Document:

Form of 2007 Participant Grant and Agreement

 Exhibit 10(d) 
 CLEVELAND-CLIFFS INC 
 2007 INCENTIVE EQUITY PLAN 
 2007 PARTICIPANT GRANT AND AGREEMENT 
 WHEREAS, on March 13, 2007 the Board of Directors (“Board”) of Cleveland-Cliffs Inc. an Ohio corporation (“Company”) (the term “Company” as used herein shall also include the
Company’s consolidated Subsidiaries) approved the 2007 Incentive Equity Plan (“Plan”) of the Company conditioned on the approval of the Plan by; and 
 WHEREAS, it is expected that the shareholders of Company will consider and vote upon a proposal to approve the Plan of the Company no later than March 12, 2008; and 
 WHEREAS, the Compensation and Organization Committee (“Committee”) of the Board has been appointed to administer the Plan; and

 WHEREAS,
                                        
(“Participant”) is an employee of the Company or of a Subsidiary of the Company; and 
 WHEREAS, on
                                        
(“Date of Grant”) the Committee authorized the granting to the Participant of
                                        
(                    ) Performance Shares and an additional
                                        
(                    ) Retention Units covering the incentive period commencing January 1, 2007 and ending December 31, 2009
(“Incentive Period”) under the Plan; and 
 WHEREAS, the Committee has authorized the execution of a Participant
Grant and Agreement (“Agreement”) in the form hereof. 
 NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the Participant and Company agree as follows: 

 ARTICLE 1. 
 Definitions 
 All terms used herein with initial capital letters shall have
the meanings assigned to them in the WHEREAS clauses or the Plan and the following additional terms, when used herein with initial capital letters, shall have the following meanings: 
 1.1       “Average Net Assets” shall mean the amount computed as described in Exhibit D.

 1.2       “Market Value Price” shall mean the latest available closing
price of a Share of the Company and the latest available closing price per share of a common share of each of the entities in the Peer Group, as the case may be, on the New York Stock Exchange or other recognized market if the stock does not trade
on the New York Stock Exchange at the relevant time. 
 1.3       “Peer Group”
shall mean the group of companies, as more particularly set forth on attached Exhibit A, against which the Relative Total Shareholder Return of the Company is measured over the Incentive Period. 
 1.4       “Performance Objectives” shall mean for the Incentive Period the target
objectives of the Company of the Relative Total Shareholder Return and Return on Net Asset goals established by the Committee and reported to the Board, as more particularly set forth on attached Exhibit B. 
 1.5       “Performance Shares Earned” shall mean the number of Shares of the Company (or
cash equivalent) earned by a Participant following the conclusion of an Incentive Period in which a required minimum of Company Performance Objectives were met or exceeded. 
  

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 1.6       “Relative Total Shareholder
Return” shall mean for the Incentive Period the Total Shareholder Return of the Company compared to the Total Shareholder Return of the Peer Group, as more particularly set forth on attached Exhibit C. 
 1.7       “Return on Net Assets” shall mean the Company’s Earnings Before Taxes
(excluding minority interest) divided by Average Net Assets, as more particularly described on attached Exhibit D. 
 1.8       “Share Ownership Guidelines” shall mean the Cleveland-Cliffs Inc Directors’ and Officers’ Share Ownership Guidelines, as amended from time to time. 
 1.9       “Total Shareholder Return” shall mean for the Incentive Period the cumulative
return to shareholders of the Company and to the shareholders of each of the entities in the Peer Group during the Incentive Period, measured by the change in Market Value Price per share of a Share of the Company plus dividends (or other
distributions, excluding franking credits) reinvested over the Incentive Period and the change in the Market Value Price per share of the common share of each of the entities in the Peer Group plus dividends (or other distributions, excluding
franking credits) reinvested over the Incentive Period, determined on the last business day of the Incentive Period compared to a base measured by the average Market Value Price per share of a Share of the Company and of a common share of each of
the entities in the Peer Group on the last business day of the year immediately preceding the Incentive Period. Dividends (or other distributions, excluding franking credits) per share are assumed to be reinvested in the applicable stock on the last
business day of the quarter during which they are paid at the then Market Value Price per share, resulting in a fractionally higher number of shares owned at the market price. 
  

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 ARTICLE 2. 
 Grant and Terms of Performance Shares 
 2.1       Grant of Performance Shares. Pursuant to the Plan, the Company, by action of the Committee, hereby grants to the Participant the number of Performance Shares as specified in the Fourth
WHEREAS clause of this Agreement, without dividend equivalents, effective as of the Date of Grant. The grant is subject to, and contingent upon, the approval of the Plan by the shareholders of the Company no later than March 12, 2008.

 2.2       Issuance of Performance Shares. The Performance Shares covered by
this Agreement shall only result in the issuance of Shares (or cash or a combination of Shares and cash, as decided by the Committee in its sole discretion), after the completion of the Incentive Period and only if such Performance Shares are earned
as provided in Section 2.3 of this Article 2. 
 2.3       Performance Shares
Earned. Payout of Performance Shares Earned, if any, shall be based upon the degree of achievement of the Company Performance Objectives, all as more particularly set forth in Exhibit B, with actual payouts interpolated between the
performance levels shown on Exhibit B. In no event, shall any Performance Shares be earned for actual achievement by the Company in excess of the allowable maximum as established under the Performance Objectives. 
 2.4       Calculation of Payout of Performance Shares. The Performance Shares granted shall
be earned as Performance Shares Earned based on the degree of achievement of the Performance Objectives established for the Incentive Period. The percentage level of achievement determined for each Performance Objective shall be multiplied by the
number of Performance Shares granted to determine the actual number of Performance Shares Earned. The 

  

 4 

 
calculation as to whether the Company has met or exceeded the Company Performance Objectives shall be determined in accordance with this Agreement.

 2.5       Payment of Performance Shares. 
 (a)       Payment of Performance Shares Earned shall be made in the form of Shares (or cash or a
combination of Shares and cash, as decided by the Committee in its sole discretion), and shall be paid after the determination by the Committee of the level of attainment of the Company Performance Objectives (the calculation of which shall have
been previously reviewed by an independent accounting professional). Notwithstanding the foregoing, no Performance Shares granted on or after January 1, 2007, may be paid in cash in lieu of Shares to any Participant who is subject to the Share
Ownership Guidelines unless and until such Participant is either in compliance with, or no longer subject to, such Share Ownership Guidelines, provided, however, that the Committee may withhold Shares to the extent necessary to satisfy federal,
state or local income tax withholding requirements, as described in Section 5.2. In addition, the Committee may restrict 50% of the Shares to be issued in satisfaction of the total Performance Shares Earned, before income tax withholding, so
that they cannot be sold by Participant unless immediately after such sale the Participant is in compliance with the Share Ownership Guidelines that are applicable to the Participant at the time of sale. 
 (b)       Any payment of Performance Shares Earned to a deceased Participant shall be paid to the
beneficiary designated by the Participant on the Designation of Death Beneficiary attached as Exhibit E and filed with the Company. If no such beneficiary has been designated or survives the Participant, payment shall be made to the estate of a
Participant. A beneficiary designation may be changed or revoked by a Participant at any time, provided the change or revocation is filed with the Company. 
  

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 (c)       Prior to payment, the Company shall only have an
unfunded and unsecured obligation to make payment of Performance Shares Earned to the Participant. The Performance Shares covered by this Agreement that have not yet been earned as Performance Shares Earned are not transferable other than by
completion of the Designation of Death Beneficiary attached as Exhibit E or pursuant to the laws of descent and distribution. 
 2.6       Death, Disability, Retirement, or Other. 
 (a)       With respect to Performance Shares granted to a Participant whose employment is terminated because of death, Disability, Retirement, or is terminated by the Company without Cause, the Participant
shall receive as Performance Shares Earned the number of Performance Shares as is then determined under Section 2.4 at the end of such Incentive Period, prorated based upon the number of months between January 1, 2007 and the date the
Participant ceased to be employed by the Company compared to the thirty-six (36) months in the Incentive Period. 
 (b)       In the event a Participant voluntarily terminates employment prior to December 31, 2009 or is terminated by the Company with Cause prior to the date of payment of Performance Shares Earned, the
Participant shall forfeit all right to any Performance Shares that would have been earned under this Agreement. 
  

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 ARTICLE 3. 
 Grant and Terms of Retention Units 
 3.1       Grant of Retention Units. Pursuant to the Plan, the Company hereby grants to the Participant the number of Retention Units as specified in the Fifth WHEREAS clause of this Agreement,
without dividend equivalents, effective as of the Date of Grant. 
 3.2       Condition
of Payment. The Retention Units covered by this Agreement shall only result in the payment in cash of the value of the Retention Units if the Participant remains in the employ of the Company or a Subsidiary throughout the Incentive Period.

 3.3       Calculation of Cash Payout. To determine the amount of the cash
payout of the Retention Units, the number of Retention Units granted under this Agreement shall be multiplied by the Market Value Price of a Share of the Company on the last day of the Incentive Period. 
 3.4       Payment of Retention Units. 
 (a)       Payment of Retention Units shall be made in cash and shall be paid at the same time as the
payment of Performance Shares Earned pursuant to Section 2.5(a), provided, however, in the event no Performance Shares are earned, then the Retention Units shall be paid in cash at the time the Performance Shares would normally
have been paid. 
 (b)       Any payment of Retention Units to a deceased Participant shall be
paid to the beneficiary designated by the Participant on the Designation of Death Beneficiary attached as Exhibit E and filed with the Company. If no such beneficiary has been designated or survives the Participant, payment shall be made to the
estate of a Participant. A beneficiary designation may be changed or revoked by a Participant at any time, provided the change or revocation is filed with the Company. 
  

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 (c)       Prior to payment, the Company shall only have an
unfunded and unsecured obligation to make payment of Retention Units to the Participant. The Retention Units covered by this Agreement are not transferable other than by completion of the Designation of Death Beneficiary attached as Exhibit E or
pursuant to the laws of descent and distribution. 
 3.5       Death, Disability,
Retirement or Other. With respect to Retention Units granted to a Participant whose employment is terminated because of death, Disability, Retirement, or is terminated by the Company without Cause during the Incentive Period, the Participant
shall receive the number of Retention Units as calculated in Section 3.4, prorated based upon the number of months between January 1, 2007 and the date the Participant ceased to be employed by the Company compared to the thirty-six
(36) months in the Incentive Period. 
 ARTICLE 4. 
 Other Terms Common to Retention Units and Performance Shares 
 4.1       Forfeiture. 
 (a)       A
Participant shall not render services for any organization or engage directly or indirectly in any business which is a competitor of the Company or any affiliate of the Company, or which organization or business is or plans to become prejudicial to
or in conflict with the business interests of the Company or any affiliate of the Company. 
 (b)       Failure to comply with subsection (a) above will cause a Participant to forfeit the right to Performance Shares and Retention Units and require the Participant to reimburse the Company for the
taxable income received or deferred on Performance Shares that become payable to the Participant and on Retention Units that have been paid out in cash within the 90-day period preceding the Participant’s termination of employment. 

 

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 (c)       Failure of the Participant to repay to the
Company the amount to be reimbursed in subsection (b) above within three days of termination of employment will result in the offset of said amount from the Participant’s account balance in the Company’s Voluntary Non-Qualified
Deferred Compensation Plan (if applicable) and/or from any accrued salary or vacation pay owed at the date of termination of employment or from future earnings payable by the Participant’s next employer. 
 4.2       Change in Control. In the event a Change in Control occurs, all Performance Shares
granted to a Participant for Incentive Periods which have not ended shall immediately become Performance Shares Earned on a one-to-one basis regardless of the Performance Objectives. All Performance Shares, if any, granted to a Participant for an
Incentive Period which ended before the Change in Control, will be deemed to be Performance Shares Earned to the extent and only to the extent that they became Performance Shares Earned as of the end of the Incentive Period based upon the
Performance Objectives for the Incentive Period. The value of all Performance Shares Earned, including ones for Incentive Periods which have already ended, shall be paid in cash based on the fair market value of the Shares determined on the date the
Change in Control occurs. Also, in the event of a Change in Control, all Retention Units granted for all periods shall become nonforfeitable and shall be paid in cash based on the fair market value of the Units determined on the date the Change in
Control occurs. All payments of Performance Shares Earned and Retention Units shall be made within 10 days of the Change in Control. 
 ARTICLE 5. 
 General Provisions 
  

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 5.1       Compliance with Law. The Company
shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any Shares or pay the
value of any Retention Units pursuant to this Agreement if the issuance or payment thereof would result in a violation of any such law. 
 5.2       Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment of Performance
Shares Earned or Retention Units to a Participant under the Plan, and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the receipt of such payment of Performance Shares Earned or Retention Units
or the realization of such benefit that the Participant make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. If necessary, the Committee may require relinquishment of a portion of such
Performance Shares Earned or such Retention Units. In the case of Performance Shares Earned, the Participant may elect to satisfy all or any part of any such withholding obligation by surrendering to the Company a portion of the Shares that are
issued or transferred hereunder, and the Shares so surrendered by the Participant shall be credited against any such withholding obligation at the Market Value Price per share of such Shares on the date of such surrender. In no event, however, shall
the Company accept Shares for payment of taxes in excess of required tax withholding rates, except that, in the discretion of the Committee, a Participant or such other person may surrender Shares owned for more than six months to satisfy any tax
obligation resulting from such transaction. 
 5.3       Continuous Employment.
For purposes of this Agreement, the continuous employment of the Participant with the Company shall not be deemed to have been interrupted, 

  

 10 

 
and the Participant shall not be deemed to have ceased to be an employee of the Company, by reason of the transfer of his employment among the Company and
its Subsidiaries or an approved leave of absence. 
 5.4       Relation to Other
Benefits. Any economic or other benefit to the Participant under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Participant may be entitled under any profit-sharing, retirement or other
benefit or compensation plan maintained by the Company or a Subsidiary and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.

 5.5       Agreement Subject to Plan. The Retention Units and Performance
Shares granted under this Agreement and all of the terms and conditions hereof are subject to all of the terms and conditions of the Plan, a copy of which is available upon request. 
 5.6       Amendments. The Plan and this Agreement can be amended at any time by the Company.
Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto. Except for amendments necessary to bring the Plan and this Agreement into compliance with current law including
Internal Revenue Code section 409A, no amendment to either the Plan or this Agreement shall adversely affect the rights of the Participant under this Agreement without the Participant’s consent. 
 5.8       Severability. In the event that one or more of the provisions of this Agreement
shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully
enforceable. 
  

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 5.9       Governing Law. This Agreement shall
be construed and governed in accordance with the laws of the State of Ohio. 
 This Agreement is executed as of the Date of
Grant. 
  
  

			
	 CLEVELAND-CLIFFS INC
	 	
	 (“Company”)
	 	
		
	  
	 	

 The undersigned hereby acknowledges receipt of an executed original of this
Participant Grant and Agreement and accepts the Performance Shares and Retention Units granted hereunder on the terms and conditions set forth herein and in the Plan. 
  

			
	 Participant
	 	
		
	  
	 	
		
	 Print Name:                                    
                             
	 	

  

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 EXHIBITS 
  

			
	 Exhibit A
	  	 Peer Group

	 Exhibit B
	  	 Performance Objectives

	 Exhibit C
	  	 Relative Total Shareholder Return

	 Exhibit D
	  	 Return on Net Assets

	 Exhibit E
	  	 Beneficiary Designation

  

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 Exhibit A 
 PEER GROUP 
 (2007-2009) 
 AK Steel Holding Corp. 
 Algoma Steel Inc. 
 Arch Coal 
 Companhia Vale ADR 
 Freeport-McMoran 
 Gerdau Ameristeel Corp. 
 IPSCO Inc. 
 Macarthur Coal 
 Nucor Corp. 
 Oxiana Limited 
 Rio Tinto plc 
 Southern Copper Corp.

 Steel Dynamics Inc. 
 Teck
Cominco Ltd. 
 USX – US Steel Group 
 The Peer Group of 15 companies shall not be adjusted within the Incentive Period, except to exclude companies which during the Incentive Period (a) cease to be publicly traded, or (b) have experienced a
major restructuring by reason of: (i) a Chapter 11 filing, or (ii) a spin-off of more than 50% of any such company’s assets. The value of the stock of a Peer Group company will be determined in accordance with the following:

  

	 	 1.
	 If the stock is listed on an exchange in the U.S. or Canada, then the value on such exchange will be used; 

  

	 	 2.
	 Otherwise, if the stock is traded in the U.S. as an American Depositary Receipt, then the value of the ADR will be used; or 

  

	 	 3.
	 Otherwise, the value on the exchange in the country where the company is headquartered will be used. 

  

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 Exhibit B 
 PERFORMANCE OBJECTIVES 
 (2007-2009) 
 The target objectives of the Company are Relative Total Shareholder Return (share price plus reinvested dividends) and Return on Net Assets over the three-year Incentive Period from
January 1, 2007 to December 31, 2009. Achievement of the Relative Total Shareholder Return objective shall be determined by the shareholder return of the Company relative to a predetermined group of steel, mining and metal companies.
Achievement of the Return on Net Assets (“RONA”) objective is a Threshold objective. Should Threshold performance not be achieved, the calculated payout generated under Total Shareholder Return will be reduced by 50%. RONA shall be
determined by comparing the Return on Net Assets achieved for the Incentive Period to the 12% target set forth on the following table: 
  

							
	  

Performance
 Factor
  
	 	  
 Performance Level
  

	 	  
 Threshold
  
	 	Target	 	Maximun
	  
 Relative TSR
  
	 	  
 35th Percentile
  
	 	55th Percentile	 	75th Percentile
	  
 Payout
  
	 	  
 50%
  
	 	100%	 	150%
	  
 Pre-Tax RONA
	 	  
 Calculated payout reduced 50% if RONA averages less than
 12% during the Incentive Period

  

  

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 Exhibit C 
 RELATIVE TOTAL SHAREHOLDER RETURN 
 (2007-2009) 
 Relative Total Shareholder Return for the Incentive Period is calculated as follows: 
  

	 	 1.
	 The Total Shareholder Return as defined in Section 1.9 of the Agreement for the Incentive Period for the Company shall be compared to the Total Shareholder
Return for each of the entities within the Peer Group for the Incentive Period. The results shall be ranked to determine the Company’s Relative Total Shareholder Return percentile ranking compared to the Peer Group.

  

	 	 2.
	 The Company’s Relative Total Shareholder Return for the Incentive Period shall be compared to the Relative Total Shareholder Return Performance target range
established for the Incentive Period. 

  

	 	 3.
	 The Relative Total Shareholder Return performance target range has been established for the 2007-2009 Incentive Period as follows: 

 

			
	 Performance Level
	  	 2007-2009
 Relative Total Shareholder Return
 Percentile Ranking

		
	 Maximum
	  	75th Percentile
	 Target
	  	55th Percentile
	 Threshold
	  	35th Percentile

  

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 Exhibit D 
 RETURN ON NET ASSETS 
 (2007-2009) 
 Return on Net Assets is calculated as follows: 
  

	 	 1.
	 Earnings Before Taxes (as computed in 2 below) divided by the Average Net Assets (as computed in 3 below) equals the Return on Net Assets for the Incentive
Period, stated as a percentage to two decimals. 

  

	 	 2.
	 “Earnings Before Taxes” is defined as average annual pre-tax income (after adjusting to exclude any minority interests income or loss) in the Incentive
Period. 

  

	 	 3.
	 “Average Net Assets” is defined as the total assets less (i) current liabilities (excluding the current portion of interest-bearing debt) and
(ii) any minority interests, as determined as of the end of the Incentive Period based on a monthly average, beginning on December 31, 2006, and ending on December 31, 2009. 

  

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 GRANT YEAR 2007         
 Exhibit E 
 BENEFICIARY DESIGNATION

 In accordance with the terms and conditions of the Cleveland-Cliffs Inc 2007 Incentive Equity Plan (“Plan”)
and the Participant Grant and Agreement Year 2007 (“Agreement”), I hereby designate the person(s) indicated below as my beneficiary(ies) to receive any payments under the Plan and Agreement after my death. 
  

																	
	 Name
	 	  
	 		 		 		 		 	
	 Address
	 	  
	 		 		 		 		 	
		 	  
	 		 		 		 		 	
		 	  
	 		 		 		 		 	
						
	 Social Sec. Nos. of Beneficiary(ies)
	 	  
	 		 		 		 	
	 Relationship(s)
	 		 	  
	 		 		 		 	
	 Date(s) of Birth
	 		 	  
	 		 		 		 	

 In the event that the above-named beneficiary(ies) predecease(s) me, I hereby
designate the following person(s) as beneficiary(ies): 

																	
	 Name
	 	  
	 		 		 		 		 	
	 Address
	 	  
	 		 		 		 		 	
		 	  
	 		 		 		 		 	
		 	  
	 		 		 		 		 	
						
	 Social Sec. Nos. of Beneficiary(ies)
	 	  
	 		 		 		 	
	 Relationship(s)
	 		 	  
	 		 		 		 	
	 Date(s) of Birth
	 		 	  
	 		 		 		 	

 I hereby expressly revoke all prior designations of beneficiary(ies), reserve the
right to change the beneficiary(ies) herein designated and agree that the rights of said beneficiary(ies) shall be subject to the terms of the Plan and Agreement. In the event that there is no beneficiary living at the time of my death, I understand
that the payments under the Plan and Agreement will be paid to my estate. 
  

					
	  
	  		  	  

	 Date
	  		  	                                        
 (Signature)

			
		  		  	  

		  		  	                                        
 (Print or type name)

  

 18Form of senior debt security--medium-term note

 Exhibit 4.01 
 LEHMAN BROTHERS HOLDINGS INC. 
 100% Principal Protected Notes Linked to a Basket Consisting of a Foreign Equity Component
and a Currency Component Due July 31, 2010 
  

			
	Number R-1	 	$7,775,000
	ISIN US 524908K254	 	CUSIP 524908K25

 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, on the Maturity Date, 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 Payment at Maturity. THE SECURITIES REPRESENTED HEREBY SHALL NOT BEAR ANY INTEREST. 
 Any amount payable on the Maturity Date hereon 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. 

 2 
  

 Each Basket Index included in the Equity Component of the Basket is a trademark of the sponsor of such
Basket Index and has been licensed for use by the Company. The Securities, which are linked in part to the performance of the Basket Indices, are not sponsored, endorsed, sold or promoted by the sponsors of the Basket Indices and the sponsors of the
Basket Indices make no representation regarding the advisability of investing in the Securities. 
 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. 

 3 
  

 IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC. has caused this instrument to be signed by its
Chairman of the Board, its President, its Vice Chairman, its Chief Financial Officer, one of its Vice Presidents or its Treasurer, by manual or facsimile signature under its corporate seal, attested by its Secretary or one of its Assistant
Secretaries by manual or facsimile signature. 
  

							
	Dated: July 31, 2007	 	LEHMAN BROTHERS HOLDINGS INC.	 	
				
	[SEAL]	 	By:	 	  
	 	
		 		 	Vice President	 	
				
		 	Attest:	 	  
	 	
		 		 	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. 
 CITIBANK, N.A. 
 as Trustee 
  

			
	By:	 	  

		 	    Authorized Officer

 4 
  

 Reverse of Security 
 This Security is one of a duly authorized series of Securities of the Company designated as 100% Principal Protected Notes Linked to a Basket Consisting of a Foreign Equity Component and a Currency Component Due
July 31, 2010 (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 Payment at Maturity, at the request of the Trustee, shall be determined by the Calculation Agent pursuant to the Calculation Agency Agreement. The Trustee shall fully rely on the determination by the Calculation Agent of the Payment at
Maturity and shall have no duty to make any such determination. The Calculation Agent will provide written notice to the Trustee at its New York office, on which notice the Trustee may conclusively rely, of the Payment at Maturity on or prior to
11:00 a.m. on the Business Day preceding the Maturity Date. 
 All calculations with respect to the Ending Basket Level and the Basket
Return (including, without limitation, each Basket Index Return and each Basket Currency Return) will be rounded to the nearest one hundred-thousandth, with five one-millionths rounded upward (e.g., .876545 would be rounded to .87655); all
dollar amounts related to determination of the Additional Amount payable at maturity, if any, per $1,000 principal amount Security will be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545
would be rounded up to .7655); and all dollar amounts paid on the aggregate principal amount of Securities per Holder will be rounded to the nearest cent, with one-half cent rounded upward. 
 This Security is not subject to any sinking fund. 
 If an Event of Default with respect to the Securities shall occur and be continuing, the amounts payable on all of the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. The amount
payable to the Holder hereof upon any acceleration permitted under the Indenture will be equal to $1,000, plus the Additional Amount. The Additional Amount will be calculated as though the date of acceleration were the Maturity Date and the third
Business Day immediately preceding the date of acceleration were the Valuation Date. If the maturity of the Securities is accelerated because of an Event of Default, the Company shall, or shall cause the Calculation Agent to, provide written notice
to the Trustee at its New York office, on which notice the Trustee may conclusively rely, and to The Depository Trust Company of the cash amount due with respect to the Securities as promptly as possible and in no event later than two Business Days
after the date of acceleration. 

 5 
  

 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, if any, or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or
interest thereon, if any, payable in any coin or currency other than that hereinabove provided, without the consent of the holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to
institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is
also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of
all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences, except a default in the payment of interest, if any, 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 whole 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 

 6 
  

 
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. 
 The Company agrees, and by acceptance of beneficial ownership interest in the Securities of this series, each Holder of such Securities will be deemed
to have agreed, for United States federal income tax purposes, (i) to treat the Securities of this series as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the “Contingent Payment Regulations”) and (ii) to be bound by
the Company’s determination of the “comparable yield” and “projected payment schedule,” within the meaning of the Contingent Payment Regulations, with respect to the Securities of this series. The Company has determined that
the comparable yield is an annual rate of 5.365%, compounded semi-annually. Based on the comparable yield, the projected payment schedule per $1,000 Security is $1,172.14 due at maturity. 
 THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
 Definitions 
 Set forth below are definitions of the
terms used in this Security. 
 “Additional Amount”, as calculated by the Calculation Agent, per $1,000 principal amount
Security paid at maturity shall equal the greater of (i) $1,000 × the Basket Return × the Participation Rate and (ii) zero. 
 “Basket” means the basket consisting of the Equity Component and the Currency Component. 
 “Basket
Closing Level”, as calculated by the Calculation Agent, shall be calculated as follows: Ending Equity Component Level + Ending Currency Component Level. 
 “Basket Currency Ending Level”, as calculated by the Calculation Agent, shall be the Reference Exchange Rate on the Valuation Date, observed in accordance with the Settlement Rate Option (subject to
the occurrence of a Disruption Event). 

 7 
  

 “Basket Currency Return”, as calculated by the Calculation Agent, shall be calculated
as follows: 
 Basket Currency Ending Level –Basket Currency Starting Level 
 Basket Currency Starting Level 
 “Basket Currency Starting Level” is the closing level of the Basket Currency on July 26, 2007. The Basket Currency Starting Level for each of the four Basket Currencies is as follows: 
  

			
	Euro	  	1.372500
		
	British pound sterling	  	2.047200
		
	Japanese yen	  	0.008377
		
	Australian dollar	  	0.878000

 “Basket Currency Weighting” means the weighting assigned to each of the Basket
Currencies. The Basket Currency Weightings assigned to the Basket Currencies are as follows: 
  

			
	Euro	  	35.42%
		
	British pound sterling	  	33.97%
		
	Japanese yen	  	21.42%
		
	Australian dollar	  	9.19%

 “Basket Index Ending Level”, as determined by the Calculation Agent, shall be
the Index Level on the Valuation Date (subject to the occurrence of a Disruption Event.) 
 “Basket Index Return”, as
calculated by the Calculation Agent, shall be calculated as follows: 
 Basket Index Ending Level –Basket Index Starting Level

 Basket Index Starting Level 
 “Basket Index Starting Level” means the closing level of the Basket Indices on July 26, 2007. The Basket Index Starting Level for each of the four Basket Indices is as follows: 
  

			
	Dow Jones EURO STOXX 50® Index	  	4,252.92
		
	FTSE 100 Index®	  	6,251.20
		
	Nikkei 225 SM Index	  	17,702.09
		
	S&P®/ASX 200 Index	  	6,258.50

 8 
  

 “Basket Index Weighting” means the weighting assigned to each of the Basket Indices.
The Basket Index Weighting assigned to each of the Basket Indices are as follows: 
  

			
	Dow Jones EURO STOXX 50® Index	  	35.42%
		
	FTSE 100 Index®	  	33.97%
		
	Nikkei 225 SM Index	  	21.42%
		
	S&P®/ASX 200 Index	  	9.19%

 “Basket Return”, as calculated by the Calculation Agent, shall be calculated as
follows: 
 Ending Basket Level –Starting Basket Level; 
 Starting Basket Level 
 provided, however, that if a Disruption Event relating to any or
all of the Basket Indices and/or Basket Currencies is in effect on the Valuation Date, the Calculation Agent will calculate the Basket Return using: 
  

	 	•	 	 for each Basket Index and/or Basket Currency that did not suffer a Disruption Event on the scheduled Valuation Date, the Index Level or the Reference Exchange Rate,
as applicable, on the Valuation Date for such Basket Index and Basket Currency, and 

  

	 	•	 	 for each Basket Index and/or Basket Currency that did suffer a Disruption Event on the scheduled Valuation Date, the Index Level and/or the Reference Exchange Rate,
as applicable, on the immediately succeeding scheduled Index Trading Day or scheduled Currency Business Day, as applicable, on which no Disruption Event occurs or is continuing with respect to the Basket Index and/or the Basket Currency;

 provided, however, that if a Disruption Event has occurred or is continuing with respect to any or all of the Basket Indices
and/or the Basket Currencies on each of the three scheduled Index Trading Days or scheduled Currency Business Days, as applicable, following the scheduled Valuation Date, then (a) such third scheduled Index Trading Day or scheduled Currency
Business Day, as applicable, shall be deemed the Valuation Date for the affected Basket Index or Basket Currency, respectively, and (b) the Calculation Agent will determine, on such day, (i) in the case of a Basket Index, the Basket Index
Ending Level, as set forth under “Market Disruption Event” herein or (ii) in the case of a Basket Currency, the Reference Exchange Rate in accordance with the Fallback Rate Observation Methodology. 
 “Business Day”, notwithstanding any provision in the Indenture, shall mean any day that is not a Saturday, a Sunday or a day on which
banking institutions generally are authorized or obligated by law or executive order to be closed in New York City and that is both (a) a Currency Business Day and (b) an Index Trading Day. 

 9 
  

 “Calculation Agency Agreement” shall mean the Calculation Agency Agreement, dated as of
December 21, 2006 between the Company and the Calculation Agent, as amended from time to time, or any successor calculation agency agreement. 
 “Calculation Agent” shall mean the person that has entered into an agreement with the Company providing for, among other things, the determination of the Payment at Maturity, which term shall, unless the context otherwise
requires, include its successors and assigns. The initial Calculation Agent shall be Lehman Brothers Inc. 
 “Closing Currency
Component Level”, as calculated by the Calculation Agent, shall be calculated as follows: 
 Starting Currency Component Level
× [1 + (the sum of (Basket Currency Return × 
 Basket Currency Weighting) for all Basket Currencies)]. 
 “Closing Equity Component Level”, as calculated by the Calculation Agent, shall be calculated as follows: 
 Starting Equity Component Level × [1 + (the sum of (Basket Index Return × Basket 
 Index Weighting) for all Basket Indices)]. 
 “Company” shall have the
meaning set forth on the face of this Security. 
 “Currency Business Day” as used in any Settlement Rate Option shall mean
any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close (including for dealings in foreign exchange in accordance with
the practice of the foreign exchange market) in New York for both (a) the Basket Currency and (b) the US dollar in accordance with the Reference Exchange Rate. 
 “Currency Component” shall mean, collectively, the four currencies which make up 50% of the Basket. The Currency Component consists of the Euro (EUR), the British pound sterling (GBP), the Japanese
yen (JPY), and the Australian dollar (AUD) (each, a “Basket Currency” and, collectively, “Basket Currencies”). 
 A “Currency Disruption Event” means any of the following events, as determined in good faith by the Calculation Agent: 
 (1)    the occurrence and/or existence of an event on any day that has the effect of preventing or making impossible (x) the conversion of any Basket Currency into USD through customary legal channels; or
(y) the delivery of USD from accounts inside the country for which a Basket Currency is the lawful currency (such jurisdiction with respect to such Basket Currency, the “Basket Currency Jurisdiction”) to accounts outside that
Basket Currency Jurisdiction; 
 (2)    the occurrence of any event causing the Reference Exchange Rate for any Basket
Currency to be split into dual or multiple currency exchange rates; or 

 10 
  

 (3)    a Reference Exchange Rate being unavailable, or the occurrence and/or
existence of any event (other than those set forth in (1) or (2) above) that (i) materially disrupts the market for a Basket Currency or (ii) makes it generally impossible to obtain a Reference Exchange Rate for a Basket Currency
on the scheduled Valuation Date. 
 A “Disruption Event” means, for a Basket Index, a Market Disruption Event and, for a
Basket Currency, a Currency Disruption Event. 
 “Ending Basket Level”, as calculated by the Calculation Agent, shall be
equal to the Basket Closing Level on the Valuation Date. 
 “Ending Currency Component Level”, as calculated by the
Calculation Agent, shall be equal to the Closing Currency Component Level on the Valuation Date. 
 “Ending Equity Component
Level”, as calculated by the Calculation Agent, shall be equal to the Closing Equity Component Level on the Valuation Date. 
 “Equity Component” shall mean, collectively, the four indices which comprise 50% of the Basket to which the Securities are linked. The Equity Component consists of the Dow Jones EURO STOXX 50® Index (SX5E), the FTSE 100 Index® (UKX), the Nikkei 225SM
Index (NKY) and the S&P®/ASX 200 Index (AS51) (each, a “Basket Index” and, collectively, “Basket Indices”). 
 “Fallback Rate Observation Methodology” means that the Reference Exchange Rate in respect of a Basket Currency will equal the noon
buying rate in New York for cable transfers in foreign currencies as announced by the Federal Reserve Bank of New York for customs purposes (the “Noon Buying Rate”) on the Valuation Date. If the Noon Buying Rate is not announced on
that date, the Reference Exchange Rate for such Basket Currency will be calculated on the basis of the arithmetic mean of the applicable spot quotations received by the Calculation Agent at approximately 10:00 a.m., New York City time, on the
Currency Business Day next succeeding the Valuation Date, for the purchase or sale for deposits in the Basket Currency by the New York offices of three leading banks engaged in the interbank market (selected in the sole discretion of the Calculation
Agent) (the “Reference Banks”). If fewer than three Reference Banks provide spot quotations, then the Reference Exchange Rate will be calculated on the basis of the arithmetic mean of the applicable spot quotations received by the
Calculation Agent at approximately 10:00 a.m., New York City time, on the relevant date from two Reference Banks (selected in the sole discretion of the Calculation Agent), for the purchase or sale for deposits in the Basket Currency. If these
spot quotations are available from only one Reference Bank, then the Calculation Agent, in its sole discretion, will determine whether that quotation is reasonable to be used. If no spot quotation is available, then the Reference Exchange Rate for
such Basket Currency will be determined solely by the Calculation Agent in good faith and in a commercially reasonable manner. 
 “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. 

 11 
  

 “Index Closing Level”, as determined by the Calculation Agent, shall mean, with respect
to any Index Trading Day, the closing level of any Basket Index or any Successor Index, as the case may be, at the regular official weekday close of the principal trading session of the Relevant Exchange or market for the Index or the Successor
Index, as the case may be, on such day, or as determined by the Calculation Agent pursuant to the Calculation Agency Agreement as described below under “Discontinuation of a Basket Index; Alteration of Method of Calculation.” 

“Index Level”, with respect to each Index Trading Day, shall be the closing level of the Basket Index, as determined and published
by the respective Index Sponsor (subject to the occurrence of a Disruption Event). 
 “Index Sponsor”, with respect to each
Basket Index shall be as follows: (A) STOXX Limited, a joint venture between Deutsche Börse AG, Dow Jones & Company, Inc. and SWX Swiss Exchange is the publisher of the Dow Jones EURO STOXX 50® Index; (B) FTSE International Limited (“FTSE”) is the publisher of the FTSE 100 Index®; (C) Nikkei Inc. is the publisher of the Nikkei
225SM Index; and (D) Standard & Poor’s Australian Index Committee (“S&P/ASX Committee”) is the publisher of the
S&P®/ASX 200 Index. 
 “Index Trading Day” means a
day, as determined by the Calculation Agent, on which trading is generally conducted on (i) the Relevant Exchanges for securities included in the Basket Indices (or the relevant Successor Indices) and (ii) the exchanges on which futures or
options contracts related to the Basket Indices are traded, other than a day on which trading is scheduled to close prior to its regular weekday closing time. 
 “Market Disruption Event”, with respect to any of the Basket Indices (or any Successor Index) shall mean any of the following events has occurred on any day as determined by the Calculation Agent:

 (1)    a suspension, absence or material limitation of trading of stocks then constituting 20% or more of the level
of the Basket Index (or the relevant successor index) on the relevant exchanges (as defined below) for such securities at any time during the one hour period preceding the close of the principal trading session on such relevant exchange; 

(2)    a breakdown or failure in the price and trade reporting systems of the primary market of any relevant exchange as a result
of which the reported trading prices for stocks then constituting 20% or more of the level of the Basket Index (or the relevant successor index) at any time during the one hour period preceding the close of the principal trading session on such
relevant exchange are materially inaccurate; 
 (3)    a suspension, absence or material limitation of trading on any
major securities exchange for trading in futures or options contracts or exchange traded funds related to a Basket Index (or the relevant successor index) at any time during, or during the one hour period preceding the close of, the principal
trading session on such exchange; or 
 (4)    a decision to permanently discontinue trading in the relevant futures or
options contracts or exchange traded funds; 
 in each case as determined by the Calculation Agent in its sole discretion. 

 12 
  

 For the purpose of determining whether a Market Disruption Event exists at any time, if trading in a
security included in a Basket Index is materially suspended or materially limited at that time, then the relevant percentage contribution of that security to the level of the Basket Index will be based on a comparison of: 
  

	 	•	 	 the portion of the level of the Basket Index attributable to that security relative to 

  

	 	•	 	 the overall level of the Basket Index, 

 in each case
immediately before that suspension or limitation. 
 For purposes of determining whether a market disruption event has occurred: 

(1)    a limitation on the hours or number of days of trading will not constitute a market disruption event if it results from an
announced change in the regular business hours of the relevant exchange or market; 
 (2)    limitations pursuant to the
rules of any relevant exchange similar to NYSE Rule 80B (or any applicable rule or regulation enacted or promulgated by any other self-regulatory organization or any government agency of scope similar to NYSE Rule 80B as determined by the
Calculation Agent in its sole discretion) on trading during significant market fluctuations will constitute a suspension, absence or material limitation of trading; 
 (3)    a suspension of trading in futures or options contracts on the Basket Index by the primary securities market trading in such contracts by reason of: 
 (A)    a price change exceeding limits set by such exchange or market, 
 (B)    an imbalance of orders relating to such contracts, or 
 (C)    a disparity in bid and ask quotes relating to such contracts 
 will, in each such case, constitute a suspension, absence or material limitation of trading in futures or options contracts related to the Basket Index; and 
 (4)    a suspension, absence or material limitation of trading on any relevant exchange or on the primary market on which futures or
options contracts related to the Basket Index are traded will not include any time when such market is itself closed for trading under ordinary circumstances. 
 “Maturity Date” shall mean July 31, 2010, unless that day is not a Business Day, in which case the amount equal to the Payment at Maturity that would otherwise be made on the scheduled Maturity
Date will instead be due on the next succeeding Business Day following such scheduled Maturity Date, with the same effect as if paid on the scheduled Maturity Date; provided, however, that if due to a non-Business Day or a Disruption
Event, the Valuation Date is postponed so that it falls less than three Business Days prior to the scheduled Maturity Date, the Maturity Date will be the third Business Day following the Valuation Date, as postponed. 

 13 
  

 “NYSE” shall mean The New York Stock Exchange, Inc. 
 “Participation Rate” shall be equal to 135%. 
 “Payment at Maturity”, as calculated by the Calculation Agent, shall equal a cash payment per $1,000 principal amount Security of $1,000 plus the Additional Amount (which may be zero). 
 “Place of Payment” shall mean the place or places where the Payment at Maturity on the Securities is payable. 
 “Pricing Date” shall mean July 26, 2007. 
 “Reference Exchange Rate”, calculated by the Calculation Agent, shall be calculated as follows with reference to the listed Reuters page: 
  

			
	Euro	  	Spot rate on 1FED
		
	British pound sterling	  	Spot rate on 1FED
		
	Japanese yen	  	One divided by spot rate on 1FED
		
	Australian dollar	  	Spot rate on 1FEE

 “Relevant Exchange” shall mean, for any security (or any combination thereof)
then included in any Basket Index or any Successor Index, the primary exchange, quotation system (which includes bulletin board services) or other market of trading for such security. 
 “scheduled Currency Business Day” is a day that is or, in the judgment of the Calculation Agent, should have been, an Currency Trading
Day. 
 “scheduled Index Trading Day” is a day that is or, in the judgment of the Calculation Agent, should have been, an
Index Trading Day. 
 “Securities” shall have the meaning set forth on the reverse of this Security. 
 “Settlement Rate Option” means, for a Basket Currency, the spot rate for the reference currency on the relevant Valuation Date observed
as per the Settlement Rate Option set forth in the following table. The screen or time of observation indicated in relation to any Settlement Rate Option set forth in the following table shall be deemed to refer to such screen or time of observation
as modified or amended from time to time, or to any substitute screen thereto as determined by the Calculation Agent. 

 14 
  

							
	 Basket Currency
	  	 Reuters Screen
Reference
	  	 Description
	  	 Principal Financial
Center

	Euro	  	1FED	  	The U.S. Dollar/Euro official fixing rate, expressed as the amount of U.S. Dollars per one Euro, for settlement in two Business Days reported by the Federal Reserve Bank of New York which
appears on Reuters Screen 1FED to the right of the caption “EUR” at approximately 10:00 a.m., New York time, on the relevant Valuation Date.	  	TARGET
				
	British pound sterling	  	1FED	  	The U.S. Dollar/Sterling official fixing rate, expressed as the amount of U.S. Dollars per one Sterling, for settlement in two Business Days reported by the Federal Reserve Bank of New York
which appears on Reuters Screen 1FED to the right of the caption “GBP” at approximately 10:00 a.m., New York time, on the relevant Valuation Date.	  	London
				
	Japanese yen	  	1FED	  	The Yen/U.S. Dollar official fixing rate, expressed as the amount of Japanese Yen per one U.S. Dollar, for settlement in two Business Days reported by the Federal Reserve Bank of New York which
appears on Reuters Screen 1FED to the right of the caption “JPY” at approximately 10:00 a.m., New York time, on the relevant Valuation Date.	  	Tokyo
				
	Australian dollar	  	1FEE	  	The U.S. Dollar/Australian Dollar official fixing rate, expressed as the amount of U.S. Dollars per one Australian Dollar, for settlement in two Business Days reported by the Federal Reserve
Bank of New York which appears on Reuters Screen 1FEE to the right of the caption “AUD” at approximately 12:00 p.m., New York time, on the relevant Valuation Date.	  	 Sydney and
 Melbourne

 “Starting Basket Level” shall be set equal to 1,000 on the Pricing Date.

 “Starting Currency Component Level” shall be equal to 500 on the Pricing Date. 
 “Starting Equity Component Level” shall be equal to 500 on the Pricing Date. 
 “Successor Index” shall have the meaning specified under “Discontinuation of a Basket Index; Alteration of Method of
Calculation” with respect to each Basket Index. 
 “Trustee” shall have the meaning set forth on the reverse of this
Security. 
 “Valuation Date” shall mean July 28, 2010, unless another date is deemed the Valuation Date in accordance
with the terms of this Security. 
 All terms used but not defined in this Security are used herein as defined in the Calculation Agency
Agreement or the Indenture. 

 15 
  

 Calculation Agent 
 The Calculation Agent will determine, among other things, the Ending Basket Level, the Basket Return, the Ending Equity Component Level, the Ending Currency Component Level, the Additional Amount, if any, and the
amount that we will pay you at maturity, as well as whether the Ending Basket Level is equal to or greater than the Starting Basket Level. The Calculation Agent will also be responsible for determining whether a Disruption Event has occurred,
whether any of the Basket Indices has been discontinued, whether there has been a material change in the method of calculation of any of the Basket Indices. All calculations, determinations and adjustments made by the Calculation Agent will be at
the sole discretion of the Calculation Agent and will, in the absence of manifest error, be conclusive for all purposes and binding on Holders and on the Company. The Company may appoint a different Calculation Agent from time to time after the date
of the original issue of the Securities without the Holders’ consent and without notifying Holders. 
 Discontinuation of a Basket Index; Alteration
of Method of Calculation 
 As used herein, “Closing Price” of a security, on any particular day, means the last reported
sales price for that security on the relevant exchange at the scheduled weekday closing time of the regular trading session of the Relevant Exchange. If, however, the security is not listed or traded on a bulletin board, then the Closing Price of
the security will be determined using the average execution price per share that an affiliate of Lehman Brothers Holdings pays or receives upon the purchase or sale of the security used to hedge Lehman Brothers Holdings’ obligations under the
Securities. 
 Dow Jones EURO STOXX 50® Index 
 STOXX Limited has no obligation to continue to publish the Dow Jones EURO STOXX 50 Index, and may discontinue publication of the Dow Jones EURO STOXX 50
Index at any time in its sole discretion. If STOXX Limited discontinues publication of the Dow Jones EURO STOXX 50 Index and STOXX Limited or another entity publishes a successor or substitute index that the Calculation Agent determines, in its sole
discretion, to be comparable to the discontinued Dow Jones EURO STOXX 50 Index (such index being referred to herein as a “EURO STOXX 50 Successor Index”), then any Index Closing Level will be determined by reference to the level of
such EURO STOXX 50 Successor Index at the close of trading on the relevant exchange or market for the EURO STOXX 50 Successor Index on each relevant Valuation Date, or other relevant date or dates as set forth herein. 
 Upon any selection by the Calculation Agent of a EURO STOXX 50 Successor Index, the Calculation Agent will cause written notice thereof to be promptly
furnished to the trustee, to us and to the holders of the Securities. 
 If STOXX Limited discontinues publication of the Dow Jones EURO
STOXX 50 Index prior to, and such discontinuance is continuing on a Valuation Date or other relevant date or dates as set forth in the relevant terms supplement and the Calculation Agent determines, in its sole discretion, that no EURO STOXX 50
Successor Index is available at such time, or the Calculation Agent has previously selected a EURO STOXX 50 Successor Index and publication 

 16 
  

 
of such EURO STOXX 50 Successor Index is discontinued prior to, and such discontinuation is continuing on, such Basket Valuation Date, Observation Date,
Averaging Date, Review Date or other relevant date, or if STOXX Limited (or the publisher of any Dow Jones EURO STOXX 50 Successor Index) fails to calculate and publish a closing level for the Dow Jones EURO STOXX 50 Index (or any EURO STOXX 50
Successor Index) on any date when it would ordinarily do so in accordance with its customary practice, then the Calculation Agent will determine the Index Closing Level for such date. The Index Closing Level will be computed by the Calculation Agent
in accordance with the formula for and method of calculating the Dow Jones EURO STOXX 50 Index or EURO STOXX 50 Successor Index, as applicable, last in effect prior to such discontinuation or failure to calculate or publish a closing level for the
index, using the Closing Price (or, if trading in the relevant securities has been materially suspended or materially limited, its good faith estimate of the Closing Price that would have prevailed but for such suspension or limitation) at the close
of the principal trading session on such date of each security most recently comprising the Dow Jones EURO STOXX 50 Index or EURO STOXX 50 Successor Index, as applicable. Notwithstanding these alternative arrangements, discontinuation of the
publication or failure to calculate or publish the closing level of the Dow Jones EURO STOXX 50 Index may adversely affect the value of the Securities. 
 If at any time the method of calculating the Dow Jones EURO STOXX 50 Index or a EURO STOXX 50 Successor Index, or the level thereof, is changed in a material respect, or if the Dow Jones EURO STOXX 50 Index or a EURO
STOXX 50 Successor Index is in any other way modified so that the Dow Jones EURO STOXX 50 Index or such EURO STOXX 50 Successor Index does not, in the opinion of the Calculation Agent, fairly represent the level of the Dow Jones EURO STOXX 50 Index
or such EURO STOXX 50 Successor Index had such changes or modifications not been made, then the Calculation Agent will, at the close of business in New York City on each date on which the Dow Jones EURO STOXX 50 Index Closing Level is to be
determined, make such calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a level of a stock index comparable to the Dow Jones EURO STOXX 50 Index or such EURO STOXX 50
Successor Index, as the case may be, as if such changes or modifications had not been made, and the Calculation Agent will calculate the Index Closing Level with reference to the Dow Jones EURO STOXX 50 Index or such EURO STOXX 50 Successor Index,
as adjusted. Accordingly, if the method of calculating the Dow Jones EURO STOXX 50 Index or a EURO STOXX 50 Successor Index is modified so that the level of the Dow Jones EURO STOXX 50 Index or such EURO STOXX 50 Successor Index is a fraction of
what it would have been if there had been no such modification (e.g., due to a split in the Dow Jones EURO STOXX 50 Index), then the Calculation Agent will adjust its calculation of the Dow Jones EURO STOXX 50 Index or such EURO STOXX 50 Successor
Index in order to arrive at a level of the Dow Jones EURO STOXX 50 Index or such EURO STOXX 50 Successor Index as if there had been no such modification (e.g., as if such split had not occurred). 
 FTSE 100 Index® 
 FTSE has no obligation to continue to publish, and may discontinue the publication of, the FTSE 100 Index. If FTSE discontinues publication of the FTSE
100 Index and FTSE or another entity publishes a successor or substitute index that the Calculation Agent 

 17 
  

 
determines, in its sole discretion, to be comparable to the discontinued FTSE 100 Index (such index being referred to herein as a “FTSE 100 Successor
Index”), then any Index Closing Level will be determined by reference to the level of such FTSE 100 Successor Index at the close of trading on the relevant exchange or market for the FTSE 100 Successor Index on each relevant Valuation Date
or other relevant date or dates as set forth herein. 
 Upon any selection by the Calculation Agent of a FTSE 100 Successor Index, the
Calculation Agent will cause written notice thereof to be promptly furnished to the trustee, to us and to the holders of the Securities. 
 If FTSE discontinues publication of the FTSE 100 Index prior to, and such discontinuance is continuing on a Valuation Date or other relevant date or dates as set forth in the relevant terms supplement and the Calculation Agent determines,
in its sole discretion, that no FTSE 100 Successor Index is available at such time, or the Calculation Agent has previously selected an FTSE 100 Successor Index and publication of such FTSE 100 Successor Index is discontinued prior to, and such
discontinuation is continuing on such Basket Valuation Date, Observation Date, Averaging Date, Review Date or other relevant date, or if FTSE (or the publisher of any FTSE 100 Successor Index) fails to calculate and publish a closing level for the
FTSE 100 Index (or any FTSE 100 Successor Index) on any date when it would ordinarily do so in accordance with its customary practice, then the Calculation Agent will determine the Index Closing Level on such date. The Index Closing Level will be
computed by the Calculation Agent in accordance with the formula for and method of calculating the FTSE 100 Index or FTSE successor Index, as applicable, last in effect prior to such discontinuance or failure to calculate or publish a closing level
for the index, using the Closing Price (or, if trading in the relevant securities has been materially suspended or materially limited, its good faith estimate of the Closing Price that would have prevailed but for such suspension or limitation) at
the close of the principal trading session on such date of each security most recently comprising the FTSE 100 Index or FTSE 100 Successor Index, as applicable. Notwithstanding these alternative arrangements, discontinuance of the publication or
failure to calculate or publish the closing level of the FTSE 100 Index may adversely affect the value of the Securities. 
 If at any time
the method of calculating the FTSE 100 Index or a FTSE 100 Successor Index, or the level thereof, is changed in a material respect, or if the FTSE 100 Index or a FTSE 100 Successor Index is in any other way modified so that the FTSE 100 Index or
such FTSE 100 Successor Index does not, in the opinion of the Calculation Agent, fairly represent the level of the FTSE 100 Index or such FTSE 100 Successor Index had such changes or modifications not been made, then the Calculation Agent will, at
the close of business in New York City on each date on which the FTSE 100 Index Closing Level is to be determined, make such calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at
a level of a stock index comparable to the FTSE 100 Index or such FTSE 100 Successor Index, as the case may be, as if such changes or modifications had not been made, and the Calculation Agent will calculate the Index Closing Level with reference to
the FTSE 100 Index or such FTSE 100 Successor Index, as adjusted. Accordingly, if the method of calculating the FTSE 100 Index or a FTSE 100 Successor Index is modified so that the level of such FTSE 100 Index or FTSE or Successor Index is a
fraction of what it would have been if there had been no such modification (e.g., due to a split in the FTSE 100 Index), then the 

 18 
  

 
Calculation Agent will adjust such FTSE 100 Index in order to arrive at a level of the FTSE 100 Index or such FTSE 100 Successor Index as if there had been
no such modification (e.g., as if such split had not occurred). 
 Nikkei 225 SM
Index 
 Nikkei Inc. has no obligation to continue to publish the Nikkei
225 Index, and may discontinue publication of the Nikkei 225 Index at any time in its sole discretion. If Nikkei Inc. discontinues publication of the Nikkei 225 Index and Nikkei Inc. or another entity publishes a successor or substitute index that
the Calculation Agent determines, in its sole discretion, to be comparable to the discontinued Index (such index being referred to herein as a “Nikkei 225 Successor Index”), then any Index Closing Level will be determined by
reference to the level of such Nikkei 225 Successor Index at the close of trading on the TSE (2nd session) or the relevant exchange or market for the Nikkei 225 Successor Index on each relevant Valuation Date or other relevant date or dates as set
forth herein. 
 Upon any selection by the Calculation Agent of a Nikkei 225 Successor Index, the Calculation Agent will cause written
notice thereof to be promptly furnished to the trustee, to us and to the holders of the Securities. 
 If Nikkei Inc. discontinues
publication of the Nikkei 225 Index prior to, and such discontinuation is continuing on a Valuation Date or other relevant date as set forth in the relevant terms supplement and the Calculation Agent determines, in its sole discretion, that no
Nikkei 225 Successor Index is available at such time, or the Calculation Agent has previously selected a Nikkei 225 Successor Index and publication of such Nikkei 225 Successor Index is discontinued prior to, and such discontinuation is continuing
on, such Basket Valuation Date, Observation Date, Averaging Date, Review Date or other relevant date, or if Nikkei Inc. (or the publisher of any Nikkei 225 Successor Index) fails to calculate and publish a closing level for the Nikkei 225 Index (or
any Nikkei 225 Successor Index) on any date when it would ordinarily do so in accordance with its customary practice, then the Calculation Agent will determine the Index Closing Level for such date. The Index Closing Level will be computed by the
Calculation Agent in accordance with the formula for and method of calculating the Nikkei 225 Index or Nikkei 225 Successor Index, as applicable, last in effect prior to such discontinuation or failure to calculate or publish a closing level for the
index, using the Closing Price (or, if trading in the relevant securities has been materially suspended or materially limited, its good faith estimate of the Closing Price that would have prevailed but for such suspension or limitation) at the close
of the principal trading session on such date of each security most recently composing the Nikkei 225 Index or Nikkei 225 Successor Index, as applicable. Notwithstanding these alternative arrangements, discontinuation of the publication or failure
to calculate or publish the closing level of the Nikkei 225 Index may adversely affect the value of the Securities. 
 If at any time the
method of calculating the Nikkei 225 Index or a Nikkei 225 Successor Index, or the level thereof, is changed in a material respect, or if the Nikkei 225 Index or a Nikkei 225 Successor Index is in any other way modified so that the Nikkei 225 Index
or such Nikkei 225 Successor Index does not, in the opinion of the Calculation Agent, fairly represent the level of the Nikkei 225 Index or such Nikkei 225 Successor Index had such 

 19 
  

 
changes or modifications not been made, then the Calculation Agent will, at the close of business in New York City on each date on which the Nikkei 225 Index
Closing Level is to be determined, make such calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a level of a stock index comparable to the Nikkei 225 Index or such Nikkei 225
Successor Index, as the case may be, as if such changes or modifications had not been made, and the Calculation Agent will calculate the Index Closing Level with reference to the Nikkei 225 Index or such Nikkei 225 Successor Index, as adjusted.
Accordingly, if the method of calculating the Nikkei 225 Index or a Nikkei 225 Successor Index is modified so that the level of the Nikkei 225 Index or such Nikkei 225 Successor Index is a fraction of what it would have been if there had been no
such modification (e.g., due to a split in the Nikkei 225 Index), then the Calculation Agent will adjust its calculation of the Nikkei 225 Index or such Nikkei 225 Successor Index in order to arrive at a level of the Nikkei 225 Index or such Nikkei
225 Successor Index as if there had been no such modification (e.g., as if such split had not occurred). 
 S&P®/ASX 200 Index 
 The Standard & Poor’s Australian Index
Committee has no obligation to continue to publish, and may discontinue the publication of, the S&P/ASX 200 Index. If the Standard & Poor’s Australian Index Committee discontinues publication of the S&P/ASX 200 Index and
Standard & Poor’s Australian Index Committee or another entity publishes a successor or substitute index that the Calculation Agent determines, in its sole discretion, to be comparable to the discontinued S&P/ASX 200 Index (such
index being referred to herein as a “S&P/ASX 200 Index Successor Index”), then any Index Closing Level will be determined by reference to the level of such S&P/ASX 200 Index Successor Index at the close of trading on the
relevant exchange or market for the S&P/ASX 200 Index Successor Index on each relevant Valuation Date or other relevant date or dates as set forth herein. 
 Upon any selection by the Calculation Agent of a S&P/ASX 200 Index Successor Index, the Calculation Agent will cause written notice thereof to be promptly furnished to the trustee, to us and to the holders of the
Securities. 
 If the Standard & Poor’s Australian Index Committee discontinues publication of the S&P/ASX 200 Index
Successor Index prior to, and such discontinuance is continuing on a Valuation Date or other relevant date or dates as set forth in the relevant terms supplement and the Calculation Agent determines, in its sole discretion, that no S&P/ASX 200
Index Successor Index Successor Index is available at such time, or the Calculation Agent has previously selected an S&P/ASX 200 Index Successor Index and publication of such S&P/ASX 200 Index Successor Index Successor Index is discontinued
prior to, and such discontinuation is continuing on such Basket Valuation Date, Observation Date, Averaging Date, Review Date or other relevant date, or if the Standard & Poor’s Australian Index Committee (or the publisher of any
S&P/ASX 200 Index Successor Index) fails to calculate and publish a closing level for the S&P/ASX 200 Index (or any S&P/ASX 200 Index Successor Index) on any date when it would ordinarily do so in accordance with its customary practice,
then the Calculation Agent will determine the Index Closing Level on such date. The Index Closing Level will be computed by the Calculation Agent in accordance with the formula for and method of calculating the S&P/ASX 200 Index or 

 20 
  

 
S&P/ASX 200 Index successor Index, as applicable, last in effect prior to such discontinuance or failure to calculate or publish a closing level for the
index, using the Closing Price (or, if trading in the relevant securities has been materially suspended or materially limited, its good faith estimate of the Closing Price that would have prevailed but for such suspension or limitation) at the close
of the principal trading session on such date of each security most recently comprising the S&P/ASX 200 Index or S&P/ASX 200 Index Successor Index, as applicable. Notwithstanding these alternative arrangements, discontinuance of the
publication or failure to calculate or publish the closing level of the S&P/ASX 200 Index may adversely affect the value of the Securities. 
 If at any time the method of calculating the S&P/ASX 200 Index or a S&P/ASX 200 Index Successor Index, or the level thereof, is changed in a material respect, or if the S&P/ASX 200 Index or a S&P/ASX 200 Index Successor
Index is in any other way modified so that the S&P/ASX 200 Index or such S&P/ASX 200 Index Successor Index does not, in the opinion of the Calculation Agent, fairly represent the level of the S&P/ASX 200 Index or such S&P/ASX 200
Index Successor Index had such changes or modifications not been made, then the Calculation Agent will, at the close of business in New York City on each date on which the S&P/ASX 200 Index Closing Level is to be determined, make such
calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a level of a stock index comparable to the S&P/ASX 200 Index or such S&P/ASX 200 Index Successor Index, as the case
may be, as if such changes or modifications had not been made, and the Calculation Agent will calculate the Index Closing Level with reference to the S&P/ASX 200 Index or such S&P/ASX 200 Index Successor Index, as adjusted. Accordingly, if
the method of calculating the S&P/ASX 200 Index or a S&P/ASX 200 Index Successor Index is modified so that the level of such S&P/ASX 200 Index or S&P/ASX 200 Index or Successor Index is a fraction of what it would have been if there
had been no such modification (e.g., due to a split in the S&P/ASX 200 Index), then the Calculation Agent will adjust such S&P/ASX 200 Index in order to arrive at a level of the S&P/ASX 200 Index or such S&P/ASX 200 Index Successor
Index as if there had been no such modification (e.g., as if such split had not occurred). 

 21 
  

 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: 
  

							
	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 tenants in common	    		  	( State)

 Additional abbreviations may also be used though not in the above list. 
                                       
                   
 FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto 
 PLEASE INSERT SOCIAL SECURITY OR OTHER 
 IDENTIFYING NUMBER OF ASSIGNEE 
  

			
	 	 	
	 	 	

  
  
  

	
	 

 (Name and Address of Assignee, including zip code, must be printed or typewritten.) 
  
  
  

	
	 

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

	
	 

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

 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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}]]