424B5 1 file001.htm FORM 424B5

Filed Pursuant to Rule 424(b)(5)
Registration Number 333-121067

PRICING SUPPLEMENT No. 5
to Prospectus Supplement dated May 18, 2005
to Prospectus Supplement dated May 18, 2005
and Prospectus dated May 18, 2005

$55,000,000
LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES H
0.25% Notes Due September 6, 2012
Performance Linked to the Common Stock of TXU Corp. (TXU)

Because these notes are part of a series of Lehman Brothers Holdings' debt
securities called Medium-Term Notes, Series H, this pricing supplement and the
accompanying prospectus supplement, dated May 18, 2005 (the "synthetic
convertible prospectus supplement") should also be read with the accompanying
prospectus supplement, dated May 18, 2005 (the "MTN prospectus supplement") and
the accompanying prospectus dated May 18, 2005 (the "base prospectus"). Terms
used here have the meanings given them in the synthetic convertible prospectus
supplement, the MTN prospectus supplement or the base prospectus, unless the
context requires otherwise.

o REFERENCE EQUITY: The common stock of TXU Corp. ("TXU"). TXU is not involved
in this offering and has no obligation with respect to the notes.

o STATED MATURITY DATE: September 6, 2012, subject to postponement if a market
disruption event occurs on the valuation date.

o INTEREST RATE: 0.25% per annum.

o INTEREST PAYMENT DATES: March 6 and September 6 of each year, beginning on
March 6, 2006.

o INTEREST PAYMENT RECORD DATES: 15 calendar days prior to each interest
payment date.

o THRESHOLD VALUE: $104.9970, which represents approximately 109% of $96.3275,
which is the average execution price per share of common stock of TXU that
an affiliate of Lehman Brothers Holdings has paid to hedge Lehman Brothers
Holdings' obligations under the notes.

o EARLIEST REDEMPTION DATE: August 29, 2008.

o REDEMPTION NOTICE PERIOD: 30 calendar days.

o OPTIONAL REPURCHASE NOTICE PERIOD: Eight business days.

o DETERMINATION PERIOD: Three business days.

o MULTIPLIER: The initial multiplier for the shares of common stock of TXU is
1.0. The multiplier is subject to adjustment under various circumstances, as
described under the caption "Description of the Notes--Adjustments to
multipliers and to securities included in the calculation of the settlement
value" on page SS-16 of the synthetic convertible prospectus supplement,
including if TXU pays a quarterly cash dividend of more or less than the
base dividend of $0.5625 per share on its shares of common stock. If TXU
fails to declare or make a quarterly cash dividend payment, the effective
adjustment date for adjusting the multiplier will be the first business day
immediately following the 17th day of each of January, April, July or
October and the valuation date, as applicable.

o STOCK SETTLEMENT: Yes, upon exercise by the holder of the repurchase option
and at the option of Lehman Brothers Holdings at maturity, all as described
under the caption "Description of the Notes--Stock settlement" on page SS-21
of the synthetic convertible prospectus supplement. Lehman Brothers Holdings
will provide the trustee with not less than 15 calendar days' prior written
notice if it elects the stock settlement option.

o LISTING: The notes will not be listed on any exchange.

Investing in the notes involves risks. Risk Factors begin on page SS-7
of the synthetic convertible prospectus supplement.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this pricing supplement, any accompanying prospectus supplement or any
accompanying prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.

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Per Note Total
------------- ---------------
Public offering price......................... 100.00% $55,000,000
Underwriting discount......................... 0.25% $ 137,500
Proceeds to Lehman Brothers Holdings.......... 99.75% $54,862,500

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

Lehman Brothers Holdings has granted the underwriter an option to purchase,
within 13 days of the original issuance, up to an additional $8,250,000
aggregate principal amount of notes on the same terms and conditions set
forth above solely to cover over-allotments, if any.

The notes are expected to be ready for delivery in book-entry form only
through The Depository Trust Company on or about September 6, 2005.

----------------------
LEHMAN BROTHERS
August 29, 2005

EXAMPLES OF AMOUNT PAYABLE AT MATURITY OR UPON REDEMPTION OR REPURCHASE

Here are two examples of hypothetical alternative redemption amount
calculations. In each of these examples it is assumed that TXU does not change
the amount of the quarterly cash dividends that it pays on its shares of common
stock during the term of the notes.

EXAMPLE 1. ASSUMING THE SETTLEMENT VALUE IS $80.00:

Alternative redemption amount per $1,000 note =

$80.00
$1,000 x --------------- = $761.93
$104.9970

As a result, on the maturity date or upon redemption, you would receive $1,000
per $1,000 note because $1,000 is greater than $761.93.

In the case of stock settlement in this example, you would receive, if you held
a $1,000 note, 12 shares of common stock of TXU plus $40.00 in cash at maturity,
or 9 shares of common stock of TXU plus $41.93 in cash upon repurchase. To the
extent that you hold more than $1,000 aggregate principal amount of notes, the
calculations of cash payments in lieu of fractional shares would be made on an
aggregate, rather than on a per $1,000 note, basis. For example, if you held
$55,000,000 aggregate principal amount of notes, you would receive, in total,
687,500 shares of common stock of TXU at maturity, or 523,824 shares of common
stock of TXU plus $39.22 in cash upon repurchase.

EXAMPLE 2. ASSUMING THE SETTLEMENT VALUE IS $120.00:

Alternative redemption amount per $1,000 note =

$120.00
$1,000 x ---------------- = $1,142.89
$104.9970

As a result, on the maturity date or upon redemption, you would receive
$1,142.89 per $1,000 note because $1,142.89 is greater than $1,000.

In the case of stock settlement in this example, you would receive, if you held
a $1,000 note, 9 shares of common stock of TXU plus $62.89 in cash at maturity
or upon repurchase. To the extent that you hold more than $1,000 aggregate
principal amount of notes, the calculations of cash payments in lieu of
fractional shares would be made on an aggregate, rather than on a per $1,000
note, basis. For example, if you held $55,000,000 aggregate principal amount of
notes, you would receive, in total, 523,824 shares of common stock of TXU plus
$58.83 in cash, at maturity or upon repurchase.

To the extent the actual settlement value differs from the levels assumed above
or that TXU changes the amount of the cash dividends it pays, the results
indicated above would be different.

PS-2

THE INDEX STOCK

TXU CORP.

Lehman Brothers Holdings has obtained the following information regarding TXU
Corp. from TXU Corp.'s reports filed with the SEC.

TXU Corp., a Dallas-based energy company, manages a portfolio of competitive and
regulated energy businesses in North America, primarily in Texas. TXU Corp. is a
holding company conducting its operations principally through its TXU Energy
Company LLC (TXU Energy Holdings) and TXU Electric Delivery Company (TXU
Electric Delivery) subsidiaries. TXU Energy Holdings is engaged in electricity
generation and retail and wholesale energy sales. TXU Electric Delivery engages
in regulated electricity transmission and distribution operations.

The index stock is registered under the Securities Exchange Act of 1934.
Companies with securities registered under that Act are required to file
periodically certain financial and other information specified by the SEC.
Information provided to or filed with the SEC can be inspected and copied at the
public reference facilities maintained by the SEC or through the SEC's website
described under "Where You Can Find More Information" on page 58 of the
accompanying base prospectus. In addition, information regarding the index stock
issuer may be obtained from other sources including, but not limited to, press
releases, newspaper articles and other publicly disseminated documents.

HISTORICAL INFORMATION ABOUT THE SHARES OF COMMON STOCK OF TXU

The shares of common stock of TXU are quoted on The New York Stock Exchange
under the symbol "TXU".

The following table presents the high and low closing prices for the shares of
common stock of TXU, as reported on The New York Stock Exchange during each
fiscal quarter in 2002, 2003, 2004 and 2005 (through the date of this pricing
supplement), and the closing price at the end of each quarter in 2002, 2003,
2004 and 2005 (through the date of this pricing supplement).

It is impossible to predict whether the price of the index stock will rise or
fall. The historical prices of the index stock are not indications of future
performance. Lehman Brothers Holdings cannot assure you that the prices of the
index stock will not fall below the threshold value or will increase enough so
that the alternative redemption amount will be greater than or equal to $1,000.
The historical prices below have been adjusted to reflect any stock splits or
reverse stock splits.

All information in the table that follows was obtained from Bloomberg L.P.,
without independent verification.

PS-3

<TABLE>

HIGH LOW PERIOD END
--------------- ------------------ -------------------

2002
First Quarter............................... $ 54.51 $ 46.58 $ 54.51
Second Quarter.............................. 56.40 49.38 51.55
Third Quarter............................... 51.17 34.64 41.71
Fourth Quarter.............................. 39.74 10.88 18.68

2003
First Quarter .............................. $ 19.95 $ 15.20 $ 17.85
Second Quarter.............................. 22.63 17.70 22.45
Third Quarter............................... 23.64 19.59 23.56
Fourth Quarter.............................. 23.73 20.92 23.72

2004
First Quarter .............................. $ 29.79 $ 23.40 $ 28.66
Second Quarter.............................. 40.51 27.74 40.51
Third Quarter............................... 47.95 38.77 47.92
Fourth Quarter.............................. 66.05 48.55 64.56

2005
First Quarter .............................. $ 79.97 $ 61.38 $ 79.63
Second Quarter ............................. 86.35 75.82 83.09
Third Quarter (through the date of
this pricing supplement).................. 96.95 81.17 96.95

</TABLE>

PS-4

HYPOTHETICAL RETURNS

The table below illustrates, for a range of hypothetical settlement values
calculated on the valuation date:

o the hypothetical alternative redemption amount per $1,000 note;

o the percentage change from the principal amount to the hypothetical
alternative redemption amount;

o the hypothetical total amount payable at stated maturity per $1,000 note;

o the hypothetical total rate of return;

o the hypothetical annualized pre-tax rate of return;

o the hypothetical total rate of return; and

o the hypothetical annualized pre-tax rate of return.

<TABLE>

PERCENTAGE
CHANGE OF
HYPOTHETICAL HYPOTHETICAL
HYPOTHETICAL ALTERNATIVE TOTAL AMOUNT HYPOTHETICAL HYPOTHETICAL
HYPOTHETICAL ALTERNATIVE REDEMPTION PAYABLE AT ANNUALIZED ANNUALIZED
SETTLEMENT REDEMPTION AMOUNT OVER STATED HYPOTHETICAL PRE-TAX HYPOTHETICAL PRE-TAX
LEVEL ON THE AMOUNT PER THE PRINCIPAL MATURITY PER TOTAL RATE RATE OF TOTAL RATE RATE OF
VALUATION DATE $1,000 NOTE AMOUNT $1,000 NOTE OF RETURN RETURN OF RETURN RETURN

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

$ 60.00 $ 571.44 -42.86% $1,000.00 0.00% 0.00% 1.75% 0.25%
70.00 666.69 -33.33 1,000.00 0.00 0.00 1.75 0.25
80.00 761.93 -23.81 1,000.00 0.00 0.00 1.75 0.25
90.00 857.17 -14.28 1,000.00 0.00 0.00 1.75 0.25
104.9970(1) 1,000.00 0.00 1,000.00 0.00 0.00 1.75 0.25
110.00 1,047.65 4.76 1,047.65 4.76 0.67 6.51 0.91
120.00 1,142.89 14.29 1,142.89 14.29 1.93 16.04 2.15
130.00 1,238.13 23.81 1,238.13 23.81 3.10 25.56 3.31

</TABLE>

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(1) This figure reflects the threshold value.

For purposes of this table, it is assumed that TXU does not change the amount of
the quarterly cash dividends that it pays on its shares of common stock during
the term of the notes.

The above figures are for purposes of illustration only. The actual amount
received by investors and the resulting total and pre-tax rates of return will
depend entirely on the actual settlement value determined by the calculation
agent. In particular, the actual settlement value could be lower or higher than
those reflected in the table.

The table above only provides hypothetical return information with regard to
notes held to maturity. It is not applicable in the case of notes repurchased or
redeemed prior to the stated maturity date.

You should compare the features of the notes to other available investments
before deciding to purchase the notes. Due to the uncertainty as to whether the
alternative redemption amount, at stated maturity or in connection with a
repurchase or redemption, will be greater than $1,000 per $1,000 note or whether
the notes will be redeemed prior to the stated maturity date, the return on
investment with respect to the notes may be higher or lower than the return
available on other securities issued by Lehman Brothers Holdings or by others
and available through Lehman Brothers Inc. You should reach an investment
decision only after carefully considering the suitability of the notes in light
of your particular circumstances.

PS-5

SUPPLEMENTAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

Lehman Brothers Holdings is required to provide the comparable yield to you and,
solely for tax purposes, is also required to provide a projected payment
schedule that includes the actual interest payments on the notes and estimates
the amount and timing of contingent payments on the notes. Lehman Brothers
Holdings has determined that the comparable yield is an annual rate of 4.7465%
compounded semi-annually. Based on the comparable yield, the projected payment
schedule per $1,000 note is $1.25 semi-annually and $1,369.48 due at maturity.
Lehman Brothers Holdings agrees and, by purchasing a note, you agree, for United
States federal income tax purposes, to be bound by Lehman Brothers Holdings'
determination of the comparable yield and projected payment schedule. As a
consequence, for United States federal income tax purposes, you must use the
comparable yield determined by Lehman Brothers Holdings and the projected
payments set forth in the projected payment schedule prepared by Lehman Brothers
Holdings in determining your interest accruals, and the adjustments thereto, in
respect of the notes.

Because there is no statutory, judicial, or administrative authority directly
addressing the characterization of notes with terms such as the notes for United
States federal income tax purposes, it is possible that the Internal Revenue
Service could assert characterizations other than those described in the
accompanying synthetic convertible prospectus supplement that could affect the
timing, amount and character of income, gain, loss or deduction. You should
consult your own tax advisors concerning the federal income tax consequences of
the notes in light of your particular situation. See "United States Federal
Income Tax Consequences" in the accompanying synthetic convertible prospectus
supplement.

SUPPLEMENTAL PLAN OF DISTRIBUTION

Lehman Brothers Holdings has agreed to sell to Lehman Brothers Inc. and Lehman
Brothers Inc. has agreed to purchase, all of the notes at the price indicated on
the cover of this pricing supplement.

Lehman Brothers Holdings has agreed to indemnify Lehman Brothers Inc. against
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments that Lehman Brothers Inc. may be required to make
relating to these liabilities as described in the MTN prospectus supplement and
the base prospectus.

Lehman Brothers Inc. will offer the notes initially at a public offering price
equal to the issue price set forth on the cover of this pricing supplement.
After the initial public offering, the public offering price may from time to
time be varied by Lehman Brothers Inc.

Lehman Brothers Holdings has granted to Lehman Brothers Inc. an option to
purchase, at any time within 13 days of the original issuance of the notes, up
to $8,250,000 additional aggregate principal amount of notes solely to cover
over-allotments. To the extent that the option is exercised, Lehman Brothers
Inc. will be committed, subject to certain conditions, to purchase the
additional notes. If this option is exercised in full, the total public offering
price, the underwriting discount and proceeds to Lehman Brothers Holdings would
be $63,250,000, $158,125 and $63,091,875, respectively.

Lehman Brothers Holdings expects to deliver the notes against payment on or
about September 6, 2005, which is the fifth business day following the date of
this pricing supplement.

Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally
are required to settle in three business days, unless the parties to any such
trade expressly agree otherwise. Accordingly, if any purchaser wishes to trade
the notes on the date of this pricing supplement, it will be required, by virtue
of the fact that the notes initially will settle on the fifth business day
following the date of this pricing supplement, to specify an alternate
settlement cycle at the time of any such trade to prevent a failed settlement.

An affiliate of Lehman Brothers Holdings has entered into a swap transaction in
connection with the notes and has received customary compensation for that
transaction.

PS-6

$55,000,000

LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES H

0.25% NOTES DUE SEPTEMBER 6, 2012
PERFORMANCE LINKED TO THE
COMMON STOCK OF TXU CORP. (TXU)

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PRICING SUPPLEMENT
AUGUST 29, 2005

(INCLUDING PROSPECTUS SUPPLEMENT
DATED MAY 18, 2005,

PROSPECTUS SUPPLEMENT
DATED MAY 18, 2005 AND

PROSPECTUS
DATED MAY 18, 2005)

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LEHMAN BROTHERS