, that no such
supplemental indenture shall, among other things, (i) change the fixed maturity
of any Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon or reduce any premium payable on
redemption, or make the principal thereof, or premium, if any, or interest
therein payable in any coin or currency other than that hereinabove provided,
without the consent of the holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security so affected. It is also
provided in the Indenture that, prior to any

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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 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, will be
issued to the designated transferee or transferees.

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            The Company intends to treat and, by purchasing this Security, the
Holder hereof agrees to treat, for all tax purposes, this Security as a
financial contract for cash settlement, rather than as a debt instrument.

            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.

            "AMEX" shall mean the American Stock Exchange.

            "ADJUSTED VALUE" shall mean, with respect to each Underlying Equity
Security:

            (a)   if the Ending Price is greater than or equal to the Starting
                  Price, the lesser of: ;

                        (i)   $175; and

                        (ii)  the product obtained by multiplying (A) $100 by
                              (B) the quotient obtained by dividing the Ending
                              Price by the Starting Price by (C) the quotient
                              obtained by dividing the Ending Multiplier by the
                              Starting Multiplier;

            or

            (b)   if the Ending Price is less than the Starting Price, the
                  lesser of:

                        (i)   $100; and

                        (ii)  the product obtained by multiplying (A) $100 by
                              (B) the quotient obtained by dividing the Ending
                              Price by 75% of the Starting Price by (C) the
                              quotient obtained by dividing the Ending
                              Multiplier by the Starting Multiplier.

            "AVERAGE EXECUTION PRICE" shall mean, for a security or other
property, the average execution price that an affiliate of the Company receives
or pays for such security or property, as the case may be, to hedge the
Company's obligations under the Securities.

            "BASKET" shall mean the basket composed of the Underlying Equity
Securities.

            "BUSINESS DAY", notwithstanding any provision in the Indenture,
shall mean any day that is not a Saturday, a Sunday or a day on which the NYSE,
Nasdaq or AMEX is not open for trading or banking institutions or trust
companies in the City of New York are authorized or obligated by law or
executive order to close.

            "CALCULATION AGENCY AGREEMENT" shall mean the Calculation Agency
Agreement, dated as of August 21, 2001, between the Company and the Calculation
Agent, as amended from time to time.

            "CALCULATION AGENT" shall mean the person that has entered into an
agreement with the Company providing for, among other things, the determination
of the Maturity Payment

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Amount, which term shall, unless the context otherwise requires, include its
successors and assigns. The initial Calculation Agent shall be Lehman Brothers
Inc.

            "CALCULATION DATE" shall mean five Business Days prior to the Stated
Maturity Date; PROVIDED that if a Market Disruption Event occurs on such date,
the Calculation Date shall be the previous Business Day on which there was not a
Market Disruption Event.

            "CLOSE OF TRADING" shall mean 4:00 p.m., New York City time.

            "COMPANY" shall have the meaning set forth on the face of this
Security.

            "ENDING MULTIPLIER" shall mean, for each Underlying Equity Security,
the Starting Multiplier for such Underlying Equity Security adjusted from time
to time for the occurrence, prior to the Close of Trading on the Calculation
Date, of any of the extraordinary corporate transactions described in Section 4
of Annex A of the Calculation Agency Agreement.

            "ENDING PRICE" shall mean, for each Underlying Equity Security, as
determined by the Calculation Agent based on information reasonably available to
it, subject to any Ending Price Adjustment:

            (i) If the Underlying Equity Security is listed on a United States
      national securities exchange or trading system or is a Nasdaq security,
      the last reported sale 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 Underlying Equity Security is listed or
      admitted to trading or on Nasdaq, as the case may be.

            (ii) If the Underlying Equity Security is listed 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 Underlying Equity Security is listed or admitted to trading, as
      the case may be. The Ending Price shall then be converted into U.S.
      dollars using the Official W.M. Reuters Spot Closing Rate.

            (iii) If the Underlying Equity Security is not listed on a national
      securities exchange or trading system or is not a Nasdaq security, and is
      listed or traded on a bulletin board, the Average Execution Price of the
      Underlying Equity Security. If such Underlying Equity Security is listed
      or traded on a non-United States bulletin board, the Ending Price will
      then be converted into U.S. dollars using the Official W.M. Reuters Spot
      Closing Rate.

            (iv) If a Market Disruption Event has occurred for an Underlying
      Equity Security on a day on which the Ending Price for such Underlying
      Equity Security is to be calculated, the Ending Price for such Underlying
      Equity Security shall initially be determined using the Ending Price for
      such Underlying Equity Security on the next preceding Trading Day on which
      a Market Disruption Event did not occur. Once the Market Disruption Event
      has ceased, the Ending Price of such Underlying Equity Security shall then
      be adjusted to equal the Average Execution Price of the Underlying Equity
      Security.

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            "ENDING PRICE ADJUSTMENT" shall mean an adjustment made by the
Calculation Agent to an Underlying Equity Security's initial Ending Price due to
the occurrence of a Market Disruption Event five Business Days prior to the
Stated Maturity Date. An Ending Price Adjustment shall adjust such initial
Ending Price, once such Market Disruption Event ceases to exist, to equal the
Average Execution Price received upon the sale of that Underlying Equity
Security.

            "HOLDER" shall have the meaning set forth on the reverse of this
Security.

            "INDENTURE" shall have the meaning set forth on the reverse of this
Security.

            "MARKET DISRUPTION EVENT", on any day, shall mean any of the
following events as determined by the Calculation Agent:

            (i) A suspension, absence or material limitation of trading in an
      Underlying Equity 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 that security is traded or, in the case of an
      Underlying Equity Security not listed or quoted in the United States, on
      the primary exchange, trading system or market for that security.
      Limitations on trading during significant market fluctuations imposed
      pursuant to the rules of any primary organized U.S. exchange or trading
      system similar 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 security traded on a bulletin
      board means a suspension, absence or material limitation of trading of
      that security for more than two hours or during the one-hour period
      preceding the Close of Trading.

            (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 an Underlying Equity Security, whether by reason of movements
      in price exceeding levels permitted by an exchange, trading system or
      market on which such options contracts 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 an Underlying Equity Security or in respect of options
      contracts related to an Underlying Equity 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:

            (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;

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            (ii) any suspension in trading in an options contract on an
      Underlying Equity 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.

            "MATURITY PAYMENT AMOUNT" shall equal, for each $1,000 principal
amount of Securities, the sum of the Adjusted Values of each Underlying Equity
Security. In the event that the Calculation Agent makes an Ending Price
Adjustment due to the occurrence of a Market Disruption Event, the payment by
the Company of the Maturity Payment Amount will be postponed until the date
three Business Days after the date of determination of any such Ending Price
Adjustment.

            "MULTIPLIER" shall mean the number of shares, or fraction of a
share, of each Underlying Equity Security included in the Basket.

            "NASDAQ" shall mean The Nasdaq Stock Market, Inc.

            "NYSE" shall mean the New York Stock Exchange.

            "OFFICIAL W.M. REUTERS SPOT CLOSING RATE" shall mean the
closing spot rate published on Reuters page "WMRA" relevant for an Underlying
Equity Security.

            "PROSPECTUS SUPPLEMENT" shall mean the prospectus supplement,
dated August 14, 2001, issued by the Company relating to $10,100,000 aggregate
principal amount of the Securities.

            "SECURITIES" shall have the meaning set forth on the reverse
of this Security.

            "SECURITY" shall have the meaning set forth on the face of
this Security.

            "STARTING MULTIPLIER" shall mean, for each Underlying Equity
Security, the Multiplier required so that such Underlying Equity Security
represented on August 14, 2001 approximately 10.0% of the Basket on a U.S.
dollar weighted basis, which Multiplier shall be the Multiplier set forth
opposite the name of such Underlying Equity Security in the table under the
caption "The Basket" on page S-18 of the Prospectus Supplement.

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            "STARTING PRICE" shall mean, for each Underlying Equity
Security, the price set forth opposite the name of such Underlying Equity
Security in the table under the caption "The Basket" on page S-18 of the
Prospectus Supplement.

            "STATED MATURITY DATE" shall mean August 21, 2003.

            "TRADING DAY" shall mean a day on which trading generally is
conducted on the NYSE, AMEX and Nasdaq and in the over-the-counter market for
equity securities, as determined by the Calculation Agent.

            "TRUSTEE" shall have the meaning set forth on the reverse of
this Security.

            "UNDERLYING EQUITY SECURITIES" shall mean the securities included in
the Basket from time to time and shall initially be the following 10 common
stocks: Amgen Inc., Cisco Systems, Inc., Dell Computer Corporation, Gemstar--TV
Guide International, Inc., Intel Corporation, Maxim Integrated Products, Inc.,
Microsoft Corporation, Oracle Corporation, QUALCOMM Incorporated and Sun
Microsystems, Inc. The Underlying Equity Securities shall only be adjusted by
the Calculation Agent pursuant to the Calculation Agency Agreement for certain
extraordinary transactions.

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

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

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

<Table>
<S>                                       <C>
TEN COM - as tenants in common             UNIF GIFT MIN ACT - _____ Custodian ________
                                                               (Cust)          (Minor)
TEN ENT - as tenants by the entireties     under Uniform Gifts to Minors
JT TEN  - as joint tenants with right of   Act _________________________
          Survivorship and not as                     (State)
          tenants in common
</Table>

     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.

         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.<Page>

                                                                    Exhibit 4.02

                          CALCULATION AGENCY AGREEMENT

            CALCULATION AGENCY AGREEMENT, dated as of August 21, 2001 (the
"AGREEMENT"), between Lehman Brothers Holdings Inc. (the "COMPANY") and Lehman
Brothers Inc., as Calculation Agent.

            WHEREAS, the Company has authorized the issuance of $10,100,000
aggregate principal amount of PORTFOLIO RANGERSSM, PORTFOLIO Risk AdjustiNG
Equity Range SecuritiesSM Notes Due August 21, 2003 (the "SECURITIES")*;

            WHEREAS, the Securities will be issued under an Indenture, dated as
of September 1, 1987, between the Company and Citibank, N.A., as Trustee (the
"TRUSTEE"), as supplemented and amended by supplemental indentures dated as of
November 25, 1987, November 27, 1990, September 13, 1991, October 4, 1993,
October 1, 1995, and June 26, 1997, and incorporating Standard Multiple Series
Indenture Provisions dated July 30, 1987, as amended November 16, 1987
(collectively, the "INDENTURE"); and

            WHEREAS, the Company requests the Calculation Agent to perform
certain services described herein in connection with the Securities;

            NOW THEREFORE, the Company and the Calculation Agent agree as
follows:

            1. APPOINTMENT OF AGENT. The Company hereby appoints Lehman
Brothers Inc. as Calculation Agent and Lehman Brothers Inc. hereby accepts such
appointment as the Company's agent for the purpose of performing the services
hereinafter described upon the terms and subject to the conditions hereinafter
mentioned.

            2. CALCULATIONS AND INFORMATION PROVIDED. The Calculation Agent
shall determine (a) the Maturity Payment Amount on the Calculation Date, (b) the
Starting Price of each of the Underlying Equity Securities in the Basket, (c)
the Ending Price of each of the Underlying Equity Securities in the Basket, (d)
the Adjusted Value for each of the Underlying Equity Securities in the Basket,
(e) the sum of the Adjusted Values for all of the Underlying Equity Securities
in the Basket, (f) the Starting Multipliers and Ending Multipliers for each of
the Underlying Equity Securities in the Basket, (g) any required adjustments to
the Multipliers of the Underlying Equity Securities in the Basket and (h)
whether a Market Disruption Event has occurred. The Calculation Agent shall
notify the Trustee of all such determinations and any such adjustment or if a
Market Disruption Event has occurred. Annex A hereto sets forth the procedures
the Calculation Agent will use to determine the information described in this
Section 2.

            3. CALCULATIONS. Any calculation or determination by the
Calculation Agent pursuant hereto shall (in the absence of manifest error) be
final and binding. Any calculation

-----------
* "RANGERS" and "Risk AdjustiNG Equity Range Securities" are servicemarks of
Lehman Brothers Inc.
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                                                                               2

made by the Calculation Agent hereunder shall, at the Trustee's request, be made
available at the Corporate Trust Office.

            4. FEES AND EXPENSES. The Calculation Agent shall be entitled to
reasonable compensation for all services rendered by it as agreed to between the
Calculation Agent and the Company.

            5. TERMS AND CONDITIONS. The Calculation Agent accepts its
obligations herein set out upon the terms and conditions hereof, including the
following, to all of which the Company agrees:

            (a) in acting under this Agreement, the Calculation Agent is acting
      solely as an independent expert of the Company and does not assume any
      obligation toward, or any relationship of agency or trust for or with, any
      of the holders of the Securities;

            (b) unless otherwise specifically provided herein, any order,
      certificate, notice, request, direction or other communication from the
      Company or the Trustee made or given under any provision of this Agreement
      shall be sufficient if signed by any person who the Calculation Agent
      reasonably believes to be a duly authorized officer or attorney-in-fact of
      the Company or the Trustee, as the case may be;

            (c) the Calculation Agent shall be obliged to perform only such
      duties as are set out specifically herein and any duties necessarily
      incidental thereto;

            (d) the Calculation Agent, whether acting for itself or in any other
      capacity, may become the owner or pledgee of Securities with the same
      rights as it would have had if it were not acting hereunder as Calculation
      Agent; and

            (e) the Calculation Agent shall incur no liability hereunder except
      for loss sustained by reason of its gross negligence or wilful misconduct.

            6. RESIGNATION; REMOVAL; SUCCESSOR. (a) The Calculation Agent
may at any time resign by giving written notice to the Company of such intention
on its part, specifying the date on which its desired resignation shall become
effective, subject to the appointment of a successor Calculation Agent and
acceptance of such appointment by such successor Calculation Agent, as
hereinafter provided. The Calculation Agent hereunder may be removed at any time
by the filing with it of an instrument in writing signed by or on behalf of the
Company and specifying such removal and the date when it shall become effective.
Such resignation or removal shall take effect upon the appointment by the
Company, as hereinafter provided, of a successor Calculation Agent and the
acceptance of such appointment by such successor Calculation Agent. In the event
a successor Calculation Agent has not been appointed and has not accepted its
duties within 90 days of the Calculation Agent's notice of resignation, the
Calculation Agent may apply to any court of competent jurisdiction for the
designation of a successor Calculation Agent.

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                                                                               3

                  (b) In case at any time the Calculation Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or make an assignment for the benefit of its creditors or
consent to the appointment of a receiver or custodian of all or any substantial
part of its property, or shall admit in writing its inability to pay or meet its
debts as they mature, or if a receiver or custodian of it or all or any
substantial part of its property shall be appointed, or if any public officer
shall have taken charge or control of the Calculation Agent or of its property
or affairs, for the purpose of rehabilitation, conservation or liquidation, a
successor Calculation Agent shall be appointed by the Company by an instrument
in writing, filed with the successor Calculation Agent. Upon the appointment as
aforesaid of a successor Calculation Agent and acceptance by the latter of such
appointment, the Calculation Agent so superseded shall cease to be Calculation
Agent hereunder.

                  (c) Any successor Calculation Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor, to the Company and to the
Trustee an instrument accepting such appointment hereunder and agreeing to be
bound by the terms hereof, and thereupon such successor Calculation Agent,
without any further act, deed or conveyance, shall become vested with all the
authority, rights, powers, trusts, immunities, duties and obligations of such
predecessor with like effect as if originally named as Calculation Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Calculation Agent shall be entitled to receive, all moneys,
securities and other property on deposit with or held by such predecessor, as
Calculation Agent hereunder.

                  (d) Any corporation into which the Calculation Agent hereunder
may be merged or converted or any corporation with which the Calculation Agent
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Calculation Agent shall be a party, or any
corporation to which the Calculation Agent shall sell or otherwise transfer all
or substantially all of the assets and business of the Calculation Agent shall
be the successor Calculation Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto.

                  7. CERTAIN DEFINITIONS.  Terms not otherwise defined
herein or in Annex A hereto are used herein as defined in the Indenture or the
Securities.

                  8. INDEMNIFICATION. The Company will indemnify the Calculation
Agent against any losses or liability which it may incur or sustain in
connection with its appointment or the exercise of its powers and duties
hereunder except such as may result from the gross negligence or wilful
misconduct of the Calculation Agent or any of its agents or employees. The
Calculation Agent shall incur no liability and shall be indemnified and held
harmless by the Company for or in respect of any action taken or suffered to be
taken in good faith by the Calculation Agent in reliance upon written
instructions from the Company.

                  9. NOTICES. Any notice required to be given hereunder shall be
delivered in person, sent (unless otherwise specified in this Agreement) by
letter, telex or facsimile transmission or communicated by telephone (confirmed
in a writing dispatched within two Business Days), (a) in the case of the
Company, to it at Three World Financial Center, New York, New York 10285
(facsimile: (212) 526-3774) (telephone: (212) 526-1936), Attention: Legal
Counsel, (b) in the case of the Calculation Agent, to it at Three World
Financial Center,

<Page>

                                                                               4

200 Vesey Street, New York, New York 10285-0600 (facsimile: (212) 526-2755)
(telephone: (212) 526-0900), Attention: Equity Derivatives Trading and (c) in
the case of the Trustee, to it at 111 Wall Street, 5th Floor, New York, New York
10043 (facsimile: (212) 657-3836) (telephone: (212) 657-7805), Attention:
Corporate Trust Department or, in any case, to any other address or number of
which the party receiving notice shall have notified the party giving such
notice in writing. Any notice hereunder given by telex, facsimile or letter
shall be deemed to be served when in the ordinary course of transmission or
post, as the case may be, it would be received.

                  10.   GOVERNING LAW.  This Agreement shall be governed by
and continued in accordance with the laws of the State of New York.

                  11.   COUNTERPARTS.  This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.

                  12.   BENEFIT OF AGREEMENT.  This Agreement is solely for the
benefit of the parties hereto and their successors and assigns, and no other
person shall acquire or have any rights under or by virtue hereof.

<Page>

                                                                               5

                  IN WITNESS WHEREOF, this Agreement has been entered into as of
the day and year first above written.

                                                LEHMAN BROTHERS HOLDINGS INC.

                                                By: /s/ Oliver Budde
                                                     Name: Oliver Budde
                                                     Title:   Vice President

                                                LEHMAN BROTHERS INC.,
                                                  as Calculation Agent

                                                By: /s/ Oliver Budde
                                                     Name: Oliver Budde
                                                     Title:   Vice President

<Page>

                                     ANNEX A

      1.    THE BASKET.

            The Basket shall be composed of the Underlying Equity Securities
(the "BASKET").

      2.    DETERMINATION OF THE MATURITY PAYMENT AMOUNT.

            The Calculation Agent shall determine the amount payable on
the Stated Maturity Date for each $1,000 principal amount of Securities (the
"MATURITY PAYMENT AMOUNT"). The Maturity Payment Amount shall equal the sum of
the Adjusted Values of each Underlying Equity Security. In the event that the
Calculation Agent makes an Ending Price Adjustment due to the occurrence of a
Market Disruption Event, the payment by the Company of the Maturity Payment
Amount will be postponed until the date three Business Days after the date of
determination of any such Ending Price Adjustment.

      3.    MULTIPLIERS FOR THE COMMON STOCKS IN THE BASKET.

            The multiplier for each Underlying Equity Security in the
Basket shall be the number of shares, or fraction of a share, of each Underlying
Equity Security included in the Basket (the "MULTIPLIER"). The Multiplier shall
be adjusted from time to time during the term of the Securities to give effect
to the extraordinary corporate transactions described below in Section 4. The
price used to determine the Starting Multiplier for each Underlying Equity
Security shall be determined based on the Average Execution Price for each
Underlying Equity Security. The Starting Multiplier for each Underlying Equity
Security in the Basket will remain constant unless adjusted. No adjustment to a
Multiplier will be required unless the adjustment would require a change of at
least 0.1% in the Multiplier then in effect. Each Multiplier, and any
adjustments to a Multiplier, will be rounded at the Calculation Agent's
discretion.

      4.    ADJUSTMENTS TO THE COMMON STOCKS IN THE BASKET.

            Adjustments to the Underlying Equity Securities included in
the Basket will be made (i) by adjusting the Multiplier then in effect for an
Underlying Equity Security in the Basket, (ii) by adding new Underlying Equity
Securities, other securities or cash to the Basket and/or (iii) by removing
Underlying Equity Securities in the Basket, each as described below. For
purposes of these adjustments, except as noted below, ADRs are treated like
Underlying Equity Securities if a comparable adjustment to the foreign shares
underlying the ADRs is made pursuant to the terms of the depositary arrangement
for the ADRs or if holders of ADRs are entitled to receive property in respect
of the underlying foreign shares.

      o     If an Underlying Equity Security is subject to a stock split or
            reverse stock split, then once the split has become effective, the
            Multiplier then in effect relating to that Underlying Equity
            Security will be adjusted. The Multiplier will be adjusted to equal
            the product of the number of shares outstanding after the split with
            respect to each share immediately prior to effectiveness of the
            split and the prior Multiplier.

      o     If an Underlying Equity Security is subject to an extraordinary
            stock dividend or extraordinary stock distribution in common stock
            that is given equally to all holders of shares, then once the
            Underlying Equity Security is trading ex-dividend, the Multiplier

<Page>

                                                                               2

            will be increased by the product of the number of shares issued with
            respect to one share and the prior Multiplier.

      o     If the issuer of an Underlying Equity Security, or, if an Underlying
            Equity Security is an ADR, the foreign issuer of the underlying
            foreign share, is being liquidated or dissolved or is subject to a
            proceeding under any applicable bankruptcy, insolvency or other
            similar law, the Underlying Equity Security will continue to be
            included in the Basket so long as the primary exchange, trading
            system or market is reporting a market price for the Underlying
            Equity Security. If a market price, including a price on a bulletin
            board service, is no longer available for an Underlying Equity
            Security included in the Basket, then the value of that Underlying
            Equity Security will equal zero for so long as no market price is
            available, and no attempt will be made to find a replacement stock
            or increase the Basket to compensate for the deletion of that
            Underlying Equity Security.

      o     If the issuer of an Underlying Equity Security, or, if an Underlying
            Equity Security is an ADR, the foreign issuer of the underlying
            foreign share, has been subject to a merger or consolidation and is
            not the surviving entity and holders of the issuer's common stock
            are entitled to receive cash, securities, other property or a
            combination of those in exchange for their common stock, then the
            following will be included in the Basket:

            o     To the extent cash is received, the Basket will include the
                  amount of the cash consideration at the time holders are
                  entitled to receive the cash consideration, plus accrued
                  interest. Interest will accrue beginning on the first London
                  Business Day after the day on which holders receive the cash
                  consideration until the Stated Maturity Date. Interest will
                  accrue at a rate equal to LIBOR with a term corresponding to
                  the interest accrual period stated in the preceding sentence.

            o     To the extent that equity securities that are traded or listed
                  on an exchange, trading system or market are received, once
                  the exchange for the new securities has become effective, the
                  former Underlying Equity Security will be removed from the
                  Basket and the new securities will be added to the Basket. The
                  Multiplier for the new securities will equal the product of
                  the last value of the Multiplier of the original Underlying
                  Equity Security and the number of securities of the new
                  security exchanged with respect to one share of the original
                  Underlying Equity Security.

            o     To the extent that equity securities that are not traded or
                  listed on an exchange, trading system or market or non-equity
                  securities or other property (other than cash) is received,
                  the calculation agent will determine the fair market value of
                  the securities or other property received and the Basket will
                  include an amount of cash equal to the product of the
                  Multiplier and the fair market value. The Basket will also
                  include accrued interest on that amount. Interest will accrue
                  beginning on the first London Business Day after the day that
                  an affiliate of the Company sells the securities or other
                  property used to hedge the Company's obligations under the
                  notes until the Stated Maturity Date. Interest will accrue at
                  a rate equal to LIBOR with a term corresponding to the
                  interest accrual period stated in the preceding sentence.

<Page>

                                                                               3

      o     If all of the shares of the class of common stock of which an
            Underlying Equity Security is a part are converted into or exchanged
            for the same or a different number of shares of any class or classes
            of common stock other than that class of common stock of which the
            Underlying Equity Security is a part, whether by capital
            reorganization, recapitalization or reclassification, then, once the
            conversion has become effective, the former Underlying Equity
            Security will be removed from the Basket and the new common stock
            will be added to the Basket as an Underlying Equity Security. The
            Multiplier for each new Underlying Equity Security added to the
            Basket will equal the product of the last value of the Multiplier of
            the original Underlying Equity Security and the number of shares of
            the new Underlying Equity Security issued with respect to one share
            of the original Underlying Equity Security.

      o     If the issuer of an Underlying Equity Security in the Basket, or if
            an Underlying Equity Security is an ADR, the issuer of the
            underlying foreign share, issues to all of its shareholders common
            stock or another equity security that is traded or listed on an
            exchange, trading system or market of an issuer other than itself,
            then the new common stock or other equity security will be added to
            the Basket as an Underlying Equity Security. The Multiplier for the
            new Underlying Equity Security will equal the product of the last
            value of the Multiplier with respect to the original Underlying
            Equity Security and the number of shares of the new Underlying
            Equity Security issued with respect to one share of the original
            Underlying Equity Security.

      o     If an ADR is no longer listed or admitted to trading on a United
            States securities exchange registered under the Securities Exchange
            Act of 1934 or is no longer a security quoted on the Nasdaq, then
            the foreign share underlying the ADR will be deemed to be a new
            common stock included in the Basket. The initial Multiplier for that
            new Underlying Equity Security will equal the last value of the
            Multiplier for the ADR multiplied by the number of underlying
            foreign shares represented by a single ADR.

      o     If an Underlying Equity Security is subject to an extraordinary
            dividend or an extraordinary distribution (including upon
            liquidation or dissolution) of cash, equity securities that are not
            traded or listed on an exchange, trading system or market,
            non-equity securities or other property of any kind which is
            received equally by all holders of the class of common stock of
            which the Underlying Equity Security is a part, then the Basket will
            include the following:

            o     To the extent cash is entitled to be received, the Basket will
                  include on each day after the time that the Underlying Equity
                  Security trades ex-dividend until the date the cash
                  consideration is entitled to be received, the present value of
                  the cash to be received, discounted at a rate equal to LIBOR,
                  with a term beginning that day and ending on the date that the
                  cash is entitled to be received. When the cash consideration
                  is received, the Basket will include the amount of the cash
                  consideration, plus accrued interest. Interest will accrue
                  beginning the first London Business Day after the day that
                  holders receive the cash consideration until the Stated
                  Maturity Date. Interest will accrue at a rate equal to LIBOR
                  with a term corresponding to the interest accrual period
                  stated in the preceding sentence.

<Page>
                                                                               4

            o     To the extent that equity securities that are not traded or
                  listed on an exchange, trading system or market or non-equity
                  securities or other property (other than cash) are received,
                  the Calculation Agent will determine the fair market value of
                  the securities or other property received and the Basket will
                  include an amount of cash equal to the product of the
                  Multiplier and the fair market value. The Basket will also
                  include accrued interest on that amount. Interest will accrue
                  beginning on the first London Business Day after the day that
                  an affiliate of the Company sells the securities or other
                  property used to hedge the Company's obligations under the
                  notes until the Stated Maturity Date. Interest will accrue at
                  a rate equal to LIBOR with a term corresponding to the
                  interest accrual period stated in the preceding sentence.

      o     If similar corporate events occur with respect to the issuer of an
            equity security other than an Underlying Equity Security that is
            included in the Basket, adjustments similar to the above will be
            made for that equity security. In addition, if any other corporate
            events occur with respect to the issuer of an Underlying Equity
            Security included in the Basket, adjustments will be made to reflect
            the economic substance of those events.

The payment of an ordinary cash dividend from current income or retained
earnings will not result in an adjustment to the Multiplier.

      5.    DEFINITIONS.

            Set forth below are the terms used in the Agreement and in
this Annex A.

            "ADR" shall mean American depositary receipt.

            "AMEX" shall mean the American Stock Exchange.

            "ADJUSTED VALUE" shall mean, with respect to each Underlying
Equity Security:

            (a)   if the Ending Price is greater than or equal to the Starting
                  Price, the lesser of:

                        (i)   $175; and

                        (ii)  the product obtained by multiplying (A) $100 by
                              (B) the quotient obtained by dividing the Ending
                              Price by the Starting Price by (C) the quotient
                              obtained by dividing the Ending Multiplier by the
                              Starting Multiplier;

             or

            (b)   if the Ending Price is less than the Starting Price, the
                  lesser of:

                        (i)   $100; and

                        (ii)  the product obtained by multiplying (A) $100 by
                              (B) the quotient obtained by dividing the Ending
                              Price by 75% of the Starting Price by (C) the
                              quotient obtained by dividing the Ending
                              Multiplier by the Starting Multiplier.

<Page>

                                                                               5

                  "AVERAGE EXECUTION PRICE" shall mean, for a security or other
property, the average execution price that an affiliate of the Company receives
or pays for such security or property, as the case may be, to hedge the
Company's obligations under the Securities.

                  "BASKET" shall have the meaning set forth in Section 1 of this
Annex A.

                  "BUSINESS DAY", notwithstanding any provision in the
Indenture, shall mean any day that is not a Saturday, a Sunday or a day on which
the NYSE, Nasdaq or AMEX is not open for trading or banking institutions or
trust companies in the City of New York are authorized or obligated by law or
executive order to close.

                  "CALCULATION AGENT" shall mean the person that has entered
into an agreement with the Company providing for, among other things, the
determination of the Maturity Payment Amount, which term shall, unless the
context otherwise requires, include its successors and assigns. The initial
Calculation Agent shall be Lehman Brothers Inc.

                  "CALCULATION DATE" shall mean five Business Days prior to the
Stated Maturity Date; PROVIDED that if a Market Disruption Event occurs on such
date, the Calculation Date shall be the previous Business Day on which there was
not a Market Disruption Event.

                  "CLOSE OF TRADING" shall mean 4:00 p.m., New York City time.

                  "COMPANY" shall have the meaning set forth in the preamble to
this Agreement.

                  "ENDING MULTIPLIER" shall mean, for each Underlying Equity
Security, the Starting Multiplier for such Underlying Equity Security adjusted
for the occurrence from time to time, prior to the Close of Trading on the
Calculation Date, of any of the extraordinary corporate transactions described
in Section 4 of this Annex A.

                  "ENDING PRICE" shall mean, for each Underlying Equity
Security, as determined by the Calculation Agent based on information reasonably
available to it, subject to any Ending Price Adjustment:

                  (i) If the Underlying Equity Security is listed on a United
         States national securities exchange or trading system or is a Nasdaq
         security, the last reported sale 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 Underlying Equity
         Security is listed or admitted to trading or on Nasdaq, as the case may
         be.

                  (ii) If the Underlying Equity Security is listed 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 Underlying Equity Security is listed or
         admitted to trading, as the case may be. The Ending Price shall then be
         converted into U.S. dollars using the Official W.M. Reuters Spot
         Closing Rate.

                  (iii) If the Underlying Equity Security is not listed on a
         national securities exchange or trading system or is not a Nasdaq
         security, and is listed or traded on a bulletin board, the Average
         Execution Price of the Underlying Equity Security. If such Underlying
         Equity Security is listed or traded on a non-United States bulletin
         board, the

<Page>

                                                                               6

         Ending Price will then be converted into U.S. dollars using the
         Official W.M. Reuters Spot Closing Rate.

                    (iv) If a Market Disruption Event has occurred for an
         Underlying Equity Security on a day on which the Ending Price for such
         Underlying Equity Security is to be calculated, the Ending Price for
         such Underlying Equity Security shall initially be determined using the
         Ending Price for such Underlying Equity Security on the next preceding
         Trading Day on which a Market Disruption Event did not occur. Once the
         Market Disruption Event has ceased, the Ending Price of such Underlying
         Equity Security shall then be adjusted to equal the Average Execution
         Price of the Underlying Equity Security.

                  "ENDING PRICE ADJUSTMENT" shall mean an adjustment made by the
Calculation Agent to an Underlying Equity Security's initial Ending Price due to
the occurrence of a Market Disruption Event five Business Days prior to the
Stated Maturity Date. An Ending Price Adjustment shall adjust such initial
Ending Price, once such Market Disruption Event ceases to exist, to equal the
Average Execution Price received upon the sale of that Underlying Equity
Security.

                  "INDENTURE" shall have the meaning set forth in the preamble
to this Agreement.

                  "LIBOR" shall mean London Interbank Offered Rate.

                  "LONDON BUSINESS DAY" shall mean shall mean any day in the
United Kingdom that is not a Saturday, a Sunday or a day on which the London
Stock Exchange is not open for trading or banking institutions or trust
companies in the City of London are authorized or obligated by law or
parliamentary order to close.

                  "MARKET DISRUPTION EVENT", on any day, shall mean any of the
following events as determined by the Calculation Agent:

                  (i) A suspension, absence or material limitation of trading in
         an Underlying Equity 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 that security is traded or, in the case of
         an Underlying Equity Security not listed or quoted in the United
         States, on the primary exchange, trading system or market for that
         security. Limitations on trading during significant market fluctuations
         imposed pursuant to the rules of any primary organized U.S. exchange or
         trading system similar 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 security
         traded on a bulletin board means a suspension, absence or material
         limitation of trading of that security for more than two hours or
         during the one-hour period preceding the Close of Trading.

                  (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 an Underlying Equity

<Page>

                                                                               7

         Security, whether by reason of movements in price exceeding levels
         permitted by an exchange, trading system or market on which such
         options contracts 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 an Underlying Equity Security or in respect
         of options contracts related to an Underlying Equity 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:

                  (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 options contract on an
         Underlying Equity 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.

                  "MATURITY PAYMENT AMOUNT" shall have the meaning set forth in
Section 2 of this Annex A.

                  "MULTIPLIER" shall have the meaning set forth in Section 3 of
this Annex A.

                  "NASDAQ" shall mean The Nasdaq Stock Market, Inc.

                  "NYSE" shall mean the New York Stock Exchange.

                  "OFFICIAL W.M. REUTERS SPOT CLOSING RATE" shall mean the
closing spot rate published on Reuters page "WMRA" relevant for an Underlying
Equity Security.

                  "PROSPECTUS SUPPLEMENT" shall mean the prospectus supplement,
dated August 14, 2001, issued by the Company relating to $10,100,000 aggregate
principal amount of the Securities.

<Page>

                                                                               8

                  "STARTING MULTIPLIER" shall mean, for each Underlying Equity
Security, the Multiplier required so that such Underlying Equity Security
represented on August 14, 2001 approximately 10.0% of the Basket on a U.S.
dollar weighted basis, which Multiplier shall be the Multiplier set forth
opposite the name of such Underlying Equity Security in the table under the
caption "The Basket" on page S-18 of the Prospectus Supplement.

                  "STARTING PRICE" shall mean, for each Underlying Equity
Security, the price set forth opposite the name of such Underlying Equity
Security in the table under the caption "The Basket" on page S-18 of the
Prospectus Supplement.

                  "STATED MATURITY DATE" shall mean August 21, 2003.

                  "TRADING DAY" shall mean a day on which trading generally is
conducted on the NYSE, AMEX and Nasdaq and in the over-the-counter market for
equity securities, as determined by the Calculation Agent.

                  "TRUSTEE" shall have the meaning set forth in the preamble to
this Agreement.

                  "UNDERLYING EQUITY SECURITIES" shall mean the securities
included in the Basket from time to time and shall initially be the following 10
common stocks: Amgen Inc., Cisco Systems, Inc., Dell Computer Corporation,
Gemstar--TV Guide International, Inc., Intel Corporation, Maxim Integrated
Products, Inc., Microsoft Corporation, Oracle Corporation, QUALCOMM Incorporated
and Sun Microsystems, Inc. The Underlying Equity Securities shall be adjusted
only by the Calculation Agent pursuant to this Agreement.

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