Document:

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                                                                    EXHIBIT 4.01

                          LEHMAN BROTHERS HOLDINGS INC.

                   10 Uncommon Values(R)Index RANGERS PLUS(SM),
      Risk AdjustiNG Equity Range Securities PLUS(SM) Notes Due July 3, 2003

Number R-1                                         Principal Amount: $20,000,000
                                                               CUSIP 524908 DM 9

See Reverse for Certain Definitions

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO SUCH DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO LEHMAN BROTHERS HOLDINGS INC. OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

                  LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized
and existing under the laws of the State of Delaware (hereinafter called the
"Company"), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, on the Stated Maturity, in such coin or
currency of the United States of America at the time of payment shall be legal
tender for the payment of public and private debts, for each $1,000 principal
amount of the Securities represented hereby, the amount payable at Stated
Maturity (the "Maturity Payment Amount") shall be the following:

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                                                                               2

         If the Ending Index Level of the 10 Uncommon Values index is greater
than or equal to 100 (the index level of the 10 Uncommon Values index on June
28, 2001), the lesser of:

         (1)      $1,420; and

         (2)      $1,000  x  ENDING INDEX LEVEL
                             ------------------
                                    100

         If the Ending Index Level of the 10 Uncommon Values index is less than
100, the lesser of:

         (1)      $1,000; and

         (2)      $1,000  x  ENDING INDEX LEVEL
                             ------------------
                                    75

                  Any amount payable 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.

                  "10 Uncommon Values" is a registered trademark of, and "Risk
AdjustiNG Equity Range Securities Plus" and "RANGERS PLUS" are service marks of,
Lehman Brothers Inc.

                  This Security shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
the Trustee under the Indenture referred to on the reverse hereof.

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

Dated:   July 3, 2001                      LEHMAN BROTHERS HOLDINGS INC.

                                           By: /s/ Barrett S. Dipaolo
                                               ---------------------------------
                                               Name:  Barrett S. DiPaolo
                                               Title: Vice President

[SEAL]
                                           Attest:  /s/ Cindy Gregoire
                                                   -----------------------------
                                                   Name:  Cindy Gregoire
                                                   Title: Assistant Secretary

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated: July 3, 2001

CITIBANK, N.A.
  as Trustee

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

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                          [Form of Reverse of Security]

This Security is one of a duly authorized series of Securities of the Company
designated as 10 Uncommon Values(R) Index RANGERS PLUS(SM), Risk AdjustiNG
Equity Range Securities PLUS(SM) Notes Due July 3, 2003 (herein called the
"Securities"). The Company may, without the consent of the holders of the
Securities, create and issue additional notes ranking equally with the
Securities and otherwise similar in all respects so that such further notes
shall be consolidated and form a single series with the Securities; provided
that no additional notes can be issued if an Event of Default has occurred
with respect to the Securities. This series of Securities is one of an
indefinite number of series of debt securities of the Company, issued and to
be issued under an indenture, dated as of September 1, 1987, as amended
(herein called the "Indenture"), duly executed and delivered by the Company
and Citibank N.A., as trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities.

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

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

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

                  If an Event of Default with respect to the Securities shall
occur and be continuing, the amounts payable on all of the Securities may be
declared due and payable in the manner and with the effect provided in the
Indenture. The amount payable to the Holder hereof upon any acceleration
permitted under the Indenture will be equal to the Maturity Payment Amount
calculated as though the date of acceleration was the Stated Maturity and the
date three Business Days prior thereto was the Calculation Date.

                  The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than 66"% in aggregate
principal amount of each series of Securities at the time Outstanding to be
affected (each series voting as a class), evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to, or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities of all such series; PROVIDED, HOWEVER, that no such
supplemental indenture shall, among other things, (i) change the fixed maturity
of any Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon or reduce any premium payable on
redemption, or make the principal thereof, or premium, if any, or interest
therein payable in any coin or currency other than that hereinabove provided,
without the consent of the holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right

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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
integral multiple of $1,000.

                  The Company, the Trustee, and any agent of the Company or of
the Trustee may deem and treat the registered holder (the "Holder") hereof as
the absolute owner of this Security (whether or not this Security shall be
overdue and notwithstanding any notation of ownership or other writing hereon),
for the purpose of receiving payment hereof, or on account hereof, and for all
other purposes and neither the Company nor the Trustee nor any agent of the
Company or of the Trustee shall be affected by any notice to the contrary. All
such payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, effectually satisfy and discharge liability for
moneys payable on this Security.

                  No recourse for the payment of the principal of, premium, if
any, or interest on this Security, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

                  The Company intends to treat, and by purchasing this Security,
the holder agrees to treat, for all tax purposes, this Security as a financial
contract for cash settlement, rather than as a debt instrument.
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                                                                               3

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

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

                  "AMEX" shall mean the American Stock Exchange.

                  "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 either the NYSE or the
AMEX is not open for securities trading or commercial banks in New York City are
authorized or required by law or executive order to remain closed.

                  "Calculation Agency Agreement" shall mean the Calculation
Agency Agreement, dated as of July 3, 2001, between the Company and the
Calculation Agent, as amended, modified or supplemented from time to time.

                  "Calculation Agent" shall mean the person that has entered
into an agreement with the Company providing for, among other things, the
determination of the Index Level and the Maturity Payment Amount. The initial
Calculation Agent is Lehman Brothers Inc.

                  "Calculation Date" shall mean the third Business Day before
the Stated Maturity date.

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

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

                  (i) If the Index Security is listed on a United States
            national securities exchange, trading system or is a NASDAQ Stock
            Market, Inc. security, the last reported sale price at the Close of
            Trading, regular way, on such day, on the primary securities
            exchange or trading system registered under the Securities Exchange
            Act of 1934 on

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                                                                               4

            which such Index Security is listed or admitted to trading or NASDAQ
            Stock Market, Inc., as the case may be.

                  (ii) If the Index Security is listed on a non-United States
            securities exchange, trading system (other than a bulletin board) or
            market, the last reported sale price at the Close of Trading,
            regular way, on such day, on the primary exchange, trading system or
            market on which such Index Security is listed or admitted to
            trading, as the case may be. The Closing Price will then be
            converted into U.S. dollars using the Official W.M. Reuters Spot
            Closing Rate.

                  (iii) If the Index Security is not listed on a national
            securities exchange or trading system or is not a NASDAQ Stock
            Market, Inc. security, and is listed or traded on a bulletin board,
            the average execution price that an affiliate of the Company
            receives upon the sale of such Index Security used to hedge the
            Company's obligations for this Security. If such Index Security is
            listed or traded on a non-United States bulletin board, the Closing
            Price will then be converted into U.S. dollars using the Official
            W.M. Reuters Spot Closing Rate.

                  (iv) If a Market Disruption Event has occurred for an Index
            Security on a day on which the Closing Price for such Index Security
            is to be calculated, the Closing Price for such Index Security shall
            initially be determined using the Closing Price for such Index
            Security on the next preceding Trading Day on which a Market
            Disruption Event did not occur. Once the Market Disruption Event has
            ceased, the Closing Price of such Index Security shall then be
            adjusted to equal the Average Execution Price of the Index Security.
            The Rollover Closing Level and the resulting Multipliers shall then
            be recalculated and adjusted accordingly.

                  "Ending Index Level" shall equal the sum of (a) the sum of the
products of the Closing Prices and the applicable Multipliers for each Index
Security for which a Market Disruption Event does not occur on the Calculation
Date, (b) if a Market Disruption Event occurs for an Index Security on the
Calculation Date, the product of the Closing Price for such Index Security and
the Multiplier for such Index Security and (c) any Cash included in the 10
Uncommon Values Index on the Calculation Date.

                  "Index Securities" shall mean the securities included in the
10 Uncommon Values Index from time to time.

                  "Issue Price" shall mean $1,000.

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

                  (i) A suspension, absence or material limitation of trading of
            such Index 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 Index Security is traded
            or, in the case of

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                                                                               5

            an Index Security not listed or quoted in the United States, on the
            primary exchange, trading system or market for such Index 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 an Index Security traded on a bulletin board
            means a suspension, absence or material limitation of trading of
            such Index 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 Index Security, whether by reason
            of movements in price exceeding levels permitted by an exchange,
            trading system or market on which options contracts related to such
            Index Security are traded or otherwise.

                  (iii) Information is unavailable on that date, through a
            recognized system of public dissemination of transaction
            information, for more than two hours of trading or during the
            one-half hour period preceding the Close of Trading, of accurate
            price, volume or related information in respect of such Index
            Security or in respect of options contracts related to such Index
            Security, in each case traded on any major U.S. exchange or trading
            system or in the case of Index 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
            will 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 an
            Index 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 will 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 will 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 will 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
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                  (iv) "Trading systems" include bulletin board services

                  "Multiplier" relating to each Index Security shall mean the
number of shares (including any fractional share expressed as a decimal) of such
Index Security included in the 10 Uncommon Values Index. The Multipliers with
respect to each Index Security shall only be adjusted for certain extraordinary
corporate events as described in the Calculation Agency Agreement.

                  "NYSE" shall mean the New York Stock Exchange.

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

                  "Stated Maturity" shall mean July 3, 2003 or if a Market
Disruption Event occurs on July 3, 2003 (or if July 3, 2003 is not a Business
Day, on the next Business Day on which the Ending Index Level can be calculated)
on the third Business Day after the date that an affiliate of the Company
completes the sale of the Index Security with respect to which such Market
Disruption Event occurred to hedge the Company's obligations under the
Securities.

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

                  "10 Uncommon Values Index" shall mean the group of common
stocks (or the depositary receipts representing such common stocks) of 10
corporations, selected each year by the Investment Policy Committee of Lehman
Brothers Inc. with the assistance of its Equity Research Department, as adjusted
for certain extraordinary corporate events as described in the Calculation
Agency Agreement.

                  All terms used but not defined in this Security are used
herein as defined in the Calculation Agency Agreement or the Indenture.

<PAGE>

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

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

<TABLE>

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

                       Additional abbreviations may also be used though not in
the above list.

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

                     FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

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

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

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

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

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

         Dated:

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

         NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Security in every particular, without
alteration or enlargement or any change whatever.

Signature(s) Guaranteed:

---------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.<PAGE>

                                                                    Exhibit 4.02

                          CALCULATION AGENCY AGREEMENT

                  AGREEMENT, dated as of July 3, 2001, between Lehman Brothers
Holdings Inc. (the "Company") and Lehman Brothers Inc., as Calculation Agent.

                  WHEREAS, the Company has authorized the issuance of up to
$23,000,000 aggregate principal amount of 10 Uncommon Values(R) Index RANGERS
PLUS(SM), Risk AdjustiNG Equity Range Securities PLUS(SM) Notes Due JulY 3,
2003* (the "Securities");

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

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

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

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

                  2. CALCULATIONS AND INFORMATION PROVIDED. 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 Calculation Agent shall determine
the Maturity Payment Amount due at Stated Maturity and notify the Trustee of its
determination. The Calculation Agent shall also be

----------
* "10 Uncommon Values" is a registered trademark of, and "Risk AdjustiNG Equity
Range Securities PLUS" and "RANGERS PLUS" are service marks of, Lehman Brothers
Inc.
<PAGE>

                                                                               2

responsible for (a) the determination of the Index Level on each Calculation
Date, (b) the determination of the Rollover Closing Level of the 10 Uncommon
Values Index for each Twelve-Month Period, (c) determining if any adjustments to
the 10 Uncommon Values Index and/or the Multipliers should be made and (d)
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. In addition, the Calculation Agent shall provide information to the
American Stock Exchange ("AMEX") that is necessary for the AMEX's daily
calculation and dissemination of the level of the 10 Uncommon Values Index if
the AMEX is unable to obtain such information. 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:

                  (i) in acting under this Agreement, the Calculation Agent is
            acting solely as an independent expert and not as agent 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;
<PAGE>

                                                                               3

                  (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 who the
            Calculation Agent reasonably believes to be a duly authorized
            officer or attorney-in-fact of the Company or the Trustee, as the
            case may be;

                  (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 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

<PAGE>

                                                                               4

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

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

                  (d) Any corporation into which the Calculation Agent hereunder
may be merged or converted or any corporation with which the Calculation Agent
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Calculation Agent shall be a party, or any
corporation to which the Calculation Agent shall sell or otherwise

<PAGE>

                                                                               5

transfer all or substantially all of the assets and business of the Calculation
Agent shall be the successor Calculation Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.

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

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

                  9. NOTICES. Any notice required to be given hereunder shall be
delivered in person, sent (unless otherwise specified in this Agreement) by
letter, telex or facsimile transmission or communicated by telephone (confirmed
in a writing dispatched within two Business Days), (a) in the case of the
Company, to it at Three World Financial Center, New York, New York 10285
(facsimile: (212) 526-3772) (telephone: (212) 526-4841), Attention: Legal
Counsel, (b) in the case of the Calculation Agent, to it at Three World
Financial Center, 200 Vesey Street, New York, New York 10285-0600 (facsimile:
(212) 526-2755) (telephone: (212) 526-0900), Attention: Equity Derivatives
Trading and (c) in the case of the Trustee, to it at 111 Wall Street, 5th Floor,
New York, New York 10043 (facsimile: (212) 657-3836) (telephone: (212)
657-7805), Attention: Corporate Trust Department or, in any case, to any other
address or number of which the party receiving notice shall have notified the
party giving such notice in

<PAGE>

                                                                               6

writing. Any notice hereunder given by telex, facsimile or letter shall be
deemed to be served when in the ordinary course of transmission or post, as the
case may be, it would be received.

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

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

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

<PAGE>

                                                                               7

                  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: /s/ Barrett S. Dipaolo
                                                --------------------------------
                                                      Barrett S. DiPaolo
                                                      Vice President

                                             LEHMAN BROTHERS INC.,
                                               as Calculation Agent

                                             By: /s/ Barrett S. Dipaolo
                                                --------------------------------
                                                      Barrett S. DiPaolo
                                                      Vice President

<PAGE>

                                     ANNEX A

         1. 10 UNCOMMON VALUES INDEX.

         Each year, the Investment Policy Committee of Lehman Brothers Inc.,
with the assistance of its Equity Research Department, selects a portfolio of 10
common stocks or other equity securities that it believes are attractive
investments over the year for which they are chosen (the "10 Uncommon Values").

         The "10 Uncommon Values Index" represents an equal dollar-weighted
portfolio of the common stocks or other equity securities of the ten companies
underlying the 10 Uncommon Values for each Twelve-Month Period during the period
beginning on the date of announcement of the 10 Uncommon Values in 2001 and
ending on the Stated Maturity, as adjusted by certain extraordinary corporate
events involving the issuers of the Index Securities as described herein. The
announcement of the ten common stocks that shall make up the 10 Uncommon Values
Index shall be made on or about July 1 (such date of announcement, the
"Announcement Day") of each year preceding the initial issuance of and during
the term of the Securities. Except as set forth below, the Index Securities in
the 10 Uncommon Values Index shall remain constant for each Twelve-Month Period.

         2. DETERMINATION OF THE MATURITY PAYMENT AMOUNT.

         The Calculation Agent shall determine the Ending Index Level and the
Maturity 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 be the following:

         If the Ending Index Level of the 10 Uncommon Values Index is greater
than or equal to 100 (the index level of the 10 Uncommon Values Index on June
28, 2001), the lesser of:

(1)      $1,420; and

(2)      $1,000  x  ENDING INDEX LEVEL
                    ------------------
                           100

         If the Ending Index Level of the 10 Uncommon Values Index is less than
100, the lesser of:

(1)      $1,000; and

(2)      $1,000  x  ENDING INDEX LEVEL
                    ------------------
                           75
<PAGE>

                                                                               9

         3. DETERMINATION OF THE ROLLOVER CLOSING LEVEL OF THE 10 UNCOMMON
VALUES INDEX.

         The Calculation Agent shall determine the Rollover Closing Level of the
10 Uncommon Values Index for each Twelve-Month Period after the Close of Trading
on the Trading Date prior to each Announcement Day (the "Rollover Determination
Date"). The "Rollover Closing Level" shall equal the sum of (a) the sum of the
products of the Closing Prices and the applicable Multipliers for each Index
Security and (b) the Cash Included in the 10 Uncommon Values Index at the
Closing of Trading, in each case on the Rollover Determination Date. The
Rollover Closing Level shall then be assumed to be used to buy, on the ensuing
Announcement Day, equal dollar amounts of the ten common stocks that shall
initially be the Index Securities for the next Twelve-Month Period at each Index
Security's Average Execution Price.

         4. MULTIPLIERS.

         The Multiplier relating to each Index Security is the number of shares
(including fractional shares, expressed as a decimal) of such Index Security
included in the 10 Uncommon Values Index. The Multipliers shall be determined by
the Calculation Agent and shall be based on each Index Security's Average
Execution Price. The number of shares of an Index Security constituting the
"Multiplier" for such Index Security shall equal the number of shares (or
fraction of one share) of such Index Security that, when multiplied by the
Average Execution Price for such Index Security, results in the Index Security
initially accounting on the Announcement Day for 10% of the level of 10 Uncommon
Values Index on an equal dollar-weighted basis. The Multipliers with respect to
each Index Security shall remain constant for the Twelve-Month Period that such
Index Security is part of the 10 Uncommon Values Index unless adjusted for
certain extraordinary corporate events as described below. Each Multiplier shall
be rounded at the Calculation Agent's discretion.

         5. ADJUSTMENTS TO THE MULTIPLIERS AND THE 10 UNCOMMON VALUES INDEX.

         Adjustments to a Multiplier and the 10 Uncommon Values Index shall be
made in the following circumstances. For purposes of these adjustments, except
as noted below, American Depository Receipts ("ADRs") are treated like common
stock if a comparable adjustment to the foreign shares underlying the ADRs is
made pursuant to the terms of the depository agreement for the ADRs or if the
holders of ADRs are entitled to receive property in respect of the underlying
foreign share.

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

         (b) If an Index Security is subject to an extraordinary stock dividend
or extraordinary stock distribution that is given equally to all holders of
shares, then once the Index Security is trading ex-dividend, the Multiplier for
such Index Security shall be increased by the product of

<PAGE>

                                                                              10

the number of shares of such Index Security issued with respect to one share of
such Index Security and the prior Multiplier.

         (c) If the issuer of an Index Security, or if an Index Security is an
ADR, the 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 Index Security shall continue to be included in the 10
Uncommon Values Index so long as the primary exchange, trading system or market
is reporting a market price for the Index Security. If a market price, including
a price on a bulletin board service, is no longer available for an Index
Security, then the value of the Index 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 level of the 10 Uncommon Values Index to compensate for
the deletion of such Index Security.

         (d) If the issuer of an Index Security, or if an Index Security is an
ADR, the issuer of the underlying foreign share, has been subject to a merger or
consolidation and is not the surviving entity and holders of the Index Security
are entitled to receive cash, securities, other property or a combination
thereof in exchange for the Index Security, then the following shall be included
in the 10 Uncommon Values Index:

                  (i) To the extent cash is received, the 10 Uncommon Values
         Index shall include the amount of the cash consideration at the time
         holders are entitled to receive the cash consideration (the "M&A Cash
         Component"), plus accrued interest. Interest shall accrue beginning the
         first London Business Day after the day that holders are entitled to
         receive the cash consideration until the next Announcement Day (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 Index
         Security shall be removed from the 10 Uncommon Values Index and the new
         security shall be added to the 10 Uncommon Values Index as a new Index
         Security. The Multiplier for the new Index Security shall equal the
         product of the last value of the Multiplier of the original Index
         Security and the number of securities of the new Index Security
         exchanged with respect to one share of the original Index 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) are received, the
         Calculation Agent shall determine the "Fair Market Value" of the
         securities or other property received based on the Average Execution
         Price. The 10 Uncommon Values Index shall include an amount of cash
         equal to the product of the Multiplier of the Index Security and the
         Fair Market Value (the "M&A Sale Component"). The 10 Uncommon Values
         Index 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

<PAGE>

                                                                              11

         hedge Holdings' obligations under the Securities until the next
         Announcement Day (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.

         (e) If all of an Index Security of an issuer is converted into or
exchanged for the same or a different number of shares of any class or classes
of common stock other than the Index Security, whether by capital
reorganization, recapitalization or reclassification or otherwise, then, once
the conversion has become effective, the former Index Security shall be removed
from the 10 Uncommon Values Index and the new common stock shall be added to the
10 Uncommon Values Index as a new Index Security. The Multiplier for each new
Index Security shall equal the product of the last value of the Multiplier of
the original Index Security and the number of shares of the new Index Security
issued with respect to one share of the original Index Security.

         (f) If the issuer of an Index Security 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 10 Uncommon
Values Index as a new Index Security. The multiplier for the new Index Security
shall equal the product of the last value of the Multiplier with respect to the
original Index Security and the number of shares of the new Index Security with
respect to one share of the original Index Security.

         (g) If an ADR is no longer listed or admitted to trading on a United
States securities exchange or trading system registered under the Securities
Exchange Act or is no longer a security quoted on the NASDAQ Stock Market, Inc.
then the foreign share underlying the ADR shall be deemed added to the 10
Uncommon Values Index as a new Index Security. The initial Multiplier for that
new Index Security shall equal the last value of the Multiplier for the ADR
multiplied by the number of underlying foreign shares represented by a single
ADR.

         (h) If an Index 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 Index Security, then the 10 Uncommon Values Index
shall include the following:

                  (i) To the extent cash is entitled to be received, the 10
         Uncommon Values Index shall include on each day after the time that the
         Index Security trades ex-dividend until the date the cash consideration
         is entitled to be received, the present value of the cash to be
         received, discounted at a rate equal to LIBOR, with a term beginning
         that day and ending on the date that the cash is entitled to be
         received (the "PV Extraordinary Cash Component"). When the cash
         consideration is received, the PV Extraordinary Cash Component will be
         deleted from the 10 Uncommon Values Index and the 10 Uncommon Values
         Index shall include the amount of the cash consideration (the
         "Extraordinary Cash Component"), plus accrued interest. 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 next Announcement Day (the
         "Extraordinary Cash Component Interest Accrual Period"). Interest shall
         accrue at a

<PAGE>

                                                                              12

         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 10 Uncommon Values Index shall include an amount of cash
         equal to the product of the Multiplier of the Index Security and the
         fair market value (the "Extraordinary Sale Component"). The 10 Uncommon
         Values Index 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 next Announcement Day (the "Extraordinary Sale
         Component Interest Accrual Period"). Interest shall accrue at a rate
         equal to LIBOR with a term corresponding to Extraordinary Sale
         Component Interest Accrual Period.

                  (iii) If similar corporate events occur with respect to the
         issuer of an equity security other than common stock that is included
         in the 10 Uncommon Values Index, adjustments similar to the above will
         be made for that equity security.

         The payment of an ordinary cash dividend by an issuer of an Index
Security from current income or retained earnings shall not result in an
adjustment to the Multiplier.

         No adjustments of any Multiplier of an Index 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.

         6. DETERMINATION OF DAILY LEVEL OF THE 10 UNCOMMON VALUES.

         If the AMEX is unable to obtain certain information necessary for its
daily calculation and dissemination of the level of the 10 Uncommon Values
Index, the Calculation Agent shall provide the necessary information as follows
below.

         In order to determine the value of an Index Security that is listed on
a non-United States exchange, trading system or market (the "Foreign Value"),
the Calculation Agent shall, once per Trading Day, value the Index Security
using the most recent sales price of such Index Security available from the
primary exchange, trading system or market in the Index Security's home market,
quoted as of the Close of Trading.

         In order to convert the Foreign Value into U.S. dollars, the
Calculation Agent shall use the Official W.M. Reuters Spot Closing Rate. If
there are several quotes for the Official W.M. Reuters Spot Closing Rate, 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

<PAGE>

                                                                              13

A.M., New York City time, the Foreign Value shall be determined using the last
available U.S. dollar cross-rate quote before 11:00 A.M., New York City time.

         In order to determine the value of an Index Security that is listed or
quoted on a bulletin board service, the Calculation Agent shall use the average
of the midpoint of the bid and ask prices provided by three market makers in
that Index Security. The Calculation Agent shall obtain the bid and ask prices
promptly upon the opening of trading on that Trading Day at 9:30 A.M., New York
City time or at such other time as the Calculation Agent determines.

         The Calculation Agent shall provide AMEX with the value of the M&A Cash
Component, the M&A Sale Component, the PV Extraordinary Cash Component, the
Extraordinary Cash Component and the Extraordinary Sale Component as soon as
such values are available. The Calculation Agent shall, once per Trading Day,
provide AMEX with the interest accrued on the Cash Included in the 10 Uncommon
Values Index.

         7. DEFINITIONS.

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

                  "ADRs" shall have the meaning assigned thereto in paragraph 5.

                  "AMEX" shall mean the American Stock Exchange.

                  "Announcement Day" shall have the meaning assigned thereto in
paragraph 1.

                  "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" shall mean any day other than a Saturday, a
Sunday or a day on which either the NYSE or the AMEX is not open for securities
trading or commercial banks in New York City 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 Index Level and the Maturity Payment Amount, which term
shall, unless the context otherwise requires, include its successors and
assigns. The initial Calculation Agent is Lehman Brothers Inc.

                  "Calculation Date" shall mean the third Business Day before
the Stated Maturity date.

                  "Cash Included in the 10 Uncommon Values Index" 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.
<PAGE>

                                                                              14

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

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

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

                  (ii) If the Index Security is listed on a non-United States
         securities exchange, trading system (other than a bulletin board) or
         market, the last reported sale price at the Close of Trading, regular
         way, on such day, on the primary exchange, trading system or market on
         which such Index Security is listed 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.

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

                  (iv) If a Market Disruption Event has occurred for an Index
         Security on a day on which the Closing Price for such Index Security is
         to be calculated, the Closing Price for such Index Security shall
         initially be determined using the Closing Price for such Index Security
         on the next preceding Trading Day on which a Market Disruption Event
         did not occur. Once the Market Disruption Event has ceased, the Closing
         Price of such Index Security shall then be adjusted to equal the
         Average Execution Price of the Index Security. The Rollover Closing
         Level and the resulting Multipliers shall then be recalculated and
         adjusted accordingly.

                  "Ending Index Level" shall equal the sum of (a) the sum of the
products of the Closing Prices and the applicable Multipliers for each Index
Security for which a Market Disruption Event does not occur on the Calculation
Date, (b) if a Market Disruption Event occurs for an Index Security on the
Calculation Date, the product of the Closing Price for such Index Security and
the Multiplier for such Index Security and (c) any Cash included in the 10
Uncommon Values Index on the Calculation Date.

                  "Extraordinary Cash Component" shall have the meaning assigned
thereto in paragraph 5(h)(i).
<PAGE>

                                                                              15

                  "Extraordinary Cash Component Interest Accrual Period" shall
have the meaning assigned thereto in paragraph 5(h)(i).

                  "Extraordinary Sale Component" shall have the meaning assigned
thereto in paragraph 5(h)(ii).

                  "Extraordinary Sale Component Interest Accrual Period" shall
have the meaning assigned thereto in paragraph 5(h)(ii).

                  "Foreign Value" shall have the meaning assigned thereto in
paragraph 6.

                  "Index Securities" shall mean the securities included in the
10 Uncommon Values Index from time to time.

                  "Issue Price" shall mean $1,000.

                  "M&A Cash Component" shall have the meaning assigned thereto
in paragraph 5(d)(i).

                  "M&A Cash Component Interest Accrual Period" shall have the
meaning assigned thereto in paragraph 5(d)(i).

                  "M&A Sale Component" shall have the meaning assigned thereto
in paragraph 5(d)(ii).

                  "M&A Sale Component Interest Accrual Period" shall have the
meaning assigned thereto in paragraph 5(d)(ii).

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

                  (i) A suspension, absence or material limitation of trading of
         such Index 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 Index Security is traded or, in the case of an
         Index Security not listed or quoted in the United States, on the
         primary exchange, trading system or market for such Index 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 an Index Security traded on a
         bulletin board means a suspension, absence or material limitation of
         trading of such Index Security for more than two hours or during the
         one hour period preceding 4:00 p.m., New York City time.
<PAGE>

                                                                              16

                  (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 Index Security, whether by reason of
         movements in price exceeding levels permitted by an exchange, trading
         system or market on which options contracts related to such Index
         Security are traded or otherwise.

                  (iii) Information is unavailable on that date, through a
         recognized system of public dissemination of transaction information,
         for more than two hours of trading or during the one-half hour period
         preceding the Close of Trading, of accurate price, volume or related
         information in respect of such Index Security or in respect of options
         contracts related to such Index Security, in each case traded on any
         major U.S. exchange or trading system or in the case of Index
         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 an
         Index Security by a major securities exchange, trading system or market
         by reason of (a) a price change violating limits set by such securities
         market, (b) an imbalance of orders relating to those contracts, or (c)
         a disparity in bid and ask quotes relating to those contracts shall
         constitute a Market Disruption Event notwithstanding that the
         suspension or material limitation is less than two hours;

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

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

                  "Maturity Payment Amount" shall have the meaning assigned
thereto in paragraph 2.

                  "Multiplier" shall have the meaning assigned thereto in
paragraph 4.

                  "NYSE" shall mean the New York Stock Exchange.
<PAGE>

                                                                              17

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

                  "PV Extraordinary Cash Component" shall have the meaning
assigned thereto in paragraph 5(h)(i).

                  "Rollover Closing Level" shall have the meaning assigned
thereto in paragraph 3.

                  "Rollover Determination Date" shall have the meaning assigned
thereto in paragraph 3.

                  "Stated Maturity" shall mean July 3, 2003 or if a Market
Disruption Event occurs on July 3, 2003 (or if July 3, 2003 is not a Business
Day, on the next Business Day on which the Ending Index Level can be
calculated), on the third Business Day after the date that an affiliate of the
Company completes the sale of the Index Security with respect to which such
Market Disruption Event occurred to hedge the Company's obligations under the
securities.

                  "Trading Day" shall mean a day on which trading generally is
conducted on the NYSE, AMEX and NASDAQ Stock Market, Inc. and in the
over-the-counter market for equity securities as determined by the Calculation
Agent.

                  "Twelve-Month Period" shall mean the period beginning on an
Announcement Day and ending (i) in the case of 2001 and 2002, at the Close of
Trading on the Trading Day prior to the next Announcement Day, and (ii) in the
case of 2003, the Stated Maturity.

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