Document:

Exhibit 4A

 

 

DISCLOSURE
DOCUMENT

 

February 11,
2008

 

(This document is
delivered pursuant to Form S-8

 

Part I, and
constitutes part of

 

a prospectus
covering securities

 

that have been
registered under the

 

Securities Act of
1933.)

 

HAEMONETICS
CORPORATION

 

2007 EMPLOYEE
STOCK PURCHASE PLAN

 

 

General Information

 

Haemonetics Corporation,
a Massachusetts corporation, whose principal executive offices are located at
400 Wood Road, Braintree, Massachusetts 
02184, telephone number (617) 848-7100 (the “Company”) has a 2007
Employee Stock Purchase Plan, which was adopted by the Board of Directors on June 12,
2007 and approved by the stockholders on August 1, 2007.  The Plan is intended to provide a means
whereby eligible employees may purchase Common Stock of the Company through
payroll deductions, thereby encouraging employee participation in the Company’s
economic growth through stock ownership, and aligning employee interests with
those of the stockholders of the Company.

 

There are 700,000 shares
of Common Stock available for grant under the Plan.  Shares issued pursuant to the Plan shall be
shares of the Company’s authorized but unissued Common Stock.  The number of shares issuable under the Plan
is subject to appropriate adjustment in the event of a stock split, a
subdivision or consolidation of shares of Common Stock, capital adjustments or
payments of stock dividends or distributions or other increases or decreases in
the outstanding shares of Common Stock effected without receipt of
consideration by the Company.

 

Set forth below is a
summary of the principal provisions of the Plan, which is set forth in full as Exhibit A
to this Prospectus; and this summary is qualified in its entirety by reference
to the Plan.

 

Eligibility

 

All persons employed by
the Company or one of its subsidiaries are eligible to participate in the Plan,
except (i) persons whose customary employment is less than twenty hours
per week or five months or less per year; and (ii) persons who are deemed
for purposes of Section 423(b)(3) of the Code to own stock possessing
5% or more of the total combined voting power or value of all classes of stock
of the Company or a subsidiary.

 

 

 

 

Administration,
Termination and Amendment

 

The Plan is administered
by the Board of Directors or a Stock Purchase Plan Committee appointed from
time to time by the Board of Directors. 
All members of the Committee serve at the discretion of the Board.  The Board of Directors or the Committee, if
one has been appointed, is vested with full authority to make, administer and
interpret such equitable rules and regulations regarding the Plan as it
may deem advisable.  Determinations by
the Board of Directors, or the Committee, as to the interpretation and
operation of the Plan are final and conclusive.

 

The last purchase period
under the Plan ends on October 31, 2017, provided, however, that the Board
of Directors has the right to terminate the Plan at any time.  In the event of the expiration of the Plan or
its termination, all rights then outstanding under the Plan shall automatically
be cancelled and the entire amount credited to the account of each Participant
thereunder shall be refunded to each such Participant.  In addition, the Board of Directors may amend
the Plan at any time without the consent of the Participants, but no such
amendment shall adversely affect rights previously granted under the Plan and
no such amendment (without the approval of the Company’s stockholders)
may:  (a) increase the total number
of shares of Common Stock which may be purchased by all Participants; or (b) change
the class of employees eligible to receive rights under the Plan.  The termination of the Plan is not to be
deemed an action which adversely affects rights previously granted under the
Plan.

 

Additional information
regarding the Plan and its administrators is available upon written or oral
request made to the Company at 400 Wood Road, Braintree, Massachusetts  02184 
(Attention:  Alicia R. Lopez, Vice
President Corporate Affairs) telephone number (617) 848-7100.

 

Operation of the Plan

 

There are two “purchase
periods” in each full calendar year during which the Plan is in effect, one
commencing on November 1 of each calendar year and continuing through April 30
and the second commencing on May 1 of each calendar year and continuing
through October 31 of such calendar year. 
Eligible employees may elect to become Participants in the Plan for a
purchase period by completing a Stock Purchase Agreement prior to the first day
of the purchase period for which the election is made.  The election to participate is effective
until it is revoked.  There is no limit
on the number of purchase periods for which an eligible employee may elect to
become a participant in the Plan.  In the
Stock Purchase Agreement, the participating employee authorizes regular payroll
deductions amounting to such full percentage of the Participant’s basic
compensation as the Participant shall designate.  Such payroll deduction cannot amount to less
than 2% nor more than 15% of the Participant’s basic compensation.

 

All sums deducted from
the basic compensation of Participants will be credited to a stock purchase
account established for each Participant on the books of the Company, but prior
to use of such funds for the purchase of shares of the Company’s Common Stock
in accordance with the Plan, the Company may use such funds for any valid
corporate purpose.  The Company is under
no obligation to pay interest on funds credited to a Participant’s stock
purchase account in any event.  The
purchase price of shares of the Company’s stock under the Plan is the lower of (i) 85%
of the fair market of a share of Common Stock for the first business day of the
relevant 

 

2

 

 

	
  purchase period or
  (ii) 85% of such value on the relevant exercise date. The fair market
  value on a given day is the closing price of a share of Common Stock of the
  Company on the New York Stock Exchange. Each participating employee receives
  a right to purchase shares, effective on the first day of the purchase period
  to purchase shares of Common Stock on the exercise date, which is the last
  business day of the purchase period. The number of shares which a Participant
  may purchase under the right is the quotient of the aggregate payroll
  deductions in the purchase period authorized by each Participant divided by
  the purchase price, but in no event greater than 800 shares per right. No
  employee can be granted a right under the Plan which permits the purchase
  shares under the Plan and any other Internal Revenue Code
  Section 423(b) employee stock purchase plan of the Company or any
  parent or subsidiary to accrue at a rate which exceeds in any one calendar
  year $25,000 of the fair market value of the Common Stock as of the date the
  right to purchase is granted. The Plan defines Basic Compensation as the
  regular rate of salary or wages in effect immediately prior to a purchase
  period, including sales commissions, before any deductions or withholdings,
  but excluding overtime, bonuses and amounts paid in reimbursement for
  expenses.

  

 

 

Each participating
employee automatically is deemed to have exercised his or her right on the
exercise date of the purchase period in which he or she is participating, to
the extent that the balance in the Participant’s account under the Plan is
sufficient to purchase, at the purchase price in effect for the purchase
period, whole shares of the Company’s stock subject to his or her right.  Any balance remaining in the Participant’s
account shall be carried forward and credited for use in the next purchase
period; but if the Participant chooses not to participate in the next purchase
period, such balance is refunded to him or her in cash.  A Participant has a right to cancel
participation in the Plan for a purchase period by delivering a notice of
cancellation to the Company not later than ten days before the exercise date
for such purchase period.  In the event
of such cancellation, the Participant receives in cash the amount credited to
his or her account.  Any Participant who
so withdraws from the Plan may again become a Participant at the start of the
next purchase period.

 

Upon dissolution or
liquidation of the Company or a merger or a consolidation in which the Company
is not the surviving entity, every right outstanding under the Plan shall
terminate and each Participant shall be refunded the sums then in his or her
account.

 

Shares of Common Stock
purchased under the Plan shall be deemed to have been issued at the close of
business on the exercise date, and prior to that date a Participant shall not
have any rights or privileges as a stockholder of the Company with respect to
such shares.  Shares purchased under the
Plan shall be registered either in the Participant’s name, jointly in the names
of the Participant and his spouse, or in the name of the Participant or his
spouse as guardian for their children, as the Participant shall designate in
his Stock Purchase Agreement.  Such
designation may be changed at any time by filing notice with the Company.

 

Upon the Participant’s
death or other termination of employment, his or her participation in the Plan
shall cease and the entire balance credited to his or her account under the
Plan shall be automatically refunded to him or her or (in the event of death)
to the Participant’s designated beneficiary, if any, under a group insurance
plan of the Company covering the Participant, or otherwise to his or her
estate.  Employment is treated as
continuing intact while a Participant is on military leave, sick leave or other
bona fide leave of absence, for up to 90 days or so long as 

 

 

3

 

 

	
  the Participant’s right
  to re-employment is guaranteed, either by statute or contract, if longer than
  90 days.

  
	
   

  

The right to purchase
shares of Common Stock under the Plan is exercisable only by the Participant
during his or her lifetime and is not transferable.  The receipt of a right under the Plan does
not imply any right to continued employment with the Company for any Participant.

 

Tax Effects of Plan
Participation

 

Under the Internal
Revenue Code, an employee incurs no tax liability on the grant of an option to
purchase shares under the Plan nor on the acquisition of the shares upon
automatic exercise of the option.

 

An employee will obtain
favorable tax treatment on the disposition of shares acquired under the Plan if
the shares are held by the employee for at least two years from the first day
of the period in which the shares are purchased (the “Purchase Period”).  Dispositions of the shares after the
expiration of the two year period are called “qualifying dispositions”.  Upon a qualifying disposition, if the amount
realized is greater than the purchase price of the shares, there shall be
included in the employee’s gross income as compensation taxable at ordinary
income rates (and not as capital gain) the lesser of (1) fifteen
percent (15%) of the fair market value of the shares on the first day of the
Purchase Period or (2) the amount by which the fair market value of the
shares at the time of disposition exceeded eighty-five percent (85%) of the
fair market value of the shares on the first day of the Purchase Period.  The basis of the employee’s shares, which is
initially equal to the actual purchase price, is increased by an amount equal
to the amount includable as compensation in his or her gross income.  The excess of the amount realized over the
employee’s increased basis is long term capital gain.

 

Upon a qualifying
disposition, if the amount realized is less than the purchase price, the
employee recognizes no ordinary income and will have a long-term capital loss
equal to the difference between the amount realized and the purchase price.

 

If an employee sells the
shares before the expiration of the required holding period, which is a
disqualifying disposition, he or she realizes ordinary income (compensation) in
the year of the disposition to the extent of the difference between the
purchase price and the fair market value of the shares on the last day of the
Purchase Period.  The basis of the
employee’s shares, which is initially equal to the actual purchase price, is
increased by an amount equal to the amount includable as compensation in his or
her gross income.

 

Any amount realized upon
such disqualifying disposition in excess of the employee’s increased basis in
the shares will be treated as long-term or short-term capital gain, depending
upon the holding period of the shares. 
If the amount realized upon such disqualifying disposition is less than
the employee’s increased basis in the shares, the loss will be treated as
long-term or short-term capital loss, depending upon the holding period of the
shares.

 

No deduction will be
allowed to the Company for federal income tax purposes at the time of the grant
or exercise of an option under the Plan. 
At the time of a disqualifying disposition by an employee, the Company
will be entitled to a deduction for the amount taxable to the 

 

 

4

 

 

	
  employee as ordinary
  income. The Company is not entitled to a deduction for the ordinary income
  realized by an employee upon a qualifying disposition.

  

 

MISCELLANEOUS

 

The Plan is not a
qualified plan under Section 401 of the Internal Revenue Code, and is not
subject to the provisions of the Employee Retirement Income Security Act of
1974 (“ERISA”).

 

No reports with respect
to rights to purchase shares under the Plan are furnished on a regular basis;
however, a Participant will be furnished, free of charge, upon request to the
general counsel of the Company, a report with respect to the amount and status
of the Participant’s account.

 

No person has or may
create a lien on any funds, securities or other property held under the Plan by
reason of the provisions thereof or any contract in connection therewith.

 

RESTRICTIONS ON RESALE

 

The Plan contains no
restrictions upon resale of shares acquired thereunder.

 

Shares acquired (while a
Registration Statement relating to such shares is in effect under the
Securities Act of 1933) under the Plan by persons who are not affiliates of the
Company may be sold by such persons without registration under the 1933 Act,
and without the need to comply with Rule 144 thereunder.  Public resales of shares acquired (while a
Registration Statement relating to such shares is in effect under the 1933 Act)
under the Plan by persons who are affiliates of the Company will be subject to
registration or compliance with the requirements of Rule 144 under the
1933 Act other than the holding period requirement of paragraph (d) of
that Rule.

 

Employees who are
directors or officers of the Company or its subsidiaries may be deemed to be
affiliates of the Company.

 

Incorporation of Certain
Documents By Reference

 

The Company hereby
incorporates by reference into the Section 10(a) Prospectus, of which
this Disclosure Document is a part, the documents listed in (a) through (c) below.  In addition, all documents subsequently filed
by the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934 (prior to the filing of a Post-Effective Amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold) shall be deemed to be incorporated by
reference in this Prospectus and to be a part thereof from the date of filing
of such documents.  Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superceded for purposes of
this prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or is deemed to be
incorporated by reference herein modifies or supercedes such earlier
statement.  Any statement so modified or
superceded shall not be deemed, except as so modified or superceded, to constitute
part of this prospectus.

 

 

5

 

 

(a)                                            The Company’s latest annual report filed
pursuant to Section 13 or 15(d) of the Securities and Exchange Act of
1934 or the latest Prospectus filed pursuant to Rule 424(b) under the
Securities Act of 1933, which contains either directly or by incorporation by
reference, audited financial statements for the Company’s latest fiscal year
for which such statements have been filed.

 

(b)                                           All of the reports filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 since the end of the fiscal
year covered by the annual reports or the Prospectus referred to in (a) above.

 

(c)                                            The description of the Company’s Common
Stock which is contained in the Registration Statement filed by the Company
under the Securities Exchange Act of 1934, including any amendment or report
filed for the purpose of updating such description.

 

These documents, as well
as the Company’s Annual Report to Stockholders for the latest fiscal year, are
available to you, without charge, upon written or oral request made to Alicia
R. Lopez, Vice President Corporate Affairs, at Wood Road, Braintree, MA  02184, telephone (617) 848-7100.

 

 

 

 

6Exhibit 4.01

 

CUSIP
NO. 5252M0AP2

ISIN NO. US5252M0AP29

 

	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT:
  $8,652,000

  
	
  No. R-1

  	
   

  	
   

  

 

LEHMAN BROTHERS HOLDINGS INC.

 

MEDIUM-TERM NOTE, SERIES I

 

NOTES LINKED TO A BASKET OF TEN COMMODITIES AND TWO COMMODITY INDICES

DUE FEBRUARY 7, 2012

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY OR A NOMINEE OF THE DEPOSITORY. 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO
CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR NOTES IN CERTIFICATED FORM (A “CERTIFICATED NOTE”), THIS
GLOBAL 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 THE
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.

 

 

LEHMAN BROTHERS HOLDINGS INC., a corporation duly
organized and existing under the laws of the State of Delaware (herein called
the “Company,” which term includes any successor corporation under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to CEDE & Co., or registered assigns, on the Maturity
Date, an amount equal to the Redemption Amount.

 

The “Maturity Date” is February 7, 2012, or if
such day is not a Business Day, on the next following Business Day.

 

The “Valuation Date” is January 31, 2012, or if
such day is not a Valuation Business Day, the immediately preceding Valuation
Business Day; provided that if a Disruption Event is in effect on the scheduled
Valuation Date, the Valuation Date may be postponed.

 

The “Redemption Amount” for each $1,000 note will be a
single U.S. dollar payment on the Maturity Date equal to:

 

(A)    the sum of $1,000 plus the product of
$1,000 times the Basket Return times the Upside Participation Rate, if the
Final Basket Level is greater than the Initial Basket Level; or

 

(B)    $1,000, if the Final Basket Level is
equal to or less than the Initial Basket Level.

 

The “Component Commodities” and “Commodity Weightings”
are as follows:

 

	
  Component Commodities

  	
   

  	
  Component 

  Weighting

  	
   

  
	
  Light sweet crude oil (“Crude Oil”)

  	
   

  	
  15

  	
  %

  
	
  Henry Hub
  natural gas (“Natural Gas”)

  	
   

  	
  10

  	
  %

  
	
  Reformulated
  gasoline blendstock for oxygen blending (“RBOB Gasoline”)

  	
   

  	
  5

  	
  %

  
	
  No. 2 fuel
  heating oil (“Heating Oil”)

  	
   

  	
  5

  	
  %

  
	
  High Grade
  Primary Aluminium (“Aluminum”)

  	
   

  	
  7

  	
  %

  
	
  Copper – Grade A
  (“Copper”)

  	
   

  	
  7

  	
  %

  
	
  Primary Nickel (“Nickel”)

  	
   

  	
  6

  	
  %

  
	
  Special High Grade Zinc (“Zinc”)

  	
   

  	
  5

  	
  %

  
	
  Standard Lead (“Lead”)

  	
   

  	
  5

  	
  %

  
	
  Gold (“Gold”)

  	
   

  	
  5

  	
  %

  
	
  S&P GSCI
  Livestock Index Excess Return (“GSCI® Livestock”) calculated and
  published by the Index Sponsor, subject to adjustment in accordance with
  Index Adjustment below

  	
   

  	
  10

  	
  %

  

 

2

 

	
  Component Commodities

  	
   

  	
  Component 

  Weighting

  	
   

  
	
  S&P GSCI
  Agriculture Index Excess Return (“GSCI® Agriculture”) calculated and
  published by the Index Sponsor, subject to adjustment in accordance with
  Index Adjustment below

  	
   

  	
  20

  	
  %

  

 

The “Upside Participation Rate” is 104%.

 

The “Basket Return” is a quotient, the numerator of
which is the difference of the Final Basket Level minus the Initial Basket
Level and the denominator of which is the Initial Basket Level, expressed as a
percentage rounded to three decimal places.

 

The “Final Basket Level” is the product of 100 times
the sum of 1 plus the sum of the Weighted Component Commodity Returns.

 

The “Initial Basket Level” is set to 100 on the Trade
Date.

 

The “Trade Date” is January 31, 2008.

 

The “Issue Date” is February 7, 2008.

 

The “Weighted Component Commodity Returns” are, for
each Component Commodity, the product of the Component Weighting times a
quotient, the numerator of which is the difference of the Final Commodity Price
minus the Initial Commodity Price and the denominator of which is the Initial
Commodity Price for such Component Commodity.

 

The “Initial Commodity Prices” for each Component
Commodity are as follows:

 

	
  Component

  Commodity

  	
   

  	
  Initial Commodity Price

  	
   

  
	
  Crude Oil

  	
   

  	
  US$

  	
  91.75

  	
   

  
	
  Natural Gas

  	
   

  	
  US$

  	
  8.0740

  	
   

  
	
  RBOB Gasoline

  	
   

  	
  US$

  	
  2.3091

  	
   

  
	
  Heating Oil

  	
   

  	
  US$

  	
  2.5345

  	
   

  
	
  Aluminum

  	
   

  	
  US$

  	
  2,643.00

  	
   

  
	
  Copper

  	
   

  	
  US$

  	
  7,170.50

  	
   

  
	
  Nickel

  	
   

  	
  US$

  	
  27,550.00

  	
   

  
	
  Zinc

  	
   

  	
  US$

  	
  2,392.00

  	
   

  
	
  Lead

  	
   

  	
  US$

  	
  2,741.50

  	
   

  
	
  Gold

  	
   

  	
  US$

  	
  923.25

  	
   

  
	
  GSCI® Livestock

  	
   

  	
   

  	
  315.4630

  	
   

  
	
  GSCI® Agriculture

  	
   

  	
   

  	
  87.7365

  	
   

  

 

3

 

The “Final Commodity Price” is, for each Component
Commodity, the Commodity Price on the Valuation Date.

 

The “Commodity Price” for each Component Commodity is
as follows:

 

	
  Component 

  Commodity

  	
   

  	
  Commodity
  Price

  
	
  Crude Oil Natural Gas
  RBOB Gasoline Heating Oil

  	
   

  	
  For each of Crude Oil,
  Natural Gas, RBOB Gasoline and Heating Oil, the official settlement price of
  the first nearby month futures contract (or, in the case of the last trading
  day of the first nearby month contract, the second nearby month contract) for
  that Component Commodity, expressed (a) in the case of Crude Oil, as the
  U.S. dollar price per barrel, (b) in the case of Natural Gas, as the
  U.S. dollar price per million British thermal units (Btu), and (c) in
  the case of RBOB Gasoline and Heating Oil, as the U.S. dollar price per
  gallon, in each case as made public by the Relevant Exchange for that
  Component Commodity (subject to the occurrence of a Disruption Event).

  
	
  Aluminum Copper Nickel
  Zinc Lead

  	
   

  	
  For each of Aluminum,
  Copper, Nickel, Zinc and Lead, the official settlement price of that
  Component Commodity for cash delivery, expressed as the U.S. dollar price per
  metric ton of the Component Commodity, as made public by the Relevant
  Exchange for that Component Commodity (subject to the occurrence of a
  Disruption Event).

  

 

4

 

	
  Gold

  	
   

  	
  The official afternoon
  fixing price of Gold, stated in U.S. dollars per troy ounce, as calculated
  and quoted by the London Bullion Market Association (the “LBMA”)
  (subject to the occurrence of a Disruption Event).

  
	
  GSCI® Livestock GSCI®
  Agriculture

  	
   

  	
  For each of GSCI®
  Livestock and GSCI® Agriculture (each an “Index” and collectively the
  “Indices”), the closing level of that Index, as determined and
  published by the Index Sponsor (subject to the occurrence of a Disruption
  Event), rounded to four decimal places.

  

 

The “Relevant
Exchange” for each Component Commodity is as follows:

 

	
  Component

  Commodity

  	
   

  	
  Relevant Exchange

  
	
  Crude Oil

  	
   

  	
  The NYMEX Division, or
  its successor, of the New York Mercantile Exchange, Inc. (“NYMEX”)

  
	
  Natural Gas

  	
   

  	
  NYMEX

  
	
  RBOB Gasoline

  	
   

  	
  NYMEX

  
	
  Heating Oil

  	
   

  	
  NYMEX

  
	
  Aluminum

  	
   

  	
  London Metal Exchange (“LME”)

  
	
  Copper

  	
   

  	
  LME

  
	
  Nickel

  	
   

  	
  LME

  
	
  Zinc

  	
   

  	
  LME

  
	
  Lead

  	
   

  	
  LME

  
	
  Gold

  	
   

  	
  The market in London on
  which members of the LBMA quote prices for the buying and selling of Gold.

  

 

A “Valuation Business Day” is a day, as determined in
good faith by the Calculation Agent, on which (a) the Relevant Exchange
for each Component Commodity and (b) each organized exchange or market of
trading for any Index Contract, is scheduled to be (or, but for the occurrence
of a Disruption Event, would have been) open for trading during its regular 

 

5

 

trading session (notwithstanding the Relevant Exchange or organized
exchange or market, as applicable, closing prior to its scheduled closing
time).

 

The “Index Sponsor” is Standard & Poor’s, a division
of the McGraw-Hill Companies.

 

If a Disruption Event identified in clauses (A), (B) or
(C) below relating to one or more Component Commodities (other than the
Indices) is in effect on the scheduled Valuation Date, the Calculation Agent
will calculate the Final Basket Level using:

 

·                       for each such Component Commodity that
did not suffer a Disruption Event on the scheduled Valuation Date, the Final
Commodity Price for that Component Commodity on the scheduled Valuation Date,
and

 

·                       for each such Component Commodity that
did suffer a Disruption Event on the scheduled Valuation Date, the Final
Commodity Price on the immediately succeeding trading day for such Component
Commodity on which no Disruption Event occurs or is continuing with respect to
such Component Commodity;

 

provided however that if a Disruption Event has occurred or is
continuing with respect to a Component Commodity on each of the three scheduled
trading days following the scheduled Valuation Date, then (a) that third
scheduled trading day shall be deemed the Valuation Date for the affected
Component Commodity; and (b) the Calculation Agent will determine the
Final Commodity Price for the affected Component Commodity on such day in its
sole and absolute discretion taking into account the latest available quotation
for the Commodity Price for the affected Component Commodity and any other
information that in good faith it deems relevant.

 

If a Disruption Event identified in clauses (D) or
(E) below relating to one or more Component Commodities (other than Gold
or the Indices) is in effect on the Valuation Date, the Calculation Agent will
determine the Final Commodity Price for the affected Component Commodity on the
scheduled Valuation Date in its sole and absolute discretion taking into account
the latest available quotation for the Commodity Price for the affected
Component Commodity and any other information that in good faith it deems
relevant.

 

With respect to any Component Commodity that is an
Index, if a Disruption Event relating to one or more futures contracts then
included in the Index or any Successor Index (each such contract, an “Index
Contract”) is in effect on the scheduled Valuation Date, the Calculation Agent
will calculate the Final Commodity Price for such Index or Successor Index in
good faith in accordance with the formula for and method of calculating the
Index or Successor Index last in effect prior to commencement of the Disruption
Event, using:

 

·                       for each Index Contract that did not
suffer a Disruption Event on the scheduled Valuation Date, the settlement price
on the applicable organized exchange or market of trading for such Index
Contract on the scheduled Valuation Date, and

 

·                       for each Index Contract that did suffer a Disruption
Event on the scheduled Valuation Date, the settlement price on the organized
exchange

 

6

 

or market of trading for such Index Contract on the
immediately succeeding trading day on which no Disruption Event occurs or is
continuing with respect to such Index Contract;

 

provided however that if a Disruption Event has occurred or is
continuing with respect to such Index Contract on each of the three scheduled
trading days following the scheduled Valuation Date, then (a) that third
scheduled trading day shall be deemed the Valuation Date for such Index
Contract and (b) the Calculation Agent will determine the price for such
Index Contract on such day in its sole and absolute discretion taking into
account the latest available quotation for the price for such Index Contract
and any other information that in good faith it deems relevant.

 

A “Disruption Event” (a) for a Component
Commodity other than an Index, any of the following events with respect to that
Component Commodity or (b) with respect to an Index any of the following
events with respect to an Index Contract, in each case as determined in good
faith by the Calculation Agent:

 

(A)    the suspension of or material limitation
on trading in the Component Commodity or Index Contract, or futures contracts
or options related to the Component Commodity or Index Contract, on the
Relevant Exchange for that Component Commodity or organized exchange or market
of trading for the Index Contract;

 

(B)    either (i) the failure of trading to
commence, or permanent discontinuance of trading, in the Component Commodity or
Index Contract, or futures contracts or options related to the Component
Commodity or Index Contract, on the Relevant Exchange for that Component
Commodity or organized exchange or market of trading for that Index Contract,
or (ii) the disappearance of, or of trading in, the Component Commodity or
Index Contract;

 

(C)    the failure of the Relevant Exchange for
the Component Commodity or organized exchange or market of trading for that
Index Contract to publish the official daily settlement price of the Component
Commodity or Index Contract for that day (or the information necessary for
determining the settlement price); and

 

solely with respect to Component Commodities other
than Gold or any Index (or any Index Contract then comprising an Index or any
Successor Index),

 

(D)    the occurrence since the Trade Date of a
material change in the content, composition, or constitution of the Component
Commodity; or

 

(E)     the occurrence since the Trade Date of a
material change in the formula for or the method of calculating the settlement
price of the Component Commodity.

 

For the purpose of determining whether a Disruption
Event for a Component Commodity or an Index Contract has occurred:

 

7

 

(1)     a limitation on the hours in a trading
day and/or number of days of trading will not constitute a Disruption Event if
it results from an announced change in the regular business hours of the
Relevant Exchange for the Component Commodity or organized exchange or market
of trading for that Index Contract;

 

(2)     a suspension in trading in a Component
Commodity on the Relevant Exchange for that Component Commodity or in an Index
Contract on the organized exchange or market of trading for that Index Contract
(without taking into account any extended or after-hours trading session), by
reason of a price change reflecting the maximum permitted price change from the
previous trading day’s settlement price will constitute a Disruption Event; and

 

(3)     a suspension of or material limitation on
trading on a Relevant Exchange for a Component Commodity or an organized
exchange or market of trading for an Index Contract will not include any time
when the Relevant Exchange for that Component Commodity or an organized
exchange or market of trading for that Index Contract is closed for trading
under ordinary circumstances.

 

For purposes of calculating the Final Basket Level in
the event of a Disruption Event relating to one or more Component Commodities
or Index Contracts in accordance with the above, “trading day” means a day, as
determined in good faith by the Calculation Agent, on which trading is
generally conducted on the Relevant Exchange applicable to the affected
Component Commodity or on the organized exchange or market of trading for the
affected Index Contract.

 

If an Index Unavailability Event is in effect on the
scheduled Valuation Date (and no Disruption Event is then in effect), the
Calculation Agent will determine the Final Commodity Price for the affected
Index on the Valuation Date in good faith in accordance with the formula for
and method of calculating the Index last in effect prior to commencement of the
Index Unavailability Event, using the closing price for each Index Contract most
recently constituting the Index on the organized exchange or market of trading
for that Index Contract.

 

An “Index Unavailability Event” means that an Index is
not calculated and published by the Index Sponsor or any Successor Index is not
calculated and published by the sponsors thereof.

 

If the Index Sponsor discontinues publication of an
Index and the Index Sponsor 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, a “Successor Index”),
then the Final Commodity Price for such Index will be determined by reference
to the level of such Successor Index at the close of trading on the organized
exchange or market of trading for any futures contract (or any combination
thereof) included in the Successor Index last to close on the Valuation Date;
provided, however, that the Calculation Agent, in its sole discretion, may make
such adjustments as it deems necessary to the level of the Successor Index so
that the level of the Successor Index reflects the same level as that of the
discontinued Index before it was discontinued. 
Upon any selection by the Calculation Agent of a Successor Index,

 

8

 

the Calculation agent will cause written notice thereof to be promptly
furnished to the trustee, to the Issuer and to the holders of the notes.

 

If the Index Sponsor discontinues publication of an
Index prior to, and such discontinuation is continuing on, the Valuation Date,
and the Calculation Agent determines, in its sole discretion, that no Successor
Index is available at such time, then the Calculation Agent will determine the
Final Commodity Price for such Index on the Valuation Date.  The Final Commodity Price for such Index will
be computed by the Calculation Agent in accordance with the formula for and
method of calculating the Index last in effect prior to such discontinuation,
using the settlement prices at the close of trading on the Valuation Date on
the organized exchange or market of trading for any futures contract (or any
combination thereof) then included in the Index (or, if trading in any such
futures contract has been materially suspended or materially limited, its good
faith estimate of the settlement price that would have prevailed but for such
suspension or limitation).

 

If at any time the method of calculating an Index or a
Successor Index, or the level thereof, is, in the good faith judgment of the
Calculation Agent, changed or modified in a material respect, the Calculation
Agent may (but is not obligated to) make such adjustments to the Index or
Successor Index or their respective methods of calculation as, in the good
faith judgment of the Calculation Agent, may be necessary in order to arrive at
a level of a commodity index comparable to the Index or such Successor Index,
as the case may be, as if such changes or modifications had not been made, and
the Calculation Agent will calculate the Final Commodity Price for such Index
or Successor Index with reference to the Index or such Successor Index as
adjusted.  Accordingly, if the method of
calculating the Index or a Successor Index is modified or rebased so that the
level of the Index or Successor Index is a fraction or multiple of what it
would have been if it had not been modified or rebased, then the Calculation
Agent will adjust the level of the Index or Successor Index in order to arrive
at a level of the Index or Successor Index as if it has not been modified or
rebased.

 

The “Calculation Agent” means Lehman Brothers
Commodity Services Inc, the determinations and calculations of which will be
binding absent manifest error.

 

Except as provided below, any Redemption Amount may,
at the option of the Company, be made by check mailed to the person entitled
thereto at such person’s address as it appears on the registry books of the
Company.

 

Payment of any Redemption Amount will be made in
immediately available funds in accordance with the normal procedures of the
Trustee (or any duly appointed Paying Agent).

 

The Company will pay any administrative costs imposed
by banks in making payments in immediately available funds, but any tax,
assessment or governmental charge imposed upon payments hereunder, including,
without limitation, any withholding tax, will be borne by the Holder hereof.

 

References herein to “U.S. dollars” or “U.S.$” or “$”
or “USD” are to the coin or currency of the United States as at the time of
payment is legal tender for the payment of public and private debts.

 

9

 

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

 

This Note 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.

 

10

 

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:  February 7, 2008

 

	
  [SEAL]

  	
   

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Andrew
  M.W. Yeung

  
	
   

  	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Cindy
  Buckholz

  
	
   

  	
   

  	
   

  	
  Title:   Assistant Secretary

  
						

 

 

TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

 

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

 

	
  CITIBANK, N.A.

  
	
  as Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  
				

 

11

 

[REVERSE
OF NOTE]

 

LEHMAN BROTHERS
HOLDINGS INC.

MEDIUM-TERM NOTES,
SERIES I

NOTES LINKED TO A BASKET OF TEN COMMODITIES AND TWO COMMODITY INDICES  

DUE FEBRUARY 7, 2012

 

Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series I, Notes Linked to a Basket of Ten Commodities
and Two Commodity Indices (herein called the “Notes”).  The
Notes are one of an indefinite number of series of debt securities of the
Company (collectively, the “Securities”) issued or issuable under and pursuant
to an indenture dated as of September 1, 1987, as amended and supplemented
(the “Indenture”), duly executed and delivered by the Company and Citibank,
N.A., as Trustee (herein called the “Trustee”), 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 Trustee, the Company and the holders of the Securities.  The separate series of Securities may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption provisions or repurchase rights (if any), may be subject to
different sinking, purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary as in the
Indenture provided.

 

Section 2.  Principal Amount for Indenture Purposes.  For the purpose of determining whether
Holders of the requisite amount of Notes of this series outstanding under the
Indenture have made a demand, given a notice or waiver or taken any other
action, the principal amount of this Note will be deemed to be the principal
amount of this Note then outstanding.

 

Section 3.  Modification and Waivers.  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 the Securities at the
time Outstanding to be affected, 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 Redemption Amount or the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or reduce any
premium or other amount payable on redemption, or make the Redemption Amount or
the principal amount thereof, premium or other amount payable, if any, or
interest thereon payable in any coin or currency other than that herein above
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, on the Redemption
Amount or the principal amount, 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 Note shall be conclusive and binding upon such Holder and upon all future
holders and owners of this Note and any Notes of this series which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes of this series.

 

Section 4.  Obligations Unconditional.  No reference herein to the Indenture and no
provisions of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay any
Redemption Amount on this Note at the place, at the respective times, at the
rate, and in the coin or currency herein prescribed.

 

Section 5.  Defeasance.  The Indenture contains provisions for the
discharge of the Indenture and defeasance at any time of the indebtedness on
this Note upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.

 

Section 6.  Authorized Form and Denominations.  The Notes of this series are issuable in
registered form, without coupons.  Each
Note will be issued initially as either a Global Security or a Certificated
Note, at the option of the Company, in denominations of $1,000 or whole
multiples of $1,000, either at the office or agency to be designated and
maintained by the Company for such purpose in the Borough of Manhattan, New
York City, pursuant to the provisions of the Indenture or at any of such other
offices or agencies as may be designated and maintained by the Company for such
purpose pursuant to the provisions of the Indenture, and in the manner and
subject to the limitations provided in the Indenture, but without the payment
of any service charge, except for any tax or other governmental charges imposed
in connection therewith.  Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, except that Global Securities
will not be exchangeable for Certificated Notes of this series.

 

Section 7.  Registration of Transfer.  As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer, at the Corporate Trust Office or agency in a Place of
Payment for this Note, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar
requiring such written instrument of transfer duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Notes
of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

 

If at any time the
Depository notifies the Company that it is unwilling or unable to continue as
Depository or if at any time the Depository shall no longer be eligible under
the Indenture, the Company shall appoint a successor Depository.  If a successor Depository for the Notes of
this series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
issue, and the Trustee will authenticate and deliver, Notes of this series in
definitive form in an aggregate principal amount equal to the principal amount
of this Note.

 

 

No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.

 

Prior to due presentment of this Note for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the person in whose name this Note is registered as the owner
hereof for all 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.

 

Section 8.  Events of Default.  If an Event of Default with respect to Notes
of this series shall occur and be continuing, the amount that may be declared
due and payable upon any acceleration of the notes will be determined by the
Calculation Agent for the period from and including the Issue Date to but
excluding the date of early repayment and will equal, for each note, the
Redemption Amount, calculated as the date of early repayment were the Maturity
Date. If a bankruptcy proceeding is commenced in respect of Lehman Brothers
Holdings, the claim of the beneficial owner of a note for the period from and
including the Issue Date to but excluding the date of early repayment will be
capped at the Redemption Amount, calculated as though the date of the
commencement of the proceeding were the Maturity Date.

 

Section 9.  No Recourse Against Certain Persons.  No recourse for the payment of the Redemption
Amount 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 Note, 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.

 

Section 10.  Defined
Terms.  All terms used but not
defined in this Note are used herein as defined in the Indenture.

 

Section 11.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

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