Document:

EXHIBIT 4.01

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

          AGREEMENT, dated as of November 14, 2000, between Lehman Brothers

Holdings Inc. (the "Company") and Lehman Brothers Inc., as Calculation Agent.

          WHEREAS, the Company has authorized the issuance of $13,000,000

aggregate principal amount of Notes Due November 14, 2007, Performance Linked

to Pfizer Inc. (PFE) Common Stock (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.

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          2.   Calculations and Information Provided.  In response to a

request made by the Trustee for a determination of the Maturity Payment

Amount due at Stated Maturity of the Securities, the Redemption Payment

Amount and the Repurchase Payment Amount, the Calculation Agent shall

determine such Payment Amount and notify the Trustee of its determination.

The Calculation Agent shall also be responsible for (a) the determination of

the Settlement Value, (b) whether adjustments to the Multipliers should be

made and (c) whether a Market Disruption Event has occurred.  The Calculation

Agent shall notify the Trustee of 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 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:

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               (i)  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;

               (ii)  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 whom 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;

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

               (iv)  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

               (v)  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

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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.

          (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

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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 shall 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

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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) 526-3772) (telephone:  (212) 526-4841), Attention:

Legal Counsel, (b) in the case of the Calculation Agent, to it at Three World

Financial Center, 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

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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.

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          IN WITNESS WHEREOF, this Calculation Agency Agreement has been

entered into as of the day and year first above written.

                               LEHMAN BROTHERS HOLDINGS INC.

                              By:
                                 -----------------------------------
                                 Name:
                                 Title:

                              LEHMAN BROTHERS INC.,
                                as Calculation Agent

                              By:
                                 -----------------------------------
                                 Name:
                                 Title:

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                                    ANNEX A

                 1.       The Settlement Value Securities.

         The "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., unless adjusted for certain extraordinary corporate
events as described herein.

                 2.       Determination of the Payment Amount.

         The Calculation Agent shall determine the Payment Amount payable for
each Security.

         The amount payable at Stated Maturity for each $1,000 principal
amount of Securities (the "Maturity Payment Amount") shall equal (i) the
greater of (a) $1,000 and (b) the Alternative Redemption Amount and (ii) any
accrued but unpaid interest through the Stated Maturity.  The amount payable
upon a Redemption of each $1,000 principal amount of Securities (the
"Redemption Payment Amount") shall equal (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 amount payable
upon a Repurchase of each $1,000 principal amount of Securities (the
"Repurchase Payment Amount") shall equal (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 Settlement Value used to calculate the Alternative Redemption
Amount shall be determined by the Calculation Agent.

                 3.       Multipliers.

         The "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 shall be 1.0.  The Multiplier with respect to the initial
Settlement Value Security or any other Settlement Value Security shall remain
constant unless adjusted for certain extraordinary corporate events as
described below.

                 4.       Adjustments to the Multipliers and the Settlement
                          Value Securities.

         Adjustments to a Multiplier and the Settlement Value Securities shall
be made in the circumstances described below.  For purposes of the following

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adjustments, except as noted below, American Depositary Receipts ("ADRs")
shall be treated like common stock 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 share.

                 (a)      If a Settlement Value Security is subject to a stock
split or reverse stock split, then once the split has become effective, the
Multiplier relating to such Settlement Value Security shall be adjusted.  The
Multiplier shall be adjusted to equal the product of the number of shares
outstanding of the Settlement Value Security after the split with respect to
each share of such Settlement Value Security immediately prior to
effectiveness of the split and the prior Multiplier.

                 (b)      If a Settlement Value Security is subject to an
extraordinary stock dividend or extraordinary stock distribution that is
given equally to all holders of shares, then once the Settlement Value
Security is trading ex-dividend, the Multiplier for such Settlement Value
Security shall be increased by the product of the number of shares of such
Settlement Value Security issued with respect to one share of such Settlement
Value Security and the prior Multiplier.

                 (c)      If the issuer of a Settlement Value Security, or if
a Settlement Value 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, such
Settlement Value Security shall continue to be included in the calculation of
the Settlement Value so long as the primary exchange, trading system or
market is reporting a market price for the Settlement Value Security.  If a
market price, including a price on a bulletin board service, is no longer
available for a Settlement Value Security, then the value of the Settlement
Value Security shall equal zero for so long as no market price is available,
and no attempt shall be made to find a replacement stock or increase the
Settlement Value to compensate for the deletion of such Settlement Value
Security.

                 (d)      If the issuer of a Settlement Value Security, or if
a Settlement Value 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 Settlement Value Security are entitled to
receive cash, securities, other property or a combination thereof in exchange
for the Settlement Value Security, then the following shall be included in
the Settlement Value:

                          (i)     To the extent cash is received, the
         Settlement Value shall include the amount of the cash consideration
         at the time holders are entitled to receive the cash consideration

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         (the "M&A Cash Component"), plus accrued interest. If the cash
         received is denominated in a foreign currency, such cash 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 foreign
         currency-denominated cash 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. Interest shall accrue beginning the first London
         Business Day after the day that holders receive the cash
         consideration until the Stated Maturity (the "M&A Cash Component
         Interest Accrual Period").  Interest shall accrue on the M&A Cash
         Component at a rate equal to the London Interbank Offered Rate
         ("LIBOR") with a term corresponding to the M&A Cash Component
         Interest Accrual Period.

                          (ii)    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 Settlement Value Security shall be removed from
         the calculation of the Settlement Value and the new security shall be
         added to the calculation of the Settlement Value as a new Settlement
         Value Security.  The Multiplier for the new Settlement Value Security
         shall equal the product of the last value of the Multiplier of the
         original Settlement Value Security and the number of securities of
         the new Settlement Value Security exchanged with respect to one share
         of the original Settlement Value Security.

                          (iii)   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 shall determine the "Fair Market
         Value" of the securities or other property received based on the
         Average Execution Price.  The Settlement Value shall include an
         amount of cash equal to the product of the Multiplier of the
         Settlement Value Security and the Fair Market Value (the "M&A Sale
         Component").  The Settlement Value shall also include accrued
         interest on the M&A Sale Component.  Interest shall accrue beginning
         the first London Business Day after the day that an affiliate of
         Holdings sells the securities or other property used to hedge
         Holdings' obligations under the Securities until the Stated Maturity
         (the "M&A Sale Component Interest Accrual Period").  Interest shall
         accrue at a rate equal to LIBOR with a term corresponding to the M&A
         Sale Component Interest Accrual Period.

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                 (e)      If all of the shares of a Settlement Value Security
of an issuer are converted into or exchanged for the same or a different
number of shares of any class or classes of common stock other than such
Settlement Value Security, whether by capital reorganization,
recapitalization or reclassification or otherwise, then, once the conversion
has become effective, the former Settlement Value Security shall be removed
from the calculation of the Settlement Value and the new common stock shall
be added to the calculation of the Settlement Value as a new Settlement Value
Security. The Multiplier for each new Settlement Value Security shall equal
the product of the last value of the Multiplier of the original Settlement
Value Security and the number of shares of the new Settlement Value Security
issued with respect to one share of the original Settlement Value Security.

                 (f)      If the issuer of a Settlement Value Security, or if
a Settlement Value 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 shall be added to the calculation of the Settlement Value as a new
Settlement Value Security. The multiplier for the new Settlement Value
Security shall equal the product of the last value of the Multiplier with
respect to the original Settlement Value Security and the number of shares of
the new Settlement Value Security with respect to one share of the original
Settlement Value Security.

                 (g)      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 Stock
Market, then the foreign share underlying the ADR shall be deemed to be a new
common stock added to the calculation of the Settlement Value as a new
Settlement Value Security.  The initial Multiplier for that new Settlement
Value Security shall equal the product of the last value of the Multiplier
with respect to the original ADR and the number of underlying foreign shares
represented by a single such ADR.

                 (h)      If a Settlement Value 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 such
Settlement Value Security, then the Settlement Value shall include the
following:

                          (i)     To the extent cash is entitled to be
         received, the Settlement Value shall include on each day after the
         time that the Settlement Value Security trades ex-dividend until the
         date the cash consideration is entitled to be received, the present

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         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 (the "PV Extraordinary Cash
         Component").  When the cash consideration is received, the PV
         Extraordinary Cash Component shall be deleted from the Settlement
         Value and the Settlement Value shall include the amount of the cash
         consideration (the "Extraordinary Cash Component"), plus accrued
         interest. If the cash consideration received or entitled to be
         received is denominated in a foreign currency, such cash or the
         present value of such cash, as the case may be, shall 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 foreign currency-
         denominated cash 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. Interest shall accrue on the Extraordinary Cash Component
         beginning the first London Business Day after the day that holders
         are entitled to receive the Extraordinary Cash Component until the
         Stated Maturity (the "Extraordinary Cash Component Interest Accrual
         Period"). Interest shall accrue at a rate equal to LIBOR with a term
         corresponding to the Extraordinary Cash Component Interest Accrual
         Period.

                          (ii)    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 shall determine the Fair Market Value
         of the securities or other property received based on the Average
         Execution Price and the calculation of the Settlement Value shall
         include an amount of cash equal to the product of the Multiplier of
         the Settlement Value Security and the Fair Market Value (the
         "Extraordinary Sale Component").  The Settlement Value shall also
         include accrued interest on the Extraordinary Sale Component.
         Interest shall accrue beginning the first London Business Day after
         the day that an affiliate of Holdings sells the securities or other
         property used to hedge Holdings' obligations under the Securities
         until the Stated Maturity (the "Extraordinary Sale Component Interest
         Accrual Period").  Interest shall accrue at a rate equal to LIBOR
         with a term corresponding to the Extraordinary Sale Component
         Interest Accrual Period.

                 (i)  If other corporate events occur with respect to such
issuer or a Settlement Value Security, adjustments shall be made to reflect
the economic substance of such events.

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         The payment of an ordinary cash dividend by an issuer of a Settlement
Value Security, or if a Settlement Value Security is an ADR, by a foreign
issuer of the underlying foreign share, from current income or retained
earnings shall not result in an adjustment to the Multiplier.

         No adjustments of any Multiplier of a Settlement Value Security shall
be required unless the adjustment would require a change of at least .1%
(.001) in the Multiplier then in effect. The Multiplier resulting from any of
the adjustments specified above shall be rounded at the Calculation Agent's
discretion.

                 5.       Definitions.

         Set forth below are the terms used in this Annex A to the Calculation
Agent Agreement.

                 "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.

                 "Average Execution Price" for a security or other property
shall mean 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.

                 "Business Day" notwithstanding the Indenture shall mean any
day other than a Saturday, a Sunday or a day on which the NYSE 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 Agent" shall mean the person that has entered
into an 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, include its successors and
assigns.  The initial Calculation Agent shall be 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.

                 "Cash Included in the Settlement Value" shall mean the M&A
Cash Component, the M&A Sale Component, the PV Extraordinary Cash Component,
the Extraordinary Cash Component, the Extraordinary Sale Component, and
interest accrued thereon as provided for herein.

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

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                 "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 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 Settlement Value
         Security is listed or admitted to trading or NASDAQ, as the case may
         be.

                          (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 of the Settlement Value 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 occurs on the relevant Calculation Day.

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                 "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 thereof.

                 "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 thereof.

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

                 "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

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<PAGE>

         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, 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 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" is defined in Section 3 herein.

                 "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.

                                      -9-

<PAGE>

                 "Non-Delaying Event Repurchase Date" shall mean the third
Business Day following the five Business Days after the day on which a Holder
gives notice to the Trustee of a Repurchase.

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

                 "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.

                 "Redemption Notice" shall mean the notice of Redemption
mailed to the Holders.

                 "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, (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" are defined in Section 1
herein.

                 "Stated Maturity" shall mean November 14, 2007, or if a
Delaying Event occurs, three Business Days after the Payment Determination
Date on which the Settlement Value has been determined.

                                     -10-

<PAGE>

                 "Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, 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.

                                     -11-EXHIBIT 4.02

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

          AGREEMENT, dated as of November 14, 2000, between Lehman Brothers

Holdings Inc. (the "Company") and Lehman Brothers Inc., as Calculation Agent.

          WHEREAS, the Company has authorized the issuance of $13,000,000

aggregate principal amount of Notes Due November 14, 2007, Performance Linked

to Marsh & McLennan Companies, Inc. (MMC) Common Stock (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.

<PAGE>

          2.   Calculations and Information Provided.  In response to a

request made by the Trustee for a determination of the Maturity Payment

Amount due at Stated Maturity of the Securities, the Redemption Payment

Amount and the Repurchase Payment Amount, the Calculation Agent shall

determine such Payment Amount and notify the Trustee of its determination.

The Calculation Agent shall also be responsible for (a) the determination of

the Settlement Value, (b) whether adjustments to the Multipliers should be

made and (c) whether a Market Disruption Event has occurred.  The Calculation

Agent shall notify the Trustee of 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 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:

                                      -2-

<PAGE>

               (i)  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;

               (ii) 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 whom 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;

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

               (iv) 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

               (v)  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

                                      -3-

<PAGE>

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.

          (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

                                      -4-

<PAGE>

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 shall 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

                                      -5-

<PAGE>

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) 526-3772) (telephone:  (212) 526-4841), Attention:

Legal Counsel, (b) in the case of the Calculation Agent, to it at Three World

Financial Center, 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

                                      -6-

<PAGE>

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.

                                      -7-

<PAGE>

          IN WITNESS WHEREOF, this Calculation Agency Agreement has been

entered into as of the day and year first above written.

                               LEHMAN BROTHERS HOLDINGS INC.

                               By:
                                  -------------------------------------------
                                  Name:
                                  Title:

                               LEHMAN BROTHERS INC.,
                                 as Calculation Agent

                               By:
                                  -------------------------------------------
                                  Name:
                                  Title:

                                      -8-

<PAGE>

                                    ANNEX A

                 1.       The Settlement Value Securities.

         The "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., unless adjusted for certain
extraordinary corporate events as described herein.

                 2.       Determination of the Payment Amount.

         The Calculation Agent shall determine the Payment Amount payable for
each Security.

         The amount payable at Stated Maturity for each $1,000 principal
amount of Securities (the "Maturity Payment Amount") shall equal (i) the
greater of (a) $1,000 and (b) the Alternative Redemption Amount and (ii) any
accrued but unpaid interest through the Stated Maturity.  The amount payable
upon a Redemption of each $1,000 principal amount of Securities (the
"Redemption Payment Amount") shall equal (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 amount payable
upon a Repurchase of each $1,000 principal amount of Securities (the
"Repurchase Payment Amount") shall equal (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 Settlement Value used to calculate the Alternative Redemption
Amount shall be determined by the Calculation Agent.

                 3.       Multipliers.

         The "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 shall be 1.0.  The Multiplier with respect to the initial
Settlement Value Security or any other Settlement Value Security shall remain
constant unless adjusted for certain extraordinary corporate events as
described below.

                 4.       Adjustments to the Multipliers and the Settlement
                          Value Securities.

         Adjustments to a Multiplier and the Settlement Value Securities shall
be made in the circumstances described below.  For purposes of the following

<PAGE>

adjustments, except as noted below, American Depositary Receipts ("ADRs")
shall be treated like common stock 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 share.

                 (a)      If a Settlement Value Security is subject to a stock
split or reverse stock split, then once the split has become effective, the
Multiplier relating to such Settlement Value Security shall be adjusted.  The
Multiplier shall be adjusted to equal the product of the number of shares
outstanding of the Settlement Value Security after the split with respect to
each share of such Settlement Value Security immediately prior to
effectiveness of the split and the prior Multiplier.

                 (b)      If a Settlement Value Security is subject to an
extraordinary stock dividend or extraordinary stock distribution that is
given equally to all holders of shares, then once the Settlement Value
Security is trading ex-dividend, the Multiplier for such Settlement Value
Security shall be increased by the product of the number of shares of such
Settlement Value Security issued with respect to one share of such Settlement
Value Security and the prior Multiplier.

                 (c)      If the issuer of a Settlement Value Security, or if
a Settlement Value 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, such
Settlement Value Security shall continue to be included in the calculation of
the Settlement Value so long as the primary exchange, trading system or
market is reporting a market price for the Settlement Value Security.  If a
market price, including a price on a bulletin board service, is no longer
available for a Settlement Value Security, then the value of the Settlement
Value Security shall equal zero for so long as no market price is available,
and no attempt shall be made to find a replacement stock or increase the
Settlement Value to compensate for the deletion of such Settlement Value
Security.

                 (d)      If the issuer of a Settlement Value Security, or if
a Settlement Value 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 Settlement Value Security are entitled to
receive cash, securities, other property or a combination thereof in exchange
for the Settlement Value Security, then the following shall be included in
the Settlement Value:

                          (i)     To the extent cash is received, the
         Settlement Value shall include the amount of the cash consideration
         at the time holders are entitled to receive the cash consideration

                                      -2-

<PAGE>

         (the "M&A Cash Component"), plus accrued interest. If the cash
         received is denominated in a foreign currency, such cash 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 foreign
         currency-denominated cash 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. Interest shall accrue beginning the first London
         Business Day after the day that holders receive the cash
         consideration until the Stated Maturity (the "M&A Cash Component
         Interest Accrual Period").  Interest shall accrue on the M&A Cash
         Component at a rate equal to the London Interbank Offered Rate
         ("LIBOR") with a term corresponding to the M&A Cash Component
         Interest Accrual Period.

                          (ii)    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 Settlement Value Security shall be removed from
         the calculation of the Settlement Value and the new security shall be
         added to the calculation of the Settlement Value as a new Settlement
         Value Security.  The Multiplier for the new Settlement Value Security
         shall equal the product of the last value of the Multiplier of the
         original Settlement Value Security and the number of securities of
         the new Settlement Value Security exchanged with respect to one share
         of the original Settlement Value Security.

                          (iii)   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 shall determine the "Fair Market
         Value" of the securities or other property received based on the
         Average Execution Price.  The Settlement Value shall include an
         amount of cash equal to the product of the Multiplier of the
         Settlement Value Security and the Fair Market Value (the "M&A Sale
         Component").  The Settlement Value shall also include accrued
         interest on the M&A Sale Component.  Interest shall accrue beginning
         the first London Business Day after the day that an affiliate of
         Holdings sells the securities or other property used to hedge
         Holdings' obligations under the Securities until the Stated Maturity
         (the "M&A Sale Component Interest Accrual Period").  Interest shall
         accrue at a rate equal to LIBOR with a term corresponding to the M&A
         Sale Component Interest Accrual Period.

                                      -3-

<PAGE>

                 (e)      If all of the shares of a Settlement Value Security
of an issuer are converted into or exchanged for the same or a different
number of shares of any class or classes of common stock other than such
Settlement Value Security, whether by capital reorganization,
recapitalization or reclassification or otherwise, then, once the conversion
has become effective, the former Settlement Value Security shall be removed
from the calculation of the Settlement Value and the new common stock shall
be added to the calculation of the Settlement Value as a new Settlement Value
Security. The Multiplier for each new Settlement Value Security shall equal
the product of the last value of the Multiplier of the original Settlement
Value Security and the number of shares of the new Settlement Value Security
issued with respect to one share of the original Settlement Value Security.

                 (f)      If the issuer of a Settlement Value Security, or if
a Settlement Value 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 shall be added to the calculation of the Settlement Value as a new
Settlement Value Security. The multiplier for the new Settlement Value
Security shall equal the product of the last value of the Multiplier with
respect to the original Settlement Value Security and the number of shares of
the new Settlement Value Security with respect to one share of the original
Settlement Value Security.

                 (g)      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 Stock
Market, then the foreign share underlying the ADR shall be deemed to be a new
common stock added to the calculation of the Settlement Value as a new
Settlement Value Security.  The initial Multiplier for that new Settlement
Value Security shall equal the product of the last value of the Multiplier
with respect to the original ADR and the number of underlying foreign shares
represented by a single such ADR.

                 (h)      If a Settlement Value 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 such
Settlement Value Security, then the Settlement Value shall include the
following:

                          (i)     To the extent cash is entitled to be
         received, the Settlement Value shall include on each day after the
         time that the Settlement Value Security trades ex-dividend until the
         date the cash consideration is entitled to be received, the present

                                      -4-

<PAGE>

         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 (the "PV Extraordinary Cash
         Component").  When the cash consideration is received, the PV
         Extraordinary Cash Component shall be deleted from the Settlement
         Value and the Settlement Value shall include the amount of the cash
         consideration (the "Extraordinary Cash Component"), plus accrued
         interest. If the cash consideration received or entitled to be
         received is denominated in a foreign currency, such cash or the
         present value of such cash, as the case may be, shall 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 foreign currency-
         denominated cash 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. Interest shall accrue on the Extraordinary Cash Component
         beginning the first London Business Day after the day that holders
         are entitled to receive the Extraordinary Cash Component until the
         Stated Maturity (the "Extraordinary Cash Component Interest Accrual
         Period"). Interest shall accrue at a rate equal to LIBOR with a term
         corresponding to the Extraordinary Cash Component Interest Accrual
         Period.

                          (ii)    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 shall determine the Fair Market Value
         of the securities or other property received based on the Average
         Execution Price and the calculation of the Settlement Value shall
         include an amount of cash equal to the product of the Multiplier of
         the Settlement Value Security and the Fair Market Value (the
         "Extraordinary Sale Component").  The Settlement Value shall also
         include accrued interest on the Extraordinary Sale Component.
         Interest shall accrue beginning the first London Business Day after
         the day that an affiliate of Holdings sells the securities or other
         property used to hedge Holdings' obligations under the Securities
         until the Stated Maturity (the "Extraordinary Sale Component Interest
         Accrual Period").  Interest shall accrue at a rate equal to LIBOR
         with a term corresponding to the Extraordinary Sale Component
         Interest Accrual Period.

                 (i)  If other corporate events occur with respect to such
issuer or a Settlement Value Security, adjustments shall be made to reflect
the economic substance of such events.

                                      -5-

<PAGE>

         The payment of an ordinary cash dividend by an issuer of a Settlement
Value Security, or if a Settlement Value Security is an ADR, by a foreign
issuer of the underlying foreign share, from current income or retained
earnings shall not result in an adjustment to the Multiplier.

         No adjustments of any Multiplier of a Settlement Value Security shall
be required unless the adjustment would require a change of at least .1%
(.001) in the Multiplier then in effect. The Multiplier resulting from any of
the adjustments specified above shall be rounded at the Calculation Agent's
discretion.

                 5.       Definitions.

         Set forth below are the terms used in this Annex A to the Calculation
Agent Agreement.

                 "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.

                 "Average Execution Price" for a security or other property
shall mean 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.

                 "Business Day" notwithstanding the Indenture shall mean any
day other than a Saturday, a Sunday or a day on which the NYSE 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 Agent" shall mean the person that has entered
into an 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, include its successors and
assigns.  The initial Calculation Agent shall be 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.

                 "Cash Included in the Settlement Value" shall mean the M&A
Cash Component, the M&A Sale Component, the PV Extraordinary Cash Component,
the Extraordinary Cash Component, the Extraordinary Sale Component, and
interest accrued thereon as provided for herein.

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

                                      -6-

<PAGE>

                 "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 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 Settlement Value
         Security is listed or admitted to trading or NASDAQ, as the case may
         be.

                          (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 of the Settlement Value 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 occurs on the relevant Calculation Day.

                                      -7-

<PAGE>

                 "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 thereof.

                 "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 thereof.

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

                 "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

                                      -8-

<PAGE>

         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, 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 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" is defined in Section 3 herein.

                 "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.

                                      -9-

<PAGE>

                 "Non-Delaying Event Repurchase Date" shall mean the third
Business Day following the five Business Days after the day on which a Holder
gives notice to the Trustee of a Repurchase.

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

                 "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.

                 "Redemption Notice" shall mean the notice of Redemption
mailed to the Holders.

                 "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, (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" are defined in Section 1
herein.

                 "Stated Maturity" shall mean November 14, 2007, or if a
Delaying Event occurs, three Business Days after the Payment Determination
Date on which the Settlement Value has been determined.

                                     -10-

<PAGE>

                 "Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, 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.

                                     -11-

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