Document:

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                                                              Exhibit 4.01

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
TO SALOMON SMITH BARNEY HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), 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.

No. R-1                                              INITIAL PRINCIPAL AMOUNT
CUSIP 79549C 62 6                                    REPRESENTED $[       ]
                                                     representing [      ] ELKS
                                                     ($10 per ELKS)

                       SALOMON SMITH BARNEY HOLDINGS INC.
                Equity Linked Securities (ELKS sm) based upon
        the Common Stock of Texas Instruments Incorporated due [ ], 2003

         Salomon Smith Barney Holdings Inc., a New York corporation (hereinafter
referred to as the "Company", which term includes any successor corporation
under the Indenture herein referred to), for value received and on condition
that this Note is not redeemed by the Company prior to [ ], 2003 (the "Stated
Maturity Date"), hereby promises to pay to CEDE & CO., or its registered
assigns, the Maturity Payment (as defined below), on the Stated Maturity Date.
This Note will bear semi-annual payments of interest, is not subject to any
sinking fund, is not subject to redemption at the option of the Holder thereof
prior to the Stated Maturity Date, and is not subject to the defeasance
provisions of the Indenture.

         Payment of the Maturity Payment with respect to this Note shall be made
upon presentation and surrender of this Note at the corporate trust office of
the Trustee in the Borough of Manhattan, The City and State of New York, in such
coin or currency of the United States as at the time of payment is legal tender
for payment of public and private debts or, if applicable, in the common stock
of Texas Instruments Incorporated ("Texas Instruments").

         This Note is one of the series of Equity Linked Securities based upon
the common stock of Texas Instruments Incorporated due [ ], 2003 (the "ELKS").
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COUPON

         A coupon of $[ ] per ELKS will be paid in cash on [ ], 2002 and a
coupon of $[ ] per ELKS will be paid in cash on [ ], 2003. The [ ], 2002 coupon
will be composed of $[ ] of interest and a partial payment of an option premium
in the amount of $[ ]. The [ ], 2003 coupon will be composed of $[ ] of interest
and a partial payment of an option premium in the amount of $[ ]. Coupon
payments will be payable to the persons in whose names the ELKS are registered
at the close of business on the Business Day preceding each Interest Payment
Date. If an Interest Payment Date falls on a day that is not a Business Day, the
coupon payment to be made on such Interest Payment Date will be made on the next
succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and no additional interest will accrue as a result of
such delayed payment.

         "Business Day" means any day that is not a Saturday, a Sunday or a day
on which the AMEX or banking institutions or trust companies in the City of New
York are authorized or obligated by law or executive order to close.

         The interest portion of the coupon will represent interest accruing at
a rate of [ ]% per annum from [ ], 2002 or from the most recent Interest Payment
Date to which the interest portion of the coupon has been paid or provided for
until maturity. The interest portion of the coupon will be computed on the basis
of a 360-day year of twelve 30-day months.

PAYMENT AT MATURITY

         On the Stated Maturity Date, Holders of the ELKS will receive for each
ELKS the Maturity Payment described below.

DETERMINATION OF THE MATURITY PAYMENT

         The Maturity Payment for each ELKS equals either:

         o       a number of shares of Texas Instruments common stock equal to
                 the Exchange Rate, if the Trading Price of Texas Instruments
                 common stock on any Trading Day after [ ], 2002 up to and
                 including the third Trading Day before the Stated Maturity Date
                 (whether intra-day or at the close of trading on any day) is
                 less than or equal to $[ ] (approximately 70% of the initial
                 share price), or

         o       $10 in cash.

         In lieu of any fractional share of Texas Instruments common stock
otherwise payable in respect of any ELKS, at the Stated Maturity Date, the
Holder of this Note will receive an amount in cash equal to the value of such
fractional share. The number of full shares of Texas Instruments common stock,
and any cash in lieu of a fractional share, to be delivered at the Stated
Maturity Date to the Holder of this Note will be calculated based on the
aggregate number of ELKS held by such Holder.
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         The "Closing Price" of Texas Instruments common stock (or any other
security for which a Closing Price must be determined) on any date of
determination will be (1) if the common stock is listed on a national securities
exchange on that date of determination, the closing sale price or, if no closing
sale price is reported, the last reported sale price on that date on the
principal U.S. exchange on which the common stock is listed or admitted to
trading, (2) if the common stock is not listed on a national securities exchange
on that date of determination, or if the closing sale price or last reported
sale price is not obtainable (even if the common stock is listed or admitted to
trading on such exchange), and the common stock is quoted on the Nasdaq National
Market, the closing sale price or, if no closing sale price is reported, the
last reported sale price on that date as reported on the Nasdaq, and (3) if the
common stock is not quoted on the Nasdaq on that date of determination or, if
the closing sale price or last reported sale price is not obtainable (even if
the common stock is quoted on the Nasdaq), the last quoted bid price for the
common stock in the over-the-counter market on that date as reported by the OTC
Bulletin Board, the National Quotation Bureau or a similar organization. If no
closing sale price or last reported sale price is available pursuant to clauses
(1), (2) or (3) of the preceding sentence or if there is a Market Disruption
Event, the Closing Price on any date of determination will be the arithmetic
mean, as determined by the calculation agent, of the bid prices of the common
stock obtained from as many dealers in such stock (which may include Salomon
Smith Barney Inc. or any of our other subsidiaries or affiliates), but not
exceeding three such dealers, as will make such bid prices available to the
calculation agent. A security "quoted on the Nasdaq National Market" will
include a security included for listing or quotation in any successor to such
system and the term "OTC Bulletin Board" will include any successor to such
service.

         The "Initial Share Price" will equal $[ ], the price per share of Texas
Instruments common stock at the market close on [ ], 2002.

         The "Exchange Rate" will equal [          ].

         A "Market Disruption Event" means the occurrence or existence of any
suspension of or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by any exchange or market or otherwise) of, or the
unavailability, through a recognized system of public dissemination of
transaction information, of accurate price, volume or related information in
respect of, (1) the shares of Texas Instruments common stock on any exchange or
market, or (2) any options contracts or futures contracts relating to the shares
of Texas Instruments common stock, or any options on such futures contracts, on
any exchange or market if, in each case, in the determination of the calculation
agent, any such suspension, limitation or unavailability is material.

         A "Trading Day" means a day, as determined by the calculation agent, on
which trading is generally conducted (or was scheduled to have been generally
conducted, but for the occurrence of a Market Disruption Event) on the New York
Stock Exchange, the AMEX, the Nasdaq National Market, the Chicago Mercantile
Exchange and the Chicago Board Options Exchange, and in the over-the-counter
market for equity securities in the United States.

         The "Trading Price" of Texas Instruments common stock (or any other
common stock for which a Trading Price must be determined) on any date of
determination will be (1) if the
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common stock is listed on a national securities exchange on that date of
determination, any reported sale price, regular way, of the principal trading
session on that date on the principal U.S. exchange on which the common stock is
listed or admitted to trading, (2) if the common stock is not listed on a
national securities exchange on that date of determination, or if the reported
sale price on such exchange is not obtainable (even if the common stock is
listed or admitted to trading on such exchange), and the common stock is quoted
on the Nasdaq National Market, any reported sale price of the principal trading
session on that date as reported on the Nasdaq, and (3) if the common stock is
not quoted on the Nasdaq on that date of determination, or if the reported sale
price on the Nasdaq is not obtainable (even if the common stock is quoted on the
Nasdaq), any reported sale price of the principal trading session on the
over-the-counter market on that date as reported on the OTC Bulletin Board, the
National Quotation Bureau or a similar organization. The determination of the
Trading Price by the calculation agent in the event of a Market Disruption Event
may be deferred by the calculation agent for up to five consecutive Trading Days
on which a Market Disruption Event is occurring. If no reported sale price of
the principal trading session is available pursuant to clauses (1), (2) or (3)
above or if there is a Market Disruption Event, the Trading Price on any date of
determination, unless deferred by the calculation agent as described in the
preceding sentence, will be the arithmetic mean, as determined by the
calculation agent, of the bid prices of the common stock obtained from as many
dealers in such stock (which may include Salomon Smith Barney Inc. or any of our
other subsidiaries or affiliates), but not exceeding three such dealers, as will
make such bid prices available to the calculation agent. A security "quoted on
the Nasdaq National Market" will include a security included for listing or
quotation in any successor to such system and the term "OTC Bulletin Board" will
include any successor to such service.

DILUTION ADJUSTMENTS

     If Texas Instruments, after the closing date of the offering of the ELKS,

     (1)      pays a stock  dividend or makes a  distribution  with  respect to
              its common stock in shares of the stock,

     (2)      subdivides  or splits  the  outstanding  shares of its common
              stock  into a greater  number of shares,

     (3)      combines the outstanding shares of the common stock into a
              smaller number of shares, or

     (4)      issues by  reclassification  of shares of its common  stock any
              shares of other common stock of Texas Instruments,

then, in each of these cases, the Exchange Rate will be multiplied by a dilution
adjustment equal to a fraction, the numerator of which will be the number of
shares of common stock outstanding immediately after the event, plus, in the
case of a reclassification referred to in (4) above, the number of shares of
other common stock of Texas Instruments, and the denominator of which will be
the number of shares of common stock outstanding immediately before the event.
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         If Texas Instruments, after the closing date, issues, or declares a
record date in respect of an issuance of, rights or warrants to all holders of
its common stock entitling them to subscribe for or purchase shares of its
common stock at a price per share less than the Then-Current Market Price of the
common stock, other than rights to purchase common stock pursuant to a plan for
the reinvestment of dividends or interest, then, in each of these cases, the
Exchange Rate will be multiplied by a dilution adjustment equal to a fraction,
the numerator of which will be the number of shares of common stock outstanding
immediately before the adjustment is effected, plus the number of additional
shares of common stock offered for subscription or purchase pursuant to the
rights or warrants, and the denominator of which will be the number of shares of
common stock outstanding immediately before the adjustment is effected by reason
of the issuance of the rights or warrants, plus the number of additional shares
of common stock which the aggregate offering price of the total number of shares
of common stock offered for subscription or purchase pursuant to the rights or
warrants would purchase at the Then-Current Market Price of the common stock,
which will be determined by multiplying the total number of shares so offered
for subscription or purchase by the exercise price of the rights or warrants and
dividing the product obtained by the Then-Current Market Price. To the extent
that, after the expiration of the rights or warrants, the shares of common stock
offered thereby have not been delivered, the Exchange Rate will be further
adjusted to equal the Exchange Rate which would have been in effect had the
adjustment for the issuance of the rights or warrants been made upon the basis
of delivery of only the number of shares of common stock actually delivered.

         If Texas Instruments, after the closing date, declares or pays a
dividend or makes a distribution to all holders of the common stock of any class
of its capital stock, the capital stock of one or more of its subsidiaries,
evidences of its indebtedness or other non-cash assets, excluding any dividends
or distributions referred to in the above paragraph, or issues to all holders of
its common stock rights or warrants to subscribe for or purchase any of its or
one or more of its subsidiaries' securities, other than rights or warrants
referred to in the above paragraph, then, in each of these cases, the Exchange
Rate will be multiplied by a dilution adjustment equal to a fraction, the
numerator of which will be the Then-Current Market Price of one share of the
common stock, and the denominator of which will be the Then-Current Market Price
of one share of the common stock, less the fair market value (as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination will be final) as of the time the
adjustment is effected of the portion of the capital stock, assets, evidences of
indebtedness, rights or warrants so distributed or issued applicable to one
share of common stock.

         Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution to which the above paragraph would otherwise apply, the
denominator in the fraction referred to in the above formula is less than $1.00
or is a negative number, then the Company may, at its option, elect to have the
adjustment provided by this paragraph not be made and in lieu of this
adjustment, at maturity, each Holder of the ELKS will be entitled to receive an
additional amount of cash equal to the product of the number of ELKS held by the
holder multiplied by the fair market value of the capital stock, indebtedness,
assets, rights or warrants (determined, as of the date this dividend or
distribution is made, by a nationally recognized independent investment banking
firm retained for this purpose by the Company, whose

<PAGE>

determination will be final) so distributed or issued applicable to a number of
shares of Texas Instruments common stock equal to the Exchange Rate.

         If Texas Instruments, after the closing date, declares a record date in
respect of a distribution of cash, other than any Permitted Dividends described
below, any cash distributed in consideration of fractional shares of common
stock and any cash distributed in a Reorganization Event referred to below, by
dividend or otherwise, to all holders of its common stock, or makes an Excess
Purchase Payment, then the Exchange Rate will be multiplied by a dilution
adjustment equal to a fraction, the numerator of which will be the Then-Current
Market Price of the common stock, and the denominator of which will be the
Then-Current Market Price of the common stock on the record date less the amount
of the distribution applicable to one share of common stock which would not be a
Permitted Dividend, or, in the case of an Excess Purchase Payment, less the
aggregate amount of the Excess Purchase Payment for which adjustment is being
made at the time divided by the number of shares of Texas Instruments common
stock outstanding on the record date.

         For the purposes of these adjustments:

         A "Permitted Dividend" is any quarterly cash dividend in respect of
Texas Instruments common stock, other than a quarterly cash dividend that
exceeds the immediately preceding quarterly cash dividend, and then only to the
extent that the per share amount of this dividend results in an annualized
dividend yield on the common stock in excess of 10%.

         An "Excess Purchase Payment" is the excess, if any, of (x) the cash and
the value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination will
be final) of all other consideration paid by Texas Instruments with respect to
one share of common stock acquired in a tender offer or exchange offer by Texas
Instruments, over (y) the Then-Current Market Price of the common stock.

         Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution or Excess Purchase Payment to which the fifth paragraph
in this section would otherwise apply, the denominator in the fraction referred
to in the formula in that paragraph is less than $1.00 or is a negative number,
then the Company may, at its option, elect to have the adjustment provided by
the fifth paragraph in this section not be made and in lieu of this adjustment,
at maturity, each Holder of the ELKS will be entitled to receive an additional
amount of cash equal to the product of the number of ELKS held by the Holder
multiplied by the sum of the amount of cash plus the fair market value of other
consideration (determined, as of the date this dividend or distribution is made,
by a nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination will be final) so distributed or
applied to the acquisition of the common stock in the tender offer or exchange
offer applicable to a number of shares of Texas Instruments common stock equal
to the Exchange Rate.
<PAGE>

         Each dilution adjustment will be effected as follows:

         o        in the case of any dividend, distribution or issuance, at the
                  opening of business on the Business Day next following the
                  record date for determination of holders of Texas Instruments
                  common stock entitled to receive this dividend, distribution
                  or issuance or, if the announcement of this dividend,
                  distribution, or issuance is after this record date, at the
                  time this dividend, distribution or issuance was announced by
                  Texas Instruments,

         o        in the case of any subdivision,  split, combination or
                  reclassification,  on the effective date of the transaction,

         o        in the case of any Excess Purchase Payment for which Texas
                  Instruments announces, at or prior to the time it commences
                  the relevant share repurchase, the repurchase price per share
                  for shares proposed to be repurchased, on the date of the
                  announcement, and

         o        in the case of any other Excess Purchase Payment, on the date
                  that the holders of the repurchased shares become entitled to
                  payment in respect thereof.

         All dilution adjustments will be rounded upward or downward to the
nearest 1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th. No adjustment in the Exchange Rate will be required unless the
adjustment would require an increase or decrease of at least one percent
therein, provided, however, that any adjustments which by reason of this
sentence are not required to be made will be carried forward (on a percentage
basis) and taken into account in any subsequent adjustment. If any announcement
or declaration of a record date in respect of a dividend, distribution, issuance
or repurchase requiring an adjustment as described herein is subsequently
canceled by Texas Instruments, or this dividend, distribution, issuance or
repurchase fails to receive requisite approvals or fails to occur for any other
reason, then, upon the cancellation, failure of approval or failure to occur,
the Exchange Rate will be further adjusted to the Exchange Rate which would then
have been in effect had adjustment for the event not been made. If a
Reorganization Event described below occurs after the occurrence of one or more
events requiring an adjustment as described herein, the dilution adjustments
previously applied to the Exchange Rate will not be rescinded but will be
applied to the new Exchange Rate provided for below.

         The "Then-Current Market Price" of the common stock, for the purpose of
applying any dilution adjustment, means the average Closing Price per share of
common stock for the 10 Trading Days immediately before this adjustment is
effected or, in the case of an adjustment effected at the opening of business on
the Business Day next following a record date, immediately before the earlier of
the date the adjustment is effected and the related Ex-Date. For purposes of
determining the Then-Current Market Price, the determination of the Closing
Price by the calculation agent in the event of a Market Disruption Event, as
described in the definition of Closing Price, may be deferred by the calculation
agent for up to five consecutive Trading Days on which a Market Disruption Event
is occurring.
<PAGE>

         The "Ex-Date" with respect to any dividend, distribution or issuance is
the first date on which the shares of the common stock trade in the regular way
on their principal market without the right to receive this dividend,
distribution or issuance.

         In the event of any of the following "Reorganization Events":

         o        any consolidation or merger of Texas Instruments, or any
                  surviving entity or subsequent surviving entity of Texas
                  Instruments, with or into another entity, other than a merger
                  or consolidation in which Texas Instruments is the continuing
                  corporation and in which the common stock outstanding
                  immediately before the merger or consolidation is not
                  exchanged for cash, securities or other property of Texas
                  Instruments or another issuer,

         o        any sale,  transfer,  lease or  conveyance  to another
                  corporation  of the  property  of Texas Instruments or any
                  successor as an entirety or substantially as an entirety,

         o        any statutory exchange of securities of Texas Instruments or
                  any successor of Texas Instruments with another issuer, other
                  than in connection with a merger or acquisition, or

         o        any  liquidation,  dissolution  or winding up of Texas
                  Instruments  or any  successor of Texas Instruments,

each Holder of the ELKS will have the right to receive cash in an amount per $10
principal amount of ELKS equal to the Exchange Rate multiplied by the
Transaction Value (as defined below).

         The "Transaction Value" will be the sum of:

         (1)      for any cash  received in a  Reorganization  Event,  the
                  amount of cash  received  per share of common stock,

         (2)      for any property other than cash or Marketable Securities
                  received in a Reorganization Event, an amount equal to the
                  market value on the date the Reorganization Event is
                  consummated of that property received per share of common
                  stock, as determined by a nationally recognized independent
                  investment banking firm retained for this purpose by the
                  Company, whose determination will be final, and

         (3)      for any Marketable Securities received in a Reorganization
                  Event, an amount equal to the Closing Price per share of these
                  Marketable Securities on the Trading Day immediately prior to
                  the maturity date or Exchange Date multiplied by the number of
                  these Marketable Securities received for each share of common
                  stock.

         "Marketable Securities" are any perpetual equity securities or debt
securities with a stated maturity after the maturity date, in each case that are
listed on a U.S. national securities exchange or reported by the Nasdaq Stock
Market. The number of shares of any equity securities
<PAGE>

constituting Marketable Securities included in the calculation of Transaction
Value pursuant to clause (3) above will be adjusted if any event occurs with
respect to the Marketable Securities or the issuer of the Marketable Securities
between the time of the Reorganization Event and maturity that would have
required an adjustment as described above, had it occurred with respect to the
Texas Instruments common stock or Texas Instruments. Adjustment for these
subsequent events will be as nearly equivalent as practicable to the adjustments
described above.

GENERAL

         This Note is one of a duly authorized issue of Debt Securities of the
Company, issued and to be issued in one or more series under a Senior Debt
Indenture, dated as of October 27, 1993, as supplemented by a First Supplemental
Indenture, dated as of November 28, 1997, a Second Supplemental Indenture, dated
as of July 1, 1999, and as further supplemented from time to time (the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the ELKS, and the terms upon which the ELKS are,
and are to be, authenticated and delivered.

         If an Event of Default with respect to the ELKS shall have occurred and
be continuing, the principal of the ELKS may be declared due and payable in the
manner and with the effect provided in the Indenture. In such case, the amount
declared due and payable upon any acceleration permitted by the Indenture will
be determined by the calculation agent and will be equal to, with respect to
this Note, the Maturity Payment calculated as though the Stated Maturity Date of
this Note were the date of early repayment. In case of default at Maturity of
this Note, this Note shall bear interest, payable upon demand of the beneficial
owners of this Note in accordance with the terms of the ELKS, from and after
Maturity through the date when payment of such amount has been made or duly
provided for, at the rate of [ ]% per annum on the unpaid amount (or the cash
equivalent of such unpaid amount) due.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities of each series to
be affected under the Indenture at any time by the Company and a majority in
aggregate principal amount of the Debt Securities at the time Outstanding of
each series affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the Debt
Securities of any series at the time Outstanding, on behalf of the Holders of
all Debt Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.

         The Holder of this Note may not enforce such Holder's rights pursuant
to the Indenture or the Notes except as provided in the Indenture. No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company to
<PAGE>

pay the Maturity Payment with respect to this Note, and to pay any interest on
any overdue amount thereof at the time, place and rate, and in the coin or
currency, herein prescribed.

         All terms used in this Note which are defined in the Indenture but not
in this Note shall have the meanings assigned to them in the Indenture.

         Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purposes.

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

                               SALOMON SMITH BARNEY HOLDINGS INC.

                               By:
                                  -------------------------------
                                  Name: Mark I. Kleinman
                                  Title: Executive Vice President and Treasurer

Corporate Seal
Attest:

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

Dated: [          ], 2002

CERTIFICATE OF AUTHENTICATION
   This is one of the Notes referred to in
   the within-mentioned Indenture.

The Bank of New York,
as Trustee

By:
     --------------------------
     Authorized Signatory<PAGE>
                                                                     EXHIBIT 4.1

                            OSI PHARMACEUTICALS, INC.

                       NON-QUALIFIED STOCK OPTION PLAN FOR
                               FORMER EMPLOYEES OF
                              GILEAD SCIENCES, INC.

1.    Purpose

            OSI Pharmaceuticals, Inc. (the "Company") has acquired certain of
      the assets of Gilead Sciences, Inc. ("Gilead"). In connection therewith,
      the Company has adopted this Non-Qualified Stock Option Plan for Former
      Employees of Gilead Sciences, Inc. (the "Plan") as an incentive to induce
      certain former employees of Gilead to accept employment with, or become
      associated with, the Company or a parent or subsidiary of the Company, and
      to encourage them to acquire a proprietary interest in the Company through
      the ownership of common stock, par value $.01 per share (the "Common
      Stock"), of the Company. Such ownership will provide them with a more
      direct stake in the future welfare of the Company. No option granted under
      the Plan shall be considered an "incentive stock option" as defined in
      Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

            As used herein, the term "parent" or "subsidiary" shall mean any
      present or future corporation which is or would be a "parent corporation"
      or "subsidiary corporation" of the Company as the term is defined in
      Section 424 of the Code (determined as if the Company were the employer
      corporation).

2.    Administration of the Plan

            The Plan shall be administered by a committee (the "Committee") as
      appointed from time to time by the Board of Directors of the Company,
      which may be the Compensation Committee of the Board of Directors. Except
      as otherwise specifically provided herein, no person, other than members
      of the Committee, shall have any discretion as to decisions regarding the
      Plan. The Company may engage a third party to administer routine matters
      under the Plan, such as establishing and maintaining accounts for Plan
      participants and facilitating transactions by participants pursuant to the
      Plan.

            In administering the Plan, the Committee may adopt rules and
      regulations for carrying out the Plan. The interpretations and decisions
      made by the Committee with regard to any question arising under the Plan
      shall be final and conclusive on all persons participating or eligible to
      participate in the Plan. Subject to the provisions of the Plan, the
      Committee shall determine the terms of all options granted pursuant to the
      Plan, including, but not limited to, the persons to whom, and the time or
      times at which, grants shall be made, the number of shares to be covered
      by each option, the duration of options, the exercisability of options,
      and the option price.

3.    Shares of Stock Subject to the Plan

            Except as provided in paragraphs 6(h), 6(i) and 7 hereof, the number
      of shares that may be issued or transferred pursuant to the exercise of
      options granted under the Plan shall not exceed 750,249 shares of Common
      Stock. Such shares may be authorized and unissued shares or previously
      issued shares acquired or to be acquired by the Company and held in
      treasury.
<PAGE>
4.    Eligibility

            Options may be granted only to directors, officer, employees and
      consultants who are former employees of Gilead.

5.    Granting of options

            No options pursuant to this Plan may be granted after ten years from
      the effective date. The date of the grant of any option shall be the date
      on which the Committee authorizes the grant of such option.

6.    Options

            Options shall be evidenced by stock option agreements in such form,
      consistent with the Plan, as the Committee shall approve from time to
      time, which agreements need not be identical and shall be subject to the
      following terms and conditions:

                  (a) Option Price. The purchase price under each option shall
            be specified by the Committee, but shall in no case be less than the
            greater of the Fair Market Value of the Common Stock at the time the
            option is granted and the par value of such Common Stock.

                  (b) Medium and Time of Payment. Stock purchased pursuant to
            the exercise of an option shall at the time of purchase be paid for
            in full in cash, or, upon conditions established by the Committee,
            by delivery of shares of Common Stock owned by the recipient. If
            payment is made by the delivery of shares, the value of the shares
            delivered shall be the Fair Market Value of such shares on the date
            of exercise of the option. In addition, unless otherwise provided by
            the Committee, an "in the money" option may be exercised on a
            "cashless" basis in exchange for the issuance to the optionee (or
            other person entitled to exercise the option) of the largest whole
            number of shares having an aggregate value equal to the value of
            such option on the date of exercise. For this purpose, the value of
            the shares delivered by the Company and the value of the option
            being exercised shall be determined based on the Fair Market Value
            of the Common Stock on the date of exercise of the option. Upon
            receipt of payment and such documentation as the Company may deem
            necessary to establish compliance with the Securities Act of 1933,
            as amended (the "Securities Act"), the Company shall, without stock
            transfer tax to the optionee or other person entitled to exercise
            the option, deliver to the person exercising the option a
            certificate or certificates for such shares. It shall be a condition
            to the performance of the Company's obligation to issue or transfer
            Common Stock upon exercise of an option or options that the optionee
            pay, or make provision satisfactory to the Company for the payment
            of, any taxes (other than stock transfer taxes) the Company is
            obligated to collect with respect to the issue or transfer of Common
            Stock upon such exercise, including any federal, state, or local
            withholding taxes.

                  (c) Waiting Period. The waiting period and time for exercising
            an option shall be prescribed by the Committee in each particular
            case; provided, however, that no option may be exercised after 10
            years from the date it is granted.

                  (d) Rights as a Stockholder. A recipient of options shall have
            no rights as a stockholder with respect to any shares issuable or
            transferable upon exercise thereof until the date a stock
            certificate is issued to him for such shares. Except as otherwise
            expressly provided in the Plan, no adjustment shall be made for
            dividends or other rights for which the record date is prior to the
            date such stock certificate is issued.
<PAGE>
                  (e) Non-Assignability of Options. Except as may otherwise be
            specifically provided by the Committee, no option shall be
            assignable or transferable by the recipient except by will or by the
            laws of descent and distribution. During the lifetime of a
            recipient, except as may otherwise be specifically provided by the
            Committee, options shall be exercisable only by such recipient. If
            the Committee approves provisions in any particular case allowing
            for assignment or transfer of an option, then such option will
            nonetheless be subject to a six-month holding period commencing on
            the date of grant during which period the recipient will not be
            permitted to assign or transfer such option, unless the Committee
            further specifically provides for the assignability or
            transferability of such option during this period. See paragraph 8
            hereof for restrictions on sale of shares.

                  (f) Effect of Termination of Employment. If a recipient's
            employment (or service as an officer, director or consultant) shall
            terminate for any reason, other than death or Retirement (as defined
            below), the right of the recipient to exercise any option otherwise
            exercisable on the date of such termination shall expire unless such
            right is exercised within a period of 90 days after the date of such
            termination. The term "Retirement" shall mean the voluntary
            termination of employment (or service as an officer, director or
            consultant) by a recipient who has attained the age of 55 and who
            has completed at least five years of service with the Company. If a
            recipient's employment (or service as an officer, director or
            consultant) shall terminate because of death or Retirement, the
            right of the recipient to exercise any option otherwise exercisable
            on the date of such termination shall be unaffected by such
            termination and shall continue until the normal expiration of such
            option. Option rights shall not be affected by any change of
            employment as long as the recipient continues to be employed by
            either the Company or a parent or subsidiary of the Company. In no
            event, however, shall an option be exercisable after the expiration
            of its original term as determined by the Committee pursuant to
            subparagraph 6(c) above. The Committee may, if it determines that to
            do so would be in the Company's best interests, provide in a
            specific case or cases for the exercise of options which would
            otherwise terminate upon termination of employment with the Company
            for any reason, upon such terms and conditions as the Committee
            determines to be appropriate. Nothing in the Plan or in any option
            agreement shall confer any right to continue in the employ of the
            Company or any parent or subsidiary of the Company or interfere in
            any way with the right of the Company or any parent or subsidiary of
            the Company to terminate the employment of a recipient at any time.

                  (g) Leave of Absence. In the case of a recipient on an
            approved leave of absence, the Committee may, if it determines that
            to do so would be in the best interests of the Company, provide in a
            specific case for continuation of options during such leave of
            absence, such continuation to be on such terms and conditions as the
            Committee determines to be appropriate, except that in no event
            shall an option be exercisable after 10 years from the date it is
            granted.

                  (h) Recapitalization. In the event that dividends payable in
            Common Stock during any fiscal year of the Company exceed in the
            aggregate five percent of the Common Stock issued and outstanding at
            the beginning of the year, or in the event there is during any
            fiscal year of the Company one or more splits, subdivisions, or
            combinations of shares of Common Stock resulting in an increase or
            decrease by more than five percent of the shares outstanding at the
            beginning of the year, the number of shares available under the Plan
            shall be increased or decreased proportionately, as the case may be,
            and the number of shares deliverable upon the exercise thereafter of
            any options theretofore granted shall be increased or decreased
            proportionately, as the case may be, without change in the aggregate
            purchase price. Common Stock dividends, splits, subdivisions, or
            combinations during any fiscal year that do not exceed in the
            aggregate five percent of the Common Stock issued and outstanding at
            the beginning of such year shall be ignored for purposes of the
            Plan. All adjustments shall be made as of the day such action
            necessitating such adjustment becomes effective.
<PAGE>
                  (i) Sale or Reorganization. In case the Company is merged or
            consolidated with another corporation, or in case the property or
            stock of the Company is acquired by another corporation, or in case
            of a separation, reorganization, or liquidation of the Company, the
            Board of Directors of the Company, or the board of directors of any
            corporation assuming the obligations of the Company hereunder, shall
            either (i) make appropriate provisions for the protection of any
            outstanding options by the substitution on an equitable basis of
            appropriate stock of the Company, or appropriate stock or options of
            the merged, consolidated, or otherwise reorganized corporation, or
            (ii) give written notice to optionees that their options, which will
            become immediately exercisable notwithstanding any waiting period
            otherwise prescribed by the Committee, must be exercised within 30
            days of the date of such notice or they will be terminated.

                  (j) General Restrictions. Each option granted under the Plan
            shall be subject to the requirement that, if at any time the Board
            of Directors shall determine, in its discretion, that the listing,
            registration, or qualification of the shares issuable or
            transferable upon exercise thereof upon any securities exchange or
            under any state or federal law, or the consent or approval of any
            governmental regulatory body is necessary or desirable as a
            condition of, or in connection with, the granting of such option or
            the issue, transfer, or purchase of shares thereunder, such option
            may not be exercised in whole or in part unless such listing,
            registration, qualification, consent, or approval shall have been
            effected or obtained free of any conditions not acceptable to the
            Board of Directors.

                  The Company shall not be obligated to sell or issue any shares
            of Common Stock in any manner in contravention of the Securities
            Act, the Securities Exchange Act of 1934, as amended (the "Exchange
            Act"), the rules and regulations of the Securities and Exchange
            Commission, any state securities law, the rules and regulations
            promulgated thereunder or the rules and regulations of any
            securities exchange or over the counter market on which the Common
            Stock is listed or in which it is included for quotation. The Board
            of Directors may, in connection with the granting of each option,
            require the individual to whom the option is to be granted to enter
            into an agreement with the Company stating that as a condition
            precedent to each exercise of the option, in whole or in part, he
            shall, if then required by the Company, represent to the Company in
            writing that such exercise is for investment only and not with a
            view to distribution, and also setting forth such other terms and
            conditions as the Committee may prescribe. Such agreements may also,
            in the discretion of the Committee, contain provisions requiring the
            forfeiture of any options granted and/or Common Stock held, in the
            event of the termination of employment or association, as the case
            may be, of the optionee with the Company. Upon any forfeiture of
            Common Stock pursuant to an agreement authorized by the preceding
            sentence, the Company shall pay consideration for such Common Stock
            to the optionee, pursuant to any such agreement, without interest
            thereon.

                  (k) "Fair Market Value." Fair Market Value for all purposes
            under the Plan shall mean the closing price of shares of Common
            Stock, as reported in The Wall Street Journal, in the NASDAQ
            National Market Issues or similar successor consolidated
            transactions reports (or a similar consolidated transactions report
            for the exchange on which the shares of Common Stock are then
            trading) for the relevant date, or if no sales of shares of Common
            Stock were made on such date, the average of the high and low sale
            prices of shares as reported in such composite transaction report
            for the preceding day on which sales of shares were made. If the
            shares are not listed on a national securities exchange or included
            for quotation in the NASDAQ National Market System at the time Fair
            Market Value is to be determined, then Fair Market Value shall be
            determined by the Committee in good faith pursuant to such method as
            to the Committee deems appropriate and equitable. Under no
            circumstances shall the Fair Market Value of a share of Common Stock
            be less than its par value.
<PAGE>
7.    Termination and Amendment of the Plan

            The Board of Directors or the Committee shall have the right to
      amend, suspend, or terminate the Plan at any time; provided, however, that
      no such action shall affect or in any way impair the rights of a recipient
      under any option right theretofore granted under the Plan; and, provided,
      further, that unless first duly approved by the stockholders of the
      Company entitled to vote thereon at a meeting (which may be the annual
      meeting) duly called and held for such purpose, except as provided in
      subparagraphs 6(h) and 6(i), no amendment or change shall be made in the
      Plan increasing the total number of shares which may be issued or
      transferred under the Plan, materially increasing the benefits to Plan
      participants or modifying the requirements as to eligibility for
      participation in the Plan.

8.    Restriction on Sale of Shares

            No stock acquired by an optionee upon exercise of an option granted
      hereunder may be disposed of by the optionee (or other person eligible to
      exercise the option) within six months from the date such option was
      granted, unless otherwise provided by the Committee.

9.    Effective Date of the Plan

            This Plan shall become effective on January 1, 2002 (the "Effective
      Date"). The Plan shall terminate after ten years from the Effective Date,
      or on such earlier date as the Board of Directors or the Committee may
      determine. Any option outstanding at the termination date shall remain
      outstanding until it has either expired or has been exercised.

10.   Compliance with Rule 16b-3

            With respect to persons subject to Section 16 of the Exchange Act,
      transactions under this Plan are intended to comply with all applicable
      conditions of Rule 16b-3 or its successors. To the extent any provision of
      the Plan or action by the Committee (or any other person on behalf of the
      Committee or the Company) fails to so comply, it shall be deemed null and
      void, to the extent permitted by law and deemed advisable by the
      Committee.

11.    Options granted to employees and directors of any subsidiary in the UK

             In addition to the provisions of paragraphs 1 to 10 (inclusive)
       above, the provisions of this paragraph 11 shall apply as herein set out
       to options granted to employees and directors of any subsidiary in the
       United Kingdom. The provisions of this paragraph 11 enable the Plan to be
       used in a tax efficient manner in the United Kingdom.

       (a) In this paragraph 11 the following terms have the meanings ascribed
           to them:

             "Election" means an election in the form envisaged in Paragraph
             3B(1) of Schedule 1 to SSCBA and acceptable to the UK Subsidiary to
             the effect that any Secondary NIC arising on the exercise,
             assignment or release of a UK Option shall be the liability of the
             recipient and not the liability of the UK Subsidiary

             "Independent Transfer Agent" means any person (other than the
             Company or any company affiliated with the Company or any
             individual affiliated with any such company) who is registered as a
             broker-dealer with the U.S. Securities and Exchange Commission and
             who is thereby able to sell and transfer shares in the Company on
             behalf of the Optionholder
<PAGE>
             "Optionholder" means an employee or director of the UK Subsidiary
             who is the holder of a UK Option

             "Secondary NIC" means secondary national insurance contributions
             as defined in the SSCBA

             "SSCBA" means the Social Security Contributions and Benefits Act
             1992 of the United Kingdom

             "UK Option" means an option granted to an employee of the UK
             Subsidiary

             "UK Subsidiary" means OSI Pharmaceuticals (UK) Limited (a company
             incorporated in England under company number 1709877) and any other
             UK Subsidiary of the Company from time to time.

                  (b) To the extent that it is lawful to do so, a UK Option may
             be granted subject to a condition that any liability of the UK
             Subsidiary (as employer or former employer of the relevant
             Optionholder) to pay Secondary NIC in respect of the exercise,
             assignment or release of that UK Option shall be the liability of
             the relevant Optionholder and payable by that Optionholder and that
             the Optionholder shall not be entitled to exercise the UK Option
             until he has entered into an Election to that effect when required
             to do so by the UK Subsidiary provided that the Committee may in
             its discretion at any time or times release the Optionholder from
             this liability or reduce his liability thereunder unless that
             Election has been entered into between the UK Subsidiary and that
             Optionholder and that Election (or the legislation which provides
             for such an Election to be effective) does not allow for such an
             Election to be subsequently varied.

                  (c) If a UK Option is granted subject to the condition
             referred to in paragraph 11(b) above then the Optionholder shall by
             completing the Election grant to the UK Subsidiary (as employer or
             former employer of the relevant Optionholder) the irrevocable
             authority, as agent of the Optionholder and on his behalf, to
             appoint an Independent Transfer Agent, to act as agent of the
             Optionholder and on his behalf, to sell or procure the sale of
             sufficient of the Stock subject to the UK Option and remit the net
             sale proceeds to the UK Subsidiary so that the net proceeds payable
             to the UK Subsidiary are so far as possible equal to but not less
             than the amount of the Secondary NIC for which the Optionholder is
             liable under the terms of the Election and the UK Subsidiary shall
             account to the Optionholder for any balance.

                        No Stock shall be allotted or transferred to the
             Optionholder by the Company until the UK Subsidiary has received an
             amount in cash equal to the amount of the Secondary NIC for which
             the Optionholder is liable under the terms of the Election.

                  (d) If a UK Option is exercised and the Optionholder is liable
             to tax duties or other amounts on such exercise and the UK
             Subsidiary (as his employer or former employer) is liable to make a
             payment to the appropriate authorities on account of that liability
             then the Optionholder shall by having completed the Option
             Agreement grant to the UK Subsidiary (as employer or former
             employer of the relevant Optionholder) the irrevocable authority,
             as agent of the Optionholder and on his behalf, to appoint an
             Independent Transfer Agent, to act as agent of the Optionholder and
             on his behalf, to sell or procure the sale of sufficient of the
             Shares subject to the UK Option and remit the net sale proceeds to
             the UK Subsidiary so that the net proceeds payable to the UK
             Subsidiary are so far as possible equal to but not less than the
             amount payable to the appropriate authorities and the UK Subsidiary
             shall account to the Optionholder for any balance.

                        No Stock shall be allotted or transferred to the
             Optionholder by the Company until the UK Subsidiary has received an
             amount in cash equal to the amount of any liability of the UK
             Subsidiary referred to in this paragraph (d).

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