EXHIBIT 4.09

                 [Form of Senior Debt Security-Fixed Rate Note]

                           [FORM OF FACE OF SECURITY]


                          LEHMAN BROTHERS HOLDINGS INC.

$                                                                  CUSIP

                                   % NOTE DUE


      LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Company"), for value received, hereby promises to pay to                   or
registered assigns, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, the principal sum of             Dollars, on
               , in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts, and to pay interest (computed on the basis of a 360-day year of twelve
30-day months), semiannually on              and              of each year,
commencing              , on said principal sum at said office or agency, in
like coin or currency, at the rate per annum specified in the title of this
Note, [and (to the extent that the payment of such interest shall be legally
enforceable), at such rate per annum on any overdue principal and premium and on
any overdue installment of interest] from the               or the            ,
as the case may be, next preceding the date of this Note to which interest has
been paid or duly provided for, unless the date hereof is a date to which
interest has been paid or duly provided for, in which case from the date of this
Note, or, if no interest has been paid or duly provided for on the Notes, from
            , until payment of said principal sum has been made or duly provided
for.

      The interest so payable on any              or              will, subject
to certain exceptions provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Note is registered at the close
of business on the [last] [fifteenth] day of the calendar month preceding such
             or             . Interest may at the option of the Company be paid
by check mailed to the person entitled thereto at such person's address as it
appears on the registry books of the Company.

      REFERENCE IS 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 THOUGH FULLY SET FORTH AT THIS PLACE.


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      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 referred to on the reverse hereof.

      IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC. has caused this
instrument to be signed by its Chairman of the Board, any Vice Chairman, its
President, its Chief Financial Officer 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:

                                                  LEHMAN BROTHERS HOLDINGS INC.


                                                  By ___________________________
                                                            [Title]


Attest:


___________________________
         [Title]


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                          [FORM OF REVERSE OF SECURITY]

                          LEHMAN BROTHERS HOLDINGS INC.

                                   % NOTE DUE

      This Note is one of a duly authorized series of Notes of the Company
designated as the       % Notes Due               of the Company (herein called
the "Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $          . The Notes are one of an
indefinite number of series of debt securities of the Company (herein
collectively called the "Securities") issued or issuable under and pursuant to
an indenture dated as of               (herein called the "Indenture"), duly
executed and delivered by the Company and               . 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 repayment 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.

      In case an Event of Default with respect to the Notes, as defined in the
Indenture, shall have occurred and be continuing, the principal hereof may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.

      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
(each series voting as a class), evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Securities of all such series; provided, however, that no such supplemental
indenture shall, among other things, (i) extend the fixed maturity of any
Security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon or reduce any premium payable on
redemption, or make the principal thereof, or premium, if any, or interest
thereon payable in any coin or currency other than that hereinabove provided,
without the consent of the holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security so affected. It is also
provided in the Indenture that, prior to any declaration accelerating the
maturity of any series of Securities, the holders of a majority in aggregate
principal amount of the Securities of such series Outstanding may on behalf of
the holders of all the Securities of such series waive any past default or Event


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of Default under the Indenture with respect to such series and its consequences,
except a default in the payment of interest, if any, on or the principal of, or
premium, if any, on any of the Securities of such series, or in the payment of
any sinking fund installment or analogous obligation with respect to Securities
of such series. Any such consent or waiver by the holder of this Note shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Note and any Notes 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.

      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 the principal of, premium, if any, and
interest on this Note at the place, at the respective times, at the rate, and in
the coin or currency herein prescribed.

      The Notes are issuable in registered form without coupons in denominations
of $         and any multiple of $            . At the option of the holders
thereof, either at the office or agency to be designated and maintained by the
Company for such purpose in the Borough of Manhattan, The City of New York,
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 may be exchanged for an equal aggregate principal
amount of Notes of other authorized denominations.

      [The Notes may not be redeemed before              ,       . On and after
that date and prior to maturity the Company may, at its option, redeem the
Notes, either as a whole or from time to time in part, at the redemption price
of 100% of the principal amount of the Notes being redeemed, together with
accrued interest to the date fixed for redemption.]

      [Other Alternative Redemption or Sinking Fund Provisions.]

      [As provided in the Indenture, notice of redemption to the holders of
Notes to be redeemed as a whole or in part shall be given by mailing a notice of
redemption not less than 30 nor more than 60 days prior to the date fixed for
redemption to their last addresses as they appear on the registry books of the
Company.]

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


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      No recourse for the payment of the principal of, premium, if any, or
interest on this Note, 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.

      All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.


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